China smartphone space bounces back but consumers still cautiousChina smartphone space bounces back but consumers still cautious

The latest market data comes from IDC, which recorded 76.4 million smartphone unit shipments in the fourth quarter of 2024, an increase of 3.9% year-on-year. The year as a whole saw stronger growth at 5.6% on the back of 286.2 million unit shipments.

That's a welcome return to growth after two years of decline, driven, IDC notes, by "pent-up demand and innovations like GenAI." But while some smartphone makers reported shipment growth, others are still in decline in China.

"The recovery is a boon to the smartphone industry, but not all OEMs have benefited from the growth as consumers are becoming more selective," said Will Wong, senior research manager for Client Devices at IDC Asia/Pacific, in a statement.

"This implies a value-seeking trend that is prevalent not only in China but also globally. Market players need to adapt to this shift in consumer behavior if they want to continue to capitalize on the recovery," Wong said.

All of which essentially means that consumers are looking to pay less for their smartphones.

That statement is backed up by some data shared by Counterpoint Research last week. The firm, which tracks smartphone sales, reported a return to growth in 2024, despite the fact that sales fell year-on-year in the final quarter. Growth came in at 1.5% last year, an improvement on a 1.4% contraction in 2023, but Q4 witnessed a 3.2% sales slide.

"The country's smartphone market saw a rebound in the first three quarters of the year, with positive YoY growth each quarter," said Counterpoint Research Associate Director Ethan Qi. "However, momentum began to slow in Q4 as consumers adopted cautious spending behavior."

Both analyst firms' numbers showed a significant market share decline for premium smartphone vendor Apple. The US firm saw shipments decline by 9.6% in Q4, thereby reducing its market share to 17.4% from 20% a year ago, IDC noted. Having led the market in 2023, Apple slipped to fourth place in full-year 2024 with a share of 15.5% of sales, Counterpoint said.

Huawei, Xiaomi and Vivo all experienced strong growth in shipments and sales, and thereby boosted their market positions. Counterpoint puts Vivo atop the sector, while IDC has it in second place in Q4, very closely behind Apple.

IDC and Counterpoint both sounded a note of optimism for the year ahead, referring particularly to the government subsidies programme that came into force earlier this month.

As Canalys explained a couple of weeks ago, smartphones, tablets, smart bands and smartwatches are now included in China's national subsidy programme. Those priced at under 6,000 yuan (just over US$800) come with a subsidy of 15%, capped at CNY500 per product. However, premium smartphone models, including those from local vendors and Apple's iPhone, are exempt from the programme.

"The market recovery is expected to be supported by government subsidies in 2025," said Arthur Guo, senior research analyst in Client System Research for IDC China. "This presents an opportunity for market players to adapt their strategies by leveraging these government's initiatives."

Counterpoint expects the programme to serve as a catalyst for boosting sales, especially in the first quarter of this year.

"However, given the challenging economic environment in China, we maintain a cautiously optimistic outlook for China’s smartphone market in 2025," it said.

Doubtless we will see some vendors reap the benefits of the programme while others fail to hit the price point consumers are looking for.