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(IT-NEWSWIRE.COM, June 16, 2015 ) China is the world’s largest smart phone market, but has experienced a decline in 2014, due to slower domestic economic growth and already high penetration of smart phones, presenting some kind of saturation on the market. Smart phone shipments reached 312 million units in China during Jan.-Oct. 2014, sliding by 10.4% compared with the same period in 2013, and is expected to arrive at 398 million units throughout the year 2014, down 9% against 2013.
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It is projected that China’s economy will grow much slower in 2015, probably more dramatically than that in 2014. The Chinese smart phone market is estimated to fall by 13% in 2015 with 346 million units shipped.
Entering the year 2014, Chinese smart phone market has undergone dramatic changes, reflected by surprisingly rapid development of 4G and substantial increase in market share of domestic vendors and retreat of foreign brands. On the one hand, 4G mobile phones held only 7.4% of the Chinese mobile phone market in Feb. 2014, but the figure rose to 63.3% in Oct., compared with 83.8% in Feb. and 21.3% in Oct. for 3G mobile phones. On the other hand, local vendors excel at hype-style marketing, which is very effective to Chinese consumers. Local brands, especially Xiaomi, are far superior to foreign brand in the aspect of marketing tools.
Moreover, the market concentration was greatly enhanced. Top ten smart phone vendors together took up less than 70% market share in 2013, but the figure rose to over 85% in 2014, and is expected to exceed 90% in 2015, further squeezing the living space of small vendors. Fourth, Internet sales channel changed rules of market game. Smart phone sold over the Internet made up only 10% in 2013 but more than 20% in the third quarter of 2014. Furthermore, as operators cancelled subsidies, mobile phone vendors are stepping up their efforts on Internet sales.
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With regard to industry, as the resolution of mobile phone display rises quickly, investment in LTPS is hot. By the end of 2016, there will be at least five G6 LTPS fabs and one G5.5 LTPS fab running in China, including G6 of AUO in Kunshan, BOE in Ordos and Chengdu, China Star in Wuhan, Foxconn in Chengdu, and G5.5 of Tianma in Xiamen. These production lines will cause severe oversupply in low-end market and sharp price decline; in high-end market, JDI, Sharp and LG Display are still able to make high profits by relying on In-Cell.
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