Playing chicken blood in mobile: Chinese smartphone shipments plunged by


the author: yong-jie sun

recently, China’s ministry of industry and the latest in the first quarter of 2014 China mobile phone industry operation status, according to a report in the first quarter of 2014 handsets, shipments of 100 million fell 24.7% year on year, becoming the first decline since the seven consecutive quarter of growth. Which once (now should also be the world’s largest and fastest growing smartphone shipments have fallen 9.8%.

according to IDC forecasts, market research and analysis of institutions, such as due to the phases of smartphone industry innovation and development bottleneck and smartphone penetration rate reached a peak in some markets, the global smartphone market growth has slowed, including the Chinese market. Even so, in China’s smartphone market shipments fell for the first time also to our surprise. Of course, in addition to the us in the industry are analyzed, such as innovation, the industrial development of mature (traditional PC industry), vendor reasons such as numerous competition is intense, product homogeneity, whether there are other reasons?

figures released from the miit (mainly three carriers of smartphone shipments and growth), td-scdma handsets listed product 263, up 26.3% from a year earlier, shipment of 43.68 million, up 16.5%; WCDMA mobile phone listed product 84, fell 42.5% year on year, shipped 20.79 million units, fell 37.6% year on year; CDMA2000 mobile phone listed new products 75, up 8.7% from a year earlier, shipment of 15.16 million, fell 33.0% year on year; The td-scdma LTE phone 50 new products and shipped 9.74 million units. Whether in the smart phone design or shipments, only China mobile to maintain the year-on-year growth, of which only td-scdma 3 g mobile phone shipments more than unicom and telecom all shipments of smartphones.

although there are people in the industry believe mobile td-scdma handsets shipped in the growth of the key factors is the td-scdma standard with China’s own intellectual property, and patent licensing fees to zero, but in the smartphone competition, profit thin today, dispense the royalty helps manufacturers to reduce costs, thus inspired vendors push the enthusiasm of the td-scdma smart phones, but who knows, with deep pockets for mobile handset subsidies is the main reason.

however, in the mobile smartphone (including new TD – LTE mobile phones) failed to offset the growth of unicom and telecom smartphone shipments. The lenovo to mobile 3 g network with unicom and telecom typical difference between 3 g network, mobile td-scdma smartphone shipments in May is far from the growth of the market and users’ active choice, but mainly because subsidies lead to low prices.

in the same way, in the td-scdma LTE 4 g phones, mobile subsidy is spare no effort, according to the moving plan, a smartphone shipments of around 200 million units this year, the td-scdma LTE mobile phone to reach 100 million units. To achieve this goal, of course, the main engine from one thousand yuan 4 g smartphones. But the fact is known to all, 4 g phones both in the aspects such as technology, cost is higher than the 3 g mobile phone, this means that the so-called one thousand yuan in smartphones is the result of heavily subsidized mobile, the mobile handset subsidies of 34 billion yuan this year, rose nearly 30% last year (just 11.5%). And given the other two operators 3 g is still the mainstream, through the operation of 3 g users ARPU value is higher than China mobile, China mobile and 4 g handsets shipped 100 million is far from the market and the user’s actual need choice.

now that td-scdma 3 g and 4 g td-scdma LTE mobile phones are not market and the user’s actual need, so its shipments growth pulling force is much less than the market and customers take the initiative to choose a big (for example, unicom and telecom 3 g mobile phone before the growth of shipments), it also explains why only mobile smartphone shipments a growth, the other two are sharply, but the growth of the mobile is far failed to make up for the decline in the two other smartphone shipments.

of course, the mobile with this type of play chicken blood strategy, also led to the 4 g mobile phone competition, foreign manufacturers to occupy the initiative and active.

is also the ministry, according to a report in the first quarter of domestic brands shipment for 66.86 million units, fell 34.9% year on year; International manufacturers and represented by apple samsung shipped 33.95 million units, bucked up 9.2% year-on-year. Performance is superior to the international manufacturers and domestic manufacturers of the biggest reason is: 2 g phone accounts for less than domestic enterprises, 4 g phones proportion is much higher than domestic enterprises.

however, as stated earlier like td-scdma handset subsidies, mobile can use subsidies to make up for the domestic mobile phone manufacturers push the cost of 4 g phone, but the end result may be an increase in their own costs. To know the mobile net profit in the last year has been the first drop in 14 years.

the more crucially, moving from the current 4 g phone frequently controversial, although mobile cost in the promotion of 4 g smart phone, but will eventually be market and user recognition, until they are fully used (in the ARPU value of user considerations) there are a lot of variables.

to sum up, although in the first quarter of China’s smartphone shipments in reason is complex, but China mobile in td-scdma terminal and td-scdma LTE steroids strategy, weaken and covered up the market and the real demand and tension is hidden behind the because I’m afraid. Very secretive, but may damage the health of Chinese smartphone industry in accordance with the law of market value (play) development.