China over the last decade has experienced high levels of economic growth and consequently there has been an explosion of growth in the Smartphone mobile Industry with China becoming the largest smartphone mobile market in the world and recently the largest producer of smartphones, producing 224 million smartphone units in 2012. This essay aims to examine how China has become an important player in the Smartphone Market. In the context of this essay it is important to define innovation and globalisation as these two words have helped to shape the Chinese smartphone industry, turning China into a serious competitive player in this growing industry. Innovation is defined as “the process of making changes to something established by introducing something new that adds value to customers and contributes to the knowledge store of the organization” Whilst Globalisation in the context of innovation is defined as “the increased international integration of economic activities and the raising importance of knowledge in economic processes”. It is clear that Chinese companies have been able to develop an established idea such as the Smartphone and make themselves leaders in the production of the hardware. The smartphone industry has become an important engine of growth for the economy, with the smartphone users in China set to double by the end of 2013 to 500million. Leading Chinese Mobile Phone makers such as ZTE and Huawei are making inroads into the mature Western markets at the same time cementing their position as some of the largest players in the Chinese Smartphone market, occupying three out of the top five slots for Smartphone manufacturers. It is clear Chinese Smartphone makers are able to produce their phones at a much cheaper cost than foreign companies, with the cost of processor chips falling greatly in price helping to reduce production costs. This essay examines how China has become a competitive and innovative global player in Smartphone production, examines the current growth trends and future trends of the Smartphone market in China, and how it is slowly evolving into a mature market with the adoption of more Smartphones amongst a greater proportion of the general population. The role of foreign investment and technology in developing the Smartphone Industry in China is examined, with large companies such as Samsung setting up Research and Development (R&D) centres in China, to help facilitate innovation in the sector. Finally I will discuss the possible advantages and disadvantages of China becoming more competitive and innovative within the Smartphone industry.
Since 2000 the Chinese Mobile Phone market has enjoyed phenomenal levels of growth, from having a customer base in 2000 of 95.22 million to 1.06Billion in 2012. Out of this figure currently only 330million subscribers use a Smartphone showing massive growth potential for companies operating in the market. This gives China a 26.5% share of the World Smartphone market. This figure should grow to 500million by the end of 2013 as more subscribers are persuaded to sign onto 3G services of which only 150million do so and the number of Chinese who access the internet via their phones also increases. Currently the figure stands at 420million for 2012 representing around 74.5% of the internet population. In the last twelve years Chinese Smartphone manufacturers have become the leaders in the Volume of smartphone units sold. The Chinese Market overtook the USA as the largest by Volume sold in 2011. The vast majority of this growth has occurred in China. A good example of Chinese company that has emerged as a winner has been Lenovo. Although it’s known for its manufacturing of Personal computers, it has launched a mobile phone division and found notable success in China becoming the second largest player in the Chinese Smartphone Market. By launching a variety of Models ranging in price, moving away from the normal model followed by most Chinese...
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