Entry-level smartphone sales expected to stay strong in China throughout 2013

Rebecca Kuo, Tainan; Alex Wolfgram, DIGITIMES [Wednesday 2 January 2013]

Entry-level smartphones in China are expected to see increasing sales in 2013 due to an expected domestic economic heat up as well as to China-based handset vendors planning to continue releasing CNY$700 (US$112) and below priced smartphones, according to market observers.

The observers said that entry-level smartphones had a low market share in China throughout the first half of 2012 but later composed approximately 18% of China's handset market by the end of the second half of the year due to economic conditions improving in China as well as to handset makers such as Huawei, ZTE and Lenovo releasing affordable smartphones priced at CNY$700.

The smartphone vendors are expected to continue releasing entry-level smartphone models in China during 2013, but have plans to bump up the models' sizes to 4-inch and above, due to 4-inch models making up over 35% of smartphones sold in China during the fourth quarter in 2012. The percentage is expected to continue increasing in 2013 while 3.5-inch and below models are expected to decrease in shipments, noted the observers.

Additionally, smartphone vendors plan to keep using WVGA (800 by 480) resolution in their entry-level smartphones but are also likely to release a number of models with higher resolutions as specifications are becoming more important to consumers in China, added the observers.

The observers also said that Taiwan-based panel makers and touch panel makers are expected to benefit from the increasing demand in 2013 but will most likely lose out to China-based panel makers in coming years due to panel production in China increasing at a rapid pace.