‘A recovery is under way’: China’s smartphone market primed to bounce back as 4G handset sales pick up

Combined 3G and 4G smartphone shipments last month rose 22 per cent to hit a record 47.3 million units

PUBLISHED : Wednesday, 30 December, 2015, 7:15pm
UPDATED : Wednesday, 30 December, 2015, 7:21pm

Strong 3G and 4G handset sales in China in November could point to a recovery in the world’s largest smartphone market, according to analysts.

Data from Bernstein and the state-run China Academy of Telecommunications Research show that combined 3G and 4G smartphone shipments last month rose 22 per cent to reach a record 47.3 million units, up from 38.8 million in the same period last year.

“A total of 122 new smartphone models were released last month, of which 120 were 4G LTE (long-term evolution) models,” said Bernstein senior analyst Chris Lane.

“We believe November’s data affirms our view that inventory correction is approaching the end, and a recovery is underway.”

Part of that strong growth was attributed to phenomenal sales during China’s annual Singles Day online shopping festival on November 11.

Total smartphones sold on that day by e-commerce giant Alibaba Group and Tencent Holdings-backed JD.com reached about six million units, according to Chinese media reports.

High-flying technology start-up Xiaomi announced last month that it was the top-selling smartphone brand on Singles Day on Alibaba’s Tmall.com, JD and Chinese retail chain Suning’s online shopping platforms.

Beijing-based Xiaomi said it generated total sales of 1.25 billion yuan (US$192.5 million) — including smartphones, tablets, home routers and audio devices — over that 24-hour period on Tmall alone.

Chinese smartphone brands had an 81 per cent share of total 4G smartphone shipments on the mainland last month, according to Bernstein.

A report from Sino Market Research showed that Xiaomi’s Mi, Huawei Technology’s Honor and Meizu were the top smartphones sold online in China last month, with a combined market share of 60.2 per cent.

Apple, maker of the premium-priced iPhones, seized an 8.7 per cent share in online sales the same month.

“Android devices have bounced back from the bottom and we expect that [recovery] to continue,” said Lane, adding that “4G continues to be in full swing”.

China Mobile, the world’s largest wireless network operator, had 287.32 million 4G customers at the end of last month, out of a total subscriber base of 825.19 million.

The country’s second-biggest wireless network operator, China Unicom, had 286.92 million total subscribers at the end of last month, a combined 180.24 million of whom are 3G and 4G users.

China Telecom recorded 196.57 million total mobile customers in the same period, with 141.03 million combined 3G and 4G subscribers.

But concerns remain as to just how far along the recovery of China’s smartphone market is.

The slowdown in China’s economy, coupled with overcapacity in the smartphone market, has hurt domestic brands, which largely provide low-priced Android devices.

Over the past several months, a growing number of Chinese contract electronics manufacturers that supply various local smartphone brands have shuttered their factories due to a steady decline in demand.