Taiwan based TrendForce is a global provider of market intelligence and tracks things at a base level – DRAMeXchange (DRAM, NAND, Flash storage), WitsView (Display), LEDinside (LED), EnergyTrend (Green Energy) and Topology (Hi-tech research). In other words, it is the company that both component suppliers and OEMs got to for market intelligence - over the past 10 years it has proven remarkably accurate.
In its latest end of year 2015 report it says that Huawei led the global rise of the Chinese smartphone brands by shipping more than 108 million units to take number three position worldwide.
The top 10 global smartphone shipments (all brands) reached 1.293 billion units - 539 million from Chinese makers. Chinese smartphone makers took seven out of the top ten world-wide vendor spots. Samsung was at the top with 320M and Apple shipped 227M iPhones (it is made in China by Foxconn but is not included as a Chinese Brand).
Conclusion: Chinese Brands are on the rapid ascent at the expense of Apple and Samsung’s market share. Read on for commentary on the top 10 brands.
- Samsung seems to be the looser with year on year volumes dropping 25% to 320M. Its Android phones compete with fully featured, lower cost, Chinese Android phones from Huawei, OPPO, Lenovo/Motorola, ZTE and others. About 10% of its sales are its flagship Galaxy series.
- .Apple recorded a 17.7% growth in shipments to 227M and averaged 17.5% of world-wide market share. TrendForce says the 6s/Plus have not generated the ‘replacement frenzy’ because they are outwardly similar to the 2014 6/Plus models. Both TrendForce and Apple’s own figures show single digit (0.4%) growth in 2016. Still this is amazing for a company with essentially three current products – the 5s, 6s and 6s Plus.
- Huawei’s heavy R&D investment in HiSilicon has paid off (in a similar way to Samsung’s Exynos) with more than 108M units shipped. It makes its own mobile processors and has avoided expensive patent litigations with its competitors (unlike Samsung). It also makes a high quality product with top draw features and has excellent relationships with Telcos worldwide – you will find most offer at least one Huawei model.
- Xiaomi is a brand we do not see in Australia despite offering very high performance/cost products. It shipped 72M units but its having issues with intellectual property (It uses stock technologies from others) and this problem actually resulted in several of the vendor’s smartphone models being banned in India. In other words, it is an assembler that has crawled out of the Android cess-pool.
- Lenovo’s smartphone shipments dropped 24% to 70M units after surging in 2014 to 92M on the back of its Motorola acquisition. Lenovo has announced a major restructure and the Moto Brand will be reserved for its flagships. Lenovo is taking the ‘innovative design’ route as its strategy for success.
- The only other non-Chinese brand in the top 10 is LG and it shipped 68 million units, up 7.9% over 2014. Sales of G4, the vendor’s flagship, have been disappointing since its release in the first half of 2015 because the model’s specs are too similar to its predecessor G3 which presents as a bargain flagship now. LG has a wide range of smartphones from bargain to flagship.
- TCL is actually Alcatel onetouch and its market strategy is to move volumes of lower cost devices – about 56M - via major grocery retailers, petrol stations, co-branded and more – an almost disposable market. Its Idol 3, an A$399 smartphone offers value over twice that price and its lower cost, less than A$99 are very good for the purpose.
- OPPO is part of the BBK group that owns brands like OnePlus, Vivo, and more. This is a global brand aimed at the mid-upper level market and it shipped about 50M units, mainly of its very Applesque R7 series that present in Australia as incredible value for the features and quality. It has an office and support here.
- BBK shipped another 43 million units – if you take this group’s performance as a whole at around 92M units it’s the one to watch.
- ZTE shipped about 40M units and it is largely an OEM maker for major Telcos. In 2014 it tried to launch its own branded phones in Australia but market success was limited.
Conspicuously absent is Sony that in 2014 shipped 46M units and is now where to be seen in 2015 or 2016. Chinese brand Coolpad which was number 7 in 2014 with 50M units has gone off the radar as well. This illustrates the volatility and fickleness of the market that Xiaomi plays in – assembly without true IP.
There is an ‘other’ category accounting for 243M units that covers an amazing plethora of local small makers with niche markets. A star could rise (like Coolpad did) from this Android cess-pool but only if it has an amazing price, and feature leading, product.
In 2016 the global brands to watch are Lenovo (if it gets the innovation differentiator right), and OPPO.
TrendForce predicts that growth in 2016 will be about 8% - mainly at the expense of Apple and Samsung sales going to Chinese global brands.