China's smartphone shipments overtake feature phones earlier than expected

Low-priced smartphones have helped drive handset sales in the country

China's smartphone shipments surpassed those of feature phones for the first time ever during the second quarter, as low-price smartphone devices continued to help drive sales in the country's mobile handset market, according to research firm IDC

The country's mobile phones shipments in the second quarter reached 87 million. Of those shipments, 51 percent, or 44.4 million, were for smartphones, according to data provided by IDC on Friday.

Smartphone shipments were originally forecast to overtake feature phones only by 2013, said Teck Zhung Wong, an analyst with the research firm.

"The market has really exploded," he said. "People are really buying into smartphones and prices have come down quite a lot. Mainly due to lower prices, more devices can be bought at a cheap price, but still perform very well."

Driving most of China's smartphone sales are those priced at 1000 yuan (US$158) and lower, Wong said. At the same time, Chinese retailers are less interested in carrying feature phones, and instead want to sell smartphones.

In the second quarter, Samsung's smartphone market share was the highest at 19 percent, according to IDC.

Apple was China's fourth largest smartphone vendor, with its market share nearly halved down to 10 percent from the first quarter, when the company launched the iPhone 4S in the country.

The decline came in part because of the high number of Apple shipments during the first quarter for the iPhone 4S launch, Wong said. Many customers have also decided to wait for the company's upcoming iPhone 5. At the same time, other consumers have also decided to buy smartphones from competing vendors instead.

Rival devices include those from Lenovo, which had the second largest share in China's smartphone market at 11 percent. Lenovo, which is based in China, is already a familiar brand name among the country's consumers, Wong said.

"They are actually being very aggressive," he added. "They have come out with models at very good prices, with good performance and capabilities. So people are buying."

The growth in China's smartphone shipments comes as mobile handsets have become the number one preferred way for people in the country to log on to the Internet. China has 538 million Internet users, 388 million of which are mobile users, according to the China Internet Network Information Center.

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Michael Kan

IDG News Service
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