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Is smartphone adoption plateauing in China? It may be, based on recent research. According to data from Baidu, the number of smartphones in use in China grew just 6% in 2014, vs. 14% in 2013 and a much larger 36% in 2012.
However, Baidu included only smartphones that accessed the internet at least once on a particular day studied, and estimates from sources with a broader definition suggest stronger growth. For example, forecasts released by iResearch Consulting Group in February 2015 put growth in the number of smartphones used in the country at 34.3% in 2014 and estimated another double-digit gain of 21.8% this year.
Either way, the smartphone market in China is still worth being in. Instead of new users, smartphone sales will likely come from consumers looking to upgrade their devices, swapping out one for the other. Nearly seven in 10 smartphones sold in H2 2014 were purchased by existing smartphone owners in China—up 11 percentage points from the first half of last year, according to Baidu. Meanwhile 31% of smartphones were sold to those purchasing a smartphone for the first time; this was down from 42% in H1 2014.
Overall, more than half of all mobile phone users in China will own and use a smartphone at least once a month in 2015, eMarketer estimates. The rise of cheap, domestically produced devices combined with escalating disposable income and faster broadband speeds is fueling China’s growing smartphone market. There will be about 184 million new smartphone users in China between 2014 and 2018, leading its smartphone user base to jump from 38.3% to 51.1% of the total population.
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