China's domestic smartphone shipments down 20.4% in 2020

12 January 2021 | Melanie Mingas

Cover

Domestic shipments of smartphones in China fell by 20.4% last year, according to figures from the China Academy of Information and Communications (CAICT).

CAICT said the number of handsets delivered to consumers across the country decreased from 372 million in 2019 to 296 million for full calendar year 2020. The decline was particularly pronounced in December when a 12.8% year-on-year drop was recorded by CAICT as phone makers shipped a total of 25.2 million smartphones to consumers across the country.

The trends emerged despite high hopes that the continued deployment of 5G across China, not to mention the launch of such models as the new iPhone SE and the Samsung Galaxy Fold 2, would buoy sales as the country tackled Covid-19.

The data showed that almost all smartphone brands experienced the downward trend, with only Huawei bucking it. However, that all changed in the second half of the year.

Domestic brands Oppo, Vivo, and Xiaomi Corp each saw steep shipment declines in H1 as Huawei's market share continued to grow. The trend reversed when Washington imposed trade restrictions on Huawei and now Oppo, Vivo, and Xiaomi are reportedly ramping up production in hopes of capturing the gap Huawei has left in the market.

Global dynamics

As early as January last year, warnings were issued about the impact of Covid on global smartphone sales and shipments. At the time, global smartphone shipments were on track to increase rapidly as more countries turned on 5G networks, however concerns were raised about the world's dependence on China as a manufacturing hub for devices.

By the end of the first quarter the largest year over year decline ever had been recorded, with worldwide smartphone shipments down 11.7% year on year, totalling sales of 275.8 million smartphones worldwide, according to International Data Corporation’s Worldwide Quarterly Mobile Phone Tracker.

By mid-year the impact of Covid had been quantified by Gartner, with Samsung, Huawei and Oppo identified as the worst hit.

Topping this table, Samsung’s smartphone sales declined 22.7% in Q1 last year, however the company maintained a leading market share of 18.5% for the period. At the time, Anshul Gupta, senior research analyst at Gartner, said: “Samsung’s limited presence in China and the location of its manufacturing facilities outside of China prevented a steeper fall.”

While that's good news for Samsung, it will do little to address the concerns of Huawei, Oppo, Vivo, and Xiaomi Corp.

Supply chain or sentiment?

The sales decline recorded by CAICT in 2020 was attributed to both supply chain issues and reduced consumer appetite caused by Covid-19 and its associated lockdowns.

However, it isn't the first decline in sales to be recorded. In 2019 shipments of smartphones decreased 4% on the previous year, again according to CAICT data, and it could be because consumers are waking up to the environmental impact of annual phone upgrades.