China smartphone shipments shrink after 2 years of growth - IDC

BEIJING Thu Feb 13, 2014 2:14pm IST

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Women use their mobile phones to take pictures of the snow at Lujiazui financial district of Pudong, in Shanghai February 10, 2014.

Credit: Reuters/Aly Song

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BEIJING (Reuters) - The explosive growth of smartphone sales in China, the world's biggest smartphone market, has come to a halt as unit shipments declined for the first time in more than two years, data firm IDC said on Thursday.

Shipments of smartphones in China fell 4.3 percent to 90.8 million in the fourth quarter from 94.8 million units in the previous one, the first drop-off since the second quarter of 2011, according to IDC.

"The world has increasingly looked to China as the powerhouse to propel the world's smartphone growth and this is the first hiccup we've seen in an otherwise stellar growth path," said Melissa Chau, a senior research manager with IDC.

"We are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year's model."

Apple Inc's (AAPL.O) deal with China Mobile Ltd (0941.HK) and the country's rollout of high-speed 4G mobile networks will encourage adoption of 4G-compatible smartphones and help shore-up growth, according to IDC.

Growth however, is shifting to other emerging markets, IDC said, as China's smartphone market becomes increasingly competitive.

Chinese smartphone manufacturers like Lenovo Group Ltd (0992.HK), which acquired Google Inc's (GOOG.O) Motorola handset unit for $2.9 billion last month, Huawei Technologies Co, ZTE Corp (000063.SZ) (0763.HK) and Xiaomi Tech are already chasing overseas expansion.

(Reporting by Paul Carsten; Editing by Matt Driskill)

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