Chinese smartphone market experiences huge growth says Canalys

Rating: Local producers take 2nd, 3rd & 4th slots

The Chinese have been demonstrating a huge desire for smartphones and the growth in shipments as tracked by Canalys has been phenomenal. [See here for the full figures]. What is rapidly becoming clear is that domestic handset producers are fast catching up to the global players. Korea’s Samsung remains in top place whilst ZTE, Lenovo and Huawei took the second, third and fourth slots ahead of Apple. Both Nokia and Motorola declined – with Nokia’s volumes down 47 per cent on Q2 2011. Could this decline have anything to do with the fact that on 81 per cent of the smartphones shipped in China in Q2 2012 ran Android, Mr Elop? Given that Apple was in fifth place, that’s just about everyone else wanting Android. And Nokia has no Android offering. So it can’t compete in the world’s largest market. Oh, dear.GoMobile News was especially intrigued by the explanations for local producers’ rapidly improving fortunes provided by Nicole Peng, research director for China with Canalys.

Peng says, “The rise of the domestic tier-one brands has been aided by a number of factors. Their re-activeness to market demands and deep understanding of local consumer behaviour and preferences have been key in helping them surpass international peers in the fast-evolving Chinese market.”

She continues, “Local tier-one vendors have worked hard in recent quarters to greatly improve their brand resonance among consumers and to expand and enhance their relationships and influence within operators.”

GoMobile News was especially intrigued by the explanations for local producers’ rapidly improving fortunes provided by Nicole Peng, research director for China with Canalys.

Peng says, “The rise of the domestic tier-one brands has been aided by a number of factors. Their re-activeness to market demands and deep understanding of local consumer behaviour and preferences have been key in helping them surpass international peers in the fast-evolving Chinese market.”

She continues, “Local tier-one vendors have worked hard in recent quarters to greatly improve their brand resonance among consumers and to expand and enhance their relationships and influence within operators.”

Even the top Chinese producers can’t afford to sit back on their laurels. The Tier Two Chinese producers – who have made their names with featurephones are waiting quietly in the background.

As Peng observes, “The tier-two vendors — the likes of Oppo, K-Touch and Gionee — have also stamped their mark, boosting smart phone shipments into tier-three and tier-four cities, predominantly through the open channels.”

She adds, “As feature phone vendors, they already have established partnerships and strong brand awareness. These domestic vendors are making significant progress transitioning their portfolios and customer bases to be more focused on smartphones.”

Jessica Kwee, a research Analyst with Canalys, revealed that, “Among the international vendors, only HTC managed an outstanding performance in mainland China.”

She added, “Its success this quarter is heavily based on the strong performance of Desire V series devices, designed with the local China market in mind, underscoring the importance of tailoring propositions to local consumer preferences.”

Significantly, whilst the locals consumed 27 per cent of the 158 million global smartphone shipments, 16 per cent went to the USA.

GoMobile News has already run the news here that China’s Lenovo could possibly buy Nokia. Why not? It makes sense. Look how well it has done with the IBM Thinkpad brand for laptop computers.