After a decade of frantic growth, China’s smartphone market is hitting a speed bump as COVID-19 roils the world’s second-largest economy.
The country’s smartphone shipments dropped 14% year-over-year in 2022, reaching a ten-year low, according to research firm Counterpoint. It was also the first time that China’s smartphone shipment had dropped below 300 million units in ten years, according to Canalys. Even in December, which has historically seen seasonal increases in sales, China recorded a 5% quarter-to-quarter decline in smartphone shipments.
The three-year-long stringent “zero-COVID” policy thattoptechtrends.com/2022/03/16/tesla-closes-shanghai-gigafactory-for-two-days-as-covid-cases-spike-in-china/” target=”_blank” rel=”noopener”> disrupted businesses and dampened consumer confidence, coupled with macroeconomic headwinds, ended China’s decades of double-digit growth. Then in early December, the toptechtrends.com/2022/12/12/as-china-relaxes-zero-covid-tech-firms-assume-a-larger-role-in-fighting-the-virus/” target=”_blank” rel=”noopener”>abrupt relaxation of COVID-19 restrictions resulted in a surge in cases and further added pressure to the already waning economy. Last year, China’s GDP grew 3%, its lowest in five decades other than 2020.
Alibaba’s annual shopping bonanza in November also offered some clues to China’s weakening spending power. The event, which is often compared to Black Friday, did not disclose its final sales number in 2022 for the first time since its inception in 2009.
There was one winner. Amid weakening consumer appetite in China, Apple finished the year with a record market share of 18% thanks to “its aggressive promotions” and “resilient” demand in the high-end segment, according to Canalys. Its ascent also coincides with Huawei’s fall from grace in the premium handset market sincetoptechtrends.com/2021/09/26/china-roundup-meng-wanzhous-release-and-huaweis-future/” target=”_blank” rel=”noopener”> U.S. sanctions cut off its access to high-end chipsets.
Apple’s relationship with China remains a delicate one. The country is not only one of its biggest markets but has been the manufacturing backbone that created the world’s most valuable company today. In the past few years, however, COVID-related disruptions, such as a rare worker protest at a major Foxconn plant that delayed production, prompted the hardware juggernaut to rethink its supply chain strategy. The Wall Street Journal reported in early December that Apple was looking to relocate some of its supply chains out of China to other parts of Asia, including Vietnam and India.
India, in particular, is expected to play a bigger role in Apple supply chains as the firm plans to expand its manufacturing capacity in the country to toptechtrends.com/2022/09/21/apple-to-move-25-iphone-production-to-india-by-2025-20-ipad-and-apple-watch-to-vietnam/”>produce 25% of all iPhones by 2025, according to JP Morgan analysts.
In Q4, the top smartphone brands in China by shipment were Apple, Vivo, Oppo, Honor (toptechtrends.com/2020/10/14/huawei-plans-to-divest-budget-phone-unit-honor-reports/” target=”_blank” rel=”noopener”>which was spun off from Huawei following U.S. sanctions on the parent firm), and Xiaomi.
toptechtrends.com/2023/01/29/chinas-smartphone-10-year-low-2022/”>China smartphone market slumps to 10-year low in 2022 by toptechtrends.com/author/rita-liao/”>Rita Liao originally published on toptechtrends.com/”>TechCrunch
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