Bloomberg News

China Smartphone Shipments Post First Quarterly Drop Since 2011

February 13, 2014

Smartphone shipments in China fell for the first quarter in more than two years in a sign that growth in the world’s biggest market may moderate, according to market researcher IDC.

There were 90.8 million smartphones shipped in China in the three months ended Dec. 31, down 4.3 percent from 94.8 million in the September quarter, IDC said in a statement on its Website. It was the first drop since the second quarter of 2011.

The slowdown may reflect that China Mobile Ltd. (941), the world’s biggest carrier with 767 million subscribers, didn’t get a commercial license for fourth-generation services until December and only started offering Apple Inc. (AAPL:US)’s iPhones last month, IDC said. Another factor may be moves by carriers to cut subsidies on devices with smaller screens amid an increasing preference in China for phones with larger displays.

“This is the first hiccup we’ve seen in an otherwise stellar growth path,” Melissa Chau, an IDC analyst, said in the statement. “We are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade.”

IDC didn’t release fourth-quarter shipment data for manufacturers.

Samsung Electronics Co. (005930) had the biggest market share in China in the third quarter, followed by Lenovo Group Ltd. (992), China Wireless Technologies Ltd., and Huawei Technologies Co., according to Canalys. Other homegrown phone makers such as Xiaomi Corp. are also gaining traction.

Beijing-based Lenovo last month agreed to buy Google Inc.’s Motorola Mobility phone unit for $2.91 billion.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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