BEIJING, May 17 (TMTPOST)— Data from a state-backed think tank showed shipments of smart mobile phones in China had a significant decline, underscoring the supply chain problem and the stagnation of smartphone sales.

Source: Visual China

The domestic shipment in March fell 40.5% year-over-year (YoY) to 21.46 million handsets, and shipment in the first three months of the year totaled 69.346 million handsets, representing a YoY decrease of 29.2%, according to China Academy of Information and Communications Technology (CAICT), a research institute under the Ministry of Industry and Information Technology (MIIT).

The government data demonstrated the downward trend in delivery deteriorated. The yearly contraction in March was much deeper than the previous two months, as the sales in January and February fell 17.7% and 31.7% respectively. As the key sector of mobile phones, the 5G-capable smartphones were shipped 14.864 million units in March, down 31.7% YoY, and the three months’ shipment decreased 22.9% from a year ago.   

China’s smartphone market underperformances the overall world’s in the first quarter. The worldwide smartphone shipments dropped 11% YoY in that quarter, when vendors faced “uncertainty due to the Russia-Ukraine war, China’s rolling lockdowns and the threat of inflation”, according to Canalys. Another market intelligence company Counterpoint released on Tuesday that China witnessed the YoY decline in smartphone sales for 10 consecutive weeks since the sixth week of the year, blaming for the weakened consumer sentiment resulted from the zero Covid policy. However, Counterpoint expected to see some recovery as the Chinese consumer sentiment picked up during the Labor Day holiday starting from May 1.

The main driver for the shipment decline is the failure to break the smartphone industry’s sales bottleneck, Pan Helin, the co-director of the Digital Economy and Financial Innovation Research Center of the International Business School, Zhejiang University (ZIBS), told the Chinese digital newspaper The Paper. Many consumers went back to 4G network as a more stable option since the 5G related charges seemed unreasonably high and there was no killer app to create demands for 5G smartphones in the past five years, Pan explained.