The entry-level mobile phone market in China has grown by 22% in Q1 for around a thousand yuan, but overall it has declined by 5%
According to research firm Counterpoint, the overall sales of China's smartphone market decreased by 5% in the first quarter of 2023. However, entry-level smartphones below $150 (approximately 1074 yuan) saw a year-on-year increase of 22% in sales and a market share of 12%. The agency stated that for many years, domestic mobile phone manufacturers have been actively promoting high-end products, hoping to seize Apple's market share in a higher price range. Nevertheless, the market share of Apple's iPhone continues to grow and reaches new highs.
Statistics show that in the first quarter of 2023, the share of mobile phones in the price range of $150-399 (RMB 1074-2858) was the highest, reaching 52%; 11% of mobile phones in the price range of $400-599 (RMB 2865-4290); Mobile phones account for 16% of the price range of 600~999 US dollars (RMB 4297~7155); The market share of ultra high-end mobile phones exceeding $1000 (7161 RMB) increased by one percentage point to 9%.
Counterpoint said that according to historical data, the market share of China's entry-level mobile phones increased significantly in 2020, when COVID-19 began to be popular, with a market share of 23%. At that time, the Chinese government implemented policies such as health codes and travel codes, which forced people to purchase smartphones to meet their travel needs. Afterwards, the proportion of sales of entry-level smartphones priced at or below 1000 yuan decreased year by year, until a rebound in 2023.
Research institutions have analyzed that with the easing of chip shortages and the decrease in raw material costs during the epidemic, the manufacturing costs of mobile phone manufacturers have decreased in the past few quarters, driving the popularization of 5G communication in the entry-level market. Counterpoint predicts that despite the sluggish macroeconomic situation, most users will not downgrade their purchases of smartphones below $150, but will extend the lifespan of their existing smartphones. Nowadays, the replacement cycle of smartphones for Chinese users has reached 40 months.
In addition, the agency predicts that the average selling price of smartphones will continue to rise by the end of 2023, due to the implementation of high-end strategies by Android phone manufacturers and an increase in the shipment volume of foldable screen phones. For future entry-level smartphones, the organization suggests that manufacturers should consider the characteristics of this consumer group more, equipped with eye protection screens, simple child restriction measures, and strict scrutiny of malicious behavior such as phishing and induced advertising, in order to attract more users.
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