You would think Chinese handset makers are making safe bets with millions of people lining up to buy their gear. The problem, however, is that the market is served by too many companies, making it poised for serious consolidation.
Four out of top 10 handset makers are based in China, including Lenovo, Huawei, ZTE and Coolpad/Yulong; and there’s an onslaught of smaller players fighting for their place under the sun. This second group includes the likes of Meizu, Xiaomi, Oppo, TCL, Neo and others.
ZTE’s Executive Vice President He Shiyou thinks the existing mobile boom won’t last forever and may end in the next three years. He goes on to compare the current state with the once booming photovoltaic sector which suffered from the production overcapacity problems. Shiyou says that mobile industry could easily follow the same pattern, eventually crashing within the next few years.
To prevent things, ZTE is focusing on the higher ends of the market, rather than entry-level products, while at the same time trying to grow its share in the markets all around the world.
But what will happen with other (smaller) vendors? As far as we can tell, they’ll either merge with one another or end-up being acquired by bigger rivals. In any case, we’ll keep following the Chinese market and let you know how things are moving; cause some of the things happening there could easily affect all of us. Stay tuned…
[Via: Unwired View]