Mobile phone vendors face tough time but 'turning point' may come in March

China’s mobile phone vendors face a tough market environment as sales declined and cost of components rose but Nomura Securities said they may face a “turning point” in March.

China’s mobile phone sales fell 27.1 percent last year as the market became saturated after experiencing several years of rapid growth, according to the China Academy of Information and Communications Technology, a research arm of the Ministry of Industry and Information Technology.

Oppo and Vivo cut their orders for flagship models in 2017. Even Apple’s iPhone X sales in December China were at only half of expected sales. 

Meanwhile, the cost of advanced components for memory, sensor and screen, especially in high-end models with the latest technologies, has jumped . But upgrading hardware such as bigger memory may not impress consumers so much, and these two factors put huge pressure on vendors and down-stream suppliers, said Donnie Teng, a Nomura analyst.

But the “turning point” may appear in March when domestic brands are slated to launch new models featuring innovative technologies. The most promising technologies are under-screen fingerprint recognition and 3D sensing developed by Huawei and Xiaomi, Teng said. 

March and April will be key months for the domestic smartphone market which is banking that consumers will accept the new models.