Chinese smartphone market registers sharp decline in demand

    China's smartphone market boom comes to an end as it registers a sharp decline in demand within the mainland and outside.
    By: ANI
    | Updated on: Aug 22 2022, 13:19 IST
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    China's smartphone market registers a sharp decline in demand. 
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    China's smartphone market registers a sharp decline in demand.  (AP)

    China's smartphone market boom comes to an end as it registers a sharp decline in demand within the mainland and outside. As per the latest data, China's second-quarter smartphone shipments fell by 14.7 per cent, which is the fifth consecutive quarterly decline, Financial Post, an American-based publication reported.

    Analysts believe that the Chinese market is in deep trouble, and under the blow of multiple factors, the prospects are becoming bleaker and bleaker.

    Earlier this week, a Bloomberg report stated that the Indian government is planning to ban Chinese phones under 12,000 in the country.

    The move is aimed at pushing Chinese telecommunication giants out of the lower segment of the world's second-biggest mobile market, reported Financial Post.

    In recent months the Government of India has been investigating a number of Chinese smartphone manufacturers in India, and how their Indian subsidiaries have been laundering money, diverting their profits and money from India to their Chinese offices, in order to pay less tax and duties.

    India is the world's second-biggest mobile market and is soon poised to become the world's largest smartphone market. However, the companies that dominate India's smartphone market are majorly Chinese.

    Ever since manufacturers like Xiaomi and Oppo inundated the market with affordable Android devices, Indian mobile manufacturers have languished.

    That is preciously the reason India seeks to restrict Chinese smartphone makers from selling devices cheaper than 12000 rupees to kickstart its faltering domestic market, reported Financial Post.

    According to data released by the US research firm IDC, smartphone shipments in China fell 14.7 per cent in the second quarter from a year earlier to 67.2 million units.

    It was the fifth consecutive quarter of declines in shipments and the second consecutive quarter of double-digit declines, with major players like Xiaomi, Vivo and Oppo reporting sharp declines in sales, reported Financial Post.

    As per reports, multiple factors contributed to the decline. The first factor is attributable to the sharp drop in demand caused by the strict Zero COVID Policy. China's severe COVID-19 restrictions are not good for all businesses. Lockdowns disrupted retail, logistics and manufacturing.

    Under the economic downturn, the need to replace mobile phones has greatly reduced, and the life cycle of smartphones has become longer and longer.

    But the bigger problem, however, is that the Chinese smartphone market is severely saturated, which could mean the end of China's more than 10-year smartphone boom, reported Financial Post.

    As of the end of last year, there were more than 1.6 billion active mobile phone accounts in China, surpassing the population of 1.4 billion. The penetration rate is much higher than the global average, resulting in intense brand competition.

    Data analysis firm, Canalys predicted at the end of July that China's mobile phone shipments this year are expected to be well below 300 million units, the lowest record in nearly 10 years, reported Financial Post.

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    First Published Date: 17 Aug, 23:34 IST
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