Simon Baker (Program Director)

Nomi, Allview, Fly, Archos — brands that few people in Europe would know as phones.

They belong to a class of minor phone names that were once big, but are now being swept away.

The names above are all local — they all still exist, though some only just – and were often opportunistic initiatives of distributors that could see there was a gap in the market, and being distributors, were in a very good position to supply a local market. They turned to a burgeoning industry of small assembly plants in Shenzhen to the north of Hong Kong which quickly came out with catalogues of readymade phones, all there bar the brand name, ready for quick customizing and turnaround and Asian service thank you very much.

That opportunity blossomed a decade ago as the big phone makers abandoned feature phones. The brands that emerged then made moves into Android smartphones themselves.

Smartphone Camera Arms Race

Many did well, but in the last few years they have ebbed as consumers’ expectations of what they want from their phones has increased. In the arms race in camera technology the Shenzhen assemblers could not keep pace with the big players, some with tie ups to big names in cameras, and they also had difficulties in keeping up in 4G.

With 5G, they will be pretty much out of the picture in Shenzhen, where a breakneck pace of change is seeing corporate campuses replace the grungy production plants of the past.

What is left? In Eastern Europe there are several local brand survivors that are holding their own now they have retreated from smartphones back to their feature phone roots. Nomi in the Ukraine, says our local analyst Natalia Milko, is a good example. It has held as much as one-third of the local feature phones market and still has one sixth. It is also spreading its brand into TVs, tablets, and other electronics products and accessories. Allview in Romania, which once had as much as a fifth of the local Android market, comments Florina Baia in our Bucharest office, is also holding out in cheaper feature phones even as its smartphone sales dwindle. It too is refocusing on TVs and other electronics. An important retail electronics chain across much of Russia, DNS, still sells feature phones after pulling back in smartphones, adds IDC Russia mobile phone analyst Olga Agapova.

Fewer Local Brands Across Western Europe

In Western Europe, there have been fewer local national brands, but a couple of big names in smartphones, both of which came out of France. Wiko rose to hold 4% of the European Android smartphone market at the end of 2015. It is now down to a fifth of that. Archos, a smaller France-based brand, is dropping out of the picture.

In a few places across EMEA, the market for local brands is still strong, but that is almost always because of some “bending” of market forces. Algeria has one of the biggest “local kings”, Condor, thanks to a government very keen to limit importers using too much foreign currency and a bias towards helping local assembly through tax breaks on components.

Condor has grown big enough to become an exporter into elsewhere in Africa, but it is increasingly challenged by big Chinese names like Africa-focused Transsion. The fall from grace as a “local king” can be rapid: Q-Mobile in Pakistan, which was once about the most dominant local player anywhere, with more than half the national phone market at its peak, failed spectacularly from 2018 with investigations into its import arrangements.

End of Operator Brands?

Along with the local brands, operator brands are also disappearing across Europe. Though they depended less on Shenzhen production shops and often contracted from well-known brand manufacturers, they focused on the entry smartphone segment and have declined with it. A lot of European operators never offered their own phones or stepped away from them several years ago. Of the ones that stayed in the business, Vodafone has recently stopped shipping them and Orange is having a rethink on its model range after slowing sales, though it believes an own brand has a future in the Middle East and Africa, as do some other operators there.

The Western European market does not hold many niches where smaller brands can hold out, says Western European research manager Marta Pinto. A few supermarket retailers maintain their own brands, including Auchan with Qilive, but with generally modest sales. There is much more scope, she believes, in focusing on particular products such as ruggedised devices or senior-friendly functionality.

One local brand that is doing just that is the Ukrainian Sigma Mobile, whose seniors and ruggedised phone line-up is currently selling well.

Eastern European markets are more numerous and eclectic and offer more nooks and crannies, and the more general approach of a retail brand selling phones alongside other electronics products, as pursued by Nomi and Allview and DNS, may survive.

Small Scale Solutions Mirror Global Ones

Some of the biggest phone players are taking a multiproduct approach. Xiaomi’s product range now extends to electric scooters and to so many products that it needs its own stores to bring them all together. TCL is moving its branding to its company name and away from Alcatel to align it with its televisions.

So sometimes the right answer for a brand can be the same both at a micro and macro level.

For lots of people, the falling number of brands is just one of the ways in which mobile phones have become so much of a muchness; most of them look the same, and there aren’t many different let alone eccentric brands out there anymore. There are a few new unusual names, such as Pocophone and IQOO, but on closer inspection these two turn out to be offshoots of established brands (respectively Xiaomi and BBK).

In a time of manufacturing consolidation, it is the big players themselves that see the need to inject a bit more character and whimsy into the business.

 

If you want to learn more about this topic or have any questions, please contact Simon Baker, or head over to https://uk.idc.com and drop your details in the form on the top right.

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