From ‘Copiers’ to Innovators

China’s smartphone manufacturers now have the capability to develop new technologies that rival the industry’s biggest names

Huawei Mate S
An advertisement for the Huawei Mate S

By Zhang Lijuan

“The Porsche Design Huawei Mate 9 sells extremely well in Europe, despite its steep price tag at €1,395,” explains a Chinese smartphone retailer. “At its peak last year, 160,000 units were sold in a single day. Sales of the Mate 9 have outnumbered that of the iPhone 7 Plus, Apple’s most comparable model in terms of size, performance and price, in the offline retail market.”

Released in November 2016, the Huawei flagship handset remains in short supply due to its surging demand, as it has found a niche in the global smartphone market. Thus, Chinese smartphone makers are quickly shaking off their reputation of being “copiers” of global technology, and are beginning to be respected as innovators.

Innovation Is the Key to Success

In the third quarter of 2016, Huawei surpassed South Korea’s Samsung with profits of US$200 million, making it the world’s most profitable Android smartphone brand. Another two Chinese smartphone makers, Vivo and OPPO, each seized 2.2 percent of the world’s smartphone market. All signs indicate that Chinese smartphones have entered the fast lane.

The ultimate solution to surviving market competitions is constant innovation.

Innovation is the key to the success of China’s smartphone markers.

Many features of the Huawei Mate 9 meet the needs of high-end business users: long battery life, safe and ultra-fast charging, dual SIM capability, fingerprint recognition and the capacity to detect fake mobile base stations which eavesdrop on people’s communication. Moreover, its operating system has also been tailored according to the demands of business users. The introduction of machine learning technologies not only prolongs its battery life, but also enhances the efficiency of data processing and switching between apps.

“The ultimate solution to surviving market competitions is constant innovation,” said Liu Lirong, chairman of Gionee, a Chinese company that has been engaged in the mobile phone industry for 15 years. Said to be the world’s first fully-secured smartphones with built-in data encryption chips, Gionee’s M6 and M6 Plus models enhance the safety of Android handsets to new heights.

Statistics show that in the first quarter of 2016, Chinese smartphone manufacturers sold a total of 125 million units. Despite slight changes in their respective market shares, producers are showing remarkable potential.

Chinese tech giant Xiaomi became the first to introduce a fully-functional NFC, which enables its Mi5 smartphone to be used as both a bus pass and a credit card. Its Mi MIX comes with an improved display and sturdy construction. With these cutting-edge technologies, Xiaomi stands out compared to its rivals.

Dual-camera design has now drawn attention from both smartphone manufacturers and consumers. Inspired by this, the Vivo X9 creatively adopts dual front-facing cameras.

“In the future, Vivo will further its advantages in photography and music playback, so as to enhance the user experience,” announced Hu Baishan, executive vice president of Vivo.

Overcoming Disadvantages for Further Development

Since 2007, when then Apple CEO Steve Jobs unveiled the first iPhone and declared it would “change the world”, smartphones have become a crucial part of people’s everyday lives. Today, all smartphone manufacturers are working to overcome their respective disadvantages so as to survive fierce market competition.

During the 2016 Singles’ Day (November 11) shopping craze in China, Xiaomi launched a promotional campaign via its Xiaomi Mall and Xiaomi Home platforms in addition to its stores on e-commerce platforms, and Suning. com. As Xiaomi’s official offline retailers that display products and allow consumers to try them out, Xiaomi Home stores demonstrate the company’s ambition to explore the offline market and promote offline sales. While in store, customers can enjoy an open, pleasant shopping experience.

In 2016, smartphone manufacturers began to face intense pressure from upstream suppliers.

“Vivo is always strict in choosing its suppliers, and has adhered to win-win cooperation with its supply chain,” Hu added.

By utilizing the creative capacity of its supply chain, Vivo has begun to collaborate with its suppliers to further technological innovation.

“Both Chinese and global smartphone makers will face technological bottlenecks in the next two or three years,” said Wang Yanhui, secretarygeneral of the Mobile China Alliance. “Competition will not be only confined to technology, but also products, sales channels, R&D and supply chains.”

Going Abroad

The global nature of the modern smartphone industry requires firms to constantly seek the expansion of their market shares. In the past two years, China’s mobile phone producers have set their sights on the overseas market, regardless of their stage of development. A recent report compiled by the International Data Corporation showed that in the first quarter of 2016, Huawei, OPPO and Vivo ranked among the world’s five best-selling smartphone brands, of which the sales of OPPO and Vivo saw year-on-year increases of more than 100 percent each.

According to Wang, some Chinese smartphone brands have managed considerable profits in the overseas market. In the next three to five years, an increasing number of Chinese smartphone manufacturers will go abroad.

For instance, Huawei has seen sound development in European and African markets. It is reported that the Huawei Mate 9 will hit the United States market in January 2017.

Meizu has also seen its global presence grow significantly. Its smartphones are now sold in Russia, France, Italy, Ukraine, Czech and Spain, as well as Brazil. Additionally, Meizu has begun to enter South Asian and Southeast Asian countries including India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

“Gionee focuses on two major services in overseas markets,” explained Lu Weibing, the CEO of Gionee. “One is the sale of products under the Gionee brand, which now has its eyes on three markets: India, the African market centered on Nigeria and the South and Southeast Asian market centered on Nepal, Myanmar and Vietnam. The other is its ODM (Original Design Manufacturer) service, which has now covered more than 50 countries around the world.”

Compared to the domestic market, overseas markets are more diverse and complicated.

“For most Chinese mobile phone manufacturers, they shouldn’t blindly go abroad before they obtain insights into the development level and policies of relevant countries, so as to choose the right destinations to explore the international market according to company advantages,” Wang added.

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