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The mainland mobile phone market has no new drama this year. Huawei is the king and Lenovo has rebounded.
In 2016, the global smartphone market showed only a slight growth, prompting IC design companies to closely monitor order trends from major terminal brands. Beyond that, they also analyzed their competitors' chip market shares, as final success or failure often hinged on shipments to branded phone manufacturers. Taiwanese IC design firms were straightforward about their expectations: whether revenue, chip shipments, or market share would continue to rise in 2016, securing key customers remained crucial.
Taking the mainland’s domestic demand and export market as an example, the landscape was quite competitive. In 2015, many brands experienced significant fluctuations, with some retreating in 2016 due to cautious customer behavior. Unless a company could win Huawei’s large-scale orders or capture Lenovo’s attention after its downturn, achieving high growth targets became challenging.
According to LCD driver IC suppliers from Taiwan, the "China Cool Alliance" — composed of older brands like Huawei, ZTE, Lenovo, and Coolpad — still saw Huawei leading the market. Huawei’s shipments exceeded 130 to 150 million units that year, benefiting from economies of scale and maintaining a third of the mainland's market share. ZTE, Lenovo, and Coolpad remained stable at around 30 to 50 million units annually. However, Lenovo faced its toughest year in 2015, but with the integration of Motorola’s brand and Google’s partnership, it had strong potential for recovery in 2016, offering chip suppliers hope for better performance.
Beyond the established players, Chinese brands like Xiaomi, Vivo, Oppo, BBK, and internet-based companies such as LeTV and Qihoo 360 also adjusted their strategies. With the terminal market becoming more price-sensitive and profit margins shrinking, these companies realized that aggressive pricing couldn’t guarantee larger market shares. As a result, their 2016 shipment goals were more modest, focusing on stability rather than rapid expansion.
After the MWC 2016 event following the Chinese Lunar New Year, new smartphone models lacked revolutionary features, which disappointed many. Taiwanese IC design companies emphasized that their operational performance in 2016 needed to outperform previous years, relying heavily on smooth shipments from end-brand customers. When everyone is connected, one brand’s success or failure can significantly impact the whole ecosystem.
Currently, securing Huawei’s orders appears to be the key to success for both domestic and international chip suppliers in 2016. Meanwhile, those who manage to win Lenovo’s business may have the chance to benefit greatly. In a year marked by recovery and steady growth, securing major clients will play a vital role in driving overall performance.