New Phones: Trade tensions threaten supply chains
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02:22
Domestic phone makers have launched a host of new smart phones over the past few months. But some say that the new phones are looking more and more alike. Why is that? Mi Jiayi explains.
Can you tell which mobile is from which brand? You might say Apple, but in fact none of them is. These newly launched mobile phones are from Huawei, OPPO, VIVO, Xiaomi, Smartisan, Meizu and other Chinese brands. But they are all trying to make the screen as big as they can, just as Apple did when it launched the iPhone X last year. Why are mobile phones nowadays looking more and more alike?
ROBIN LI, SENIOR ANALYST TECHNOLOGY, MEDIA & TELECOM, IHS CHINA RESEARCH "The supply of certain parts is monopolized by major industry players. For example, most of the OLED screens in the market are made by Samsung, that includes Sumsung, iPhone and Chinese brands. The appearance of these cellphone screens is almost the same except for some tiny features, like whether there's a cut-out at the top, and the size of the cutout."
Li says full sized screens are a major trend in the industry. And since everyone is doing the same thing, the competition is fierce -- and that in turn means the companies have to have access to trade from around the world to get the best price for components. Thus what is most essensial for them, is free trade. The result, is that the recent US ban on components sales to ZTE has cast a shadow over all the Chinese phone makers.
DAI YOUJUN, DEPUTY DIRECTOR RGK GROUP "Most of the components can be made in China, but around 10 - 15 percent of them are purchased from the US. And most of those are core parts. Should domestic brands begin to suffer purchase bans from the US, they won't be able to survive."
Li from survey firm IHS says China also sells a lot of key mobile phone components to foreign makers. Foxconn for one, is one of the biggest suppliers for Apple. So the complicated trade relationship between China and US could turn out to be a danger to mobile phone makers worldwide. Li says that the implication of current trade tensions is that all mobile makers will begin looking for ways to diversify their supply chains and back them up.