China’s smartphone sales dropped by more than a quarter in the first three months of the year, as the domestic market continues to show signs that it is nearing saturation after years of breakneck growth.
According to data released by the China Academy of Communications and Information Technology (CACIT) – a body directly under the Ministry of Industry and Information Technology – 81.87 million smartphones were sold in the first quarter, down by 27 percent compared to the year before.
The trend marks a continuation of a slump in sales that began at the end of 2017, with December year-on-year sales down by 33.2 percent. The whole of 2017 saw smartphone shipments fall by 11.6 percent, according to CACIT.
The data suggests that the Chinese smartphone market is reaching saturation point, with 772 million people using such devices in the country as of last year.
Smartphone companies are now moving to alter their strategies ahead of this new change in the domestic market, with 8.4 percent fewer new models being registered from January to March than the same period last year.
As well as the drop in sales, domestic smartphone makers also saw their grip on the Chinese market loosen slightly in the first quarter, as foreign brands took up 13.2 percent of market share, compared to 11.2 percent in the first three months of 2017.
With the Chinese government and companies like Huawei and ZTE pumping billions of yuan into research on 5G technology, the launch of the first 5G network is expected at some point in the next two years, with CNBC reporting in March that China “has the edge” in developing the technology.
Many consumers and smartphone manufacturers are likely awaiting further news on when 5G will launch before developing and buying new models.
China Mobile plans to launch the largest test of the new technology at some point in 2018, while AT&T and Verizon in the US are planning to roll out 5G in several cities this year and next.