"Science and Technology Innovation Board Daily" December 3 news (Reporter Yu Jiaxin): "According to IDC statistics, the top ten manufacturers in the global smartphone market in 2023 collectively account for about 93% of the market share, showing a high degree of market concentration. Currently, emerging market countries are still in the market trend of transitioning from feature phones to smartphones. Overall, the penetration rate of smartphones in emerging market countries is relatively lower than that of North America, Western Europe, developed economies in mature Asia-Pacific, and the China market. The transition from feature phones to smartphones is still an important factor driving smartphone market growth in emerging markets." Zhu Zhaojiang, Chairman and General Manager of Shenzhen Transsion Holdings Co., Ltd., mentioned this during the third quarter earnings conference in 2024.

This year, the growth rate of Shenzhen Transsion Holdings' performance has shown a slowdown. In the first three quarters of this year, the company achieved revenue of 51.252 billion yuan, a year-on-year growth of 19.13%; net income attributable to the parent company was 3.903 billion yuan, a marginal increase of 0.5% year-on-year.

Looking at a single quarter, after maintaining high growth for multiple quarters in 2023, the net income for the second and third quarters of this year showed a year-on-year decline. In the third quarter, the company's revenue was 16.693 billion yuan, a decrease of 7.22% year-on-year; net income attributable to the parent company was 1.051 billion yuan, a decrease of 41.02% year-on-year, and a decrease of about 14.27% quarter-on-quarter.

During the earnings conference, Shenzhen Transsion Holdings' Chief Financial Officer Xiao Yonghui stated that the company's gross margin for the third quarter of this year was 21.72%, showing a slight decrease year-on-year but an increase quarter-on-quarter. This was mainly influenced by market competition and comprehensive supply chain costs. The company's gross margin is affected by factors such as competitive landscape, cost changes, and company pricing strategies. In the future, we will make adjustments based on dynamic changes in costs and market competition to maintain a reasonable gross margin level.

Regarding production capacity, Zeng Chun, Secretary of the Board of Directors of Shenzhen Transsion Holdings, mentioned that the company has established multiple production manufacturing centers globally, including in China, Ethiopia, India, Bangladesh, etc., and currently, the company's production capacity utilization rate is relatively high.

Looking at this year, there has been a significant recovery in consumer electronics. Tianfeng Securities' research reports believe that the combination of domestic demand stimulus and product cycle resonance is optimistic about the consumer electronics industry chain. Continued policy stimulus is expected to drive the demand for consumer electronics products through trade-ins.

However, looking at the first three quarters, Shenzhen Transsion Holdings' market share has shown a decline. Data published by IDC shows that in the third quarter of 2024, global smartphone shipments increased by 4% year-on-year to reach 0.316 billion units, achieving five consecutive quarters of shipment growth. However, Shenzhen Transsion Holdings' market ranking in the third quarter of 2024 has declined, slipping from consistently being in the top five market positions in the previous quarters to the sixth position.

Zhu Zhaojiang stated that the company's business plan includes: advancing the stable expansion of the mobile phone business, strengthening breakthroughs in mid-to-high-end products; advancing the development of diversified business categories, gradually building an AIoT intelligent ecosystem; building a mobile internet ecology, exploring localized business models... The company will further increase research and development investment, building core capabilities in technologies such as imaging, gaming, AI, charging, basic experience, etc.

"The company will continue to build its competitive advantage in the African market, while continuously exploring new markets, steadily advancing the long-term development of the mobile phone business; the company will also continue to promote the healthy development of diversified business categories, through localized business models and product innovation, providing consumers with a diverse, interconnected matrix of hardware and software products and experiences; additionally, the mobile internet business relies on the company's mobile traffic to continue cultivating, providing high-quality digital products and commercial solutions for emerging market users." Zhu Zhaojiang said.

Regarding business operations, in a recent institutional survey, Shenzhen Transsion Holdings Co., Ltd. stated that in the field of AI, the company actively explores large models and interconnected technologies, and has built an architecture that includes AI-enabled multi-end integration and interconnection, AIOS system-level application reconfiguration, AI edge applications, and AI Edge-to-Cloud coordinated applications. It has released TECNO AI, bringing a new generation of intelligent assistant Ella and innovative interactive experiences. Since September, the company's brands have released multiple AI-enabled phones, including the second-generation foldable flagship PHANTOM V Fold2 from the PHANTOM series, equipped with the all-new TECNO AI, featuring a range of AI functions such as real-time call translation, AI wallpaper, AI image elimination, AI cutout, recording to notes conversion, and more.

Since July of this year, Qualcomm has successively sued Shenzhen Transsion Holdings Co., Ltd. and its affiliates in relevant courts in India, Germany, and other places on the grounds of patent infringement, demanding cessation of infringement, delivery and destruction of products containing the patented technology, and compensation for losses.

Regarding the latest developments in the lawsuit, Zhu Zhaojiang stated that Transsion respects third-party intellectual property and is willing to follow the principles of fairness, reasonableness, and non-discrimination, reaching intellectual property licensing agreements through friendly negotiations with patent holders. "Transsion is currently engaged in patent negotiations with patent holders, promoting the determination of reasonable licensing fees within the framework of fairness, reasonableness, and non-discrimination, to achieve a win-win situation for the industry chain, including patent holders and licensees, better meeting the needs of consumers in emerging markets."