Chinese Smartphone Market Progress and Prospects

Chinese Smartphone Market Progress and Prospects

Sherri Cheng (St. Louis University, USA) and Jujian Chen (University of Missouri – St. Louis, USA)
DOI: 10.4018/978-1-4666-9787-4.ch094
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Introduction

The year 2015 marks the 28th anniversary of Chinese mobile services. In the past twenty seven years, the Chinese mobile communication market has undergone tremendous growth. According to Statista, China overtook the United States in becoming the world’s largest global smartphone market (in terms of shipment) in 2012, with 208 million units shipped. This number accounted for 21 percent of the entire global smartphone market (Statista, 2013c).

In the past two years, the Chinese smartphone market has witnessed another remarkable growth both domestically and internationally. According to Statista (2013b), in 2014, the offline Chinese mobile phone sales were to reach 445 million units, 420 million of them being smartphones. The most recent report from Trendforce has confirmed the forecast, PCworld predicted that Chinese brands had shipped 453.4 million units in 2014 (Kan, 2015).

With the incomparably vast consumer base, China has drawn great attention from smartphone manufacturers worldwide. Companies such as Samsung, Apple, Motorola, HTC, and Nokia have been actively competing in the Chinese mobile phone market in the past years. Chinese domestic manufactures are also on the rise. Xiaomi, the domestic start-up, overtook the sales of Samsung Electronics Inc. at the Q2 of 2014, and tripled its last year sales to reach about 60 million global shipments in 2014 (T., 2014). Lenovo, Coolpad, Huawei, ZTE and Oppo are strong domestic competitors. In addition, Xiaomi and Coolpad have quickly gained market share in international competition with low prices.

By 2014, the smartphone penetration in Chinese mobile phone markets had exceeded forty percent (Statista, 2013a). eMarketer (2014) estimated that the Chinese smartphone users base would be the largest in the world by 2014, with 521.7 million users. According to Chinese Ministry of Industry and Information Technology's official Q4 report in 2014, the Chinese mobile phone market ranked number one in size worldwide with more than 1.273 billion mobile phone subscribers.

With the wide adoption of smartphones in recent years, a great number of mobile applications have been presented to the Chinese mobile app market. With the additional functionalities enabled by the various mobile apps, however, significant threats have also confronted the smartphone users. Although the wide adoption of smartphones has also brought the prosperity of mobile-commerce (m-commerce), it increases concerns on mobile security. Meanwhile, with various apps competing to obtain individual consumer data, malicious hackers aiming to reap illegal financial gains, the threats to data privacy and security to both users and businesses prevail.

In this article, we focus on the Chinese smartphone market’s development process, its challenges and future prosperity. First, we introduce the Chinese mobile phone history and the current smartphone market situation. Second, we describe the mobile app market in China, including the currently popular mobile apps, various categories of apps, and app revenues. Third, we identify challenges in the Chinese mobile app market and offer suggestions to the industry practitioners, users and government. Lastly, we conclude with thoughts on the opportunities for the future of the Chinese smartphone market.

Key Terms in this Chapter

Security Awareness: The knowledge and attitude members of an organization possess regarding the protection of the physical, and especially informational, assets of that organization.

Security: The degree of resistance to, or protection from, harm. It applies to any vulnerable and valuable asset, such as a person, dwelling, community, nation, or organization.

Privacy: The state or condition of being free from being observed or disturbed by other people.

Smartphone: A mobile phone with an advanced mobile operating system. It typically combines the features of a cell phone with those of other popular mobile devices, such as personal digital assistant, media player and GPS navigation unit.

Mobile App: A computer program designed to run on smartphones, tablet computers and other mobile devices.

Mobile Market: The market that trades various mobile phones.

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