This article studies the development of China’s smartphone industry through data collection and chart analysis. In the context of tense China-US relations, all Chinese mobile phones are affected by the China-US trade war. Among Chinese local mobile phone brands, Huawei, the only company that can design its own chips, has been banned and is most affected by the international situation. This is precisely because due to Huawei’s sanctions turmoil and the Chinese government’s encouragement of technology companies to conduct chip research and development in recent years, other technology companies have been investing in their own industrial chains, developing their core components. are developing, reducing their dependence on American companies and reducing the impact of sanctions. This article predicts that due to the impact of China-US relations, the main components of the Chinese smartphone market will still depend on US suppliers in the short term, but in the long run, with the upgrading and reform of China’s industrial chain, this dependence will gradually -Will gradually reduce until the final key components can be completely produced locally in China.
Introduction
Smartphones are one of the most popular mobile devices and a necessity for some people, so their production requires the collaboration of many suppliers around the world. Such supply chain collaboration between countries around the world is also an example of current economic globalization. However, at present, there are many direct conflicts between China and the United States due to political factors, ranging from trade wars to sanctions against various technology companies, and the Sino-US conflict has been further intensified by the epidemic. Therefore, it has had a great impact on the Chinese mobile phone market, and the Chinese mobile phone market and the suppliers behind it are also constantly changing. In this article, we use data and graph analysis to investigate the problems in the Chinese mobile phone market and predict the development trends of the Chinese mobile phone market.
According to Daniel’s market data and research, China is the world’s largest mobile phone market. China accounts for a quarter of the world’s total shipments, and China has the largest number of users in the world. China is also the country with the largest number of mobile phone manufacturers and the most fierce competition. Apple and Samsung can’t maintain their best deliveries. Chinese users are catching up with global users, and the time they spend on mobile phones is increasing year by year. Capone et al. We followed an evolutionary methodology and a model study suited to history. The first stage of development of the mobile phone industry is not easy for multinational companies to manage. Low-cost vendors can accumulate technology, but without sufficient technology, they cannot produce high-end mobile phones. This is in line with the Chinese market 20 years ago.
The second stage is the technology accumulation stage, but some emerging companies adopt marketing methods that do not lead to technology accumulation, resulting in a situation where they cannot technically catch up with companies that have already developed technology accumulation. Have done. Older companies with technology accumulation can only benefit from new marketing-driven companies, destroying the possibility of technology accumulation in low-cost markets. According to Maximize’s industry analysis and forecast, the main players in China’s mobile phone market are Huawei, Apple, Oppo, Vivo and Xiaomi. Thanks to the rapid construction of 5G infrastructure in China, 5G will accelerate mobile phone sales, and the introduction of 5G has broken the previous market saturation. Live streaming sales in China have grown rapidly and are gradually becoming an important part of foundry production, which will also boost the growth rate of online sales as Huawei mobile phones continue to lead the Chinese market.
According to Li and Yi’s research report, the user experience of mobile phone system affects users’ purchase intentions. The Matthew effect has appeared in the mobile phone industry, and people are paying more attention to the user experience rather than just the brand of mobile phone. User-centered and human-centered design concepts are attracting more and more attention in the market. People need a mobile phone that is user-friendly and focused on user experience. Research by Li et al shows that Chinese mobile phone industry enterprises have benefited from the globalization of the industrial chain, have focused on China, implemented market innovation and maintained development advantages, But there are also structural uncertainties. Due to the limitations of the institutional environment, non-state-owned enterprises have chosen the incremental innovation model to gain competitive advantage in China.
Through a comparative research design, Park conducted an in-depth analysis of the various determinants of first-mover advantage and late-mover advantage. Comparing Samsung and Apple, they found that market- and firm-level determinants are more strongly associated with first-mover advantage, and product-level determinants are more strongly associated with first-mover advantage. The late-mover advantage is more important. According to Liu’s analysis, this comparative case study of Huawei views China as a rising power in tense US-China relations: a red threat to hegemony in the eyes of China and the United States, leading to deep animosity and mistrust. is born; Huawei’s presence in the technology sector symbolizes China’s cultural divide, but “politicization” is also a problem facing Chinese companies overseas.
According to Lee et al’s paper, US allies in Asia are also joining US sanctions in fighting Chinese technology manufacturers. Australia and Japan are also concerned that Huawei products may affect national security issues. South Korea did not find any security issues, but took some measures in response to US pressure. Nokia considers itself a loser in the mobile phone industry in the paper by Lemberg et al. Changes in organizational structure have led to multiple incompatible technology platforms and development projects competing for resources at the same time, resulting in Nokia being unable to effectively utilize its abundant market resources to maintain its market position . The company has chosen the worst time to introduce strategic agility and high levels of technological development.
This paper analyzes the Chinese smartphone market in recent years through shipment data and graphs, which show the shipment volume of Chinese brands, the technology level behind it, the impact of US sanctions, the degree of dependence on the United States, and a combination of various factors. Starts with. The research and development status of manufacturers analyzes the problems of Chinese local brands and predicts future short-term and long-term development.
Current Situation Of Chinese Mobile Phone Market
There are 6.3 billion smartphone users in the world, of which China is currently the country with the most mobile phone users in the world. The number of users in China is about 912 million, more than double that of India, which comes in second place. At the same time, there are many mobile phone manufacturers in China, making China the world’s most representative mobile phone market.
As of May 2021, there are 912 million smartphone users in China. Four Chinese manufacturers, Oppo, Vivo, Huawei and Xiaomi, are the five largest manufacturers in China in terms of delivery volume. Mobile services in China are provided by three major domestic telecommunications network operators: China Mobile, China Unicom, and China Telecom. As of November 2021, the number of registered mobile phone subscribers in China is approximately 1.64 billion. China is the world’s leading smartphone manufacturer and is expected to grow rapidly in the future. Xiaomi, OnePlus, Oppo, Realme, Huawei, Honor, Vivo, etc. are Chinese smartphone brands. Except for Samsung and Apple, Chinese brands dominate all other markets. Among them, Huawei is the mobile phone brand with the largest market share in China, accounting for more than 38%.
China is one of the world leaders in 5G deployment due to its rapid adoption of 5G technology. In 2020, the region saw over 200 million 5G connections, accounting for 87% of the world’s 5G connections. Aggressive network rollout and a strong device ecosystem are driving 5G adoption in China. Despite COVID-19, Chinese operators installed more than 600,000 new 5G base stations in 2020, and more are planned for 2021. China’s rapid transition to 5G led to a peak in 4G deployment. 4G adoption declined for the first time in 2020 and is expected to continue to decline over the forecast period as consumers upgrade to more widespread 5G services. Chinese consumers are more eager to transition to 5G than consumers in any other market. This is due to the growing share of 5G device sales in mainland China, where 163 million 5G phones were sold in 2020, accounting for about 53% of total smartphone shipments.
In the first half of 2021, online retail sales of smartphones in China accounted for 31% of total market shipments. For the full year of 2021, online retail sales are expected to be slightly lower than 2020, but revenues will increase. From the fourth quarter of 2020 to the first half of 2021, 5G-enabled phones have dominated the market. However, most of the 5G target users have already upgraded their phones. The smartphone replacement cycle in China is 26-30 months, and the market is close to saturation. China’s e-commerce is entering a new era. Live streaming and online sales have grown rapidly since the second half of 2020 and are expected to account for a significant portion of smartphone sales in 2022. In today’s China, smartphone OEMs must have a complete and up-to-date e-commerce channel plan. The growth of online sales channels is expected to be the main driver of China’s smartphone market from 2022 to 2027.
Chinese Mobile Phone Technology And The American Technology Behind It
Chinese brand mobile phones have become number one in global shipments. However, the technology suppliers of these smartphones are not primarily from China. Of all the parts of a mobile phone, the central processing unit is the most important part. It helps the mobile phone to perform various data operations. Every time the screen is refreshed and the software launches, all instructions are processed by the Central Processing Unit. In the current mobile market, only a few companies can produce smartphone CPUs: Qualcomm, Apple, Samsung, Kirin and MediaTek. They are the most important suppliers of mobile phone processors in the world. In China, Qualcomm and Apple dominate the Kirin high-end mobile phone market.
According to the information, MediaTek is ranked No. 1 in smartphone SoCs with a market share of 33% in the fourth quarter of 2021, but MediaTek does not have any high-end chips that are shipped on a large scale. Qualcomm is in second place with a market share of 30%. Due to various mobile phone manufacturers actively promoting 5G development, Qualcomm has monopolized most of the high-end 5G SoC. Apple is in third place, but all of Apple’s chips are made in-house. They are for use, not for sale. Mainland Chinese chip maker UNISOC has grown significantly due to political support, but HiSilicon has also declined due to international conflicts.
Chinese Cpu Manufacturers
There is no company in China that can manufacture major semiconductors of this scale. They have to rely on three companies: Intel in the United States, TSMC in Taiwan, and Samsung in South Korea. SMIC, China’s largest chip maker, is still years behind in manufacturing technology. But it is not limited to just manufacturing. Companies like TSMC and Intel also depend on others to make their equipment and tools. Power is concentrated in the hands of a few people. ASML, a Dutch company, is the only company in the world that can build the machines chipmakers need to make cutting-edge chips. Huawei developed the Kirin processor for smartphones. However, a chip design alone is not enough to make it happen and Huawei still needs TSMC’s help to complete the chip. Kirin’s chips are often based on the latest technology and have helped Huawei become one of the world’s largest smartphone makers. But the US put Huawei on a trade blacklist, known as the Entity List, in 2019, depriving the Chinese company of some US technology. The US government imposed rules last year that would require foreign manufacturers using US chip manufacturing facilities to obtain a license before selling semiconductors to Huawei.
1. China’s political situation will affect the mobile phone market
UNISOC is currently the chip maker with the largest mobile chip shipments in mainland China. UNISOC has started active development in 5G. The company is the only general-purpose 5G chip supplier on the open market in mainland China. With the continuous promotion and application of 5G technology scenarios, major chip manufacturers are gradually withdrawing from the 4G market. UNISOC hopes to gain more market share and take third place in the 5G market. However, all of UNISOC’s chips are designed for 5G. 5G is important, but UNISOC does not have other types of chips needed for mobile devices, such as central processors.
The only manufacturer in mainland China that can develop 5nm SoC chips for mobile phones is Huawei HiSilicon. System-on-chip integrates the main core components required for smartphones into a small chip, which can significantly save the internal space of the mobile phone. The hardest part of this is the CPU processor. The Kirin processor series has always been Huawei’s biggest chip maker. Although Huawei’s HiSilicon shipments have increased year-on-year, relations between China and the United States have worsened, and Huawei has also been the target of attacks.
In May 2019, Huawei was placed in the entity list by the US government, but was able to avoid initial sanctions by working with third -party companies. However, in May 2020, new sanctions meant that Huawei could no longer use electronic products designed or manufactured by the US. This was a disastrous blow for Huawei’s chip construction, and Huawei’s partnership with TSMC, one of the world’s largest semiconductor manufacturers, was dissolved. This means that Huawei cannot build its own chipset, and there is no company in the mainland China that can manufacture chips of the need for Huawei Hisilicon. As China-American relations are constantly becoming tense, the development of China’s high-tech industry is being affected. The most technology patents in the chip sector are with the US, and Chinese companies are always severely affected in these areas. China-US relations also make China hostile towards more countries of the world. Without any exception, American ally is reducing its exchange with China. This has forced Chinese technology companies to develop independently and to be less dependent on foreign aid. Also, the Chinese government has taken several steps to promote and support the development of Chinese technology companies.
2. Predictions of the future
The gradual deterioration of US-China relations will affect the development of China’s smartphone industry to some extent. Huawei, the only Chinese mobile phone maker capable of developing standalone SoCs, is unable to manufacture them. However, due to sanctions against Huawei, Chinese mobile phone manufacturers have begun to make greater use of China’s local technology supply chain. In addition, Xiaomi and OPPO are preparing to make their own chips for mobile phones to reduce the need for American technology, but Huawei’s experience may raise doubts about the supply chain. However, due to the Huawei incident, Chinese mobile phone manufacturers are under pressure and in crisis. We cannot rely too much on American technology suppliers. This also makes the future of Chinese mobile phones clear.
Perhaps Xiaomi and OPPO will be the next mobile phone manufacturers to be banned by the US, but they know very well what they need, and if they can develop and cooperate, they can also develop more comprehensive independent supply chain technology . Therefore, the future of Chinese mobile phone manufacturers is bright, but at the same time it is full of crisis. Sino-US relations cannot return to the past, and China’s technology industry will continue to face continued attacks by the US. For now, China’s mobile phone industry is still restrained in the short term, and mobile phone manufacturers including Huawei can only use Qualcomm chips. But this is not the future. Now, more and more manufacturers are beginning to reduce their dependence on American technology. This measure will be a great help to the future of China’s mobile phone industry.
Conclusion
This article considers the development of China’s smartphone industry through data collection and graph analysis. As US-China relations become increasingly tense, all Chinese mobile phone manufacturers are being hit by US sanctions. Among them, Huawei is most affected because it can develop chips on its own. Other manufacturers are also working on developing chips, but their development is being hampered by the impact of the sanctions on Huawei. This article speculates that the US-China conflict will have a certain impact on China’s mobile phone market. In the short term, manufacturers that can develop chips will not be able to mass-produce them in time, and will only be able to use US-made chips. However, in the long term, in order to avoid dependence on the United States to a certain extent and prevent the impact of future sanctions, various Chinese manufacturers are also developing different chip production chains. And thanks to government encouragement and support, more manufacturers are getting into chip manufacturing. With the support of the government, the chip manufacturing process is expected to be further improved. Chinese mobile phone manufacturers will also have more choices and will no longer be constantly influenced by the US.
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