Smartphone saturation in China forcing manufacturers to look abroad

Smartphone saturation in China forcing manufacturers to look abroad

Lenovo's acquisition of Motorola is a consequence of Chinese manufacturers having to expanding overseas operations in light of market saturation in the Asia/Pacific region, according to IDC.

China has remained as the top smartphone market in the world despite its first decline in nine quarters. According to IDC, China shipped 90.8 million units in Q4 compared with 94.8 million in the previous quarter, resulting in a drop of 4.3%. Saturation in the market is forcing manufacturers to look further afield, but other factors such as 4G handsets not reaching the market until Q1 2014 and the increasing popularity of phablets has also had an impact. IDC also forecasts that more Chinese smartphone makers will try their luck away from their home market in the future.

IDC Asia/Pacific senior research manager, Melissa Chau, said: ‘Chinese players are getting hungrier to turn themselves into international rather than China-only brands. Nowhere is this more clear than Lenovo’s acquisition of Motorola’s handset business, and even smaller players, some unknown to much of the world, like Oppo, BBK, Gionee and of course Xiaomi are ramping up on international expansion.’

‘The world has increasingly looked to China as the powerhouse to propel the world’s smartphone growth and this is the first hiccup we’ve seen in an otherwise stellar growth path. There will certainly be future drivers to unlock further smartphone growth in China, as Apple demonstrated with its China Mobile tie-up in January, and the massive device migration to come of phones only supporting 2G and 3G networks to devices supporting 4G networks. However, we are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year’s model.’

Elsewhere in the region, India jumped to number three in the rankings of largest worldwide smartphone markets, leaping above Japan, the UK, South Korea, Germany and France, all of which were above India in 2012.


Please wait...

Please write code to prove you're human