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Home / Business / Chinese smartphone companies bring products up to date using Apple's way home

Chinese smartphone companies bring products up to date using Apple's way home



SHANGHAI (Reuters) – Smartphone retailers in China claim it's been a heavy sale lately, as consumers are reluctant to be upgraded, deterred by cool economic winds.

FILE PHOTO: Xiaomi Founder and CEO Lei Jun attends an opening ceremony of the new flagship Xiaomi Mi 9 in Beijing, China, February 20, 201

9. REUTERS / Jason Lee / File Photo

Even domestic brands are led by Huawei They have made great strides in attracting consumers with world-class hardware and innovative features that continue to grow in the $ 500 to $ 800 range. The result: a share loss in a key segment for Apple Inc. and new price reductions for iPhones by Chinese retailers.

"Of the people upgrading, many are switching from Apple to Chinese brands, but very few from Chinese to Apple," said Jiang Ning, who manages a Xiaomi store in northern Shandong province.

Huawei Technologies Co Ltd, Xiaomi Corp., Oppo and Vivo once attempted to participate in the world's largest smartphone market with low-cost devices, but consumer demand for better cell phones has led to strategic considerations.

"More than ever, people are connected to their phone and have higher expectations of the function and experience it offers. The answer was the constant updating of hardware specifications, "said Alen Wu, global vice president of Oppo, Reuters.

He Fan, CEO of Huishoubao, who buys and resells used phones, said he has experienced a shift in consumer behavior from Apple to Huawei, fueled by Chinese love for selfies and the emphasis on camera quality. Huawei has been connecting with German camera maker Leica since 2016.

"Huawei's cameras are noticeably better than Apple's because they are more in line with the taste of Chinese consumers," he said.

Compared to dual cameras, common on most smartphones, Huawei's P20 Pro has three rear-facing cameras, with the added camera enhancing the zoom capabilities.

It is one of several new devices in its P20 and Mate 20 lines that helped Huawei's share of the $ 500- $ 800 segment in China from 8.8 percent to 26.6 percent last year , show data from the research company Counterpoint.

In contrast, Apple lost its share of the segment from 81.2 percent to 54.6 percent, which was also harmed by his decision to go even further with the iPhone X series, was harmed.

"Most Chinese smartphone buyers are unwilling to spend more than $ 1,000 on a phone," said Neil Shah, research director at Counterpoint. "This left a gap in the $ 800 segment that Chinese vendors have seized with both hands."

(Click on "Chinese smartphones increase the share of home market"), click on tmsnrt.rs/2HvsyQi)

Prices for phones in China in 2018 were over $ 600. This is confirmed by data from the research company Canalys. By contrast, the overall market contracted 14 percent, marking a second year of decline.

OVERSEAS WINS

Apple's weaker cachet in China was underlined this month as several major retailers lowered iPhone prices for the second time this year.

A 64 GB iPhone 8 sold at Suning.com Co Ltd now costs $ 3,899 ($ ​​580), about 25 percent less than in December. This is also lower than the $ 599 price in the United States, where iPhones usually cost less than in China. Most iPhone models up to the iPhone 8 series have seen price cuts in China, albeit not equally.

Revenues also seem to be a story in which assets are different. Apple's October and December revenue in the Greater China region declined by about a quarter from a year ago. China currently accounts for 15.6 percent of total sales.

Huawei, the world's # 2 leading smartphone maker, estimates that revenue for 2018 has increased 21 percent, largely attributable to strong smartphone sales by analysts.

In general, fewer sales for Apple means fewer customers for the App Store and the media streaming services. The transition of Chinese brands to high-end phones has also meant a bigger slump overseas.

Huawei's European shipments increased 55 percent in the last quarter and now have a market share of 23.6 percent, according to Canalys. This is not far behind Samsung Electronics and Apple, where shipments have declined slightly.

OPPO, VIVO

When Huawei takes over the lion's share of the lawn that Apple once had in China, Oppo and Vivo – brands of electronics hardware company BBK – are the latest threats.

In June, Vivo launched the Nex, which starts at 3,898 yuan ($ 610). In July, Oppo launched Find X at 4,999 yuan ($ 755).

The models mark the first time that brands have given away a phone worth over $ 600, a significant departure from their roots, where $ 300-500 models were sold to young consumers in secondary cities.

The devices had features that are not available on the iPhone, including fingerprint sensors under the glass and "notch-free" displays, both of which increase the usable screen size.

Xiaomi also continues to rise, announcing in January that it has split the low-cost Redmi series of phones into a sub-brand. In this way, the book by Huawei, which has been selling cheaper devices under the Honor brand for years, a little way away and thus supports the differentiation of its products.

Redmi will target international markets and ecommerce sales while flagship brand Xiaomi will target China and offline retail markets, company founder Lei Jun told reporters.

Slideshow (7 pictures)

Last month, Xiaomi introduced the new Mi 9, his latest flagship with a price tag of 2,999 yuan ($ 450). But the company also said it was the last time a Xiaomi flagship was offered under 3,000 yuan.

"The Xiaomi series main phones used to be set at 1,999 yuan," Lei said. "This has been an important factor in our rise, but has also become an obstacle to our growth," he said.

(Click on tmsnrt.rs/2Hx2KD4 to raise a graphic to "Chinese Smartphones Increase Market Share")

coverage by Josh Horwitz; Additional coverage by Stephen Nellis of San Francisco, Paul Sandle of Barcelona and the Shanghai Newsroom; Editing by Jonathan Weber and Edwina Gibbs

Our Standards: The Thomson Reuters Trust Principles.

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