China smartphone shipments fell 22 per cent in first 10 months of 2022 amid sluggish demand and manufacturing supply chain disruptions

Total smartphone shipments to China reached 214.5 million units from January to October, down from 275.3 million in the same period last year
In October alone, the country’s smartphone shipment volume fell 27.2 per cent year on year to 23.8 million units

Smartphones

Iris Dengin Shenzhen

Published: 10:00pm, 26 Dec 2022

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Smartphone shipments in China slumped 22 per cent in the first 10 months of the year, according to latest government data, as the industry’s largest market has been beset by cooling domestic demand and turmoil in its manufacturing supply chain.

There were 214.5 million total smartphones shipped to the country from January to October this year, down from 275.3 million units in the same period last year, according to a report on Monday by the China Academy of Information and Communications Technology (CAICT), a scientific research institute under the Ministry of Industry and Information Technology.

In October alone, the shipment volume in the world’s largest smartphone market fell 27.2 per cent year on year to 23.8 million units, according to CAICT data. That total, however, was up 20 per cent from September, when the volume reached 19.8 million units.

The latest CAICT figures reflect the Chinese smartphone market’s struggle to recover from sluggish demand, as the flagging domestic economy and strict mobility restrictions under Beijing’s zero-Covid-19 policy prompted more consumers to delay making new purchases. It remains uncertain how much demand would pick up after the central government relaxed Covid-19 controls earlier this month.

A man sits inside a smartphone repair store at the Huaqiangbei electronics market in Shenzhen, in southern Guangdong province, on July 12, 2022. Photo: Agence France-Presse

While consumer confidence and the economy in China would take long to recover, the decline in the country’s smartphone market is expected to narrow next year and a rebound is likely to take place in 2024, according to tech research firm IDC in a report published earlier this month.

Slowing consumer demand has already prompted major smartphone vendor Xiaomi Corp to conduct a new round of lay-offs affecting nearly 10 per cent of its workforce, after cutting more than 900 jobs earlier this year.

China’s retail sales saw a sharp decrease in November, down 5.9 per cent from a year earlier, according to data released by the National Bureau of Statistics.

That figure missed expectations, falling from minus 0.5 per cent in October to the lowest reading since dropping to minus 6.7 per cent in May and minus 11.1 per cent in April.

Chinese smartphone giant Xiaomi cuts thousands of jobs amid weak sales

Even Apple – which seized a record 25 per cent share of China’s smartphone market in October, according to Counterpoint Research – has been scrambling to fix problems in its manufacturing supply chain on the mainland.

Production of its popular iPhone 14 Pro models at Foxconn Technology Group’s plant in Zhengzhou, the capital of central Henan province, has been hit by severe disruptions including worker protests that turned violent and the exodus of tens of thousands of employees because of a Covid-19 outbreak at the facility.

Apple was estimated to ship 20 per cent fewer smartphones this holiday quarter than previously expected because of its manufacturing issues in China, according to Kuo Ming-chi, analyst at TF International Securities.

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