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Smartphone saturation hits China as shipments fall for the first time

It would seem that smartphone saturation has reached the Chinese market, thanks to the latest data from analyst firm Canalys. For the first time, the country has experienced a sustained decline in shipments, reaching 459 million units in 2017. This is down four percent year-on-year, and down 14% comparing the fourth quarter to the one prior.

Huawei bucked the trend, however, showing a nine percent increase in its shipments, reaching 24 million units in Q4 2017. This was in part thanks to Honor grabbing market share away from smaller vendors according to Research Analyst Mo Jia:

“Nova and Honor have successfully gained share from smaller vendors, such as Gionee and Meizu. Honor’s performance has complemented Huawei’s success, by contributing more than half of Huawei’s total shipments. But competition between Huawei and Honor is getting fierce, and Huawei must deal with possible internal cannibalization.”

Oppo and Vivo did not fare as well, showing a decline in shipments of sixteen and seven percent respectively. Despite this dip, these two vendors showed double-digit annual growth in 2017. At CES 2018, Vivo revealed the first smartphone that has an integrated fingerprint reader under the display, going on sale soon at a retail price of around $565.

According to the research firm, competition will continue to heat up squeezing smaller vendors like Gionee, and Meizu out of the space. The biggest threats mentioned in the report included Lenovo and ZTE, reportedly refocusing their efforts in the Chinese market this year. Apple, seemingly unaffected, bumped Xiaomi from the third spot, thanks to its latest iPhone X and iPhone 8 launch in that country.

Source and image: Canalys

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