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After squeezing out Sony and HTC in the global market, Huawei, ZTE, Xiaomi and other Chinese brands are now competing head-to-head with regional vendors in the midrange and value line segments.
"There is a substantial difference between the key components adopted by products in different market segments," says Sagitta Pan, senior industry analyst with MIC (Market Intelligence & Consulting Institute).
"As far as the value line segment is concerned, the costs of key computing chips (application processors and baseband processors) total around US$12, or 15% of the overall hardware costs. Common solutions include MediaTek's MT675x, Spreadtrum's SC682x, and Huawei's Kirin 940 series. Based on value line smartphone shipments, shipment value of key computing chips is estimated to top US$5.0 billion in 2015 and will grow over US$10 billion by 2019."
Affected by the distinctive development trends of high-end and value line products, the adoption of ICs also has gone on different paths: system integrators such as Apple, Samsung, and Huawei have sought vertical integration to produce in-house designed chips; local branded vendors have shifted from Qualcomm's solutions to MediaTek's or Spreadtrum's, thereby intensifying competition of value line products.
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