Smartphone makers challenged by China 'saturation'

WASHINGTON — A cooling of smartphone sales in China suggests the world's biggest market for the devices has reached a saturation point, posing challenges for manufacturers, a research report said last week.

According to a report by Gartner research firm, worldwide smartphone sales in the second quarter showed the slowest growth rate since 2013, increasing 13.5 per cent to 330 million units.

But sales in China were down 4 per cent from a year ago, as growth shifted to other Asian markets and emerging markets in Eastern Europe, the Middle East and Africa, the report indicated.

"China is the biggest country for smartphone sales, representing 30 per cent of total sales of smartphones in the second quarter of 2015. Its poor performance negatively affected the performance of the mobile phone market in the second quarter," said Gartner analyst Anshul Gupta.

"China has reached saturation — its phone market is essentially driven by replacement, with fewer first-time buyers. Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China," he added.

The survey confirmed earlier reports on market share: Samsung remained the top seller with a 21.9 per cent market share, but its overall handset sales fell five per cent to 72 million units.

Apple boosted its market share to 14.6 per cent as iPhone sales jumped to 48 million units.

Three Chinese makers rounded out the top five, Gartner found: Huawei at 7.8 per cent, Lenovo at 5 per cent and Xiaomi at 4.9 per cent.

The Google Android operating system remained dominant with 82.2 per cent of the market, but dipped from 83.8 per cent a year earlier, Gartner said. Apple's iOS accounted for 14.6
per cent.