China’s smartphone sector is speeding up its reshuffling to see large brands and suppliers take an ever-bigger share in a flattening market, said a report of China Securities Journal on Friday.
The global smartphone market had reached a level of saturation, product innovation would hardly propel its further expansion and the compound growth from 2018 to 2021 might stand at a mere one percent to two percent, according to a recent study by Counterpoint Research, a Hong Kong-based research firm focusing on mobile and technology products across the world.
This is also the case for China. In the first 11 months of 2018, smartphone shipments at home were down by 15.3 percent from a year earlier to 356 million units.
Considering a high level of user penetration, a longer upgrade cycle and the launch of 5G phones not to be seen until 2020, smartphone sales in China would remain as weak next year as in 2018, said an electronics analyst from a prominent Chinese securities company.
Amid the sales slowdown at home, large brands have been faring better than their smaller peers to take a bigger share of the market.
In the first 11 months of this year, the top ten smartphone companies accounted for 92.8 percent of shipments in China, up by 7.7 percentage points from a year earlier, according to data from the China Academy of Information and Communications Technology (CAICT).
The smartphone sector in China is undergoing a reshuffling, with the big Chinese names of Huawei, OPPO, Vivo and Xiaomi taking the lion’s share, said a senior manager of a Shenzhen-based mobile phone producer.
Large brands and companies with superior technologies would have more development opportunities while some small players would find it hard to take a turn for the better, said the above electronic analyst.
The drop in smartphone sales has taken its toll on some companies along the supply chain.
“The decreasing shipments are affecting our company’s business performance this year,” said a securities broker working for a mobile phone component supplier listed at the A-share market. This company had stopped recruiting new workers and expected no turnaround in business for the first half of 2019.
Another component supplier based in the southern province of Guangdong said it had scaled down its structural part business due to the negative changes at the smartphone market.
Still, strong performances were registered by industry leaders. The above electronics analysts pointed to polarized performances among players along the smartphone supply chain.
As the supply chain experiences continuous adjustments, leading players are gaining a larger market share and there may be only two or three giants left for each specific field of business, he said.
A senior manager of a prominent smartphone original design manufacturer (ODM) said his company had already received too many orders to accept new ones. “Last year, there were only 1,400 to 1,500 people in one of our R & D centers and this figure had risen to 2,000 this year,” said this senior manager.
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