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10 forecasts for China's smart connected devices

Posted: 05 Feb 2015 ?? ?Print Version ?Bookmark and Share

Keywords:IDC? smart connected device? PC? tablet? smartphone?

China's shipment of smart connected devices (SCDs), which include PCs, tablets and smartphones, was about 510 million units in 2014, a YoY increase of 16.2 per cent, according to the latest report from IDC. Breaking down the broad category, PC shipment reached 61.02 million units, down by 5.5 per cent YoY; tablet shipment hit 27.86 million units, up by 7.5 per cent YoY; and smartphone shipment was 420 million units, up by 20.9 per cent YoY. The market research firm further predicted that this year, the shipment of China's SCDs will arrive at 540 million units, while YoY growth will slow down.

According to Nick Mu, senior analyst of IDC China, "2014 witnessed the rapid integration of China's SCD products. In 2014, many factors changed China's SCD market including the penetration of SCD products into lower tier cities, changes in sales channels, as well as the impact of smartphones and tablets on PCs."

Although the overall growth of China's SCDs will slow down a little bit, the real question is what will occur in regional markets and urban markets, at different tiers of cities as well as different products and channels? Which trends will determine how consumers and suppliers adapt to the market changes? Bearing these questions in mind, IDC came up with 10 predictions for China's SCD market in 2015.

1. PC demands will recover 1st- to 3rd-tier cities

In the recent two years, PCs were impacted by smartphones and tablets, in the way that the sales of the smartphones and tablets were greatly stimulated by the demand for the mobile Internet. Thus far, PCs didn't fare well in the mobile Internet age, and consumers' PC-upgrading cycle was undoubtedly prolonged. Recently though, Microsoft has formally issued Windows 10, which was advertised as the universal OS compatible on PCs, tablets, smartphones and all desired devices. It is expected to become the standard in the PC industry in 2015, especially for the corporate users in the 1st- to 3rd-tier cities and the individual consumers pursuing interconnectivity. Hardware manufacturers will begin to see the redemptive recovery resulting from the consumers' accumulated demands to upgrade their PCs.

2. Smartphone market growth in the 4th- to 6th-tier cities will slow down

In recent years, smartphones have been substantially popularised, thanks to high subsidies offered by telco operators and the fierce competitions among manufacturers of medium-to-low-end products. In 2014, the shipment of China's smartphones reached 250 million units in the fourth- to sixth-tier cities, a YoY growth of over 25 per cent. However, with the saturation of the smartphone market, these cities will face the challenge of transforming from increment market to replacement market. The explosive growth will come to an end. IDC predicts that in 2015 the growth rate of smartphone shipment in the 4th- to 6th-tier cities will be lowered to a single digit.

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