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Chinese Smartphone Market Sees Sharp Drop in Shipments in Q2: Report

The smartphone market boom in China is coming to an end as there is a sharp decline in demand in the mainland and beyond.

According to the latest data, smartphone shipments in China fell 14.7% in the second quarter, marking the fifth consecutive quarterly decline, the US-based Financial Post reported.

Analysts believe that the Chinese market is in deep trouble, and the outlook is getting bleaker and bleaker under the impact of many factors.

Earlier this week, a Bloomberg report said that the Indian government plans to ban Chinese phones under Rs 12,000 in the country.

The move is aimed at pushing Chinese telecommunications giants out of the bottom end of the world’s second-largest mobile market, according to the Financial Post.

In recent months, the Indian government has been investigating a number of Chinese smartphone makers in India and finding out how their Indian subsidiaries are laundering money by transferring their profits and money from India to their Chinese offices in order to pay less taxes and duties.

India is the second largest mobile market in the world and will soon become the world’s largest smartphone market. However, the companies that dominate India’s smartphone market are mainly Chinese.

Ever since manufacturers like Xiaomi and Oppo flooded the market with affordable Android devices, Indian mobile phone makers have been languishing.

It is for this reason that India is seeking to ban Chinese smartphone makers from selling devices under Rs 12,000 to kick-start its volatile domestic market, according to the Financial Post.

According to data China’s smartphone shipments fell 14.7% year-over-year to 67.2 million units in the second quarter, according to US research firm IDC.

It was the fifth consecutive quarter of declining shipments and the second consecutive quarter of double-digit declines, with major players such as Xiaomi, Vivo and Oppo reporting sharp declines in sales, according to the Financial Post.

Several factors were reported to have contributed to the decline. The first factor is related to the sharp drop in demand caused by the strict “Zero COVID policy”. Strict restrictions due to COVID-19 in China are not suitable for all businesses. The lockdowns have disrupted retail, logistics and manufacturing.

With the economic downturn, the need to replace mobile phones has been greatly reduced, and the life cycle of smartphones is getting longer and longer.

The bigger issue, however, is that the Chinese smartphone market is heavily saturated, which could mean the end of a more than 10-year smartphone boom in China, according to the Financial Post.

As of the end of last year, there were more than 1.6 billion active mobile phone accounts in China, more than a population of 1.4 billion. The penetration rate is much higher than the global average, leading to intense competition between brands.

Data analytics firm Canalys predicted in late July that mobile phone shipments in China this year were expected to be well below 300 million units, the lowest record in almost 10 years, the Financial Post reported.

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