China rings up US$32.4b sales of smartphones in second quarter

Higher demand from rural areas to boost full year sales to US$132.1 billion, according to GfK estimates

PUBLISHED : Friday, 19 August, 2016, 6:44pm
UPDATED : Friday, 19 August, 2016, 10:18pm

Smartphone sales in China, the world’s largest market for these devices, surged to US$32.4 billion in the second quarter of this year on higher demand from the country’s vast rural areas.

That amount represented a 24 per cent increase from US$26.9 billion in the same period last year, but fell short of the record quarterly high of US$33.5 billion posted in the three months to December last year, according to data released on Friday by GfK.

The global market research firm raised its total sales forecast for the mainland to US$132.1 billion this year, up from its US$120.4 billion estimate in March.

Kevin Walsh, the director of trends and forecasting at the Nuremberg, Germany-based GfK, said local smartphone brands are the biggest beneficiaries of the sales resurgence in the Chinese mainland.

“We need to look beyond sales in the major cities and the shipments of global manufacturers to reveal this strong growth – since it is consumers in rural areas who are driving this demand,” Walsh said.

GfK forecasts are based on consumer purchases rather than manufacturer shipments, so supplier rankings are typically provided by other organisations.

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Technology research firm IDC on Monday said the mainland’s top-five smartphone suppliers in the second quarter were Huawei Technologies, Oppo Electronics, Vivo, Xiaomi and Apple, which together accounted for 63.9 per cent of the market.

According to GfK, sales of Chinese smartphone brands grew the most outside the major cities on the mainland amid continued mobile network operator subsidies to drive 4G service adoption.

It said the domestic brands’ overall share of the country’s smartphone market reached 81 per cent in the second quarter, compared with 74 per cent a year earlier.

Data from Bernstein Research showed that China Mobile, China Unicom and China Telecom added a combined 80.33 million new 4G subscribers nationwide in the second quarter.

GfK estimated that the mainland recorded a 24 per cent increase in smartphone volume growth last quarter to 109.7 million units sold, up from 88.8 million a year ago.

“This year-on-year growth ... is the highest seen for over two years,” Walsh said.

GfK forecast total smartphone volume sales in China to hit 439 million units this year.