mercredi 25 mars 2015

The smartphone market in China

The smartphone market in China

1. Analysis of the Smartphone Market in China 

TOEFL reading China

from TOEFL show that the number of smartphone users in China has more than tripled from the beginning of 2011 to the end of 2014. Recently, China has reached 520 million active smartphone users, almost half of all mobile phone users in the country. Furthermore, some researches forecast 704 million active smartphone users for 2018.
This graph shows a comparison between the Chinese and American mobile phone markets. It is clear that China is already one of the most important TOEFL markets in the world, and will continue to be so for the foreseeable future.
Future projections of China's smartphone users show that smartphone activations will consistently increase within the coming years:

While a few platforms are competing for market share, Android is the leader with 85% of devices sold by July 2014. Apple smartphones trail behind with only 12% of the market.

Reinforcing the previous data, Samsung smartphones, using the Android platform, were the most sold at the beginning of 2014, followed by Lenovo and Xiaomi, also carrying the Android platform. Nevertheless, Xiaomi took the lead, and edged out Samsung as China’s top smartphone vendor at the end of 2014. In January 2015, Apple also overtook Samsung thanks to the success of the iPhone 6 and 6 Plus.

To be more precise, the most popular android phones in China are the Xiaomi MI3 and MI2, iphone6 and 6 Plus, and the Samsung GT and SM.This data shows that the smartphone market in China is mainly led by Asian brands, especially the new Chinese brand Xiaomi, created in 2010, which challenges Samsung’s supremacy. Xiaomi’s success is due to online flash sales and its low price of only $310 for the Xiaomi MI-2, compared to the $700 for the iPhone 5 and $660 for the Samsung Galaxy S3. The Chinese brand tries to focus on young people who cannot afford a smartphone. To keep costs low, Xiaomi is only selling its devices online.
The Chinese smartphone market benefits from their home market.

2. Characteristics of Chinese Smartphone Users 

China counts more than one half of billion smartphone users, meaning that China has more smartphone users than the USA has people. But what is the profile of these users?
In 2014, smartphones were more popular with male users at 54%, but an equal distribution is forecasted for 2018.

In 2014, the majority of smartphone users were the bracket of 18-24 year-olds and 25-34 year-olds. However, in 2018, the bracket of 35-44 year-olds will multiply by 1.6, reducing the former gap between brackets.

Chinese smartphone owners use smartphones not only to phone, but also to surf the web. The following graph shows that 72% of internet users use their smartphones instead of using their computers.

They also use smartphones to shop online, play games, and talk with their friends. Since the rise of the smartphone, mobile gaming has become a big industry in China.
3. Social Environment and Trends
It’s important to know what do Chinese people have and what do they want to have.
China has become the world’s most important smartphone market because of the opening of China to capitalism. The opening of the Chinese market to foreign brands, and the emergence of a middle class are the two fundamentals that permit such a big market. Because of the immensity of the country, internet and smartphone penetrations depend on location. What is the use of having a great smartphone if your mobile network is not able to provide you with a high-speed internet connection?

In this graph, China's mobile coverage is shown in blue. It can be seen that even for the first Chinese carrier, China Mobile, the entire country is not totally covered yet.

Whereas 5G is going to be deployed and ready in South Korea, 4G coverage has just begun in China. However, even if the deployment is slow, Chinese carriers, helped by the central government, do plan to cover the whole country.

Some Chinese people never had their own computer; therefore it’s very important for them to have smartphones with Internet access. Furthermore, these people get low salaries, hence a big potential for the low-cost market.
With great coverage and low prices, it is inevitable that more and more Chinese are going to buy smartphones.
Another important feature of the smartphone market in China is that Chinese people favor a large screen for their smartphone such as the Mi Note. For instance, the idea of a new kind of phones called phablets (smartphone/tablet hybrid) appeals a lot of Chinese people: 65% of those planning to buy a new smartphone in China want a phablet.


Given that China's smartphone market has already been rising for several years, we can expect this rise to endure. Because of the huge population and the tendency to follow western trends, Chinese people will continue to buy more smartphones. Foreign manufacturers need to be compatible with the Chinese demand. Chinese users are expecting low-cost products but with high performances.