Smartphone OEMs in China and the Economy - Who's rising and falling

   

At least 3 of the top 5 Chinese OEMs are predicting declining smartphone volumes in 2015. The one clear stand out from this category seems to be Huawei that blew through its numbers and already paid out large bonuses to the employees in its Consumer division.  Huawei is the first of the large traditional OEMs that has proven they can take on Xiaomi and the other new generation smartphone OEMs.

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Putting Huawei aside, the rest of the traditional smartphone OEMs are struggling due to a combination of factors:

  1. The conversion from feature phones to Sma

  2. Smartphones in China is now essentially completed.

  3. A continued over capacity in brands as new ones continue to appear every month. PPTV is the latest of the new phone brands entering by a company with deep pockets.

  4. The overall global slowdown caused by China or caused by the fear of the perception of a slowdown in China. What is interesting on this front is that some of the OEMs are not even filling open orders from some developing countries for fear of not being paid. Apparently some of these country’s central banks are running low on US dollars and can’t afford to purchase new ones at the current exchange rates.

We have also been hearing that not only small ODMs but even those that typically manufacture 10 of millions of devices are dropping their prices to the floor and going through major layoffs.

On the positive side some of the OEMs that seem to be on track and growing include Huawei, Vivo and still too early to tell but starting strong is LeTv which sold nearly 600,000 units in one day during its 919 LeTv sales day. 

About The Author

Chris DeAngelis is a Partner and the General Manager of Alliance Development Group (ADG). Chris is considered a leading expert on the Chinese technology scene and is regularly cited in leading media including The Wall Street Journal, The Financial Times, Forbes, TechNode, MSNBC, Digital Trends, China Economic Review, International Business Times, Thomson Reuters and others. He has BS in Accounting from Lehigh University and an MBA from Columbia Business School. He has two daughters and has been living in Beijing since 2005.