China’s smartphone market is shrinking for the first time in years

While smartphone markets in places like India and Indonesia continue to explode, the Chinese smartphone market is reaching a level of maturity closer to that of Japan or the United States, which means its growth is starting to slow. Since most Chinese people own smartphones, the primary goal of companies like Apple and Xiaomi is to convince people to upgrade, which means less sales and is why the world’s largest smartphone market has seen its first drop in shipments in six years. 

iPhones may be selling like hotcakes in China, but overall demand for smartphones in the world’s biggest market is in fact slowing, according to IDC. Smartphone shipments in China fell by 4 percent in the first quarter from a year earlier to 98.8 million units – the first contraction year-on-year contraction in six years. On a quarter-on-quarter basis, the market shrank 8 percent following a large inventory buildup at the end of last year. “Smartphones are becoming increasingly saturated in China,” said Kitty Fok, managing director at IDC China. “China is oftentimes thought of as an emerging market but the reality is that the vast majority of phones sold in China today are smartphones, similar to other mature markets like the U.S., UK, Australia, and Japan,” she added. Convincing existing users as well as feature phone users to upgrade to new smartphones will now be the key to further growth in the China market, Fok said.