China to account for half of APAC smartphone shipment

By 2016, China will account for the majority of smartphone shipments to Asia-Pacific due to the rise in first-time smartphone users over the next year as well as the decline in feature phone manufacturing and usage.

According to a Canalys report released Tuesday, the Asia-Pacific annual smartphone shipment will reach 594 million by 2016, remaining the world's largest region in terms of volume. China will account for almost half of all shipments in the region and nearly a quarter of the world's smartphones in 2016.

There will be a substantial increase in the number of first-time smartphone users in China over the next 12 months, while feature phones will continue to decline, Rachel Lashford, managing director for mobile and Asia-Pacific at Canalys, said in the report. Smartphone sales will also extend beyond tier-one and tier-two cities in the country, she added.

China's domestic feature phone vendors are also quickly moving their businesses to smartphones, supported by low-cost offerings from chipset providers such as MediaTek, Spreadtrum and Qualcomm's QRD.

Strong demand can be expected from local Chinese vendors which sell in both operator and open channels, observed Nicole Peng, Canalys' research director for China. According to the analyst, chipset vendors are reporting growing momentum in 2.5G smartphone offerings.

Peng added in the Canalys report that for less developed areas where 3G coverage is limited, 2.5G smartphones provide advantages in cost and battery life. They are becoming popular with consumers, especially where prices are already close to those of feature phones, around RMB500 (US$78), and in China's tier-three and tier-four cities which have been traditional strongholds for feature phone vendors, she explained.

"Local vendors will use their longstanding relationships with open channels and their established infrastructure to distribute smartphones, with or without operator subsidies, over the next few years," Peng noted.