China biggest and fastest growing smartphone market
Nov-28-2013 By : agxadmin
China accounted for nearly 40% of the global smartphone market as of the third quarter, and enjoys the world’s biggest growth in smartphone sales. Smartphone shipments for the third quarter stood at roughly 100 million in China, a year-on-year increase of 64%, according to research firm Canalys. Samsung Electronics has nabbed nearly 20% of the market, but local vendors are presenting a threat to the South Korean smartphone maker. “In China, local vendors Lenovo Group, Yulong Co and Huawei Technologies Co are directly following Samsung,” said Nicole Peng, Research Director at Canalys China. Apple’s strategy to prioritize China as one of the initial launch countries for its new products has the United States company clinching fifth place, followed by Xiaomi Corp and ZTE Corp. IDC, a U.S.-headquartered consulting firm, estimates that China’s smartphone shipments could hit 360 million this year, while the global total is on track to break 1 billion, representing a 40% year-on-year jump. “Rapid growth is the result of a variety of factors, including steep device subsidies from telecom carriers as well as a growing array of smartphones priced below USD200,” IDC said. It forecast that China’s smartphone shipments will exceed 450 million by 2014, boosted by an increasing penetration rate of mobile devices and the upcoming fourth-generation (4G) telecommunication networks. Canalys researchers said that large-screen smartphones-those 5 inches and larger-are grabbing market share from smaller products. “Over the next year, the Asia-Pacific is expected to continue to lead the demand for large-screen smartphones,” said Wang Jingwen, Shanghai-based Analyst with Canalys.
Hon Hai moving on from contract manufacturing
By : agxadmin
Hon Hai Precision Industry’s decision to move away from major client Apple and the lower-value electronics contract manufacturing business is a long-term bet that will improve margins and offset rising labor costs, analysts say. The Taiwanese company, better known by its trading name Foxconn, is building an integrated service package ranging from electronic devices to software applications and cloud computing as it strives to become more consumer-driven. Hon Hai still draws an estimated 40% to 50% of its revenue from assembling iPhones and iPads, a slight decline from 60% a year ago. But analysts said the move was likely to boost profit margins this year and in the longer term. Hon Hai announced a better-than-expected net profit of NTD30.75 billion for the third quarter, higher than a median forecast of NTD25.99 billion by 13 analysts polled. The figure compared with a net profit of NTD16.98 billion in the previous quarter and NTD30.26 billion a year earlier. Operating profit margin rose 1.36 percentage points from the previous quarter to 3.46%. The margin in the third quarter of last year was 3.4%. Improved production efficiency may allow Hon Hai to reduce costs, which could result in improved operating margins, according to JPMorgan Chase. So far this year, Hon Hai has teamed up with Chinese mobile video provider Le TV in a bid to sell large internet-enabled televisions. The company is also setting up a factory in the United States to build televisions, the South China Morning Post reports. It also recently bought a license for the faster, internet-enabled 4G mobile network in Taiwan, a USD311 million investment aimed at linking its software and devices.
U.S. tech companies facing backlash in China
By : agxadmin
U.S. technology companies including Cisco Systems, International Business Machines (IBM) and Microsoft may face new challenges selling their goods and services in China as fallout from the U.S. spying scandal starts to take a toll. “All the big U.S. IT companies are concerned,” said Jim Lewis, Senior Fellow with the Center for Strategic Studies in Washington, who is an expert on China and technology. “But so far Cisco is bearing the brunt of it.” IBM reported last month a 22% drop in China revenue and Microsoft executives singled out China as the company’s weakest performing area in the world during the September quarter. Although Beijing has not prohibited state firms from purchasing Western-made technology services and equipment, the government has sent a clear message to choose Chinese-made equipment first, executives based in the country say. “The government’s signal is pretty clear – they want to rely less on U.S. products, such as those from IBM, Oracle and EMC,” said a former China-based telecommunications executive. Four domestic software and hardware makers, including China National Software & Service, announced this month they had received a “top-tier” rating from the Ministry of Industry and Information Technology (MIIT). Cisco Chief Financial Officer Frank Calderoni said the company was most affected by a political backlash in China but noted that it was difficult to quantify how much of its revenue shortfall was due to politics versus macro-economic trends.
Samsung and Xiaomi winners in smartphone market
By : agxadmin
Samsung and Xiaomi are the big winners in China’s smartphone market this year while Apple sales dropped, according to a new research report by consumer insight company Kantar Worldpanel. Galaxy S3 and S4 models have been especially popular, as has been the Galaxy Note 2, a “phablet”. The combined sales of these three models accounted for 25% of Samsung’s total profit for the third quarter this year. Half of all “premium” smartphones – phones with a price of at least CNY3,000 – sold in China during the period were Samsung products. But Kantar’s research also shows the company would need to create more innovative models if it wants to stay ahead in the long run, particularly as the Galaxy S4 is widely seen as only an incremental upgrade over the S3. Xiaomi benefited from its latest “budget” smartphone – the Mi-3, starting from CNY1,999. This price point has helped Xiaomi sell to consumers keen on “high-spec, low-price phones”, the report said, and helped the company beat Lenovo to become the second-largest Android phone seller in the third quarter of this year. “Consumers are beginning to realize that good user experiences don’t necessarily come with a hefty price tag,” the report said. In contrast to the success enjoyed by Samsung and Xiaomi, Apple’s sales this year have lagged behind the competition, and its market share dropped from 19.5% in the second quarter of the year to 18% in the third. The drop in sales may have been caused by the launch of the iPhone 5s and 5c on September 20 as consumers stopped buying older models. Kantar Worldpanel’s research was carried out via a survey of 15,000 Chinese smartphone users over the past year.
China Mobile’s Beijing branch starts 4G smartphone sales
By : agxadmin
Despite the fact that the government has yet to issue 4G licenses to telecom carriers, China Mobile’s Beijing branch started sales of 4G smartphones with two models on offer-Sony’s M35T and Samsung Electronics’ Galaxy Note 2. Customers do not need to change their phone numbers but just have to get a new SIM card for their 4G handsets. However, the coverage of 4G networks in Beijing is limited, said Gao Shu, Spokeswoman for China Mobile’s Beijing branch. Only people in areas inside the capital’s Third Ring Road will be able to access the network. Some Chinese cities, including Guangzhou and Hangzhou, have also started offering 4G services on a trial basis. China Mobile-the only operator in the country currently testing 4G networks-has adopted the domestic Time Division-Long Term Evolution (TD-LTE) 4G technology. The lack of mature 4G smartphones has long been seen as a major obstacle for the expansion of China Mobile’s 4G business, but the situation has improved in recent months. China Mobile’s net profit dropped 9% in the third quarter partly due to the increasing challenges posed by mobile internet applications. 4G could help the carrier to attract more high-end users from rivals. The launch of 4G services in China will definitely be a new driver for the growth of the nation’s smartphone market, inciting people to buy new phones. Ryan Reith, Program Director at IDC’s Worldwide Quarterly Mobile Phone Tracker, said that China has become one of the fastest-growing smartphone markets in the world, accounting for more than one-third of total shipments in the third quarter of the year, the China Daily reports. China is carrying out 4G network tests in 10 cities, including Shanghai, Beijing and Guangzhou.
China Mobile will start 4G services on December 18 with a new brand “He”, meaning harmonious in Chinese. China is expected to issue licenses for 4G before the telco’s new services start. Users in Beijing, Guangzhou and Chongqing will be the first to enjoy commercial 4G. Shanghai, which is still building a citywide 4G network, will launch the services later. 4G phone services will become rapidly popular thanks to the low cost of 4G phones, according to Li Yue, China Mobile’s President, who expects some 4G phones priced below CNY1,000 to appear in the second half of next year. Apple is also set to introduce iPhones supporting the 4G network in China on December 18.
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