China ships 34 mn smartphones, achieves 7.8% growth

China’s mobile phone shipments reached 38 million units in July 2014, of which smartphone shipments reached 34 million units up by 7.8 percent on a year-on-year (YoY) basis as per IDC China Monthly Mobile Phone Tracker.

On the other hand, feature phone shipments grew by 0.5 percent on a  MoM basis, and declined by 22.4 percent on a YoY basis.

According to James Yan, senior analyst, IDC China Mobile Phone Market Research, continued popularization of smartphones resulted  in a YoY growth this July, while the shrinkage of the 3G smartphone market and sluggish performance of China Unicom channels resulted in a MoM decline.

In comparison, China’s feature phone market stopped shrinking on a MoM basis, which can be attributed to the market performance in third-tier cities and below as well as the demand for the second mobile phone.

“The performance of different vendors varied in the smartphone market in July. Those vendors who depend more on operator channels failed to score satisfactory shipments, while those that took advantage of the open market realized better market performance during the summer vacation,” added James.

IDC believes the performance of the smartphone market is relatively stable in July and August. However, with the upcoming national holidays and the high volume distribution of low-end 4G devices, IDC expects the market to reach a sales peak in September.

IDC expects China smartphone market to show the following characteristics in 2H2014- improved sales of 4G smartphones, flattened user interface and simplified user experience and material quality.

IDC research shows that the supply of 4G chips, including low-end chips, will accelerate after August, when 4G mobile phones from major mobile phone vendors will be in abundant supply. Meanwhile, 4G mobile phones of SME vendors will also be massively available in the market. In addition, the peak shipment period of 4G smartphones will not be hindered by marketing budget cuts of the top three operators (China Mobile, China Unicom and China Telecom).

Flattened UI has two key implications: first, single-layer UI will minimize mobile phone users’ operating steps; second, pure and linear icon color will help users to concentrate on content rather than the form of UI.

As smartphone screen size approaches its limit, the shell material of mobile phones becomes another market differentiator, according to IDC. Magnalium and steel, with their improved hardness and touch, become the preferred choice of users and manufacturers. Although the material comes with metal cutting difficulties and network signal restrictions, smartphone ID will continue to adopt them.

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