China’s smartphone shipments jumped 22.6% in May, accelerating sharply from previous months in a positive sign for the country’s struggling mobile device industry.

Phone makers shipped 25.2 million handsets last month in the buildup to China’s second biggest shopping festival, 6.18, which features discounts that stretch from late May into June. That may have helped manufacturers offload devices, marking a rise of over 4 million units compared to the same period a year earlier, according to the China Academy of Information and Communications Technology.

The domestic market has been stuck in a protracted malaise, and even with the latest growth, it’s down 2.6% from January through May, the official data show.

Worries about the country’s economy and a glut of unsold supply crimped demand for more hardware. As the world’s biggest smartphone market, China accounts for much of the global industry’s slowdown, and it was forecast by IDC this month to be the biggest drag on worldwide shipments. Suppliers like Sony Group Corp., which provides image sensors for Apple Inc.’s iPhone cameras, have also warned they don’t expect demand to recover this year.

Still, shipments returned to growth after months of contraction this year and May’s positive result supports hopes for a faster recovery.

What Bloomberg Intelligence Says

Smartphone providers Apple, Samsung, Oppo and Vivo are likely to see improving demand later this year after a slump through 1H. We expect the smartphone market to drop 4% in 2023 to $480 billion, due largely to early weakness, but China’s reopening, the Apple iPhone 15 refresh cycle and the need to upgrade older devices could be leading catalysts for a rebound later this year and a stronger 2024 recovery.

— Woo Jin Ho, senior industry analyst

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