Chip prices continue to decline Smart phone price war will start

When Apple and Andrews and Microsoft’s mobile phone companies pack thousands of yuans of smart phones into the pockets of countless Chinese people, the wave of another wave of ultra-threatening thousand-dollar smartphones is already in the second and third-tier cities and some fine details. The rapid spread of consumer groups. These smart phones with logos such as Lenovo, ZTE, and Huawei sell for less than half the price of Apple's iPhone. Coupled with the full support of the three major domestic carrier package subsidies, their market impact is remarkable.

Thousand yuan smartphone price war will start

TD Industrial Union Secretary General Yang Hao once stated clearly: “Thousand yuan TD standard intelligent machines have become the focus of operators and consumers.” Unicom has market participants said: “China Unicom plans to purchase 8 million units in the fourth quarter. Thousand Yuan smart machine."

Thousand yuan smart phones are faced with huge market demand, mobile phone manufacturers continue to drive down prices while bound to transfer cost pressures to upstream chip manufacturers and platform solutions.

Some market analysts analyzed that in the second half of 2011 to the first half of 2012, the smart phone chip platform will usher in a price war for low-end and mid-range handsets, among which major chip providers such as Qualcomm, MediaTek and Spreadtrum will face price competition.

For these voices, Wang Yanhui, secretary-general of the Mobile China Alliance, said in an interview with the “Daily Economic News”: “Thousands of Yuan machines, the current and the next one or two years will also maintain a market model where manufacturers and operators are tied together. The major manufacturers of Thousand Yuan Machines are concentrated in Lenovo, ZTE, and Huawei. It is difficult for some small plants to enjoy the resources of operators of large plants. For this reason, Qualcomm's chip list prices for ZTE and Huawei are much cheaper.

Wang Yanhui said that the current price war has not reached its climax, and it is estimated that 2012 will be even more intense. “Up to a year or two later, operators’ subsidies in this area will be terminated. At this time, open market competition will bring about real price and brand battles for 3G mobile phone chips and even smart phones. However, the 3G era is dominated by mobile phone chips. The proportion of costs is not as high as in the 2G era. The proportion of the cost of mobile phone chips in the 2G era may be 30%. In the 3G era, this proportion was only about 10%, and chip prices will continue to decline.

Qualcomm leads low-end smartphone market

At present, in the domestic market of thousand yuan machine sales, Lenovo's thousands of smart machines A60, Huawei C8650, ZTE V880 and TCL thousand yuan machine A890 and other star models have burst out of sales story. Previously, Feng Xing, vice president of Lenovo Mobile has revealed that Lenovo A60 single month sales have been close to 500,000 units.

It is reported that the leader of the domestic thousand yuan smart phone chip and solution provider is mainly Qualcomm and latecomers, MediaTek, Spreadtrum, Infocom, Broadcom and other companies, of which Qualcomm's market advantage is still very clear. Among them, Lenovo's A60's list of sub-sectors MediaTek, ZTE, Huawei has Qualcomm control most of the chip, TCL part of the smart machine is responsible for chips by Broadcom.

"In terms of the market share of low-end thousand yuan machines since the first half of this year, the sales volume of Huawei and ZTE is roughly in the range of 6 million and 4 million, while the sales volume of Lenovo's thousand yuan machines in less than six months is about 1 million units. Because ZTE and Huawei use Qualcomm chips and Lenovo uses MediaTek, its market share gap is evident, Wang Yanhui said.

A market person pointed out to the reporter of “Daily Economic News” that at present, this market still focuses on the basic monopoly of Qualcomm. MediaTek just entered the market soon. Its chip supply mainly focuses on the Lenovo A60 model, and it has insufficient supply. Happening. "I believe that Qualcomm will continue its current price reduction trend to stop MediaTek from increasing its market share. If MediaTek's successful model in the 2G era is once copied to 3G chips, it will put a lot of pressure on it."

According to a public report, Qualcomm’s senior officials had previously pointed out in an interview with the media that this year, Qualcomm’s cooperation with Chinese customers will become more and more close and cooperation will become more and more widespread. Not only ZTE and Huawei, many Chinese manufacturers' design capabilities have improved very quickly. Many vendors are already doing dual-core products, and some are even doing LTE terminals.

Previously, market participants have stated that Qualcomm's single-chip solutions and integration capabilities can transfer the functions of high-end products to low-cost solutions. This will also help operators and manufacturers quickly introduce cost-effective 1,000-yuan smartphones.

MediaTek strong challenge Qualcomm

Lu Xiangzheng, general manager of Lianfa Technology China, pointed out to the “Daily Economic News”: “The company will use the leading market share in the 2G market to actively promote wireless applications on the 2G platform, significantly reduce the wireless application threshold and drive GSM users to use it. 3G service."

For the strong challenge of MediaTek, the world’s largest 2G chip supplier, Wang Yanhui said: “The company still suffered from patent and price constraints on Qualcomm.”

The "dark current" signal of price warfare is that the market rumors that Qualcomm's MSM7225A chip will directly meet with MediaTek's MT6573 (the main low-end smartphone solution) for MediaTek. The wholesale price of this chip is RMB388-453. Around Yuan, it is a lot lower than its competitor's. However, Qualcomm's subsequent downward adjustment is about 20% lower than the latter.

According to reports from Nomura Securities, Qualcomm MSM7225A will be mass-produced in the first quarter of next year, and the price adjustment may directly lower the retail price of low-end smartphones to RMB 700 to RMB 800.

It is worth noting that, at the end of 2009, MediaTek officially obtained Qualcomm's authorization, and MediaTek and Qualcomm's WCDMA chip licensing case finally reached a deal for the two parties to achieve "MediaTek will ship a 3G chip for each shipment and Qualcomm will draw a 6% premium." The main advantage of MediaTek's future competition is its technological development experience in the 2G era. Patent restrictions can be seen as a powerful means for Qualcomm to restrict MediaTek.

Talking about its own competitive advantages and disadvantages in the price war, MediaTek said: "High integration and high stability, multimedia application experience and network platform performance will be an advantage, while the challenge is in 3G smart machines, MediaTek is only in the CPU main There is a slight lag in frequency. We don’t think of raising the frequency is a strategic consideration.”

Another cell phone chip giant Spreadtrum is also overweight middle and low end smart phones. "Currently, the company is working with domestic and foreign terminal companies and design companies such as Huawei, Xunrui and Zhanyingtong to carry out the cooperation of low-end and middle-end smart machines," said a person from Spreadtrum to the "Daily Economic News." For the price of chips, Spreadtrum will make strategic adjustments based on the development of the market and the evolution of technology, rather than blindly playing the price war. The development of smart machines is unstoppable. Spreadtrum will also expand its products into the field of smart machine chips.

The industry insiders pointed out that Spreadtrum may launch TD chips at the end of this year, and WCDMA chips are expected to be available next year. The Broadcom chip has also been supplied to TCL, ZTE and other vendors. However, it is more difficult for them to shake up Qualcomm’s position in a short period of time.

Or and Xiaomi and other brands of mobile phones

"Going to Qianyuan" seems to have become a slogan for domestic brands.

In the domestic market with a lot of mobile phone cottage and high-cost self-reliant millet and other brand machines, in the face of chip prices have fallen after biting each other, its "low price is no longer low" dilemma has attracted the attention of many analysts. “At this stage, the thousands of machines are not designed to achieve short-term high gross profit margins, but at the cost of losing profits in order to shop for the cost. Under the condition of ensuring that the basic quality is not compromised, there is almost no suspense in reducing costs substantially. After the year the operator stops the subsidy, the brand advantage is crucial, which is why the current reason why Huawei and other companies focus on pushing the brand.On the other hand, the price of low-end smart phones will go down collectively towards the current rise The impact of the production of Xiaomi's mobile phones and cottage smart machines," Wang Yanhui pointed out.