Overseas phone firms smarting over losses in market
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E-mail China Daily, April 17, 2012
International mobile phone companies have begun selling low-priced smartphones in China as they struggle to turn the tide in their battle with their Chinese rivals.
Last week, Motorola Mobility Holdings Inc announced that it had joined China Unicom (Hong Kong) Ltd, the country's second-biggest telecom operator, to introduce a smartphone priced at about 1,000 yuan ($158). The Motorola XT390, the first low-priced smartphone to be brought into China by an international brand, is a 3.5-inch device that runs on Google Inc's Android 2.3-based operating system.
Previously, prominent overseas brands mainly tried to sell mid- to high-priced smartphones, which usually cost more than 2,000 yuan each.
Motorola's announcement came more than half a year after a Chinese phone maker introduced a smartphone priced at about 1,000 yuan. In June, 2011, ZTE Corp and China Unicom released the Blade V880.
The ZTE phone achieved unexpected success in the domestic market and once was the second most popular smartphone in China, following only Apple Inc's iPhone handset.
In the 10 months leading up to March, China Unicom shipped 11 million smartphones priced at about 1,000 yuan, Lu Yimin, president of China Unicom (Hong Kong) Ltd, said at a Beijing news briefing on Monday. None of them was produced by international phone makers.
Frank Meng, president of Motorola Mobility China, cited one chief reason to explain why Motorola was late to sell low-priced smartphones in the Chinese market.
"Timing is important," Meng said. "It will take time for the Chinese smartphone market to be well-developed and mature."
The Chinese smartphone market is now vigorous and full of potential. That opens opportunities for companies such as Motorola to expand their product lines and reach out to the masses, Meng added.
Following Motorola, HTC Corp, a Taiwan-based smartphone maker, announced on Monday that it would also bring a low-priced smartphone, the 4-inch HTC Desire V, to the mainland starting on Monday. Peter Chou, chief executive officer of HTC Corp, said HTC has great hopes for the mainland market.
Since 2005, international companies have seen their share of China's mobile phone market shrink greatly. Such companies held more than 56 percent of that market, measured by shipments, in 2005. But the figure declined to less than 30 percent by the end of 2011, according to a white paper issued by the China Academy of Telecommunication Research.
A decrease in international brands' China sales was partly the result of the rise of domestic mobile phones. Chinese phone makers, such as ZTE Corp, Huawei Technologies Co Ltd and Lenovo Group Ltd, have made significant progress in producing mobile phones, especially mid-to low-priced phones.
Although international phone makers have reviewed their plans and have begun to enter the burgeoning market for low-priced smartphones, analysts doubt they will be as successful as their Chinese rivals or gain back the market shares they have lost.
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