As first-tier China-based smartphone vendors including Huawei, Oppo, Vivo, Xiaomi and Gionee are gearing up efforts to expand sales overseas, their white-box handset competitors are facing the possibility of being phased out, according to industry sources.

Most China-based brand vendors have adopted the same strategy used by white-box makers by launching low-priced models to grab market share in overseas markets, affecting seriously on shipments from white-box makers, said the sources.

For example, Oppo, Vivo, Xiaomi, Lenovo and Coolpad were all included in the top-10 vendors list in the India market in 2016, during which over 100 smartphones million were shipped to the market in the year.

In their domestic China market, brand vendors have also stepped up their efforts to penetrate into tier-3 and tier-4 cities, where white-box makers had been the major suppliers previously.

The increasing penetration of brand vendors has not only affected white-box makers but also independent design houses (IDHs), ODMs, and parts and components suppliers, added the sources.

Small-scale IHDs and ODMs are likely to be phased out of the market as brand vendors tend to place more orders with first-tier suppliers to avoid seeing their production and shipments caught up by financial problems at small-scale suppliers, said the sources, noting that first-tier ODMs such as Wingtech Group and Huaqin Telecom are expected to benefit from the ongoing trend.

Holitech Technology, a China-based touch panel supplier which previously shipped the bulk of its products to the white-box sector, has shifted its focus to niche market applications such as telematics and industrial control, while also stepping into the development of fingerprint sensors and camera modules, indicated the sources.