The smartphones, planet Earth’s hottest gadget
With a market share of 31.3%, South Korea’s Samsung Electronics dominates the world’s smartphone market, while Apple followed behind with a 15% share. The two have long been expanding at the expense of struggling handset makers like Nokia Corp. and HTC, reaping record profits and witnessing their share prices skyrocketing to new high until the Apple’s fizzle recently.
But there is now a shift in the market balance, specifically China, who replaced America to become the worlds largest smartphone market during the second quarter of 2012. As more and more people in China turn to smartphones, the shipments reached 44.4 million units in Q2, surpassing feature phone for the first time. This present a strong business opportunity, and any brand that rules China may be poised to lead the smartphone industry.
That brand may be Lenovo. As far as the American and European markets are concerned, Lenovo might not be a well-known smartphone manufacturer. But according to a recent study, the Chinese company jumped up to be the second most successful smartphone manufacturer in China only after Samsung, ousting even Apple. This is a welcoming progress for Lenovo, considering that it ranked a far seventh in China at the start of this year.
In just a short one year, Lenovo, who earlier toppled HP as the worlds biggest PC manufacturer, saw its smartphone market share in China rose from a mere 1.7% to 14.8%, way ahead of Apples 6.9% and just shy of Samsungs 16.7%. And the momentum will continue, said research firm Gartner. Latest survey reveals that Lenovo is set to oust Samsung as the no.1 smartphone manufacturer in China, thanks to success at the mid-to-low end of the market.
Gartner added that Lenovo is the only smartphone player in China that can compete with global top brands, owing to its household brand recognition, distribution networks, strong portfolio and reasonable pricing. The brand is positioned at the mid-to-lower end which will drive much of its future growth, and this is where global brands are less competitive.
Success in the Chinese smartphone market could propel Lenovo to similar heights just like it is in PCs. Market watcher TrendForce predicted that Chinese buyers will purchase a whopping 294 million smartphones in 2013, making Chinas entire smartphone market double that of the United States. According to data from China-based startup incubator Innovation Works, factors such as the availability of 3G networks and the decrease in smartphone prices could greatly increase Chinas smartphone market. Broadband wireless coverage is now already available in 58% of China,
Indeed, about one year ago China had less than 50 million smartphone users in its market. This year, however, it is expected to reach an installed base of 250 million active smartphones. That number could double to 500 million next year. On the other hand, 90% of the smartphones sold in China including those from Lenovo run on Android, so regardless of whether Lenovo becomes the new head honcho or not won’t matter much to Google.
Following its mobile phone success in China, Lenovo announced it is expanding its smartphone market overseas to India this month. Mobile Internet connected devices, including smartphones and tablets, are now part of Lenovo’s “PC plus” strategy. The company is now attempting to diversify from its PC businesses into smartphones and tablets as well as smart TVs.