A report from research firm Canalys suggests that there has been a 4 per cent decrease in annual shipments of smartphones in China in 2017.
This is the first time in eight years that the market has seen a decrease in sale of smartphones.
The Chinese handset market is dominated by Huawei, Oppo and Vivo.
The Canalys report said that double-digit growth was noted by Huawei despite the overall decline in the market.
In contrast, Apple and Samsung dominated the world smartphone market between 2010 to 2015.
But with faster entry-level handsets at costs that are much more affordable, there has been a rise of smaller Chinese Android smartphone brands in the last two years.
While the iPhone and Galaxy devices is seen as “must-have” handsets for consumers in big Chinese cities like Beijing and Shanghai, they are way over affordable for consumers in the rural areas and therefore mostly remain with basic feature phones.
And to make premium smartphone experience at affordable prices in rural areas, brands like Oppo and Vivo concentrated on online sale instead of opening up of retail stores.
And this approach was successful. and in 2016, there were a large percentage of Chinese customers who shifted to premium smartphones from their basic phones.
Huawei had managed to sell an equal number of smartphones as Apple did by August 2017 according to Counterpoint Research. And the brands had become the most profitable Android deice brand globally overtaking Samsung by the end of 2016.
The factor for the decline in the smartphone shipment have also been identified in the report. Chinese consumers have already shifted from their basic phones to the entry-level smartphones and now they are of the opinion that they do not need a further upgradation now.
Mr Jia said that people are saying that “the phones they have now are already good enough.”
“We say that it’s gone from a ‘change’ market to a ‘stop’ market.”
According to Canalys, the life cycle of the new smartphones, with many features, has increased up to 26.8 months because of the entry-level smartphones.
And till such time that 5G enabled devices come to the Chinese market in 2019, there is little chance of the smart phone market growing, claims the research firm.
Mr Jia claims that the latest models of smartphones from Chinese brands are very similar in terms of specifications and hardware to iPhones despite the fact that iPhones are perceived as “luxury” prestige elements could induce some consumers to purchase it.
“The phone makers are making much better phones. For example, if you look at the Huawei Mate 10 and the Mate 10 Pro, their specs are comparable to iPhone 8 and iPhone 8 Plus. But the Mate 10 is at least 30% cheaper than the iPhone 8,” he said.
“Oppo and Vivo are trying to expand into more countries like Russia and Japan, and they’re trying to deepen their market in South East Asia,” said Mr Jia.
“Xiaomi is doing very well in India. They are the most popular brand there and are seeking to open more stores. They are also expanding into Thailand.”
(Adapted from BBC.com)