China Smartphone Market Declines 14 Percent in 3Q20

Smartphone sales in China recovered slowly with 6% quarter-on-quarter growth in 3Q20, according to Counterpoint Research. However, the country’s smartphone market still saw 14% year-on-year decline and it was yet to recover to the pre-COVID level.

According to the National Bureau of Statistics of China, China’s economy grew by 4.9% in Q3, recovering from a contraction of 6.8% in Q1 and a mild growth of 3.2% in Q2. Nevertheless, the domestic consumption in China remained weak despite the sequential perk-up, along with a worse unemployment rate. During the post-pandemic recovery period in Q3, the overall market demand in China remained stagnant despite smartphone OEMs’ efforts to stimulate sales.

Huawei continued to lead the market with 45% share in the quarter. However, attacked by the escalated US trade ban since mid-September, Huawei has suffered severe component shortage and its sales have started to decline. The iPhone 11, grabbing near 5% market share, remained the best-selling smartphone model in China during the quarter. Nevertheless, the overall sales volume of Apple dropped 7% YoY, impacted by the deferred debut of the iPhone 12 series.

Xiaomi’s share increased to 11% in Q3, outperforming the market with 8% YoY growth in sales volume. Driven by the aggressive promotions during the OEM’s decennial celebrations in August, Xiaomi became the only major OEM that achieved positive YoY growth in Q3. Sales of OPPO and vivo declined YoY but saw an increase from the last quarter.

From the start of the second half this year, Chinese OEMs have been active in launching price-for-value 5G smartphones in the sub-$300 price band. By the end of September, Chinese telecom operators had built 690,000 units of 5G base stations, fully covering the country’s prefecture-level cities. Stimulated by efforts from these industrial players, 5G smartphone sales in China continued to surge. In Q3, over 50% smartphones sold in China were 5G enabled, compared to 33% in Q2 and 16% in Q1. With the 5G iPhones lining up across channels in Q4, this share will rise to near 70% by the end of 2020.