Smartphones Account 62% Mobile Connections in China

Smartphones-Account-62%-Mobile-Connections-in-ChinaSmartphones account for 62 percent of mobile connections in China according to a report by GSMA Intelligence, the research arm of the GSMA.

The new study, ‘How 4G Devices in China Are Transforming the World’s Largest Mobile Market’, finds that smartphone adoption in the country (as a percentage of connections) had reached 62 percent by the end of Q1 2015 and this is higher than European average of 55 percent.

The rapid adoption of smartphones across urban areas in China has been fueled by the increasing popularity of both international device brands, such as Apple’s iPhone, and devices produced by a growing number of domestic smartphone vendors. 4G models are now the primary driver of smartphone sales, which is accelerating China’s migration from 3G to 4G networks.

“Almost half of the Chinese population now account for China’s 1.3 billion mobile connections and 62 percent of these connections are smartphones,” said Hyunmi Yang, chief strategy officer, GSMA.

According to GSMA Intelligence, there were 672 million unique mobile subscribers in China in Q1 2015, accounting for 48 percent of the population. Smartphones accounted for 805 million (62 percent) of China’s 1.3 billion mobile connections in Q1 2015, a figure predicted to reach 913 million (68 percent) by the end of the year.

However, growth in smartphone connections has slowed in recent quarters as the market matures, suggesting that the majority of current smartphone sales are now being driven by replacements rather than new connections.

3G connections in the country have begun to decline as 3G smartphones are replaced with 4G models. The study predicts there will not be any new non-4G models released by Chinese smartphone vendors after 2016, with many having taken this step already.

It is forecast that 4G connections in China will reach one billion by 2020, representing about two-thirds of the market by this point, up from 100 million (8 percent) at the end of 2014. Local mobile operators are also driving the move to 4G by subsidizing the cost of an increasingly wide range of 4G devices via their retail channels.

According to the study, the average price of a smartphone in China is $175. The average price of a smartphone from a domestic Chinese vendor is $150, almost half the price of a smartphone from an international brand at $285. However, the study finds that major Chinese vendors such as Xiaomi and Huawei are increasingly releasing new models that target mid-to high-end market segments.

“Chinese smartphone vendors such as Xiaomi, Huawei and Lenovo are benefiting from a rich local smartphone manufacturing and design ecosystem, which is allowing them to compete effectively with foreign smartphone brands such as Apple and Samsung,” added Yang.

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