(Yicai) July 15 -- Smartphone shipments in China fell for the fifth quarter in a row, as soaring memory chip costs, fueled by demand from the artificial intelligence sector, pushed up handset prices, according to global market intelligence and advisory firm International Data Corporation.

China's phone shipments dropped 4 percent to about 66 million units in the three months ended June 30 from a year earlier, IDC said in a report published yesterday. The global figure fell 7 percent to 277.5 million, declining for the second consecutive quarter.

Rising memory costs have weighed on Chinese Android phone makers since late March last year, forcing many to raise prices or lower product specifications, thereby dampening the consumer’s willingness to upgrade devices, IDC said. In addition, the effect of government consumption subsidies has gradually faded, removing another source of support for demand, it said.

Huawei Technologies and Apple bucked the market downturn, emerging as the only major vendors to log shipment growth in China during the quarter. The Shenzhen-based firm's shipments jumped 19 percent, lifting its market share to 23 percent from around 18 percent, while its US peer saw shipments surge 24 percent and its share grow to 18 percent from 14 percent.

Unlike most competitors, Huawei and Apple kept prices largely unchanged despite higher component costs and supplemented their offerings with targeted promotions, strengthening their appeal to cost-conscious consumers, IDC pointed out. Huawei continued broadening its product lineup to serve a wider range of buyers, while Apple flagged potential price increases in the second half, prompting some users to buy early, the report said.

Among other Chinese phone makers, shipments by Oppo Mobile Telecommunications tumbled 10 percent, while those by Vivo Mobile Communication sank 11 percent, with both seeing their market share shrink to 16 percent from 17 percent.

Xiaomi's shipments plunged 22 percent, leading to its market share contracting to 12 percent from 15 percent. Honor, which spun off from Huawei five years ago, saw shipments sink 10 percent and its market share 1 percentage point to 11 percent.

Cost pressures are expected to worsen in the second half as manufacturers deplete inventories of lower-cost components bought before prices surged, IDC stressed, adding that this may result in a China's phone market contracting by about 20 percent year on year during the rest of 2026.

Looking ahead to next year, IDC sees little scope for a major drop in memory chip prices, so the market will likely continue to face severe challenges. A meaningful market recovery is expected to be delayed until 2028 or 2029, when a new replacement cycle could stimulate consumer demand and revive shipments, it said.

Editor: Martin Kadiev