SMARTPHONES: Xiaomi, Vivo Skip Barcelona Telecoms Bash

UPDATE: After publishing this earlier this morning, a source in Barcelona informs me that Oppo is indeed attending and is holding a press event to show off their newest products. Headline and photo caption changed to reflect Oppo’s attendance, but the rest of the original post remains the same.

Bottom line: The absence of Oppo and Vivo from the world’s top telecoms trade show in Spain this week reflects their overwhelming reliance on China sales, while Xiaomi’s absence from the show could be a cash conservation move.

Most eyes from the telecoms world will be focused on Barcelona this week, where an annual show that’s arguably the world’s most important for smartphones is taking place. That seems like a good opportunity to look at who from China’s crowded smartphone arena is attending this year’s Mobile World Congress (MWC) in Spain, even though I’m personally not at the show.

Attending the event is by no means cheap, which is probably why some companies may choose the skip the affair. But the decision to attend or not does provide some insight as to what companies are thinking, since you would expect anyone with truly global aspirations to make an appearance at this showcase for the newest telecoms products.

That said, I’ll end the suspense by saying that most of the big names are on the list, including Huawei, Lenovo (HKEx: 992), ZTE (HKEx: 763; Shenzhen: 000063) and a few others I’ll mention shortly. But notably absent are China’s two hottest names, Oppo and Vivo, which surged last year to challenge incumbent leader Huawei in their hotly contested China market. Also absent on this year’s list was Xiaomi, the former high-flyer that struggled last year and is now trying to mount a comeback.

Let’s begin with the no-shows, as that’s probably the most intriguing part of this list. I was actually quite surprised to see Vivo and Oppo absent from the MWC attendance list, since both have taken their home market by storm over the last year. In the fourth quarter of 2016, Vivo took the top spot by shipping 24.5 million phones in China, while Vivo was third with 21.7 million units.

But both of those companies have been almost exclusively domestic plays, with Vivo garnering about 90 percent of its sales in its home market. That might explain why neither is taking part in MWC, since both appear to be focused on consolidating their position in China. Oppo did announce it was building a factory in India, in what appears to be one of its first major steps outside China. But without more focus on expansion abroad, it will be hard for both companies to maintain their spectacular triple-digit growth  that they posted last year.

Where’s Xiaomi?

Xiaomi’s absence at MWC is a bit more puzzling, since this company has said numerous times that the global market will be part of its comeback story. Xiaomi did suffer a big loss last month when its head of global sales announced he was leaving to return to his home in Silicon Valley. (previous post) But Xiaomi would have decided to skip MWC well before Hugo Barra made his surprising announcement.

Some might say Xiaomi’s absence could reflect a recent cash-conservation mode, since it’s now two years since the company last raised any money, or at least that it’s publicly disclosed. We should also point out that Xiaomi has held its own ad hoc events on the sidelines of MWC in the past, so perhaps it’s planning something similar this year. Either way, this skipping of MWC doesn’t look that savvy for a company that wants to be seen as a global brand.

We’ll close with a list of the usual suspects who are attending, including the big names of Huawei, Lenovo and ZTE that I mentioned above. Perhaps more interesting are the second-tier names in attendance, including Alibaba-backed (NYSE: BABA) Meizu and Gionee, both of which have expressed global ambitions.

But the most interesting attendee is probably LeEco (Shenzhen: 300104), the former high flyer that is currently in the midst of a major cash crunch. That cash crunch first roared into the headlines back in November, so it’s possible that LeEco had committed to attend MWC before things started to go south for the company.

That cash crunch was the direct result of growing too quickly beyond its core online video service, and one of the many new areas it entered was smartphones. LeEco has boasted of lofty smartphone sales goals in its pre-crunch days, but I have yet to see a single one of those phones on the street here in China.

The company was testing the waters at MWC when I attended a couple of years ago by buying some significant ads, and perhaps this actual attendance was the next logical step after that. But I suspect the LeEco contingent at MWC has probably been greatly scaled back from earlier plans, and I honestly don’t see this company becoming a major smartphone exporter anytime soon.