White label phonemakers stay nimble, relevant amid competition

White label phonemakers are relying on faster speed-to-market, ability to customize devices, and serving the underserved consumer segments to fend off competition from established smartphone players.
Written by Liau Yun Qing, Contributor

White label phonemakers are responding to the increasing competition from big name smartphone vendors by leveraging advantages such as quicker time-to-market using ready-made chipset designs, ability to customize to operators' needs, and servicing underserved customer markets.

Samsung and Apple are just two smartphone manufacturers that are looking to capitalize on the low-cost handset market and enticing consumers to switch from feature phones to more advanced smartphones. Meanwhile, aspiring phonemakers such as Huawei Technologies and ZTE have also priced their smartphone offerings low so as to wrest market share from the more established vendors.

Amid the growing competition from these established players, Michael Morgan, senior analyst for mobile devices at ABI Research, said white label phonemakers continue to be a market presence both in the feature phone and low-cost smartphone markets.

Cheaper, faster to market
In the latter arena, particularly, many of these players rely on more cost effective system-on-a-chip (SoC) chipsets by MediaTek or Spreadtrum to produce low-cost Android-based devices, Morgan noted.

Using ready-made reference design chipsets from chipmakers help to speed up their time-to-market advantage, which helps white label phonemakers stay competitive, noted John Stefanac, president of Southeast Asia and Pacific at Qualcomm. For instance, Qualcomm's reference design allows white label phone manufacturers to release their products into the market in 60 days, he added.

Through the use of these reference design chipsets from established chipmakers, Stefanac believes these phonemakers are also able to produce better quality handsets that will keep customers such as operators happy with the quality.

These white label phonemakers will also remain relevant as long as they continue to provide the necessary customization capabilities to meet operators and their subscribers' needs, said Morgan.

"If you look at the market today, it would seem that the OEMs (original equipment manufacturers) are dictating terms to operators in terms of what the smartphone should do and what it should cost. As smartphones become more mainstream, however, white label phonemakers will be able to increasingly serve the needs of these operators looking to reclaim control over the types of devices operating on their networks," the analyst stated.

Targeting the 'underserved' markets
Wong Teck-Zhung, senior market analyst at IDC's Asia-Pacific client devices research, also believe these less known smartphone makers will find opportunities in markets that have not been served adequately by the big brands.

"There's still a market for white label smartphones as they offer a low price option, though that advantage is being whittled down by local brands offering smartphones at very low prices, some as low as 299 yuan (US$47.50)," Wong noted.

Bigger phone vendors tend not to aggressively market their low-cost smartphones as it is not appealing for their overall brand reputation, and this gives room for white label phone manufacturers to tout their wares in this customer segment, added Jessica Kwee, research analyst at Canalys.

"The limelight is usually focused on the flagship products" for global brands, Kwee said, pointing to Samsung's Galaxy S3 and HTC's One series devices as these create a "halo effect" to entice customers to the brands' other products.

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