4G Popularity Rises Rapidly in China

A new study by GSMA Intelligence shows that smartphones will represent two-thirds of mobile connections in China by the end of the year. Smartphone adoption in the country was at 62% by the end of Q1’15 – ahead of Europe’s 55%.

The increasing popularity of international brands, as well as domestic vendors, is driving the rapid adoption of smartphones in urban China. 4G models are now the most popular handsets.

In Q1’15, there were 632 million unique mobile subscribers in China: 48% of the population. Smartphones accounted for 805 million of the total 1.3 billion mobile connections – and are predicted to reach 913 million (68%) by the end of the year. However, growth in smartphone connections has slowed recently, as the market matures. The majority of current smartphone sales are now replacements, rather than new connections.

3G is fading as 4G popularity grows. The GSMA study predicts that no non-4G models will be introduced by Chinese smartphone vendors after 2016. 4G connections in the country are expected to reach 1 billion by 2020, up from 100 million at the end of 2014.

An average Chinese smartphone costs CNY1,100 ($175). The average smartphone from a Chinese vendor is CNY935 ($150), compared to CNY1,765 ($285) from an international brand – although vendors such as Xiaomi and Huawei are increasingly targeting the mid- to high-end markets.

Chinese vendors are producing a greater range of 4G smartphones than their international rivals. 70% of new models from Chinese vendors in Q1’15 were 4G, compared to a global average of 40%. The difference in price between 3G and 4G smartphones, manufactured by a Chinese vendor, is about CNY375 ($60).

GSMA’s new study is available to members of GSMA Connected Intelligence.