International handset vendors align with Taiwan and China makers to take on local competition in emerging markets
International handset brand vendors will likely step up cooperation with manufacturers in Taiwan and China to compete more effectively with local vendors in emerging markets that are sourcing white-box models and selling under their own brands.
India's Micromiax, Indonesia's Nexian and i-Mobile of Thailand are some of the domestic brand vendors that have taken down global giants at home with current market share rankings at third, second and fourth, respectively, in their countries.
Their business models are sourcing handsets from white-box manufacturers to target the entry-level segment as well as niche opportunities that were neglected by larger international vendors, according to sources from Taiwan-based handset makers.
The low-end strategy is certainly effective since consumers in emerging regions are typically more price sensitive. For niche markets, Micromax introduced phones with long standby time of 30 days and models with dual-card, dual-band and dual-standby functionalities. Nexian heavily promoted devices with dual-card and dual-standby features and QWERTY keypads. i-Mobile launched dual-card and dual-standby phones and models with analog-TV features.
Besides entry-level products, local vendors have rolled out smartphones and begun to expand to markets overseas, the sources said.
Most of the local vendors are also well-known distributors with strong ties within domestic sales channels and are responsible for their own after-sale services, the sources pointed out. This solves two major issues white-box critics often bring up - low brand recognition and poor service. Combined with protectionism policies and consumer preferences for home-made brands, the local players still have plenty of room for growth.
Recently, several brand vendors ranked in the top-five globally have contacted manufacturers in Taiwan and China-based handset designers to outsource new models that are comparable in both features and price to those sold by local vendors, said the sources.
Taiwan handset manufacturers have previously produced for local players in emerging markets but gradually gave up orders to white-box makers, since those clients never provided long-term order commitment and often shopped around between seven to eight contract manufactures, the sources noted.
International brand vendors, which place greater value on quality and consistent outsourcing partnerships, will likely lean towards Taiwan's handset makers, the sources said. However, low costs, multiple models with small volumes and shorter development time frames are several issues that will pose big challenges for Taiwanese manufacturers.
source
India's Micromiax, Indonesia's Nexian and i-Mobile of Thailand are some of the domestic brand vendors that have taken down global giants at home with current market share rankings at third, second and fourth, respectively, in their countries.
Their business models are sourcing handsets from white-box manufacturers to target the entry-level segment as well as niche opportunities that were neglected by larger international vendors, according to sources from Taiwan-based handset makers.
The low-end strategy is certainly effective since consumers in emerging regions are typically more price sensitive. For niche markets, Micromax introduced phones with long standby time of 30 days and models with dual-card, dual-band and dual-standby functionalities. Nexian heavily promoted devices with dual-card and dual-standby features and QWERTY keypads. i-Mobile launched dual-card and dual-standby phones and models with analog-TV features.
Besides entry-level products, local vendors have rolled out smartphones and begun to expand to markets overseas, the sources said.
Most of the local vendors are also well-known distributors with strong ties within domestic sales channels and are responsible for their own after-sale services, the sources pointed out. This solves two major issues white-box critics often bring up - low brand recognition and poor service. Combined with protectionism policies and consumer preferences for home-made brands, the local players still have plenty of room for growth.
Recently, several brand vendors ranked in the top-five globally have contacted manufacturers in Taiwan and China-based handset designers to outsource new models that are comparable in both features and price to those sold by local vendors, said the sources.
Taiwan handset manufacturers have previously produced for local players in emerging markets but gradually gave up orders to white-box makers, since those clients never provided long-term order commitment and often shopped around between seven to eight contract manufactures, the sources noted.
International brand vendors, which place greater value on quality and consistent outsourcing partnerships, will likely lean towards Taiwan's handset makers, the sources said. However, low costs, multiple models with small volumes and shorter development time frames are several issues that will pose big challenges for Taiwanese manufacturers.
source
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