Electronics

After ten years, China's mobile phone market experienced the largest decline - the overall shipment volume in 2022 was less than 300 million units; The sales data is also not optimistic. According to Huacheng Import and Export Data Observation, China's smartphone sales fell by 14%, falling for five consecutive years.

Chinese mobile phone companies are gloomy: Huawei dropped out of the list, Xiaomi's market share fell by 19%, Vivo fell by 23%, and OPPO fell by 27% to become the largest brand. In addition, according to the recommendation index of Chinese customers to various brands of mobile phones in 2023 by the rating agency Chnbrand, OPPO fell to the sixth place and became the "crane tail" in the list of well-known mobile phone manufacturers in China.

2022 is the most difficult period in China's mobile phone market in the past decade. Many mobile phone dealers try to open other businesses to relieve pressure. With the optimization of epidemic prevention policy, the industry expects the market to recover as soon as possible, and the sales promotion data during the Spring Festival boosted confidence. However, after the Spring Festival, the problems such as "market saturation", "slow innovation", "performance surplus" and "revenue decline" remain the challenges facing the mobile phone market.

The largest drop in shipments

According to Huacheng Import and Export Data Observation, in the fourth quarter of 2022, the shipment volume of China's smartphone market was about 72.92 million units, down 12.6% year on year. In 2022, the shipment volume of China's smartphone market was about 286 million units, down 13.2% year on year, the largest drop in history.

After 10 years, the shipment volume of China's smartphone market fell back to less than 300 million units. Xiang Ligang, president of the Information Consumption Alliance, told reporters that the COVID-19 has had some impact on the industry. "The epidemic has led to a reduction in people's income, affected shopping sentiment, had a negative impact on consumer confidence, and further delayed the pace of consumers' replacement of smart phones."

"But the epidemic is not the decisive factor." Guo Tianxiang, a senior analyst at IDC China, told reporters that in recent years, the sales volume of China's mobile phone market has been declining, for three fundamental reasons. "First, the technology development has reached a bottleneck, second, the product innovation is insufficient, and third, the mobile phone centralization status has declined."

The view is that the homogeneity of the mobile phone market is serious, and other smart terminals are developing rapidly, and the popularity of smart appliances, smart speakers and other devices is increasing, which has weakened the importance of mobile phones, so the market demand is difficult to be as strong as before.

In addition, the upgrading of mobile phone technology drives the high-quality development of the industry, the service life of individual products is significantly increased, and the failure rate is reduced. In addition, the lack of fundamental innovation makes it difficult to attract consumers to buy. Therefore, consumers' desire to change phones is generally not strong.

According to Huacheng Import and Export Data Observation, Vivo ranked the first in domestic smartphone shipments in 2022, with a market share of 18.6%; Glory's total annual shipments rose to the second place, with a market share of 18.1%; OPPO ranked third with Apple, with a market share of 16.8%; Xiaomi ranked fifth with a market share of 13.7%.

"Vivo has broadened its online and offline brand layout and strengthened its product line diversification, which has played a certain role in promoting its own development," Guo Tianxiang told reporters.

"Vivo's products meet the needs of consumers, and its price is competitive." Xiang Ligang believes that Vivo's products are relatively popular and have maintained a relatively important position in the low-end market. "In 2022, many mobile phone companies hit the medium and high-end market, such as Xiaomi, but it is difficult to make a fundamental breakthrough in products and technology, which led to the general poor performance of the high-end market, and some brands also lost the original medium and low-end market, so the market share of the whole year decreased significantly."

It is noteworthy that among the top five mobile phone manufacturers in China's mobile phone market in terms of shipment volume in 2022, only the glory growth rate was positive, reaching 34.4%. The view is that since the split with Huawei, the data of Glory in 2022 began to gradually return to normal, and the initial market base was low, so the relevant data showed high.

"Glory has entered a period of rapid growth, but it is still in the recovery stage as a whole. It may maintain growth in 2023, but maintaining the growth momentum in the future development is the key to the development of Glory." Guo Tianxiang said that Glory has many highlights this year, such as the upcoming Magic 5 series and other flagship strategies.

Innovation and going to sea become the key

"It is more and more difficult to sell mobile phones." A mobile phone brand dealer told reporters that in order to survive 2022, the team had done shop leasing, printing and copying, and even sold firecrackers, couplets and other holiday supplies during the Spring Festival.

"In the next few years, there will be a lot of pressure for the 'recovery' of China's mobile phone market, and the market space will increase slowly." Guo Tianxiang said that the overall shipment volume of China's mobile phone market will increase slightly in 2023, or reach 290 million units; It will recover to 300 million in 2024. However, after 2025, the overall market of mobile phones in China will tend to be stable, and the relevant data will not fluctuate too much.

At present, the medium and low-end smartphone market in China has entered the platform period, and it is difficult to achieve a breakthrough in a short time. Although there is room in the high-end market, it is difficult to guarantee the shipment volume. From the perspective of consumer side switching, China's mobile phone market has entered a period of saturation. Although the dividend of consumer population and the growth of per capita disposable income will cause consumers to change planes in advance, this does not mean that the market will increase.

Since the peak of China's mobile phone market in 2017, the domestic mobile phone market has become increasingly competitive, and the market has been saturated to some extent. "Technological innovation" and "overseas layout" have become the first two breakthroughs targeted by domestic mobile phone manufacturers.

Why do consumers buy new mobile phones?

"For example, the emergence of new technologies makes consumers feel new and refreshing. In order to pursue this new feeling, consumers will switch mobile phones." Xiang Ligang believes that China needs to build high-quality mobile phone brands, and innovation is the leader. "I think China needs all kinds of innovation to seek a premium breakthrough."

The underlying logic of China's consumer market is undergoing tremendous changes. While technological innovation has lost the moat for one group of enterprises, it has also provided the strongest support for another group of enterprises. There is even a view that the innovation ability of an enterprise will determine the life and death of the enterprise.

Innovation is the core of competition in the high-end mobile phone market, and it is also an inevitable battle for Chinese mobile phone enterprises. How to achieve high-end breakthrough? The view is that product innovation and user word of mouth become the key.

"High-end brands have been accumulated from generation to generation, and there is no shortcut. For example, Huawei has built its own strong product reputation for several years, but in the complex international situation, how to ensure the shipment volume has become a problem. If Huawei's problem can be solved, China's mobile phone market will usher in a wave of innovation dividends." Xiang Ligang said.

The overseas market is also a breakthrough in the competitive strategy of domestic mobile phone stores. In 2016, India's mobile phone users exceeded the 1 billion mark and became the second largest mobile communication market in the world, second only to China. In recent years, the market competition in emerging countries has been upgraded, and global mobile phone manufacturers hope to strengthen the business structure optimization with the help of overseas key customers to achieve long-term and stable business development, Huacheng Import and Export Data Observation Report.

"Overseas, many emerging countries have great market development potential and huge business opportunities, such as India and South Asia, where the population base is large and the population structure is relatively young, and the demand for electronic products is at the right time. In addition, with the slow development of technology, some even 4G communications have not been popularized, and are basically in the active phase of switching, which is a good choice for domestic mobile phone manufacturers." Guo Tianxiang said.

Wang Hao, a researcher at the Institute of Informatization and Industrialization Integration of the China Academy of Information and Communications, said that from the perspective of overall scale and promotion efforts, China's mobile phone brand is in a mainstay position in the international market - not only has a large market scale in more than 100 countries in the world, but also makes an important contribution to promoting some underdeveloped countries and regions to enter the era of mobile Internet.

The view is that the demand of overseas mobile phone industry is large, especially some developing countries and regions have similarities with the development process of China's mobile phone market, which is convenient for China's brand development and market segmentation. In addition, Chinese mobile phone brands have been deeply involved in overseas markets since around 2014. After years of layout, they have gained rich experience and have gained strong development momentum in multinational markets.