Taipei, Thursday, May 26, 2016 09:22 (GMT+8)
thunderstorms
Taipei
28°C
Digitimes Research: China smartphone vendors rely on international brands for overseas expansion
Anthony Chen, DIGITIMES Research, Taipei [Monday 10 March 2014]

China-based smartphone players' shipments to markets outside of China currently account for 20% of their total volume. As demand from the local market - which has been their main growth driver - is weakening and the China-based players' combined shipments will only grow by 26.7% on year in 2014, expanding their presence in overseas markets has become a priority.

However, expansion in overseas markets needs a large amount of resources and manpower, and a business models that is completely different than the one used in China. Therefore, despite the fact that many second-tier players are aggressively trying to have a share of the overseas markets, most of them are unlikely to achieve good results in the short terms.

First-tier players such as Huawei, ZTE, Lenovo and TCL, however, have more advantages; they have already been operating in other countries for a while.

In 2013, Digitimes Research's figures showed that ZTE shipped 19.1 million smartphones to markets outside of China, trailed by TCL with 15 million units. Huawei and Lenovo ranked the third and fourth, respectively with both having less than 10 million in unit shipments.

Although TCL is not considered a first-tier smartphone player in China, its strong sales growth from exports had significantly narrowed its shipment gap with the first-tier vendors (Lenovo, Huawei, CoolPad and ZTE), showing that China players are able to quickly stimulate demand for their products in overseas markets by selling them under international brand names.

TCL acquired the handset business of France-based Alcatel in 2004. After three years of losses, the handset business started to turn around in 2007 and since has seen stable growth in shipments to overseas markets. TCL's smartphone shipments to overseas markets surpassed six million units per quarter starting the second half 2013.

TCL only has less than 10% of its handsets shipped to the domestic market in China, and since its TCL brand has a higher recognition than its sub-brand Alcatel in China, the vendor is mainly selling its Alcatel smartphones in markets outside of China, adopting a strategy of pushing different brands for different markets.

Lenovo has already been selling its own-brand smartphones in Asia, Latin America, Eastern Europe and Africa. Digitimes Research expects its acquisition of Motorola Mobility to help the vendor further expand in North America, Europe and Latin America.

For North America and Western Europe, Lenovo will release smartphones under the Motorola brand, but will promote both brands - Motorola for the high-end/mid-range segment and Lenovo for the mid-range/entry-level segment - in emerging markets and China.

By covering all the market segments, Lenovo is aiming to significantly boost its shipments to ease the impact of its different product lines fighting each other on the market.

Lenovo has revealed that it is planning to release products under Motorola in the second half of 2014 and will sell them in both overseas markets and China. With its dual-brand strategy, Digitimes Research expects Lenovo's smartphone shipments to reach 60.9 million units in 2014, surpassing Huawei and become the leader of the China smartphone industry.

TCL, with surging shipments to overseas markets, is expected to ship over 25 million smartphones in 2014, widening its gaps with other second-tier players.

Both cases - Lenovo and TCL - demonstrate the importance of brand recognition in boosting their shipments to overseas markets.

This article is an excerpt from a Digitimes Research Quarterly Data Report (China smartphone market and industry – 1Q 2014). Visit our latest Data reports.

Topics: Page 2

Realtime news
  • Taiwan market: Smartphone sales slow down in April

    Mobile + telecom - Newswatch | 10h 42min ago

  • ASE, SPIL halt trading pending release of material information

    Bits + chips | 12h 21min ago

  • Sony sees strong LCD TV sales in 2016

    Before Going to Press | 11h 25min ago

  • Big Data Expo 2016 begins on May 25 in China

    Before Going to Press | 11h 30min ago

  • Taiwan market: Samsung launches Galaxy J7 2016 and J5 2016

    Before Going to Press | 12h 4min ago

  • Small motherboard players aggressively seeking new business opportunities

    Before Going to Press | 12h 22min ago

  • Taiwan market: Smartphone sales slow down in April

    Before Going to Press | May 25, 20:41

  • Market watchers pessimistic about 2-in-1 market

    Before Going to Press | May 25, 20:34

  • Server management SoC provider Aspeed to see revenues grow 30% in 2016

    Before Going to Press | May 25, 20:33

  • MLS reportedly cooperates with IDG Capital Partners to bid for Ledvance

    Before Going to Press | May 25, 20:16

  • DLC-coated glass to potentially replace sapphire cover glass

    Before Going to Press | May 25, 20:14

  • Digitimes Research: Japan begins to utilize Wi-SUN technology

    Before Going to Press | May 25, 20:07

  • UltraChip revenues to rise in 2Q, 3Q16

    Before Going to Press | May 25, 20:05

Pause
 | 
View more

Taiwan server shipment forecast and industry analysis, 2016

RESEARCH EXTRAS | Apr 1, 15:47

Strong demand from the cloud computing market helped Taiwan's server shipments grow 12.5% on year to break 10 million units in 2015, accounting for 90.7% of worldwide shipments and the percentage is expected to grow to 91.1% in 2016. This Digitimes Research Special...

China smartphone touch-panel industry 2016 forecast

CHINA SMARTPHONE | Feb 6, 17:23

In 2016, China's smartphone panel capacity is expected to increase steadily, with BOE and Tianma expanding 6G capacity and GVO and Truly Optoelectronics increasing their share of handset panel production. This Digitimes Research Special Report analyzes the key...

China smartphone market and industry - 1Q 2016

CHINA SMARTPHONE | May 25, 17:39

Smartphone shipments to the China market in the first quarter of 2016 reached 104.7 million units

Taiwan large-size LCD panels – 1Q 2016

TAIWAN LCD PANEL | May 16, 14:02

Taiwan's large-size TFT LCD panel production in the first quarter of 2016 took a major hit as a strong earthquake damaged Innolux's fabs in southern Taiwan.

Taiwan notebooks – 1Q 2016

TAIWAN MOBILE DEVICE | May 9, 14:28

The global notebook market continued to slump in the first quarter, with shipments going down. Vendors were less interested in boosting shipment volume than in improving their profitability by focusing more on midrange and high-end models.

UMC
Trends and forecasts for the China FPD industry, 2014-2017
Analysis of China revised domestic semiconductor industry goals
  • Wireless broadband developments in Southeast Asia markets

    As of 2013, the 10 ASEAN nations had a total of over 700 million mobile subscriptions, with the CAGR from 2003-2013 reaching 24%. This Digitimes Research Special Report analyzes the various mobile broadband markets in ASEAN and looks at the respective trends in 4G LTE development for those markets.

  • 2015 global tablet demand forecast

    This Digitimes Research Special Report provides a 2015 forecast for the global tablet market and analyzes the strategies of key market players such as Google, Apple, Intel, and Microsoft.

  • 2015 China smartphone panel trend forecast

    This Digitimes Research Special Report analyzes the strategies of key China-based major panel makers BOE, Tianma and IVO for attacking the different market segments through technology and pricing, and their relationship to local vendors Huawei, Lenovo, ZTE, Xiaomi and Coolpad.