Smartphone sales fall in China says Gartner

Smartphone sales in China have fallen year-on-year for the first time, according to data gathered by Gartner.
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The market research firm says 4% fewer handsets were sold in the months of April, May and June compared with the same period in 2014.

It suggests the market has "reached saturation" - meaning about half the population owns a smartphone and is not upgrading on an annual basis.

However, not all manufacturers experienced a drop.

Samsung's sales were 49% lower - despite the launch of its Galaxy S6 models- and Lenovo also experienced a big fall-off in demand.

But Apple's sales rose 68%, even though it did not have new phones out. 

Huawei took the top spot in its home country with a 46% growth in sales.

Gartner research director Anshul Gupta said: "Samsung is down significantly, not just in China, but in other markets as well.

"And the Chinese players have taken a significant lead in their home market."

Samsung's figures will have been affected by problems it had making the S6 Edge's curved screen, which meant the firm could not meet demand.
 
But Mr Gupta stressed that the bigger picture was that overall sales were down for the first time in the country.

That, he said, was something that might concern all manufacturers, bearing in mind China accounted for about 30% of global sales, making it the world's biggest market.

"China has reached saturation. Its market is essentially driven by smartphone replacements rather than upgrades from feature phones, so they will follow an 18-month, 24-month, or whatever, replacement cycle."

'Low-hanging fruit'

Another research firm, Strategy Analytics, recently reported China's smartphone sales had eked out 3% growth in the April-to-June period - so, Gartner's headline finding is not undisputed.

But Strategy Analytics' own figure was still significantly down on the 29% growth it reported for the second quarter of 2014.

"The smartphone market in China has been slowing down for several quarters and a lot of the low-hanging fruit has been picked," the firm's executive director, Neil Mawston, told the BBC.

"Most people in major cities like Beijing already own a smartphone, and the penetration of smartphones across the general population is approaching 50% or more, which is a relatively high rate."
China's smartphone sales tend to be strongest in the first quarter, when people give presents to mark the Chinese New Year.

In addition, many of the highest-profile launches tend to happen in the last five months of the year, so many industry watchers may wish to see further data before accepting that the country's smartphone market is truly in retreat.

"The Chinese economy is also not as strong as it was, and the level of innovation from smartphone-makers is also taking a pause at the moment," added Mr Mawston.

(BBC)