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China smartphone market to contract in 1Q21, says Digitimes Research
Sean Lin, DIGITIMES Research, Taipei 0

Smartphone shipments to the China market are expected to fall over 10% sequentially in the first quarter of 2021, after growing 19.2% in the fourth quarter of 2020, according to Digitimes Research's latest data from its smartphone tracker.

With China's smartphone demand remaining weak in the fourth quarter of 2020 and key components remaining in short supply, smartphone shipments to the China market - despite an over 19% sequential growth - still dropped 10.5% on year, wth whole-year 2020 volumes slipping 17.2% on year, Digitimes Research's figures show.

Honor, the smartphone brand which Huawei sold to a Chinese government-backed consortium in 2020, launched new-generation smartphones in late January. With other first-tier brands such as Oppo, Vivo and Xiaomi to also continue keenly placing orders and Huawei pushing to digest its remaining smartphone AP inventory, the China smartphone market's shipments will drop only 12.5% sequentially in the first quarter of 2021 despite the quarter being the traditional slow season.

Huawei's smartphone shipments to the China market further shrank in the fourth quarter of 2020, prompting its competitors to build up component inventory in a bid to take over Huawei's lost market share.

However, the smartphone brands still faced serious shortages of components including APs, power management ICs and display driver ICs due to competitions from the PC and automotive sectors.

Apple's iPhones took a major share of the China smartphone market's replacement demand and undermined shipments of Android-based smartphones in the fourth quarter of 2020. With the exception of Huawei, most Chinese first-tier Android smartphone brands increased the ratio of exports in the quarter, resulting in weaker-than-expected growths in their domestic shipments.

In the fourth quarter of 2020, the top-5 smartphone brands were Huawei, Apple, Vivo, Oppo and Xiaomi, together contributing 97.5% of the volumes to the China's smartphone market, up slightly by 0.3pp.

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