China to fuel global smartphone growth
Latest Canalys figures show increasing competition at the low end as new players enter market
China will account for more than a third of the global increase in smartphone shipment volumes this year, according to analyst Canalys.
According to previous figures released by the market watcher, China is already the largest smartphone market in the world, but Canalys said entry-level devices are driving the growth, with sub-$200 (£128) models representing more than 40 per cent of the market by 2015, up from 25 per cent in 2011.
Nicole Peng, research director for China at Canalys, said price erosion is accelerating, and new internet providers entering the smartphone market are increasing competition at the low end.
“New, low-cost models, such as the Lenovo A65, have come to market at about $110. In Q4 last year, devices with a similar specification were priced around $158.
“We are also seeing more local brands enter the smartphone arena and they represent a growing force for competition against international vendors. Established mobile phone makers such as Yulong, Gionee and K-Touch have the advantages of strong operator relationships and channels. In addition, emerging vendors such as Xiaomi and Green Orange are building a reputation quickly in the youth market. International vendors will still retain a considerable presence at the high end of the market.
“Vendors such as Samsung, Apple and HTC should continue to dominate in the space above $400,” Peng added.
“This segment will still account for almost two thirds of shipment value in 2016. Leading local tier-one brands, such as Huawei and ZTE, are diversifying beyond the entry level by launching a number of high-profile, flagship smartphones, but it will require significant marketing and brand investment to deliver a significant return and this will take a long time.
“Product innovation is the best route for local brands seeking to increase share in higher-value segments, and we are yet to see the radical moves needed here,” said Peng.