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China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

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Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#81

Post by melling »

bruceb wrote: post #78
melling wrote: post #72

Earlier quoted context omitted.

Because I want a great camera in my pocket. It’s only a few dollars more a month.

There will always be people who want the best, but good enough solution serves most people. Smart phones have reached a point where most are at least good enough. A flagship Samsung is say $700. That is $500 more which is more than a couple bucks a month. Clearly well worth for you but probably not for a good portion of society.

You’re talking in generalizations. Got any data to back up your claims? The average selling price for iPhones keeps increasing, and it’s over $700.

If you’re talking about global markets then of course, $200 phones have always been more common. That’s why Android has 80% market share.

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#82

Post by matwood »

GFischer wrote: post #12
anilshanbhag wrote: post #10

It sometimes amazes me that people switch their phones so often. I tend to have a phone for 3 years. Many of my friends change every year ! One step to towards reducing global warming is reducing consumption.

I have a Xiaomi phone. It costs less than 200 dollars after taxes in my country, and it's great. My cell phone company basically gives them for free in exchange for the 2 year contract, so after my 2 years are up, I'm definitely switching it for a newer model, or I'm leaving money on the table. Many people are way more careless than I am, or heavier users, and definitely switch every year (or even less!). Chinese pho…

That's not free, and is basically back to the subsidized plans that were so terrible. With TMO I know exactly what I pay for service and for the phone. I could pay the 0% loan off on the phone today and my bill will down accordingly. When the 2 years is up, my bill will go down accordingly. I could pay off the phone and leave TMO today if I wanted to.

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#83

Post by jpeg_hero »

diminish wrote: post #5

After relentless growth we're about to arrive at a plateauing smartphone market. I wish I could read insights from experts on what to expect in coming years in smartphone market in light of similar markets which entered a no growth zone. Specifically what will happen to prices, market shares , unit sales, pace of innovation, competition, international growth, developer ecosystems. Anyone?

Looking at the PC plateau. Dell would sell a $700 PC, and then next year when it should have cost $350, they didn't sell it for $350, they sold a different PC for $700.

So "mainstream" handset prices wont go to zero, or $50 bucks. The market will probably establish a set of price points, and vendors will supply models to compete at those price points.

Think "entry-level", "prosumer" "flagship"

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#84

Post by visarga »

slezyr wrote: post #14
dis-sys wrote: post #4

Smartphone maker Xiaomi is rushing to get its IPO done, the market is betting a $100 billion valuation [1]. This reminds me what its founder Lei Jun said a few years ago - "Even a pig can fly if it is in the middle of a whirlwind" [2]. Now the market has apparently reached its peak, I am wondering whether those who are thinking to buy Xiaomi shares will find their whirlwind and fly. ;) [1] https://www.telegraph.co.uk…

Well, xiaomi produces not just smartphones. Laptops, TVs, Wearables, "Smart" Scales and other stuff.

I have an Xiaomi robovac. It's just amazing, smartest little thing. It's like the feeling I got when I bought my first iPhone.

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#85

Post by ShroudedNight »

baldfat wrote: post #69
jdietrich wrote: post #63

Earlier quoted context omitted.

The Chinese market is different. Chinese carriers offer minimal subsidies, so most customers are paying close to full retail for their phones and aren't tightly coupled to a two-year upgrade cycle. Used phones are a popular choice for value-oriented customers. Repair is the norm rather than the exception, so most customers will replace a cracked screen or a weak battery rather than just disposing of their phone. Labo…

> consumers are starting to wise-up to the benefits of paying cash for a mid-range device rather than taking the "free" upgrade when their contract expires. What "free phones" they are all leased now. There might not be a monthly fee but at the end of the lease their is a buy out to be paid. My wife's Essential phone (SHE HATES IT) is $6 a month for 24 months and then $430 if she want to keep this crash prone phone.

Was there an initial outlay? Depending on when one got it, < $150 for the best two years of what should have been a flagship level device sounds good to me, at least in theory...

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#86

Post by bobthepanda »

nopinsight wrote: post #46
genefriend wrote: post #36

Earlier quoted context omitted.

1.) dollar is reserve currency. Yuan is not. Yuan is barely convertible 2.) US has large debt but way larger assets. 40% of the worlds wealth in fact 3.) US gdp to debt is only around 100%

It's clear that the US is much stronger from the asset point of view. If one looks at real economy, however, China can basically produce almost anything they need, except oil and some advanced electronics (which they are catching up fast and might become self-sufficient within 10 years). The US can do the same in the medium term but it will take time to reestablish its manufacturing industry to cover all needs. Both…

Wasn't there concern that local gov't (provincial and municipal) debt in China is very high and very opaque? https://www.forbes.com/sites/sarahsu/2018/01/02/fears-over-c...

Local governments in the US are constrained by the very real threat of bankruptcy, and often balanced budget requirements.

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#87

Post by digi_owl »

bruceb wrote: post #15

Almost any $200+ phone made since 2015 has a pretty good camera, screen, speed for most people. Why upgrade when what you have is good enough? One used to check out gizmodo/engadget when a new phone came out but seems not anymore as "the new" is only incremental.

It really makes this "old" guy miss the days when Nokia et al would bring out all kinds of wacky attempts at phones.

https://en.wikipedia.org/wiki/Nokia_3650

https://en.wikipedia.org/wiki/Siemens_SX1

These days they all seems to be some variant of a glass slab.

Damn it, the most used apps are "variants" of SMS and MMS in HD...

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#88

Post by jcfrei »

nopinsight wrote: post #29
genefriend wrote: post #13

China’s growth fueled by massive debt is over(350% to gdp, government + corporate + individuals). it’s barely returning one yuan for every yuan debt it takes on. The Chinese consumer is weighed down by housing debt and credit card debt. And the tariff is going to hit the consumers hard; soy prices increases already has Chinese consumers screaming.

Interestingly, the US' total private and public debt amounts to 3.5 times the GDP as well but few seem to have as much concern over its debt as they do China's. Also, the UK appears to have a similar level of private debt as the US, and only a bit less public debt. On public debt alone, China:UK:US is 66:85:107 percent of GDP, according to the IMF. So what is the reason for major concerns over one but not others? Dev…

As the parent noted China has a very high debt to GDP ratio. But more importantly it's really hard to tell in China where the state ends and real capital markets begin (well, they probably don't exist outside of Hong Kong). The Communist Party certainly has a saying when it comes to Chinese banks extending loans to Chinese companies (as a part of their 5 year plans, etc). The US on the other hand has a well regulated and audited capital market. This just means that the debt in China is probably even less sustainable than it appears, which in the long term will either require a gradual depreciation of the Yuan or a constant "cooking of the books" to keep borrowers solvent. The former will cause social unrest when lots of savers see their wealth disappear and the latter just leads to an inefficient economy - with unprofitable "zombie" companies being kept alive by constant loan extensions.

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#89

Post by DenisM »

nopinsight wrote: post #46
genefriend wrote: post #36

Earlier quoted context omitted.

1.) dollar is reserve currency. Yuan is not. Yuan is barely convertible 2.) US has large debt but way larger assets. 40% of the worlds wealth in fact 3.) US gdp to debt is only around 100%

It's clear that the US is much stronger from the asset point of view. If one looks at real economy, however, China can basically produce almost anything they need, except oil and some advanced electronics (which they are catching up fast and might become self-sufficient within 10 years). The US can do the same in the medium term but it will take time to reestablish its manufacturing industry to cover all needs. Both…

I don't see how self-sufficiency matters (unless war). In a globalized economy you want to keep the high-margin business and offload low-margin business to someone else.

Re: China smartphone market suffers hard-landing, shipments decline 21% in Q1 2018

#90

Post by Johnie »

See:

* Bass Diffusion Model: https://en.wikipedia.org/wiki/Bass_diffusion_model

* Diffusion of Innovation Model: https://en.wikipedia.org/wiki/Diffusion_of_innovations

These models have been fairly accurate in forecasting diffusion of innovation. While many of the innovators have started to exit and move on, this leaves the imitators around in a slowing market.

Apple has been surprisingly good at being the forefront of innovation entering a market. While people play catch up in smartphones, Apple has already moved onto the next technological innovation: Apple Watch and wearables.

While one may argue that Apple is more of an imitator than innovator, they have a really unique strategy. They enter a market after the initial innovators have entered with a product that becomes the Dominant Design [1]. They don't focus on the Innovator or Early Adopter market, but more on the Early Majority and Late Majority and exit before the laggards arrive. The Innovator and Early Adopter market require the most capital in R&D and Marketing with lowest return on investment.

[1] https://en.wikipedia.org/wiki/Dominant_design

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