China’s Cellphone Industrial Chain Prediction in Next Five Years
China, the largest cellphone market, shipped 97 million units phones in the first quarter of 2013, an increase of 15% from 2012; among which, the shipments of smartphone reached 78 million units, growing by 117% comparing with the same period of 2012, according to IDC report.
With the continuous price cutting, smartphone replacing feature phone has become a certain trend globally. In addition, the enhancement of user experience, introduction of multi-core handset and the application of NFC technology are also the future directions. Then what’s unique prediction for Chinese cellphone industrial chain?
Market potential: overall, Chinese cellphone industry will follow the global direction, seeing more smartphones but less feature phones. IDC noted, driven by subsidy from carriers and strong replacement momentum, Chinese smartphone will exceed 470 million units, contributing 740.5 billion yuan to market size.
Competition between Apple and Samsung
In 2012, Samsung saw great harvest, surpassing Nokia and Apple and leading Chinese phone market with 19% of market shares. Furthermore, the monthly growth of shipments is a wholly 24%. In the future, Samsung’s major market strategy will turn to maintain shares in high-end market and focus more on grabbing mid and low-end segment.
By contrast, Apple shows relatively bad performance. In addition to the iPhone 5 quality problem, the different after-sale service provided for Chinese consumers, Apple, this month, is involved in the “PRISM” which mainly works at monitoring users’ information. In the first quarter, Apple represented 9% in China’s smartphone market, ranking the fifth. It is reported that Apple plans to introduce low-cost iPhone to compete with Samsung and Chinese manufacturers in the mainstream mid and low-end market, but the effect is of doubt.
4G displace 3G, changing mobile communications industry. With the gradually mass production of upstream 4G chip manufacturers, the boost of Chinese three major carriers and the support of terminal manufacturers, IDC predicted 4G handsets will ship more than 3G phones, promoting the great development of the entire mobile communication and internet industry.
Large screen moves to 5 inch. Since Huawei first introduced the 5-inch screen smartphone in the last year CES, the large screen wave began. IDC said, by the first quarter of 2013, 5-inch and above screen smartphone saw 7.5% of shares, up by 74% quarterly. IDC foresees over 20% by the end of 2013. But personally, the proportion will not lead the market due to weight and wearing consideration as well as the competition of tablets.
More integration: due to bottlenecks in developing high-end products, the limitation of product patent, large foreign vendors controlling core parts, Chinese brands have to integrate upstream and downstream of the industry or achieve merger. IDC forecasted more mergers and acquisitions in next two years.
Lay out mobile internet and even mobile communication. The hardware competition makes it difficult for higher premium differentiation. The layout of internet such as App Store, voice input, mobile browser, mobile Desktop and cloud services business has become the necessary strategy increasing user stickiness.