Chinese smartphone brand Oppo doubles R&D investment to keep up with rivals ahead of 5G deployment

  • Oppo’s efforts to boost its R&D spending come at a time when global and domestic smartphone markets continue to consolidate
PUBLISHED : Thursday, 27 December, 2018, 12:10pm
UPDATED : Thursday, 27 December, 2018, 1:58pm

Chinese smartphone brand Oppo announced plans to more than double its research and development (R&D) spending to 10 billion yuan (US$1.16 billion) over the next year as it gears up for deployment of devices for the next-generation 5G network.

Identifying 5G, artificial intelligence (AI), cloud computing and virtual reality as future trends in the industry, Liu Chang, a vice-president of the Dongguan-based brand, said the company will make mobile phones the core of so-called multi-intelligent terminals that will integrate new technologies and be powered by the 5G network.

“The exploration of application scenarios will determine the value of 5G,” Liu said during the Oppo developer conference in Beijing on Wednesday. The company, which is due to release 5G-enabled smartphones in the coming year, also announced a plan to allocate 1 billion yuan worth of resources to developers so they can help Oppo achieve its goals.

Oppo, which is the No 5 global smartphone brand behind Samsung, Huawei, Apple and Xiaomi, said it would boost R&D investment from the current 4 billion yuan to keep up with rivals who have all indicated they will release new 5G phones in 2019 after chip maker Qualcomm unveiled devices for 5G-enabled smartphones earlier this month.

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The roll-out of next generation 5G mobile networks – which can handle big data at faster speeds, crucial to the new industrial internet – is a high priority on the national agenda, with the Chinese government providing supportive policies and local enterprises actively participating.

However, the US-China trade war has clouded prospects for global network equipment vendors such as Huawei and ZTE, which have been blocked by Washington and its allies on alleged security and espionage concerns. Beijing regards these moves as an attempt by the West to restrain the growth of Chinese hi-tech companies.

Oppo’s efforts to boost its R&D spending comes at a time when global and domestic smartphone markets continue to consolidate as competition among leading brands becomes more heated. Among the top five vendors globally, only Huawei and Xiaomi saw notable increases in year-on-year sales in the third quarter of 2018, while Apple and Oppo registered tepid growth and Samsung declined more than 14 per cent, according to Gartner.

Separately on Wednesday, Huawei’s Honor brand unveiled its new logo and e-commerce platform. To enhance global awareness, the company also teamed up with luxury brand Moschino to unveil its latest smartphone model, the Honor V20.

Honor’s move comes two weeks after rival OnePlus entered into an exclusive partnership with UK luxury carmaker McLaren to launch a premium handset that it expects will lift brand awareness and deliver higher profits from big-spending consumers.