Chinese Smartphone Sales Suffer Worst Decline Ever

The icons for Tencent Holdings Ltd. applications WeChat, clockwise from top left, QQ, JOOX, Tencent News and Tencent Video are arranged for a photograph on an Apple Inc. iPhone taken in Hong Kong, China, on Wednesday, July 26, 2017. Tencent is scheduled to release second-quarter earnings figures on Aug 16. …
Anthony Kwan/Bloomberg via Getty Images

The South China Morning Post reported on Thursday that Chinese smartphone sales suffered their worst decline ever during the first quarter of 2020, with a drop of 22 percent for every major manufacturer except Huawei, which grew by six percent.

Analysts quoted by the SCMP said the slump was particularly sharp in February, at the height of the Wuhan coronavirus epidemic, but overall it was not as bad as expected because online sales helped to offset the loss of brick-and-mortar business.

Huawei, on the other hand, managed to thrive in the Chinese market despite restrictions placed on sales in the United States due to security concerns:

In the first quarter of the year, Huawei’s chip unit HiSilicon also surpassed US chip giant Qualcomm as the top smartphone processor supplier in China, according to a separate report by Chinese research firm CINNO, as the Shenzhen-based company ramped up production of its own American component-free parts.

Counterpoint’s report on Wednesday showed that Huawei, along with fellow Chinese smartphone vendors Oppo, Vivo and Xiaomi and consumer tech behemoth Apple, accounted for a record 93 per cent of the Chinese smartphone market, up by 6 percentage points compared to last year.

Huawei’s gain in market share was the most drastic, rising from 29 per cent in the first quarter of last year to 39 per cent in the latest quarter.

The hardest-hit Chinese smartphone company was Xiaomi, which took a 35 percent hit to sales but said its plans to roll out 5G phones next year would proceed on schedule. Industry forecasts see 5G phones accounting for over 40 percent of sales in China by the end of this year.

Foreign smartphone providers rarely approach ten percent of market share in China, despite considerable efforts by companies such as Apple and Samsung. Apple’s expensive push to get a bigger share of the market appears to have fizzled last summer due to what VentureBeat described as a “swell of patriotism” among Chinese customers after Huawei was blacklisted in the United States.

Chinese smartphone use became a topic of interest to students of the coronavirus pandemic in March after a huge number of telephone accounts vanished for no apparent reason. This was all the more curious because mobile phones are not merely popular in China, but essentially mandatory, particularly during the coronavirus emergency.

Some who challenge the absurdly low numbers of infection and death reported by the Chinese government took this as evidence that far more people died from the virus than Beijing is willing to admit. The slump in smartphone sales would suggest that many of the 21 million accounts that disappeared in March did not rush out to buy new phones.

.

Please let us know if you're having issues with commenting.