Major Smartphones companies in China
We focus on the smartphone market in China and on the leading brands of handsets sold in the China.
In 2013, the world of smartphone manufacturers is divided into two parts Samsung and Apple on one side, holding 52% of the market, and the other Chinese companies are becoming more and more important.
CHINA: second quarter 2013
You will find below a summary sheet of different brands of smartphones operating in China:
SAMSUNG Electronics :
Revenue for the year 2012:
- Turnover: 141,206 billion won (96.31 billion euros).
- 61.3% of the operating profit of the 75 subsidiaries of the group comes from Samsung electronics (18,510 billion won / 12.62 billion euros).
- Profit: 5900 trillion won (4.02 billion euros).
- 40 millions Galaxy S3 & 5 million Galaxy Note 2 sold.
- 215.8 million units sold.
The leader Samsung :
2012: Samsung becomes the world leader in mobile phone dethroning Nokia, and the world leader in smartphones to Apple.
South Korean benefits to the sales of its handsets sold under $ 200, which increased by 47% compared to last year.
This trend highlights the strategic shift that Samsung has revised for its marketing position, previously centered on the premium segment to compete with Apple.
Since early 2012, the South Korean company is focused on entry-level devices, which have long been the specialty of Chinese manufacturers.
There is little time Samsung has faced to a big image problem: several associations have filed a complaint against the Korean giant for deceptive marketing practices. The brand does not respect the ethical commitments.
Indeed, several studies have exposed that some Samsung factories in China exploit their workers in inhumane conditions: poverty wages, excessive overworking hours of, health risks …
But the worst is the presence of many children on the production lines.
This famous Californian company designs and markets electronic products including smartphones “Iphone”.
- Turnover: 156.5 billion dollars.
- Profit: $ 41.7 billion.
- 40 million Galaxy S3 & 5 million Galaxy Note 2 sold.
- 200 million exported devices.
Apple in China:
- 2 million iPhone 5 sold in China in 3 days.
- 11 stores with the largest Asian mall in Wangfujing.
- 14 additional stores planned in the coming years.
- China accounts for 12.5% of its turnover. An annual turnover up 60%.
We can see above the contribution of each category of Apple‘s revenue.
Sales of iphones are the heart of Apple’s revenue. North America and Western Europe reaching saturation, it is vital for the company to win new market share in developing countries such as China.
China is becomes to be increasingly important for Tim Cook, the CEO of Apple. Multiplying his travels to strengthen relationship between the Middle Kingdom and his firm, he said that China is currently the second largest market in the world and will soon be in first position ahead of the United States.
For Apple, the potential in China is huge: 2,000,000 iphones 5 sold in three days … Currently 11 stores are present in China. 14 are expected in the near future a total of 25.
Apple is waiting for a partnership with China Mobile, the largest mobile operator in the world (over 677 million subscribers in 2012). Apple could grow by 33% per year after the Chinese broadband network built.
An image problem : Ostentatious, unsuitable, and expensive
The Cupertino company has known a recent image problem linked to its customer service: users have complained that Apple replaces faulty models with a new one in most countries except China, where only the defective component would be replaced. Chinese consumers feel less respected from Apple than others. Following these complaints, the Chinese government said more closely monitor the activities of the U.S. group.
2012: full year ended March 31, 2013
- Turnover: USD 34 billion, up 15%.
- Profit before tax 801 millio Income: USD 635 million
- Increase in smartphone shipments by 270% compared to last year worldwide.
- 30 million smartphones sold worldwide.
Lenovo MIDH group in China:
- Market share in China: 11%, 2nd manufacturer of smartphones in China.
- Turnover in China: 998 million (77%)
Lenovo is a Chinese company manufacturing hardware, telephones, computer servers, connected TVs … The brand is known to have bought in 2005 the IBM Personal Computer service. Lenovo is now the world’s number 1 as PC maker. However, the market is down, it is to the segment mobility that is currently running Lenovo for continued growth.
Lenovo has experienced considerable growth in sales of smartphones, sold under the trademark “LePhone” in 2012.
Lenovo has implemented an aggressive strategy to replace Samsung, the leading manufacturer of smartphones in the Chinese market by investing 793.5 million dollars in Wuhan to build a factory that can produce 30 to 40 million terminals per year. Smartphones “LePhone” are sold at relatively low prices and are adapted to the Chinese market. Lenovo is in the top 3 manufacturers of smartphones in China with 11% market share in 2012.
The brand has a strong support of the Chinese mobile phone companies and content providers such as Baidu, Alibaba and Tencent.
- Turnover: USD 13.7 billion.
- Gross profit for the year: 16.8% (+1.6 points)
- Cash: 1.86 billion yuan (305.5 million USD)
- 7.5 million smartphones sold in the third quarter of 2012.
- 35% of ZTE smartphones are marketed internationally.
Forecast confirmed by ZTE in 2013:
- Growth of 30% of the turnover of sales of smartphone.
ZTE (or Zhong Xing Telecommunication Equipment Company Limited) is a company that manufactures and markets equipment to telecommunications.
ZTE is the fourth largest smartphone maker in the world in the third quarter of 2012.
The company is, after Apple, the maker of smartphones with the fastest growth. With 15 million units shipped in 2011, an increase of 400% compared to 2010 units, ZTE has multiplied these figures by two for the year 2012.
ZTE is working with 230 operators and distributors in more than 160 countries worldwide.
Mr. He Shiyou, vice president of ZTE and director of the “Terminal Division,” said: “The performance of the “Grand” series of ZTE smartphones, our flagship series, is one of the main engines of growth continues in ZTE this sector. […] We also launched in Q3 the Grand Era U985, which is the thinnest smartphone in the world. ”
Huawei is a company active in the field of information technology and communications headquartered in Shenzhen, China. It is the world’s number two telecommunications network equipment behind Ericsson. The company occupies three areas of activity which is the position of world leader.
- Total global business: 27 billion euros (8%)
- Net income : 2.05 billion €(+32%)
- Operating profit: € 2.43 billion
- R & D budget: 13% of its turnover (3.7 billion euros)
Forecast 2013: Progress 10 to 12% of sales.
Activity of Huawei :
- OEM Division (telecoms): € 19.8 billion (73% of sales)
- Consumer Division (smartphones, tablets): € 6 billion (22% of sales)
- Business Division (network, Cloud): 1.42 billion euros (5.2% of sales)
Huawei in China:
Turnover in China: 9.1 billion (+12.2%)
• China accounts for 34% of sales of Huawei
Xiaomi dethroned the giant Apple
According to research of the Canalys agenc, the U.S. giant Apple has sold fewer smartphones in China that the Chinese manufacturer Xiaomi the second quarter of 2013.
Indeed, Apple has sold a total of 4.3 million smartphones, against 4.4 million for Xiaomi during the same period. Apple is thus dethroned by a Chinese company.
One explanation: Xiaomi is not interested only of major Chinese cities. The company is in contact with remote populations to sell its smartphones.
Yulong, the unknown champion of smartphones
Yulong is a Chinese company that is celebrating its 20th anniversary this year. It is a 100% owned subsidiary of Chinese giant “China Technologies”.Yulong has more than 3,000 employees of which 40% in the area of R & D.
This company is a great success: In just months me, she managed to sell more than 10.7 million smartphones, an increase of 216% in one year thanks to the commercialization of entry-level of smartphone in the Chinese territory.