China’s consumer electronics sales emerge from ‘winter slump’

New launches could inject new vitality into the market and draw steeper growth, experts say. — China Daily

SHANGHAI: After enduring nearly two years of a “winter slump”, the Chinese consumer electronics market is showing signs of recovery, with the growing popularity of artificial intelligence (AI) and foldable smartphones expected to provide a further boost to sales, company executives and experts say.

The forecast comes as Chinese tech companies scrambled to roll out new AI hardware products, including AI personal computers and AI smartphones, among others, to stimulate consumer enthusiasm.

The new launches, coupled with the arrival of a product replacement cycle, could inject new vitality into the market and draw steeper growth, they added.

A case in point is the overwhelming enthusiasm consumers are showing for Huawei’s latest Pura 70 series smartphones. Huawei’s retail stores are crowded with consumers eager to try the series’ new handsets.

Ma Min, an IT programmer in Shanghai, said: “I could not buy a Huawei Mate 60 series smartphone unveiled in September because these always seemed to be in short supply.

“I want to be among the first to buy a phone in the Pura 70 series, which is one of the two most iconic flagship smartphone series from Huawei.”

Ming-Chi Kuo, an analyst at TF International Securities, said that the Pura 70 series, featuring Huawei’s self-developed HarmonyOS 4.2 operating system and its in-house large language model to support more AI functions, such as automatically deleting unwanted objects in photos, is expected to see more significant sales growth this year than the P60 series in 2023.

If demand is strong, total shipments of Pura 70 smartphones from factories to retailers are expected to reach 13 million to 15 million units.

Even if demand slows, total shipments are expected to reach 10 million to 12 million units, Kuo said.

That is in line with the broader picture in China’s consumer electronics industry.

The Industry and Information Technology Ministry, China’s top industry regulator, said phone production volume in the country reached 374 million units in the first quarter, representing a 13.6% year-on-year increase.

Additionally, integrated circuit production surged by 40% to 98.1 billion units.

“China’s electronic information manufacturing industry saw steady production growth, sustained export recovery, continued improvement in efficiency, and maintained high investment growth rates,” the ministry said.

Market research firm Counterpoint said smartphone sales in China grew 1.5% year-on-year in the first quarter, marking the second consecutive quarter of positive year-on-year growth.

Ethan Qi, associate director at Counterpoint, said: “Momentum seems to be building on a recovery as China’s smartphone sales continued their growth trajectory and grew 4.6% quarter-on-quarter from January to March.”

Another international market research company, International Data Corp (IDC), which said the continued recovery of market demand helped the Chinese smartphone market maintain rebound momentum at the end of last year, with performance better than expected.

Among them, the Android market grew by 9.3% year-on-year in the first quarter, while the iOS market faced greater competitive pressure and fell by 6.6% during the same period.

Thanks to the application of AI in large language models and foldable screens, Android smartphones have gained differentiated advantages over iPhones in the high-end market, IDC said.

Chinese tech company Vivo, for instance, unveiled its latest foldable smartphone, the X Fold 3 Pro, which is the world’s lightest foldable phone, opening like a book in a competitive market.

The move comes as size and weight have been drawbacks for book-style foldable phones’ pursuit to enter the mainstream, and makers have increasingly released thinner and lighter foldable devices by using innovative materials and hinges. — China Daily/ANN

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