The integration of consumer electronics into the 3C national subsidy program under the ConsensusAI software and hardware integration is expected to bring about a wave of device replacement.

On December 3, the Science and Technology Innovation Board Daily News recently released a research report, predicting that consumer electronics such as mobile phones and AIoT terminals are expected to be included in the 2025 3C national subsidy, and the subsidized categories will be further expanded.

Guobu, short for National Government Subsidy, is a financial subsidy provided by the government to encourage the development of specific areas. For example, the 3C Guobu is a national subsidy policy for 3C digital products (including computer, communication, and consumer electronics products), which aims to promote consumption and encourage people to buy mobile phones, tablets, digital cameras, and other products.

Currently, subsidies can be roughly divided into national subsidies and local subsidies. Since August this year, national subsidies have mainly focused on major household appliances, including computers, televisions, washing machines, refrigerators, air conditioners, water heaters, range hoods, and household stoves, a total of 8 categories.

According to Aoweiyun Network data, from August 26 to November 17, 2024, the online market retail volume, retail sales, and average price of seven major categories including color TVs, air conditioners, refrigerators, washing (drying) machines, water heaters, range hoods, and gas stoves rose by 18%, 25.2%, and 6% respectively compared to the same period last year. The offline market retail volume, retail sales, and average price rose by 49.5%, 65.9%, and 9.5% respectively compared to the same period last year, and the combined promotion of national subsidies and the Double Eleven platform’s big promotion contributed to the recovery of the home appliance market.

In terms of consumer electronics, the current policy support for 3C digital products such as smartphones is still mainly focused on subsidies for rural areas and trade-in programs. Recent specific policies include:

On November 26, Jiangsu Development and Reform Commission issued the “Guidelines for Subsidy Special Activities for 3C Digital Products”, which provides subsidies of 15% of the transaction price, with a subsidy limit of 1500 yuan, for 7 categories of 3C products including mobile phones, tablets, digital cameras (including camera bodies and kits, excluding lenses and other accessories), smartwatches, learning machines, translation devices, and wireless Bluetooth headsets. The subsidy period is from November 27, 2024 to December 31, 2024. If the subsidy quota is used up, the subsidies will end in advance. The subsidy quota has not been announced and is only available for offline purchases.

On November 27, the General Office of the Guizhou Provincial People’s Government issued the “Several Policies and Measures of Guizhou Province to Promote the Sustained Economic Recovery”, which included more high-quality consumer goods such as domestic mobile phones and tablets into the scope of trade-in support on the basis of the 17 types of household appliances and 12 types of household goods that have been supported.

Huafu Securities’ research report on December 1st pointed out that from a policy perspective, commodity consumption is still a key area of support, and compared with previous home appliances and home products, mobile phones/tablets/computers, etc. have been newly included in the scope of support. More policies are expected to be introduced in the future to drive demand for 3C products and bring investment opportunities related to the industrial chain. Huaxin Securities believes that in the future, the superposition of AI big models and consumer electronics subsidies may stimulate the replacement of mobile phones and consumer electronics.

CITIC Securities further pointed out that mobile phones and AIoT terminal devices are more likely to be included in the national subsidy in 2025, and it is expected to be launched around the two sessions, with a potential duration of more than half a year. Domestic brands with a higher proportion of dump in the Supply Chain are relatively more beneficial. In addition, considering the marginal cost drop of expanding production and the increase in capacity utilization, upstream IC design companies and heavy asset component companies are relatively more beneficial than the middle and lower reaches.

IDC report shows that the global smartphone shipment is expected to rise by 6.2% to 1.24 billion units in 2024, ending two consecutive years of decline and achieving a strong Rebound. However, the global smartphone shipment rise will slow down from next year, with a compound annual rise rate of 2.6% from 2023 to 2028. Factors influencing this include the increased penetration rate of smartphones, extended replacement cycles, and the rapid rise of the second-hand smartphone market.

Source: Science and Technology Innovation Board Daily

Author: Science and Technology Board Daily