Apple, Samsung Among Smartphone Makers That May See Stress as China Contracts

NEW YORK (TheStreet) -- Some of the world's biggest makers of mobile phones, including Apple (AAPL) and Samsung (SSNLF), may be on the edge of seeing their business in China begin to slow down. A new industry report says the country's smartphone market is showing signs of contracting for the first time in years.

The report, from tech industry researcher IDC, said during the first quarter of this year, smartphone shipments in China fell by 4.3% from a year ago, to 98.8 million phones. The data is seen as concerning, as China surpassed the United States as the world's top smartphone market in 2011. IDC attributed the decline to the Chinese smartphone market reaching a saturation point, as sales fell on a year-over-year basis for the first time in six years.

For industry giants like Apple and Samsung, the IDC report portends the possibility of disruption in one of their biggest business markets.

Kitty Fok, an analyst with IDC, said that smartphone makers need to look at China as a mature market, on par with the U.S., United Kingdom, Australia and Japan, instead of an emerging market, where they can just put out any phones and expect immediate high sales in return.

"China is oftentimes thought of as an emerging market but the reality is that the vast majority of phones sold in China today are smartphones," Fok said.

According to IDC, Apple shipped 14.5 million phones in China during the first quarter, to give it 14.7% of the country's market share, up from 8.7% a year ago. Apple shipments rose 62% from the first quarter of 2014.

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