Ring­ing in Change

Beijing Review - - EDITOR’S DESK -

Though late­com­ers in the in­ter­na­tional com­mu­ni­ca­tions mar­ket, Chi­nese mo­bile phone brands have caught up quickly. In the 2G era, in­ter­na­tional com­mu­ni­ca­tion stan­dards and tech­nolo­gies were dom­i­nated by sev­eral for­eign tech com­pa­nies. Even China’s do­mes­tic mar­ket was con­trolled by for­eign brands like Mo­torola and Nokia.

The rise of Chi­nese brands is at­trib­uted to tech­no­log­i­cal ad­vance­ments and a per­cep­tive un­der­stand­ing of con­sumers’ needs. In the 3G and 4G era, China’s own com­mu­ni­ca­tion stan­dards and tech­nolo­gies be­gan to grab some mar­ket share, which in turn boosted the growth of Chi­nese cell­phone man­u­fac­tur­ers and brands. Af­ter be­com­ing a ma­jor player in the do­mes­tic mar­ket, Chi­nese hand­set brands be­gan se­cur­ing a foothold in the in­ter­na­tional mar­ket. Then they grew rapidly, ac­count­ing for the lion’s share in some for­eign mar­kets like Africa.

Pix­els, screen sizes, op­er­at­ing ca­pac­i­ties and other de­tails are all im­por­tant fac­tors to con­sider when con­sumers choose a cell­phone. For­eign brands like Mo­torola and Nokia be­gan to wane in the Chi­nese mar­ket be­cause they failed to catch up with Chi­nese con­sumers’ evolv­ing de­mands. In the 2G era, con­sumers were sat­is­fied with fun­da­men­tal func­tions like mak­ing calls and send­ing text mes­sages, but to­day, they use cell­phones for tak­ing pho­tos, surf­ing the In­ter­net, on­line shop­ping, watch­ing movies and a whole lot more. Chi­nese brands, on the con­trary, have made it be­cause they cater to lo­cal con­sumers’ de­mands, which range from in­no­va­tive games to mak­ing four-sim hand­sets.

Tech­no­log­i­cal progress has also up­graded con­sumers’ re­quire­ments for cell­phones. To­day, the de­vel­op­ment of 5G wire­less tech­nol­ogy has brought new op­por­tu­ni­ties for Chi­nese mo­bile phone brands. Huawei, Xiaomi, Len­ovo and oth­ers are gear­ing up to launch their 5G cell­phones. It’s likely that Chi­nese brands will em­brace an­other break­through like they did dur­ing the 3G and 4G era.

In­sid­ers pre­dict that in the 5G pe­riod, the Chi­nese mar­ket will need more than 1 bil­lion cell­phones, mak­ing it a bat­tle­field where Chi­nese brands will cross swords with for­eign com­peti­tors like Ap­ple and Sam­sung. The key to grab­bing a ma­jor share of the mar­ket is lev­er­ag­ing Chi­nese phone com­pa­nies’ bur­geon­ing in­vest­ment in state-of-the-art de­sign and re­search and de­vel­op­ment. Chi­nese com­mu­ni­ca­tions com­pa­nies have been har­ness­ing big data, cloud com­put­ing, ar­ti­fi­cial in­tel­li­gence and the In­ter­net of Things for pro­duc­ing more hi-tech prod­ucts and Chi­nese smart­phones are get­ting smarter.

Nev­er­the­less, Chi­nese cell­phones still have a for­mi­da­ble bar­rier to over­come—the lack of core tech­nolo­gies. Bar­ring Huawei, al­most no Chi­nese cell­phone brands man­u­fac­ture their own core chips and are forced to buy the com­po­nent from other coun­tries. If chip providers stop the sup­ply for some rea­son, a lot of China’s cell­phone brands will face a cri­sis of sur­vival.

The re­stric­tion Chi­nese multi­na­tional ZTE faced in the United States is a case in point. In April 2018, the U.S. Gov­ern­ment barred the tele­com gi­ant from us­ing com­po­nents made in the United States, say­ing it had vi­o­lated U.S. sanc­tions against North Korea and Iran.

How to ad­dress this po­ten­tial Achilles’ heel is some­thing Chi­nese cell­phone mak­ers need to crack in the fu­ture, no mat­ter how tough a nut it is.

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