China's Golden Era of Smartphones Is Ending (bloomberg.com) 44
The world's largest smartphone market is in deep trouble. China saw a 14.7% decline in phone shipments in the second quarter, according to research firm IDC. And multibillion-dollar pillars of the industry like Xiaomi Corp., Vivo and Oppo all reported steep sales declines. From a report: Many factors drove the fall, including a strict Covid Zero policy that torpedoed demand, but the bigger issue is one that's long been feared by the country's smartphone makers. China's 10-year-plus smartphone boom, fueled by new buyers and ceaseless upgrades, is likely coming to an end. China was eager to become a mobile nation a decade ago. It used state capital to build 4G base stations in almost every village, enabling brands like Oppo and Vivo to sell chic-looking devices to hundreds of millions of people in rural areas, most of whom had never tried a touchscreen. Apple, Samsung Electronics and Motorola pursued tech-savvy city dwellers with more expensive options. (Although the latter two quickly fell out of the game due to product flaws, marketing missteps and geopolitical pressures.)
More recently, smartphone makers saw an opportunity as China pushed toward advanced 5G networks. But few saw the trouble already brewing. A key problem is that China's massive smartphone market has become highly saturated. The country has more than 1.6 billion active mobile phone accounts by the end of last year compared to its 1.4 billion population. The penetration rate is well above the global average and has led to fierce competition. The need to replace phones has also dwindled. The life cycles of smartphones are getting longer, and can be stretched when the economy isn't doing well. The price of 5G service has prompted many people in China to simply keep their adequate 4G subscriptions.
More recently, smartphone makers saw an opportunity as China pushed toward advanced 5G networks. But few saw the trouble already brewing. A key problem is that China's massive smartphone market has become highly saturated. The country has more than 1.6 billion active mobile phone accounts by the end of last year compared to its 1.4 billion population. The penetration rate is well above the global average and has led to fierce competition. The need to replace phones has also dwindled. The life cycles of smartphones are getting longer, and can be stretched when the economy isn't doing well. The price of 5G service has prompted many people in China to simply keep their adequate 4G subscriptions.
Re:No it's not (Score:5, Informative)
What's with all this pseudo-FUD against China lately? They aren't going anywhere, and you know it, and I know it.
Well, if I'm reading TFA correctly, it's not saying there won't be a phone market in China. It's saying that everyone in China who wants a phone largely has one, just like in the US. If you recall, the US market went from "no one has a phone, sell everyone their first unit" to "everyone is upgrading every two to three years because phones are rapidly getting better" to the current market, where phones are well past "good enough" and people upgrade when the phone breaks, not because of new features.
Sounds like China is hitting that final phase. Everyone has a phone, new features aren't really compelling, and people buy replacements as phones break. Cost has become an issue. The rate of phone sales is dropping from it's peak and will plateau at a much lower level. None of this is surprising, it's just interesting that it's finally happening.
Re: (Score:3)
What's with all this pseudo-FUD against China lately? They aren't going anywhere, and you know it, and I know it.
Well, if I'm reading TFA correctly, it's not saying there won't be a phone market in China. It's saying that everyone in China who wants a phone largely has one, just like in the US. If you recall, the US market went from "no one has a phone, sell everyone their first unit" to "everyone is upgrading every two to three years because phones are rapidly getting better" to the current market, where phones are well past "good enough" and people upgrade when the phone breaks, not because of new features.
Sounds like China is hitting that final phase. Everyone has a phone, new features aren't really compelling, and people buy replacements as phones break. Cost has become an issue. The rate of phone sales is dropping from it's peak and will plateau at a much lower level. None of this is surprising, it's just interesting that it's finally happening.
Yep, and much like the west, the phone market has matured to the point where people are putting off their upgrades for years because their current phone is good enough.
Re:No it's not (Score:5, Insightful)
China is going through a pretty rough economic patch. That doesn't mean it is "going anywhere", but that doesn't make that fact "FUD".
The information sphere has been saturated by opposing propagandas, one of which consistently says China is doomed and the other of which insists China is having no troubles at all. I think both these positions are false, but the idea that China would *never* have troubles is false *on its face*.
As for the long term survival of the regime, that's an open question. It depends on the ability of the regime to navigate trouble it cannot avoid. As an authoritarian regime its first response when faced with a challenge is to manage the information people receive about that challenge. While that can be helpful in buying the regime time to work on a problem, it's not a solution in itself. The CCP needs work on the economic disruption of COVID, excessive risk taken on in its real estate and financial sectors, growing youth disaffection with the structure of the economy, and a collapse of foreign investor and business partner confidence. If it successfully deals with all those problems it will surely survive. If it fails in some number of them it will face a crisis and nobody can say for sure the outcome. The regime may survive, but look very different.
Re: (Score:3)
The CCP needs work on the economic disruption of COVID, excessive risk taken on in its real estate and financial sectors, growing youth disaffection with the structure of the economy, and a collapse of foreign investor and business partner confidence.
They also need to get a handle on their demographic problem [substack.com]. The same problem is starting to bite a number of countries, but it seems to be more of a problem for China. I also seem to recall that their last census revealed a much lower population than their plans were counting on.
Re: (Score:2)
Sure. That's probably the biggest one, but that's more of a frog-boiling situation.
Re:No it's not (Score:4, Insightful)
Yeah, sure, pointing to a down turn in China's smart phone market is "trying to paint China in a negative light" and / or is implying that they're somehow going to be irrelevant globally. Gimme a frick'n break.
I hate to think what you'd have to say about the economists predicting a looming recession for the US. "What horrible slander against the United States!"
Re: (Score:1)
What's with all this pseudo-FUD against China lately?
lately? it has been going on for years. it's fear, actually, of china becoming the new superpower, which is inexorably happening.
check the recent post right here about china surpassing the us in cutting edge research. it's an objective and pretty humble analysis of numbers. the reactions in that thread speak for themselves.
but fud isn't by far the worst consequence, though. actually, imo the mess in ukraine is, besides a very lucrative business, largely a byproduct of the same fear, the us panicking because
Re: No it's not (Score:2)
Re: (Score:3)
While we probably agree on a lot more than we disagree on in regards to the rise of China, you make a lot of bold claims which would be hard to back up.
it's fear, actually, of china becoming the new superpower, which is inexorably happening.
Perhaps you meant to say China is becoming a superpower, not "the" superpower. It may surpass the US in the next couple decades, but it is facing the same demographic headwinds which were primarily responsible for Japan's lost decade and limited GDP growth for three decades now. Even if China does surpass the US, however, they would simply both be superpower
Re: (Score:2)
How is the war in Ukraine caused by fear of China? That is a stretch. Perhaps you are implying we are only helping Ukraine to send a message to China about Taiwan? If so, that is a huge stretch.
just my speculation. it does deny china having a possible powerful ally, russia. it might become a pariah ally instead. it does multiply defense budgets across europe, which might be a deterrent to china, but not to russia which has already clearly shown they can't even get past kiev, so they were never a threat to begin with. all that talk of russian expansionism was nonsense. but the brutality has revitalized nato which had no purpose, not even to deter russia, and now has a new one: show its teeth to ch
Re: (Score:1)
What's with all this pseudo-FUD against China lately? They aren't going anywhere, and you know it, and I know it. I don't know what your objective is here, but you're trying to paint China in a negative light over and over again. It's as though B-I-Z-X which is essentially owned by the Chinese is trying to distract us and make us think that this administration is anti-China when it is in fact owned by the Chinese...
Literally none of this is painting China in a negative light. You have some serious reading comprehension issues. Go back to your troll farm superiors and get put back in the local language division, you're making Chinese trolling look bad.
Zero Covid (Score:5, Interesting)
The Zero Covid policy has been really hurting China's economy (shutting down huge swaths of factories and such for months on end hurts a lot), and the entire world is in a bit of a financial slump right now due to a myriad of factors (war in Ukraine, COVID, etc).
In a nation with a GDP per capita of $10,500, smartphones (let alone upgrades to them) are something that will be the first thing to go when the finances need to be reexamined.
Re: (Score:2)
The Zero Covid policy has been really hurting China's economy (shutting down huge swaths of factories and such for months on end hurts a lot), and the entire world is in a bit of a financial slump right now ..
I am puzzled why you made a point to be selective about declaring that Zero COVID policy is harmful only in China. It is harmful, period. Anywhere 0C was tried it ended up as an unmitigated disaster with nothing to show for it. Even New Zealand, that had ideal geographic conditions for isolation, did not succeed.
Re: (Score:2)
I didn't state that it is only harmful to China, but that it is HARMING China - indicating ongoing action. China is pretty much the only remaining country still trying the zero-COVID approach.
Re: (Score:2)
Worked just fine in West Australia until Omicron eventually broke the dam (You cant win an arms race against evolution it seems).
We had no covid, no lockdowns and no masks, and lived very normal lives while the rest of the world burned.
Its a little hairier now, but thanks to our high vacciation rate were not seeing the higher infection rates reflected in high hospitalization rates. Covid Zero worked just fine.
Re: (Score:2)
Anywhere 0C was tried it ended up as an unmitigated disaster with nothing to show for it. Even New Zealand, that had ideal geographic conditions for isolation, did not succeed.
Did not succeed in what? Having a death rate in the bottom 10 of all countries globally? Having a relatively fast economic recovery and avoiding a recession?
What did they not succeed in? Having zero cases for ever and ever? Maybe you don't know what the purpose of zero COVID was, how it relates to vaccination rates, what the economic purpose of it was, and how it's very much different to China making comparing the two very very silly.
Most of the world is holding up New Zealand as a shining example of a roar
Re: (Score:2)
It's also wrong to say Zero Covid doesn't work.
It's draconian, but it works. The active cases in China are close to zero [worldometers.info].
The only question is whether it's worth it. And that's a question of values/desires, not a question of whether it works.
Re:Zero Covid (Score:4, Interesting)
Even New Zealand, that had ideal geographic conditions for isolation, did not succeed
I guess you are correct if you mean there were not zero cases of Covid in New Zealand, but it's hard not to consider New Zealand's Covid policy decisions an overwhelming success.
New Zealand kept their cases and deaths very near zero until they had vaccination rates at about 90% earlier this year. They then opened up and started to allow the virus to spread. No one thought you could stay closed forever, just until everyone was as safe as they would ever be. If the US was as successful as New Zealand at fighting Covid nearly a million people would still be alive. That's not a fair comparison because of New Zealand's natural advantages, but you have to be pretty dishonest to claim there was anything substantially wrong with their approach to virus.
Re: (Score:2)
Even New Zealand, that had ideal geographic conditions for isolation, did not succeed
I guess you are correct if you mean there were not zero cases of Covid in New Zealand, but it's hard not to consider New Zealand's Covid policy decisions an overwhelming success.
New Zealand kept their cases and deaths very near zero until they had vaccination rates at about 90% earlier this year. They then opened up and started to allow the virus to spread. No one thought you could stay closed forever, just until everyone was as safe as they would ever be. If the US was as successful as New Zealand at fighting Covid nearly a million people would still be alive. That's not a fair comparison because of New Zealand's natural advantages, but you have to be pretty dishonest to claim there was anything substantially wrong with their approach to virus.
The thing is, NZ's extreme isolation helped. We joke that it takes six months for anything to get to Australia and then six more for it to get to NZ... but this time it helped them.
The strategy was a huge failure in other countries that were not so isolated because closing borders doesn't work when the virus is already inside. Around the same time as Trump issued his China ban, Colombia's then president Ivan Duque ordered a total ban at any port of entry (land, air or sea) into Colombia except for repatr
Re: (Score:2)
The strategy was a huge failure in other countries that were not so isolated because closing borders doesn't work when the virus is already inside. Around the same time as Trump issued his China ban, Colombia's then president Ivan Duque ordered a total ban at any port of entry (land, air or sea) into Colombia except for repatriation. Colombia were still in the top 10.
Allowing repatriation means the country didn't close their borders. Pandemic experts were clear that closing borders to foreigners without also closing borders to citizens has limited effect, as we saw in countries like the US and Columbia which tried it. Any country which declared closing of borders while allowing citizens back in mostly unrestricted was simply trying to make it look like they were doing something without actually doing anything meaningful.
New Zealand locked down for both citizens and non-
Golden era of smartphone is ending. (Score:5, Insightful)
Not just China, but in general. who really cares about smartphones anymore?
Back in 2007 if you saw someone with an iPhone you were like, ohh fancy, that guy must be in a good place.
2012 kids would love to show off their fancy new phones, as kinda like showing off a luxury shoes
2017 Yea everyone kinda all has a smartphone now.
2022 If my phone isn't broke, I don't see a reason to upgrade.
Kids today do not really care what other kids are using for their phones, and there isn't that status competition about it anymore.
Smart phone have became utility and not luxury.
Strongly agree. It's a utility. (Score:4, Interesting)
Re: (Score:2, Insightful)
2022 If my phone isn't broke...
I am sure "broke" will be rolled out with the next update to force you to buy a new one.
Re: (Score:2)
Not just China, but in general. who really cares about smartphones anymore?
Kids and single women.
Kids always want the latest thing, even if their thing is more than good enough. Kids always want the New, the Latest.
Single women are iPhone fanatics, because they're young-ish and fashion oriented, and will go to great expense to upgrade to the latest model to keep up with their girlfriends.
Married women? Not so much. They're much more practical. But the ranks of single women are increasing, and marriage rates decreasing, so you're probably gonna see women go through an extended Sex
Re: (Score:3)
I am sure Kids may want the newest thing... But, I don't think they "Need" it like they use to. Where say having a cheap Android phone compared the the Latest iPhone 5-10 years ago where there were just things you couldn't do on the device, (games, apps, video conference), Today it is kinda Hey it is faster than the old one, cool.
Single Women, were phone fanatics... However those who are still in the new and trendy probably are now just meh... The current iPhone fanatics are often those who are out of the l
Re: (Score:2)
You forgot to add that smartphones aren't rolling out the new features and bigger screens like they used to, so even those who used to get a new phone every other year are keeping their phones much longer. I'll have had my current phone for 4 1/2 years until I plan on replacing it next year, and this is the first time I have kept a smartphone for over 2 years since I got my first one.
Re: (Score:2)
My queen and I wanted to keep using our old iPhone 6 +, but we were forced to upgrade because of updated apps wants newer iOS versions than v12 (12.5.5 was released last year by Apple). Also, some apps were getting too slow. :(
Phones have reached commodity status. (Score:3)
Re: Phones have reached commodity status. (Score:2)
Phones reached commodity status in the 50s.
Re: (Score:2)
Then the Cordless Telephone popular in the 1980's, The Cell phone in the 2000's, Smart Phones 2020's.
We get trends where we want something more than just the Basic Design, it will get popular to a point where everyone has it, and it is no longer a big deal.
As a kid, our family got a Cordless phone, it had a big antenna and could be used 100 yards away! This allowed me to take the phone to my Dad who was working in the detached garage on the other end of the property.
Re: (Score:3)
"As a kid, our family got a Cordless phone,"
The early ones in the UK operated around 1700Khz just above the AM/MW band. I used to listen to my neighbours conversations for a while on a radio that could tune up that high but they were so dull the novelty soon wore off.
Re: (Score:2)
You weren't interested in the Weather? Chances are back then it was probably raining.
Re: (Score:2)
And the market is saturated. I hope they don't go dumb like the TV industry with scams like 3D.
Oh dear, someone wasn't paying attention ... https://www.androidpolice.com/... [androidpolice.com]
Re: (Score:2)
And the market is saturated. I hope they don't go dumb like the TV industry with scams like 3D.
Actually a "dumb" TV would be something I'd be willing to pay for. Give me a good panel with a few HDMI ports and let me connect what I want to them. None of this "smart TV" nonsense where you require network connections, software updates, long boot times and have to watch ads for the privilege.
How is the US that different? (Score:2)
At this time in the US everyone who wants a smart phone has one. The market is saturated. New devices in 2022 and the 4G to 5G upgrade represent small incremental improvements. 3G to 4G was huge. Average people generally can't tell the difference between 4G and 5G. The incentive to upgrade isn't there anymore (Unless you are still on an iPhone 6). And those hyper competitive Chinese phone companies are eying the US market. 50% the cost for 90% of the functionality.
Re: (Score:2, Interesting)
On a walk the other day, I found a perfectly good smart phone laying by the side of the road. I powered it up and saw that it was a Consumer Cellular deal so I threw it in the electronics recycling bin.
You know a smart phone is a commodity when they are discarded as trash even if they aren't broken.
Re: (Score:2)
I've got a phone from 2016 which still does all I want. It is a LG G5, running Lineage OS. Decent SOC, 5G wifi, LTE, NFS, good speakers, 3.5 headphone jack, user replaceable battery, 512GB microsd card, >500 ppi display, etc. I see absolutely no reason to replace it.
Best wishes,
Bob
Broader symptom of Chinese economic downturn (Score:2)
Another big one though that is not reflected in Chinese economic statistics is that the labor market is in deep trouble. Chinese workers enterign the market are giving up; they see no path to own
Saturated (Score:2)
And maybe all the GOTTAHAVETHELATESTPHONEFROMXYZ crowd is finally satiated, and having the last I/AndroidPhone, only another $4000 to replace the phone I bought 2 years ago for $2000 has lost its charm.
the west is no longer buying Chinese made (Score:3)
If only some nation had to buy from them (Score:3)
And even better, was currently flush with revenue from oil and had a strong currency.
I guess it could take time to adapt the excess inventory to the Russian market, but their needing to buy, and China needing to sell, seems likely to provide a strong impetus for that to happen quickly.
Russians that are fond of their iPhones and Samsung devices might be loathe to switch, especially if they are invested in their ecosystems, but low prices on top of phones simply aging could spur demand for what China has to offer.