Nation leads in smartphone penetration

Passengers surf the Internet on the Hangzhou subway, May 2014. [Photo/IC]

China now has the world's highest penetration rate for smartphones, according to a report released by the Global System for Mobile Communications Alliance.

The new study, which serves as a prelude for the Mobile World Congress Shanghai which begins on Wednesday, shows that smartphone adoption in China reached 62 percent during the first three months of this year, against Europe's 55 percent on average.

The alliance said the number of unique mobile subscribers, which can account for multiple mobile connections, reached 632 million by the end of March, accounting for 48 percent of the population.

Smartphone penetration is predicted to reach 68 percent by the end of this year, it said.

The proliferation of smartphones across urban areas of China has been fueled by increasing popularity of both international brands such as Apple's iPhone and domestic devices, it said.

4G models are now the primary drivers of sales but the study predicts there will not be any new non-4G models released by Chinese smartphone vendors after 2016.

It forecasts 4G connections in China will reach one billion by 2020, representing about two-thirds of the market by that point, up from the 8 percent at the end of 2014.

Local mobile operators are helping to drive the overall shift to 4G by subsidizing the cost of an increasingly wide range of 4G devices via their retail channels. Chinese vendors are also producing a greater proportion of 4G smartphones than their international rivals.

During the first quarter, 70 percent of the new handset models released by Chinese vendors supported 4G, against a global average of 40 percent. A China-manufactured 4G smartphone costs around 375 yuan ($60) more than its 3G equivalent.

"Chinese smartphone vendors such as Xiaomi Corp, Huawei Technologies Co Ltd and Lenovo Group Ltd are benefiting from a rich local smartphone manufacturing and design ecosystem, which is allowing them to compete with foreign smartphone brands such as Apple and Samsung," said Hyunmi Yang, chief strategy officer at the GSMA.