Mid-end, Chinese smartphones rapidly gaining traction

By the end of 2013, 928 million smartphones will have been shipped worldwide, according to the latest forecast by TrendForce. The research firm also identified the prevailing trend of smartphone models priced in the $150 to $450 range becoming increasingly more popular among consumers since these mid-end units are already able to fulfil the general entertainment and web browsing needs of the majority of users.

The availability of free, open source platforms such as Android, and the active measures taken by smartphone makers to lower manufacturing costs is making it easier for consumers to acquire smartphone devices that are priced at less than $100. The demand for high end smartphone models, by contrast, is gradually shrinking, and this is in turn limiting the potential profits available to high-end smartphone manufacturers.

South Korean electronics giant Samsung was able surpass its quarterly shipment record mostly due to large shipments in the mid-end sector. Although sales of the Galaxy S4 ended up falling short of expectations, TrendForce believes growing sales of its mid-entry level handsets could still help it maintain a dominant position within the global smartphone stage.

Chinese smartphone brands make their mark

Benefiting from growing domestic demand, Chinese branded smartphone shipments have risen 44 per cent compared to the numbers in 2012. The four most popular Chinese smartphone brands that are currently gaining a lot of global recognition include Huawei, ZTE, Lenovo, and Coolpad.

Lenovo was a top sales leader in China during the last quarter of 2012 and managed to claim up to 13.7 per cent of the domestic market, which at the time was close to the amount of market share acquired by Samsung. The situation took a notable turn in 2Q13, when Huawei retook the market lead and shipped a total of 14 million smartphone units.

Aside from the domestic regions, nearly 30 per cent of Huawei's smartphones are directed at emerging markets, which include India, Southeast Asia, and Eastern Europe. The stable sales growth in these emerging regions is among the key reasons why Huawei was able to rank third in terms of global Q2 shipments.

The first tier Chinese manufacturers' dominance was relatively unaffected by the shortage of memory parts in the second quarter of 2013 partly because of their ability to secure major smartphone components. Similar to Huawei, both Lenovo and Coolpad were able to ship over 10 million smartphone units thanks to their strong local channel support.

Mid-end smartphone competition to intensify

By the end of the third quarter, Trendforce estimates that the mid end smartphone shipments will grow by approximately 8.6 per cent and arrive at 130 million units. These smartphones are expected to account for more than 50 per cent of all the smartphones shipped globally, and could prove useful for the branded manufacturers hoping to increase their market share. Android smartphone makers such as Samsung, SONY, HTC, and LG are all expected to release a wider assortment of mid-ranged devices as a means to attract consumers.

China has traditionally promoted low to mid end smartphone devices that are priced within the range of $120 to $230. As first-tier Chinese manufacturers become more popular, however, smartphone products that are priced above $300 have also begun to emerge. It is predicted that in the second half of this year, competition within the mid end smartphone market will grow more rigid. Success in this market will be dependent on a variety of key factors, including the ability to make cost-effective products and take advantage of distribution channels.