Published: 15:02, April 7, 2021 | Updated: 20:10, June 4, 2023
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Domestic handset market expects 2021 boom
By Ma Si

Visitors experience newly launched Xiaomi products at an outlet in Beijing on March 30, 2021. (PHOTO PROVIDED TO CHINA DAILY)

Spring is in the air and Chinese smartphone makers are anticipating that the new season will help the industry to recover the ground it lost due to the COVID-19 epidemic fallout.

Companies are vying with each other to unveil the latest cutting-edge premium handsets after a new report showed that smartphone shipments in China rose by 236.6 percent on a yearly basis in February.

During the month when China's Spring Festival took place, more than 21.3 million smartphones were shipped out of factories to retailers across the country, said the China Academy of Information and Communications Technology, a Beijing-based government think tank.

That is in sharp contrast to February 2020 when the pandemic was paralyzing the nation and almost all smartphone shops struggled to keep their doors open.

Spring is a time of rebirth, renewal and awakening, and Chinese smartphone vendors now see the season as a perfect time to rekindle competition for top bragging rights in the nation.

Sensing the opportunity left by Huawei in the US$600-and-above premium segment, local smartphone makers are all beefing up resources to show consumers their advances in product design, research and development, as well as ambitions in expanding retail channels

In March, dozens of smartphone launch events were held. Vivo alone held three events to release three new phone series in the month and its rival Realme also held two. And because smartphone companies tend to select auspicious days to unveil new products, they often end up releasing phones on the same day.

For instance, Vivo and another smartphone maker Meizu both unveiled their new 5G phones on March 3. Realme and Nubia both held launches on March 4.

In the second half of March, the battle was even fiercer. From March 22-25, device makers Honor, Oppo and Vivo unveiled their new 5G smartphones one after another. Four days later, on March 29, Xiaomi unveiled its latest flagship models.

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Such a frenzied smartphone release schedule has not been seen in recent years as the global smartphone market hit a saturation point and people did not have a desire to upgrade their handsets, said Fu Liang, an independent telecom expert who has been following the industry for more than a decade.

"Such a revival signals that the spring battle for 5G smartphone market supremacy in China is game on, especially in the high-end segment. This comes while Huawei, the former longtime champion of the local market, was impacted in its smartphone business following restrictions by the United States government," Fu said.

Sensing the opportunity left by Huawei in the US$600-and-above premium segment, local smartphone makers are all beefing up resources to show consumers their advances in product design, research and development, as well as ambitions in expanding retail channels.

Liu Zuohu, founder and CEO of OnePlus, a Chinese smartphone vendor known for its dedication to design details, said the company will spare no efforts this year to expand its presence in the high-end segment.

"We will invest 1 billion yuan (US$152.9 million) over the next three years to continuously seek breakthroughs in color and professional experience to create the ultimate mobile imaging experience," Liu said.

The company announced a partnership with Swedish professional camera maker Hasselblad in March under which Hasselblad will help its smartphones develop better photo-taking capabilities.

Such a commitment is already reflected in the latest OnePlus 9 series, unveiled on March 24, featuring cameras that Hasselblad helped develop.

OnePlus, which chiefly relies on e-commerce sites for sales, said it will ramp up efforts to expand its presence in the offline retail channels, with more than 1,000 employees now working in this area.

Rival Oppo made its ambitions even clearer after the brand rose through the ranks to become the top smartphone brand in China for the first time in January, with a market share of 21 percent, said Counterpoint Research.

Customers shop for Oppo phones at a store in Shanghai on Feb 7, 2021. (WANG GANG / FOR CHINA DAILY)

Liu Bo, president of Oppo China, said the company aims to be one of the three major players that dominate the US$600-and-above market in the future. The other two players are Apple Inc and Samsung Electronics Co Ltd.

In March, Oppo also unveiled its latest premium smartphone series the Find X3. The smartphone model is expected to be Oppo's biggest-ever push to grow its share in the premium smartphone segment.

This year will see explosive growth of 5G smartphones. We forecast that over 350 million units of smartphones will be sold in China and 280 million units of them will be 5G handsets. We think nearly 300 million users on our telecom network may upgrade to 5G.

Jian Qin, deputy general manager of China Mobile

Varun Mishra, senior analyst at Counterpoint Research said: "Oppo has been successfully able to reposition its product lines in 2020. The rebranding of the Reno series and launching a more capable device at a lower price point than its predecessor helped Oppo capture the affordable premium segment. The strong momentum of the company's A series in the midrange segment strengthened the product portfolio for Oppo and it was able to cater to the 5G demand in China across a wide price band. This was further helped by the decline of Huawei."

In the face of such intensified competition, Honor-a brand that gained independence from Huawei in November-is devoting its resources to regain lost market share.

Zhao Ming, CEO of Honor, said the company plans to be among the world's top 500 companies as it fast tracks efforts to grow its presence in the high-end smartphone segment and open more offline retail stores.

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Honor aims to reach annual revenue exceeding 100 billion yuan soon, Zhao said, but he did not disclose more details including its top line last year. Before Huawei sold Honor in November, Honor's annual shipments of smartphones once exceeded 70 million units.

Zhao said Honor will launch a high-end flagship smartphone series Magic, which will reach or even surpass the level of Huawei's premium Mate and P series smartphones.

He said that although only two generations of Magic smartphones have been unveiled in the past four years, Honor has invested a lot of money in these two phones. In the future, the Magic series will continue to be positioned for exploring new technologies.

"We will continue listening to consumer preferences while leveraging our technological edge to meet demand at the same time," Zhao said. On March 23, Honor unveiled its latest 5G smartphone-the Honor V40 Lite Luxury Edition-featuring slim design and fast charging technologies.

The senior executive said Honor will also further expand its retail footprint in the country by setting up offline stores in more cities. The plan came after Honor had opened more than 2,300 offline stores as of the end of 2019.

Jian Qin, deputy general manager of China Mobile, the world's largest telecom operator by mobile subscribers, said: "This year will see explosive growth of 5G smartphones. We forecast that over 350 million units of smartphones will be sold in China and 280 million units of them will be 5G handsets. We think nearly 300 million users on our telecom network may upgrade to 5G."

High enthusiasm for 5G smartphones are also becoming more evident. Chinese smartphone vendor Realme said on social media platform Weibo last month that Realme GT earned in excess of 100 million yuan in just 10 seconds on the first day of its sales on March 10.

But the fast rhythm of new 5G smartphones popping up in the market is sometimes overwhelming consumers.

Zhang Wentao, a white-collar employee in Beijing, is searching for a new 5G smartphone.

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"So many new phones have come out and some of them look very similar. I am a bit confused. I will try three of most popular models and pick one," Zhang said.