Taiwan-based ODMs and component makers have been seeking orders from China-based vendors of mid-range and high-end smartphones, mainly Vivo, Oppo and Meizu, because of their considerable order volumes and relatively high gross margins, according to Taiwan-based handset supply chain makers.

While first-tier China-based smartphone vendors, mainly Lenovo, Huawei device, Coolpad, ZTE and Xiaomi Technology, and second-tier ones, including K-touch, GiONEE, Hisense and Haier, have focused on inexpensive models priced at up to CNY1,000 (US$163), average retail prices for smartphones launched by Vivo, Oppo and Meizu are above CNY2,000, the sources said. However, Vivo, Oppo and Meizu have begun to launch models for sale at CNY1,000-2,000 to expand their market shares in China and tap overseas markets. Vivo and Oppo have been setting up retail channels in Southeast Asia, while Meizu has offered a platform for online sales abroad, the sources noted.

Vivo, Oppo and Meizu together are likely to ship 30 million smartphones in the China market in 2014, the sources said.