HuaMiOV’s Global Dominance and 5G Strategy

People using their smartphone in hand

Although the market share of foreign brands such as Apple and Samsung has declined in China, it has not affected the domestic smartphone market. In fact, the forecast looks more and more lively for them. The so-called “Premium brands” have been losing their edge in the Chinese market, while some brands are out of the market altogether.  Consequently, the traditional players are lagging behind their modern competitors. Moreover, an aggressive marketing strategy has reaped a rich dividend for these Chinese brands and have established themselves as a credible market power much beyond China and Asian markets.

Huawei, Xiaomi, OPPO and Vivo (HuaMi OV) are the contemporary domestic top four, but the route of the global top four is different. Samsung has the advantage of its in-house component production, whereas, Apple has the advantage of its own operating system iOS and the network of assembly factories in China. On the contrary, the Chinese giant Huawei is still dependent on Qualcomm for its micro-processing chip. The remaining players like Xiaomi, OPPO and Vivo are dependent on foreign companies for the chip, operating system and other core components like display screen.

Regardless of whether Huawei can surpass Qualcomm in the field of self-developed chips or that it can be completely self-contained and self-sufficient in the operating system, at least after the recent addition of various factors inside and outside, Huawei has successfully captured the imagination across the market. The subtle changes and adaptive approach from Huawei will certainly be going to reap benefits for the company and Huawei’s biggest advantage in the next few years.

When Apple initially entered the Chinese market it did establish a strong consumer base as a result of its marketing strategy. However, the company was never able to connect with the Chinese audience on the personnel level.  Huawei, on the other hand, has been able to incline itself with traditional Chinese values and connects with Chinese people on an emotional level.

Now coming to the on-going 5G debate, which is a crucial area for smartphone manufacturers around the world. But contrary to its ostensible approach, Apple has adopted a wait and watch approach in this matter. At the same time, the Chinese manufacturer has been proactive on this issue. The question here is, why? After all, to warm up in advance, you must not give up any hot spots to ensure the heat.

First of all, Apple’s brand influence is already there, so there is no need to take advantage of the situation, also Apple’s marketing has been low-key recently, there are few celebrity endorsements and small advertisements on the street. So not chasing heat does not mean any heat at all.

Another point is that the global 5G network is still in the testing stage. And after the commercial launch, the technology is bound to pass through the typical process of bug exposure. After being exposed, you can avoid a lot of unnecessary costs by playing the waiting game.

The third point is to launch a 5G mobile phone later is to see off the early bird issues. After the initial bombardment of the 5G phones, the consumer sentiment will wear down.  Apple can then take advantage of this period and promise the perfect-flawless phone.

Therefore, although many domestic mobile companies have launched 5G mobile phones and actively promoting it, Apple is not in a hurry. If this group of domestically produced machines is successful, Apple can keep up with the rhythm effortlessly. What’s more important is that Apple can capture more audience in less marketing expense. Thus domestic brands will have to aggressively chase the marketing momentum, which in fact will act as a dress rehearsal or Apple’s marketing strategists.

Objectively speaking, Apple’s success lies in the research and development of its core technologies. Domestic mobile phones. especially OPPO and Vivo are still dependent on marketing as the mainstay. Thus as long as Qualcomm, the Android system and foreign screens continue to dominate the domestic manufacturing sector, the competitive path for domestic players will remain difficult.

To sum up, Huawei has begun to improve its position in the microprocessor chip segment.  On the other hand, Xiaomi has a slightly weaker R&D capability than Huawei, but it is consistently paying attention to the device performance and its proactive focus on marketing. While Vivo and OPPO currently have a low market share, their offline operation and the cost involved in it will become a major problem for them. All in all, if domestic top four (HuaMi OV) wish to become Global top four, they need to curtail their dependence on foreign components. Otherwise, in today’s dynamic market it will get difficult for them to remain relevant and profitable.

Blue Technology

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