Shipments of smartphones in China fell 4.3 percent quarter-on-quarter to 90.8 million from 94.8 million units, the first drop-off since the second quarter of 2011, according to IDC.
"The world has increasingly looked to China as the powerhouse to propel the world's smartphone growth and this is the first hiccup we've seen in an otherwise stellar growth path," said Melissa Chau, a senior research manager with IDC.
"We are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year's model."
Growth however, is shifting to other emerging markets, IDC said, as China's smartphone market becomes increasingly competitive.
Chinese smartphone manufacturers like Lenovo Group Ltd, which acquired Google's Motorola handset unit for $2.9 billion last month, Huawei Technologies Co, ZTE Corp and Xiaomi Tech are already chasing overseas expansion.
© Thomson Reuters 2014