Domestic phonemakers drive China smartphone growth

China accounts for 27 percent of 158 million smartphones shipped in second quarter 2012 to be top single country market, spurred by local manufacturers' fast growth.
Written by Kevin Kwang on

Chinese smartphone manufacturers, not international vendors, are driving growth in the domestic market, resulting in China becoming the top single country market with 27 percent of the 158 million global smartphone shipments in the second quarter of 2012.

According to a study by Canalys on Thursday, China's smartphone shipments grew 199 percent year-on-year to reach over 42 million and represented the second consecutive quarter of record-breaking volumes in a single country market. It represented 27 percent of the total global shipments of 158 million, ahead of the United States with 16 percent, it noted.

Its growth was down to local manufacturers making their mark ahead of international vendors, Canalys noted. While Samsung maintained its leadership with 17 percent of the market, its shipment volumes were flat and this allowed local vendors to close the gap.

Domestic vendors make mark
ZTE, Lenovo, and Huawei Technologies were the second-, third-, and fourth-placed vendors, and represented a third of the market. ZTE and Huawei achieved 171 percent and 252 percent on year growth respectively, while Lenovo jumped 2,665 percent. Collectively, domestic Chinese vendors shipped 25.6 million smartphones, while international vendors were responsible for the remaining 16.7 million units.

Nicole Peng, research director for China at Canalys, explained that the rise of these tier-1 domestic vendors was due to their reactiveness to market demands and deep understanding of local consumer behavior and preferences. These helped them surpass international competitors in the fast-evolving China market, she added.

These Chinese companies have also worked hard to greatly improve their brand resonance among consumers and to expand and enhance their relationships with operators, Peng said.

As for tier-2 vendors such as Oppo, K-Touch, and Gionee, they have also "stamped their mark" by boosting their shipment numbers into tier-3 and tier-4 cities, she noted.

"As feature phone vendors, they already have established partnerships and strong brand awareness. These vendors are making significant progress transitioning their portfolios and customer bases to be more focused on smartphones," the research director said.

Apple, meanwhile, fell to fifth place in China, and while its shipments were up 102 percent from the same quarter last year, it fell 37 percent from the first quarter of 2012, the report stated. Similarly, Nokia and Motorola Mobility both lost ground, with the former's volumes down 47 percent from last year's performance.

Jessica Kwee, research analyst at Canalys, said: "Among the international vendors, only HTC managed an outstanding performance in mainland China. Its shipments grew 389 percent year-on-year to reach 1.8 million units.

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


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