Smartphone production in mainland China continued to decline in the first eight months of this year, although analysts expect Huawei Technologies’ release of new 5G handsets in spite of U.S. sanctions to help reinvigorate the industry’s biggest market. The country manufactured 679 million smartphones from January to August this year, down 7.5% from the same period in 2022, according to data published by the Ministry of Industry and Information Technology (MIIT).
Smartphone sales have also slowed down. Total unit volume fell 4% year-on-year in the first eight months of 2023, according to market research firm Counterpoint. In the quarter to June, China’s smartphone consumption recorded its lowest second-quarter sales since 2014, as macroeconomic headwinds took a toll on consumer sentiment, Counterpoint said in a report published in July. It indicated a “relatively weak performance” for handset sales during China’s 618 shopping festival last June.
The sluggish performance of the world’s largest smartphone market reflects low consumer sentiment amid the country’s bumpy post-pandemic economic recovery, which has been weighed down by the property crisis, record high youth unemployment and weak confidence in the private sector. The market’s outlook for the rest of 2023, however, could improve on the back of the new smartphones released by Huawei and Apple, as well as the coming winter sales season, according to Ivan Lam, Senior Research Analyst at Counterpoint. Shenzhen-based Huawei’s Mate 60 Pro series 5G handsets have “brought great confidence” to China’s smartphone market, Lam said. Counterpoint has estimated sales of Huawei’s latest 5G smartphones to reach between five to six million units by the end of this year. That optimistic forecast, according to Lam, comes on the back of Huawei’s large domestic base of HarmonyOS users, referring to the mobile operating system alternative to Android. Lam added that Huawei’s new 5G devices are expected to not only attract new customers, but draw back former users who had switched to other smartphone brands in the past few years.
In the first eight months of this year, Huawei’s smartphone sales already saw a 41% jump from the same period last year, according to Lam. “Huawei has successfully recovered from a strained supply chain, and has returned to its normal rhythm for product launches,” he said, as reported by the South China Morning Post.
