Smartphone shipments in China slumped 22% in the first 10 months of the year as the market has been plagued by cooling domestic demand and disruptions in the manufacturing supply chain. A total of 214.5 million smartphones were shipped in the country from January to October this year, down from 275.3 million units in the same period last year, according to the China Academy of Information and Communications Technology (CAICT), a scientific research institute under the Ministry of Industry and Information Technology (MIIT). In October alone, the shipment volume in the world’s largest smartphone market fell 27.2% year-on-year to 23.8 million units. That total, however, was up 20% from September, when the volume reached 19.8 million units. The latest CAICT figures reflect the Chinese smartphone market’s struggle to recover from sluggish demand, as the flagging domestic economy and strict mobility restrictions under the zero-Covid-19 policy prompted more consumers to delay making new purchases. It remains uncertain how much demand would pick up after the central government relaxed Covid-19 controls earlier this month.
While consumer confidence and the economy in China would take long to recover, the decline in the country’s smartphone market is expected to narrow next year and a rebound is likely to take place in 2024, according to tech research firm IDC in a report published earlier this month. Slowing consumer demand has already prompted major smartphone vendor Xiaomi Corp to conduct a new round of lay-offs affecting nearly 10% of its workforce, after cutting more than 900 jobs earlier this year.
China’s retail sales saw a sharp decrease in November, down 5.9% from a year earlier, according to the National Bureau of Statistics (NBS). That figure missed expectations, falling from minus 0.5% in October to the lowest reading since dropping to minus 6.7% in May and minus 11.1% in April.
Even Apple – which seized a record 25% share of China’s smartphone market in October, according to Counterpoint Research – has been scrambling to fix problems in its manufacturing supply chain on the mainland. Production of its popular iPhone 14 Pro models at Foxconn Technology Group’s plant in Zhengzhou, the capital of Henan province, has been hit by severe disruptions, including worker protests and the departure of tens of thousands of employees because of a Covid-19 outbreak at the facility.
Apple was estimated to ship 20% fewer smartphones this holiday quarter than previously expected because of its manufacturing issues in China, according to Kuo Ming-chi, Analyst at TF International Securities, the South China Morning Post reports.
