Jimmy Yi, president of OPPO Asia-Pacific
Oppo Mobile Telecommunications Corp., one of the biggest Chinese mobile phone makers operating out of Guangdong, China, is making a big push to expand in the Asia-Pacific region and compete head-on with the leading global brands.
According to German market research firm GfK, the Apac region accounted for half of global smartphone sales in 2019 and would continue to maintain its growth momentum due to favorable demographics. As a geographical market for Oppo, Apac includes countries in Southeast Asia plus Hong Kong and Taiwan.
In Southeast Asia alone, smartphone sales in the second quarter of 2019 reached 30.7 million units, with Chinese firms accounting for 62 percent, according to Singapore-headquartered global technology market analyst firm Canalys. It said that while Samsung shipped 7.7 million units or a growth of 5 percent, Oppo had the best quarter’s performance with a 49-percent year-on-year growth to 7.3 million units.
The coming 5G era is expected to generate 170 million units of potential shipment for global smartphones, according to GfK, adding that as commercial 5G rollout ramps up in several markets in Apac in 2020, it would create unprecedented development opportunities in the region.
Additionally, GfK said the 5-percent growth rate of the technology consumer goods market (including Internet of Things, or IoT) in emerging Apac would lead the other regions of the world in 2020.
Oppo opened last Dec. 16 its Asia-Pacific regional hub in Kuala Lumpur, Malaysia, to oversee the firm’s marketing offensive in this rapidly booming part of the world that has been identified as a key driver of the smartphone market. Last year, more than 100 million smartphones were sold in Apac.
Rapid growth
Oppo is one of the Chinese smartphone brands that have made it big in the Philippines and other emerging and developed economies. It is now present in 40 countries. The company is part of BKK Electronics Corp., founded by Chinese billionaire Duan Yongping and also includes the makers of Vivo, OnePlus and Realmi smart phone brands.
It is one of the very few survivors of the cheap smartphone era that started about 10 years ago. Up to the third quarter of 2019, Oppo was among the leading smartphone brands, particularly in the $200-$300 (P10,000 to P15,000) price segment in the Philippines, Indonesia, Cambodia and Thailand, according to Canalys.
After its growth mainly in that segment, Oppo is stepping up by introducing what it calls cutting-edge smartphones that can compete with dominant brands Samsung, Apple, LG and Huawei.
The emergence of the next-generation 5G mobile communications technology has been tapped to bring both new opportunities to the industry and create new challenges to the overall operational capabilities of smartphone manufacturers.
Oppo is aiming to reengineer itself as an R&D-centric technology company employing its global resources to power the development of local markets where it operates in.
Over the next three years, Oppo officials announced during the Kuala Lumpur meeting that the company was investing more than $7 billion in research-and-development initiatives as it continues to focus on developing technologies such as 5G, 6G, artificial intelligence (AI), augmented reality (AR) and big data while also building core technologies for the hardware and software needed to address the infinite possibilities in the coming era of intelligent connectivity.
Alen Wu, Oppo vice president and president of global sales, commented: “Oppo has become more than just a smartphone maker. In fact, smartphones have simply been a tool for Oppo to deliver a diverse portfolio of technological services. Oppo will continue to improve its capabilities in hardware, software and services as well as expanding its presence in the IoT field.”
An important part of Oppo’s strategy is what it calls “glocal”-its mantra of “Think Globally, Act Locally”. To achieve this, officials said Oppo would grant more flexibility to the operation of the Apac Hub, strengthening its operating capabilities backed by a series of supporting initiatives such as local recruitment, key channel building, operator customer services, product customization, co-branding and co-marketing.
Jimmy Yi, president of Oppo Asia Pacific, said: “Oppo’s aspiration is more than ‘the leader in market share ‘, but to become the all-round leading brand in the Apac markets.”
He said the company was already evolving beyond a smartphone company and targeting the next business expansion in the IoT space for personal and home application scenarios, digital content creation and offering mobile internet services for more diversified users.
“Through the establishment of the Apac Hub Center, we are set to connect all markets and develop strategies more localized for the region. We will also connect with our partners to uncover more opportunities and create more value. Last but not least, we will also connect our users to more smart devices to deliver the experience of Intelligent Connectivity,” he explained.
The very idea of having this hub center at Kuala Lumpur, he said, was to allow Oppo to focus more on the needs of our clients and consumers. “We stay closer to them so that we can better respond to the needs of our partners and address any of the requirements in the market.”
5G rollout
As one of the global pioneers of 5G, Oppo established a communication standard team in 2015 and applied for 5G communication standard patents in more than 20 countries worldwide with more than 2,500 global patent applications completed. On the commercial rollout of 5G, Oppo launched the “OPPO 5G Landing Project” in February 2019 in Barcelona in partnership with key global operator partners, releasing its Reno 10x Zoom 5G edition smartphone in Switzerland, United Kingdom, Australia and Italy successively. It is a collaboration with carriers planning to commercialize their 5G operations in 2020. For the Philippines, Globe Telecom is part of the project.
Oppo has also undertaken several initiatives to boost market exposure. This year, it opened the first Oppo Flagship Store in Thailand and Malaysia as well as the first airport experience store in Indonesia.
The company said it now has more than 52,000 stores and 256 self-built service centers in the Apac market. It also has more than 55,000 employees in the region, with locals making up 95 percent.
Moving forward, Oppo officials said the plan was to enhance core partner relationships, recruit more talent with an international mindset while strengthening localized operations as the company believed that intelligent connectivity is the way to maintain customer loyalty.
This is in preparation of Oppo’s launching next year of its 5G smartphones in the Apac market, which it hopes will provide a faster and improved user experience. The Philippine launch is scheduled in the third quarter of 2020.
Oppo’s Yi said Apac would be the battleground for the top 4-5 global smartphone brands in 5G technology and noted that Oppo was ready for this with the scheduled launch of multiple IoT devices, with smartphones at the center. In the future, with the Apac Hub, he said Oppo would work more closely with upstream and downstream partners in the industrial chain to deliver cutting-edge 5G experiences to users across Apac.
Henry Tang, chief 5G scientist at Oppo said: “With the maturity of 5G technology and improvements of big data, cloud computing and AI capabilities, we will usher in a broader space for ongoing development, which will lead to many unprecedented products and services. In the prelude to 5G’s arrival in 2020, Oppo will strengthen the next step innovation on 5G technology to bring a better experience for global users.”
“Leaders are proven during each new ‘G’ transition and Oppo is sure to be among the leading 5G innovators,” said Jim Tran, senior vice president and general manager for handset products at Qualcomm Technologies Inc.
With the global commercial rollout of 5G and the continuous improvement of AI technology, Oppo said it believed that “Intelligent Connectivity,” rather than the “Internet of Things,” would truly bring about revolutionary user experiences. As Bobee Liu, Oppo vice president and president of intelligent mobile devices, said: “Today, IoT, 5G, cloud and AI cooperating with emerging core devices are vastly improving the quality and efficiency of people’s lives. We aim to create a people-oriented, multi-device, cross-scenario smart lifestyle service in four major areas—personal, home, offices and travel—focusing strongly on interactive and experiential products. Meanwhile, we will continue to expand our interconnectivity capacity, building a service network to make a new and exciting user experience.”
As part of the latest exploration of the intelligent connectivity ecosystem, Oppo and Malaysian operator Maxis jointly built a 5G network at the Kuala Lumpur event to present the revolutionary experiences powered by 5G network.
Morten Bangsgaard, chief technology Information officer at Maxis, said: “With supported handsets, the possibilities of 5G are immense—almost instantaneous download speeds, higher resolution video and next-level AR and VR capabilities. We are excited at the potential of 5G in a future of smart solutions for both consumers and businesses.”
Challenge
For marketing officials, the biggest challenge for Oppo will be to increase market share through its higher-end products.
Charles Tan, Oppo’s Apac marketing director, told the Inquirer that the company already has a market share of more than 20 percent in the region and was number 1 or 2 in many countries (measured in number of units sold, not value of the handsets).
He said the competition is now versus top global brands and the big challenge is how to increase market share beyond 20 percent.
Tan said this could be done by focusing on technologies that would ensure connectivity of gadgets and services that are a step up from the $200-$300 range of smartphones where Oppo is a leading player in the region. The massive investment in R&D in the next three years is aimed at achieving this
The focus on 5G is understandable as all technology companies have been moving in this direction. It will be an era where everything will be converged or connected: technologies, devices, products, content and services. It will usher in greater use of cloud computing until that time when one will need only a screen and a keyboard to do many things.
Oppo’s vision seems clear. It wants to position itself as more than just a smartphone company and become a leading tech brand loved by consumers. Based on the strategic direction Oppo officials presented during the high-tech Kuala Lumpur event launching its Apac hub, the company looks well positioned to play a big role in the coming 5G era.