Amidst COVID-19’s global ramifications, China’s smartphone market sees a slowdown. This is mainly due to the slowing economy in the country, which has Consumers less incentive to spend money on mobile devices. Among Chinese manufacturers, Huawei and Tencent are seeing the most significant drops in shipments. With Apple comfortably holding onto first place with nearly 40% of China’s total smartphone sales, Huawei and Tencent must work hard to regain lost ground before their marketshare shrinks even further.
There is reason to believe that the slowdown in Chinese smartphone sales is starting to have a serious impact on the country’s economy. Counterpoint research analyst Paolo Pescatore said, “Chinese shipments are continuing their downward trend, down 14% YoY in Q4 and 10% MoM […] This implies that a meaningful slowdown may start catching up with mainland China’s economy late 2020 or early 2021.” this dip could be an indication of larger economic problems down the road.
Economists and businesspeople have long been divided over whether China’s unique Communist political system is a plus or minus for the country’s economy. With increased global competition, increasing levels of debt, and slowing domestic demand – all against a backdrop of a maturing society and diminished agricultural productivity – economists have warned about the potential for an impending economic crises in China. In recent months, these fears appear to be coming true: The harsh three-year long “zero-COVID” policy that disrupted businesses and dampened consumer confidence has finally ended; however, with widespread reports of more COVID-19 cases surfacing following the policy relaxation last December, economists are increasingly concerned about what this added pressure will do to China’s already slowing economy.
Alibaba announced that its shopping event, dubbed November 18 in China, generated USD 258.35 billion in sales. This is a decrease of 3% from last year’s total and the first time since its inception in 2009 that the company has omitted releasing a final figure for 2022. With Beijing trying to rein in excessive spending by citizens, it’s likely that consumers are choosing to save their money rather than splurge on items offered at this year’s event.
2018 was a tough year for Apple as the Chinese consumer market weakened. However, the company still managed to retain its dominance in the smartphone market thanks to its aggressive promotions and resilient demand in the high-end segment. The ascent of Huawei meanwhile comes to an end as U.S. sanctions cut off its access to high quality chipsets, leaving it behind Apple on performance and features in premium smartphones
Apple’s relationship with China is one of close cooperation and reliance on each other, but recent disruptions at Beijing-based factories have prompted reconsideration of Apple’s supply chain strategy. Disputes over working conditions, safety and wages are common in Chinese factories, which has led to widespread protests both at home and abroad. Mitigating the impact of these disruptions on production is a major challenge for Apple, requiring careful balancing between maintaining quality control and avoiding costly delays.
The influx of iPhone manufacturing in India is seen as essential to Apple’s plans to increase the output of its devices by 25%. This will help the Cupertino-based company better compete with low-cost rivals like Huawei and Oppo, which are currently leading in the smartphone industry.
China is the world’s second largest economy and it is predicted to overtake the United States as the world’s most populous country by 2027. With such a large population, there are a variety of different smartphone brands and models available to consumers. In Q4, Apple, Vivo, Oppo, Honor (which was spun off from Huawei following U.S. sanctions on the parent firm), and Xiaomi were the top smartphone brands in China by shipment.
