Note: The article was first published on TechNode China written by Evan Huang and translated by Zinan Zhang and Jake Newby.

On Dec. 5, 2023, Pete Lau, the founder of OnePlus (now Senior Vice President at Oppo), held a press conference to mark the Chinese mobile phone brand’s tenth anniversary where he answered a series of screened questions from netizens, posted on the social media platform Weibo. These questions led Lau to offer a retrospective on OnePlus’s entrepreneurial history, discuss its brand positioning, and evaluate some of its classic products from the last decade. 

OnePlus was founded on Dec. 17, 2013, and released its first product, the OnePlus One, in Beijing five months later. Time magazine later praised the phone as a “Phone of Dreams” in an article that made OnePlus the first Chinese smartphone brand to be reviewed by the outlet. Yet in recent years the brand has struggled to differentiate itself from Oppo, with whom it shares a large amount of investment, leading to several restructurings in the relationship between the two firms.

Understandably, the tenth anniversary milestone found Lau in a reflective mood, but he also laid out some of his ambitions for the brand’s future and repeatedly emphasized that OnePlus’ has its place in a crowded mobile phone market.

Material innovation

One area in which Lau feels the brand has excelled – and differentiated itself – in the last ten years is in the materials it has used.

As early as 2014, with the OnePlus One, OnePlus introduced two innovative materials: “baby skin” and bamboo. The baby skin white variant, featured a three-layer evenly brushed back cover, with a delicate and smooth texture due to its spray-on material extracted from natural cashew nuts that didn’t retain sweat stains. The bamboo version, using the grass as its back cover material, provided a warm and smooth feel.

With the OnePlus 3 series protective cases, OnePlus introduced another new material: ebony wood. This is a scarce wood with a tight structure, hardness, and corrosion resistance, showcasing distinct wood grains.

With the OnePlus 5T, OnePlus once again challenged traditional material usage and craftsmanship modes, using a new spray-on material and process on the white back cover. Through four new high-precision spray processes, sandstone white and metal materials were organically fused to provide outstanding tactility.

AG glass, widely used in current phones, gained its popularity from OnePlus. On the OnePlus 6T, AG etching was used to create AG glass, providing an impressive matte feel. Today, OnePlus has adopted the fifth-generation AG glass technology, achieving a haze of the glass surface to 72%, and delivering a matte texture resistant to fingerprints and sweat stains.

OnePlus’ pursuit of material innovation extends beyond this. In the spring of this year, OnePlus launched the OnePlus 11 Jupiter Rock Limited Edition, using 3D microcrystalline rock, a material that has never been used before in the industry.

OS issues: From independence to adoption

OnePlus phones were originally equipped with an in-house developed operating system, HydrogenOS. HydrogenOS was known for its simplicity. The “smoothness” of HydrogenOS was highly praised by many early users and was considered a competitive advantage for OnePlus.

As other domestic smartphone systems became more localized, however, HydrogenOS, which leant more towards Android systems, began to see that competitive advantage significantly reduced. 

ColorOS, developed by Oppo, is a more comprehensive operating system compared to HydrogenOS, offering rich and stable functionality. Therefore, with the OnePlus 9 series in 2021, OnePlus directly adopted ColorOS, aiming to gradually replace its HydrogenOS with a higher caliber system. On Nov. 13, Oppo announced that ColorOS’s global monthly active users exceeded 600 million. 

The recently released OnePlus 12 comes equipped with ColorOS 14, debuting the all-new AndesGPT model and integrating deeply with the PANTANAL system to break down barriers between data and services.

OnePlus and Oppo integration

Due to Pete Lau’s connections with Oppo, OnePlus has always had a close relationship with the mobile phone giant. In 2021, OnePlus and Oppo fully integrated, with the former becoming an independent sub-brand under Oppo. 

Lau has always been keen to emphasize that OnePlus and Oppo are two completely independent companies, with overlapping relationships only in terms of investment. However, OnePlus has benefited from the support and resources provided by Oppo in areas such as product development, technology, supply chain, and channels. To seize new opportunities and promote the healthy and long-term growth of OnePlus, collaboration with Oppo is needed to enhance the former company’s brand strength, while also bringing positive synergies to both sides, Lau said.

In recent years, OnePlus has opened up a new Ace series product line, as part of an attempt to differentiate its brand from Oppo. The Ace series is intended to enable more people to gain access to what Lau terms “premium flagship” products but with lower price points. 

After the release of the Ace series, OnePlus achieved a year-on-year growth of 9.6% in total domestic sales in the third quarter of last year, with a month-on-month growth of 44.3%. In the first half of 2023, OnePlus’ smartphone sales increased by 335% year-on-year, making it the fastest-growing mobile phone brand in the industry during the same period. Therefore, Lau jokingly remarked that competitors should be grateful that OnePlus has yet to venture into products priced below RMB 2,000.

Thinking globally

At the OnePlus tenth anniversary event, Lau repeatedly emphasized the mantra of “making good products”. Yet he also stressed that for OnePlus, this philosophy doesn’t mean that they excessively emphasize the differences between countries. Whether in design style or product experience, there is no deliberate effort to create different products based on regional distinctions. He believes that “internationalization is a false proposition.” Truly good products are universal and have no borders, he said – as long as the product is good enough, it will be accepted by users both domestically and internationally.

Looking back over the past decade, Lau admitted that OnePlus has many dreams yet to be realized. In the future, Lau said, the company will continue to persist in making good products, continually pursue higher performance, and bring users more quality products and experiences.

Well, it’s here. In June, the rumors were there’d be a 5G Huawei phone towards the end of the year. It hit the shelves two or three months earlier than expected.

In my previous article, I argued that Huawei’s handset would be more of a domestic play, and I stand by that argument. While I did argue Huawei and SMIC creating a 7nm chip was no surprise, what has been produced has nevertheless surprised some, including myself.

So what is good about this chip? How will Huawei and SMIC progress from here? And what does it mean for others in the industry?

The positives

Let’s start with the positives from a Chinese point of view. Although not 100% confirmed, as we are not sure who else could possibly fabricate this chip for Huawei, SMIC has seemingly produced a true 7nm density chip without EUV. (Some still speculate that SMIC isn’t responsible.) Despite what many believe this was always possible – TSMC did it back in 2018 and SMIC did it by itself earlier in 2023 with a bitcoin mining chip. So no surprises here. When it comes to using DUV equipment to create 7nm density designs SMIC now seems to be on a par with the rest of the world. What the yield looks like is unknown, I can’t believe it is as low as 10%, and also it cannot be as good as an EUV process. I can only speculate that it is good enough and will improve as SMIC gets more customers for this process. With government subsidies, the economics of low yields mean less to SMIC than they might to other foundries.

The other positive is its RF front-end. While Huawei was always a leading modem designer, it previously relied on US suppliers like Skyworks and Qorvo for the RF front-end. This is no longer the case with the Kirin 9000S. It’s impressive that a completely self-developed front-end works at 5G speeds, even if the OS still says 4G.  

The negatives

Nevertheless, there are a few negatives. Despite the rhetoric, this is not a completely indigenous Chinese chip. It is based on Arm IP, it uses SK Hynix memory, it was presumably designed somehow using US EDA tools (I would like to know if it wasn’t), and the fabrication process used foreign equipment from the likes of ASML, AMAT, LAM, TEL, KLA, etc.

Sanctions to date haven’t stopped China’s equipment imports. In fact, they are higher than ever on this front rather than finding ways around sanctions. China hasn’t really needed to do anything. The equipment that can be used for 28nm can be repurposed for 7nm, and perhaps 5nm in a couple of years. While this is a positive for China, it does mean that it is still reliant; products from the likes of SMEE are still far behind. SMIC is keeping quiet. It won’t want to have any stricter sanctions placed on it, but really, the only way to truly stop it would be to limit or ban all sales into China for all such equipment. This is unlikely to happen.

The use of SK Hynix memory is also interesting. This must have come from old stockpiles as SK Hynix was not aware of any recent sales to sanctioned Huawei. This answers the question as to whether domestic DRAM or NAND is ready for such applications yet, and it seems the answer is no, as Huawei opted for SK Hynix memory which was first announced in 2020. We don’t know how much is stockpiled, so it could be possible that future versions of the chip will be forced to change to domestic suppliers.

The fallout

The popular opinion in Chinese society is that China has broken US sanctions, Huawei and SMIC have saved China, and the Huawei phone deserves all the praise it can get. In one sense this is true. It performs like a leading edge chip from a couple of years ago and is easily good enough for any application today. I myself use a phone more than two years old.

There are others outside of China that completely dismiss this chip as a low-yield propaganda project. The likes of MediaTek announced its own equivalent chip using TSMC’s 3nm process almost at the same time as Huawei’s announcement. Huawei itself used to use TSMC’s 5nm process before sanctions, so in fact, sanctions have caused Huawei to go backward.

The truth is in between of course. This is a serious chip, but not surprising. We know 7nm chips can be created using multi-patterning on the ASML 1980i series of DUV lithography machines, and this unsurprisingly is what SMIC has done. We know Huawei subsidiary HiSilicon is great at designing handset chips, and this is what they’ve done extremely well here.

Threats and restrictions remain, however, sanctions could get tighter. SMIC could be punished for supplying Huawei.; it does have a considerable foreign business that could be threatened for example. Could Huawei itself be sued in any way for using SK Hynix chips or perhaps illegally using US tools? If SMIC produced a chip where its customer could not prove it was using properly licensed tools, this could also be an issue for SMIC. I know from my own experience that not having a proper license for EDA tools in China can be quite common. This in turn could restrict any sales outside of China. Even if all this is fine, selling outside of China will still be difficult. This is an expensive $1,000 phone with no Google services installed and a chip performing to the standards of two years ago. The average consumer is not going to want to install Google services manually themselves, let alone fork out $1,000 for doing so. Patriotic marketing does not translate outside of China.

Finally, this new device may mean hard times in the Chinese market for Huawei’s competitors and other chip companies. As Huawei’s sales dropped in recent years, Oppo, Vivo, Xiaomi, and Apple, all took a piece of the pie. This in turn led to more sales for Qualcomm and MediaTek who supply these other handset companies. Will Huawei’s sales rise to eat into that of other Chinese handset companies or Apple’s? If Apple sales in China remain strong then Huawei’s phone will only serve to take market share away from other Chinese brands and hurt Qualcomm and MediaTek as well in the process.

Chinese phone maker Honor on Tuesday released its Honor V Purse, a smartphone designed to resemble a handbag. Using optimized hinges and batteries, the new Honor V Purse is the slimmest foldable phone on the market, with a body measuring 8.6mm in its folded state and 4.3m when unfolded.

Why it matters: Three years on from its forced split with Huawei, Honor continues to try and establish its own brand identity and differentiate itself from other Chinese smartphone makers. Meanwhile, the competition for foldable smartphones is steadily increasing as more manufacturers enter this niche market; in recent weeks, major Chinese players Oppo and Huawei have introduced their own foldable devices, namely the Oppo Find N3 Flip and the Huawei Mate X5. Honor’s “handbag” design may help it stand out in an increasingly competitive market.

Details: While the Honor V Purse’s design is certainly eye-catching, its record-breakingly thin body has meant compromises have been made on performance. 

• The V Purse is powered by the Snapdragon 778G. Qualcomm released this mid-range chipset in May 2021 and updated it to the Snapdragon 7s Gen 2 on Monday. The phone’s use of an older generation of chips means that the V Purse is unlikely to be the first choice of those seeking high-performance gaming capabilities.
• In its folded state, the phone measures 156.5 x 74.7 x 8.6mm and weighs 214g. For comparison, the iPhone 15 Pro Max is 159.9 x 76.7 x 8.3mm and 221g. 
• The device offers a 7.71-inch 2K OLED display with a peak brightness of 1,600 nits,  2,160Hz high frequency PWM dimming, and a 90Hz refresh rate. The silicon-carbon batteries provide a capacity of 4,500mAh, which can last for around eight hours of regular usage.
• Designed to be worn like a handbag, the phone comes with a strap or chain and can be customized with different wallpapers on its outer screen. Honor is also selling a leather phone case to complete the purse feel.
• The V Purse comes in three color options: gold, blue, and black. The 16GB RAM smartphone provides two storage variants, 256GB and 512GB, which are priced at RMB 5,999 ($822) and RMB 6,999 ($959) respectively.
• At the product launch, Honor’s CEO Zhao Ming presented a set of data for foldable phones showing that global shipments of the devices exceeded nine million units in 2021, accounting for 4% of the high-end phone market. Shipments of foldable phones are predicted to exceed 100 million units in 2027, and make up 39% of high-end phone sales by that time, according to the data presented by Zhao. 
• Zhao also refuted recent reports that Honor is set to return to the Huawei fold. Zhao labeled Honor’s former parent company “a respected competitor” and said that competition between the two brands was a positive for the industry.

Context: In August, market intelligence firm IDC released a report that indicates the foldable phone market in China has experienced rapid growth, albeit from a low base. In the first half of 2023, 2.27 million foldable phones were shipped, a year-on-year increase of 102%.

• In the second quarter of 2023, the shipment of foldable phones in China reached 1.26 million units, an increase of 173% year-on-year. The leading five brands were Huawei (with a 43% market share), Vivo (19.7%), Oppo (15.9%), Samsung (8.9%), and Honor (7.2%).

Troubled Chinese smartphone maker Meizu has recently closed a round of funding from Zhuhai government-backed capital fund Honghua, the latest development for the Xiaomi rival following layoffs, declining sales, and shuttered storefronts.

Rumors about the Zhuhai municipal government takeover began circulating online earlier this week. According to business research platform Qixinbao, Meizu shareholder transfers were completed Thursday. Honghua, the state-owned fund under the Zhuhai High Tech Development Zone, replaced Meizu founder Huang Xiuzhang, also known as Huang Zhang, as the largest shareholder with 50.92% of the total, reported Jiemian.

Meizu later confirmed it received investment of an undisclosed amount from the Zhuhai government-backed capital fund, which now has one director on its board. However, it denied any change to controlling shareholders and maintained that Huang remains in control of the company, reported Tencent Tech.

Meizu was not immediately available for comment.

Company information on Qixinbao is now unavailable, according to a TechNode reporter’s observations on Sunday. The latest figures from Qichacha shows that Honghua ranks seventh with 2.09% in the shareholder list. Huang (49.08%) and Alibaba’s investment subsidiary Hangzhou Meitou (27.23%) remain the two largest shareholders.

Founded by Huang in 2003, Meizu was one of the country’s major music player manufacturers at the time. The Zhuhai-based company ventured into Chinese smartphone market in late 2006, achieving huge success three years later with its first smartphone model, the M8. It earned sales revenue of RMB 500 million ($75 million) over a period of five months in 2009, before Xiaomi was established in 2010 and the launch of Vivo’s first smartphone, the V1, in 2011.

However, Meizu’s first-mover advantages have fallen by the wayside. It reported smartphone shipments of 20 million units in 2017, compared with Xiaomi’s 55 million, Vivo’s 68 million, and Huawei’s 90 million in the same period, reported Chinese media citing IDC. Yan Zhanmeng, research director at Hong Kong-based Counterpoint Technology, said the figure sank to only 8 million units in 2018 “mainly due to the lack of funds” (our translation).

The Chinese smartphone maker has suffered a series of blows over the past year, with executives including co-founder Aber Bai and marketing head Yang Tuo—a former Huawei vice president—stepping down from the company. It has also more than halved the number of stores to fewer than 1,000 from 2,500 in 2016, according to Chinese media. It received $590 million from Alibaba in February 2015, when the Chinese tech giant sought to expand shares for its mobile operating system YunOS. The deal has reportedly lost its relevance since Alibaba renamed YunOS into AliOS and pivoted it into a vehicle system in 2017.

Samsung has reportedly postponed the Galaxy Fold’s launch in China – The Verge

What happened: Samsung has delayed the Shanghai launch event of its foldable smartphone, the Galaxy Fold, after a number of media publications reported problems after just a couple of days of use. Samsung China said the event, originally set to take place next week, was postponed due to an issue with the venue, according to National Business Daily. However, Samsung also postponed another event related to the launch in Hong Kong next Tuesday, reported Engadget Chinese.

Why it’s important: The announcement comes not long after several reports of broken devices. One from a Bloomberg review last week reported that the display failed to operate properly after a plastic protective layer was removed. Priced at $1,980 with a promise to “outlast 200,000 folds and unfolds,” the high-profile Samsung Galaxy Fold is a first-generation foldable device that is meant to reignite the flagging market. The delay in the launch dates was a major blow to the Korean smartphone manufacturer as well as peers also producing folding phones, namely Huawei, who showcased its foldable Mate X in February during a trade event but would not allow it to be handled.

March mobile phone shipments to China fall 6 percent as economy slows – Reuters

What happened: Shipments of mobile phones to China faces declined for the fourth consecutive month, falling 6% month-on-month in March, according to a report (in Chinese) by the China Academy of Information and Communications Technology (CAICT). Shipments dropped to 28.4 million units in March from 30.2 million units in March 2018. The number of new devices launched also fell 35% from a year earlier, with 52 new mobile phones hitting the market. Mobile phone shipments in 2018 fell 15.5% year-on-year in China, the world’s largest mobile phone market.

Why it’s important: In addition to the slowdown in economic growth, analysts also attribute the underperformance of the mobile phone market to a lull in feature innovation before widespread 5G network rollout. The domestic mobile phone market is nearly saturated and is waiting on next-generation wireless technology to bring new profit margins. A report by Counterpoint Research said 5G smartphone shipments are expected to grow 255% by 2021, almost reaching 110 million units. The report indicated growth would be slow during the initial commercialization phase in 2019, but an uptick in sales would appear once 5G infrastructures were ready.

Foldable Phone Sales Won’t Open to Big Numbers, Analysts Say – Fortune

What happened: Despite the buzz surrounding foldable phones, market research firm Gartner expects that they will “remain a niche product” through the next five years, reaching 30 million units by 2023. Garner analysts estimates that amount will account for 5% of high-end phones in the global smartphone market, given a number of factors such as manufacturing challenges and price barriers. “Priced at $2,000, foldable phones present too many trade-offs even for many early technology adopters,” research director Roberta Cozza wrote in the report.

Why it’s important: Foldable phones are setting trends in the global smartphone market after top phone makers showed off their folding models at the Mobile World Congress in Barcelona in February. Samsung plans to put its $2,000 Galaxy Fold on sale at the end of April, while Huawei’s Mate X is now listed on its official online store earlier this week. Gartner’s report offers a cautious outlook for the segment in the short term, though Chinese manufacturers take a more positive view. An executive from BOE, Huawei’s screen vendor, expects market prices for foldable phones could lower to RMB 10,000 (around $1,490) by 2021 as material costs decline over time, reported Chinese media on Tuesday.

Lei Jun, Xiaomi’s 50-year-old founder and chief executive, received a compensation package of around RMB 10 billion ($1.5 billion) in 2018, a year capped by slowing handset sales in the fourth quarter and weakened share prices.

According to a corporate filing released Monday, Xiaomi’s highest-paid executive raked in at least RMB 9.8 billion in compensation in 2018, which blossomed at least sixty times the record held the prior year—a maximum of RMB 128 million. When contacted by TechNode on Tuesday, a Xiaomi spokesman confirmed the best-paid “employee” was its founder and CEO Lei Jun, but he declined to provide further details.

Xiaomi’s five highest-paid executives made a total of RMB 10.218 billion during the year ended December 31, 2018, more than 50 times the RMB 196 million collectively earned a year earlier. Four of them were paid between around RMB 26 million (HK$30 million) and RMB 86 million (HK$100 million) each in 2018.

In addition to a compensation package including salaries and bonuses totaling RMB 9.4 million, Lei Jun and the four other executives were rewarded RMB 10.2 billion total in share-based compensation. The figure echoes an earlier announcement released in June, when Xiaomi was in the process of going public in Hong Kong. The company said in April 2018 it issued nearly 64 million class B shares to a separate company controlled by Lei Jun “for his contribution to the company.”

Accordingly, the company recorded more than RMB 9.8 billion as share-based compensation expenses for fiscal 2018. The Chinese tech entrepreneur founded Xiaomi in 2010 and made it into the world’s fifth-largest smartphone maker behind Samsung, Apple, and Huawei, and Oppo, according to research firm IDC.

Despite a 41.3% year-on-year growth in its smartphone sales over the past year, Xiaomi smartphone shipments slumped to 25 million units in the fourth quarter, a 12.3% decrease from the same period a year earlier. To address this deceleration, 2019 marks the year that Xiaomi looks beyond smartphone sales to the artificial intelligence of things or AIoT sector, Lei said during a call with analysts in March. The company’s stock prices closed at HK$11.76 on Monday, nearly half of its record high of HK$22.2 in July.

Xiaomi is forming a new subsidiary to shore up its goal of becoming the next chipmaking powerhouse, part of a RMB 10 billion ($1.5 billion) artificial intelligence of things (AIoT) initiative.

Pinecone, a chipset subsidiary launched in 2014, will be restructured. Part of the team to be split out to form a new company named Dayu (Big Fish, translated literally), according to a company announcement released Tuesday. The newly formed semiconductor company will focus on the research and development (R&D) of chipset solutions in AIoT applications such as smart speakers, while Pinecone will continue to develop mobile computing processors for smartphones.

Xiaomi will hold 25% of Dayu, with the balance to be held by company employees. The new subsidiary may soon start raising funds independently—a number of investment firms had already expressed their interest, and several agencies “have completed due diligence,” Chinese media reported citing an employee.

“Now, the world’s three largest smartphone companies have all achieved chip technologies. We should develop our own technology to be one of the top makers,” Xiaomi CEO Lei Jun said in February 2017 at an event in Beijing. The company had just unveiled its first proprietary mobile chipset, Surge S1, according to Tencent Tech, which the company spent nearly two and a half years developing.

Chinese smartphone makers are building more customized, software-defined system-on-chips (SoCs) for different tasks, such as image processing and video decoding, as they look ahead to 5G and increasingly interconnected smart devices. In late December, Huawei announced that its IoT platform HiLink had connected 300 million devices, including AI speakers and vehicle systems. It also said it would roll out a low-energy usage IoT chip to enhance its cloud-based IoT platform.

Xiaomi, on the other hand, set it sights early this year on “smartphone + AIoT” as the company’s dual-engine growth strategy. It reported an 86.9% year-on-year surge in revenue of its IoT and lifestyle products segment in 2018, more than double the 41.3% year-on-year growth in its smartphone segment during the same period. Global smartphone shipments fell 4.1% in 2018 and China-specific data points to a slowing growth trend, according to research firm IDC, as the market reaches saturation and economic headwinds continue.

美图2018年财报喜忧参半 互联网业务将“接棒”智能手机 – 21st Century Business Herald

What happened: Chinese selfie app maker Meitu has announced its annual results for the 12 months ended Dec. 31, 2018, reporting a net loss of over RMB 1.2 billion (around $179.6 million). The Xiamen-based company’s total revenue declined 37.8% to RMB 2.8 billion (around $419 million), which the company attributed primarily to a slower smartphone business. Meitu said that of its net loss, some RMB 0.5 billion was linked to its smartphone activities. The company said it expected to wind down that business line by the middle of this year. Last November, Meitu announced a partnership with Xiaomi, in which Xiaomi would represent all future Meitu branded smartphones other than the Meitu V7. That model was released at the end of 2018.

Why it’s important: Starting out as a beauty filter app maker, Meitu developed its first selfie smartphone called the Meitu Kiss in 2013. Since then, the company has released several smartphones that highlight selfie features. But the company only sold 3.5 million smartphones in the five years of its hardware business, according to an earlier announcement. After handing its smartphone business over to Xiaomi, Meitu will shift focus back to core activities and says it is committed to developing next-generation image technology and algorithms.

Chinese smartphone maker Xiaomi Corp. announced on Tuesday its first consolidated financial statements since listing in Hong Kong in July, reporting RMB 13.48 billion (around $2 billion) in profit last year, bouncing back from a RMB 43.9 billion loss in 2017.

The Beijing-based company generated revenue of RMB 174.9 billion (around $26 billion) for 2018, representing a year-on-year increase of 52.6%, but missing the RMB 176 billion average estimate from analyst forecasts compiled by Bloomberg.

Xiaomi’s smartphone segment recorded revenue of approximately RMB 113.8 billion ($16.6 billion) in 2018, a 41.3% year-over-year increase, driven by growth in both smartphone sales volume and average selling price. Smartphone shipments saw robust growth, increasing 29.8% year-on-year to 118.7 million units in 2018, a marked difference from the 4.1% year-on-year decline in the global smartphone market, according to figures from International Data Corp (IDC).

Revenue from its IoT and lifestyle products segment surged 86.9% year-on-year to RMB 43.8 billion ($6.5 billion). It shipped 8.4 million smart TVs, representing growth of 225.5% compared with a year earlier. As of the end of 2018, approximately 150.9 million IoT devices (excluding smartphones and laptops) were connected on Xiaomi’s IoT platform, a quarter-over-quarter increase of 14.7% and a year-on-year increase of 193.2%.

While the smartphone segment comprises the lions share of its revenue, Xiaomi aims to be known as an internet company, rather than a hardware manufacturer. It will invest more than RMB 10 billion (around $1.5 billion) into the development of the “artificial intelligence of things,” or AIoT, over the next five years. AIoT refers to embedding AI applications into infrastructure components which are linked by IoT networks, such as an air conditioning unit that adjusts its thermostat based on preferences learned from past use. The company launched its “smartphone + AIoT” dual-engine strategy in January.

“Over the last eight years, our focus was always around smartphones, but this year we have started our smartphones + AIoT as a dual engine,” Xiaomi founder and CEO Lei Jun told analysts on a call Tuesday, according to Nikkei Asian Review. “AIoT is a historic opportunity for us, we can be a pioneer in this very big market segment.”

Chinese phone manufactuer Transsion, a rival to Xiaomi in Africa, is planning to list on the Shanghai new tech board, said China’e biggest state-owned brokerage on Friday.

Citic Securities filed a report Friday confirming that Transsion had completed a mandatory three-month counseling session for its initial public offering (IPO) on Shanghai’s new Science and Technology Innovation board. The brokerage, which is underwriting the IPO, stated in the report that the Chinese phone maker meets listing requirements. Transsion was not available for comment.

Founded in Hong Kong in 2006, Transsion was one of the first phone manufacturers in Africa and is a leader in its feature phone market. Transsion’s three brands—Tecno, Infinix, and Itel—comprised 58.7% of market share by units sold in 2018, according to the latest figures from research firm International Data Corporation (IDC). It also leads the smartphone sector with 34.3% share, followed by Samsung (22.6%) and Huawei (9.9%) respectively.

Xiaomi is also eyeing the phone market in Africa. In January it set up a business unit for the region, aiming to boost its sales on the continent. The company is now turning its attention to growth opportunities in Africa after launching in Spain, France and Italy, said Wang Xiang, Xiaomi senior vice president, at the Mobile World Congress in Barcelona in late February.

The news comes as the Shanghai Stock Exchange began accepting IPO applications for its new tech board on Monday. Some 11 technology companies have already announced their filings, according to state-owned Chinese media Securities Daily, and the first batch of listings is expected to come as early as mid-June.

Pre-listing counseling was implemented in 2006 as a mandatory procedure for filing an IPO in China to ensure that companies are informed about legal obligations, relevant national laws, and regulatory guidelines. Qualified agencies assist companies with compliance in corporate structures and management systems, particularly concerning business operations, information disclosures, and accounting practices.

Xiaomi to triple European store count as Chinese smartphone makers double down on Europe – CNBC

What happened: Xiaomi is accelerating its move in the European market with plans to open more than 150 stores in Western Europe by the end of year. It has nearly 50 shops in the region since opening its first location in Spain in 2017. Wang Xiang, Xiaomi global business head and senior vice president, disclosed its ambitious plan on Tuesday targeting Europe ahead of the US, where carriers play “very important roles” and “a lot of customization ” is needed.

Why it’s important: Chinese companies are challenging the dominance of established phone manufacturing giants in overseas markets. Nearly a third of phone shipments in Europe came from Chinese handset manufacturers, namely Huawei and Xiaomi, who together represented less than a quarter of the market in the same period a year earlier, according to market analysts Canalys. Oppo, another Chinese phone maker, unveiled plans earlier this month to debut in the UK, Turkey and Poland.

酷派集团 CEO 蒋超被罢免 – TechNode Chinese

What happened: Chinese smartphone maker Coolpad has removed Jiang Chao as its chief executive officer amid a leadership reshuffle, according to company documents filed to the Hong Kong Stock Exchange. Jiang was also stripped of his roles as chief executive director and vice-chairman, and dismissed from his duties on the board committee. Amid the leadership shuffle, Ma Fei, one of the company’s longest-serving directors, was named chief financial officer.

Why it’s important: It is becoming increasingly difficult for smaller companies to survive in the country’s fiercely competitive smartphone market. Xiaomi, Huawei, OPPO, and a handful of other companies dominate in China. Firms like Coolpad and Gionee have seen their shipments fall significantly over the past two years. In 2018, Coolpad shareholder LeEco, also suffering from a cash crunch, decided to sell off a significant portion of its stake in the company. Coolpad debuted in Hong Kong in 2016, but its shares were suspended in March 2017.

Liu Lirong, founder and chairman of Gionee, one of China’s earliest phone manufacturers, has been added to the country’s black list of social credit as of October 26.

According to a court in Shenzhen, Liu must pay more than RMB 200 million ($28.8 million) in debt before he can be removed from the list.

On November 24, Liu acknowledged (in Chinese) that he had used corporate funds for gambling, losing millions of dollars.

Chinese news outlet Jiemian (in Chinese) alleged that Liu lost over RMB 10 billion in gambling. Liu has denied these allegations.

“In the 16 years since I established Gionee, I have always been the absolute authority in the company. My only income comes from Gionee, and it’s inevitable that sometimes boundaries between corporate assets and personal money could be blurred,” Liu said in an interview (in Chinese), adding that detailed figures would be released soon after Gionee completes bankruptcy procedures in December.

In the same interview, Liu also said that between 2013 to the end of 2017, Gionee lost around RMB 8 billion in total.

As a privately held company, Gionee’s current debt status is still unclear. According to some suppliers, who urged Gionee to pay pending fees as soon as possible, the company owes more than RMB 5 billion.

Liu didn’t specify the company’s total debt publicly, but attributed Gionee’s failure as a result of fierce market competition and problems with supplier relationships. He denied in the same interview that his gambling had a direct, significant impact on the company’s finances.

Liu added that Gionee’s average monthly loss was more than RMB 100 million throughout the period 2013 to 2015. In 2016 and 2017, its average monthly loss doubled to RMB 200 million.

Xiaomi apologizes for misleading “Flash sale” ad when only 10 units were up for grabs – Gizmo China

What happened: Chinese smartphone maker Xiaomi’s expansion to the UK market hit a roadblock as its first promotional activity got really messed up. To celebrate its entry to the new market, the company launched a flash sale where its flagship models were offered for £1. Thousands of potential buyers were disappointed when the website told them it has “sold out” soon after it has opened. Enraged users called Xiaomi for an explanation on social media. Things got worse when one user find Xiaomi had programmed its website to “sold out” in its website code as soon as the flash sale kicked off. The company Tweeted out an apology via its official apology for the misleading terms.

Why it’s important: The European market is an important part of the globalization plan of Xiaomi, which is trying to expand beyond the market in China and Southeast Asia, where it has built a solid presence. Xiaomi has been expanding in Europe for quite some time now, the company had announced a number of retail stores in Europe this year, including stores in Italy and France, amongst other. The company may need extra efforts to remove the negative first impression in UK consumers.

Counterpoint Research released earlier today the latest report on global smartphone shipments.

The research shows a 3% annual decline regarding total global shipments. Counterpoint Research suggests that “this is the first time that the global smartphone market has declined for three consecutive quarters.”

Chinese manufacturer Huawei’s global shipments for the period hit 52 million, up 33% year-over-year, making the company the second largest one on the global shipment units list. Xiaomi, which just completed a 100 million global shipments goal for 2018 on October 26, recorded 35.7 million global shipments for the period, up 25% year-over-year.

Oppo and Vivo both report quarterly international shipments over 30 million, making the two and Xiaomi the wining Chinese manufacturers with their own “highest ever shipments in a single quarter”.

Lenovo, a Chinese brand well-known for PC technology, saw a 26% decline in shipment units, and a 25% decline in shipment market share.

Industry leader Samsung remained on top of the list in terms of shipment units (72.3 million) and shipment market share (19%), though both units and share declined year-over-year. Apple’s performance remains flat.

Another highlight of the report is top Chinese smartphone manufacturers’ declining reliance on domestic markets.

Xiaomi’s shipment growth domestically dropped 16%, whereas global shipment growth increased 83%. Xiaomi ranked 4th with a 9% global market share for the period on the global list, but was 38.1% behind Oppo and Vivo which both acquired 21% in-China shipment share on the domestic list.

As Huawei, Apple, and Xiaomi all released new models recently, a report on the 4th quarter and the whole 2018 year will be worth looking forward to.

 China’s Xiaomi Aims Its Priciest Phone at Huawei and Apple – Bloomberg

What happened: Smartphone maker Xiaomi unveiled the MIX 3—it’s most expensive and advanced model so far. With a starting price at RMB 3,299, the new device will go head-to-head with the older iPhone X and Huawei’s P20. The MIX 3 will go on sale in November.

Xiaomi also announced that it expects smartphone shipments to hit 100 million marks by the end of October— two months ahead of its estimates.

Why it’s important: Xiaomi is putting itself against other premium phone makers like Apple, Huawei, and Samsung. With the new MIX 3, the smartphone maker has a better chance at increasing its presence in Europe and the US—the biggest premium phone markets. Xiaomi has been putting more focus on overseas markets post IPO.

Weeks after opening pre-orders for its more expensive iPhone models, Apple finally began to take preorders for its latest midrange phone iPhone XR on October 20. To meet potential strong demand from Chinese users, the US smartphone giant has bet over 2 million (or 65%) of its first batch of 3 million iPhone XR handsets inventory on the Chinese market, local media reported citing people familiar with the matter.

Compared with iPhone XS and iPhone XS Max whose price is up to RMB 12,799, lots of analysts predict the iPhone XR will become the bestseller for the future two quarters with its more affordable price tag where users can start at RMB 6499. iPhone XR’s lower price range will bring down iPhone’s average pricing, but it may achieve high shipments by attracting users who want to seek replacements for their iPhone 6, iPhone 6s and iPhone 7, Robert Cihraf, an analyst from Guggenheim told local media. He expects iPhone XR shipment to account for 40% of iPhone shipments by Q4 this year, and 50% by Q1 next year.

Extra attention to the Chinese market in inventory arrangement, especially for the inexpensive iPhone XR, speaks to Apple’s plan to appeal to customers in China. The country is Apple’s most important emerging market but where the company has seen continuous declines.

Apple is smart in setting a mid-priced for iPhone XR, according to Bloomberg writer Tim Culpan. He explained that the RMB 7,000-ish price range would be attractive for Chinese users because it’s obviously a cheaper alternative. But more importantly, the price tag would also grant a decent spec phone so it would “give face” to the users, which is an important part for the argument to purchase an iPhone in China. The company is also catering to the need of Chinese users feature-wise with its long-overdue move into dual SIMs.

However, initial sales of iPhone XR, which recorded approximately 2 million units in the first three days, are weaker than expected. The US smartphone maker is facing increasing competition amid rising local competitors and a stagnating Chinese market.

黄牛亏惨了？iPhone XS黄牛价暴跌 卖得比官网还便宜 – Tencent Tech

What happened: The prices of iPhone XS and iPhone XS Max dropped below official prices as the US smartphone maker start to ship its largest product in mainland China this week. Price drop not only happened on the grey market but also in Apple’s reseller networks.

Why it’s important: Unlike previous iPhone manias, China’s once lucrative grey market for the latest iPhone models has cooled down over the past few years. It’s a combined effect of Apple’s shipping policies as well as a changing Chinese smartphone market landscape. On the one hand, Apple has been trying to solve the problem by getting better prepared with abundant stock and tightened sales policies for Hong Kong, the source market for most scalpers to purchase the phones. At the same time, iPhone is no longer considered a luxury product that shows one’s social status, or even the coolest gadget, when a raft of Chinese smartphone makers like Huawei, Xiaomi, Vivo, and Oppo are elbowing into the premium smartphone market.

一加手机宣布要造电视 准备进军智能家居 – Tencent Tech

What happened: Pete Liu, founder and CEO of smartphone startup OnePlus, announced on September 17 that the company has decided to enter the smart TV market. Liu believes that in the future TVs will be transformed into an intelligent screen which will connect and enhance a smart home’s use cases. OnePlus has over five million registered users across 196 countries. Liu would also like to leverage the user base advantage for the new product line.

Why it’s important: It’s uncertain whether OnePlus’ decision is for innovation or the purpose of diversifying its product portfolio for commercial gains; or both. Nevertheless, Liu’s announcement implies a path which shares some common elements with that of Xiaomi’s: community, devices connected via IoT, and an internal product matrix and ecosystem. OnePlus’ future moves deserve close attention.

Huawei Denies Buyout by State-Owned Firm-Yicai Global

What happened: China’s top smartphone and telecom equipment maker Huawei Technologies denied a rumor that it’s in the process of being acquired by a state-owned entity. The Shenzhen-based firm also rebutted reports about a business spinoff and about divesting some of its subsidiaries.

 Why it’s important: Founded in 1987, Huawei is known as a private enterprise whose 180,000 employees hold all the stakes. The status of being an employee-owned company is one of the arguments that the company emphasizes to distance itself from allegations of government control. Due to the military background of its founder Ren Zhengfei, however, the company is cautiously warded off in the overseas market for security reasons. After failed efforts to expand to the US smartphone market, Huawei receives another blow in its core telecos equipment business as Australia banned the firm from selling 5G tech in the country. Huawei’s relationship with the government, especially in terms of ownership, could have a direct influence on the company’s overseas business.

Chinese smartphone manufacturer and telecommunications giant Huawei has launched a pilot program for an electronic ID (eID) that integrates into Huawei Pay.

The eID is issued by the Ministry of Public Security and stored on the security chip within Huawei phones, protecting the integrity of the sensitive identity data. According to local media, it will allow users to authenticate their identity online, but will also be available for offline use when checking into hotels.

Sun Jianfa, director of Huawei Pay’s Consumer Businesses Group, said the ultimate goal is to allow users not to use wallets. He said the company hopes to integrate ID cards, bank cards, various membership cards, door keys, and even car keys into Huawei Pay.

The digitization of government-issued ID cards in a popular trend in China, with officials hoping not only to increase convenience but also improve the integrity of personal data. In April 2018, Jiangxi Province issued the first batch of ID chips for smartphone users. The smart chips, dubbed SIMeID,  attach to the phone’s SIM card and can store sensitive identifying information for safer verification over the internet.

Huawei is not the first Chinese tech company to experiment with ID services. Both Tencent and Alibaba have also trialed digitized versions of China’s ubiquitous ID cards. Alibaba is currently trialing its Alipay-based digital IDs in Hangzhou and Quzhou in Zhejiang province, and Fuzhou in Fujian province. While the virtual IDs allow their users to book train tickets and check into hotels, they are only accepted by local authorities.

Tencent also began issuing ID cards though WeChat in December 2017. The service was first provided in the southern city of Guangzhou.

Numerous other government services have also undergone the process of digitization. Tencent has also been working with the government to provide a WeChat-based e-pass that would make travel between Hong Kong and mainland China easier for Chinese citizens.

In May, Beijing began issuing electronic health cards through WeChat for use at some of the city’s hospitals. The move forms part of a broader push to improve healthcare and standardize patient information.

Xiaomi creates new Poco brand to take on Samsung, Huawei in premium smartphone market – South China Morning Post

What happened:  Xiaomi is scheduled to launch a separate smartphone brand Poco to enter world premium Android phone competition. The product will debut in India on August 22. This is not Xiaomi’s first attempt to bring on premium products. Xiaomi launched Mi Mix 2, a model priced around $400, but received a tepid response in India.

Why it’s important: It remains to be seen whether the launch of Poco is a marketing strategy or a genuine new design of product. The company’s premium model Mi Mix 2 received no satisfactory market response in India. To truly enter the high-end smartphone competition, Xiaomi has to show new technology and premium user experience. Meanwhile, if Xiaomi wishes to grab market share currently owned by Samsung, Huawei, or the iPhone, breaking those brands’ existing user stickiness and establishing Xiaomi’s own takes time.

China’s leading smartphone manufacturer and communication giant Huawei stands firmly as the world’s second largest in terms of global smartphone shipment volume and market share in the second quarter of this year, International Data Corporation (IDC) said yesterday.

Samsung remains as the leader with Apple placing itself in the third place. Huawei overtook Apple in global smartphone sales in June 2017, according to an earlier report by Counterpoint Research.

IDC’s data say Huawei’s shipments during the second quarter of 2018 hit 54.2 million units. Compared to the same period last year, the company’s smartphone market share increased 43.6% and shipments increased 40.8%, while global shipments declined 1.8%.

Huawei’s ambitions are even higher

The company has its own ambitions beyond the quarterly report. Huawei announced last month that by July 18, it had sold over 100 million smartphones since the beginning of this year. The company said the 2018 target plan is 200 million units (in Chinese). The figure is close to Apple’s 215.8 million total 2017 shipments and 130.6% of Huawei’s 2017 annual figure, calculated from a 2017 IDC report.

Meanwhile, Honor, an e-brand under Huawei Group, said yesterday that their sales performance abroad during the first half of the year increased 150% compared to the same period in 2017, according to local media. Zhao Ming, president of Honor, said growth figures for India, UK, and Spain are 300%, 200%, and 500% respectively. He also said Honor’s competition with Xiaomi, another China’s leading smartphone brand, is over. Honor’s goal is to be the 5th global brand by 2020.

China Tech Talk 54: Huawei’s wolf culture: Kill or be killed, part 1

Made-in-China

What is interesting is that IDC’s latest report highlights the concept of Made in China. While it’s still common to link the term with the “world’s factory” and cheap products, at least in the smartphone market, we see an extra layer of added premium value.

Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers, says that in most markets worldwide, Apple, Samsung, and Huawei are the major players in the ultra-high end ($700+) competition. Although the market share in the ultra-high-end may vary geographically, IDC believes this phenomenon would remain in the near future.

While Chinese companies’ common price-for-value strategy and brand identity have brought smartphone manufacturer Xiaomi and OPPO to the 4th and 5th place of the IDC report, the two players’ commercial profitability capability remains an issue.

Xiaomi reported a net loss of RMB 43.9 billion for the whole of 2017 and RMB 7 billion for the first quarter of 2018. Huawei didn’t specify its profit for the period but confirmed an operating profit ratio of 14%, the 4th year above 10% since 2014.

After witnessing its first ever annual decline in shipment 2017, the Chinese smartphone market, once the world’s engine for smartphone growth, continues to slow down. The country’s smartphone shipment dwindled by a drastic 16.65％ to 39 million handsets (in Chinese) in the first quarter of 2018, according to a report released by the Ministry of Industry and Information Technology.

The plunge not only indicates weaker demand from the consumers but also languishing supply form smartphone makers. Only 51 new smartphones made their debut during the period, down 19% compared with a year before.

Chinese smartphone makers have a grip on the local market with the sales of over 33.49 million handsets or a predominant 85.7%. Of the total newly released devices, 45 were from Chinese smartphone makers, accounting for 88.2% of the total. But the overall drop affected everyone in the field, shipment from Chinese makers dipped 18% year-on-year.

Android system still dominates China, representing a 92.9% of the smartphones shipped in the period.

As a satuating market slows down the growth, more Chinese smartphone makers are exploring opportunities in the overseas market.  Leading players like Xiaomi, Vivo, and OPPO have seen momentum in South East Asian markets and Huawei in Europe, Latin America and the Middle East.

But these inroads are not without twists and turns. Xiaomi has been entangled in a series of patent litigations ever since its India expansion. Huawei, on the other hand, had their American dream fall apart after the failed deal with US telecom carrier AT&T.

A Chinese court in Shenzhen has ruled today in favor of Chinese smartphone maker Huawei, issuing a ban on its South Korean competitor Samsung from infringing the firm’s wireless communication technology through manufacturing and selling products that use the patent, local media The Paper is reporting. Huawei’s other litigation requests were rejected and Samsung retains the right to appeal to a higher court.

The patent infringement spat between Huawei and Samsung took shape in 2016 amid mounting competition between two of the world’s largest smartphone vendors. Most of the litigation is about patents related to mobile technology and design.

Huawei initiated the first attack in May 2016, suing Samsung over patent infringements in the U.S. and China. The Chinese firm claimed Samsung infringed on their 4G technologies, operating systems and user interfaces. In another suit filed in Quanzhou in June, Huawei claimed an indemnity of RMB 80.5 million ($12 million). Samsung fought back two months later, claiming an RMB 161 million damage amount from its Chinese rival.

This wave of patent disputes saw early results in 2017 when Huawei gained the upper hand. In April 2017, the Quanzhou court ruled in favor of Huawei: Samsung was ordered to pay the cash damages of RMB 80 million as required.

Amid slowing smartphone sales worldwide, Huawei has emerged as the second strongest smartphone brand, next only to Samsung. In an increasingly competitive market, patents are one of the primary weapons of defense among big smartphone brands.

Xiaomi, China’s leading smartphone manufacturer, has turned profitable in its third year in India, highlighting an increasing preference for Chinese phones over those produced by local rivals.

Xiaomi’s India unit saw a 696% sales surge to Rs 83.79 billion ($1.3 billion) with a net profit of Rs 1.64 billion ($25.42 million) during FY17, marking the company’s growing clout in India. This reflects that Xiaomi has started to make a profit in the fiscal ended March 2017 as sales surge more than seven times, as reported by The Economic Times.

Just one year ago, the company saw its revenues at Rs 10.46 billion ($ 162.13 million) with a net loss of Rs 469 million ($ 7.27 million).

It didn’t come as a surprise that Xiaomi decided to roll out two low-priced models in India this month—both models under RMB 1,000—to further infiltrate the Indian market.

Oppo, another smartphone maker from China, is ambitiously making a foray into the Indian market as well and entered India four years ago. It earlier announced that its sales surged to Rs 79.74 billion ($1.24 billion) during FY17, marking a 754% growth from the fiscal year before. This means that Oppo has surpassed Sony and Micromax, the Indian mobile maker, after its rapid growth in sales. The sales growth of Xiaomi and Oppo reflects a further Chinese dominance in the Indian smartphone market.

Chinese smartphone brands are gaining momentum in their Russia expansion efforts, according to a research report from Counterpoint.

As forerunners in this initiative, Xiaomi, which made its official debut in April this year after six months of operation through a distributor, is now the  fifth largest smartphone brand in Russia during Q3 this year, grew by 325% YoY. “Xiaomi was the fastest growing smartphone brand in Russia in both online as well as offline sales,” said Tarun Pathak, Associate Director at Counterpoint Research, in a statement. The firm is also expanding its offline retail expansion efforts in the country by setting up its first 24/7 outlet in Moscow.

Huawei and lesser-known Chinese brand Bright & Quick eclipsed Xiaomi with 11% and 5% market share, respectively. However, they are growing at a less, but not insignificant, YOY growth rate of 140% and 177%. Samsung and Apple took the top two spots.

Counterpoint’s Market Monitor service indicates sustained growth in Russian smartphone industry, which grew by 7% annually and 38% sequentially during Q3 2017.Commenting on the analysis, Minakshi Sharma, Research Associate said:

 “The Russian handset market grew during this quarter driven by aggressive marketing campaigns by new Chinese brands and subsequent price cuts from all the leading retail chains as consumer spending during third quarter of the year normally remains high due to the new academic year and a ‘back-to-school’ uptick.”

The saturating domestic arena has forced Chinese smartphone makers to seek new opportunities globally. Cheering milestones in tapping Southeast Asia countries have been recorded. Over 50% of India’s smartphone market is currently controlled by Chinese brands, including Xiaomi, Oppo, Vivo, Shenzhen-based Gionee, and Lenovo.

In addition to strengthening foothold in the existing markets, companies like Xiaomi are eyeing other regional markets from Europe to Africa and Latin America.

Right before Apple’s iPhone annual launch event tomorrow, Xiaomi—China’s top smartphone manufacturer—launched today its latest smartphone lineup: the Mi Mix 2.

The Mi Mix 2 is a successor to last year’s Mi Mix phone. The latest model features a four-sided curved ceramic body with the bottom bezel 12 percent narrower than the Mi Mix.

“I have faith in our product. Let’s wait and see what Apple has [to offer] tomorrow,” said Lei Jun, Xiaomi’s founder and CEO, at the launch event today in Beijing.

The Mi Mix 2 phone has a 5.99-inch display with a screen aspect ratio of 18:9, which Xiaomi claims is a smaller body than the iPhone 7 Plus for such a large screen display. Plus, the Mi Mix 2 comes with the Snapdragon 835 processor and 6GB of RAM.

The latest model is priced at RMB 3299 (roughly $505) for the model with 6GB of RAM and 64GB of internal storage, cheaper than last year’s model Mi Mix that started at RMB 3499 ($536). The other options in the lineup include one with 6GB of RAM and 128GB of storage priced at RMB 3599 ($551) and another option with 6GB of RAM and 256 GB of storage priced at RMB 3999. Also announced today was the Mi Mix 2 Special Edition that comes with a ceramic “Unibody” design and 8GB of RAM, retailing for RMB 4699 ($720).

It’s worth noting that the Mi Mix 2 is equipped with near-field communication (NFC) technology—a technique that has been widely implemented in China. Last month Beijing metro has set up NFC-enabled gates that allow passengers to just swipe with their NFC-powered smartphones to enter the station, sparing the effort of purchasing transport cards or tickets.

Aside from the Mi Mix 2, Xiaomi also upped the ante in two other product lines—Mi Note 3, which boasts a dual-camera setup, and the new Mi Notebook Pro, an upgrade of its lines of laptops.

Chinese leading smartphone maker Huawei has overtaken Apple in global smartphone sales since June to become the world’s second-largest smartphone brand, next only to Samsung, according to the latest report by consulting firm Counterpoint Research.

The August sales haven’t been released yet, though the report points out it’s looking strong for the Chinese vendor. With Apple’s major iPhone launch scheduled in less than one week, however, the US smartphone maker is expected to record a rebound in September.

Still, this is a big deal for Huawei—more commonly known as a network infrastructure manufacturer previousl—to rocket to the top of the industry over the last three to four years. Counterpoint attributes the quick surge to its consistent investment in R&D and manufacturing, which brings excellent design and rich feature sets, aggressive marketing, and sales channel expansion.

Huawei enjoys the leadership position in China and operator-centric markets in Europe, Latin America, and the Middle East, but its presence in South Asian, Indian and North American markets are relatively weak, limiting its potentials to take a sustainable second place position, the report pointed out.

Despite the striking performance in sales, Huawei still lacks a true hero device although it already features a multiple SKU portfolio that ranges from low to high-end products. “While Huawei climbed to be the world’s second largest brand overall, it is surprising to see none of its models breaking into the top ten rankings. While having a diverse portfolio allows Huawei to fight on multiple fronts, it does little to build overall brand recognition; something Huawei badly needs if it is to continue to gain share. While Huawei has trimmed its portfolio, it likely needs to further streamline its product range like Oppo and Xiaomi have done – putting more muscle behind fewer products,” Counterpoint Research senior analyst Pavel Naiya commented.

Huawei’s surge comes with the rise of a raft of Chinese smartphone makers, like Oppo, Vivo, and Xiaomi, which have been challenging market incumbents with the latest innovations in bezel-free and full displays, augmented reality, in-house chipsets, and advanced camera features.

Floundering smartphone maker Smartisan has raised RMB 1 billion (around $150 million) in fresh funding, the company’s charismatic founder and CEO Luo Yonghao disclosed at Geek Park’s Rebuild 2017 conference.

The former English teacher and now internet celebrity did not disclose the participating investors but did reveal that the new funding will allow the troubled smartphone maker to ship five to six products every year to cover low- to high-tier markets

At the same occasion, Luo also shared the painful experience that Smartisan team has gone through in their “hardest time” in 2016 when the company was on the verge to collapse and almost got acquired by Xiaomi (in Chinese).

Founded in 2012 amid China’s smartphone boom, Smartisan has always been one of the most unique brands, famous for its idealism. Targeting a narrow group of tech-savvy users, the company aimed to draw upon a spirit of artisanship to offer fans a first-rate user experience.

In a crowded marketplace, however, fast-moving competitors don’t leave enough time for those who move slow. The hype surrounding the company in its early days soon faded away due to problems such as failure to ship products on time. Also, the higher-than-expected price tag for early products also put the startup on disadvantage in a market where budget phones like Xiaomi’s prevailed.

Despite the early setbacks, the company’s recent smartphone releases, like Smartisan M1 and Nuts Pro, have received positive reviews and strong market reaction. The struggling company is expected to make a comeback with positive word-of-mouth and sufficient financial support.

Previous investors of the company include PurpleSky, Buttonwood Capital and Tang Yan, founder of Chinese social networking firm Momo.

Huawei, the Chinese telecom equipment and smartphone maker, is in a dispute with Chinese social networking and gaming giant Tencent over the right to collect user data from Tencent’s popular app WeChat installed on Huawei phones, Wall Street Journal reported on August 3 (paywall).

This is not the first time Chinese tech giants have fought over data access. In June, Alibaba’s logistics arm Cainiao and China’s biggest private courier SF Express engaged in a month-long standoff over access to customer data.

According to WSJ, Huawei is seeking to collect data from users of its Honor Magic phone. With this data, Huawei will be able to beef up its AI-driven functions, for example, making restaurant recommendations based on a user’s text messages. Contention arose because Huawei’s data source will include users’ chat logs on WeChat.

The high-end phone Honor Magic, available in China only, has been marketed for its “smarter” and “futuristic” features including a face- and eye-tracking algorithm made possible by a front-facing infrared sensor.

According to people familiar with the matter, Tencent contends that Huawei has seized Tencent’s data and infringed on the privacy of WeChat users, and has asked the Chinese government to intervene. This is reminiscent of the Cainiao-SF dispute which was mediated and eventually resolved with help from China’s State Post Bureau.

In its statement to WSJ, Huawei denies that it is violating user privacy. The data belongs to the user, says Huawei, not Tencent or Honor Magic, and the data is collected only after gaining user authorization.

“There are no adequate laws and regulations to supervise and administrate China’s mobile industry,” says Peter Cui, a lawyer at a Beijing-based insurance firm. China recently passed a new cybersecurity law to protect internet user data, but the specific provisions have yet to be defined. Chinese users also lack an awareness of the importance of personal privacy, Cui reckons. “Thus, under the regulatory and social environment, any discussion of privacy protection has no teeth.”

Both companies are headquartered in Shenzhen and command leading positions in their own industry. Huawei, an employee-owned company ranked 83rd in the latest Global Fortune 500 List, is now the world’s largest telecom equipment maker. Hong Kong-listed Tencent owns China’s largest social networking service WeChat with 938 million MAU—over 90% of China’s smartphone users—as of Q1 2017.

Xiaomi, Oppo, Vivo, and Lenovo are among the top five mobile brands in India, but Samsung continues to rule India’s smartphone shipments with a 25 percent market share, according to new figures from market research company Canalys.

“With China suffering its own decline this quarter, India is a market of huge strategic importance to Chinese smartphone vendors,” said Canalys Research Analyst Ishan Dutt. “Samsung is under immense pressure in the mid-tier from the Chinese players.”

Over 50 percent of India’s smartphone brands is currently controlled by Chinese brands, including Xiaomi, Oppo, Vivo, Shenzhen-based Gionee, and Lenovo.

The biggest winner of this year’s Q2 is Xiaomi which has more than quadrupled its shipments to 4.8 million units making it India’s largest smartphone brand after Samsung. This month, Xiaomi celebrated its third Mi anniversary in India. Sales of Xiaomi’s Redmi series have been growing strong despite a viral video showing one of Xiaomi’s phones catching fire. The incident, however, seems to be fake.

Thanks to its popularity among tier-two and tier-three cities, Vivo placed third in this quarter shipping a record 3.4 million units. Unfortunately, the company’s reputation came under scrutiny after a protest from former workers turned violent on Tuesday. According to media reports, as a part of its efforts to boost its brand by sponsoring the Indian Premier League Vivo hired a number of workers during the season and has now begun laying them off. In the case of Tuesday’s protests, the workers were fired with no prior notice.

Oppo, which is like Vivo owned by Guangzhou-based BBK Electronics, came fourth, closely followed by Lenovo with 1.9 million units shipped in the second quarter.

One brand that was notably missing from the report is Huawei which is lagging behind its compatriots in conquering the Indian market. Huawei sold only 1 million units during the last fiscal year ending on March 31st. The second largest Android smartphone manufacturer in the world hopes to bolster its success in this core market during 2017.

The research also warned that India’s smartphone market has contracted for the first time in history this Q2 causing shipments to the country to fall 4% year on year to just under 27 million units. A portion of the blame goes to India’s new Goods and Services Tax, the report said.

Sales of China’s domestic smartphone market continues to grow, but the spoils of the increase are not going to international brands like Apple and Samsung. Instead, domestic smartphone makers are gobbling up 87% of the smartphone shipment in Q2 2017, according to a new report from research firm Counterpoint. The top four Chinese brands—Huawei, Oppo, Vivo, and Xiaomi—have eaten away close to 69% of the market.

One notable change is Xiaomi’s comeback. After declining for a few quarters, Xiaomi, once called the Apple of China, is showing a positive uptick at 20% YoY growth. 2016 was the first time the privately-held company did not disclose its annual sales. Based on data published by research firm IDC, Xiaomi slipped to the fifth spot in the home market as demand for its smartphones declined 40.5% YoY in Q4 2016. In Q2 2017, Xiaomi overtook Apple’s fourth place.
“The key reason behind the [Xiaomi] comeback can be attributed to strong demand for its latest flagship Mi 6 and low-tier models such as Redmi Note 4X as well as focus on diversifying distribution channels,” says Tarun Pathak, Associate Director of Counterpoint. Xiaomi had traditionally relied only on online channels for smartphone sales, whereas its rivals Vivo and Oppo have found increasing success in investing heavily in offline stores and expanding their reach to tier-2 and tier-3 cities. Xiaomi has responded by opening more Mi Home stores to drive offline growth.

Apple’s smartphone sales are also under attack on a global scale. According to research company Gartner, the top three Chinese brands Huawei, Oppo and Vivo have a combined global market share of 24% in the first quarter of 2017, up 7% YoY. Samsung comes in at 20.7% followed by Apple at 13.7%. Top Chinese brands are edging in closer to their international counterparts with competitively priced, high-quality smartphones, aggressive marketing and sales promotion, reckons Anshul Gupta, research director at Gartner.

Despite Chinese smartphones’ widening margins both at home and globally, analysts from IDC believe that Apple’s weak performance is seasonal, as most Apple users are expected to be holding out for the new iPhone 8 launching in 2017 at iPhone’s 10th anniversary.

Amid slowing growth in China, Apple is creating a new head position for its Chinese team to invigorate the Chinese business. The global smartphone giant announced today the appointment Isabel Ge Mahe, formerly vice president of Wireless Technologies, as vice president and managing director of Greater China.

Isabel will report directly to CEO Tim Cook and COO Jeff Williams. She will assume her new role later this summer and will be based in Shanghai, the firm says.

“Apple is strongly committed to invest and grow in China, and we are thrilled that Isabel will be bringing her experience and leadership to our China team,” said Tim Cook, Apple’s CEO. “She has dedicated a great deal of her time in recent years to delivering innovation for the benefit of Apple customers in China, and we look forward to making even greater contributions under her leadership.”

This appointment comes when the global tech giant is gradually losing ground to local smartphone manufacturers like Huawei, VIVO, and OPPO. Apple’s Q1 report revealed that its revenue from China, which lost its status as Apple’s second-largest market to Europe last year, slumped by 14 percent year on year, compared with a 1 percent drop globally.

Apple’s decline as a foreign smartphone maker in China isn’t a single case. Something very similar happened to Samsung, only it’s worse for them. A report from Counterpoint shows that Samsung’s smartphone sales in China dropped around 60 percent in Q1 this year. Samsung Note 7’s battery failure and the company’s belated recall plan in China play no small part to the shattering of the Samsung brand.

The rise of local smartphone brands also plagued the foreign competitors. In 2016, a total of 559.7 million mobile phones were shipped in China, of which local smartphone makers account for a dominating 497.8 million or 88.9% of the total shipments.

Xiaomi, a once red-hot Chinese hardware startup touted as the China’s answer to Apple, is encountering serious challenges from local competitors of Oppo, Vivo, and Huawei in the past year. It’s even been being moved from the first to the fifth spot in the market share list.

The reasons behind this disastrous drop were multi-faceted and involve issues from supply chain management to the lack of high-end products. However, the company’s online-focused marketing strategy is widely considered as a major reason.

Online marketing was a success, but it’s not one-size-fits-all

Born in 2010, Xiaomi positioned itself a brand with internet DNA and tried to engage customers with its geeky positioning. This is perfectly reflected in its slogan “Born for You, Burn for MI” (为发烧而生). In line with the positioning, Xiaomi leveraged corresponding online-focused marketing strategies, rejecting physical retail stores, traditional distribution channels, and conventional advertising as a way to keep lower product prices.

From online flash sales, social media promotion to creating a fanatic fan community, Xiaomi’s marketing moves proved to be a success in tapping China’s urban starter smartphone user base in its early stage of development with smartphones packed decent specs and affordable prices.

As the first regions to adopt smartphones, China tier-one and tier-two cities have gradually becoming saturated in recent years. Lower-tier cities and rural areas, where internet penetration is lower and traditional retailing still dominates, are taking bigger roles in driving smartphone market.

Market changes. Sticking to the old strategies, no matter how effective it was in the past, to tap a different market is obviously not a wise choice.

How will Xiaomi differentiate?

While Xiaomi is losing ground, its local competitors Oppo and Vivo are rising by adopting the exact tactics that Xiaomi once avoided. Now, Xiaomi is shifting to the offline-focused strategy that’s helped its rivals boom.

Xiaomi opened its first flagship retail stores in 2013. Back then, the move was largely a PR effort to build a more favorable company brand. Currently, there’s overall 47 Mi Homes in the country, including one in Hong Kong and one in Taiwan.

The firm’s obviously more serious about going offline this time. Company founder Lei Jun said the smartphone maker is going to add 200 brick-and-mortar Mi Home stores in 2017. A combined 1,000 such stores will be opened in the future three years.

In addition, the company started a pilot of a direct-to-retail model to eliminate distributors and other middlemen. Every individual retailer can order directly from the company on Xiaomi’s marketplace. The site shows that Xiaomi will offer training and incentive plans to individual merchants in the plan. Compared with opening physical stores, this is a less pricey way to reach to customers.

On 19th of October, LeEco made their official debut into the US market. According to speech made by Jia Yeuting, the CEO and founder of LeEco in San Francisco, LeEco would begin selling their smartphones and Smart TVs from Nov. 2nd. Along with their main products, TV and smartphone, they have also presented streaming service, bike and automobile, all of which will compose the whole ecosystem.

Compared to other companies leading in consumer electronics market such as Apple and Samsung, LeEco takes a different approach. Their products are at more affordable prices which, on the other hand, means less earnings for the company. However, because what LeEco aims is not restrained to selling one or two products more, but rather to establish their ecosystem where people are using LeEco’s devices, consuming LeEco’s contents, driving LeEco’s car and shopping in LeEco’s shopping platform. So, short-term profit is not so much of their concern, according to Jia Yeuting.

LeEco has been preparing quite thoroughly for successfully settling in the US market, mainly through partnerships and acquisition. LeEco announced the plans to acquire TV manufacturing company Vizio Inc. in US. And LeEco’s streaming service would include content from their partners, such as MGM, Lionsgate, VICE and Showtime.

LeEco seems to be a little different from other Chinese upstart Tech companies such as Huawei or Xiaomi. It is hard to define this company as hardware company. LeEco is equipped with all hardware, software, and contents. Some might say that LeEco is no more than a combination of Apple, Amazon, Google, Netflix, Samsung, and Tesla. Could be. But it is still worthy to note that even if each product resembles already existing products, the magic to link them all into one ecosystem is indeed LeEco’s thing.

When Huawei is having a hard time in US market due to security problem and Xiaomi is not so different due to patent problem, it is difficult to pre-assume LeEco’s debut in US was the right strategy. But, at least at this point, market reactions are far from bad. As long as product is good, price is reasonable, and design is attractive, it seems like there is no reason that American consumers neglect LeEco’s products.

image credit: Sohu

Instead of the long-rumored Smartisan T3, China’s fledging phone maker Smartisan Technology took the wraps off the fourth smartphone in its product lineup M1/M1L on Tuesday in a showy press conference held in Shanghai. Together with hardware, the handset vendor also launched a new update for its custom OS.

Like always, rumors and hypes surround Smartisan’s new product has churned up weeks before the official press release. The event gets much local press attention partially because it has been a while for the once high-profile company to make a move, partially because this is a make-or-break point for the Chinese smartphone vendor.

M1 continued its signature minimalist design with aluminum body and seamless strips, which makes it resemble iPhone a lot. Enabled by Android-based Smartisan OS, the smartphone is powered by Qualcomm Snapdragon quad-core 821 processor, which clocks at 2.35GHz, along with Adreno 530 GPU.

It comes with two versions, a 5.15 inch M1 and a 5.7 inch M1L, which are offered in three color options of silver, white (mirror stainless steel) and leather coffee. The phone sports a 4080mAh battery that can support a claimed 45.54 hours of continuous phone call. Luckily, the firm has integrated Quick Charge 3.0 technology to get the phone charged more quickly.

The power button is integrated into the home button and the SIM card tray is hidden behind keys on the right side. One big difference is Smartisan has finally incorporated finger scanners into its products, a standard for most smartphones now. A handy feature that comes along with the scanner is users can assign various functions to fingerprints, allowing users to open either Alipay or WeChat payment QR codes by scanning different fingers without faffing around with separate apps.

The phone features a 23 megapixel rear camera and a 4 megapixel front facing camera. The rear camera supports 4K video recording.

Unlike most Chinese smartphone companies that try to bombard users with high specs, the company’s charismatic leader Luo Yonghao emphasized that the company puts priority on the look and feel of their products rather than standard hardware. But it’s catching up, at least on par with mainstream flagship products in the country.

Specs:

• 5.5-inch/5.7-inch in-cell display
• 2.35GHz Qualcomm Snapdragon quad-core 821 processor
• Adreno 530 GPU
• Android based Smartisan OS3.X
• Dual SIM card
• M1: 149.36x 71.75x 8.22mm, 146g; M1L: 159.66x 78.96 x 8.32mm, 175g
• 23MP rear camera with LED flash, f/2.0 aperture, ISOCELL sensor, 4K video recording
• 4MP selfie camera, OmniVision OV4688
• 4G LTE / 3G /2G
• 4080mAh battery

Pricing various according to RAM and memories.

• M1: 4GB RAM + 32GB – 2,499 yuan ($370)
• M1L: 4GB RAM + 32GB – 2,799 yuan ($415), 6GB RAM + 64GB – 2,999 yuan ($445)
• M1L 6GB RAM + 64GB (mirror stainless metal version) 3,299 yuan ($489)

Product info page (in Chinese)

Highlights from Smartisan OS update

At the same event, the company released a new update for its Android-based operating system, which offers more highlights to the event as compared with the hardware. Smartisan OS 3.X sports a raft of features that aims to make smartphone input or textual processing more convenient for mobile users.

Supported by China’s top voice recognition service iFLYTEK, the voice input demo wowed the audience with a reliable and accurate output which the company claimed an accuracy rate of 97%. A good news for users with foreign contacts. Smartisan’s phone book now supports search in English, Japanese and Korea.

By long pressing the screen, a new feature dubbed “Big Bang” can fragment lengthy paragraphs into word segments, easy for copy to other editing tools, select as search keywords, or drag to a sidebar to share with friends. It’s worth nothing that not only sheer texts, words from pictures can also be processed.

“One Step” facilitates multitask operations by allowing users to put various items such as pictures, files on the top bar, or apps, frequent contacts, commonly accessed settings on the right sidebar, eliminating steps in switching between apps.

In a forward-looking move to contribute to the Android community, Smartisan plans to make “Big Bang” and “One Step” open source technologies in a hope that Google could make them basic features of the Android operating system.

Crucial flagship for the troubled company

Smartisan has hit a tough development path since its first product launch. Its first generation flagship product T1 suffered from capacity problems and the following products U1 and T2 failed to become smash-hits the company once harped about.

The company has been under lot of financial pressure as its total assets has slumped from 825 million yuan at the end of 2015 to 296 million yuan as of the first half of this year. The phone maker has recorded losses of 462 million yuan and 192 million yuan in 2015 and H1 2016, respectively, according to data from Tap4Fun, a listed investor of Smartisan. In June this year, company founder Luo has pledged 2.05 million shares in the company to Alibaba for an undisclosed sum of funding.

Rumors around Smartisan’s acquisition emerged in the past few months and potential investors include all big names from Lenovo, Alibaba, LeEco to Xiaomi. But company founder Luo Yonghao dispelled them. All this makes the flagship handset all the more important, and if the M series lives up to expectations and could register with users, it would gain more time for Smartisan to build a more solid foothold in China’s competitive smartphone battlefield.

Update (10/20/2016) 12:48: This story has been updated to add more information on Smartisan OS’s new features.

Qualcomm has sealed a licensing deal with China’s third biggest smartphone vendor, Vivo, as the chip giant smoothes over a rough few years in the Chinese market with steady gains.

Vivo is licensed to use Qualcomm’s technology in their 3G and 4G phones, the chipmaker said on Monday.

It comes just a week after Qualcomm sealed a similar deal with OPPO, which is also owned by Vivo’s parent company BKK Electronics.

The two brands have accelerated through China’s smartphone rankings in 2016, entering the top five local smartphone vendors and surpassing cult favorite Xiaomi. Along with OnePlus, which is also marketed by BKK Electronics, they now make up over 30 percent of phones shipped to the Chinese market.

According to research firm IDC, Vivo and Oppo’s market share grew 124 percent and 153 percent respectively in the year ending in March 2016, while Apple and Samsung’s share dropped in the same period.

Both vendors have a strong presence outside of China’s largest cities, which gives them leverage against premium vendors who market to China’s rapidly saturating first-tier markets.

The deal also marks a new milestone of progress for Qualcomm, which is steadily regaining momentum in the Chinese market following years of uncertainty. The U.S. chipmaker surprised analysts with an unexpected bump revenue bump in last month’s earnings, driven by Chinese chip demand.

Qualcomm makes over half of their total revenue from their chip licensing business, though they have struggled to ink deals with China’s largest smartphone vendors in the past. The company was subject to a year-long anti-trust investigation which ended in Qualcomm forking out a $975 million USD fine in early 2015.

They also payed out a $7.5 million USD fine in March this year after an investigation by the U.S. securities and exchange commission released a report that accused the company of bribing Chinese officials with gifts and employment offers.

With their regulatory issues settled and renewed progress on Chinese licensing deals, the company is hoping for a much brighter future in the world’s largest smartphone market.

During last month’s earnings call Qualcomm CEO Steve Mollenkopf said they were optimistic about further deals, and were in active discussion with remaining OEMS.

Huawei, the world’s third largest smartphone brand, posted a 40 percent increase in first quarter sales revenue when they reported their earnings on Monday. The company says they expect to maintain their current growth trajectory throughout the year.

Huawei recorded $245.5 billion yuan ($37 billion USD) in revenue during the first six months of 2016, claiming they have managed to beat the sluggish market with upgraded smartphones and strong network gear sales.

Despite hearty growth figures, Huawei’s operating margin dipped to 12 percent from 18 percent the same time last year. The privately held company diversified their smartphone stock heavily in late 2015 and early 2016, pushing into the premium space occupied by Apple and Samsung.

A saturated Chinese market, particularly in first-tier cities, has slowed smartphone sales and put local vendors under pressure. Huawei has managed to come out on top of competing local brands, including Xiaomi, by aggressively marketing their high-end models abroad while maintaining a significant share of the local budget smartphone market.

In line with previous rhetoric, Huawei CEO Richard Yu said the company’s ultimate aim is to displace market leaders Apple and Samsung to become the world’s largest smartphone vendor. The company will release the results of individual business groups on Tuesday.

Flowing on from an aggressive local campaign, Huawei has been exerting its influence more openly abroad. In recent months the company has engaged in a tit-for-tat legal battle with Samsung over patent infringements. In May, Huawei brought a patent suit against the Korean vendor in both U.S. and Chinese courts. Samsung has since responded with a similar suit in China.

Huawei has extended the scope of their patent-backed battle, now targeting U.S. telecommunications company T-Mobile. It comes as the Chinese smartphone vendor recently filed a second filing against Korean electronics maker Samsung over a patent dispute.

Huawei filed a complaint against T-Mobile on Tuesday to the U.S. District Court for the Eastern District of Texas, claiming the later company had infringed on a wireless network patent held by the Chinese company.

A handful of Chinese smartphone makers, including Huawei, Lenovo and ZTE have been rapidly acquiring and developing pools of patents in an attempt to challenge leading global companies as the Chinese vendors seek to expand.

In May, Huawei began legal action against Samsung int he U.S., claiming the Korean company had violated 11 patents pertaining to mobile technology. Yesterday it was revealed that Huawei filed a second patent suit against Samsung to a court in Shenzhen, where the Chinese company is based.

Huawei has been aggressively building out their high-end mobile business, looking to take a bigger bite out of the U.S. and European markets as local Chinese demand stagnates. The company has amassed over 50,000 patents as of the start of 2016.

The ecosystem that permitted the meteoric rise of Xiaomi’s valuation to over $45 billion no longer exists. A year-long contraction in the Chinese smartphone market has yielded a consolidated field of players struggling to find new inroads to a saturated market, and the latest casualty has fallen.

Dakele, or “big coke”, the Chinese smartphone maker that once aimed to emulate Xiaomi, has suspended R&D along with marketing and business operations, according to the company’s Ding Xiuhong, the former deputy editor-in-chief at online news service NetEase. The rumor of Dakele’s collapse reared its head late last year and the announcement on Mr. Ding’s microblog has finally confirmed it.

“The shuffling of the smartphone industry is much faster and tougher than we expected. We have survived competition in product [and] marketing, but the entry of more internet giants has brought the rivalry to operating capital,” said Mr. Ding.

“The unexpected capital shortage across industries cut our funding sources that were settled earlier.”

Dakele released a total of eight smartphones since their launch in June 2012. All their products are budget phones retailing less than 1000 RMB ($153 USD), featuring big screens and Kele UI, the company’s proprietary OS. Dakele’s selling point, like most Chinese smartphones, is their low price and decent specs. It’s the same strategy that boosted Xiaomi above the pack, though it’s not a method that has as much success in the current market.

The lack of powerful upstream support accelerated the collapse of Dakele. The company’s OEM subsidiary Shenzhen Yunchen Jiye Telecom Co. Ltd., which was shut down in October last year, reported local media.

For Chinese smartphone companies, there are two ways out: find more growth momentum in emerging markets like India and Latin America, or focus on higher-tier markets. Xiaomi has committed to the former, cementing sales channels to emerging markets. Huawei on the other hand rocketed into the high-end market with the Huawei Mate S. Strategies aside, it’s clear that a solid brand and mountains of capital are the fundamental tools required to survive the market squeeze.

Image credit: Dakele

China has kicked off 2016 with a serious milestone – more than half their 1.37 billion population is now connected to the internet, according to a report released by state-backed China Internet Network Information Center (CNNIC).

As of January first 2016, 688 million Chinese people had access to the internet, accounting for 50.3% of the population. The report also revealed that over 90% of the country’s web users access the internet through their smartphone.

China has seen an explosion in mobile-enabled services in the past three years, spurred on by massive capital injections from the country’s internet giants including Alibaba, Tencent and Baidu. Mobile services have extended across retail, banking, education, travel and lifestyle in urban centers, capitalizing on the logistics problems posed by China’s overpopulated cities.

New brand-leaders have also emerged in China’s low-cost Android smartphone sector, including Xiaomi, who experienced a meteoric rise in sales before the market slowed in 2015.

According to CNNIC, mobile payments rose 64.5% in 2015, buoyed by Alibaba’s Alipay and the release of Tencent’s Wechat Pay. Travel bookings leapt 56% as market leaders Ctrip and Qunar joined forces. Mobile shopping rose 43.9% over the same figures in 2014.

While almost half of the country’s population is yet to be connected, growth levels in the smartphone sector are unlikely to reach previous heights. China’s smartphone shipments have now dropped below 10%, according to a report from market research company IDC in December 2014, caused by saturation in the Chinese market. The report notes that China is slowly shifting to a replacement market, meaning the pool of first-time buyers is shrinking.

According to CNNIC it’s China’s youth market that continue to drive growth, with those under the age of 19 accounting for 46% of total growth in 2015.

The global smartphone growth percentage will drop below double-digits for the first ever full year in 2015, according to market research company International Data Corporation (IDC).

IDC predicts that smartphone shipments will grow just 9.8% globally in 2015 to a total of 14.3 billion units, with no upturn in sight.

The Chinese market has been a significant driver in smartphone growth in the past few years. As China’s untapped millions became mobile, both internet companies and the vendors themselves experienced an intense growth period, which saw companies like Xiaomi and Alipay become household names on the mainland.

The market has since saturated. According to IDC China is now a “replacement” market, meaning that the core group of consumers who previously drove smartphone adoption are already mobile.

“The main driver has been and will continue to be the success of low-cost smartphones in emerging markets,” said IDC program director Ryan Reith.  “This, in turn, will depend on capturing value-oriented first-time smartphone buyers as well as replacement buyers.”

Following the meteoric rise of Xiaomi and Apple within China, two distinct smartphones sales patterns have emerged dominant: the first are the vendors who sell low-end products on a mass scale for a drastically reduced price, including Xiaomi’s Mi series.

The second are those who are tapping the disposable wealth of China’s growing middle class by offering high-end phones, including Apple’s iPhone and Huawei’s Mate S.

Low-cost smartphones will continue to motivate growth, according to the report. They will also continue to drive replacements. The sub-$100 phones deteriorate quicker, which could bring the average replacement cycle to less than two years, according to IDC.

The Android market share is expected to rise a percentage point in 2015, despite the best efforts of alternate platforms including Linux-based Cyanogen and Xiaomi’s own MIUI.

2015 has been a tough year for smartphone vendors in China, with an economic slowdown taking its toll of country-wide sales. However some vendors have been more successful than others.

Huawei reached one of its major milestones this quarter, shipping 100 million units in 2015, becoming the first Chinese vendor to do so, according to research firm TrendForce. Given the current climate for phone sales in China, meeting goals is a quite an achievement. Some of the biggest contenders in the industry have been forced to lower expectations.

Samsung held tight to their top spot in global smartphone rankings, accounting for 25% of total shipments in Q3. However their global shipments are expected to decline a percentage point in 2015 to 324 million units, while rival Apple will see a 16% boost, shipping 223.7 million.

While Huawei’s expected shipments for 2015 are less than half of Apple’s, the company is speeding up where others are struggling, with TrendForce estimating a growth rate of more than 40% over 2014.

That said, China’s smartphone market has not been particularly kind to any of the big smartphone vendors, and it is expected to stay that way until at least mid 2016.

Several Chinese vendors have attempted to stave off market saturation woes by introducing high-end models at a premium price in an attempt to edge into Apple and Samsung’s territory. Xiaomi attempted to crack the premium market with its Mi Note series, positioned as a slightly less pricey alternative to the foreign brands.

However 2015 revealed that Chinese consumers are willing to pay more for the premium names rather than take a price cut for something with less brand appeal. Xiaomi is still set to achieve a 14.6% shipment growth this year due to steady sales in their budget models, however they will fall short of their 100 million yearly target.

Huawei also made an attempt to crack the high-end market, aggressively targeting features in other name brand devices. The Mate S series, which was released just before the iPhone 6s, is Huawei’s most expensive flagship yet, retailing within the iPhone’s price range. They also unveiled a Force Touch feature similar to Apple’s 3D Touch, along with Knuckle Sense technology and fast charging.

While Huawei may have had more success in pushing their high-end smartphone offering, their market share in China did fall almost 1% to 17.9% in Q3 while Xiaomi gained close to 1.5% to reach 14%.

Total third-quarter global smartphone shipments were up 9.1%, reaching 332 million.

It’s a sign of China’s hardware prowess that that not even a saturated market can deter PepsiCo from making an Android smartphone.

Before you get too excited, the U.S. beverage company will not be entering the manufacturing game for good. Currently they are just seeking out hardware partners for China-only promotional phone in line with other accessories they are releasing.

The phone will be dubbed the ‘Pepsi P1’, and will not be competing against high-end rivals in the China market specs-wise. It’s expected to retail at around 1300 RMB ($200 USD approx.) which puts it in the price category of several popular phones from Xiaomi, Meizu, Lenovo, Huawei and OnePlus, among others.

It will will feature a 5.5 -inch screen with 16GB of storage and a 1.7GHz processor.

Pepsi has joined hardware makers in the past to develop co-branded products, but the Pepsi P1 marks the first smartphone project. Last year, the U.S. beverage maker teamed up with B&O Play to develop headphones.

Cheap manufacturing and an abundance of viable hardware partners makes China an ideal market for launching a promotional phone, if not the only market. China-side brands including ZTE and Huawei have specialized in selling hardware to be used under alternate brands, including U.S. and other international carriers.

Branded phones have historically performed poorly in western markets, though a China-only project has better prospects. Consumption of low-end smartphones is higher and Chinese consumers replace their mobile devices every 18 months according to recent statistics.

Despite this, China’s smartphone market has slowed considerably this year, and large brands have felt the effects of a saturated market. Considering the Pepsi P1 will share a price bracket with several competitive options, the company may run into barriers in such a crowded market.

Image Credit: Mahathir Mohd Yasin/ Shutterstock.com

If you are one of those hardware fans who’s always itching to get the latest device whenever there’s a new update, you’ll probably have one of those junk drawers spewing out tentacles of wires and gadgets that are covered in dust. Among them, a bunch of old smartphones — sound familiar?

That’s exactly the case with many Chinese citizens as the country’s smartphone market is reaching saturation. China now boasts a total of 1.14 billion mobile users, according to data from the Ministry of Industry and Information Technology. The country’s smartphone shipment number stood at around 425 million in 2014, while there were only 56.98 million newly added mobile subscribers in the same year.

The gap between these figures indicates that nearly 400 million old smartphones were discarded per year. “Over 90% of the smartphones are purchased for replacing old ones”, said Sun Wenping, head of Shenzhen Smartphone Association, “due to reasons like the need to shift from 2G to 4G networks, or simply for a fancier version.”

Researches show that Chinese smartphone users change their smartphones once every 29-months in 2011, but the period has been shorted to 18 months now. Over 20% of Chinese users will update for a newer phone within one year, while only 8.4% would do so within two years.

Of course, there are tons of great things you can do with your old phone, either as a music player, e-reader or a security camera, but another equally useful option is to trade it in to help bank roll your next phone. Smartphone ‘upcycling’ is forming a huge industry in China, the world’s largest smartphone market. There’s already multiple startups tapping this emerging sector.

We’ve put together a short list of our top picks for those looking to empty the junk draw and recycle some of those old smart phones:

JD.com

JD.com, one of the to-go e-commerce site for electronics, has launched a dedicated channel for electronic trade-in services, where customers can exchange their used smartphones for coupons and bonus. The platform works just like the e-commerce portion, offering the same payment and insurance services.

Aihuishou

Aihuishou  (meaning “love recycling”) is a bidding-based C2B platform for recycling and the sale of second-hand electronic items such as mobile phones and laptops. Aihuishou adopted O2O model and built more than 40 service centers in four core commercial cities of Beijing, Shanghai, Guangzhou, and Shenzhen.

Their WeChat service helped to accumulate a huge number of users, who can ask questions and explain the phone’s condition on chat rooms. The user is then lead to nearby offline service center to conduct transaction. Also, the site has its own courier, who collect the used devices and users can ask online to take their old phone.

The company has raised $60 million USD funding of Series C funding led by Tiantu Capital this August. JD also participated this round.

Taolv365

Taolv365, founded in 2009, is an electronics upcycling platform that includes all kinds of services like online electronics tread-in, and the sale of second-hand gadgets as well as dissembled parts. Founded in Shenzhen, the site now operates in all major cities across the country.

Image Credit: ShutterStock

It’s been a tough season for smartphone makers aimed at the China market and that’s something HTC can attest to.

The Taiwan-based smartphone maker will be removed from the Taiwan Stock Exchange’s Top 50 Index, now shifting into the Taiwan Mid-Cap 100 Index. The company’s stock has dropped over two-thirds in the past year as smartphone sales in the region experience a uniform slowdown.

It’s the latest in a series of worrying signals for HTC, which has seen its global market share dwindle in recent years, Once the world’s biggest smartphone maker by volume, they now hold under 2% of the market, dropping out of the top 10.

The indexes, which rank companies according to their market cap, were recently reassessed, and will be reshuffled as of September 21st. HTC’s position on the Top 50 Index will be replaced by fabric producer Eclat Textile.

Last month HTC revealed that it would be cutting approximately 15% of its workforce and hoping to reign in operating expenses by over a third. While all smartphone makers have felt the pinch of a sluggish market, HTC’s outlook has become particularly grim as the market continues to saturate.

Following poor Q2 results this August, the company revealed that it expects to remain unprofitable in the third quarter of 2015. In an attempt to cut off dying limbs, they have decided to axe low-end models, a market now dominated by newer players including market-leader Xiaomi.

According to the report, HTC will be focussing on its premium market, hoping to differentiate itself. However the high end market is also experiencing saturation. Following the lead from Apple, Samsung, OnePlus, Lenovo and Huawei, Chinese smartphone maker Meizu also revealed plans last week to enter the premium market.

According to a report from IDC, smartphone shipments to China are expected to rise just 1% from last year. At the same time, global growth is expected to dip from 27.5% last year to a more modest 10.4% in 2015. Slowing sales have put pressure on smartphone makers that both originate from and target China. Many local players, including market-leader Xiaomi, have opted for a rapid expansion into emerging markets such as India and Brazil to offset the slowdown at home.

HTC would be hoping to shake off their stock market blues with the release of the mid-range Desire 728 phablet in China this week, featuring dual sim slots and a 64-bit MediaTek 728 chipset.

@CateCadell

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Image Credit: Shutterstock

After rocketing to the top of China’s smartphone game, Xiaomi is reportedly taking on a new challenge: notebooks.

According to a report from Bloomberg the smartphone vendor is in talks with Samsung to source the memory chips and displays for a device that could be released as soon as 2016, putting them in direct competition with Apple and Lenovo.

A separate source quoted in DigiTimes says “Xiaomi is planning to use the same strategy as the one for smartphones and will release notebooks with high price performance ratio.”

The same source believes the notebook will run Linux on a 15-inch screen and retail considerably lower than the comparable Macbook Air at 2,999RMB ($471 USD). Other potential partners in the project include Inventec and Apple manufacturer Foxconn.

As of this year Xiaomi has shot ahead of competitors in the Chinese market with the promise of a high quality product with a low-end price. They are known for their slick user interface and creative custom OS, though it remains to be seen whether the company is capable of transferring that concentrated success into such a saturated new market.

PC sales have faltered in 2015, slipping almost 9% according to IDC. But the move into laptops could be an attempt to diversify in the face of poor smartphone sales. According to a Gartner report released in August this year smartphone sales reached a record slowdown, recording the poorest growth numbers since 2013.

While Xiaomi still managed to come out on top, their main market competitor in the smartphone sector, Apple, slipped to third place behind Huawei despite and increase in sales, signaling a tough market. Lenovo, who would be Xiaomi’s biggest competitor in the Chinese notebook market, has the fourth largest market share in terms of smartphones.

Xiaomi has extended into a range of other product lines outside its smartphone business, but none have been as technically challenging as notebooks. Their product line includes air purifiers, battery packs, headphones, tablets, fit bands and other tech accessories.

@CateCadell

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Image Credit: Shutterstock

“Enjoy the luxury lifestyle, break into the aristocratic life,” is the mantra Samsung is using to sell its latest flagship, and nothing screams blue-blood quite like a flip phone.

No, it’s not 2003, but Samsung did release a clamshell smart-flip-phone called the Samsung G9198 on Friday, complete with a 3.9-inch dual screen 768p touch display, powered by Snapdragon 808.

While it may seem like a strange move in China, a market defined by incredibly cheap smartphones, Samsung isn’t the only player who seems to think there’s potential in a high-end clamshell. Just two weeks ago LG released a single-screen flip phone, the LG ‘Gentle’ with a physical keypad along with a touch sensitive display. It’s powered by Android 5.1 Lollipop and retails for over $170 USD.

The Samsung G9198 – while not exactly “aristocratic” – packs a punch for its size, and is definitely a significant upgrade on the previous model G9098. It comes with 2 GB of RAM, 1.8GHz hexa-core processor, 16 GB internal storage capacity and dual cameras (16-megapixel f/1.9 forward facing and a 5-megapixel f/1.9 selfie camera) with LED flash. It also has a heart rate monitor and supports dual-SIM along with a microSD card slot.

But if you’re looking to tap into “the luxury lifestyle” from outside of China, you’ll be disappointed. For now, the G9198 appears to only be on sale in the Chinese store. Since it seems to be a Middle Kingdom exclusive, it won’t support Google services, and from the images available it appears to be run on a modified Android system.

It’s not unusual to see the occasional flip phone on the streets of China, though with Xiaomi and Apple fighting for domination of the 20-35 age range, it’s likely these clamshells are targeted at the older generations. Samsung hasn’t yet released a price point for the G9198 flagship.

@catecadell

Image Credit: Samsung China

When OnePlus first launched its flagship smart phone One last year, it received fairly positive comments from overseas blogs. With its tagline ‘Never Settle’, the phone maker was credited for pushing the boundary of low-cost phone with its premium features. Chinese upstart smartphone manufacturer OnePlus has officially just launched OnePlus 2, which – so far – looks like a significant step up from its predecessor.

The appetite for affordable smartphones with high-end specifications is rising quickly. With the aim of being a global phone maker, OnePlus ships phones and supports service providers worldwide. Earlier this year, the company doubled its overseas markets to 35 countries, adding 16 from Europe. The new OnePlus 2 introduces dual SIM capabilities that allow users to connect to two networks simultaneously. 

From a specs perspective, the phone features a 5.5-inch, 1080p screen, a Qualcomm Snapdragon 810 processor paired with a 3,300 man battery. It features 4G LTE and an octacore CPU which should power through demanding apps, games, and HD video.

The back-facing camera has a 13 0megapixel sensor with optical image stabilzation, while providing multiple lens elements that prevent distortion and improve clarity. Also, its 5.5 inch IPS LCD display produces clear images and provides a front-facing fingerprint unlock sensor. 

OpenPlus’s in-house software OxygenOS provides off-screen gestures and customizable buttons. The company also provides a SwiftKey Keyboard, that uses Artificial Intelligence to automatically learn the words you like to type and enhanced audio in collaboration with MaxxAudio sound design technologies.

OnePlus is notorious for its invite-only purchase system. In order to preorder OnePlus 2, one needs to get an invite from a OnePlus phone buyer. However, this time it will be much easier to get an invite as anyone can sign up to the OnePlus website. The 16GB model is affordable at $329 USD, while the 64GB version is $389 USD. OnePlus’s optional $27 rear covers use actual wood (bamboo, rosewood, black, apricot) or Kevlar for great looks and feeling. The phone reportedly will start shipping to the US, Europe, and India by the middle of August. 

Image Credit: OnePlus

Nothing says ‘look at me’ quite like a Chinese tech brand appropriating a Hitler cartoon to take a shot at the world’s biggest technology company.

If you live in a Chinese city, watch Chinese video streams or peruse the local social media, chances are you’re familiar with LeTV’s anti-Apple campaign. From Nazi satire to a high budget parody of Apple’s iconic ‘1984’ ad, LeTV is making it clear that they know who their biggest rival in the local smartphone market is – and that they’re willing to take it on.

This week, LeTV launched three new premium ‘Le Superphone’ models which appear to be the world’s first USB type-C enabled smartphones. The event was simultaneously webcast in Beijing, San Francisco and Los Angeles, highlighting what the company calls its ‘BLS’ (Beijing, Los Angeles, San Francisco) strategy.

On CEO Jia Yueting’s personal Weibo account, he attacked Apple for lacking innovation and stifling developer communities with their closed OS, taking the same approach as Android’s fierce supporters.

Chinese Smartphones Breaking Into Foreign Markets

If you’re a foreigner looking at Chinese smartphone makers, you may not recognise a good number of them. The quality and diversity of Chinese phones has grown substantially over the past five years, with local brands trying hard to shake off the low cost, low quality image that comes with being a Chinese smartphone in the west. 

As the Chinese middle class grows, the market for the cheap-and-nasty tech is shrinking. Premium products are gaining traction, and high-end brands – both local and foreign – enjoy a cult following. This Chinese New Year, iPhones sales outstripped competitors in urban China for the first time ever, according to a report form Kantar Worldpanel released this month. Over the same period, local brands released a spate of ‘premium’ 5.5 and 6 inch alternatives, hoping to dip into the same pool of the increasingly wealthy Chinese urban population.

Despite the general surge in quality, however, Chinese smartphone brands are still struggle to expand to the west. Even if they can manage to avoid the Huawei nightmare of  publicly vetted for security issues, they still face a wall of consumers who see little benefit to buying a Chinese smartphone. Especially one that eventually intends to price itself into the premium range. 

Which puts LeTV’s oddly obsessive campaign into perspective. For a company that doesn’t even intend to launch its new phones in the U.S. until late 2015, they’ve sure managed to put their name next to Apple’s in a lot of headlines. Playing the role of the active challenger – no matter how ludicrous – has bought LeTV a ticket to the fight, at least in the arena of possible Chinese contenders. 

The LeTV ‘1984’ Parody

Despite several flaws in its logic, the parody is surprisingly on-point. It opens with a crowd of chalky, white-faced worshipers in hazmat suits mimicking the original 1984 Apple ad – except they’re idolising a green Apple on a pedestal.

A man in a red shirt runs from a hallway behind the dark room, fighting off heavily armoured S.W.A.T-style special forces police. He breaks through the crowd and takes a bite out of the apple. The walls slowly slide open to reveal blinding sunlight. The final shot shows a gnawed apple core. 

While the Hitler gag drew criticism at home and abroad for obvious reasons, the ‘1984’ parody is playfully geeky – even if it’s a bit self-indulgent of the part of LeTV. But we’ll let you be the judge – on the left is Apple’s ‘1984’, on the right, LeTV’s parody:

To view both ads on LeTV’s video streaming service, click here.

While the concept is cheeky, the unfortunate eyebrow-raiser of the parody is the fact that the Le Superphone looks a bit too much like the Apple iPhone 6 to be making jabs about innovation. Even the billboard marketing here in China shares Apple’s distinctive minimalistic vibe. Giving LeTV the benefit of the doubt, here’s to hoping the innovation is in their hardware-software combo.

Image sources: Sina Weibo, Apple ‘1984’ & LeTV

China’s online video streamer LeTV launched its smart phone at simultaneous events in Beijing and San Francisco last night, in a play to introduce U.S. consumers to the Chinese company, despite the new LeTV phones not being available in the U.S. until later this year.

If you know the Chinese smart TV market, you’ll know that LeTV always tries to keep everything high profile – no matter how weird. Their latest launch was no exception. Photos of the new phone were leaked by Chinese celebrities on social media long before the event happened. CEO Jia Yueting even controversially posted a picture on Weibo of Hitler wearing an Apple T-shirt  in a misguided attempt to create buzz for the brand.

According to Mark Li, who is guiding the company’s entry into the U.S. market, the dual-city launch event was designed to introduce the U.S. to the LeTV ecosystem. “We don’t just sell the content but the experience, and we wanted the U.S. to know about how great LeTV is”, said Li.

The Phone

The company officially announced its new Le Superphone with large screens in different sizes. LeTV emphasized the USB type-C connector and bezel-less display on their Le Superphone. It runs on a Snapdragon 810 processor with a 21-megapixel camera and a 3,000 mAh battery. The Le Superphone also has two upgraded versions in different sizes which will be on the Chinese market later.

Like other Android phone manufactures in China, LeTV has also built its own operating system which is called EUI 5.

Expanding into the U.S.

LeTV now has two U.S. offices, in Los Angeles and San Francisco.

“We believe in the power of the three cities [Beijing, Los Angeles and San Francisco – also referred to as the “BLS strategy” inside the company]. Beijing is the fastest growing market for consumers, Los Angeles is the biggest factory for content globally, and San Francisco is the centre for innovation and technology. It’s fantastic that we can build platform, content and technology in the best places,” Mark Li said.

Last year the company announced its global expansion plan, and this time it made the announcement again especially for the U.S. CEO Jia Yueting said “I just can’s see any reason why we can’t succeed in the US. We’ve got everything required to do well.” Though the new Le Superphone won’t officially take off in the U.S. until the end of the year, the company said they were confident they would win over American consumers.

“We won’t launch anything that is not perfect at LeTV. Everything got to be super,” Li said.

Photo and Video: LeTV

Editing by Mike Cormack (@bucketoftongues)

The 2015 Chinese New Year period lived up to its frenzied reputation with several local and international companies setting market records. The booming local smartphone industry received a tidy bump during the holiday, but the clear winner was Apple’s iPhone 6.

iOS now has a 27.6% share of the urban market in China, setting a company record. Momentum for Apple products continues to skyrocket, with the iPhone 6 taking the top spot in urban sales from Xiaomi’s RedMI Note. Third place went to the iPhone 6 plus, which sold well in a country with a strong appetite for larger phones and phablets.

“China Mobile subscribers accounted for 59% of the 27.6% volume share recorded by iOS in this latest period”, said Carolina Milanesi, Chief of Research at Kantar Worldpanel ComTech. The iOS market share has dipped slightly over the past year in the US, from 39.2% to 38.8%.

Lenovo re-launched Motorola Mobility with a selection of new smartphones released during the New Year, while Chinese giant Xiaomi launched several products during the holiday spending period, such as a special edition of the Xiaomi Redmi 4G as well as a China Mobile version of the same budget favourite. Huawei also launched the Honour 6 plus just before the festival, featuring a larger body in line with the season’s 6-inch screen trend.

Samsung has also entered the ring with its Galaxy S6 and Galaxy S6 edge earlier this month. The company chose to separate the release of their highly publicised 6-inch smartphone from the Apple offering by several months.

While urban sales continue to rise, the iPhone is still struggling to crack markets across regional China, with cheaper alternatives from local companies more popular. According to findings by Kantar Worldpanel, the iPhone 6 was also the bestseller in Britain, France, Germany, Italy and Japan over the same period.

Image Source: Lewis Tse Pui Lung / Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

Chinese telecom equipment and smartphone maker Huawei shipped more than 75 million smartphones in 2014, according to a year-end letter by the company’s Consumer Business Group (source in Chinese). This is a greater than 40% increase from last year, with 34.27 million sets sold during the first half of this year.

Huawei attributes the growth to breakthroughs in mid- and high-tier smartphone markets, led by flagship products such as the Mate 7. Sales of the company’s new Honor brand has increased more than 30-fold, according to the letter.

Huawei is experiencing rapid growth in the Middle East, Latin America, Southeast Asia, Africa and the South Asia-Pacific. It has set up more than 450 bricks-and-mortar stores and has nearly 30,000 sales counters around the world,.

Annual revenue from its consumer business group is expected to rise from US$9 billion in 2013 to over US$11.8 billion in 2014, a surge of over 30% year-on-year. The letter added that it is the first time the group has exceeded the 10 billion revenue threshold.

The company claims to be the world’s third largest smartphone manufacturer by shipment, while the gap between the company and industry leaders Apple and Samsung is narrowing, the letter reads.

Another internal email released by Huawei CEO Hu Houkun disclosed that total sales are expected to surge 15% year-on-year to US$46 billion this year (source in Chinese).

image credit: ShutterStock

Editing by Mike Cormack (@bucketoftongues)

AppComm, a Guangzhou-based wearable device solution provider, rolled out today a smartwatch FashionComm A1 with a price tag of 1,299 yuan ($211.85). The gadget has been opened up for preorder and will be shipped on Dec. 12 (report in Chinese).

A1 features MTK 6250 processor, 260MHz CPU, 2M pixel camera and offers six color options. A1 sports 1.55-inch Mirasol™ screen, an energy-saving display developed Qualcomm. It not only presents vivid visual effects of colored contents even under sunlight, but also supports multi-touch and extended the battery life to more than 220 hours.

Different from other smartwatches that need to be connected with smartphone or other devices, users can make phone calls or send messages via A1 directly because it embedded a micro SIM card. It also supports other functions, such as, sports data monitoring, album, radio, camera, alarm, music, and Bluetooth.

image credit: Sina

There has been a lot of predictions about when China will become the world’s biggest economy, some say it will achieve this within a short five years. Back in August, we reported China overtook America to become the world’s biggest PC market in the world. Today, according to research firm, Strategy Analytics, China has also become the largest smart-phone market in the world by volume.

Deliveries of smart phones to operators and retailers in China grew 58% in the third quarter from the previous quarter to 24 million units. That surpassed 23 million units delivered to the U.S. market, down 7% from the previous quarter, according to the report.

However in terms of revenue, there is still a long way to go. The key driver for this surge in smart-phone sales is apparently the under 30 year old middle class youth market who have an insatiable demand to play with and show off their latest devices. This is clearly evident by watching young people glued to their smartphone walking on the street, in the subway, in the lift – everywhere!

Nokia still has the biggest market share at 6.8% and Samsung is the second with 4.2%. Nokia leads the way because of their first mover advantage into China. However, now with more choices from alternatives like cheaper Chinese brands running the Android operating system like ZTE, Huawei and Xiaomi, people are switching away from Nokia and Blackberry. Of course the phone everyone wants in the Apple iPhone which is the symbol for smart-phones. People want it so badly, they are willing to fight for it, literally.

Despite all the hype, Android is still small among different smartphone platform in China. Researcher estimated there were only about 250,000 – 280,000 Android phones China, at the end of October. Nevertheless, industry experts have high hope in the free and open-source OS. Many phone manufactures have embraced it as the de-facto smartphone OS, as it allows them to easily control applications preload and distribution. HTC, Motorola, Samsung, and Chinese local phone markets, such as Lenovo, Huawei, ZTE, Meizu, Coolpad, etc., have all launched their version of Andriod phones.

MediaTek, which supplies the chipset of about a quarter of all mobile phones in China, has also started shipping Android supported chips since October. This will make Android affordable to the mass market. Already, there are Android phones selling at RMB 1000 (about US$140) a piece in Shenzhen. Many expected next year, Android phones will flood the China market.

Surprisingly, there are more Blackberry than Android phones in China. Researchers estimated there are more than 300,000 Blackberry phones in China. Blackberry has been the love of bankers and traders since day one. As long as they survive (and no doubt they will no matter how many market crash there will in the future), Blackberry will always find its fans.

As of Apple’s iPhone, which started the whole mobile internet revolution in the West, experts believe it will remain a niche market for high end users in China. Its price, about RMB5000, is too high for the common white collars, who are earning about RMB3000-5000 per month. Researchers estimated currently there are about 1-2 million iPhone supplied by the official channel, China Unicom, and another 3-4 million imported from places like Hong Kong and U.S.

Although many have little faith in Nokia’s Symbian platform, experts believe it will remain a significant player, if not the largest. Finally, Window mobile, which almost everyone has forgotten until Microsoft launched WP7, experts believe it will capture certain portion of the high end market, together with iPhone and some of the most expensive Android phones.

By the way, Data Center of China Internet (DCCI) has forcasted by 2013, there will be more smartphones sold in China than the feature phones (the not-so-smart ones). Currently, the researcher said smartphone only accounts for 16% of the market. The following chart is DCCI’s forecast. (The blue indicate feature phone and the orange smartphone. Click to enlarge the chart.)

Source: DATA CENTER OF THE CHINA INTERNET