[News] China’s Smartphone Market Enters the “National Subsidy” Era

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On January 20, the “National Subsidy” program for consumer electronics officially launched, igniting a wave of enthusiasm in China’s smartphone market.

Up to ¥500 in Subsidies, Discounts on Multiple High-End Smartphones

According to the Chinese government’s “Subsidy Implementation Plan for Purchasing Smartphones, Tablets, and Smartwatches (Bands)”, individual consumers are eligible for subsidies when purchasing smartphones, tablets, or smartwatches (bands). The subsidy criteria are as follows:

For products priced under ¥6,000, a subsidy equal to 15% of the sales price is provided.

Each consumer can receive a subsidy for one item per product category, with a maximum subsidy of ¥500 per item.

Based on this policy, smartphones priced around ¥3,333 will benefit from the highest discount percentage, allowing consumers to receive the full ¥500 subsidy. Industry experts predict that mid-to-high-end smartphones in the ¥3,000–¥4,000 range will be the primary beneficiaries of this subsidy, likely stimulating device upgrades among consumers. Additionally, smartphones priced under ¥2,000 may attract price-sensitive consumers, leveraging the favorable subsidy.

High-end smartphones priced above ¥6,000 are not eligible for subsidies under the policy. However, recent reports indicate that several high-end models have been adjusted to below ¥6,000 on e-commerce platforms, combining the subsidy with year-end promotions to attract buyers.

For example, the Apple iPhone 16 (128GB), priced at ¥4,999 on JD.com, is eligible for a further ¥500 reduction with the national subsidy, bringing its cost down to ¥4,499.

Fierce Market Competition: What Will the “National Subsidy” Bring?

Over the past year, the consumer electronics market, led by smartphones, has experienced slow recovery due to global economic conditions. Entering 2025, the momentum for recovery in this sector remains uncertain, and the outlook for the smartphone market is still unclear.

Against this backdrop, the introduction of the “National Subsidy” is expected to boost the development of the smartphone industry in two key ways:

Lowering Costs for Consumers: The subsidy reduces the cost of purchasing new devices, potentially stimulating consumer demand and fostering growth in the domestic smartphone market.

Driving Technological Advancements: By increasing demand, the policy encourages consumers to focus on new technologies and features in smartphones, further driving innovation in the industry.

At the same time, the “National Subsidy” is likely to intensify competition in the smartphone market. To attract consumers, manufacturers will need to continuously improve product quality, enhance service levels, and accelerate innovation.

In an era where smartphone homogenization is becoming increasingly pronounced, the industry is optimistic about the future performance of foldable phones and AI-powered smartphones.

(Photo credit: Huawei)