TLDRs;
Contents
- China’s mobile shipments dropped 21.8% in May 2025, echoing the 2018 downturn.
- 5G phones still dominate but saw a 17% decline, showing waning momentum.
- Government subsidies boosted Q1 sales but failed to prevent May’s slump.
- Longer replacement cycles continue to undermine sustainable smartphone growth.
China’s smartphone market faced a fresh blow in May 2025, as mobile phone shipments tumbled by 21.8% year-on-year, reflecting a steep drop that is drawing parallels to the 2018 industry shakeout.
According to the China Academy of Information and Communications Technology (CAICT), the country shipped just 23.716 million devices last month, with the downturn reigniting concerns over the long-term viability of growth in the mobile sector.
Even though 5G smartphones continued to dominate, accounting for 21.19 million units or 89.3% of all shipments, this segment also saw a notable 17% year-on-year decline. Analysts say the contraction is part of a broader and more cyclical trend that has defined China’s mobile market in recent years.
A familiar cycle of contraction and consolidation
This May’s figures are not entirely unprecedented. Market watchers point to similar contractions in 2017 and 2018, when the industry went from booming expansion to abrupt slowdown. The 2018 downturn, which saw a 14% drop in annual shipments, led to a rapid consolidation of market share among the top five vendors. That same pattern appears to be re-emerging in 2025, with dominant players using scale, strategic distribution, and product differentiation to weather the storm while smaller brands struggle to survive.
Industry experts note that this cyclicality is baked into the market, with alternating periods of expansion and contraction shaping the competitive landscape. The current decline, while sharp, may signal the start of another consolidation phase rather than an outright collapse.
Consumers hang onto their phones longer
Behind the statistics lies a deeper shift in consumer behavior. Since around 2017, Chinese consumers have steadily lengthened their smartphone replacement cycles.
Once considered eager adopters of each new iteration, many now keep their devices for over two years. In 2018, the average device lifespan reached nearly 27 months, and that trend has only solidified over time.
While the arrival of 5G was once hoped to rejuvenate consumer enthusiasm, it has done little to reverse this behavioral shift. Most buyers now view modern smartphones as sufficiently powerful for daily use, which has transformed the once dynamic upgrade cycle into a slow-moving market where new releases no longer guarantee surging sales.
Subsidy programs offer only short-lived relief
The Chinese government attempted to revive the sector in early 2025 by rolling out national subsidy programs to encourage device upgrades. These policies fueled a brief resurgence in Q1, with the market growing by 5% and Xiaomi regaining its spot as the top vendor after a strong performance.
However, the May figures suggest that the positive impact of these subsidies was short-lived. Analysts argue that the programs merely pulled forward demand rather than creating new, sustained interest. As the stimulus effect fades, the underlying softness of the market has re-emerged, calling into question optimistic full-year forecasts.
Strategy, not scale, will define success
With economic headwinds, longer upgrade cycles, and subsidy fatigue setting in, manufacturers must now pivot away from traditional growth models.
Simply pushing out more devices will no longer be enough. Instead, players in China’s mobile space will need to focus on product innovation, ecosystem integration, and differentiated services to maintain relevance in a tightening market.
For now, the 21.8% plunge in May serves as a stark reminder that the Chinese smartphone market, once the engine of global mobile growth, is entering a new and more mature phase, one marked less by explosive expansion and more by strategic survival.
