Report: China is now a saturated smartphone market, sales fall for first time

The worldwide market for smartphones is inching closer to saturation, and in China, the biggest smartphone market of all, saturation may have finally been reached. Smartphones sales in China declined for the first time in the second quarter of 2015, according to a recent report from Gartner.

The research firm’s latest update revealed that worldwide smartphone sales notched the slowest growth rate since 2013 in the second quarter. More specifically, a total of 330 million smartphone units were sold in the second quarter, a rise of 13.5 percent from the same quarter in 2014.

“While demand for lower-cost 3G and 4G smartphones continued to drive growth in emerging markets, overall smartphone sales remained mixed region by region in the second quarter of 2015,” said Anshul Gupta, research director at Gartner.

The fastest growing regions of the world in terms of smartphone sales in the second quarter were emerging Asia-Pacific, Eastern Europe, and Middle East and Africa. Chinese and local smartphone vendors drove the growth in these areas of the world.

Speaking of China (which is not included in Gartner’s definition of “emerging Asia-Pacific”), Gartner reported that smartphone sales in China declined for the first time year-over-year, dipping 4 percent. Gupta said China accounted for 30 percent of smartphone sales in the second quarter.

“China has reached saturation — its phone market is essentially driven by replacement, with fewer first-time buyers,” Gupta said. “Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China.”

The smartphone slowdown in China isn’t a complete surprise. In May, IDC China reported that for the first time in six years, the number of smartphones shipped to China had fallen.

Samsung’s new Galaxy S6 and S6 Edge smartphone flagships have done little to fend off Apple and its iPhone 6 and 6 Plus smartphones. While Samsung continues to lead with 21.9 percent of smartphone sales to end users in the second quarter, it reflects a decline from its 26.2 percent share in the second quarter last year. Meanwhile, Apple claimed 14.6 percent of worldwide smartphone sales in the second quarter, up from 12.2 percent in the same quarter last year.

In China, iPhone sales surged 68 percent to 11.9 million units in the second quarter, according to Gartner. This was a big driver in Apple’s year-over-year growth.

Gartner’s report also showed that Android was running on 82.2 percent of smartphones sold in the second quarter, followed by iOS with 14.6 percent, Windows with 2.5 percent, and BlackBerry with 0.3 percent.