February Smartphone Shipments In China Plummet

The decline in smartphone demand in China continued last month, with the market suffering its worst month in years as shipments fell in February.

According to a report in CNBC, citing the China Academy of Information and Communications Technology, mobile phone shipments were 14.51 million in February, which is close to 20 percent lower than a year ago. Smartphone shipments came in at 13.8 million, marking a 20 percent year-over-year decline.

February is traditionally a slow month for mobile phone sales in China thanks to the week-long New Year  celebration. New phone releases tend to happen at the end of February as well, noted the report. Nevertheless, demand this February was worse than in years past, with the news report saying this shipment rate hasn’t been seen since at least 2013.

Weighing on demand in February is a smartphone market that is increasingly saturated, a slowing economy, a longer replacement cycle and excess inventory on the part of industry players. Vendors typically ship a lot of devices to retailers during January to have a good start to the new year and then slow down in February. That results in excess inventory at the retailers, noted the report.

Experts also told CNBC that a lack of innovation with the devices is dampening consumer demand. “I think there is a lack of revolution in products. Mere evolution is not enough, and now prices are too high, and life cycles are extended because existing technology is good enough. People aren’t waiting for the next releases — they are tired of the options,” Neil Campling, head of technology, media and telecommunications research at Mirabaud Securities, told the news outlet. “We are waiting for the next big thing — but there are no clear signs yet of what that could be.”

Apple was one of the big losers in February, with analysts telling CNBC its woes in China had extended into the new year. The lackluster demand for iPhones, particularly in China, has prompted Apple to focus more on services. It doesn’t help that Chinese manufacturers are able to offer the same technology found in the iPhone at a lower cost.