LG & Moto ignored ZTE at their own risk. They are now in the rear-view mirror having been dethroned in the league tables with ZTE widening the lead. The growth has been mostly in emerging markets. The impact on the North American and Western European markets, by far the most profitable, has been limited – for now. This is changing. Now: Huawei is beginning major marketing push for brand awareness in the US (see http://www.youtube.com/watch?v=KGAqvpYLiGw&feature=player_embedded).

Both ZTE and Huawei’s competitive advantage was a mix of cost-competitiveness and quick turnaround in producing new models. This is due to the pressures they experience domestically from the Shenzhen ecosystem where smaller and nimbler competitors churn out more models monthly than the big 5 do in a year. That has kept ZTE and Huawei at the edge of shifting market preferences. For example, Huawei put out the thinnest phone in the world (The Ascend P1) while Sammy was still finalizing specs on the Galaxy SIII and a price that is simply unbeatable for a phone this class.

What can the market expect from this? strong downward price pressure, less emphasis on hardware, more Android customizations, software as a differentiator.

With featurephone users outnumbering smartphones 2:1, and operators and phone brands in the emerging world weighted 90:10 toward featurephones, the surprising answer for most of the world is: focus on the users and makers of featuresphones.

India doesn’t have many PC users at all — phone usage is 10x bigger. So the champs of the coming era are likely to have more in common with featurephone kingpins like Micromax and less in common with PC world winners like HCL.

So delivering great apps on the phones people use today is probably the best way to create revenue-share streams from operators, ad network scale, user mindshare and network-effects, and distribution pathways inside the big phone brands like Karbonn, Lava, MicroMax, ZTE, and others.

Bonus: Making the proposition even sweeter is the dearth of good applications and a lack of serious competition in the space. Just ask Facebook who not too long ago acquired Snaptu to go after this market and continue to push for development on MTK and other platforms.

Our friend Tom Clayton @BubbleMotion agrees. Check out his very nice article on TechCrunch: Facebook’s mobile future rests on today’s feature phone users (the users…)

Peek was lucky to be included with a great group on stage at TechCrunch Disrupt in New York — the topic was making great gadgets.

Amol had the Peek view: “great gadgets need amazing software”.

When we created Peek we invented an amazing device with our partners in China, plus some beautiful software and a cloud-based platform that makes the Internet work fast and well on ultra-low-cost devices.

These days we are putting our software and cloud on devices made entirely by our customers and partners — ZTE, Nexian, Micromax, Lava, and lots more big powerful names.

And we believe it very strongly: for the next generation of phone brands to win in the global phone market, brands will have to do more than install generic Android.

See the full discussion below about inventing the next generation of gadgets.

“HTC sees China as a major growth driver, but this story may not work,” says Gai.

According to Barclays, Taiwan-based mobile chipmaker MediaTek, will start supplying the Chinese market with mass produced high-tech chips by the third quarter of this year, allowing the smaller unbranded mobile handset makers to offer better features and applications on their phones at cheaper prices.

This, according to Aaron Jeng, Analyst at Nomura, will hurt HTC’s sales in China and threaten the company’s market share.

“MediaTek would be disruptive as it would enable low-end smartphones to provide more features and functions, but with lower retail prices,” Jeng said in a report.

According to Gai, “these (low priced chips) will allow smaller handset makers to compete with HTC in the mainstream market, its key growth area, at under 1,000-2,000 yuan ($157-$315).”

HTC currently has about 5 percent market share in China, the world’s largest smartphone market, and 10 percent of its earnings last year came from there.

More

Peek is hiring technical people in New York, Nanjing, and Delhi.

Come help us make the next generation of software that brings smart Internet experiences to the widest possible reach of phones in the world.

We are a well-funded venture-capital and strategic investor backed technology company whose software reaches people everywhere on the planet through some of the world’s phone makers and brands.

Email jobs at peek.ly with a little about yourself.

We want

Software engineers all tenures. Hackers. Any background. Mobile or web.

Visual designers for mobile and/or web.

Interns welcome! We’ll train you! You’ll love us.

Baidu announced their own fork of Android today.

Alibaba already has theirs — complete with phones.

So does Amazon.

Why do they do it? Because, as the Baidu guy says, to reach the mass market you want to low-price your phones, and to make money “You don’t need a lot of power, just the ability to connect to the Internet because we are shifting the computing from the terminal back to the cloud.”

Peek is there. The question for emerging OEMs like ZTE and Micromax and MyPhone who seek to topple Nokias and Samsungs — where are they?

That was 2006 on that chart.

Today a lot of those names are dead. Mediatek is bigger, perhaps by half, and Spreadtrum has doubled, and there is Mstar.

The last few days they’ve been telling us how the Global China Ecosystem is doing as they release earnings and guidance.

The answer: Team China is killing everybody

Mstar — the smallest — beat by a lot

Spreadtrum — beat and raised

Mediatek — notwithstanding lots of competition — is up on volume and revenue — their smartphones in particular are already double the projections from a year ago and up 50% from 60 days ago

This is all because the mobile market keeps growing so fast, and because the middle-pack players keep losing. Sure Apple and Qualcomm are riding high — but middling players like Nokia or LG and TI or Infineon are falling further behind.