Qualcomm is setting up a new business unit that will help Chinese smartphone makers with getting worldwide exposure.
Huawei and Xiaomi are getting a fair amount of attention in the Americas and Europe. Innovative new offerings have encouraged people to forgo mainstream brands like LG, HTC, Sony and Samsung.
Qualcomm is betting that it could find companies who have a compelling product, but lacks the ability to sell it overseas. Jeff Lorbeck, senior vice president of Qualcomm China, stated that an office was set up in Shenzhen in early 2015 which will provide Chinese smartphone makers the ability to “connect with overseas markets:”
Qualcomm derives half its revenue from China and this is a market where having an office and local staff is critical. There are a number of notable phone companies and start-ups that could benefit from the global distribution network. But, Qualcomm is facing exterior forces that are maneuvering against them.
Qualcomm, which is the biggest maker of chips for smartphones, gets about 2/3 of its profits from licensing its wireless patents. That business model was the subject of a 15-month investigation by Chinese antitrust authorities, which analysts believe was prompted by several major Chinese smartphone makers complaining that Qualcomm was pricing its technology unfairly. This resulted in a landmark $975 million dollar fine and prompted Beijing to curb their reliance on foreign firms.
I think the only way Chinese phones can make an impact in the wider global market is if they have something to difference themselves from the competition. The OnePlus One is garnering a ton of media attention because it they feature an OS done by the CyanogenMod team. Firefox, Tizen and Sailfish are also going to be more popular in the coming years, so there is room to impact the market in an meaningful way and build brand identity.