Most Chinese Mobile Phone Companies Operating at a Loss

Most Chinese Mobile Phone Companies Operating at a Loss
Apr 26, 2016 By eChinacities.com

Editor's Note: Home grown mobile phone companies such as Xiaomi, Huawei, and Vivo have made impressive gains in the market over the past years with their surprisingly capable, low priced products, but the release of Apple's iPhone SE has put them back in their place. The budget brand Chinese mobile phones were taking huge chunks from the low-end of the market, and it seemed like Samsung and Apple could not do anything about it. However, the cheapish iPhone SE has stolen back the low-end market. Chinese mobile phone companies are still aggressively fighting back. This translated article reports on sales figures of 2015 and the first quarter of 2016.

There are two measures of success for a mobile phone company: sales and profits. In theory, the higher the sales numbers, the greater the profit. However, in reality, this is not always the case. In some cases, companies with high sales numbers have giant losses. Let’s look at Lenovo’s mobile division as an example.

In 2015, Lenovo ranked second only to Huawei in Chinese sales. However, in the second quarter of last year, the company’s mobile sector reported losses of $292 million (1.86 billion RMB).

Fortunately, for Lenovo’s mobile division, the Fortune 500 company has deep pockets, and mainly depends on computer sales. If Huawei had reported losses of almost 2 billion RMB, the company would not have been able to survive.

Here is a look at sales vs. profit amongst Chinese mobile phone companies:

Sales:
5) Vivo: In fifth place we have Vivo. Vivo sold over 45 million units within China in 2015. The company sold over 14 million units in the first quarter of 2016.

4) OPPO: OPPO performed slightly better than Vivo in 2015. The company sold over 60 million units in China in 2015, and is ranked fourth domestically in sales. OPPO sold over 16 million units in the first quarter of 2016, more than Xiaomi and Lenovo.

3) Lenovo: Lenovo sold over 70 million units in China in 2015, ranking third. The company sold about 16 million units in the first quarter of 2016.

2) Xiaomi: Xiaomi sold 73 million units in 2015, ranking second in China. The company sold 14.85 million units in the first quarter of 2016, which is less than both Lenovo and OPPO.

1) Huawei: The undisputed winner, Huawei sold 108 million units in 2015. This is significantly more than Lenovo and Xiaomi. Huawei sold 27 million units in the first quarter of 2016.

Net Profits:
Most mobile phone companies in China operated at a loss, or only made a small profit because the market is dominated by Apple and Samsung. We’ve collected data on the profits of domestic mobile companies through research reports and financial data.

5) Meizu: Meizhu sold 20 million units in 2015, and recorded profits of over 1 billion RMB. The company earns about 50 RMB per phone sold.

4) Xiaomi: Xiaomi sold 73 million units in 2015 and reported profits of about 5 billion RMB. Xiaomi earns about 70 RMB per phone sold. Xiaomi’s profit mostly comes from software, and they make almost nothing from hardware.

3) Vivo: Vivo’s 45 million units sold earned that company over 5 billion RMB in 2015. The company makes about 100 RMB per every phone sold. Vivo spends a shocking amount on advertising.

2) OPPO: OPPO earned over 6 billion RMB from its 60 million units sold in 2015. The company earns about 120 RMB per phone sold, and also spends a ton on advertising.

1) Huawei: Huawei sold 108 million units and earned 13 billion RMB. The company earns about 120 RMB per phone, and is clearly the most profitable Chinese mobile phone company.

Source: QQ News 

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Keywords: loss Chinese mobile phones sales profits mobile phones

2 Comments

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Englteachted

Maybe I don't understand what loss means?

Apr 26, 2016 18:26 Report Abuse

kuntmans

Article does not support the headline. Intro paragraph makes confusing statement about iphone which doesn't get backed up or elaborated in the article. Who writes and edits this stuff?

Apr 26, 2016 17:27 Report Abuse