Industry

China Smartphones

Can low-cost smartphone makers

make money?

Presenter: Chris Lu

Date: 5/14

1

Agenda

1)

2)

3)

4)

2012 the year of the low-cost smartphone

BOM analysis

Conclusion

Suggestion

2012 the year of the low-cost

smartphone

2012 the year of the low-cost

smartphone

1.

Strong growth in 3G

2.

3.

4.

Telecom operators and handset makers support it

All targeting strong volume growth

Low-end 2G feature phone makers are moving

5.

No big international brand presence in this segment

BOM Analysis

ZTE Blade V880

• This was ZTE’s the best selling model in 2011

• The most successful Rmb1,000 smartphone in China

in 2011

• Most components are from international component

makers that can help in handset performance

ZTE Blade V880

ZTE Blade V880

• This was ZTE’s the best selling model in 2011

• The most successful Rmb1,000 smartphone in China

in 2011

• Most components are from international component

makers that can help in handset performance

• Four major components account for nearly 40% of

the total BOM cost.

ZTE Blade V880

ZTE Blade V880

• This was ZTE’s the best selling model in 2011

• The most successful Rmb1,000 smartphone in China

in 2011

• Most components are from international component

makers that can help in handset performance

• Four major components account for nearly 40% of

the total BOM cost.

• Gross margin is less than 4%.

ZTE Blade V880

Coolpad E239

Coolpad E239

•

•

•

•

More components are from domestic component makers

User interface components use domestic vendor products

Poor touch screen sensitivity and display performance

Cheaper BOM have better unit margins

• Gross margin is around 6.6%

Coolpad E239

Alcatel OT-980

Alcatel OT-980

• Adopted a lot of feature phone design elements

• Saved on BOM costs by using no-name components for

non-core components

• The component costs of this model are relatively low

• Gross margin is...