Chinese Phone-Makers Eye European Flagship Sales

Chipset choice key to brands’ expansion in the West

Following Huawei’s loss of access to US technologies and resulting decline in market share, the global smartphone market is being recalibrated. This has presented an enormous opportunity for Chinese brands to establish stronger reputations in the West, gaining share in various price tiers of the European smartphone market.

MWC 2022 was an embodiment of this opportunity, with the cohort of Chinese brands lavishly displaying innovations and trying to impress the European market. One notable theme here was Qualcomm’s Snapdragon 8 Gen 1 chipset, which featured in almost all new flagship smartphones launched in Barcelona. The show reaffirmed Qualcomm’s leading position in the flagship space, adding to the number of devices powered by its Snapdragon 8 Gen 1 chipset, now totalling 24 since the platform’s launch in late November 2021.

Competition between flagship system-on-chips is set to hot up in 2022, with a renewed emphasis from MediaTek as it vies for Qualcomm’s dominance in the premium market. With the first slew of devices launched at MWC all adopting the Snapdragon 8 Gen 1, MediaTek hasn’t produced much of a wave of adoption for its flagship platform, despite its Dimensity 9000 boasting similarly impressive specifications.

The draw to Qualcomm chipsets — for established and challenger brands — was commented on by Cristiano Amon during Qualcomm’s MWC press event. The CEO discussed his company’s fruitful efforts to make Snapdragon processors a consumer preference by tying the Snapdragon brand directly into marketing of flagship smartphones — similar to the successful Intel Inside campaign that made the chipmaker a household name in the 90s. MediaTek, however, has a way to go to raise brand awareness, and even more work to do for its brand to be associated with flagship specifications.

Extending its flagship leadership, Qualcomm provides not only the core system-on-chips for smartphone designs but also a complete radio frequency (RF) front-end solution to smartphone-makers, which helps to remove risks and accelerate RF design. This has made the choice of Snapdragon beneficial for marketing as well as for reducing development costs.

A major theme of MWC that’s been seen to benefit Qualcomm is the growing competition from Chinese manufacturers in the European flagship smartphone space. Brands such as Oppo, Xiaomi and Realme are looking to challenge Samsung and Apple, and are seeking recognition as innovative leaders, rather than low-cost followers. Adopting a recognized flagship system-on-chip platform is one way to gain credibility, and the Snapdragon 8 Gen 1 has offered a springboard for each manufacturer to add their flavour of innovation.

A good example came from Oppo and the launch of its Find X5 Pro flagship phone, which sports the Snapdragon 8 Gen 1 alongside its in-house-designed imaging neural processing unit, called MariSilicon X and showcased at its Inno Day in December 2021.

The Find X5 Pro goes head-to-head with Samsung’s latest Galaxy S22 smartphones, offering similar claims to improved night-time photography and video capture. Oppo has also announced a MediaTek Dimensity 9000 version of its Find X5, which will be launched for the Chinese market. However, this model lacks Oppo’s MariSilicon X, reserved for its Snapdragon-powered Pro devices. This only strengthens the premium status recognized with the use of Qualcomm’s high-end processors.

Realme, typically known for its low-cost smartphones, is another Chinese brand with ambitious sights on the European flagship market. It outlined its plans to enter the premium smartphone space in Europe at MWC, launching its GT2 Pro flagship during the exhibition (see Insight Report: MWC 2022: Smartphones). Qualcomm joined the launch event, highlighting the importance of the new flagship partnership and its appreciation that the new smartphone had opted for a Snapdragon chip. With the GT2 Pro being the cheapest Snapdragon 8 Gen 1 smartphone launched at the show, priced at €649, we believe Realme saw more value in teaming up with Qualcomm than in gaining a larger margin through the inclusion of MediaTek’s lower-priced Dimensity 9000 platform.

Another Chinese player, Honor, has also adopted the Snapdragon 8 Gen 1 for its newly released Honor Magic4 Pro. Although the manufacturer has used other flagship Snapdragon chips for previous releases, the move solidifies this relationship after Honor moved from Huawei’s Kirin chipsets — an expansion of the addressable market for third-party chipmakers that Qualcomm has successfully snagged.

The flagship phone launches at MWC are just some examples of Qualcomm’s continued momentum in achieving design partnerships, especially with Chinese phone-makers. The chip designer’s success so far in 2022, coupled with the alleviating economic pressures of the pandemic and strengthening component supply throughout the year, are set to aid a strong performance of Snapdragon-based smartphones. And with millimetre-wave 5G smartphones set to become more relevant in markets beyond the US, an area Qualcomm leads in system-on-chip design, it will be well-placed to secure further wins despite MediaTek’s rise in mid-to-high tiers.