China smartphone market contracted the first time in 6 years

GMT 04:45 2015 Tuesday ,11 August

Arab Today, arab today China smartphone market contracted the first time in 6 years

Smartphone growth in China
Beijing - XINHUA

New stats show the smartphone market here in China has contracted by 4-percent through the first half of this year.

The 4-percent drop marks the first time in 6-years smartphone sales in China have dropped through the first half of the year.

225 million units were shipped in the first half.

Market saturation and a more discerning consumer are being pointed to as the main reason for the downturn.

"I prefer domestic brands. Xiaomi and Huawei are both doing well compared with other foreign brands in the same price range."

"Stand-by time, speed, memory, and long-term performance are all in my consideration. My biggest concern is the operating system, which I don't want to slow down after being used for a while."

"If I could,, I would change my phone to Apple or Huawei. The two are the world's best smartphone makers, one with the IOS operating system and one using Android."

Communications industry analyst Sun Qi says as consumers become more familiar with the brands, they're going to become more picky about what they choose.

"If you look at 2012's rapid growth in smartphone sales in China, this could be viewed as the first phase. 2015 is phase two. We are already starting to see changes in consumer habits. Their focus is shifting to the performance of the phone instead of just simply having one. For years, China's smartphone market has been growing by 10-percent. This is a pace which is hard to maintain. As such, I think over the next 5 to 10-years, the biggest challenge for smartphone makers will be adapting to the market."

Observers say one of the key reasons behind the weak demand for new phones is the penetration rate, which sits at around 90-percent.

Sun Qi says convincing existing users to buy a newer model is critical.

"The focus is going to shift back to the phone's intrinsic qualities. Consumers used to be attracted to the design of the phone. But now they have bigger demands. Stand-by time, information safety and user-compatibility are the core needs for smartphone users moving forward."

To counter the drop in sales, Chinese smartphone makers Xiaomi and Huawei have been attempting to expand overseas.

But despite the downturn in sales for smartphone producers, retailers are still doing well.

Chinese home appliance giant Suning has seen its sales through the first half of this year jump by some 70-percent.

Gu Wei, manager of the telecom sales division at Suning, says their sales are growing both online and offline.

"We hope we can be the fastest in delivery, with latest products, bringing more products to customers with reasonable price. Through our store, our online platform and mobile app, we try to meet needs of the customers."

Suning recently inked a multi-billion dollar deal with Alibaba for online payments, deliveries and aftersales services.

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