They may not be household names – yet – but these Chinese companies have been behind some of the biggest selling phones of recent memory. And now they’re getting more of a foothold in the UK, pretty soon you really won’t be able to avoid them.
So what’s the secret to their success? What can we expect them to do next? And how are they shaping our mobile landscape? Read on to find out all about the companies you can’t afford not to know.
It may be tough to imagine, but it was just four years ago the original iPhone launched, turning a whole generation onto smartphones that didn’t require a stylus and the patience to struggle with Windows Mobile.
The preponderance of apps and the fact no-one’s used a keypad for years show how mainstream smartphones have become, but did you know exactly how huge the shift from feature phones is? Well Juniper Research estimates global shipments are set to grow 230% in the next five years, reaching one billion by 2016, up from 302 million in 2010.
Predictions are all well and good, but what about real, hard data? “The smartphone segment is growing significantly in North America, about 45-46% year on year, and about 30% in Europe,” says Enrico Salvatori, SVP Qualcomm and President of Qualcomm Europe. This growth means two things: it’s keeping Steve Jobs in turtlenecks for the foreseeable; and there’ll be a wider variety of smartphones available for everyone wanting a piece of the action. Juniper predicts that by 2016, low cost smartphones (costing $150 or less), will make up a third of all on sale. There’s such huge potential that even Apple is rumoured to be working on a budget version of the iPhone. Just last week, Facebook launched an app for phones at the lower end of the market.
Leading the budget charge is a cluster of Chinese manufacturers that, while you may not have heard of them, have been pulling the mobile strings for a while now.
ZTE is already the fifth largest phone maker in the world, recently overtaking BlackBerry maker RIM. To put that in perspective, a little company called Apple is currently fourth. ZTE has been making network branded phones for years now for the likes of Orange, and has recently signed up to produce Windows Phone 7 handsets.
“The likes of ZTE have been helping carriers deliver smartphones for the masses,” says Carolina Milanesi from Gartner, “as well as a great degree of customization that they are happy to do for them.”
“A number of operators, like Orange, have their own brand phones that they customise themselves, to be built by these Chinese companies,” confirms Ian Fogg, an independent analyst. One to watch is the Orange Monte Carlo, a ZTE Skate in different clothing.
But this anonymity is starting to change. Last week ZTE signed a deal with Brightpoint to bring ZTE-branded handsets and tablets sold through its channels. Huawei has a growing presence in the UK with its wireless dongles, and Alcatel-Lucent, who recently signed a deal with China Telecom, has been selling own-brand budget phones in the UK for years now, some for as little as £2.95.
Milanesi says the growth of Google’s Android operating system, with its customisable open source nature, has been a major driving force behind the push to budget smartphones. “Android has become the platform of choice,” she says, “and we will see more and more devices coming to market on this OS.” After all, Android doesn’t have any minimum hardware requirements, like Windows Phone 7.
And if you’re in any doubt that a behind the scenes manufacturer can make the leap to high street name, HTC did just that, as Fogg points out. “HTC made almost all Windows Mobile phone between 2000 and 2007. It came from behind the scenes and is now very well known. One of the smart moves it made was getting in on the ground floor with Android, with the T-Mobile G1 being made by them.” The G1, the first Android phone, was known as the HTC Dream in some countries.
Less mature markets are also making the move from feature phones to smartphones. “Europe is one of the fastest growing markets for budget handsets,” says Salvatori (Qualcomm provides chips for handsets made by Huawei, Alcatel and ZTE). “But it’s important to remember the importance of emerging markets. The smartphone is the only computer in the home in some countries, the only way of accessing the internet.”
So what can we expect in the future from these budget phone makers? We’re already seeing tablets coming in at under £100, and Salvatori thinks this trend will continue. “Increased segmentation will open the path for tablets, at these compelling price points, much as we have with smartphones.” With a wider range of devices at more varying prices, that’s good news for us all.