China – long viewed as one of the key growth markets for smartphones – is now approaching saturation point, according to data being released today by IDC. The WSJ reports that smartphone shipments fell for the first time in six years, 4.3% down year-on-year in the previous quarter. Other sources say sales are still growing, but at a much-reduced rate.
Experts say the slowdown is largely driven by the disappearance of China’s first-time buyers. Smartphones now have a more than 90% penetration rate in China, said Tom Kang, research director with market-research firm Counterpoint, meaning just about everybody in China who wants a smartphone already has one. “China is now a replacement market,” Mr. Kang said.
While the news may be bad for many smartphone manufacturers, Apple is less likely to be affected as existing owners upgrade from low-end and mid-range handsets to premium ones.
Apple now sells more iPhones in China than in the US, Kantar putting the company’s market share there at 26%. Tim Cook stated in the most recent earnings call that revenue was up 58% year-on-year in emerging markets, Apple also revealing that Chinese App Store sales doubled in 12 months, while online sales in China tripled in the same time.
The company this morning announced a number of new environmental initiatives in the country.
Photo: Darley Shen/Reuters