Chinese smartphone shipments fell dramatically in the first half of the year, according to official data, and look set to fall to a 10-year low by the end of this year.

The news sheds some light on Apple’s first-ever iPhone discounts on its official Chinese website …

Nikkei Asia reports.

This echoes a recent Canalys report:

Market saturation, longer waits between upgrades, and increasingly budget-conscious consumers combine for what could prove a prolonged downturn.

In the first half of the year, smartphone shipments in the world’s largest market sank 21.7% on the year to 134 million, according to the China Academy of Information and Communications Technology.

One Chinese smartphone maker says that people are keeping their existing phones for twice as long as they used to.

“The full-year shipment projection could end up well below 300 million units, making for the worst performance since 2012,” the research company said in a report.

The global smartphone market has been badly hit by a combination of supply chain problems, high inflation, and economic uncertainty, leading many consumers to reduce spending on discretionary items like new phones.

Consumers are upgrading handsets less frequently. “It used to be 16 to 18 months, but recently it’s been 36 months,” a Vivo executive said.

The position in China has been exacerbated by city-wide lockdowns as part of the government’s continued insistence that such drastic actions will enable it to completely eradicate COVID-19. This has led to many being unable to work, while others are not allowed to leave their factories.

Apple has, however, fared better than most. The Chinese government doesn’t provide any breakdown across brands, but Canalys reported big declines for Oppo, Vivo, and Xiaomi – while the iPhone 13 continued to sell well across the globe.

All the same, the iPhone maker does seem concerned. The company has always avoided offering iPhone discounts on its official website, preferring instead to quietly offer discounts to resellers on the understanding that the savings will be passed onto consumers. But last month the company for the first time also offered iPhone discounts on the Apple website.

Now, two supply chain sources have told Reuters that iPhone sales have continued to do well “in July despite signs of cooling market demand for other smartphone makers.”

Photo: Daniel Romero/Unsplash

Many products on Apple’s official website in China have started to be discounted. This seems to be the first time that Apple is offering a direct discount on the official website. The campaign is limited to 4 days, and you can get up to 600 RMB (about $89) off.

Includes iPhone 13 series, iPhone SE (3rd generation), iPhone 12/12 mini, Apple Watch SE, AirPods Pro, AirPods (3rd generation).

While the discounts are not huge, they are likely to boost sales to a worthwhile degree. We’ve already seen the iPhone outperform local rivals during the 6.18 festival, when discounts were available from major retailers.