Analysis | Prospect for big profits stokes competition in China smartphone race

Competition in the Chinese smartphone market is escalating as non-traditional phone makers join the game, looking to cash in on surging demand. 

Soon to join the established local players Xiaomi, ZTE and Huawei as well as the top foreign brands of Apple and Samsung will be home appliance maker Gree and internet security firm Qihoo 360, with new ranges of Android-based phones.

And it is not just big companies. Already in the fray are the Chuizi smartphone from start-up Smartizan, founded by former English teacher Luo Yonghao, and the Dakele phone, developed by Ding Xiuhong, a former managing editor at the NetEase web portal.

 “It’s the high profit which is driving the fever to make smartphones. Android smartphone users tend to change to a new phone every year,” said Wang Bo, the chief executive of Beijing-based One Card Technology, which develops mobile payment technologies.

“China’s internet giants are guarding their territory and the mobile market is dominated by state companies. There are still opportunities in the smartphone market,” he added, referring to the top three private Internet companies Baidu, Alibaba and Tencent, know locally as ‘BAT’.

Chinese smartphone makers sold 390 million phones in 2014, 21.9 per cent more than the previous year. Smartphone inventories stood at 780 million last year, increasing by 34.3 per cent over 2013, according to iResearch, a top research group on the Chinese IT industry.