By Li Panpan

The Chinese mobile phone market has entered a sluggish state. The 2022 first-quarter reports show that 15% of the listed supply chain companies increased revenue but not profits, and 20% lost revenue. Sales of Android brands in April fell more than Apple, mainly caused by the lagging-behind SoC technology of their suppliers.

Shipments of three top Chinese mobile phone brands, namely Xiaomi, OPPO, and Vivo, have fallen sharply in 2022. In April, OPPO had the biggest year-on-year decline in sales, reaching 42.7%, Vivo down by 40%, and Xiaomi by 32%. And 5G smartphone shipments in the Chinese market in the first quarter also declined year-on-year.

The latest report by CINNO Research said that smartphone sales in the Chinese market in April were only 17.6 million, down 21.6% from the same period last year, and it’s also the worst April sales since 2015.

CINNO said the direct reason is that April was at the time of the worst impact of the pandemic in many parts of China, such as Shanghai, Shenzhen, and Jilin, which affected consumer consumption, the opening hours of stores, and the logistics system.

In April, Apple bucked the trend and regained the sales champion, with sales down only 2.2% month-on-month. Its three models of the iPhone 13 series still firmly occupy the top three of the Top 10 list in April sales.

Guo Mingchi, a well-known analyst at TF Securities, said that the Android mobile phone market in the Chinese mainland would continue to decline, with 270 million orders cut this year.

CINNO Research noticed a lack of development momentum in the Chinese mobile phone market, especially the Android models. In April, the sales of Android brands fell by 24.6% year on year, while Apple’s year-on-year decline was only 3.5%.

The main reason is firstly lowered consumer consumption, and secondly, SoC technology of Android suppliers like Qualcomm and MediaTek has been surpassed by Apple for at least two generations. It’s tough for Android models to attract consumers with poor device experiences and increased costs.

Although major brands like Xiaomi, OPPO, and Vivo are improving chips and algorithm software in imaging, they are still limited by the disadvantages of their suppliers in the short term. CINNO Research predicts that Chinese smartphone market sales will decline by 7-8% year-on-year in 2022.

Since the second half of last year, the mobile phone industry companies have been very pessimistic, especially those small and medium-sized companies.

One analyst commented, “Recession is inevitable, especially for manufacturers that rely heavily on the Chinese mobile phone brands. Some leading manufacturers have prepared for this and expanded their businesses. It’s time to see whether new businesses can make up for the loss from the mobile phone market.

Statistics on the performance of nearly 200 listed companies in the mobile phone industry chain in the first quarter of 2022 show that 120 companies had a year-on-year increase in revenue, accounting for 60%. However, only 90 companies had a year-on-year increase in net profit, accounting for only 45%, which means that at least 15% of the companies are in a state of increasing revenue but not profits. At the same time, nearly 40 companies are in a state of loss, accounting for as high as 20%.

An industry insider said, “The cold winter is not over yet; Statistics for the first half of the year may be worse.”