Smartphone sales in China saw the worst-performing quarter since the country was first swept by Covid-19 two years ago, according to data from Counterpoint Research, which cited weaker consumer sentiment amid economic headwinds and ongoing disruption due to coronavirus outbreaks.

China’s smartphone sales slid 14 per cent in the first quarter of 2022 to 74.2 million units, according to a report published by Counterpoint on Thursday.

Consumer demand was already waning before the recent wave of Covid-19 infections, and combined with slowing economic growth, a decline in retail sales growth and record-high unemployment rates in big cities, the impact on the sector has been significant, said research analyst Mengmeng Zhang.

“We expect smartphone demand to continue to be underwhelming due to weak consumer sentiment and lack of new innovations to stimulate consumers,” Zhang added.

China’s economy grew by 4.8 per cent in the first quarter of 2022 year-on-year, beating expectations but below the government’s 5.5-per cent annual growth target.

Since February, large cities including Shenzhen, Guangzhou, Shanghai and Beijing have all imposed various levels of lockdowns. China’s financial hub Shanghai, which has 25 million residents, has been hardest hit and has yet to announce plans to lift a citywide lockdown that began on April 1 and which has resulted in an array of supply chain disruptions.

Retail sales in the city fell 18.9 per cent in March alone compared to the same period last year, according to Shanghai’s Municipal Bureau of Statistics.

In the first quarter, Chinese smartphone maker Vivo led the pack with 19.7 per cent market share, followed by Chinese peer Oppo and US consumer electronics giant Apple.

Vivo’s newly launched mid-end S12 series, with a self-portrait feature, has been a hit with younger customers and the affordable Y series has also performed well, according to Ivan Lam, a senior research analyst at Counterpoint.

Although Apple’s iPhone 13 series – including the iPhone 13, mini13, 13 Pro and 13 Pro Max – has seemingly lost some momentum, the iPhone 13 remained the best-selling smartphone in China in the first quarter, according to Counterpoint.

Apple has benefited from declining sales at former market leader Huawei Technologies Co, which has been hit by US trade sanctions that have cut off its access to cutting-edge chips. Huawei’s smartphone market share dropped to 6.2 per cent in the first quarter, against 15 per cent in the same period a year ago.

Leading original equipment manufacturers are continuing to work on high-end foldable smartphones, even though the segment accounted for less than one per cent of the market in the first quarter, according to the report.

Huawei, which saw its first quarter revenue fall 13.9 per cent, released the new Huawei Mate Xs2 foldable smartphone on Thursday.