China’s Smartphone Market Dropped 14.1% in 1Q22 Under Soft Demand and Lack of Product Upgrades, IDC Reports

SINGAPORE – According to the IDC Worldwide Quarterly Mobile Phone Tracker, 74.2 million smartphones shipped in China in 1Q22, down 14.1% year-on-year (YoY). The decline was not only the result of a high comparison base year but also due to a continued soft demand caused by the lack of product upgrades and the surge of the COVID-19 cases. Looking into the full-year 2022, the market has a downside risk of shipping less than 300 million smartphones if it continues to see an absence of a fresh stimulus.

“2022 will be a challenging year, as both domestic and overseas’ uncertainties are snarling at the market, pushing many smartphone vendors into a more conservative mode,” said Will Wong, Research Manager for Client Devices at IDC Asia/Pacific. Wong adds, “Such an environment makes vendors’ brand equity more crucial than ever in competing with Apple.”

Top 5 Smartphone Company Highlights:

OPPO ranked first in 1Q22, mainly supported by the favorable sales performance of its Reno 7 series and the new A series. In the high-end segment, its foldable Find N helped to build an image of innovation, strengthening OPPO’s online channel share by successfully catching the attention of online users.

Honor achieved high YoY growth, driven by the low comparison base year and the good performance of the Honor 60 and X30 series, which contributed about 60% of its shipments. The launch of the Honor Magic 4 also strengthened Honor’s position in the high-end segment.

vivo faced declines in its key product series, whereas its sub-brand, iQOO, managed to maintain its growth momentum with new product launches. Nevertheless, the steady performance of the S series and price adjustments on the X70 series helped vivo maintain its share in the US$400<600 segment.

Apple slowed in 1Q22 after achieving a high number of shipments in the previous quarter. The higher-end iPhone 13 Pro series also took a lower portion of the product mix, with iPhone 13 accounting for more than 55% of shipments after Apple’s launch peak season. Halts in Shanghai and Kunshan led to some disruptions in the new iPhone SE’s production, but the events had an insignificant impact on the product’s sales performance locally.

Xiaomi leveraged JD.com to drive its sales in February and launched the new K50 series and K40s model in March to strengthen its position in the mid-range segment. But an overlap in market positioning of several Note and K product series in the mid-range suggests a need to enhance customer reach in the different segments.

“China’s pandemic’s impact on the smartphone market’s logistics and the supply chain is relatively manageable for now. On the other hand, the outbreak in key Chinese cities produced a nationwide impact on consumer sentiment,” said Xi Wang, Research Manager for Client System Research at IDC China. Xi adds, “On the supply side, rising costs of the core components will also lead to a more challenging market environment.”

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