'No-names' drove Q2 handset market

Lesser-known feature and smartphone brands made the biggest gains in the second quarter, according to IDC.

Both Samsung and Apple fell back and Huawei slipped out of the top five as the lower prices of Android phones accounted for 42.4% of smarphone sales, compared with 36.4% in the previous quarter and 40.2% a year ago.

Just under 237 million smartphones were shipped, up 53% from a year ago. Samsung, Apple and LG remained the top three vendors, with Lenovo taking Huawei’s spot at fourth and ZTE retaining fifth position.

In the broader mobile phone market, 432m units were sold, with the top three – Samsung, Nokia and Apple – also losing market share to smaller brands such as Alcatel.

Said Ramon Llamas, a research manager with IDC's mobile phone team:

“Lower-priced smartphones continue to gain traction, but the key for vendors will be to keep prices low while still offering premium devices and services. We fully expect to see large-screen smartphones and other flagship devices establish a presence within the lower-priced smartphone segment as well."

Even at home, China handset brands battle for acceptance

 

Led by Huawei and ZTE, Chinese handset players might be exporting to the world, but they can’t make  the A-list in their home market.

Domestic brands have virtually a zero market share above the key 3000 yuan ($489) threshold, according China’s biggest mobile phone retailer D.Phone.

That applies even to Huawei and ZTE, both in the worldwide smartphone top 5 and both betting heavily on building global handset brands, Beijing newspaper Jing Hua says in this analysis (zh).

Huawei’s Ascend P6, just launched in a high-profile event in London, is on sale at €449 (3600 yuan) in Europe, yet Chinese consumers can buy it for a mere 2688 yuan. At this price the product has no profit margin, according to Huawei handset chief Richard Yu.

ZTE last year priced its Nubia Z5 at 3456 yuan and the titanium version at 7890 yuan, but neither sold well.

In a frank admission (and that might invite the attention of regulators in other markets), Lenovo vice president Feng Xing acknowledges that:

... managers from leading brands like Huawei, Coolpad, ZTE and Lenovo often get together, and the central topic of discussion is how to make products profitable.

Against this, the optimistic view is that the sector has come a long way. Sun Changxu, an analyst at market research firm ESM China, points out that ten years ago, when domestic brands briefly dominated the device market, they were mostly using Korean solutions.

“But now Chinese enterprises can design and build extremely good products, making them much more competitive.”

But in the eyes of demanding Chinese consumers, that's not enough. “[T]heir understanding of brands is mostly embodied in face and price. A high price embodies quality and brand," says another analyst, Yang Haifeng.

Nokia appoints fourth China CEO in three years

Nokia China and Huawei have both swapped out the heads of their handset operations – but that’s where the similarity ends.

Gustavo Eichelmann, Nokia’s China chief since the beginning of 2012, has left the company for “personal reasons”, Nokia announced Monday. He will be replaced by Erik Bertman, the head of Nokia Russia, effective June 1.

Eichelmann’s departure follows the collapse of Nokia’s share of China’s smartphone market last year – from market leader, with a 29.9% share in 2011, down to seventh with just 3.7% share.

Bertman, a Swedish national, is the fourth head of Nokia’s China business since the beginning of 2010.

He has the job ahead of him. Nokia’s global devices sales were down 32% year-on-year in Q1. Handset shipments were off 25% and smartphone shipments fell by a scary 49%.

As he wings his way to Beijing Bertman may cross paths with Wan Biao, Huawei’s terminals group CEO, who has just been sent to Moscow. In a promotion for Wan, he will head up all of Huawei's operations in Russia, one of the Huawei’s target ofshore markets.

Wan will be replaced by Yu Chengdong, who will retain his current title of chairman of the terminals unit.

In contrast with Nokia’s declining fortunes, the Huawei’s devices team is on a roll. Of course, the popularity of Huawei's affordable smartphones is one reason why Nokia is struggling.

Huawei boosted devices revenue 8.4% to $7.9 million last year and shipped 32 million smartphones. It’s aiming for 60 million this year.

Asian CIOs love and fear iOS

Apple’s iOS is the platform Asia-Pacific CIOs are most keen to deploy. Yet when it comes to security, it’s also the one they’re most anxious about.

That apparent disconnect shows up in IDC’s latest survey of regional IT decision-makers.

A hefty 43% said they most preferred iOS as the system to support their mobile apps and solutions; just chose 28% Android.

Yet when it comes to security iOS is the one they’re “most worried about.” Open-source, fragmented Android and its often-unpatched security holes comes in fourth.

The explanation probably lies in Symbian’s ranking as the OS that enterprise IT guys are least worried about. As IDC’s Claus Mortensen puts it, that’s because they aren’t planning to use it.

So the high nervousness about iOS most likely reflects its growing popularity as an enterprise platform.

From that perspective, the poll is a spot of good news for BlackBerry. It’s the fourth most preferred OS, chosen by 12% – just behind Microsoft/Windows Mobile.

But in the security anxiety rankings the BlackBerry 10 and BlackBerry 7 come in second and third respectively. Asian enterprises at least seem to have plans for BlackBerry.