China's Smartphone Market Dropped 7.5 Percent in 2019

366.7 million smartphones were shipped in China in 2019, according to IDC. This was a 7.5% decline from a year ago, resulting from market saturation as well as a challenging economy. In 4Q19, 86.2 million units shipped, down 15.6% year-on-year due to both Huawei’s large inventories as well as consumers waiting for cheaper 5G smartphones. This was the market’s 11th consecutive quarterly decline and its 3rd consecutive annual decline.

“In 2019, vivo was able to surpass OPPO for the number two spot, as the latter struggled to refine the positioning of its Reno series, while the former did well with its new mid-range iQOO and S series as well as 5G models,“ says Will Wong, Research Manager for Client Devices at IDC Asia/Pacific. Wong adds, “In 4Q19, both Huawei and Apple gained share over the same period one year ago as a result of their strong branding. Nevertheless, the Wuhan coronavirus could have a Black Swan effect on the market in the first half of 2020.

Huawei saw high rise in shipments in the last quarter and specially in the whole year. Their growth was 10,5% in the quarter and 33,9% in the full 2019. vivo captured second place with 27,4% and 12,5% decline. OPPO was third with the 30,5% decline in the quarter and 20,4% in 2019. Apple climbed to the fourth position in the quarter with 4,8% growth, but was down 9,7% in the full 2019 capturing the fifth position. Xiaomi was fifth in the period and declined 12,5%, while in 2019 it was the fourth most selling brand with 21,2% decline.

The coronavirus outbreak impacted the Lunar New Year’s shopping season in late January and is also expected to have adverse effects in the following months. IDC expects China’s smartphone shipments to drop more than 30% year-on-year in 1Q20, not to mention create uncertainty in product launch plans, the supply chain, and distribution channels, in the mid and long term.

“5G handsets will require lower pricing, better 5G network coverage, and attractive use cases to create a good value proposition for consumers. The innovation and 5G-related offerings from the whole ecosystem will play an important role in stimulating the demand for 5G products,“ says Xi Wang, Research Manager for Client System Research at IDC China.