In May 2014, Strategy Analytics published a report revealing that China would become the world’s leader in the mobile market. Indeed, the market research company based its conclusion on the prediction that the demand for 4G smartphones would be more than three times higher in China than in the United States. Approximately $83 billion are expected to be generated from corresponding mobile sales in China, compared to $60 billion in the United States.
What Is Driving China’s Demand for Smartphones?
One major cause has been identified: the increase of the information transfer speed. As you might know, 4G smartphones allow users to transfer data faster than 3Gs. To take advantage of this new feature, Chinese cellphone users are shifting to 4G smartphones, which in turn is boosting China’s place on the global mobile market.
But when it comes to profitability, the United States still leads the mobile market. Looking at the research data from Strategy Analytics, one can see that the average selling price of 4G smartphones is considerably higher in the United States than in China. But this can be imputed to the fact that American phone carriers offer a lot more subsidies.
Will China Keep Its Crown?
That China could potentially become the world’s largest mobile market certainly deserves to be headlined, but there’s another question worth asking: how long will it hold its crown? A report from Quartz indicates that there now are fewer Chinese consumers buying smartphones. The report was conducted over the course of a year, from May 2013 to April 2014. Considering how high the demand for 4G smartphones has been, it seems safe to assume that a decrease in the growth of mobile phone users in China will negatively affect the number of mobile units sold.
China is set to become the first country to beat the United States in the global mobile market. Although there are reports stating that China’s leading position won’t last, it remains an achievement and reminds us that nothing is meant to be permanent in the ultra-competitive world of global commerce.
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