Sandalwood: China's e-commerce mobile sales hit 45.71 million units in 1H23, down 5% YoY.

Under the influence of macro and industry cycles, the overall e-commerce cellphone sales slightly declined in 2023.

According to Sandalwood's China e-commerce market monitoring, in the first half of 2023, cellphone sales in China's e-commerce market were 45.71 million units, a year-on-year decrease of 5%. The overall decline in the e-commerce cellphone market is due to the macro environment, the consumer scene gradually recovered in the first half of 2023, but the expectations for employment and income have not improved significantly, especially durable consumer goods are in a weak recovery state. On the other hand, the current overall market is still at the bottom of the downward cycle, China's cellphone sales started to decline after the rapid growth from 2009 to the peak in 2016, 274 million units in 2022, the market is still in a downward channel; it is expected that the overall cellphone market will decline by more than 5% in 2023, with a market size of 260 million units, e-commerce is expected to decline slightly by 4% throughout the year, with a market size of 98 million units, and the proportion of e-commerce (online) will rise to 38%.

E-commerce price segments show a K-shaped distribution in the first half of 2023, with high, medium, and low-end markets decreasing in a stepped manner year-on-year.

In terms of price segment structure, the high-end market (priced over 4000 yuan) is growing, with its market share rising from last year's 32% to 40%. The share of the mid-end market (priced between 2000-4000 yuan) dropped from 26% to 24%. Meanwhile, the market share of the low-end market (priced below 2000 yuan) declined from 42% to 36%.

In terms of growth rate, despite the overall market decline, the high-end maintains a relatively high growth rate. Specifically, the year-on-year change rates of the high, medium, and low-price markets are +17%, -10%, and -19% respectively. High-end prices have become the key interval for market growth, driven by the high-end market, the first-half mobile e-commerce sales amounted to 180.9 billion yuan, a year-on-year increase of 13%. Amid the overall market downturn, price has become a more critical variable, with revenue and profit indicators taking precedence over sales.

The adjustment of Apple's product line structure has propelled ASP to achieve new breakthroughs.

From June 2020 to June 2023, the ASP of iPhone showed an upward trend, rising from 5716 yuan to 7742 yuan, an increase of 35.3%. The average selling price (ASP) of Apple cellphones has achieved a new breakthrough. This change mainly stems from the adjustment of Apple's product line structure. In the first half of 2023, in the iPhone product line, the Pro Max and Pro versions grew by 187% and 235% year-on-year, significantly outperforming the growth of the standard version.

Android and Hongmeng Enter a Stage of High-Intensity Competition: Average Prices Highly Concentrated, Iteration Pace Accelerating

At the same time, the average price of Android brands is moving from a dispersed distribution to a highly concentrated one, with the range of fluctuations (variance) in brand average prices rapidly narrowing. This change reflects the high consistency of Android brand product structures and the concentration of product releases and listings. This indicates that Android brands have entered a stage of intense competition without differentiation.

In the first half of 2023, the sales share of new Android and Hongmeng products (products on the market within half a year) continued to climb, exceeding 60%. This ratio was only between 40%-50% in 2022, indicating that the competition for new product iterations is accelerating. This high level of competition also drives the overall competitiveness of the Android and Hongmeng markets, especially in the high-end market, where the enhancement of competitiveness is more obvious.

Android and Hongmeng's High-End Breakthrough Reaches a Turning Point: Establishing Strongholds at 4000-6000 Price Range, Further Breakthrough at 6000-8000

In the first half of 2023, Android and Hongmeng phones performed excellently in the high-end market above 4000 yuan, with an overall volume growth of 30% year-on-year. The volume of the 4000-6000 yuan price segment increased by 20% year-on-year, while the 6000-8000 yuan price segment increased by a staggering 103% year-on-year. This growth trend indicates that Android and Hongmeng phones have established a very solid market position in the 4000-6000 yuan price range and have received positive feedback from the market. Brands have entered a positive product iteration stage and have fully competed in this price range.

On the other hand, the 6000-8000 yuan price range has become the fastest-growing segment for Android and Hongmeng phones in the high-end market. Within this price range, the "Pro Max" level products grew by 1610% year-on-year, while "Pro" level products also grew by 147%; in addition, even the basic standard versions achieved a year-on-year growth of 216%. Led by the top-spec versions of Android and Hongmeng phones, the basic standard versions also achieved significant growth, signifying a significant upgrade in the product levels of Android and Hongmeng phones.

Foldable Phones Surpass Startup Phase, Extend Product Lifecycle, and Enter Steady Growth Stage

Foldable phones have also achieved significant sales in the Android and Hongmeng market. In the price segment above 6000 yuan, foldable phones have occupied more than 30% of the market share, becoming a key product category for Android and Hongmeng's breakthrough in the high-end market.

According to Sandalwood's China e-commerce market monitoring, in the first half of 2023, the total sales volume of foldable phones reached 480,000 units, an increase of 78% year-on-year. It is estimated that by the end of 2023, the e-commerce sales of foldable phones will exceed one million units. Foldable phones have begun to attract widespread attention and acceptance from consumers, and their unique features and designs will further enhance the competitiveness of Android and Hongmeng in the high-end market.

From the perspective of product form, vertical and horizontal folding designs have become two mainstream forms. The average price of horizontally folding design products remains at the level of 10,000 yuan, mainly concentrated in the price range of 8000-9000 yuan and above 10,000 yuan; while the average price of vertically folding design products has dropped to the level of 6000 yuan, and new products are mainly concentrated in the price range of 6000-7000 yuan. Additionally, with the advancement of the product life cycle, the sales volume of products priced below 6000 yuan is rapidly growing.

From the perspective of the product lifecycle, the foldable phone market has crossed the startup phase. The sales volume of products on the market for more than six months has begun to grow, and the market share is also increasing, indicating that the foldable phone market has entered a relatively stable growth stage. This trend suggests that foldable phones may occupy a more important position in the cellphone market in the future.

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