China’s Oppo doubling down on R&D investment to tap 5G opportunities beyond smartphones

Oppo, one of China’s biggest smartphone brands, is boosting its R&D spending to 50 billion yuan (US$7.1 billion) between 2020 and 2022
It is looking to expand beyond smartphones to other 5G-enabled products such as augmented reality glasses and smart displays

Technology

Li Taoin Shenzhen

Published: 5:55pm, 10 Dec 2019

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Chinese smartphone brand Oppo is significantly boosting its research and development (R&D) expenditure over the next three years, after the commercial launch of the 5G network in China last month.

The Shenzhen-based company will invest 50 billion yuan (US$7.1 billion) in R&D between 2020 and 2022, its founder and chief executive Tony Chen Yongming said in a speech at Oppo’s Inno Day event, its annual global technology convention, on Tuesday. “The arrival of the 5G era is bound to set off a new information revolution, which will become a major business opportunity for Oppo and its business partners from all industries worldwide,” he said.

Oppo already more than doubled its R&D investment from 4 billion yuan to 10 billion yuan this year to keep up with rivals that planned to release 5G-enabled smartphones after the technology to do so became available last year. The company is the No 5 global smartphone brand behind Samsung, Huawei, Apple and Xiaomi.

As of last month, 328 operators in 109 countries were investing in 5G, Tom Morrod, an executive director of IHS Markit said at the Oppo event. And China, with a population of over one billion, is expected to be a global front-runner since it launched commercial 5G services in 50 major Chinese cities last month. It is projected to have 600 million 5G subscribers by 2025, according to a GSMA estimate, and there are plans to install 130,000 5G base stations across the country by the end of the year.

Although handsets will remain the major gateway to 5G, the technology – which promises lightning fast wireless connections, reduced latency and massive capacity – has many other applications. Chen stressed in his speech that Oppo was looking to grow beyond just a smartphone company to tap other opportunities in 5G. The company has plans to introduce a slew of smart devices and services including augmented reality glasses and smart displays, he said.

Oppo announces AR glasses and IoT products

The ongoing trade and tech war between the US and China has pushed many Chinese technology companies to rethink their strategies. Huawei Technologies, one of the most high-profile companies put on a US trade blacklist earlier this year, has sharpened its focus on the domestic market while boosting its investments in R&D, including in 5G. Already the market leader in Chinese smartphones, Huawei’s grab for even more market share has in turn put pressure on local rivals such as Oppo.

It makes sense for smartphone companies to diversify their portfolios in the age of 5G, according to Mo Jia, an analyst at research firm Canalys.

“If you compete for smartphone products, you will be restricted by the supply chain. So companies need to diversify their business to secure the future,” Mo said. “Oppo is a latecomer in many fields [compared with its competitors], so it needs a bigger investment to catch up in the 5G era.”

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This article appeared in the South China Morning Post print edition as: Oppo boosts spending on R&D to tap opportunities in 5G beyond smartphones

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