Skip to main content

Smartphone Market in China is Reaching Saturation

Worldwide smartphone shipments are expected to grow by 11.3 percent in 2015, which is down from 27.6 percent in 2014, according to the latest global market study by International Data Corporation (IDC).

While overall smartphone growth will continue to slow as mature markets reach saturation, some markets will experience robust growth in 2015 and beyond. As a result, worldwide shipment volumes are forecast to reach 1.9 billion units annually by 2019.

IDC now expects 2015 to bring two notable milestones. First, they predict that this will be the first year in which China's smartphone growth, forecast to be 2.5 percent in 2015, will be slower than the overall worldwide market.

Second, Google Android smartphone growth is also expected to be slower than the worldwide market -- now forecast at 8.5 percent in 2015. IDC believes both trends will persist throughout the forecast period, which now goes out to 2019.

"Smartphone volume still has a lot of opportunity in the years to come, but two fundamental segments driving recent years' growth are starting to slow," said Ryan Reith, program director at IDC.


As reported earlier in May, smartphone shipments in China declined year-over-year in the first quarter of 2015, showing that the largest market in the world has reached a level of maturity where further growth will be harder to achieve.

IDC believes that this has implications for Google because China has been a critical market for Android-based smartphone shipments in recent years -- accounting for 36 percent of total volume in 2014.

That said, as Chinese OEMs shift their focus from the domestic market to the next high-growth markets, they will face a number of challenges, including competition from local brands.

In contrast to the overall market, IDC now expects Apple iOS smartphones to grow by 23 percent in 2015 and remain above worldwide market growth rates throughout the forecast period to 2019.

However, IDC believes a sizable portion of the recent Google Android gains were from those people who abandoned their old iPhone models for a more affordable larger screen Android smartphone. This may be a win-back opportunity for Apple. But the relatively high-price of new iPhones will remain a significant hurdle for Apple to overcome.

Popular posts from this blog

The $150B Race for AI Dominance

Two years after ChatGPT captured the world's imagination, there's a dichotomy in the enterprise artificial intelligence (AI) market. On one side, technology vendors are making unprecedented investments in AI infrastructure and new feature capabilities. On the other, there's measured adoption from customers who carefully weigh the AI costs and proven use case benefits. Artificial Intelligence Market Development The scale of new investment is significant. Cloud vendors alone were expected to invest over $150 billion in capital expenditures in 2024, with AI infrastructure being the primary driver. This massive bet on AI's future is reflected in the rapid growth of AI server revenue. Looking at just two major players - Dell Technologies and HPE - their combined AI server revenue surged from $1.2 billion in Q4 2023 to $4.4 billion in Q3 2024, highlighting the dramatic expansion. Yet despite these investments, the revenue returns remain relatively modest. The latest TBR resea...