Chinese companies Huawei, Oppo, and Vivo ranked the top three in the Chinese mobile phone market and out of ten best-selling mobile phones worldwide there are six Chinese bands.
REN Zegang, Jake Sun
In accordance with International Data Corporation (IDC), Chinese companies Huawei, Oppo, and Vivo ranked the top three in the Chinese mobile phone market in the first quarter of 2017. The share of Huawei was 20.0%, Oppo 18.2% and Vivo 14.1%. Apple came to the fourth with 9.2%. Back to 2012, the top and third place in the Chinese marekt was hold by Samsung and Apple.
Internationally while Samsung and Apple continue to hold the first and second position in the first quarter of 2017, Chinese bands of Huawei, Oppo, and Vivo have entered the top five. Out of ten best-selling mobile phones worldwide there are six Chinese bands. Five years ago there was no single Chinese brand in the top five.
Huawei’s international sales was brilliant in the first quarter of 2017: its shipment of mobile phone increased by 50% to 50 nations and 100% to 32 nations; its market share has climbed to 15% in 31 nations and 20% in 21 nations; its total shipment of mobile phones worldwide reached 34.55 million up by 21.6% on year-on-year basis. Consequently Huawei’s global market share has increased to 9.8%.
Chinese phone makers Oppo and Vivo also saw a major growth in international markets in the same time frame whose phone shipments have reached 25.5 million and 22.7 million, an increase of 93% and 82% respectively.
Obviously the mobile phones made in China have gained major progress in market share not only in China but also the whole world.
Although holding the top two positions in the global market, Samsung and Apple witnessed a sluggish in sales in the first quarter this year. Samsung recorded just 1% growth while it was minus 1% for Apple.
Analysts emphasized that among top 10 mobile phone makers worldwide, Huawei, Oppo, and Vivo have grown faster than the average, which has produced enormous pressure on Samsung and Apple.
Lu Yue, director of Communications Information Research Institute commented that apart from dramatic growth in the domestic market, the expansion of output of Chinese mobile phones has also benefited from the growth in market share in India, Middle East, Africa, Asia and Europe. In these high-growth markets, Chinese mobile phones have been popular among young consumers thanks to their relatively low price and high quality. Sale of Chinese mobile phones has won the first place for 5 consecutive years in the world with market share of 47% in 2014, 53% in 2015 and 61% in 2016.
In the high-end sector, Huawei is continuing to challenge Samsung and Apple. As of the first quarter of this year, Huawei’s share in the high-end sector reached 6%. By seeking breakthrough in the settings related to charger, camera and video-audio display, Oppo, Vivo have also made rapid improvement in the high-end sector.
An Hui, director of Research Institute for Electronic Information, CCID Consulting Group, made comments that Chinese phone makers have built their unique advantages thanks to fierce competition in the domestic market which is the largest and fastest growing one in the world. While Huawei has developed sophisticated chips for its mobile phones of P series and Mate series, Oppo and Vivo have achieved a high popularity among young people, in particular those in small cities in inland provinces, through effective marketing and development of some attractive functions.
Two factors should be highlighted to the rise of Chinese mobile phone industry. First, the breakthrough by Chinese companies in setting up international standard for mobile communication. Specifically the commercialization of TD-SCDMA and TD—LTE standard in 2012, which are the standards for third generation mobile communication initiated by Chinese companies, have played an important role in promoting the development of Chinese mobile phone manufacturing industry. It is estimated that from 2013 to 2015, the establishment of the standards mentioned above directly contributed to an expansion of production value up to 1.29 trillion yuan to the Chinese mobile phone manufacturing.
The second factor to the success of Chinese mobile phone makers is their commitment to research and development. In 2015, R&D investment by Huawei increased by 37.88%, making its total R&D investment up to US$ 49 billion over the past 10 years.
Absent of indigenous chips and displays have been the outstanding weakness to the Chinese phone makers. However this problem has been preliminary resolved by Huawei thanks to its great effort in the past 10 years.
HiSilicon Semiconductor, a wholly-owned subsidiary of Huawei, has successfully developed more than 100 kinds of chips with independent right of intelligence property and over 500 patents. At present, more than half of Huawei’s mobile phones are fitted with HiSilicon chips. Many commentators in the industry consider HiSilicon’s Kirin 960 is ready to take on the chips of Samsung and Qualcomm.
Xiaomi is the second domestic mobile phone maker that has developed its own chips. In February 2017, Xiaomi released its first independently developed chip — “Surging S1”, which makes it the fourth position in self-ownership of chips after Apple, Samsung and Huawei.
Statistics show that in the first 5 months of 2017, 20% of Chinese made mobile phones have fitted with local developed chips. In relation to FHD Display, shipments from Tianma Microelectronics Co. Ltd has ranked second globally only to JDI from Japan, with the market share of nearly 20%. In addition, Chinese battery suppliers such as BYD and Desai, and headphone and speaker suppliers such as Goertek and AAC technology, are growing into industry leaders. In 2016, Apple has 766 suppliers worldwide, in which 346 suppliers are from China.
Large economies of scale, a huge and matured market, a sophisticated mobile phone manufacturing industry with complete range of suppliers have attracted major international companies to join the mobile phone industry in China. The concentration of activities in innovation and marketing as a result has further reinforced the development of the Chinese mobile phone industry.