Cultivating the Smartphone Component Business in the Chinese Market
The popularity of smartphones spread worldwide in the latter half of the 2000s, and in China both Chinese and foreign manufacturers rushed to enter the business and increase production, both for export and for sale to the enormous Chinese domestic market.
From around 2007 the Electronic Materials Division had been involved in a full-scale business of supplying advanced components to Chinese smartphone manufacturers. Chinese enterprises were making great advances, and Hitachi High-Technologies sales personel worked with the local Chinese subsidiary to bolster sales efforts. However, the price demands for general-purpose components were difficult to meet, and this, combined with differences in business customs, meant that deals remained elusive.
Then one day a certain Chinese smartphone manufacturer asked if Hitachi High-Technologies could supply a new electronic camera module. When walking around the town a sales person had in fact noticed that many young people liked to take “selfies” and then post them on social networking services.
It suddenly dawned on him, “If someone can make a smartphone that makes it easy to take selfies it will be a big hit.” He suggested to an electronic component manufacturer in Japan that they develop a new type of electronic camera module that would allow the user to switch the lens between “outward” and “inward” orientations.
The Chinese smartphone manufacturer immediately expressed interest in the new module. This was followed by tough negotiations concerning price and specifications, and in the end Hitachi High-Technologies won the order in collaboration with the Japanese electronic component manufacturer. In this way Hitachi High-Technologies went on to supply other advanced smartphone components from Japanese manufacturers, building up a solid track record and growing the product category into a substantial business.
In 2015 the Chinese market accounted for roughly one-third of total world smartphone demand of 1,447,300,000 units (according to IDC of the U.S.). The Chinese company that Hitachi High-Technologies originally supplied with advanced components is today one of the world’s leading smartphone manufacturers.
Sales location in China