Brendan James: takeaways from the east, February 2020

Takeaways from the east: how to thrive edition

When, in the course of certain technological events, the market takes a downturn, and when hopes of a quick rebound dissolve only for the malaise to become the status quo, the need to find a silver lining takes center stage. In discussing mobile phone shipments outright, there’s nothing more that can be said about the sad state of affairs that is plaguing our industry. Takeaways From The East is not one to tell you traders what you already know and feel, nor to beat the drums of gloom and doom! It’s time to look at interesting choices for opportunity that could point to new places to rake in serious revenue in the short term while we wait for the clouds to lift.

While we wait for the newest reports of shipments for the fourth quarter of 2019, let’s quickly review the third quarter. Smartphone shipments actually increased worldwide, according to IDC. Maybe it’s only 0.8%, but we all need a win and we’ll take one where we can get it! The free-for-all in India is to thank for this modest rise, as well as China’s preparations for November 11th’s Singles Day. Meanwhile, Xiaomi is still out to play while Huawei stays at home. Samsung’s Galaxy helped bolster its profile, and Apple is still shooting itself in the foot. You know, the usual. However, it’s important to look at an outlier in the crowded markets of the east. It’s a story of a manufacturer doing what they must do to survive in trying times, and coming out the other end with an exciting business strategy that could be sustainable for years to come. I’m talking, of course, about BBK Electronics.

RealMe's recent performance BBK started in 1998 in the Dongguan sector of

Guangdong, China. They are the firm behind three established smartphone brands on the market: Vivo, Oppo, and OnePlus, which all bring in respectable shares of the market each quarter. The reason this firm has become salient to talk about is because of the results its newest brand, RealMe, has garnered lately. Launched in May 2018 -- well under two years ago! -- RealMe has climbed all the way to 7th in the global smartphone shipment rankings in an extremely short time, achieving a growth of 800% year-on-year in Q3 2019.

How has RealMe managed such astounding success? For one, they have gone big on premium smartphone features such as quadruple-camera setups, rear cameras as high as 64MP, water-drop designs, and pop-up selfie functions while still keeping the price point low (<$250). They have also built their name on word-of-mouth name recognition and have shied away from large marketing campaigns. Quality and value will always get the people talking! Another factor is where the brand has made their hay. Counterpoint Research estimates that around 80% of their shipments go to India, where they rank fourth on the overall list of brands and account for 16% of the total market, and Indonesia. Together, BBK’s brands account for 20% of the global smartphone market overall per Counterpoint and, shockingly, 46% of the Indian market according to Pritesh Pawar.