Chinese firms make smartphone stridesComment on this story
David Williams Barcelona
China’s smartphone makers are on a global expansion drive that could transform the market, analysts say, and one day challenge market leaders Samsung and Apple.
The mightiest, Huawei, Lenovo and ZTE, are battling for attention at the four-day World Mobile Congress opening today in Barcelona, Spain, as their ambitions grow well beyond China’s borders.
Already, China is the largest single smartphone market, with sales soaring 86.3 percent last year, according to technology research group Gartner.
Chinese smartphone manufacturers made most of their sales at home, Melissa Chau, the Asia Pacific senior research manager at International Data Corporation (IDC), said.
But signs are emerging that the boom is set to slow, with IDC reporting a 4.3 percent quarterly decline in smartphone shipments in China at the end of last year, the first hiccup in more than two years of uninterrupted growth.
The sales slowdown was caused by short-term factors, such as a slower-than-expected roll-out of fourth-generation (4G) networks, Chau said. But longer term, she predicted, growth in the Chinese market would slow as more potential customers – people able to afford entry-level smartphones at about 1 000 yuan (R1 779) – owned a device.
“Chinese players are looking beyond their own borders to scale up.” Eventually, manufacturers could take a dominant position in the smartphone market worldwide, she added. “They have a lot of challenges, but in the three-to five-year timeframe, that is possible.”
Chinese groups such as Huawei have carved out a space in developing markets offering affordable smartphones, the fastest-growing segment. Now they are seeking a place in mature markets, where potential profit margins are greater but competition fiercer.
Lenovo struck a dramatic blow last month, agreeing the $2.9 billion (R32bn) purchase of the loss-making Motorola Mobility from Google to grab a strong platform in the Americas and a foothold in Europe.
Though smartphone sales leapt by 42 percent to nearly 1 billion units worldwide in 2013, most of that came from developing countries, Gartner said. In the fourth quarter of last year, sales in mature markets fell on limited growth potential in countries “saturated with smartphone sales”.
Already, in the last quarter of last year, Huawei was the world’s third-biggest smartphone maker, according to Gartner, and Lenovo ranked fourth. – Sapa-AFP