In the midst of troubling sales forecasts for Apple and Samsung, smartphone shipments in China dropped by 12-15.5 percent, according to a report from Reuters.
The China Academy of Information and Communications (CAICT), which is a research institute under the umbrella of China’s Ministry of Industry and Information Technology, said smartphone shipments fell 15.5 percent to about 390 million units for 2018, with 17 percent of the slump coming from December alone.
The Chinese smartphone market is the biggest in the world, but it’s going to potentially shrink another 3 percent in 2019, according to market research firm Canalys. The firm expects smartphone shipments in the country to fall under 400 million, which would be the lowest number since 2014.
The continued decline marks the third consecutive year of softening shipments. However, shipments mark amounts sent, but not amounts sold.
The trade war with the U.S. and a slowing economy are seen as key variables in the smartphone plunge. Apple cut its quarterly sales forecast, citing China for that as well. The move caused a global selloff. The lowered shipments could potentially cause a 1 percent contraction in the worldwide smartphone market.
TuanAnh Nguyen, a Singapore-based analyst for Canalys, said China’s market is now mature and requires longer refresh cycles. “Weaker economic growth and lower consumer confidence will likely hit the premium segment well into the first half of 2019,” Nguyen said. “Apple certainly was the biggest victim of this trend, with added effects from the fact that it’s lagging behind local competitors in innovation and attractive pricing.”
On Tuesday (Jan. 8), Samsung said its Q4 earnings fell 29 percent and that revenue would be less than desired due to less demand for its memory chips.
Samsung has over one fifth of the global market, followed by Huawei, which leads the Chinese market and has a total of 14 percent market share.