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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 while also keeping a watchful eye on competitors' market shares. Ultimately, success hinged on the shipment performance of branded phone customers. Taiwanese IC design firms were quite open about their concerns: whether revenue, chip shipments, and market share would continue to rise in 2016 depended heavily on securing key clients.
Taking the mainland's domestic demand and export markets as an example, the situation in 2015 was turbulent, with many brands retreating in 2016. Customers became more cautious, and unless a company could win Huawei’s massive orders or secure a big list from Lenovo, which was still in recovery, it would be difficult to achieve significant growth. The goal of operational expansion seemed too ambitious without solid customer support.
Taiwanese LCD driver IC suppliers noted that in the second half of 2015, the "China Cool Alliance" — consisting of older brands like Huawei — remained dominant. Huawei's shipments exceeded 130 to 150 million units, maintaining a strong presence in the mainland market, accounting for around one-third. ZTE, Lenovo, and Coolpad maintained annual shipments between 30 to 50 million units, though Lenovo struggled in 2015. However, with the integration of Motorola's brand and Google's partnership, Lenovo had a strong potential for a rebound in 2016, offering chip suppliers hope for better business.
Beyond the established players, Chinese brands like Xiaomi, Vivo, Oppo, BBK, and internet-based companies such as LeTV and Qihoo 360 also faced challenges in 2016. With the terminal market becoming increasingly price-sensitive, lower prices no longer guaranteed high sales, and sacrificing profits didn’t translate into greater market share. As a result, companies adopted a more conservative approach, aiming to maintain stability rather than chase aggressive growth targets.
After the MWC 2016 event following the Lunar New Year, new smartphone models lacked groundbreaking features or applications, leading to a relatively flat market. Taiwanese IC designers emphasized that their performance in 2016 would depend largely on the smooth shipment of end-brand customers. When all companies are interdependent, the outcomes can be highly correlated — one wins, and others lose.
Currently, securing Huawei's orders is seen as the key to success for both domestic and foreign chip suppliers in 2016. Meanwhile, those who manage to win Lenovo’s orders may have a chance to "eat the tiger" and gain significant market traction. In this year of strategic shifts and shipment growth, capturing key client orders could provide a crucial boost to operational performance.