Light Reading
Lenovo's deal to buy Motorola Mobility leaves Apple as the only major Western smartphone player.

Asia Strengthens Its Grip on Smartphone Market

Robert Clark
News Analysis
Robert Clark
1/31/2014
50%
50%

Lenovo's acquisition of Motorola Mobility from Google, the largest ever by a Chinese tech firm, will provide it with access to key markets and the chance to challenge Samsung as the dominant Android brand. (See "Lenovo to Buy Motorola From Google?" and this Google statement confirming the agreement.)

But it also underlines how the center of gravity of the handset business is now very firmly in Asia-Pacific, and especially China.

As a result, you can now add smartphones to the list of consumer electronics products that were pioneered in the West but which are now dominated by Asian firms.

This time it's companies from South Korea and China, not Japan, that have taken the mantle.

Apple Inc. (Nasdaq: AAPL) is the only non-Asian firm in IDC's top six smartphone suppliers in the fourth quarter of 2013, commanding the number two position. Samsung Corp. tops the table, with Huawei Technologies Co. Ltd. third, followed by Lenovo Group Ltd. (Hong Kong: 992), LG Electronics Inc. (London: LGLD; Korea: 6657.KS) , and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).

In China, the world's largest smartphone market, the iPhone is being outsold by the cheaper Coolpad, which costs less than $100, and three other local brands, reports Bloomberg. That helps explain why Apple was so keen to enter the Chinese market and increase its presence there. (See China Mobile Gets the iPhone.)

Yet even China, where consumers bought 350 million smartphones in 2013, is becoming saturated, says CK Lu, principal research analyst at Gartner Inc. .

He says the acquisition will help Lenovo to expand beyond its home market: Motorola has brand recognition in North America and Western Europe, where Lenovo is absent.

But these developed markets are declining in importance. Motorola, though, also has an 8% share in Latin America, while Lenovo is strong in countries such as India, Indonesia, and Russia. According to IDC forecasts, emerging markets will account for 42% of the smartphone market in 2017, up from 32% today.

The scale economies that firms such as Lenovo, Samsung, and Huawei can bring to bear will ensure they can continue to dominate a business that is now being driven by falling prices.

Despite these prospects, Lenovo's stock dipped more than 8% on news of the deal, primarily because of the short-term impact on its cash in the wake of Lenovo's recent $2.3 billion acquisition of IBM's x86 server business.

Lenovo CEO Yang Yuanqing told Bloomberg: "Before, we only had PCs as a core business. Now, we've built two pillars: the first is enterprise, and the second is this mobile business."

Yuan says Lenovo will retain the Motorola brand.

— Robert Clark, contributing editor, special to Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
R Clark
50%
50%
R Clark,
User Rank: Blogger
2/2/2014 | 10:52:22 PM
Re: Market saturation
You'd think Apple would get a bit of a bump this year from China Mobile and the 4G rampup, but I guess they won't be chasing the sub-$150 segment in China and emerging.  Bring on the wearables?
DOShea
50%
50%
DOShea,
User Rank: Blogger
2/2/2014 | 3:12:55 PM
Market saturation
Market saturation in China is not something you hear much about, and assuming Apple has been hoping otherwise as it tries to gain ground there.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (1) comment


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
LRTV Interviews
Bob Wilson, Arsenal Legend: The Light Reading Interview

1|16|15   |   35:36   |   (3) comments


Arsenal goalkeeping legend Bob Wilson was Light Reading's guest interviewee at the 2020 Vision Executive Summit in December. See what the former soccer star and sports broadcaster had to say when he took to the stage in Iceland.
LRTV Custom TV
What MEF Third Network Initiative Means for SDN & NFV

1|14|15   |   6:13   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss discusses the importance of the MEF Third Network initiative and why it's good news for SDN/NFV industry initiatives.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
BlackBerry Wants Net Neutrality Protection – That's Just Sad
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/22/2015
Verizon Ready for Google MVNO Challenge
Dan Jones, Mobile Editor, 1/22/2015
FiOS Picks Up Pace Again
Alan Breznick, Cable/Video Practice Leader, 1/22/2015
Indiana Carrier Takes Fiber to the Farm
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/22/2015
Like Us on Facebook
Twitter Feed
Webinar Archive