(Yicai Global) Aug. 12 -- China's smartphone shipments fell for a third straight month in July as the market slowly recovers from the pandemic’s impact and many users stick with their old handsets waiting for prices of fifth-generation wireless phones to come down.

Phone shipments fell nearly 35 percent to 22.3 million units in July from a year ago, according to data released by an institute under the Ministry of Industry and Information Technology.

But the 5G category gained traction. They made up over 62.4 percent of total shipments last month, up from 61.2 percent in June, even though volume fell 21 percent to 13.9 million. As a share of the total, 5G handset shipments have gained for seven months.

Consumers tend toreplace their phones every28 months now, two months longer than before, and the high cost of 5G models makes an upgrade less appealing,Yicai Global learned from sellers in rural China.

Brands have excess supply amid sluggish sales, leading manufacturers are destocking, said an analyst. That in turn is squeezing profits at distributors and prompting them to carry fewer new models.

Huawei Technologies, China's biggest phone maker, has already cut its second-half sales forecast. For the year, its shipments could stay below 240 million units because of US curbs on chip sales to the Shenzhen-based telecoms giant, its consumer business group's Chief Executive Yu Chengdong said over the weekend.

An analyst predicted that Huawei's full-year shipments could be as low as 180 million. Yu said the firm moved 60 million fewer phones last year due to the first round of US controls.

The decline shows at the grassroots level. A shopkeeper in southwestern Yunnan province told Yicai Global that his store sold 7,000 phones a month in 2016 but now can only achieve a fifth of that.

In the first seven months of this year, China's smartphone shipments slid more than 20 percent to 175 million from a year earlier, while new models releases fell 14 percent to 260.

Editor: Tang Shihua