China smartphone market hitting 'saturation' point

Summary:Smartphone manufacturers will likely struggle to achieve sustainable growth this year as the Chinese market segment heads toward saturation point, reaching 90 percent penetration rate, predicts Gartner analyst.

China's smartphone market is heading toward saturation point this year, where manufacturers will likely struggle to achieve sustainable growth.

The Chinese smartphone market had enjoyed strong growth in recent years with sales accounting for over 82 percent of total mobile device sales in third-quarter 2013, said C.K Lu, principal analyst at Gartner, in a China Daily report. Speaking at a media briefing in Beijing, the analyst said the country's smartphone penetration rate may hit 90 percent this year. 

Lu warned: "The Chinese smartphone market is getting saturated. That means mobile phone companies will find it hard to maintain steady growth in China starting in 2014." He added, though, that mobile phone makers in the market are "really resilient" and will figure out ways to survive. 

According to Gartner estimates, about 443.5 million mobile phones will be sold in China this year, bringing the total number of mobile phones to over 1.07 billion. Some 395 million smartphones are projected to be sold this year, accounting for 31.5 percent of overall smartphone sales globally.

Lu noted that Chinese smartphone users choose products that offer value for money, have a strong brand, and provide good customer care. Citing a survey that found middle-income shoppers in China highlight brand and customer care as the top two IT purchasing factors, he said: "Chinese customers do not want just low-cost or inexpensive products . Vendors can no longer treat China as one of the emerging markets in which a focus on low price is enough to grow market share."

According to Gartner, mobile phones in the premium price segment will clock the highest growth in the country over the next five years. This sector is projected to account for 20 percent of overall sales, climbing to 32 percent in 2017. 

China is currently home to over 618 million Internet users , 80 percent of whom access the Web via their smartphones. 

Topics: Smartphones, China

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 15 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings. Eileen majored i... Full Bio

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