SINGAPORE/HONG KONG: The extraordinary rate of growth of the smartphone market in China has been checked as the sector experienced a slowdown in the final quarter of 2013.
New figures from the International Data Corporation (IDC), the market intelligence business, revealed that after nine consecutive quarters of growth there had been a 4.3% decline, quarter on quarter, in the last three months of 2013. Shipments fell from 94.8m in the third quarter to 90.8m.
IDC highlighted several factors behind the "stumble", including the arrival of 4G. It noted that China Mobile's 4G TD-LTE network had gone live in mid-December but supplies of 4G handsets had not been widely available until the first quarter of 2014.
Another was the increasing popularity of phablets, as operators cut phone subsidies on phones with smaller screens, so triggering distribution channels looking to clear out those stocks.
Melissa Chau, Senior Research Manager with IDC Asia/Pacific's Client Devices team, described the dip as "the first hiccup we've seen in an otherwise stellar growth path".
But she was optimistic about the future. "There will certainly be future drivers to unlock further smartphone growth in China, as Apple demonstrated with its China Mobile tie-up in January, and the massive device migration to come of phones only supporting 2G and 3G networks to devices supporting 4G networks," she said
That migration, however, would not be a simple process. "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 to this year's model," Chua said.
IDC expected that future growth in the Asia-Pacific region would shift to more emerging markets, such as India, which was already the third largest smartphone market in the world.
It also anticipated that more Chinese phone manufacturers would expand overseas in 2014, challenging the existing majors.
"Chinese players are getting hungrier to turn themselves into international rather than China-only brands," said Chau, pointing to Lenovo's recent acquisition of Motorola's handset business.
"Even smaller players, some unknown to much of the world, like Oppo, BBK, Gionee and of course Xiaomi are ramping up on international expansion," she added.
Data sourced from IDC; additional content by Warc staff