Goldman Sachs: Subsidies for Chinese smartphones starting to expand in January, optimistic about short-term increase in shipment volume.

Goldman Sachs released a research report stating that the National Development and Reform Commission (NDRC) announced on January 3 that the scope of national subsidies will expand to include smartphones, tablets, and smartwatches by 2025. Goldman Sachs expects that the national subsidies will cover more consumers, driving market demand in the short term, while the long-term product cycle depends on technological upgrades or changes in appearance. Goldman Sachs predicts that the shipment volume of Chinese smartphones will increase by 4%/2% year-on-year in 2024-2025. The bank stated that as the upgrade to the next 6G technology will take time, the shipment volume of Chinese smartphones is expected to grow modestly by 2% in 2025. The growth in the high-end market is stronger, with an expected annual growth of 10%/7% in shipment volume from 2024 to 2025, reflecting consumer demand for high-end phones. High-end phones have the latest technology to attract consumers. The report mentioned that although the subsidy amount has not been disclosed, for reference, several smartphone subsidies announced by local governments in 2024 ranged from 10% to 20%, and last year's national subsidies for home appliances were between 15% and 20%. Considering that promotional activities like Double Eleven and 618 also fall within a similar range of 8% to 20%, Goldman Sachs expects the subsidies to stimulate short-term demand for smartphones, which is an attractive discount for consumers.