The hyper growth stage for Chinese smartphones is clearly over, in terms of unit shipment. However, product innovation is heating up, as Chinese brands try hard to play the catch-up game in the mid-to-high end space. The story will shift from volume growth to value increase.
The common feedbackfrom the supply chain is that Chinese smartphone domestic demand has reached a plateau(if not declined slightly), due to market saturation and reduced subsidies from mobile operators. Export demand(mainly from emerging countries)is still growing but might not be sufficient to support the high growth(30%+) experienced in past years. On a positive note, Huawei and emerging brands (Xiaomi, Oppo, Meizu, Vivo)who focus more on higher-end and differentiated devicesare taking market shares from conventional brands (Coolpad, ZTE, TCL, etc) who offer more low-cost devices. Smartphone component/ODM firms believe that this market share shift could lead to ASP upside andgross margin improvement potential for them.
