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Chinese smartphone makers racing for 5G early adopters

5G phones are predicted to hit over 100 million shipments by the end of 2020.

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Chinese smartphone maker Realme, a novice company that spun out of larger mobile communication company Oppo, has announced on Monday that it will only launch 5G-enabled handsets in China from 2020, adding itself to a large list of local companies, including Huawei, Xiaomi, Vivo, and ZTE, which have all taken actions to grab a slice of the country’s red-hot 5G smartphone market.

In October, 2.94 million 5G-powered smartphones were shipped in China, posting a staggering 400% month-on-month increase, according to a report released by the China Academy of Information and Communications Technology (CAICT), KrASIA wrote. While continuous slowdown clouds the country’s total mobile phone sales, 5G phones are predicted to hit 100 million shipments by the end of 2020.

China’s three largest telcos are also investing big money on 5G. In 2019 alone, Chinese telcos are expected to spend RMB 34.2 billion (USD 4.95 billion) on 5G-related infrastructure, and their total spending on this technology is estimated to hit RMB 1.5 trillion (USD 217 billion) between 2020 and 2025, according to a report by Ernst & Young.

With quite different approaches, top smartphone manufacturers are taking steps to ensure their position in the new market playground.

Underpinned by its homegrown Kirin series 5G processor, Huawei is one of the strongest first-movers in the field.

Earlier in July, Huawei unveiled its Mate 20 X, the first 5G model in the market that supports both standalone (SA) and non-standalone (NSA) network (NSA network is considered to be a transitional solution between 4G and 5G, and most available 5G phones now only support NSA). Soon after, the Shenzhen-based tech giant has beefed up its portfolio of 5G-enabled gadgets by releasing the Mate 30 series and foldable Mate X. Besides, Huawei’s sub-brand Honor also presented its 5G offering V30, with a temptingly low price starting from RMB 3,299 (USD 468) on November 26.

Xiaomi, the budget gadget maker who also has been focusing on Internet of Things (IoT) products, unveiled the Mi 9 Pro 5G, carried with Qualcomm chipsets in September, also among the cheapest 5G mobile phones currently available, starting from RMB 3,699. The company has been undergoing a drop in its smartphone sales in China and announced a high-level management reshuffle in efforts to boost its 5G business, KrASIA reported. Xiaomi’s founder Lei Jun also announced that at least ten Xiaomi 5G-compatible smartphone models will debut in 2020.

In terms of the current market share, Vivo is the leader. The smartphone vendor grabbed a 54.3% market share in China’s newborn 5G smartphone market in the third quarter of 2019, according to industry data provider IDC. Huawei and Xiaomi followed with slices of 9.5% and 4.6%, respectively. Vivo’s 5G models have adopted its all-time low price strategy. Its iQOO Pro 5G was the first 5G phone model with a price under RMB 4,000 (USD 567) when it came out in August.

Additionally, Vivo’s sister brand Oppo plans to release its first 5G Qualcomm-powered smartphone dual-mode mobile phone in December.

International companies are also fighting for China’s 5G market.

Korean tech heavyweight Samsung expects to retake its share in the Chinese market as soon as possible, on the back of its 5G-integrated processor Exynos 980 and the upcoming S11 models. Samsung’s market share fell drastically in recent years and reportedly is planning a massive layoff in China, KrASIA reported.

Cupertino-headquartered Apple is also reportedly mobilizing suppliers to produce its first-ever 5G iPhones next year, as reported by the Nikkei Asian Review.

Industry watchers believe that 2020 will be a critical year for a 5G upgrade. All three Chinese state-owned carriers have rolled out data packages to accelerate the commercialization of the technology and more than 130,000 5G base stations will be installed by the end of this year.