High competitive market

Several media including CNBC reported that Geely will launch a new company that will make premium smartphones.

It seems that Geely will enter a highly competitive sector. It is no longer growing in China and is dominated by a couple of players including Apple, Samsung and Xiaomi. In fact, Apple dominates the market for phones priced over $400, with a market share of 57%, according to Counterpoint Research. What’s more, Samsung follows behind with a 17% share.

Geely becomes the first established automotive manufacturer to commit to selling smartphones. In fact, the company representative mentions in the following. “There is a close connection in technologies within intelligent vehicle cockpits and smartphone technologies. The major trend in the coming future is to create user ecosystems across borders and provide users with a more convenient, smarter and seamlessly connected multi-screen experience.”

Who is Geely?

Geely Auto Group is a leading automobile manufacturer and its head office is in Hangzhou, China. Founders founded the company in 1997 as a subsidiary of Zhejiang Geely Holding Group. The group manages several leading brands including Geely Auto, Lynk & Co, Proton Cars, and Geometry.

The group employs more than 50,000 people and operates 12 plants. Also, the Chinese automotive giant has five global R&D centers in Hangzhou, Ningbo, Gothenburg, Coventry and Frankfurt. What’s more, the Group boasts five global design studios in Shanghai, Gothenburg, Barcelona, California and Coventry with over 1000 members of staff in total.

In 2020, the brands under Geely Auto Group management sold over 1.43 million units. As a result, the company kept its position as the best-selling Chinese brand for four consecutive years.

Smartphones by automotive makers

This news seems totally new for our media. This is because we have already reported that several smartphone manufacturers or their suppliers try to enter the EV market. For example, Xiaomi, the Chinese technology giant, invest in $10bn over ten years for the production of EVs. Therefore, we think it is more reasonable that smartphone manufacturers enter the EV market than the fact that automotive makers do the smartphone market.

The smartphone market has already been matured and the number of shipment does not increase a lot. As a result, LG made a decision to withdraw the market. Other European and Japanese makers had already withdrawn. On the other hand, the EV market is growing rapidly recent years. In addition, this trend will continue within few decades probably. Of course, Geely also wants to enter the market and tries to gain its share.

Therefore, we think this decision shows how the competition in the EV market is intense. That is why Geely wants to differentiate itself from competitors by combining user ecosystems across borders. As a result, they expect that the combination can provide users with a more convenient, smarter and seamlessly connected multi-screen experience.

Will other automotive manufacturers follow this trend? Of course, we still do not know, but it can be possible for other Chinese car makers follow it.