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How China Became a Leader in Consumer Electronics

China is now a significant market opportunity for new connected consumer electronic devices, as more people adopt mobile internet access. Local Chinese vendors are lining up to deliver smartphones and media tablets specifically targeted at the needs and wants of this growing user population.

Coolpad, Lenovo, and Xiaomi have something special in common -- all were able to beat Apple in the battle for China’s second quarter (Q2) 2013 smartphone market leadership.

While Samsung retained its leading smartphone market share of 17 percent, Lenovo took second place with 13 percent, Coolpad was third with 10 percent, and Xiaomi edged out Apple with 6.5 percent share, according to the latest market study by ABI Research.

"Even though these OEMs are only selling into the Chinese market, the size of the market has allowed them to achieve shipment volumes that place these OEMs in the top 12 globally," says Michael Morgan, senior analyst at ABI Research.

It is not hard to imagine these OEMs as global competitors within the next 2 years. Because China is the largest smartphone market, accounting for 28 percent of all smartphone shipments in Q2, success in China carries an increasingly global significance.

As an example, consider the implications of this recent local growth from a global perspective. These three rising stars accounted for 11.1 percent of all worldwide shipments in the quarter.

The sheer size of the Chinese market has made it one of the most coveted for tier one OEMs looking to expand share and secure a future as smartphone market growth becomes increasingly dependent on emerging and low-cost markets.

As Apple continues to struggle with delivering viable low-cost products, Chinese OEMs continue to press their advantage of being able to design and ship competitive devices at lower price points.

ABI believes that China has proven to be an excellent environment for local OEMs to test and prove their product designs and business models. In time it will be interesting to see if their unique home-field advantages can be leveraged beyond the Chinese market.

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