China 4G smartphone market to reach 72.4m units this year

Guy Daniels
By Guy Daniels

Jan 31, 2014

China’s domestic market for 4G smartphones is poised to take off this year as shipments grow dramatically from 2013 levels, according to a new report from IHS Technology. Sales in 2014 of 4G smartphones within China are forecast to reach 72.4 million units, up from just 4.6m last year, with the market expected to accelerate during the second half of the year.

IHS also predicts that shipments will double next year to 144.1m units, rising to 219.8m in 2016 and 298.5m by the end of 2017.

“With support from the government and increasing clamor from the public, 4G smartphones will be the new hot market in China,” said Kevin Wang, director for China research at IHS. “Already Beijing has granted licenses for TD-LTE, China’s homegrown version of the 4G LTE standard, to the state’s three carriers. This way, China Mobile, China Telecom and China Unicom can all launch commercial 4G services whenever they wish.”

Whilst 4G devices will account for just 19 per cent of the total 371.8m market for smartphones in China this year, 3G handsets will make up the majority of sales with an estimated 290.3m units – up just one per cent from 2013.

The overall Chinese smartphone market is controlled by domestic OEMs, which collectively owned 70 per cent of shipments in 2013. The Top 10 OEMs accounted for more than half of the total, and lesser names as well as mostly anonymous white-box smartphone suppliers are increasingly being marginalized. The underground gray market for China-made handsets is on the decline after active government intervention to stop a once-thriving trade. Now considered illegal by authorities, these devices should decline to 183m units this year.

The top-selling smartphone manufacturer in China last year was Huawei Technologies with more than 50m units, followed by Lenovo with 44m and ZTE with 40m. The new stars in 2014 will be Xiaomi, OPPO and vivo, although Lenovo now has gained some market momentum with its purchase this week of Motorola from Google.

IHS says that for the first half of 2014, the Note 3 from Samsung will be one of the most popular 4G devices, along with the iPhone 5s, which it expects will sell more than 20m units in China this year.

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