China Smartphone Tracker, 1Q14 DIGITIMES Research China smartphone and industry Research Analyst: Anthony Chen
Introduction China first-tier smartphone players Lenovo, Huawei, CoolPad and ZTE started releasing new smartphones in the fourth quarter of 2013 because their entry-level model inventories, accumulated over the first three quarters of 2013, were mostly digested by October 2013. The new models larger screen sizes and better application processors also increased China consumers demand. At the end of the fourth quarter, Huawei and CoolPad have both established sub-brands for the Internet channel and through creating online shops to lower selling price, it has attracted consumers and raised both players shipments to China. However, their moves are expected to impact Xiaomi, the first player that has adopted the business model and heat the competition in the China smartphone market. China s smartphone market achieved a sequential shipment growth of 21.9% in the fourth quarter of 2013; however, the on-year growth of only 15.9% showed that the market is already approaching saturation. In the first quarter of 2014, demand from the Lunar New Year holidays and expanded sales from online shops should help China s smartphone market to reach a shipment volume of almost 100 million units, despite a weak sequential growth compared to the fourth quarter.china smartphone players include local brand vendors such as Lenovo, Huawei, CoolPad, white-box brand vendors (Other) and independent design houses (IDHs) (Other). First-tier players are those with annual shipments over or close to 30 million units. IDHs are similar to ODMs. 1
Key factors affecting smartphone shipments to China in 4Q13 Factors Item Analysis Influence on shipments Supply: Markets/Clients Demand recovery/ Better product price/performance ratio New shopping season and online channel China players 4.7-inch and above quad-core smartphones priced at between CNY600-800 November 11 online shopping promotion attracted strong demand More players entered the online channel Consumer demand rose Strong demand remained into the first quarter of 2014 International brands Samsung had weaker-than-expected performance Apple s cooperation with China mobile delayed to January 2014. Apple s sales could have gone even higher International brands had weakerthan-expected performance Players: China players/ International brands China first-tier players Inventory issues resolved; picking up their paces on launching new models Turning conservative over cooperation with telecom carriers; increasing sales through online and retail channels Players enjoyed shipment growths with most having better performance than 2Q13 China second-tier players Players such as Oppo, BBK and Gionee saw stable shipment growth Xiaomi shipped over 7 million smartphones Players saw increased shipments, but fiercer competition Note: The more stars, the higher the influence. indicates negative influence, indicates a positive influence. 2
Key factors affecting smartphone shipments to China in 4Q13 Markets/Clients: China players quad-core and 4.7-inch and above smartphones saw their prices drop to a new low, which relatively increased their demand from consumers. Frequent promotions of China-based Internet shopping website players such as JD, Tmall and Taobao continue to heat up consumer demand for smartphones. In addition, as more smartphone players have entered the Internet channel, more sales have been done through players online shops because without needing to share parts of their profits with channel retailers, players are able to lower their prices. Players (China players/international Brands): International brands: Samsung Electronics, the largest smartphone vendor worldwide had weak sales for its high-end models in the fourth quarter in China and was mainly relied on its entry-level and mid-range models to prop up its shipments. Apple and China Mobile s cooperation had been delayed to late-january of 2014 and Apple s smartphone sales in China are expected to rise higher in the first quarter of 2014. China-based first-tier players: With old inventories mostly digested, the players had been releasing new models during the fourth quarter to help boosting their shipments to China. The players are also balancing their channel focuses to avoid the same inventory issue occurred during their cooperation with telecom carriers in the first three quarters of 2013, from happening again. China-based second-tier players: Second-tier players such as Oppo, BBK and Gionee achieved 20-30% sequential shipment growth in the fourth quarter. Xiaomi s shipments surpassed seven million units and ranked the sixth largest player in China, behind only CoolPad. However, as first-tier players are starting to adopt product and business strategies similar to those of second-tier players, competition is expected to become fiercer in the future. 3
China smartphone shipments, 1Q13-1Q14 (m units) 120 100 80 60 40 20 0 81.0% 80.1% 35.4% Content only for DIGITIMES 16.5% Research 21.9% Data Tracker customers 21.4% 15.9% 8.2% -7.4% -15.4% 71.5 86.8 73.4 89.5 96.8 1Q13 2Q13 3Q13 4Q13(e) 1Q14(f) Shipments Q/Q Y/Y 100% 80% 60% 40% 20% 0% -20% -40% 4
China smartphone shipments, 1Q13-1Q14 (m units) Digitimes Research expects China s smartphone shipments to grow over 8% sequentially in the first quarter of 2014 because: The Lunar New Year holidays in China provided strong sales. China Mobile started selling iphone in late-january of 2014. Content only for DIGITIMES Research Data Tracker customers Lenovo will try to push its shipments as the first quarter of 2014 is the last quarter of its fiscal 2013 China first-tier players will enter the online channel, boosting their sales. 5
3G service users and new subscribers for China telecom carriers, January-December 2013 (m units) 250 200 150 100 50 0 11.6 10.8 10.5 9.5 9.9 9.4 9.2 8.5 7.1 6.5 Content only for 5.7 DIGITIMES Research Data Tracker customers 5.1 4.3 3.7 4.1 4.0 4.1 3.4 3.9 3.9 3.8 3.8 3.7 3.5 3.0 2.8 3.2 3.1 3.1 3.1 3.1 3.0 3.1 3.1 3.1 3.1 14 12 10 8 6 4 2 0 China Mobile existing subscriber China Telecom existing subscriber China Unicom new subscriber China Unicom existing subscriber China Mobile new subscirber China Telecom new subscriber 6
3G service users and new subscribers for China telecom carriers, January-December 2013 (m units) With its goal of selling 120 million TD-based handsets in 2013 being achieved early in September 2013 and first-tier players 3.5-inch entry-level smartphone inventories mostly digested in October, China Mobile has turned passive about subsidizing smartphones starting the fourth quarter of 2013. Since China smartphone players did not release their new smartphone models until after November, most 2G users have waited until then before upgrading their services to 3G. As a result, China Mobile only had an increase of 5.1 million 3G users in November, the lowest in 2013. China Unicom Content and China only Telecom for DIGITIMES are both aiming Research to push the FDD-LTE Data Tracker network in customers China as their priorities, but because the China government still has not yet released the related licenses, in the short terms, the two players will focus on establishing small scale of their own TD-LTE network and rent China Mobile s TD-LTE network to provide 4G services. China Unicom has raised its 3G network speed to HSPA+42M, hoping to gain an equal footing against China Mobile; however, its new subscribers gained as well as that of China Telecom had always maintained at a similar range each month during 2013. 7
China smartphone market shipments, by China-based players, 1Q13-1Q14 (m units) 12 8 4 0 1Q13 2Q13 3Q13 4Q13(e) 1Q14(f) Lenovo 6.6 10.8 8.0 10.2 11.2 Huawei 6.1 9.0 6.9 9.0 9.4 CoolPad 6.8 8.3 6.9 7.8 7.7 Xiaomi 3.1 4.2 4.0 7.0 5.6 Oppo 3.1 3.7 4.0 4.8 4.8 BBK 2.3 Content only for 2.8DIGITIMES 3.2 Research Data 4.1 Tracker customers 4.0 Gionee 2.4 2.6 2.7 3.1 3.7 ZTE 2.1 2.7 1.9 1.6 2.3 Hisense 1.6 2.5 2.6 2.7 2.3 Tianyu 4.0 3.6 1.3 1.0 1.0 8
China smartphone market shipments, by China-based players, 1Q13-1Q14 (m units) Lenovo s smartphone shipments returned above 10 million units in the fourth quarter. Since Lenovo is aiming to ship 50 million smartphones for its fiscal 2013, ended the first quarter of 2014, the player has been pushing its shipments in China and with demand from the Lunar New Year holiday, the company is expected to ship over 11 million smartphones in China in the first quarter of 2014. Huawei s Ascend P6 and Mate smartphones, which are both able to contribute a million of sales, midrange/entry-level smartphone models and new online sub-brand Honor are expected to pump up the company s Content shipments only by 4% for sequentially DIGITIMES in the first Research quarter of 2014. Data Tracker customers Xiaomi, ranked at the fourth in the fourth quarter of 2013, will see its shipments impacted by other players joining the online channel. 9
China smartphone market shipments, by international brands, 1Q13-1Q14 (m units) 20 15 10 5 0 1Q13 2Q13 3Q13 4Q13(e) 1Q14(f) Samsung 12.0 14.5 15.4 16.4 18.1 Apple 6.2 5.5 5.7 11.2 13.1 Nokia 1.0 1.2 1.0 0.8 1.3 HTC 2.1 Content only 2.3 for DIGITIMES 1.5 Research Data 1.4 Tracker customers 2.4 LG 0.5 0.4 0.4 0.5 0.3 Sony 0.3 0.4 0.8 0.6 0.3 10
China smartphone market shipments, by international brands, 1Q13-1Q14 (m units) Since Samsung Electronics high-end Galaxy Note 3 launched in the third quarter of 2013, did not receive feedbacks as good as its predecessors in China, while Content only for DIGITIMES Research Data Tracker customers its Galaxy S4 sales has also weakened after several quarters of availability, the Korea-based vendor is now relying on its mid-range and entry-level models to maintain its shipments in China. 11
China smartphone market shipment share, by all players, 1Q13-1Q14 100% 80% 60% 40% 20% 0% 1Q13 2Q13 3Q13 4Q13(e) 1Q14(f) Samsung 16.8% 16.7% 21.0% 18.3% 18.7% Apple 8.7% 6.3% 7.8% 12.5% 13.5% Lenovo 9.3% 12.4% 10.8% 11.4% 11.6% Huawei 8.6% 10.3% 9.5% 10.0% 9.7% CoolPad 9.6% 9.6% 9.4% 8.7% 7.9% Xiaomi 4.3% 4.8% 5.4% 7.8% 5.8% Oppo 4.3% 4.3% 5.4% 5.4% 5.0% BBK 3.2% Content only 3.2% for DIGITIMES 4.4% Research Data 4.6% Tracker customers 4.1% Gionee 3.4% 3.0% 3.7% 3.5% 3.8% HTC 2.9% 2.7% 2.0% 1.6% 2.5% Hisense 2.2% 2.9% 3.5% 3.0% 2.4% ZTE 2.9% 3.1% 2.5% 1.8% 2.4% Tianyu 5.6% 4.2% 1.8% 1.2% 1.0% Other 18.2% 16.5% 12.8% 10.3% 11.6% 12
China smartphone market shipment share, by all players, 1Q13-1Q14 China smartphone shipment share by all players: International brands: Samsung is facing a bottleneck for its smartphone sales growth and has seen its share in China smartphone shipments drop below 20% since the fourth quarter of 2013. Apple s iphone 5S sales in the fourth quarter of 2013 significantly raised the company s market share in the fourth quarter. Apple s cooperation with China Content Mobile only in for the DIGITIMES first quarter Research will further Data increase Tracker the percentage. customers Slow upgrades for its high-end models, while its mid-range and entry-level models pricing strategy and product specifications were both weaker than those of China s second-tier players, High Tech Computer (HTC) suffered declines in both shipments and shipment share in the fourth quarter. China players: Xiaomi became the fourth largest China-based smartphone players in the fourth quarter. In the first quarter of 2014, the company will see its share drop 2pp sequentially, but still ranked the same. 13
China smartphone market, 2013
China market share of global smartphone shipments, 2012-2013 (m units) 2012 WW smartphone shipments 685.1 China market Other markets Content only for DIGITIMES Research Data Tracker customers 2013(e) WW smartphone shipments 958.8
China market share of global smartphone shipments, 2012-2013 (m units) China s smartphone market had shipments of 321.3 million units in 2013, up 41% on year. The global smartphone market had an on-year shipment Content growth only for DIGITIMES of 40% Research in 2013, Data only Tracker 1pp customers behind that of the China smartphone market. This shows that the China smartphone market has already stabilized and may no longer be able to see surging growths as before. 16
China smartphone market, shipments and share by local players and international brands, 2012-2013 (m units) 2012 China smartphone shipments 227.8 2013(e) China smartphone shipments 321.3 China players Content only for DIGITIMES Research Data Tracker customers International brands 17
China smartphone market, shipments and share by local players and international brands, 2012-2013 (m units) China players shipments to the local market increased 42.7% on year to 219.1 million units with combined market share growing 0.8pp. Content only for DIGITIMES Research Data Tracker customers International brands also saw their shipments to China rise 28.1 million units on year in 2013, contributed mainly by Samsung and Apple. 18
China smartphone market shipments by all players, 2012-2013 (m units) 60 250% 50 40 30 Content only for DIGITIMES Research Data Tracker customers 150% 50% 20 10-50% 0 Samsun g Lenovo Huawei CoolPad Apple Xiaomi Oppo BBK Gionee Tianyu Hisense ZTE HTC Other 2012 30.3 24.7 22.2 21.9 23.1 7.3 6.9 6.3 8.3 3.4 4.1 18.2 7.6 41.8 2013(e) 58.3 35.6 31.0 29.8 28.6 18.3 15.6 12.4 10.8 10.0 9.4 8.2 7.3 44.8 Y/Y 92.4% 44.1% 39.6% 36.1% 23.8% 150.7% 126.1% 96.8% 30.1% 194.1% 129.3% -54.9% -3.9% 7.2% -150% 19
China smartphone market shipments by all players, 2012-2013 (m units) China smartphone shipments and growth by all players: Samsung s annual smartphone shipments reached 58.3 million units in 2013, down from Digitimes Research s original forecast of 60.9 million units, but still the largest vendor in China. The delay in Apple and China Mobile cooperation increased the USbased vendor s sales only by 23.8% on year, weaker than most of its Content only for DIGITIMES Research Data Tracker competitors. customers Lenovo shipped over 35 million smartphones to China in 2013. Although the company surpassed Apple and became the second largest in the year, it still had over 20 million unit gap with Samsung. With China smartphone players shipments to the local market mostly surpassing 10 million units in 2013, HTC dropped out of the top-10 in the China smartphone market in the year. 20
China smartphone shipment share by all players, 2012-2013 2012 2013(e) 1.5% 1.8% 2.8% 3.0% 3.2% 3.3% 3.6% 3.9% 4.8% 5.7% 8.0% 19.1% 8.9% 9.6% 13.3% 9.3% 9.7% 10.8% 10.1% Content only for DIGITIMES Research Data 2.3% Tracker customers 2.9% 2.6% 14.3% 18.1% 3.1% 3.4% 11.1% 9.6% Samsung Gionee Apple Oppo HTC BBK Huawei Xiaomi ZTE Hisense Lenovo Tianyu CoolPad Other 21
China smartphone shipment share by all players, 2012-2013 Handset independent design houses (IDHs) in eastern China, which are being categorized by Digitimes Research as Other, have mostly turned to land mid-range and entry-level smartphone ODM orders from large China players such as Huawei, Lenovo and CoolPad. Since the shipments are counted toward the smartphone players Content performances only for instead DIGITIMES of the IDHs, Research it has impacted Data Tracker the Other customers segment s shipment share in 2013. The Other segment s share drop in 2013 was partly due to Huawei, Lenovo and CoolPad s entry-level smartphones, which seriously impacted white-box smartphone players sales. 22
China smartphone industry shipment performance, 4Q13 and 1Q14
Introduction China players smartphone shipments enjoyed a sequential growth in the fourth quarter with a volume surpassing that of the second quarter because China s first-tier smartphone players Huawei, Lenovo, CoolPad and ZTE have already ridded most of their entry-level model inventories at telecom channels and started releasing new models, and Huawei, ZTE and TCL s shipments to markets outside of China (overseas) also continued to enjoy growth. The fourth quarter is the traditional peak season for overseas markets and related demand had been rising since the late-third quarter of 2013. However, most China players smartphone shipments still went to the local market. Content With only the releases for DIGITIMES of new smartphones Research and the upcoming Data Tracker Lunar New customers Year holidays demand, China s first-tier and second-tier smartphone players have enjoyed a good sequential shipment growth in the fourth quarter. Fewer working days in February and China s weakening smartphone demand will cause China players shipments to drop sequentially in the first quarter. China smartphone players include local brand vendors such as Lenovo, Huawei, CoolPad, white-box brand vendors (Other) and independent design houses (IDHs) (Other). First-tier players are those with annual shipments over or close to 30 million units. IDHs are similar to ODMs. 24
Key factors affecting China players smartphone shipments in 4Q13 Factors Item Analysis Influence on shipments Supply: Manufacturing and products Demand: Clients and markets Component supply First-tier smartphone vendors in China China market Emerging markets outside China Sufficient memory supply; prices returned stable Smartphones with MediaTek quad-core and eight-core processors showing up; high adoption rate for its Turnkey solution 3.5-inch entry-level smartphone inventory had mostly been cleared and new models were being launched Vendors had been pushing shipment in China for the Lunar New Year holiday demand Markets such as India, Indonesia and Brazil are seeing exchange rate depreciation, which is impacting players profitability Players had better cost and component preparation management Accelerated new product launches Good inventory management in 3Q13 helped shipments to return stable in 4Q13 Content only for DIGITIMES Research Data Tracker customers Shipments to China increased White-box vendors in China were impacted the most Mature markets worldwide Europe and the US markets enjoyed strong demand during the year-end holidays Extending the strong demand from the third quarter Note: The more stars, the higher the influence. indicates negative influence, indicates a positive influence. 25
Key factors affecting China players smartphone shipments in 4Q13 Key factors that affected China players smartphone shipments in the fourth quarter of 2013: Mobile memory shortage and price hike issues were eased, returning players costs and inventories management back to normal. Over 50% of China s smartphone players adopted MediaTek s application processors for their products. Its turnkey solutions and friendly prices accelerated China smartphone players pace of launching new products, while its quad-core and eight-core processors increased the players number of new projects and helped improve devices usage experience. The China telecom channel s entry-level smartphone inventory was mostly cleared in the early fourth Content quarter only and for players DIGITIMES had been Research launching new Data models Tracker during customers the quarter, returning their shipment pace back to normal. The Lunar New Year holidays also boosted the players shipments to local channels. Seeing emerging markets such as India, Indonesia and Brazil, having exchange rates depreciation, white-box smartphone players reduced their shipments to these countries to minimize losses from exchange differences. Mature markets worldwide enjoyed strong smartphone demand in the fourth quarter thanks to the year-end holidays shopping season with related vendors having placed strong orders until the end of November. Some orders from the end of the third quarter were postponed to the fourth quarter for shipments. 26
China player smartphone shipments, 1Q13-1Q14 (m units) 100 200% 80 60 100% 40 0% 20 0 1Q13 2Q13 3Q13 4Q13(e) 1Q14(f) -100% Shipments 69.4 81.2 77.1 87.1 86.5 Q/Q -3.6% 17.0% -5.0% 13.0% -0.7% Content only for DIGITIMES Research Data Tracker customers Y/Y 169.0% 100.5% 38.4% 21.0% 24.6% 27
China player smartphone shipments, 1Q13-1Q14 (m units) Since demand from non-china countries remained strong and the four major smartphone players in China, Lenovo, Huawei, CoolPad and ZTE started launching new models in China after finished digesting their old inventories in the telecom channel, Content only for DIGITIMES Research Data Tracker customers China smartphone players combined shipments grew 13% sequentially and 21% on year to over 87 million units. Digitimes Research expects China smartphone players shipments to still rely on local demand in the first quarter of 2014. 28
Shipments by China player, 1Q13-1Q14 (m units) 25.0 20.0 15.0 10.0 5.0 0.0 1Q13 2Q13 3Q13 4Q13(e) 1Q14(f) Lenovo 7.2 11.7 8.7 11.2 13.1 Huawei 7.5 11.0 9.0 11.7 12.1 CoolPad 7.0 8.5 7.0 8.0 7.8 Xiaomi 3.1 4.2 4.0 7.1 6.1 TCL 1.5 3.2 4.6 6.8 6.1 ZTE 6.8 8.8 6.2 5.5 5.9 Content only for DIGITIMES Research Data Tracker customers OPPO 3.1 3.7 4.0 4.9 4.8 Gionee 3.1 3.3 3.6 4.4 4.5 BBK 2.3 2.8 3.2 4.1 4.0 Hisense 1.6 2.5 2.6 2.7 2.3 Tianyu 4.2 3.8 1.4 1.1 1.0 Other 22.0 17.7 22.8 19.6 18.8 29
Shipments by China player, 1Q13-1Q14 (m units) China smartphone players shipments in the fourth quarter of 2013: Huawei surpassed Lenovo and become the largest China smartphone player. Both players entry-level smartphone inventories at their telecom carrier partners were mostly digested. Xiaomi and TCL both shipped more smartphones than ZTE in the quarter, squeezing ZTE out of the top five. Xiaomi s strong growth was mainly due to demand pickup for its Xiaomi 3 and Hongmi smartphones, while TCL was benefited by its overseas shipments. Oppo, Gionee and BBK saw stable shipment and profit growths in the quarter because of their products high gross margin. China smartphone players shipments in the first quarter of 2014: The first quarter of 2014 is the final quarter of Lenovo s fiscal 2013 and the company is expected to focus on pushing its shipments Content to reach only the goal for of 50 DIGITIMES million units for Research the fiscal year. Data The intention Tracker will allow customers Lenovo return as the largest player. Because of the Lunar New Year holidays in China and its online shop smartphone brand, Honor having successfully expanded into new consumer groups in China, Huawei s shipments will grow over 12 million units in the quarter. Huawei and CoolPad s smartphone sub-brands, which are selling devices through their online stores like Xiaomi, may create threat against Xiaomi s business model. TCL is focusing mainly on the overseas market and is not benefiting much from China s strong demand in the quarter. Compared to the previous quarter, most of other second-tier players will have a flat performance in the first quarter of 2014. Because overseas markets have entered the slow season in the first quarter of 2014 and China s first-tier and second-tier brand vendors have been expanding their presence in the markets, China s white-box players (other), which focus mainly on the markets, are seeing their shipments being impacted. 30
Y/Y shipment growth by China players, 4Q13 250% 200% 150% 100% 50% 0% -50% -100% Huawei Lenovo CoolPad ZTE TCL Xiaomi Oppo BBK Gionee Tianyu Hisense Other Q/Q 30.0% 28.7% 14.3% -11.3% 47.8% 77.5% 22.5% 28.1% 22.2% -21.4% 3.8% -14.0% Y/Y 11.4% 36.6% Content 25.0% only -41.5% for DIGITIMES 195.7% 102.9% Research 75.0% Data 64.0% Tracker 41.9% -21.4% customers 92.9% -4.4% 31
Y/Y shipment growth by China players, 4Q13 China smartphone player s shipments in 4Q13: Because of its weak performance in the China smartphone market, ZTE suffered shipment drop in the quarter. TCL focuses mainly on markets outside of China (overseas) and the year-end holidays strongly boosted the company s shipments sequentially. Thanks to their mid-range and high-end smartphones good reputation, Oppo and BBK s shipments, which are mainly supplied to China, enjoyed steady growths in the quarter. Xiaomi had a surging shipment growth in the quarter because its entry-level Hongmi smartphone supply has stabilized and the device is expected to continue contributing growth in the first half of 2014. Xiaomi released the WCDMA version of its Xiaomi 3 in December 2013 to strengthen its product lines, which originally Content only only had models for DIGITIMES with the TD-SCDMA Research standard. Data The Tracker new device customers is expected help Xiaomi expand its sales in China and prepare for the entry to the overseas market. Gionee achieved strong performance in both China and overseas markets. China brand vendors have been aggressively expanding into the online channel and markets outside of China, and their mid-range/entry-level smartphones supplied to overseas markets and sub-brands models for selling through online shops, have mostly been outsourced to independent design houses (IDHs) in eastern China. These volumes are included into brand vendors shipments instead of those of IDHs. IDHs shipments to non-china vendors are included in Other. Because of exchange rate depreciation in some of their focused emerging markets, China white-box players (included in Other) have reduced their orders to minimize their losses and relatively impacted shipments of IDHs in southern China, the main manufacturing partners of white-box players, causing the Other category to suffer 14% sequential drop in the quarter. 32
Shipments of China smartphone players by market, 4Q13 (m units) China Overseas markets Overseas market share 25 92.6% 100% 20 70.9% 64.8% 80% 15 10 5 0 Content only for DIGITIMES Research Data Tracker customers 12.7 2.7 1.0 29.5% 23.1% 0.2 0.1 0.1 8.9% 3.9 1.3 6.3 9.1% 2.5% 2.0% 1.4% 0.1 60% 40% 20% 0% 33
Shipments of China smartphone players by market, 4Q13 (m units) China smartphone players shipments to non-china (overseas) market in the fourth quarter of 2013: Huawei s overseas shipment share rose up to over 23%. ZTE s overseas shipments mainly went to North America, Latin America and Europe. TCL Content remained only the for vendor DIGITIMES with the largest Research overseas Data shipments. Tracker customers Xiaomi and Oppo just recently entered overseas markets. Xiaomi has chosen Taiwan and Singapore, while Oppo has entered Russia and Thailand. IDHs (included in Other) saw their overseas shipments drop 3.3 million units on quarter because of the exchange rate depreciation in India, Indonesia and other countries in Southeast Asia. 34
Shipment share by China player, 1Q13-1Q14 100% 80% 60% 40% 20% 0% 1Q13 2Q13 3Q13 4Q13(e) 1Q14(f) Lenovo 10.4% 14.4% 11.3% 12.9% 15.1% Huawei 10.8% 13.5% 11.7% 13.4% 14.0% CoolPad 10.1% 10.5% 9.1% 9.2% 9.0% Xiaomi 4.5% 5.2% 5.2% 8.2% 7.1% TCL 2.2% 3.9% 6.0% 7.8% 7.1% ZTE 9.8% 10.8% 8.0% 6.3% 6.8% Oppo 4.5% Content only 4.6% for DIGITIMES 5.2% Research Data 5.6% Tracker customers 5.5% Gionee 4.5% 4.1% 4.7% 5.1% 5.2% BBK 3.3% 3.4% 4.2% 4.7% 4.6% Hisense 2.3% 3.1% 3.4% 3.1% 2.7% Tianyu 6.1% 4.7% 1.8% 1.3% 1.2% Other 31.7% 21.8% 29.6% 22.5% 21.7% 35
Shipment share by China player, 1Q13-1Q14 China smartphone players proportions in the country s overall shipments White-box players (Other) are seeing dropping shipment proportion and relatively caused IDHs in southern China to suffer Content from only difficult for DIGITIMES operation, Research while Data IDHs Tracker in eastern customers China with partnerships with first-tier and second-tier brand vendors to design and manufacture mid-range and entrylevel smartphones for China s tier-3 and below cities as well as overseas emerging markets, are seeing steady shipment growths. 36
China players shipments, 2013
China players share of worldwide smartphone shipments, 2012-2013 (m units) 2012 WW smartphone shipments 685.1 Content only for DIGITIMES Research Data Tracker customers China players Other players 2013(e) WW smartphone shipments 958.8 38
China players share of worldwide smartphone shipments, 2012-2013 (m units) Worldwide smartphone shipments grew 40% on year to reach 959 million units in 2013 and China players contributed 315 million units, up 62.4% from 193 million units in 2012. China Content smartphone only for DIGITIMES players Research combined Data Tracker shipments customers enjoyed a higher growth than that of global shipments, showing China brand vendors were the one benefited the most from the local market. The growth is partly benefited from China players complete supply chain, strong R&D ability and cost management. 39
China smartphone shipments: Export shipments and share, 2012-2013 (m units) 2012 China smartphone shipments 193.9 Content only for DIGITIMES Research Data Tracker customers China Overseas markets 2013(e) China smartphone shipments 314.8 40
China smartphone shipments: Export shipments and share, 2012-2013 (m units) China players overseas shipments grew significantly by 137% on year to reach over almost 96 million units in 2013. Smartphone demand in China turned weak in the second half of 2013 and to maintain their shipment volumes, most of them have turned to push overseas markets. Because smartphone players had been enhancing their product specifications rapidly throughout 2013 to Content boost their only devices for DIGITIMES attraction, to quickly Research digest Data their old Tracker inventories, customers in addition to China s tier-3 and below cities, first-tier players had also been selling the inventories to overseas emerging markets such as India, Russia and countries in Southeast Asia and Latin America, which relatively increased their overseas shipments in 2013. The shipments to overseas emerging markets also helped first-tier players to digest most of their inventories at the beginning of the fourth quarter. 41
Shipments and Y/Y growth by player, 2013 (m units) 100 80 60 40 20 0 Shipments Y/Y 209.6% 149.6% 128.2% 129.3% 153.4% Content only for DIGITIMES Research Data 95.6% Tracker customers 95.5% 73.5% 54.0% 33.2% 23.7% -7.1% 39.2 38.8 30.5 27.3 18.4 16.1 15.7 14.4 12.4 10.5 9.4 82.1 250% 200% 150% 100% 50% 0% -50% 42
Shipments and Y/Y growth by player, 2013 (m units) CoolPad surpassed ZTE and became the third-largest smartphone player in China in 2013. Tianyu enjoyed a giant shipment growth in 2013, but because its financial Content only crisis for has DIGITIMES not seen Research any improvement Data Tracker customers since the second half, the company may be in danger of being eliminated from the smartphone industry. 43
Overall shipment share by player, 2012-2013 2012 2013(e) 1.7% 21.7% 2.1% 3.7% 3.3% 16.3% 15.2% 13.0% 3.5% 3.3% 11.8% 4.3% Content only for DIGITIMES Research Data Tracker customers 3.3% 3.0% 5.8% 3.9% 26.1% 5.0% 5.1% 12.5% 4.6% 8.7% 9.7% 12.3% Huawei ZTE Lenovo CoolPad Gionee TCL Oppo BBK Xiaomi Hisense Tianyu Other 44
Overall shipment share by player, 2012-2013 Among the first-tier players (Huawei, Lenovo, ZTE and CoolPad), only Huawei and Lenovo s market share remained above 10%, while CoolPad only accounted for close to 10% and ZTE 9% in 2013. Content only for DIGITIMES Research Data Tracker customers Outside the first-tier players, Xiaomi and TCL had grew strongly and accounted for over 5% of China s total shipments in 2013. The rise of the second-tier vendors are gradually becoming a threat against the first-tier players. 45