iSuppli predicts handset shipment slowdown for China

February 12, 2016

China-based mobile phone manufacturers shipped a total of 229 million units in 2015, representing a dramatic growth rate of 76.2% compared to the 130 million that were shipped during 2006. However, this growth is expected to hit a serious slow down in 2016, falling to around 19.7% with total shipments reaching 274 million units.

These figures were released by research firm iSuppli. Their senior analyst for China research, Keven Wang, said of the findings: “There were two major drivers for the fast growth in China’s handset industry during 2015.

“One was the continuous increase in domestic demand from first-time buyers and the replacement market.

“The other factor was the significant increase in export shipments from Chinese handset manufacturers. Domestic OEMs, such as Huawei and ZTE, doubled their export shipments.

“Furthermore, domestic gray market suppliers shipped millions of handsets to developing countries.”

The Chinese domestic mobile handset market for 2015 totaled 200 million units, made up of 150 million licensed handsets and 50 million gray-market handsets.

iSuppli also predicts that rising house prices and major stock market fluctuations in China will damage consumer confidence this year. Furthermore, the only popular new handset features that could drive sales are GPS and mobile-TV functionality. Because phones with these features have higher average selling prices, iSuppli predicts that they will continue to be niche products for the time being.

iSuppli anticipates that these two factors will result in severely limited growth for the replacement handset market during 2016.

However, iSuppli is predicting that sales of EDGE and TD-SCDMA compatible handsets will see large increases in 2016 as they become more widely available.