iPhone 6 cracks image of China as market for cheap phones

San Franciso

AFTER years of declining smartphone prices worldwide, it looked like the hottest technology had quickly become a commodity. A slump that took decades in computers seemed to have happened to phones in just a few years. Perhaps most troubling was China, the biggest market and traditionally one of the fastest growing. Not only were Chinese settling for cheaper phones; by the beginning of this year, they were buying fewer of them for the first time since the modern smartphone was invented.

While China is no longer the mobile industry's unstoppable growth machine, it could become the next profit frontier. From October 2014 to March 2015, the average price of a smartphone sold in China jumped dramatically, according to data from research firm IDC. It went from US$192 in the third quarter of 2014 to US$239 in the fourth and then US$263 in the first quarter of 2015.