Annual Report of 2015-2016 of Chinese Smartphone Market Research (Part I)

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ZDC has released its yearly report on Chinese smartphone market in December 21th, 2015. Based on an all-round analysis, it has made its own prediction about future trends. 

The future smart phone market development trends predictions:

1. An ecological competition would be fostered in smart phone industry.

The year of 2015 has seen a more and more brutal battle of market share for smart phone, especially among Chinese mobile phone vendors. Due to the existing situation state that smart phone devices are all with similar builds and finish, future competition battlefield would be focused on the construction of eco-system. The past year business market has been crowded with analogous configurations, be it the star model or the flagship. More sadly, the price war has never stopped. Before long, smart phone manufacturers would be heading towards the battlefront of software, highlighted contents, hardware eco-system. Otherwise, there would be no peace ground for them to stand still.

2. One thousand yuan (equals to 155USD based on latest currency) device would dominate the low-end market.

No doubt that 2015 has witnessed the most prevailing application of 4G smartphone. It has already taken over the market of mobile units due to the steadily growing attention of end consumer in 4 quarters, and the lowered cost of 4G coverage in operators’ side. It would not be long for 4G mobile covers more areas with its fast entry into the third and fourth level cities, to small towns even countryside. The battlefield now is moving to 155USD low-budget smartphones in 2016. Predictably, most vendors would fight for the main field of smartphone at the cost of 155USD to 460USD.

3. 4.6” to 5.0” smartphones would be overwhelmingly popular.

From the last 4 quarters’ tendency, there is constant attention for 4.6” to 5.0” smartphones, whereas mobile devices with over 5.0” only sustain stationary attention. Moreover, from the ZDC’s interneters’ questionnaires, the number of buyers for 4.6” to 5.0” devices takes up 50% of the total number. Those who do not want 5.5” bigger screen phones, reasoned that it would be too troublesome to hold an unit with oversize. Generally the 4.6” to 5.0” smartphones that are able to manage better user experience would be much more favored as the dominant in the coming new year. 

4. Fingerprint sensing technology would be favored.

With the development of mobile phone handy payment system, terminals with access to fingerprint is getting more and more popular as it makes sure that payer’s info are secure and well kept. Not only does this technology helps protect user’s info security, it also serves as the passport for other apps that may is convenient for people’s life. In future, there would be more manufacturers following up in the technology of fingerprint. 

5. A greater number of buyers would prefer to order via e-commerce channels.

Previously the main sales channels of smart phones are operators, outlets, electronics supermarkets, and the like. Recently the e-commerce businesses are growing rapidly, people all tend to buy online, especially during the past November 11th, known as “double-eleven”, the sales volume is crazily highly. With the improved after-sale service and price getting more and more transparent, it is predicted that online shops would be the main sale channel for smartphones. 

ZDC summary:

2015 has witnessed the smart phone market entering into a sea of blood. Samsung, Apple these two international giants of smartphone brands, still take up a great part of the market surely, but they also have gone through astonishing threat and shock. Chinese manufacturers, Huawei as the representative, have successfully attracted consumers’ attention for Samsung and iPhone. In the meanwhile, competition between Chinese vendors is growing more and more heat, many factories were shut down and labors are off. 

Overall, the current smartphone market has been crowded with the uncreative products. To deal with market debate, main vendors are launching new products faster. The product line is updated, however, there is not much creation and innovation difference between different vendors, which is the main reason that vendors cannot win over the competition. Hence, it is very crucial that Chinese manufacturers should seize every opportunity to cater to people’s desire for unique design. Get prepared for innovation and revolution; actively develop new technology and product. Better user experience and reasonable price range, plus good build quality, end consumer would be definitely willing to pay. It is important for vendors to keep vitality applying original key edge technologies. 

 

Above graph: smart phone frame with die-casting.

There are at least three points the trends indicated, which frame and housing manufacturers should be attentively aware: 

Ecological competition: Smartphone assemblers, if they need to go eco-system, would absolutely select out the main suppliers, it is a “The survival of the fittest” policy. 

Screen size: The devices should be featured with several different screen sizes, do not follow oversize screen without considering market trends. 

The last but not least, vendors should enhance efficiency. Because the lead time for products is getting shorter, manufacturers are required to produce for mass order in short period. Thus, it is the high time to increase work efficiency. One of the ways to achieve efficiency is to form alliance with other factories; when upper buyers place bulk orders, with combined production capacity, orders can be finalized efficiently. If no orders received during slack season, vendors can help others to produce at low margin. 

Following are also part of the yearly report on Chinese smart phone market analysis. 

Part one: Mobile phone market development outline: 

1. Smart phone price decreases generally, phone users number grows steadily.

Data from CNNIC indicated that by the end of June, 2015, Chinese interneters number has reached 6,68 billion, among which, the smart phone users is 5.9357 billion, taking up a ratio of 88.9%. 

Mobile phone price is lowered, operators decreased service fee and mobile internet application environment is getting richer, all these have greatly build up people’s willingness to use phone to surf the internet. However, the speed is tended to slow down as well.

Graph 1: 2009-2015,June, Chinese smart phone market internet users number and ratio. 

2. New products are launched in very short time, smart phones market is turning into a sea of blood.

ZDC monitoring survey shows that, from 2008 to 2015, China smart phone market is growing rapidly, in 2008, the number of manufacturers in this competition is no more than 30, in 2013, it exceeds 100, later, the market enters into overheated competition and cruel elimination. By the end of October 2015, smartphone market competitors number is kept within 100. The device varieties, under production and supply, later exceeded 1,000 in 2013. In 2015, it is over 1,200.

Graph 2: Chinese smartphone vendors and selling models changes during 2008-2015 October. 

3. Chinese smart phone attention rate exceeds a half, more influential than some international brands.

With the help of Android operating system, more and more local brands are devoted in smart phone research and development, and have achieved great success in sales revenue and market share.

ZDC survey reveals that in 2015, Chinese smart phone user attention reaches 51.3%, more than a half, which means it has taken up more share than international brands.

Graph 3: Attention rates comparison between Chinese smart phone brands and international brands during 2011-2015. 

4. 4G smartphone is more and more popular, attention rate is very much close to 90%

Since 2014, when the three operator giants provide 4G service thoroughly, and in 2015, 4G service fee has been lowered, more and more 4G users are paying attention to 4G mobile devices and finally choose it. From the selling device quantity numbers, we know, in October 2015, there are 845 different types, 352 types more, comparing with that in January. In the meantime, there is a 20% growth in user attention, from 66.4% in January to 86.6% in October.

Graph 4: Chinese 4G smart phone market product numbers, attention ratio, and trends during Jan. to Oct, 2015. 

Part Two: Chinese smartphone market brands structure analysis

 1. Top 10 brands

Samsung is narrowly leading the market.

ZDC statistics demonstrated that in Chinese market, Samsung is ranked first with its attention rate reaches 17.93%. Huawei, following Samsung, with a narrow gap of 0.59%, owns a 17.34% attention rate. Apple, whose attention rate is close to 15%, ranks in the third place. The phone brands ranking from fourth to tenth have their attention rate between 2%-8%, not much difference. Vivo, a Chinese local brand, is clearly more promising in the second level smart phone manufacturers leader board.

Graph 5, 2015 yearly top 10 brands and their attention rates 

2. The 11th to 20th ranked brands

LG leads the third camp manufacturer ranking list, with minor brand impact differences.

Among the 11th to 20th ranked brands, LG and Xiaomi have an attention rate of 2.38% and 2.06% respectively, ranking the 11th and 12th. The ones ranking from 13th to 20th all just have as small as 2% attention rate. Among the third camp manufacturers, 5 out of 10 are from China.

Graph 6: 11th to 20th smart phone brands attention rate in 2015. 

3. Tendency for Top 20 brands’ attention.

Huawei exceeds Samsung in 2 quarters successively.

In 2015, Chinese smart phone market has been unprecedented competitive. In the first quarter, Samsung ranks first, followed by iPhone and HUAWEI. Nevertheless, in the second quarter, HUAWEI outranks iPhone and became the runner up. In the following two quarters, HUAWEI even surpassed Samsung and won the champion. The great success HUAWEI achieved is highly related to its product line renewing and improvement.

Graph 7: Brands attention rate comparison in 2015 Chinese smart phone market.

 

China , Smartphone industry

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