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Mobile Phones - China - January 2015

“China’s mobile phone market is maturing with a more stable growth of 15.6% in retail sales volume in 2014. The non-smartphone to smartphone switching has almost completed, presenting 92% of smartphone sales volume out of the total market.

Thanks to its start of internet-based model (marketing and understanding consumers’ needs via online) and affordable smartphones with high configuration, Xiaomi has reached the sales volume of mobile phone market leader – Samsung in 2014. As the star of the premium smartphone segment, Apple ranked the first by sales value in 2014.

Both Xiaomi and Apple’s successes show that the strong players win by responding to consumer needs. Brands and companies should continuously offer high-quality products and focus on enhancing customer stickiness via outstanding consumer services and brand image.”

-Ivy Jiang, Research Analyst

This report looks at the following areas:

  • What is the current mobile phone and smartphone ownership status in China?

  • What are consumers’ preferences on brand, price and screen size of mobile phone?

  • Where is information sourced from when consumers purchase mobile phones?

  • What are future purchase intentions of smartphones on brand, price and screen size?

  • How to enhance Chinese consumers’ brand loyalty?

  • What will help mobile phone manufacturers stand out?

  • Will large-screen smartphones become mainstream?


Chinese consumers attach importance to mobile phone brands, while consumers’ brand stickiness can be enhanced via high-quality products, outstanding consumer services, brand integrated cross-devices platforms as well as breakthrough features.

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Table of contents

  1. Introduction

      • Definition
        • Methodology
          • Abbreviations
          • Executive Summary

              • The market
                • A steadier growth in 2014 after years of continuous growth
                  • Figure 1: Mobile phone sales and growth rate in China, by volume, 2011-14
                • Smartphones drive growth of the market
                  • Figure 2: Non-smartphones and smartphones split, by volume share, 2008-14
                • Market drivers and growth barriers
                  • The forecast
                    • Figure 3: Mobile phone forecast, by volume sales, 2009-19
                  • Companies and brands
                    • Figure 4: Top mobile phone companies in China, by volume share, 2012-14
                    • Figure 5: Top mobile phone companies in China, by value share, 2012-14
                  • The consumer
                    • Mobile phone ownership
                      • Figure 6: Mobile phone and smartphone ownership, December 2013 and October 2014
                      • Figure 7: Types of smartphone ownership, December 2013 and October 2014
                    • Brands, price range and screen size of mobile phone owned
                      • Figure 8: Brand of smartphones being used, October 2014
                      • Figure 9: Price of smartphones being used, DECEMBER 2013 and October 2014
                      • Figure 10: Screen size of smartphones being used, October 2014
                    • Information source of smartphone purchase
                      • Figure 11: Information sources of smartphone purchase, October 2014
                    • Importance of brands in the purchasing process
                      • Figure 12: Importance of brands in the purchasing process, by consumers who think the statement is important, October 2014
                    • Future purchase intentions of smartphones
                      • Figure 13: Future purchase intentions of smartphones, October 2014
                      • Figure 14: The ownership of smartphones and future purchase intentions of smartphones, by brand, October 2014
                      • Figure 15: The ownership of smartphones and future purchase intentions of smartphones, by price, October 2014
                      • Figure 16: The ownership of smartphones and future purchase intentions of smartphones, by screen size, October 2014
                    • Attitudes towards mobile phones
                      • Figure 17: Attitudes towards mobile phones, October 2014
                    • Key issues
                      • Build brand loyalty in three ways
                        • Unique selling point still matters even if it would make you a niche player
                          • Large screen is the trend but don’t forget small screen either
                            • What we think
                            • Issues and Insights

                                • Build brand loyalty in three ways
                                  • The facts
                                    • The implications
                                      • Unique selling point still matters even if it would make you a niche player
                                        • The facts
                                          • The implications
                                            • Figure 18: Summary of highlighted product features of selected mobile phone brands, December 2014
                                          • Large screen is the trend but don’t forget small screen either
                                            • The facts
                                              • The implications
                                                  • Figure 19: Consumer segmentation, by screen size preference, by demographics, October 2014
                                              • Trend Application

                                                • Prove it through word of mouth
                                                  • Never stop helping consumers by perfecting what the phone can do
                                                    • Consumers are more receptive to domestic brands than ever before
                                                    • Market Size and Forecast

                                                      • Key points
                                                        • Mobile phone market expands with strong growth
                                                          • Figure 20: Mobile phone sales in China, by volume and growth, 2008-14
                                                          • Figure 21: Mobile phone sales in China, by value and growth, 2011-14
                                                        • Smartphones dominate mobile phone market
                                                          • Figure 22: Non-smartphones and smartphones segment share, by volume, 2008-14
                                                          • Figure 23: Mobile phone volume growth rate, by non-smartphones and smartphones, 2008-14
                                                        • Market drivers
                                                          • Increased income and falling prices make mobile phones more affordable
                                                            • 4G network further boosts mobile connectivity
                                                              • Figure 24: 2G, 3G and 4G-capable mobile phones sales split, by volume share, 2008-14
                                                            • Further market liberation with VNO licence issuance to private sector players
                                                              • Low market barrier for new entrants
                                                                • Smartphone has become an integral part of urban lifestyle
                                                                  • Market barriers
                                                                    • Government handset subsidies cut
                                                                      • High smartphone ownership in urban tier one to three cities
                                                                        • Lack of breakthrough innovation
                                                                          • Threat from small-screen tablets
                                                                            • Figure 25: Mobile phone sales and tablet computers sales in China, by volume, 2010-14
                                                                          • Market forecast
                                                                            • Figure 26: Mobile phone volume sales, China, 2009-19
                                                                        • Market Share

                                                                          • Key points
                                                                            • Samsung’s leading position is under threat
                                                                              • Figure 27: Top 10 mobile phone companies in China, by sales volume share, 2012-14
                                                                              • Figure 28: Top 10 mobile phone companies in China, by value share, 2012-14
                                                                            • Xiaomi’s success is phenomenal
                                                                              • Large-screen iPhones will fuel Apple’s revenue
                                                                                • Microsoft is struggling due to the weak Windows OS
                                                                                  • Domestic brands are growing to occupy half of the volume market
                                                                                  • Who’s Innovating?

                                                                                    • Key points
                                                                                      • Xiaomi’s smart home idea extends the usage occasion of smartphones
                                                                                        • Curved and soft screens will become a trend
                                                                                          • Fingerprint readers become a standard configuration
                                                                                          • Companies and Brands

                                                                                            • International players
                                                                                              • Apple Inc.
                                                                                                • Latest developments
                                                                                                  • Samsung Group
                                                                                                    • Latest developments
                                                                                                      • Microsoft Corporation
                                                                                                        • Latest developments
                                                                                                          • Sony Corporation
                                                                                                            • Latest developments
                                                                                                              • Domestic brands
                                                                                                                • Lenovo Group Limited
                                                                                                                  • Latest developments
                                                                                                                    • Xiaomi Inc.
                                                                                                                      • Latest developments
                                                                                                                        • Huawei Technologies Co. Ltd.
                                                                                                                          • Latest developments
                                                                                                                            • Coolpad Group
                                                                                                                              • Latest developments
                                                                                                                                • Guangdong OPPO Electronics Industry Co., Ltd.
                                                                                                                                  • Latest developments
                                                                                                                                    • Zhongxing Telecommunication Equipment Corporation (ZTE Corporation)
                                                                                                                                      • Latest developments
                                                                                                                                      • The Consumer – Mobile Phone Ownership

                                                                                                                                        • Key points
                                                                                                                                          • Smartphone ownership further increased
                                                                                                                                            • Figure 29: Mobile phone and smartphone ownership, December 2013 and October 2014
                                                                                                                                            • Figure 30: Types of smartphone OS currently in use, December 2013 and October 2014
                                                                                                                                          • Differences in iPhone and Android smartphone user profile
                                                                                                                                            • Figure 31: Types of smartphone OS currently in use, by demographics, October 2014
                                                                                                                                        • The Consumer – Brands of Mobile Phone Owned

                                                                                                                                          • Key points
                                                                                                                                            • International brands are still leading the smartphone market
                                                                                                                                              • Figure 32: Brand of smartphones being used, international vs domestic brands, October 2014
                                                                                                                                              • Figure 33: Brand of smartphones being used, October 2014
                                                                                                                                            • User profile of leading brands
                                                                                                                                              • Figure 34: Brand of smartphones, by demographics, October 2014
                                                                                                                                              • Figure 35: Brand of smartphones being used, by type of company/organisation working with, October 2014
                                                                                                                                            • Apple
                                                                                                                                              • Samsung
                                                                                                                                                • Huawei
                                                                                                                                                  • Xiaomi
                                                                                                                                                  • The Consumer – Price Range of Mobile Phone Owned

                                                                                                                                                    • Key points
                                                                                                                                                      • Consumers are upgrading to more premium smartphones
                                                                                                                                                        • Figure 36: Price of smartphones being used, DECEMBER 2013 and October 2014
                                                                                                                                                        • Figure 37: Price of smartphones being used, by mobile phone operating system, October 2014
                                                                                                                                                      • Who are buying premium smartphones?
                                                                                                                                                        • Nearly half of high-income consumers use premium smartphones
                                                                                                                                                          • Figure 38: Price of smartphones being used, by monthly personal income, October 2014
                                                                                                                                                        • Premium smartphones attract well-educated group
                                                                                                                                                          • Figure 39: Price of smartphones being used, by education level, October 2014
                                                                                                                                                        • Tier one cities have more premium smartphone users
                                                                                                                                                          • Figure 40: Price of smartphones being used, by city tier, October 2014
                                                                                                                                                      • The Consumer – Screen Size of Mobile Phone Owned

                                                                                                                                                        • Key points
                                                                                                                                                          • About a third are using large-screen smartphones
                                                                                                                                                            • Figure 41: Screen size of smartphones being used, October 2014
                                                                                                                                                          • The right move for Apple to launch big size screen
                                                                                                                                                            • Figure 42: Screen size of smartphones being used, by mobile phone operating system, October 2014
                                                                                                                                                          • Who are large- and small-screen smartphone users?
                                                                                                                                                            • Figure 43: Screen size of smartphones being used, by demographics, October 2014
                                                                                                                                                          • Large screen users
                                                                                                                                                            • Small-screen users
                                                                                                                                                            • The Consumer – Information Source of Smartphone Purchase

                                                                                                                                                              • Key points
                                                                                                                                                                • Information from online retailers second to family/friends’ recommendation
                                                                                                                                                                  • Figure 44: Information sources of smartphone purchase, October 2014
                                                                                                                                                                • Males are more influenced by online information
                                                                                                                                                                  • Figure 45: Information sources of smartphone purchase, by gender, October 2014
                                                                                                                                                                • Households with children are more cautious on smartphone selection
                                                                                                                                                                  • Figure 46: Information sources of smartphone purchase, by presence of children in the household, October 2014
                                                                                                                                                                • Recommendations from in-store salespersons obtain more followers in tier two and three cities
                                                                                                                                                                  • Figure 47: Information sources of smartphone purchase, by city tier, October 2014
                                                                                                                                                              • The Consumer – Importance of Brands in the Purchasing Process

                                                                                                                                                                • Key points
                                                                                                                                                                  • Brand of the handset is the most important
                                                                                                                                                                    • Figure 48: Importance of brands in the purchasing process, October 2014
                                                                                                                                                                  • High income group value brands more…
                                                                                                                                                                    • Figure 49: Importance of brands in the purchasing process, by percentage of consumers saying this is important, by income, October 2014
                                                                                                                                                                  • …as well as households with children
                                                                                                                                                                    • Figure 50: Importance of brands in the purchasing process, by presence of children in household, October 2014
                                                                                                                                                                  • Women address more importance on brand of network operator
                                                                                                                                                                    • Figure 51: Importance of brands in the purchasing process, by percentage of consumers saying this is important, by gender and age, October 2014
                                                                                                                                                                • The Consumer – Future Purchase Intentions of Smartphones

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Nine in 10 consumers plan to buy a new smartphone
                                                                                                                                                                      • Figure 52: Future purchase intentions of smartphones, October 2014
                                                                                                                                                                      • Figure 53: Future purchase intentions of smartphones, by demographics, October 2014
                                                                                                                                                                    • What brand of smartphone are consumers planning to buy?
                                                                                                                                                                      • Figure 54: The ownership of smartphones and future purchase intentions of smartphones, by brand, October 2014
                                                                                                                                                                    • What price of smartphone will consumers consider?
                                                                                                                                                                      • Figure 55: The ownership of smartphones and future purchase intentions of smartphones, by price, October 2014
                                                                                                                                                                    • A sizeable number of low earners are also considering an upgrade to premium phones
                                                                                                                                                                      • Figure 56: Future purchase intentions of smartphones on price, by monthly personal income, October 2014
                                                                                                                                                                      • Figure 57: Demographic profile of people who have a personal income of RMB4,999 or below but would like to buy a phone worth RMB4,000 or above, October 2014
                                                                                                                                                                    • What screen size will people consider?
                                                                                                                                                                      • Figure 58: The ownership of smartphones and future purchase intentions of smartphones, by screen size, October 2014
                                                                                                                                                                      • Figure 59: Future purchase intentions of smartphones, by screen size, October 2014
                                                                                                                                                                    • Consumers in their forties are big fans of large-screen smartphones
                                                                                                                                                                      • Figure 60: Future purchase intentions of smartphones on screen size, by demographics, October 2014
                                                                                                                                                                  • The Consumer – Attitudes towards Mobile Phones

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Most consumers perceive no significance in product quality between international and domestic brands
                                                                                                                                                                        • Figure 61: Attitudes towards mobile phones – International versus domestic, October 2014
                                                                                                                                                                      • Lower-income consumers are more supportive of local brands
                                                                                                                                                                        • Figure 62: Agreement with “Given the same price and configuration, I prefer buying domestic brand rather than an international brand”, by monthly personal income and city tier, October 2014
                                                                                                                                                                      • Although ‘face’ comes into play, most people want to know what they are paying for
                                                                                                                                                                        • Figure 63: Attitudes towards mobile phones – Functional versus emotional, October 2014
                                                                                                                                                                      • High income groups are more driven by the status factor
                                                                                                                                                                        • Figure 64: Attitudes towards mobile phones – Functional versus emotional, by income, October 2014
                                                                                                                                                                      • Consumers may stay with your brand, but it doesn’t mean they haven’t thought about alternatives
                                                                                                                                                                        • Figure 65: Attitudes towards mobile phones – Brand importance, October 2014
                                                                                                                                                                      • Collaboration with online retailers is a must given the purchasing potential on this channel
                                                                                                                                                                        • Figure 66: Attitudes towards mobile phones – Channel, October 2014
                                                                                                                                                                        • Figure 67: Attitudes towards mobile phones – Channel, by gender and age, October 2014
                                                                                                                                                                      • One-hand hold phones are being sacrificed for large screen
                                                                                                                                                                        • Figure 68: Attitudes towards mobile phones – Size, October 2014
                                                                                                                                                                        • Figure 69: Attitudes towards mobile phones – Size, by gender and age, October 2014
                                                                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                                                                        • Figure 70: Mobile phone volume sales, China, 2009-19
                                                                                                                                                                    • Appendix – The Consumer – Mobile Phone Ownership

                                                                                                                                                                        • Figure 71: Mobile phone ownership, October 2014
                                                                                                                                                                        • Figure 72: Most popular mobile phone ownership, by demographics, October 2014
                                                                                                                                                                        • Figure 73: Next most popular mobile phone ownership, by demographics, October 2014
                                                                                                                                                                    • Appendix – The Consumer – Brands of Mobile Phone Owned

                                                                                                                                                                        • Figure 74: Brand of smartphones, October 2014
                                                                                                                                                                        • Figure 75: Most popular brand of smartphones, by demographics, October 2014
                                                                                                                                                                        • Figure 76: Next most popular brand of smartphones, by demographics, October 2014
                                                                                                                                                                        • Figure 77: Other brand of smartphones, by demographics, October 2014
                                                                                                                                                                    • Appendix – The Consumer – Price Range of Mobile Phone Owned

                                                                                                                                                                        • Figure 78: Price of smartphones, October 2014
                                                                                                                                                                        • Figure 79: Price of smartphones, by demographics, October 2014
                                                                                                                                                                        • Figure 80: Price of smartphones, by demographics, October 2014
                                                                                                                                                                        • Figure 81: Price of smartphones, by demographics, October 2014 (continued)
                                                                                                                                                                    • Appendix – The Consumer – Screen Size of Mobile Phone Owned

                                                                                                                                                                        • Figure 82: Screen size of smartphones, October 2014
                                                                                                                                                                        • Figure 83: Screen size of smartphones, by demographics, October 2014
                                                                                                                                                                        • Figure 84: Screen size of smartphones, by demographics, October 2014 (continued)
                                                                                                                                                                    • Appendix – The Consumer – Information Sources of Smartphone Purchase

                                                                                                                                                                        • Figure 85: Information sources of smartphone purchase, October 2014
                                                                                                                                                                        • Figure 86: Most popular information sources of smartphone purchase, by demographics, October 2014
                                                                                                                                                                        • Figure 87: Next most popular information sources of smartphone purchase, by demographics, October 2014
                                                                                                                                                                        • Figure 88: Other information sources of smartphone purchase, by demographics, October 2014
                                                                                                                                                                    • Appendix – The Consumer – Importance of Brands in the Purchasing Process

                                                                                                                                                                        • Figure 89: Importance of brands in the purchasing process, October 2014
                                                                                                                                                                        • Figure 90: Importance of brands in the purchasing process – The brand of the handset manufacturer, by demographics, October 2014
                                                                                                                                                                        • Figure 91: Importance of brands in the purchasing process – The brand of the operating system on the phone, by demographics, October 2014
                                                                                                                                                                        • Figure 92: Importance of brands in the purchasing process – The model of the handset, by demographics, October 2014
                                                                                                                                                                        • Figure 93: Importance of brands in the purchasing process – The brand of the mobile network operator, by demographics, October 2014
                                                                                                                                                                    • Appendix – The Consumer – Future Purchase Intentions of Smartphones

                                                                                                                                                                        • Figure 94: Future purchase intentions of smartphones, October 2014
                                                                                                                                                                        • Figure 95: Future purchase intentions of smartphones, by demographics, October 2014
                                                                                                                                                                        • Figure 96: Future purchase intentions of smartphones, by brand, October 2014
                                                                                                                                                                        • Figure 97: Most popular future purchase intentions of smartphones, by brand, by demographics, October 2014
                                                                                                                                                                        • Figure 98: Next most popular future purchase intentions of smartphones, by brand, by demographics, October 2014
                                                                                                                                                                        • Figure 99: Other future purchase intentions of smartphones, by brand, by demographics, October 2014
                                                                                                                                                                        • Figure 100: Future purchase intentions of smartphones, by price, October 2014
                                                                                                                                                                        • Figure 101: Future purchase intentions of smartphones, by price, by demographics, October 2014
                                                                                                                                                                        • Figure 102: Future purchase intentions of smartphones, by price, by demographics, October 2014 (continued)
                                                                                                                                                                        • Figure 103: Future purchase intentions of smartphones, by price, by demographics, October 2014 (continued)
                                                                                                                                                                        • Figure 104: Future purchase intentions of smartphones, by screen size, October 2014
                                                                                                                                                                        • Figure 105: Future purchase intentions of smartphones, by screen size, by demographics, October 2014
                                                                                                                                                                        • Figure 106: Future purchase intentions of smartphones, by screen size, by demographics, October 2014 (continued)
                                                                                                                                                                    • Appendix – The Consumer – Attitudes towards Mobile Phones

                                                                                                                                                                        • Figure 107: Attitudes towards mobile phones, October 2014
                                                                                                                                                                        • Figure 108: Attitudes towards mobile phones – International versus domestic, by demographics, October 2014
                                                                                                                                                                        • Figure 109: Attitudes towards mobile phones – Functional versus emotional, by demographics, October 2014
                                                                                                                                                                        • Figure 110: Attitudes towards mobile phones – Channel, by demographics, October 2014
                                                                                                                                                                        • Figure 111: Attitudes towards mobile phones – Brand switching, by demographics, October 2014
                                                                                                                                                                        • Figure 112: Attitudes towards mobile phones – Innovation, by demographics, October 2014
                                                                                                                                                                        • Figure 113: Attitudes towards mobile phones – Size, by demographics, October 2014
                                                                                                                                                                    • Further Analysis – Consumer Profile for Potential Upgrading Mobile Phone Buyers

                                                                                                                                                                        • Figure 114: Demographic profile of people who have a personal income of RMB4,999 or below but would like to buy a phone worth RMB4,000 or above, October 2014
                                                                                                                                                                    • Further Analysis – Segmentation by Screen Size Preference

                                                                                                                                                                        • Figure 115: Demographic profile of smartphone user groups based on screen size, October 2014

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                                                                                                                                                                    Mobile Phones - China - January 2015

                                                                                                                                                                    £3,170.69 (Excl.Tax)