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Lenovo forecast to become the top smartphone vendor in China – Retail in Asia

Retail in Asia

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Lenovo forecast to become the top smartphone vendor in China

Technology and research advisory firm Gartner forecasts Lenovo to become the top smart vendor in China in 2013. Currently the world’s top PC manufacturer, Lenovo’s mobile phone business has gained real momentum in the country in the last few years.

Its smartphone market share rose from 1.7 percent in 3Q11 to 14.8 percent in 3Q12, making it now the No. 2 smartphone brand, ahead of Apple (6.9 percent) and behind Samsung (16.7 percent).

However, Gartner said it is the only local smartphone player that can compete with global top brands in China, due in large part to its household brand recognition, nationwide distribution, strong portfolio and reasonable pricing.

The research firm believes that its brand positioning at the mid-to-lower end will drive much of its future growth because this is where global brands are less competitive. It also forecasts Lenovo to gain share from open markets where its brand and distribution are better established than local competitors.

Gartner also predicts that by 2016, shipments of media tablets will match shipments of mobile PCs in China as tablets become much more affordable worldwide.

In China, Gartner expects the average price of media tablets will drop from USD262 in 2011 to USD176 in 2016.

"This price drop will make media tablets more affordable and suitable personal devices than mobile PCs, and as a result, media tablet shipments will eventually match those of mobile PCs," it said.

Shipments of media tablets is forecast to reach 57 million units in China in 2016, nearly matching mobile PCs at 58 million units. This is not limited to the consumer market as there is increasing media tablet demand from many different vertical markets such as hospitality, insurance, finance, retail transportation, education and others.

In another report, Gartner said by year-end 2014, three of the top five mobile handset vendors will be Chinese.

Mobile phone penetration in emerging markets has resulted in a changing of the guard in terms of the leading vendors. The openness of Android creates new markets for OEMs that previously did not have the necessary software expertise and engineering capabilities. The market continues to consolidate around Android and iOS, with other ecosystems struggling to gain traction, and, with most vendors committed to Android, it has become difficult to differentiate.

The result is that the traditional mobile phone players are getting squeezed, being unable to compete with Apple and Samsung at the high end and struggling to differentiate from aggressive new vendors, most notably Huawei and ZTE, which are using the same Android platform for their models.

Chinese vendors have the opportunity to leverage their strong position in the domestic Chinese market for entry-level smartphones and expand to other regions, because this is not just an emerging-market phenomenon.