China smartphone market hiccups as growth streak ends with first sequential decline in 4Q13, says IDC
Press release; Jessie Shen, DIGITIMES [Monday 17 February 2014]

After nine consecutive quarters of explosive growth, which propelled China into the top smartphone market in the world, the China smartphone market experienced its first slowdown in the fourth quarter of 2013, according to IDC.

Shipments of smartphones in China fell to 90.8 million units in the fourth quarter from 94.8 million in the third, a 4.3% sequential decrease, said IDC.

“The world has increasingly looked to China as the powerhouse to propel the world’s smartphone growth and this is the first hiccup we’ve seen in an otherwise stellar growth path,” said Melissa Chau, a senior research manager with IDC.

“There will certainly be future drivers to unlock further smartphone growth in China, as Apple demonstrated with its China Mobile tie-up in January, and the massive device migration to come of phones only supporting 2G and 3G networks to devices supporting 4G networks,” Chau continued.

“However, we are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year’s model,” Chau noted.

IDC pointed out two trends while looking ahead at the prospects for the Asia/Pacific (excluding Japan) region. First, growth will increasingly shift to ever-more emerging markets. While India volumes significantly lag China, India has taken the number three ranking of largest smartphone markets in the world in 2013, surpassing Japan, the UK, South Korea, Germany and France, which were all ranked higher in 2012.

Second, China-based phone players which have previously been content to make their mark on the China market itself, are looking to expand their ambitions overseas. While this trend has started already through 2013, IDC expects it to become more common in 2014.

“Chinese players are getting hungrier to turn themselves into international rather than China-only brands. Nowhere is this more clear than Lenovo’s acquisition of Motorola’s handset business, and even smaller players, some unknown to much of the world, like Oppo, BBK, Gionee and of course Xiaomi are ramping up on international expansion,” Chau said.

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