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Huge 4G Smartphone Upside Growth Potential in China

According to the latest market study by Canalys, 279.4 million smartphones were shipped worldwide in Q1 2014, representing growth of 29 percent over Q1 2013, but a decline of 5 percent on the seasonally strong Q4 2013.

Once again, the Google Android ecosystem was the dominant force in the global marketplace. 81 percent of smartphones were Android devices, with iOS and Windows Phone accounting for 16 percent and 3 percent respectively.

Samsung remained the leading vendor with a 31 percent share, ahead of Apple at 16 percent. Half of the top 10 vendors were Chinese companies: Huawei (third), Lenovo (fourth), Xiaomi (sixth), Yulong (eighth) and ZTE (ninth). China, the world’s largest smartphone market, accounted for 35 percent of shipments, substantially ahead of the U.S., which managed just 12 percent.

97.5 million smartphones shipped in China alone in Q1, though this was down 3 percent sequentially.

"The Chinese market is undergoing major change and maturing quickly, with smartphones making up 93 percent of total mobile phone shipments in Q1 2014," said Nicole Peng, research director at Canalys.

4G will be the biggest growth driver for 2014 in the Chinese market, pushed heavily by China Mobile, which holds a dominant share of the 3G market but still has 70 percent of its subscribers using 2G mobile services.

Besides, the upside growth potential for 4G in China is huge -- just 16 percent of smartphones shipped in China were 4G handsets, compared with 34 percent globally and 80 percent in the U.S. market.

For the first time, all four BRIC countries appeared among the top 10 smartphone markets, reflecting the shift in momentum toward the new growth markets that has been occurring over the last few years. With China first, India was the third largest market, accounting for a 5 percent share of global shipments.

Brazil and Russia were in eighth and tenth place respectively, each at 2 percent. Combined, the BRIC countries saw shipments of 123.4 million units, equivalent to 44 percent of the global total. New growth and emerging markets represent a collective opportunity that now far outweighs mature markets. Q1 smartphone shipments represented 65 percent of the wider mobile phone market.

Smartphones with 5" and larger screens grew 369 percent -- a substantially greater rate of growth than the overall market. Worldwide, they represented just over a third of shipments (34 percent), and in Greater China the figure hit 39 percent, and 43 percent in Asia Pacific.

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