China smartphone market drops to 10-year low in 2022 TechCrunch

After a decade of frenzied growth, China’s smartphone market is picking up speed as COVID-19 shakes the world’s second-largest economy.

According to research firm Counterpoint, the country’s smartphone shipments fell 14% year-on-year in 2022, hitting a 10-year low. According to Canalys, this is also the first time that China’s phone sales have fallen below 300 million units in 10 years. Even in December, which has historically seen sales skyrocket, China recorded a 5% drop in smartphone sales compared to the previous quarter.

Strict “no COVID” policy lasts three years interrupted business and weakening consumer confidence, coupled with macroeconomic difficulties, have put an end to China’s years of double-digit growth. Trouble mounting when abrupt easing of COVID-19 restrictions in early December led to a spike in infections, adding to the pressure on a weakening economy. Last year, China’s GDP grew by 3%, the slowest in decades except 2020.

Alibaba’s annual shopping season in November offered some clues to China’s waning spending power. The event, often compared to Black Friday and seen as a bellwether for domestic consumers’ appetites, did not disclose its final sales figure for 2022 for the first time since its founding in 2009.

There is a winner in these bleak times. According to Canalys, Apple ended the year with an all-time high market share of 18% thanks to “robust promotions” and “resilient” demand in the premium segment in China. Its rise also coincided with Huawei’s decline in the premium phone market since then. US sanctions have cut off access to high-end chipsets.

Apple’s relationship with China remains a delicate one. The country is not only one of the largest markets but also the manufacturing backbone that has created the most valuable company in the world today. However, over the past few years, COVID-related disruptions such as A rare worker protest at a large Foxconn factory brought production to a halt, has prompted the hardware giant to rethink its supply chain strategy. The Wall Street Journal report In early December, Apple was looking to move some of its supply chain out of China to other parts of Asia, including Vietnam and India.

In particular, India is expected to play a larger role in Apple’s supply chain as the company plans to expand its manufacturing capacity in the country to produce 25% of all iPhones by 2025According to analysts at JP Morgan.

In Q4, the top smartphone brands in China by shipments were Apple, Vivo, Oppo, Honor (separated from Huawei following US sanctions against the parent company) and Xiaomi.

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