China handsets take 20% of global smartphone sales

August 5, 2013 7:06 pm

China handsets take 20% of global smartphone sales

By Danie Thomas, Telecoms Correspondent

Surging sales of cut-price smartphones mass produced in China has meant that the country’s handset makers now account for about a fifth of global branded sales. Companies that few people know outside China, such as Yulong, which makes Coolpad devices, and Xiaomi, have soared in the past year, according to Canalys, the global research group.

Yulong, along with Chinese rival Lenovo, has entered the top five of global handset makers for the first time,pushing out better known Western names such asNokia and BlackBerry that once dominated the market. Along with Huawei, ZTE and Xiaomi, these Chinese companies make up a fifth of the total branded smartphone market, up from less than 15 per cent a year ago.Their shipments still sit far below the top two manufacturers, Samsung and Apple, which grew 55 per cent and 20 per cent, respectively. Even so, both lost market share to Chinese vendors.

Collectively, the market share held by Nokia, HTC and BlackBerry fell from almost 18 per cent in the second quarter last year to about 9 per cent this year.

The rise of cheaper Asian smartphone makers has come on the back of the popularity of previously expensive internet connected devices in emerging markets.

Lenovo, for example, shipped 11.3m branded smartphones in the quarter, but about 95 per cent of these were in China, the world’s largest smartphone market This took the group to third place in the global smartphone market for the first time.

Nicole Peng, research director in China, said: “China Mobile’s strategy of continuously pushing smartphones to the mass market benefits local vendors, in particular Lenovo and Yulong. The critical task for these vendors now though is to reduce their reliance on their home market and grow businesses internationally.”

Canalys only measures branded sales, which means that it does not track the large numbers of unbranded smartphones made by companies such as Huawei and ZTE.

India has become the third-largest smartphone market, according to Canalys, having been the fastest growing in the past year. Again, local vendors such as Micromax and Karbonn benefited as Indian mobile users upgraded from basic “feature” phones to smartphones.

In total, Canalys said global smartphone shipments neared 240m in the second quarter, a rise of about 50 per cent year-on-year.

Apple’s market share fell to its lowest level since the first quarter of 2009. Four in five phones use the rival Android platform, according to Canalys.

Chris Jones, principal analyst, said this reflected the need for Apple to produce a lower priced iPhone, which has been rumoured for the autumn.

“The high end of the market continues to grow but there is no doubt that the explosive growth will come from the low end of the market,’ he said.

Microsoft’s Windows Phone market share grew only marginally, from 3.1 per cent to 3.3 per cent, as the fledging platform continued to struggle to gain widespread popularity.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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