Original URL: http://www.theregister.co.uk/2012/07/10/china_smartphones_outsell_feature_phones/

Chinese smartphone shipments outstripping feature phones

All aboard the mobile internet

By Phil Muncaster

Posted in Business, 10th July 2012 06:15 GMT

China is celebrating another technology milestone after claiming that smartphone shipments in the world’s biggest mobile market have now exceeded feature phone shipments, although analysts have their doubts.

China’s IT ministry revealed (via TechInAsia) that around 195 million mobile phones were shipped in the first half of 2012, with on average 48 per cent of these smartphones.

However, it added that over three consecutive months since April this figure has exceeded 50 per cent, and in June it shot up to 56.9 per cent.

The report also shows the 2G/3G split for the first half of the year, with 3G phones recording a share of device shipments close to 58 per cent.

Although shipments do not equal sales, and installed user base is another matter again, the stats would appear to demonstrate the tremendous momentum behind smartphones in China.

By rough comparison, in Japan smartphones only began outselling feature phones in February this year, according to comScore stats.

In terms of what’s driving this growth, all the signs point to Android and budget.

Beijing-based analyst Analysys International said Android took a 76.7 per cent share of the smartphone market in Q2, while Canalys estimated recently that by 2015 almost half of Chinese smartphones will be handsets under $200 (£127).

Chinese internet firms like Alibaba and Baidu are getting into the market with cheap handsets based on their own mobile platforms, while the likes of local giants Lenovo, ZTE and Huawei and smaller players including Yulong and K-Touch are all targeting the low end.

Even chip giant MediaTek which traditionally produced chipsets and support for shanzhai or counterfeit phone makers, is apparently now focusing all its R&D away from feature phones and onto smartphones.

Of course, government stats are far from gospel truth.

The MIIT was recently forced to hastily recalibrate the size of China’s 3G mobile market to half of original estimates after it discovered some of the figures it had obtained from China Mobile were inaccurate.

There could be a similar twist in the tale if we discover the ministry has been rather loose with its technical definitions of what it classes as a smartphone, although the macro-trends are valid enough.

Gartner analyst Sandy Shen also cast doubt on the figures.

“According to our numbers, smartphones accounted for 18 per cent of the total mobile phone shipment in 2011, increasing to 28.7 per cent in 2012,” she told The Reg.

“On the installed base, the numbers will be even lower. So I’m not sure how they got the 50 per cent, but smartphone is the only segment that is growing while others like basic phones and feature phones are declining.” ®