Smartphone brands in China are expected to enter a new phase of consolidation in 2016 as some vendors have sold their sub-brands or introduced new strategic partners, according to industry sources.
Smartphone brands in China were active previously setting up sub-brands as a means to penetrate into different segments to ramp up overall market share. Such sub-brands include Huawei's Honor, ZTE's Nubia, K-Touch's Nibiru, Gionee's INUI, Lenovo's ZUK and Coolpad's Great God and ivvi.
However, with the exception of Honor, these sub brands have not been successfully, the sources indicated.
Sales of Nubia-brand series products have accounted for one-fourth of those sold by parent company ZTE. As a result, ZTE sold recently a 33.33% stake of Nubia to China-based retail giant Suning for CNY1.93 billion (US$293.44 million).
Coolpad's separation into three brands to focus sales in telecom, retail and online segments, respectively, has turned out to be a mishap for the vendor, forcing it to bring in new investors including Qihoo 360 and LeTV.
Coolpad has also been forced to transfer the management of Great God brand to Qiku, a subsidiary of Qihoo 360. Furthermore, the possibility is also high for Coolpad to hand over its assets and management to LeTV, indicated the sources.
It will be also difficult for ZUK, a joint venture between Lenovo and Baidu, to make a major breakthrough in the smartphone space as it has been too late for it to enter the already crowded market, commented the sources.
Meanwhile, IUNI of Gionee and Nibiru of K-Touch will be also ill-fated as the two secondary brands have failed to ramp up overall shipments of their parent companies.
OnePlus, a secondary brand of Oppo, reportedly is to lay off some of its employees and also likely to be incorporated into the parent company as sales of its smartphones in overseas markets have been lower than expected, indicated the sources.
TCL, which markets TCL and Alcatel brand smartphones, bought Palm brand in early 2015, but so far it has yet to release any Palm brand devices, attesting to the difficulty running a multi-brand strategy.
