May 16, 2020

Chinese vendors continue to put pressure on established smartphone manufacturers

Manufacturing
Smartphones
China
IoT
Admin
4 min
Chinese vendors continue to put pressure on established smartphone manufacturers
Mobile World Congress 2016 will bring in a flurry of new phone announcements to kick off the year.Roberta Cozza, research director at Gartner, will be a...

Mobile World Congress 2016 will bring in a flurry of new phone announcements to kick off the year. Roberta Cozza, research director at Gartner, will be attending this year’s event, and she shared her views on the new developments in the smartphone market and the rise of lower-priced Chinese vendors.

In 2016, what advanced features in smartphones are you expecting vendors to release?

The smartphone is becoming an integral part of a bigger continuum of devices and smart objects as users increasingly live their lives in a "device mesh" environment, where they own multiple devices and use a combination of them that better fits the situation they are in. In 2016, we expect vendors to offer more, and new, bundles of sensors and enhanced connectivity standards to support the role of the smartphone as the central hub for Internet of Things scenarios such as the connected home and smart workspaces.

We should also observe the evolution of biometric technologies, which enable authentication as well as more personalised device experiences. New biometric technologies will go beyond fingerprint and increasingly include voice, facial recognition and other modes to enable authentication. In the future, this will expand to solutions, which by gathering and assessing sensor and biometrics data (such as facial expression or voice intonations), will detect human emotion, and, on that basis, trigger a specific response or advice to give to the user.

I expect immersive experiences such as augmented reality (AR) and virtual reality (VR) capabilities to be another key theme in 2016. For example, Samsung Gear VR already uses a smartphone as a portal for VR experiences, and we expect continued development of this more mainstream approach together with the consumption of 360-degree videos.

Could the focus on midrange and budget smartphones be the answer for some vendors to grow market share in 2016? If so, who are they?

During the next five years we expect growth in the smartphone market to come mostly from emerging markets. Basic and lower-end smartphones will account for two-thirds of smartphone sales by 2019; in the same year, only 20 per cent of smartphone sales will come from mature markets.

This shows that there is still an opportunity for mobile manufacturers to penetrate the lower- tier segments in some geographies, such as emerging Asia/Pacific and EMEA, as users continue to shift from feature phones to smartphones. We have witnessed Indian and Chinese players within these regions — such as, Micromax, Xiaomi, Huawei, Intex, Oppo and BBK Electronics — benefit from increased demand for affordable smartphones.

However, affordability and specifications are not everything. Increasingly, channel strategy and knowledge of local consumer market dynamics will help create more competitive smartphone offerings, because the Android market has become highly commoditised. Furthermore, partnerships with local developers and content providers will also be increasingly important in differentiating offerings.

Are you expecting the Chinese mobile manufacturers to increase their share amongst the top mobile phone vendor rankings in 2016? Are you expecting any consolidation during the next two years?

We expect Chinese smartphone players will continue to gain share throughout 2016. They are well positioned to capitalise on demand for midrange to lower-end smartphones in emerging markets as they aggressively expand outside China. Their cost advantage allows them to push affordable, but more sophisticated midtier offerings, while increasing their brand awareness. However, in the midterm Chinese vendors will be under pressure to improve profitability, and the possibility of some level of consolidation amongst Chinese vendors cannot be excluded.

To improve margins, Chinese vendors need to break through the premium smartphone segments to address replacement buyers who have bought iPhones and other high-end Android smartphones in the past, in both developing and mature markets. Some Chinese vendors actively promoted more premium offerings outside China in 2015, but if they want to crack the high-end smartphone market they need to improve their brand value and user loyalty, and demonstrate a clear and differentiated device experience that goes beyond just price and features.

Additional insight into the smartphone market is available in the Gartner press release, Gartner Says Worldwide Smartphone Sales Grew 9.7 Percent in Fourth Quarter of 2015.

 

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Jun 8, 2021

IMF: Variants Can Still Hurt Manufacturing Recovery

IMF
Manufacturing
COVID19
Musk
Elise Leise
3 min
The International Monetary Fund (IMF) claims that while markets are rising and manufacturing is coming back, it’ll push for global immunisation

After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022

Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery. 

Lingering Concerns Over COVID

Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high. 

Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery? 

IMF: Current Boom Could Falter

Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”. 

Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”. 

Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.

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