China approaches smartphone saturation point, shipments fall as penetration hits 90% – IDC

China – long viewed as one of the key growth markets for smartphones – is now approaching saturation point, according to data being released today by IDC. The WSJ reports that smartphone shipments fell for the first time in six years, 4.3% down year-on-year in the previous quarter. Other sources say sales are still growing, but at a much-reduced rate.

Experts say the slowdown is largely driven by the disappearance of China’s first-time buyers. Smartphones now have a more than 90% penetration rate in China, said Tom Kang, research director with market-research firm Counterpoint, meaning just about everybody in China who wants a smartphone already has one. “China is now a replacement market,” Mr. Kang said.

Even local brands like Xiaomi are finding it tougher to compete, say analysts, while Samsung fell from the best-selling brand in China a year ago to fourth place today. Samsung was, however, upbeat about its prospects in the country.

“While there are signs that the explosive growth of smartphones in China will slow this year, the vast majority of China’s 885 million mobile users are using low-end and mid-range smartphones,” Samsung said in a statement. “This leaves plenty of room for upgrades to high-end phones as China’s market matures.”

Android manufacturers are also facing increased competition in China from Apple, which recently hit 26% market share.

Photo: Darley Shen/Reuters