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Another Sign China's Smartphone Market Is Cooling, One Day After Apple Seeks to Calm Investors

IDC predicts that smartphone shipments to China in 2015 will grow by a mere 1.2 percent over last year.

Feng Li / Getty Images

The latest global smartphone forecast from researcher International Data Corp. projects slowing growth in China, one day after Apple Chief Executive Tim Cook sought to reassure investors about its sales in the region.

IDC predicts that this year’s smartphone shipments to China will grow by a mere 1.2 percent over last year, marking a dramatic slowdown in the world’s largest market for mobile phones. In 2014, shipments had risen nearly 20 percent over the prior year as China consumed roughly one-third of all smartphones.

The report comes a day after Cook took the unusual step of writing a message to CNBC’s “Mad Money” host Jim Cramer Monday to say that Apple’s iPhone business is going strong in China. The statement was designed to address investor concerns at a time when Apple has shed $165.5 billion in market cap since July 20. Apple offered similar assurances earlier this month, in an article in USA Today.

“I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August,” Cook wrote. “Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last two weeks.”

IDC is only the latest research firm to report an overall cooling Chinese smartphone market. Strategy Analytics pegged growth at a 3 percent year-over-year rate in the second quarter — mainly because of an unfavorable economic climate and market saturation (yes, even in a populous place like China, only so many people are reached by mobile networks and can afford a smartphone). Researcher Canalys reported an even more anemic growth rate of 1 percent in the first half of the year.

Apple has thus far been able to grow its share in China, despite the overall sluggishness, researchers and Wall Street watchers say. Its iPhone 6 and iPhone 6 Plus tap into pent-up demand for larger-screen smartphones from Apple, helping it achieve double-digit gains of 67 percent for the first half of the year, Canalys estimates.

IDC projects Apple will see eye-popping year-over-year growth of 46 percent in 2015, but notes the company can only outpace a 1 percent market for so long. The firm forecasts that Apple’s year-over-year growth will slow to about 8 percent in 2016.

Apple did not respond to a request seeking comment.

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