News & Analysis
Slideshow: Chinese smartphone menu
Junko Yoshida
9/10/2012 7:46 PM EDT
SHENZHEN, China – Huawei, ZTE, Lenovo and Coolpad are the Chinese smartphone brands you probably know. But what about Kente, Meizu, SGiFe, ThL or Zopo?
As the Chinese smartphone market surges, few should be surprised to see so many new brands popping up. After all, the Chinese like nothing better than a hot market.
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So-called white box vendors (or "Shanzai," as they are sometimes called, even though it sounds derogatory) still exist in China. They assemble products from standardized parts and sell them to operators, OEMs/ODMs or even to the gray market. Now, some of the non-branded, local mobile handset design houses are wising up, changing their business model and moving up the food chain.
The target for these new brands remains domestic. But it’s important to note that vendors are not just slapping brand names onto generic smartphones. They’ve made a conscious effort to create a whole storefront with a unique brand, a la, the Apple Store, rather than selling in crowded retail shops where a vast array of smartphones are sold.
When I say storefront, I mean a cubbyhole on Huanqiang Road here, nothing like the sleek Apple stores in Manhattan and Palo Alto. Still, Chinese manufacturers have a new slogan: Branding matters.
Who leads China smartphone market? (% share based on unit shipment)
(Source: IHS iSuppli Research, August, 2012)
New brands like Kente, Meizu, SgiFe, ThL and Zopo – many of which have emerged in the last 12 months – have a ways to go before they can crack IHS iSuppli’s Chinese Top Ten. Nonetheless, these upstarts are thinking big, and many already offer a 5-inch-screen smartphone.
Here's what we found during a recent tour of Shenzhen's consumer electronics outlets.
Welcome to Shenzhen
Next: Where do we start?
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maxmin
9/11/2012 5:19 AM EDT
The hot smartphones in China this year are quad-core phones. CPUs are primarily from Qualcomm, Nvidia & Samsung among which Samsung's Exynos line shows really strong. These high-end smartphones mostly go with large hi-def display, e.g. Lenovo launched its K860 with 5.5" supporting 1080p display on August 28 priced at only ￥2188 yuan. The dominant OS of all these is Android 4 but many brands adopt their own custom UI.
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dylan.mcgrath
9/11/2012 4:53 PM EDT
It's amazing that there are all of these handset vendors and products available in China that most of us in the West are completely unaware of.
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GREAT-Terry
9/11/2012 5:40 PM EDT
I believe China is the biggest market for cell phone. So, if any vendor neglect the LTE-TDD development, their market share will be limited. Let's see what iPhone will do in this market.
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DMcCunney
9/11/2012 8:35 PM EDT
@dylan.mcgarth: What's so amazing about it? China is a huge market, large enough to support a number of home grown vendors targeting the local market. The language barrier will mostly prevent us hearing about them, but that's only one reason. China is Terra Incognita for most westerners and our understanding is of necessity surface at best.
It will be interesting to see how the Chinese market develops. Right now, those vendors are all trying to establish themselves and get local market share. There will inevitably be the same sort of shakeouts that happen in any industry as some efforts fail and go under or are absorbed, and others grow larger, till we'll see a few dominant players.
The fun will begin when the survivors get big enough to need broader horizons, and start trying to sell to other parts of the world.
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rick.merritt
9/12/2012 12:44 AM EDT
Smartphone city!
The Kente shop looked like an Apple store and the phones were very much like the Galaxy SIII.
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junko.yoshida
9/12/2012 8:27 AM EDT
From what I gather, China Mobile (which does TD-SCDMA)alone has something like 700 million subscribers. That volume is said to be equivalent to U.S. and European mobile phone users combined!
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docdivakar
9/12/2012 4:20 PM EDT
@junko: I am curious, are these China handset makers offering only mobile phones or do they also offer phones & tablets like Apple & Samsung do? If it is the latter, are they leveraging the invested R&D; in processors and using the same processor platforms for both?
MP Divakar
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junko.yoshida
9/14/2012 2:29 PM EDT
Some are offering both. One thing you should remember, though, is that there is no R&D; involved for these system guys. Companies like MediaTek give phone vendors (and tablet makers) the turnkey solutions. Yes, often times, they are using the same platform.
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docdivakar
9/12/2012 2:54 PM EDT
@junko: what I find surprising is that Samsung has big market share in China in spite of Huawei and ZTE homegrown brands. What would be nice to know is how these handset makers differ in their business models with carriers in China. Obviously some of them are showing losses but I don't know if Samsung is doing any better in China.
I realize many of these models are few years old in China... how often to consumers recycle their old with the new handsets?
MP Divakar
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DMcCunney
9/12/2012 4:32 PM EDT
"what I find surprising is that Samsung has big market share in China in spite of Huawei and ZTE homegrown brands."
No surprise here. From where I sit, smartphones are fashion accessories that just happen to include technology, and the purchase decision is often made for fashion reasons.
People over here often buy phones because they are "cool", and the coolness factor is critical. Purchasers gratifying that desire want something at least as cool as and preferably cooler than the ones used by their friends.
Given that, it it a surprise that a world-wide brand name will get market share? I very much doubt Chinese consumers are that different from those elsewhere.
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junko.yoshida
9/14/2012 2:35 PM EDT
@docdivakar. The first thing to remember about China's mobile market is that consumers go out and buy their favorite phones -- regardless the carriers. So whatever "connections" each of those handset vendors has with carriers doesn't really matter.
Young people do recycle their models every several months -- just like U.S. So, there is really not much different.
Of course, I am talking about the trend in the big cities I have been to. Things may be differnt in the deep country side. But again, the majority of smartphone markets are in big cities at the moment...
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tb1
9/13/2012 8:52 PM EDT
"if any vendor neglect the LTE-TDD development, their market share will be limited. Let's see what iPhone will do in this market."
I think that Clearwire is going with LTE-TDD and Sprint has an agreement with them to offload their LTE network.
So any phone that supports Sprint (which includes the iPhone5) probably has to support LTE-TDD.
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