China Smartphone Shipments Skyrocket 22.6% in May Following Slump

The global smartphone industry has been witnessing a slump over the last few quarters amid falling sales and high inventories. However, in what looks a healthy sign for the industry, smartphone sales in China – the world’s largest market by shipments – rose 22.6% in May.

Companies shipped 25.6 million handsets in China in May amid strong response to the 6.18 sales event which is the country’s second biggest shopping extravaganza after the Singles Day which is held in November.

The Singles Day event was pioneered by Alibaba which has now restructured its business into six units and is looking to list the unit that houses the cloud and AI business. AI stocks have skyrocketed in 2023 with both Nvidia and C3.ai tripling.

Meanwhile, coming back to the Chinese smartphone industry, despite the discount-aided shopping spree last month, shipments in the first five months are down 2.6% YoY in the first five months of the year.

According to the IDC, China is expected to be the biggest dampener for smartphone sales globally. Apple accounted for a fifth of smartphone sales in China in the first quarter of 2023.

Notably, while the country lifted its controversial zero-COVID policy in December, its economic recovery hasn’t been as brisk as the markets expected.

Goldman Cuts China GDP Forecast, Citing Limited Options to Boost Stimulus

Goldman Sachs — which has cut its forecast for China’s growth this year to 5.4% from 6% — says Beijing is more constrained now because of a shrinking population, elevated debt levels and President Xi… pic.twitter.com/iPyO3HPndm

— PiQ (@PriapusIQ) June 19, 2023

Over the last month, brokerages including Goldman Sachs, JPMorgan, Nomura, and Standard Charted have lowered China’s 2023 GDP growth forecast. The world’s second-largest economy is targeting GDP growth of “around 5%” in 2023.

China’s Smartphone Shipments Spiked in May

The spike in China’s May smartphone shipments is nonetheless positive for the industry which has been battling falling sales for the last many months.

According to Counterpoint Research, global smartphone shipments totaled 280.2 million in the first quarter of 2023 – a YoY fall of 14%.

Global smartphone shipments tumbled last year as well with holiday sales being the lowest since 2013.

According to the Counterpoint report, Samsung shipped 60.6 million smartphones in the first quarter which made it the bigger seller.

Apple came in second with 58 million shipments – the iPhone maker was the biggest smartphone seller in the fourth quarter with 70 million shipments.

While Samsung retook the leadership position in the first quarter, there is a catch – the seasonality in Apple iPhone sales whose shipments tend to peak in the December quarter amid the new launch and holiday sales.

Meanwhile, Apple’s Q1 2023 smartphone shipments were 59 million as compared to 58 million in the corresponding quarter last year. In percentage terms, its shipments fell the least among major producers.

However, when it comes to PCs, Apple underperformed other major players as Mac shipments fell 40% YoY in the first quarter while the industry-wide shipments fell 29%.

Bloomberg Intelligence Expects a Rebound in Volumes in H2 2023

Bloomberg Intelligence expects a rebound in global smartphone sales in the second half of 2023 led by the Apple iPhone 15 launch, China’s reopening, and the refresh cycles for older smartphones.

Gadget sales swelled in the early days of the pandemic as the majority of people were working from home. This led to some preponement of purchases which is now reflected in lower sales.

However, many consumers who bought smartphones between 2020 and 2021 might now look for newer models.

Also, Apple announced the iOS 17 at The Worldwide Developers Conference (WWDC) earlier this month.

The iPhone maker also announced the Vision Pro headset priced at $3,499. The company would launch the gadget next year and it would take on other products in the markets including the Quest headset from Meta.

What meanwhile looked surprising was that the word “artificial intelligence” was missing at the event even as tech companies are going overboard with their AI plans.

Related Stock News and Analysis

• Best AI Crypto Tokens & Projects to Invest in 2023