China is different, particularly when it comes to its smartphone market. Three smartphone brands — Coolpad, Lenovo and Xiaomi —which are unknown to western consumers all managed to beat Apple in China.
According to research firm ABI Research, Samsung retained its leading smartphone market share of 17% in Q2 2013, Lenovo took second with 13%, Coolpad was third with 10%, and Xiaomi edged out Apple with 6.5% share.
ABI Senior analyst Michael Morgan says:
Even though these OEMs are only selling into the Chinese market, the size of the market has allowed them to achieve shipment volumes that place these OEMs in the top 12 globally. It is not hard to imagine these OEMs as global competitors within the next 2 years.”
China is the largest smartphone market, accounting for 28% of all smartphone shipments in Q2. That means that these manufacturers also make quite a dent in global smartphone market, even though they currently do not sell outside of China.
Indeed, these three rising stars accounted for 11.1% of all worldwide shipments in the quarter, according to ABI Research. The sheer size of the Chinese market has made it one of the most coveted for tier 1 OEMs looking to expand share and secure a future as smartphone market growth becomes increasingly dependent on emerging and low-cost markets, the firm argues.
As Apple continues to struggle with delivering low-cost products, these Chinese OEMs have built considerable experience in delivering mass-market products at lower price points.
The big question, of course, is whether these China-only OEMs will one day feel sufficiently confident to start selling their branded smartphones beyond China.
Chinese manufacturers such as Huawei and ZTE do sell smartphones outside of China but they are typically rebranded by mobile service providers.