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Chinese smartphones to gain >30% of global share in 2013

Posted: 31 Oct 2012 ?? ?Print Version ?Bookmark and Share

Keywords:smartphone shipment? 3G? Lenovo? Samsung? Apple?

According to the latest report from DRAMeXchange, a research arm of TrendForce, the decreasing component cost has allowed many mobile phone makers to develop entry to mid-level smartphones in an effort to increase market share. Due to this, feature phones are gradually being phased out of the market. Smartphone shipments are seen to top 650 million units this year, more than 40 per cent growth compared to 460 million units shipped last year.

Looking towards 2013, as 3G network infrastructure gradually becomes more widespread and mobile phone prices are dropping to market-friendly levels, smartphone shipments are likely to continue increasing. TrendForce estimates global smartphone shipments will exceed 830 million units in 2013, a nearly 30 per cent increase. Worth noting, Chinese brands are expected to see especially strong smartphone shipments, with 50 per cent growth projected for next year, more than the global average.

Currently, there is a plethora of high-end smartphones available, but Apple and Samsung products continue to dominate the market. Together, the manufacturers' devices are expected to account for 50 per cent of global smartphone shipments, at 330 million units in 2012. With the arrival of the iPhone 5 in 3Q12, Apple saw record-breaking pre-orders. iPhone 5 shipments are estimated to hit 45 million units in Q4, pushing the total iPhone sales forecast above 120 million units for 2012. Samsung's Galaxy series has experienced similar popularity around the globe, with 2012 sales projected to exceed 200 million units, nearly 30 per cent of global smartphone shipments. Unlike Apple, Samsung's smartphone supply chain is vertically integrated, from the core SoC to other components such as memory, display and battery. Not only does vertical integration give Samsung a cost advantage when it comes to smartphone production, but it also provides an outlet for Samsung Semiconductor components. As a testament to their success, Samsung is currently the leader in global smartphone shipments. On the high-end smartphone market, Apple and Samsung are each others' main competition, which clearly both makers are aware of as intellectual property lawsuits between the two continue.

Traditionally, smartphones have sported price tags of at least $500. However, as component cost has decreased, $100 smartphones emerged on the market in 2012, with Chinese smartphone brands and white-box manufacturers introducing the lowest-priced devices. TrendForce believes such low pricing is the main reason Chinese brands are able to show such strong growth against competition from major manufacturers. Chinese telecoms provide relatively low smartphone subsidies. Most high-end devices carry a steep price tag even after signing a contract.

TrendForce estimates Chinese smartphone shipments will exceed 200 million units in 2012, nearly 30 per cent of the global shipment forecast. Of the Chinese brands, ZTE and Huawei's combined smartphone shipments will reach 65 million units in 2012, accounting for 30 per cent of total shipment volume for Chinese smartphone makers. Taking a closer look at China's mobile phone makers, as ZTE and Huawei began as telecommunication equipment manufacturersHuawei is second only to Ericsson as a telecom equipment supplierthe move into the mobile phone market is a logical one. Huawei's smartphones, while mostly sold on the domestic market, have seen a decent international sales. As for Lenovo, the manufacturer has only been in the smartphone market since 2Q12. After only six months on the market, Lenovo's Q3 smartphone shipment volume has surpassed that of ZTE and Huawei, making the newcomer China's leading smartphone brand. With 14.7 per cent of the market, Lenovo is close behind Samsung, whose market share is currently at 15.5 per cent. As a PC maker turned telecommunications product manufacturer, Lenovo's smartphone strategy sets a good example for other major PC makers looking to follow suit.

Figure: 2011-2013 Smartphone Shipment Volume, Global vs. China
Source: DRAMeXchange

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