China smartphone market in deep trouble, records sharp decline in demand
PremiumChina's smartphone market boom comes to an end as it registers a sharp decline in demand within the mainland and outside.
The rapid fall in demand both domestically and internationally signals the end of China's smartphone market bubble. According to the most recent data, China's smartphone shipments in the second quarter decreased by 14.7%, marking the fifth consecutive quarterly loss, according to Financial Post, an American website.
India is currently the second-largest mobile market in the world, and it will soon surpass China as the greatest market for smartphones. However, Chinese businesses predominate in India's smartphone sector.
Indian smartphone makers have been struggling ever since companies like Xiaomi and Oppo flooded the market with inexpensive Android devices. According to the Financial Post, India wants to stop Chinese smartphone manufacturers from selling products for less than 12000 rupees in order to revive its flagging local market.
Analysts feel that the Chinese market is in deep trouble, and that things are only going to become worse as a result of a variety of causes. According to a Bloomberg report from earlier this week, the Indian government intends to outlaw Chinese phones priced under ₹12,000 throughout the nation.
According to Financial Post, the initiative aims to force Chinese telecom giants out of the second-largest mobile market's lower price range.
Several Chinese smartphone makers have been the subject of investigations by the Indian government in recent months about allegations of money laundering and the transfer of revenues and funds from India to Chinese offices in an effort to avoid paying taxes and levies.
IDC, a US research company, reported that smartphone shipments in China decreased by 14.7% in the second quarter compared to the same period last year, reaching 67.2 million devices.
With big companies like Xiaomi, Vivo, and Oppo reporting severe drops in sales, it was the fifth straight quarter of declining shipments and the second consecutive quarter of double-digit declines.
As per reports, multiple factors contributed to the decline. The first factor is attributable to the sharp drop in demand caused by the strict "Zero COVID Policy". China's severe COVID-19 restrictions are not good for all businesses. Lockdowns disrupted retail, logistics and manufacturing.
Under the economic downturn, the need to replace mobile phones has greatly reduced, and the life cycle of smartphones has become longer and longer.
But the bigger problem, however, is that the Chinese smartphone market is severely saturated, which could mean the end of China's more than 10-year smartphone boom, reported Financial Post.
As of the end of last year, there were more than 1.6 billion active mobile phone accounts in China, surpassing the population of 1.4 billion. The penetration rate is much higher than the global average, resulting in intense brand competition.
Data analysis firm, Canalys predicted at the end of July that China's mobile phone shipments this year are expected to be well below 300 million units, the lowest record in nearly 10 years, reported Financial Post.
(With ANI inputs)
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