China to leapfrog the U.S. in mobile phone revenue, according to report

chinese authorities will make things tough china foreign smartphone companies mobile market

According to a report by predictive analysis firm Strategy Analytics, Chinese consumers will spend more than $87 billion on mobile phones this year. The firm predicts that U.S. consumers, by comparison, will spend $60 billion, which makes China poised to overtake the U.S. to become the world’s largest mobile phone market, as reported by the Wall Street Journal.

According to Strategy Analytics senior analyst Woody Oh, China’s shift to 3G and 4G smartphones will help mobile phone sales rise 15 percent to 430 million units in 2014. This rise is aided by Samsung’s, Huawei’s and Lenovo’s expansions across China in order to meet demand. In addition, the increase is aided by the decrease in the low tier market and increase in other higher-price segments.

Strategy Analytics executive director Neil Mawston isn’t very concerned about the U.S. market, however.

“High average selling prices for mobile phones and huge operator subsidies from Sprint and others continue to make the U.S. a very profitable market for major device brand such as Apple, Samsung and Alcatel,” said Mawston. On the other hand, the firm predicts U.S. mobile phone sales will stagnate at 163 million units, with revenues rising just 4 percent.

Strategy Analytics also points out that smartphone penetration in mature markets will saturate, with emerging economies such as Brazil, Russia, India, and China witnessing growing revenue rates above the global average. According to the firm, those countries will compose over a third of global handset revenue in 2014.

(Image courtesy of Vepar5/Shutterstock)