The certainty of unforeseeable growth: The rise of ZTE and Huawei

  • According to rumors, Huawei shipped 30 million phones last year. The target for this year is 60 million of which 15 will be smartphones.
  • According to IDC ZTE is now the fourth largest mobile phone vendor with 51.8 million units in 2010. Assuming 70% for 2011, ZTE could ship 88 million units in 2011, 25 million of which would be smartphones.
  • These data imply that ZTE and Huawei will ship nearly 150 million phones in 2011 of which 40 million would be smartphones.
  • That would imply approximately 7% share of the global smartphone market for these two companies together.

What is remarkable about this is that the market share of these vendors was zero in the previous year.  It’s hard to get comfortable with this market entry. The challenge for forecasters and analysts is that there is little history to draw upon. How will the entrants affect the rivalry between firms? Will the distribution be overlapping with incumbents or will the entrants be competing with non-consumption?

The only thing we can be certain of is that the adoption of smartphones is increasing at a faster rate than is foreseeable.