Mobile phones are seen on display at the electronics market in Shanghai.
In 2021, China shipped 342.8 million phones to domestic consumers, up 15.9% year-on-year, according to government data released on Tuesday, implying a sector recovery from a blow it took in the early days of the COVID 19 crisis.
The annual shipments did not scale the pre-pandemic levels.
According to the China Academy of Information and Communications CAICT, shipments were above the 296 million mark that the industry reached in 2020, but were below the level of 2019, when they came in at 372 million for the year.
China shipped 32.7 million smartphones domestically last month, up 29.6% year-on-year.
Phone brands and other hardware companies struggled to source components in 2021 due to a chip shortage and supply chain restraints that hampered the global economy.
The difficulties have compounded problems for Chinese smartphone brands, which have suffered slow growth in recent years, as consumers don't upgrade their phones to the latest models.
Apple Inc., the only major foreign brand competing in China's domestic market, has largely dodged this trend in 2021.
The company reported a revenue increase of 83% year-on-year from Greater China, which includes Taiwan and Hong Kong in the third quarter of 2021.