Three out of every four mobile phones are already manufactured in China

China has become the epicentre of global smartphones. Three out of every four mobile phones in the world were manufactured there, according to the report The fu

Three out of every four mobile phones are already manufactured in China

China has become the epicentre of global smartphones. Three out of every four mobile phones in the world were manufactured there, according to the report The future of devices released this Tuesday in the framework of the CES by GSMA Intelligence, the research division of GSMA, the association of telecommunications operators). In addition, the asian country increasingly have a greater number of consumers: around 30% of smartphones globally are sold in your market.

Tim Hatt, head of research, GSMA Intelligence, says, “China has accumulated a level of influence is huge in the world of consumer devices, even in comparison with its large population, which represents 20% of the global total”. The manufacturers of this country, he argues, have benefited from the increasing participation of outside companies like Apple that choose to locate a part or the whole of their supply chain in China to take advantage of economies of scale.

“we Expect this trend to accelerate with the devices 5G bearing in mind the forthcoming reduction of the costs of different components of smartphones. This will put greater competitive pressure on factories of the united States, different parts of Europe, and even India,” he says.

Until now, the strategy of the chinese manufacturers on the european market and the american has been betting on lower prices for its terminals. But this trend, according to the report, is changing. Tech giants like Huawei and Xiaomi are now looking to compete with other companies like Apple or Samsung, and to lead the race to 5G is not only looking at the price. Their tactic goes for giving better benefits to its terminals.

The data of the research report come from a global survey conducted more than 38,000 users from 36 countries and secondary analysis of data from different companies. In accordance with the same, the sales of smartphones has fallen in the last two years due to market saturation, the lack of innovation and low-income users.

tech Giants such as Huawei and Xiaomi are now looking to compete with other companies like Apple or Samsung, and to lead the race to 5G is not only looking at the price

But, according to GSMA Intelligence, with the arrival of 5G, there is hope of a revitalization of the sector. Users of China, South Korea and various countries in the Middle East is very likely to adopt smartphones compatible with this technology. In fact, nearly 50% of chinese consumers says that you will get a phone 5G as soon as it is available. Another 20 percent say they also will buy a smartphone of this type, but does not know when he will do so. Taking into account the population of China, this means that the asian country would overtake any other country in the first years of adoption of this technology.

By contrast, in the united States, Europe and Australia, users do not have so clear that they need a mobile of this type. In Spain only three out of every 10 people claim to have intention of buying a terminal with these features.

why users in China or South Korea are more interested in buying a phone compatible with 5G that europeans or americans? The report attributes this interest among the Chinese population to the marketing campaigns of the mobile operators and the political will that the country be seen as a world leader in 5G.

Hatt, there are also other reasons. Both China and South Korea have users that are familiar with the technology and operators are committed to extending the network coverage of 5G to cities highly populated in the first two years of service. “In addition, in China the prices of mobile phones are shrinking faster than initially expected, which should increase adoption among consumers are marginal —those who want to 5G but not pay a high price for this—”, he adds.

The majority of respondents considered that the main advantage of 5G is in a higher speed. Also expect better coverage, improved new services and connecting new devices. While half would pay for having faster speeds, only 15% would be for new services.

The rise of Huawei and the asian market

For the GSMA, the biggest change in the sector of smart phones in the last 12 months has been the rise of Huawei. While Apple and Samsung represent more than half of the smartphones in circulation (55%), Huawei has now expanded beyond China to significant moves into Europe despite the ban that has suffered in recent months by the united States.

This trend could continue if the chinese manufacturer chooses to adopt an aggressive strategy in terms of the pricing of the devices compatible with 5G, according to Hatt: “In the case of chinese consumers to reach the 5G faster than other markets of early adoption, the competitive prices would be an important factor that favored domestic manufacturers like Huawei and Xiaomi, while he would push the margins of external competitors".

Apart from the 5G, the report portends a change in the content generation and the manufacture of devices, that will be more focused on the users of asian. Of the top 10 growth markets for smartphones in the next five years, seven are in Asia. China and India are the largest, by virtue of the size of its population, but countries such as Indonesia and Vietnam also have a large number of people accessing the Internet through their phones.

Hatt explains that the majority of these users do not speak English, are young, are attracted by the local culture and do not have a PC. “In this sense, Netflix, and its intention to dominate the world must not be taken for granted. There are a number of local producers in India, Indonesia and sub-saharan Africa that take advantage of this local demand. MTN and Turkcell are good examples,” the researcher explains.

The smart home

Not all are smartphones. China has the largest share of connected devices in the home, followed by away from the united States and Europe. The report divides the smart home in three categories: speakers, intelligent, media and entertainment and other types of devices such as appliances.

Despite the recent controversy for the programs you hear of companies like Amazon or Google, the sale of speakers smart not to increase. While in 2017, only 3% of Spanish households had this type of devices, in 2018, the percentage increased to 5% and in 2019, 13%. The adoption is considerably higher in USA (27%) and China (33%). The report tochaca the growth to falling prices and the simplicity of the use cases.

however, the majority of consumers still use the speakers for basic functions such as listening to music or set reminders. The lack of usefulness, followed by the cost and privacy concerns, is the main reason that users do not acquire a speaker intelligent. In fact, there are still very few clients that use it for other options, such as controlling household devices or make purchases online. This reflects, according to the report, the need for third parties to develop more complex functions for the speakers.

In the category of entertainment include smart tvs. In China, 58% of households with a smart TV, a markedly high compared with the 35% from united States and 29% of Europe. Other devices such as light bulbs connected to or burglar alarms have a adoption lower —below 20%— both in the homes of China as the US and Europe.

One out of every four adults has a smart watch

The levels of adoption of watches and smart trackers of physical activity have grown markedly in the past 18 months. The 25% of adults currently with a device of this type. The rise of these devices, especially among millenials, has led to the tech giants to acquire capabilities from a third party. In 2019 Google bought smart watches Fitbit for face-planting the Apple Watch. In addition, both the company of Mountain View as Amazon and Apple have interest in information about health to nourish their tools of analysis and improve the devices. The researchers argue that such watches and smart trackers, in combination with remote consultations, have the potential to reduce in-person visits to medical centres or hospitals.

Date Of Update: 07 January 2020, 19:00

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