TrendForce：Desire to Purchase iPhone Decreases in Chinese Market; Lenovo and Xiaomi Potential Threat to Samsung

According to a market survey on the Chinese smartphone market in the third quarter of 2012, conducted by global research firm TrendForce and Chinese consumer research company AVANTI Research partners, Chinese smartphone brands are experiencing rapid growth as a result of cost and software advantages. Global shipment volume is climbing every year, to the point that these domestic makers are posing a threat to foreign brands in the Chinese market. TrendForce forecasts Chinese smartphone brands will account for 34% of global smartphone shipments in 2013, up from 28% in 2012.

In the category of consumers’ desire to purchase, Chinese smartphone brand Xiaomi, whose products demonstrate a high price-performance ratio, is quickly catching up to Samsung. The Chinese smartphone market has shown massive potential, and Lenovo has seen impressive sales results thus far. Although the manufacturer places seventh in this category, with only 2%, Lenovo continues to see strong smartphone shipments, and may pose a threat to Samsung’s position in the Chinese smartphone market in 2013.

Samsung and Apple Battle for Brand Recognition, Desire to Purchase iPhone Wanes

As in other global markets, Apple and Samsung are at the top when it comes to brand recognition in the Chinese smartphone market. Nokia, whose brand image was strong last year, failed to take advantage of their lead and have suffered losses in both the brand recognition and consumers’ desire to purchase categories.

As the chart indicates, Apple’s brand recognition has improved rapidly in the past year, increasing from 35.2% to 80.4%, with the strongest growth occurring in the second quarter of 2012. However, desire to purchase the iPhone has decreased by 12% since the second quarter. TrendForce believes that due to the iPhone’s relatively high retail price and inability to work with China’s largest telecom, its strong brand image has been unable to stimulate purchase desire.

Samsung, whose brand recognition was steady at around 60% last year, close behind Apple, has seen an increase to 74.1% due to the release of many new models and heavy advertising. Although Samsung’s brand image remains weaker than the iPhone’s, Samsung has already become the most used smartphone brand in China, beating Nokia’s 17.1% with 20.7%; purchase desire has increased by 5.6% compared to the second quarter.

Xiaomi Brand Shows Strong Market Potential, Lenovo Catching Up to Samsung with Channel Advantage

Chinese brands including Xiaomi, Huawei, Lenovo and ZTE have made it into the top ten in terms of brand recognition. Xiaomi in particular has garnered widespread acceptance due to its social networking management and understanding of consumer expectations. The company’s successful marketing has caused consumer awareness towards its brand to jump from almost nothing to 14.4%, showing great market potential. The consumer survey indicates, since the introduction of the first Xiaomi smartphone, Chinese consumers’ purchase desire has surged due to the device’s favorable price-performance ratio and the suitability of the MIUI operating system to Chinese users. As such, in the third quarter of 2012, Xiaomi was China’s only domestic brand to surpass Nokia and HTC in terms of purchase desire, quickly catching up to Apple and Samsung.

As for Lenovo, who placed seventh in terms of brand recognition and purchase desire, the maker’s actual sales figures in the Chinese smartphone market were second only to Samsung, surpassing all other domestic brands. TrendForce believes Lenovo’s high sales volume is attributable to cooperation with China’s three major telecoms as well as Lenovo’s numerous sales channels. With sales on the Internet, in brick and mortar stores, and through China’s major telecoms, the maker has a strong retail network. Add to that comprehensive after sales services, and Lenovo’s high sales figure is unsurprising; Samsung may very well be knocked off the sales throne next year.

Although Xiaomi surpasses Lenovo in terms of both brand recognition and purchase desire, the former’s sales volume is far lower than the latter’s. According to TrendForce research, Xiaomi is in tenth place for smartphone shipment volume. TrendForce believes the bottleneck for Xiaomi lies in its limited capacity and sales channels. The maker currently has an M1, M1S, and the newest M2 model available, but consumers can only purchase via Xiaomi’s website or through a contract with telecoms. Xiaomi’s few sales channels and long-term supply shortage may be the reason the brand’s strong performance in the purchase desire category has not been reflected in its shipment figures.

Smartphone Brand Recognition Performance, 2Q11 – 3Q12
Source：AVANTI Research Partners

Next Smartphone Brand Purchase (Purchase Desire), 1Q12 – 3Q12
Source：AVANTI Research Partners

Most Commonly Used Smartphone Brand, 1Q12 – 3Q12
Source：AVANTI Research Partners
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AVANTI Research Partners is a new platform and research firm that provides professional consultation based on the results of our market research analysis. Our team is led by a PhD graduate from Columbia University who has over 8 years of e-commerce experience (B-B, B-C, C-C), more than 15 years market research experience, and is familiar with all Internet platform technologies. Providing innovative research on the consumer market and fulfilling the research needs of high-end clients, AVANTI Research Partners’ services cover products such as traditional consumer, service industry, and high technology products. Established in 2007 in Shanghai, our headquarters are currently based in Shanghai, with other locations and cooperative partners in China and Taiwan.

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