As the mobile phone market gradually becomes saturated, consumers' brand awareness and loyalty continue to improve, making the survival space for small and medium-sized manufacturers narrower and narrower.

Blue Whale News, September 26 (Reporter Zhai Zhichao) In the first eight months of this year, the domestic mobile phone market delivered an impressive performance, with 5G phones showing the most robust growth momentum.

According to data from the China Academy of Information and Communications Technology (CAICT), from January to August, the total shipment of mobile phones in the domestic market reached 195 million units, a year-on-year increase of 16.6%. Among them, the cumulative shipment of 5G phones was 165 million units, a year-on-year increase of 23.9%, accounting for 84.5% of mobile phone shipments during the same period.

From the above data, it can be seen that consumers' demand for 5G phones is continuously increasing, and they are willing to purchase 5G phones to obtain a better network experience and smoother application experience. At the same time, the growth of 5G phones has also driven the growth of the entire mobile phone market, underscoring the important role of 5G technology in promoting the development of the smartphone market.

It is worth noting that while domestic mobile phone shipments have surged, the number of newly launched models has declined.

According to the CAICT, 47 new mobile phone models were launched in China in August, a year-on-year decrease of 14.5%. Among them, 29 were 5G phones, a year-on-year decrease of 3.3%, accounting for 61.7% of the number of newly launched mobile phone models during the same period. From January to August, 281 new mobile phone models were launched in China, a year-on-year decrease of 4.1%.

Surge in 5G Phone Shipments

Since 2024, the proportion of 5G phones in domestic market shipments has increased significantly, becoming a core driver of market growth.

Blue Whale News reporters have noticed that the rapid growth in 5G phone sales is no accident, driven by a complex interplay of various factors.

Firstly, the accelerated construction of 5G networks has laid a solid foundation for the development of 5G phones. In recent years, China's 5G base station count has continued to climb, with coverage continuously expanding. As of now, the total number of 5G base stations in China has exceeded millions, and 5G networks have covered most cities and regions. With good 5G network coverage, consumers can enjoy high-speed internet access, smooth video playback, low-latency gaming, and other high-quality experiences in more areas.

At the same time, the active planning and layout of mobile phone manufacturers are also important driving forces for the rapid growth of 5G phones. It is reported that since the commercialization of 5G networks, major mobile phone manufacturers have made 5G phones a top priority in product development and promotion. In recent years, they have continued to enrich the range of 5G phones, from price to function, and from the high-end flagship market to the low-end market, with an increasing number of 5G phones being launched.

At the same time, the upgrading of consumer demand has injected continuous momentum into the growth of 5G phones. With continuous technological advancements and improvements in living standards, consumer demand for mobile phones continues to escalate. 5G phones happen to meet consumers' demands for high-speed networks, powerful performance, and rich functionality. For example, applications such as Augmented Reality (AR), Virtual Reality (VR), and the Internet of Things (IoT) can perform better under 5G networks, providing users with more functional value.

It is worth mentioning that consumers' phone replacement cycle has also contributed to the growth of 5G phones to a certain extent. Research reports show that with the continuous updating and iteration of mobile phone technology, consumers usually replace their phones every 2 to 3 years.

Profound Market Changes Are Underway

Behind these data changes, profound market changes may also be underway.

Midstream mobile phone manufacturers face both opportunities and challenges in the process of shipment growth. They need to expand production scale, increase production lines, hire employees, and work closely with suppliers. At the same time, they need to improve production efficiency and reduce costs to maintain competitiveness. By innovating in design, functional features, and operating systems, and introducing unique designs and new technologies, they can attract consumers. In addition, brand building and marketing are also crucial, requiring various ways to enhance brand awareness and reputation, and formulating personalized marketing strategies.

The downstream sales and service links also play an important role in shipment growth. Sales channel partners have more sales opportunities and need to strengthen cooperation with mobile phone manufacturers, improve sales service levels, and provide consumers with a convenient shopping experience. After-sales service providers face greater pressure as the increase in shipments leads to increased demand for after-sales services. They need to strengthen the after-sales service network and improve response speed and quality.

Profound changes are taking place in the mobile phone market, and the same is true for the mobile phone industry chain.

With the growth in mobile phone shipments, upstream component suppliers play a crucial role. Chip manufacturers have increased research and development investment to launch advanced chip solutions in response to the popularization of 5G technology and the demand for improved mobile phone performance, effectively supporting mobile phone operating speeds and emerging applications.

Screen suppliers continue to innovate, with high-resolution, high refresh rates, and OLED, AMOLED technologies providing users with exceptional visual experiences. The maturity of foldable screen technology has added a new highlight to the market. Camera module suppliers continuously improve product quality, with higher-resolution cameras, multi-camera systems, and advanced image processing algorithms making mobile phone photography functions increasingly powerful. Battery suppliers actively improve technology to meet the demands for long battery life and fast charging in mobile phones.

Increased Pressure on Small and Medium-sized Mobile Phone Manufacturers

While profound changes in the mobile phone industry bring opportunities, they also pose challenges for some small and medium-sized mobile phone manufacturers.

As we all know, leading mobile phone manufacturers continue to expand their market share by leveraging their strong brand influence, robust R&D capabilities, and excellent supply chain management capabilities. They have significant advantages in product design, performance optimization, and user experience, attracting many consumers.

For example, brands such as Apple and Huawei occupy an important position in the high-end market, renowned for their excellent performance, smooth operating systems, and outstanding photography capabilities. Brands such as Xiaomi, OPPO, and vivo perform strongly in the low-end market, winning over consumers with cost-effective products and extensive sales channels.

In addition, leading manufacturers have more abundant financial and human resources, enabling them to invest more resources in product development and marketing. They place greater emphasis on product iteration, upgrading, and optimization rather than frequently launching new models. For example, Apple typically launches a new iPhone series once a year, continuously improving product performance and user experience by refining existing product lines. Huawei also continuously optimizes its Mate and P series phones, strengthening its technological advantages in photography, communications, and other fields. This strategic adjustment enables leading manufacturers to better meet consumer demand while reducing R&D and production costs.

In contrast, small and medium-sized mobile phone manufacturers face many difficulties. Firstly, their market share is constantly being squeezed. Small and medium-sized manufacturers are at a disadvantage in terms of brand awareness, technological capabilities, and supply chain management, making it difficult for them to compete with leading manufacturers. As the mobile phone market gradually becomes saturated, consumers' brand awareness and loyalty continue to improve, making the survival space for small and medium-sized manufacturers narrower.

Secondly, small and medium-sized manufacturers have limited R&D capabilities. Limited by financial and technological resources, they struggle to bear the costs and risks of frequently launching new models and can only make minor improvements and innovations based on existing technologies. At the same time, they also face significant challenges in supply chain management, making it difficult to obtain high-quality components and production resources, further affecting their ability to launch new models.

In addition, market positioning is challenging. Small and medium-sized manufacturers find it difficult to compete with leading manufacturers in the high-end market and face fierce competition from other small and medium-sized manufacturers in the low-end market. In this context, it is difficult for small and medium-sized manufacturers to find a clear market positioning and launch new models with differentiated competitive advantages.