According to common perception, the sales of mobile phones are inversely proportional to their prices, as the sales should decrease as the prices increase. However, the actual situation is different.
Recently, IDC released its latest quarterly report on the mobile phone market. In the fourth quarter of 2023, the shipment volume of smartphones in China was approximately 73.63 million units, a year-on-year increase of 1.2%, marking the first rebound after 10 consecutive quarters of year-on-year decline. In 2023, the annual shipment volume of smartphones in China was around 271 million units, a year-on-year decrease of 5.0%, marking the lowest shipment volume in nearly 10 years.
It’s worth noting that the report also mentioned that although the overall market has finally returned to an upward trend, the market performance is still significantly below expectations. Currently, the market demand mainly comes from the high-end population in tier 1-3 cities, and thus the best-selling products are mostly concentrated in the flagship product series of various brands, such as the iPhone 15 series, Huawei Mate 60 series, Xiaomi 14 series, and vivo X100 series.
Surprisingly, the sales of mid- to low-end phones responsible for the overall volume have not improved significantly. The replacement demand of mid to low-end users, who occupy the majority market share, has not been completely released, while the sales of mid- to high-end phones are declining.
According to the data provided by IDC, the relationship between price segments and sales volume in the Chinese smartphone market in 2023 shows a divergent trend.
The market share of the high-end segment, priced above $600 (approximately 4306 RMB), reached 27.4%, an increase of 3.7 percentage points year-on-year. At the same time, the market share of the low-end segment, priced below $200 (approximately 1435 RMB), recovered to 27.5%, an increase of 5.2 percentage points year-on-year.
From 2019 to 2023, the sales of mid- to high-end phones in the price segment of $400-600 (approximately 2870-4306 RMB) have been continuously declining, reaching only 10.4% in 2023.
IDC states that while the high-end consumer group continues to maintain their purchasing power, more mid to high-end consumers are starting to spend more on flagship products to extend their replacement cycles.
Regarding the flagship market, IDC believes that although Apple is facing significant competition in the high-end market in China, and its limited product upgrades have resulted in decreased attractiveness, it still attracts a significant number of consumers due to substantial price promotions through third-party channels. Although compared to Android flagship products, it no longer has obvious advantages, the overall product strength of iPhone is still one of the best. However, the price of Apple products is not being maintained as before, and the adjustment time for channel delivery prices is becoming earlier.
As for Huawei, analysts were optimistic about the quarterly sales of 6 million units for the Mate 60 series, but according to IDC’s report, the performance of the Huawei Mate 60 series exceeded expectations.
Guo Tianxiang, a senior analyst at IDC China, pointed out that although the Chinese smartphone market has returned to an upward trend, cautious optimism should be maintained for the market performance in 2024. The consumers who made high-volume purchases in the peak of shipments in the second half of 2020 will gradually enter the replacement cycle in the first half of this year, which will be the basis for the market rebound this year.