Rise of the Smartphone

According to a Q2 2015 smartphone findingsreleased by GfK on Monday, average pricetags on handsets inflated notably in China during the previous quarter, with total sales value in the country having increased by 17 percent over the same period last year. This was despite a registered slump of 10 percent in total sales volume.

A total of 88.7 million handset units were shipped in China during the second quarter this year, down from last year's 98.6 million units. The 10 percent year-on-year decrease in shipment in the second quarter followed a decline of 14 percent recorded in the first quarter, GfK noted. Meanwhile, smartphone sales reached $26.8 billion in China during the second quarter, up from $22.8 billion for the same period in 2014.

"Strong demand for high-end smartphones ($500+) pushed smartphone value up 17 percent year-on-year to $26.8 billion in the quarter. The high-end smartphone market now accounts for 17 percent of the market, up from 10 percent in Q2 2014 -- and is growing at the expense of the low-end," said the research note.

GfK also forecasts the demand for high-end handsets to expand 28 percent year-on-year in China, the strongest growth in this price band of any region in 2015.

The results may deliver a negative signal to Chinese smartphone makers such as Xiaomi and Huawei--local brands that are still competing fiercely for the mid to low-end markets where consumers are chasing well-equipped handsets at competitive prices.

In China, commonly seen high-end smartphones, or those priced over $500 as defined in the GfK report, are Apple's iPhones and Samsung's flagship models. But their fates differ dramatically, withApple's revenue surging 71 percentfor a record-breaking second quarter of sales in the country, while Samsung lowered prices on flagship smartphone models in an effort to boost its gloomy sales.