By Coco Feng
Smartphone shipments in China plunged 21.8 per cent year on year in May to 23.7 million units, the biggest decline this year, according to the latest data from a government-run research institute.
Foreign brands, including Apple鈥檚 iPhone, saw shipments drop by 9.7 per cent in May from a year earlier, outperforming local brands. Domestic manufacturers, including Huawei Technologies and Xiaomi, saw their shipments fall a combined 24.2 per cent, according to data released on Friday by the China Academy of Information and Communications Technology (CAICT), under the Ministry of Industry and Information Technology.
The May figures marked a downward shift from the previous three months, as monthly shipments from February to April all rose year on year. Smartphone shipments in February jumped 38 per cent year on year to 19.7 million units, although in January they had dropped 14.3 per cent to 27.2 million, CAICT data showed.
鈥淒omestic brands faced difficulties in the release of new models,鈥 the Shenzhen Mobile Communications Association said in a post on its official WeChat account on Saturday.
In May, Chinese brands launched 36 new models, down 25 per cent year on year. In comparison, the first five months saw 192 new releases from local brands, representing a growth of 9.7 per cent.
The weak consumption in smartphones could be for multiple reasons, including 鈥渆xtended replacement cycles鈥, a 鈥渕ore saturated market鈥 and the 鈥渆conomic environment鈥, the association said.
Since last year, the Chinese government has provided subsidies to encourage consumers to trade-in their electronic appliances and gadgets. This year, the programme 鈥 which is funded using hundreds of billions of yuan from the sale of ultra-long-term special government bonds 鈥 has expanded from product replacements to new purchases. For example, 15 to 20 per cent discounts are available on certain goods, including smartphones priced below 6,000 yuan (US$837).
Apple, whose products mostly do not qualify for the subsidy due to their higher cost, saw its shipments in China fall 9 per cent in the first quarter, according to market research firm IDC. It was the only top-five-ranked handset vendor to record a decline in the period.
However, Apple鈥檚 second-quarter sales grew 8 per cent, according to Counterpoint Research, thanks to the company鈥檚 aggressive discount campaigns. As a result, some of its models, like the iPhone 16 Pro, have been cheap enough to qualify for government subsidies.
In early June, the subsidies were paused by certain local governments, such as Jiangsu and Hubei provinces, casting uncertainty over a recovery in the consumer market. Late last month, state media the People鈥檚 Daily said that the central government would allocate 138 billion yuan to reinject into the subsidy programme in the third and fourth quarters