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Episode 34: The Rise of China Smartphone Makers with Bryan Ma

We interview Bryan Ma, Vice President for IDC’s Asia Pacific client devices research group to have an insightful discussion on three interesting topics: (a) the rise of the chinese smartphone makers and where they are heading with a short discussion on why Xiaomi is adapting their strategy to overseas markets, (b) the tablets and PC market in Asia with specific mention of Microsoft making headways in capturing the tablets market with their surface pro,  and (c) the wearables market in Asia for both consumers and enterprise sectors.


Here are the interesting notes and links to the discussion:

  • The Story of Bryan Ma, Vice President for IDC’s Asia/Pacific Client Devices research group. (@bryanbma)
    • His current role in IDC and his research coverage includes smartphones, tablets, PCs, thin clients, wearables & displays across 16 countries in Asia Pacific.
  • Rise of Chinese smartphone makers
    • Introduction to the China smartphone makers in China: Xiaomi, Oppo, Coolpad and even the traditional vendors – Lenovo and Huawei. Even the software players such as Qihoo and Alibaba are in the fray. A few points of note here
      • The Oneplus One team is a separate company from Oppo but shares a common ownership from a larger company.
      • Lenovo launched a new higher end branded smartphone, Shenqi. Likewise, Huawei and ZTE launched their equivalents of high end smartphones, Honor and Nubia respectively.
    • Why are they operating at very low margins? Reasons: price competition within the Chinese smartphone makers.
    • Discussion on Xiaomi
      • Xiaomi’s differentiation against the rest as an integrated hardware and software platform and ability to harness a loyal base of customers.
      • What is Xiaomi’s business model? Is it (a) a consumers electronics company like Apple or Sony, (b) a company provide web services and content (and they have a money fund too) or (c) a ecommerce company? Bryan gives his viewpoint on this question.
      • The paradox for Xiaomi: How do they grow in web services and content outside China, where they don’t have the web services advantage similar to where they started. How do they leverage on their successful model with the dependency on Google stock Android in markets like India? Bryan offers an interesting hypothesis: Xiaomi is trying to get scale for their business from a component and supply chain perspective, so that it feeds back into their China business where they have advantages over the competitors in controlling their components and manufacturing costs and an interesting observation that Xiaomi is already localising test services that is crowdsourced from the Indian market.
      • When will Xiaomi expand to Hugo Barra’s home country: Brazil where it is another large market like India?
    • What are the market share of Chinese smartphone vendors? Surprises: Apple led the first quarter of 2015, and interesting observations:
      • The rise of the number 3: Huawei Ascent is doing better than expected with better reviews.
      • Lenovo leveraging on their purchase of Motorola to attack the mid and high end smartphone markets but it has not shown results yet.
    • What are the trends that you expect to see from China? Ref: China Smartphone article – Multi-brand strategies, Higher price tier competition, non-traditional channel strategies and expansion in overseas markets. The observation that the Chinese smartphone makers are avoiding the US market due to intellectual property issues.
    • Given that most of them except Xiaomi are weak in software, how are they compensating against that? Is Cyanogen the only way out for Chinese OEMs? Bryan pointed out that only OnePlus One used Cyanogen but the rest of the Chinese OEMs used Color OS provided by Oppo.
    • How are the Chinese OEMs shaping against Micromax and Samsung? Micromax has introduced a “Yu” phone (pronouned as “Why You” and noticed the pun on Xiaomi.
  • PC and tablet markets in Asia & Microsoft in Asia
    • Currently, the iPads year over year sales have declined in the last 8 quarters. However, there is no decline from the consumer side. What are the reasons why most analysts are not optimistic with the tablet market? Bryan offer a few interesting perspectives: (a) the substitution of tablets with a combination of phablets and PCs, (b) the replacement cycles for tablets are actually longer compared to smartphones.
    • How does that compare to PCs in Asia? Given that many countries in Asia are moving towards mobile first, will the demand for PCs significantly reduce?
    • How do you see the surface pros going in the Asian market?
    • Is Microsoft specifically targeting the enterprise market by bundling with software and web services? Bryan offer a few indicators in the conversation on how Microsoft is faring in the market based on the adoption of their web services such as Skype, Bing and Microsoft Office 365.
  • Wearables in consumer and enterprise
    • How are the fitness/lifestyle wearables space shaping in Asia, for example fitbit and jawbone?
    • How are the smart watches such as Samsung Gear and Apple Watch playing out in the consumer market? The problem at the moment is finding the killer app on these wearables according to Bryan.
    • Can you discuss how wearables are adopted in the enterprise?

Podcast Information:

The show is hosted by Bernard Leong (@bleongcw) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) and Linkcious (and check out their other product, Chiibi).

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By | 2015-08-10T06:06:47+00:00 May 31st, 2015|Analyse Asia Podcast, Podcast Shows|

About the Author:

A pragmatic idealist in technology, media & entrepreneurship.