China's smartphone market is almost saturated -- so what happens next?

[Commentary] Just like in the US, the smartphone market in China is near saturation. They are now a common tool, owned by the average family, like washing machines or rice cookers. More than 90 percent of cellphone sales in China are smartphones. In the first quarter of 2015, according to IDC, China's smartphone shipments dropped to 98.8 million units, a 4.3 percent drop from a year earlier, the first quarterly fall in six years. So China is now close to "peak smartphone." What happens next? A few possibilities:

1. Apple booms as a status symbol: "Apple is perceived as a luxury brand in China, so its brand status is just as important as its utility in the Chinese market," says Liz Flora, who watches the China luxury market as editor in chief at Jing Daily.
2. More premium competition: In China's saturated smartphone market, other brands will realize that they not only need to make more premium models, they need to do a much better job of them than they have in the last few years.
3. Sub-brands aimed at younger buyers: Looking at the phone market as a whole, many Chinese brands will create or expand sub-brands to challenge Xiaomi.