In the 1980’s we saw the emergence of the PC production complex around Taiwan. This decade we are going to see a smart-device complex emerge around Shenzhen and South China. In this note we look at the China Branded smartphone OEMs, that group once known as ‘white box’ or ‘shanzhai’ handset makers. First, we try to put some numbers around the industry which is likely to produce over one billion phones this year. Then we look at the growth of tablets coming out of these players. Finally, we look at how this industry is changing and how it is changing the wider technology landscape.
A few highlights of this (long-ish) piece:
- The China OEMs are likely to ship over 1 billion phones this year, over half of those will likely be Android smartphones.
- These smartphones will account for over half of the world’s Android shipments. This is probably the final frontier of the OS wars, if Google can keep these devices on main branch Android they will likely seal up the market. However, there is a real risk that Android “look-alikes” (replicants?) from companies like Baidu will try to grab a piece of market share here.
- The OEMs are expanding beyond phones to tablets, smart watches, laptop computers, TV Internet adapters and more.
- This is a highly competitive market, with hundreds, if not thousands, of entrants, all fighting for a piece of the pie. At some point, this will have to consolidate, but the shape of that consolidation is still unclear. The market may shake down to companies who invest the most in their brands and distribution, or it may go to some new kind of company that discovers a service model to layer on top of the hardware.
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