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The world's biggest smartphone market could soon become really tough for Apple, Samsung, HTC and others

Posted: , by Chris P.

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The world's biggest smartphone market could soon become really tough for Apple, Samsung, HTC and others

A new policy, shoved down the throats of the three major carriers in the world's largest smartphone market, China, may adversely affect popular brands like Apple, Samsung, HTC, and create room for a shift in market share.

Indeed, what is likely the most important market on the planet for smartphone OEMs may prove to be even harder to penetrate than initially thought. According to Taiwan Focus, Chinese authorities are unhappy with the amount of resources the three state-owned carriers are spending on device subsidies and promotions, and is now intervening. Apparently, the big three will be forced to cut spending in these two areas by a combined 40 billion Chinese yuan (about $6.5 billion) in the coming three years.

As you can imagine, subsidies serve to mitigate the upfront cost of a number of devices that are perceived as expensive -- specifically ones from established brands that are significantly more expensive than what local companies, like Xiaomi, are charging. In fact, Xiaomi (which is already China's largest smartphone vendor) is one of the few companies who likely stand to gain from this, as it makes its dough through online retail channels and through its app store. The upstart's neighboring rivals Lenovo, Huawei, ZTE, and others, may not be as fortunate, as they rely on carriers do drive sales at least partially.

"Those handset OEMs that rely on operator channels will likely be adversely affected (in the) long term (if they do not) diversify their channel focus,” - Jasmine Lu, Morgan Stanley

Obviously, non-Android competitors, like Apple, may also be affected by the change, though Morgan Stanley analysts appear notably less worried about it, believing that its premium status will continue to ensure healthy sales.

Like it or not, this is actually big news, as the question of who wins in China could, ultimately, dictate the pace on the world stage, too. Do keep in mind that due to China's refusal to harm local companies in the interest of outsiders, it has created a market ripe for new local entrants. These companies also have an enormous room for growth, as the local market is still largely untapped, with hundreds of million customers who are yet to buy their first smartphone. By the time many of these need to branch out in regions where they may have to play fair, they're usually big enough to stand on their own. This obviously has the potential to threaten the current status quo.

Time will tell.

39 Comments
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posted on 20 Aug 2014, 04:59 6

1. iluvsonynokia (Posts: 110; Member since: 27 Aug 2013)


i like that picture

posted on 20 Aug 2014, 05:53 4

14. itsdeepak4u2000 (Posts: 2586; Member since: 03 Nov 2012)


Yeah, that is really a nice picture, I kept looking at it for 5-10 secs. :)

Anyways this will help Chinese OEMs like Xiaomi, etc. to again lower the prices and I find other OEMs to forcibly lower the prices to stay and sustain in the competition.

posted on 20 Aug 2014, 05:01 9

2. NokiaFTW (Posts: 1978; Member since: 24 Oct 2012)


Do I see Xiaomi one day becoming the largest smartphone vendor on the planet? Yes, absolutely yes!

posted on 20 Aug 2014, 05:12 1

5. vuyonc (Posts: 214; Member since: 24 Feb 2014)


I do wish Xiaomi the best but it's BS that other good OEMs are missing out on the biggest smartphone market.

posted on 20 Aug 2014, 10:37 3

26. neela_akaash (Posts: 140; Member since: 05 Aug 2014)


The only options left for those big players is either to reduce their prices or sue them for some patent law violation(this is what apple is best known for)....

posted on 20 Aug 2014, 17:11 1

37. rallyguy (Posts: 541; Member since: 13 Mar 2012)


China has been like this for decades. Look at how much kissing ass General Motors had to do to get into China. The government controls everything so you must grease the government's wheels if you want their permission to do business in china.

posted on 20 Aug 2014, 05:32 2

7. LetsBeHonest (Posts: 762; Member since: 04 Jun 2013)


Ohhhh yesss.. I hope its available internationally . Also no online exclusivity and local retailers will be welcomed.

posted on 20 Aug 2014, 05:36 2

10. ArtSim98 (Posts: 2700; Member since: 21 Dec 2012)


When Xiaomi releases it's phones worldwide, the others will be forced to lower their prices. I'm afraid not many would survive through that. I have a feeling that Apple can see that and so keep high prices now so the cut wouldn't hurt that much.

posted on 20 Aug 2014, 09:32 1

24. neela_akaash (Posts: 140; Member since: 05 Aug 2014)


For the first time in my life i am eagerly waiting for Chinese brands to come to my local market i.e. Xiaomi and OnePlus.

posted on 20 Aug 2014, 11:04 1

27. neela_akaash (Posts: 140; Member since: 05 Aug 2014)


And if they focus on expanding their mi tv range, it will be the instant success for xiaomi and biggest threat to sony, samsung, lg etc.

49" 4K UHD Smart TV for just $640 with that gorgeous design. That's insane....

posted on 20 Aug 2014, 20:52

38. Venkatramanan (Posts: 38; Member since: 15 Aug 2014)


I like Asus to come up. They are doing some great innovation.

posted on 20 Aug 2014, 13:05

28. androtaku (Posts: 176; Member since: 12 Dec 2013)


with the help given by socialis china government, i don't see that as a proud victory

posted on 20 Aug 2014, 05:09 1

3. techmac (Posts: 3; Member since: 20 Aug 2014)


i hope xiaomi & one +one will gain to lead the race very quickly to be the top two brands in other countries as well

posted on 20 Aug 2014, 05:11 3

4. mayur007 (Posts: 409; Member since: 10 Apr 2012)


it will be for every company as they are not providing value to their

accept apple in america (every one knows y)

as other countries they go for value for money and right chinese companies like oppo, xiaomi

they are providing real value at the price they are offering,

if go for samsung there price drops too much a 49k phone in 2 -3 months goes to 43k some time 40k they who will buy

sony, htc and nokia they ask way too much for they offer(over price products)

and honestly no company is providing real value accept chinese companies

posted on 20 Aug 2014, 05:34 1

8. LetsBeHonest (Posts: 762; Member since: 04 Jun 2013)


Exactly. Like xiaomi mi3. I hope 64gb version will be available in india soon.

posted on 21 Aug 2014, 05:14

39. mayur007 (Posts: 409; Member since: 10 Apr 2012)


i waiting for oppo's

posted on 20 Aug 2014, 05:12

6. NationGuettaTR (Posts: 36; Member since: 28 Dec 2013)


Android in the Acidland lol

posted on 20 Aug 2014, 05:36 4

9. HugoBarraCyanogenmod (Posts: 134; Member since: 06 Jul 2014)


I'm a huge fan of XiaoMi but I never bash Lenovo and Huawei, instead I always recommend them to my customers and boost their sales in order to give XiaoMi a threat to innovate.

While HTC, is our cousins and I always recommend one m8 to those who willing to pay extra, rather than American iCrap.

Samsung fans suppose to help LG no? Why I keep seeing them fighting each other even they're same ethnic?

posted on 20 Aug 2014, 05:37 3

11. ArtSim98 (Posts: 2700; Member since: 21 Dec 2012)


Why are you mixing politics so hard into this? U mad bro?

posted on 20 Aug 2014, 14:29

32. Ashoaib (Posts: 1837; Member since: 15 Nov 2013)


yeah.. whats the point of expressing views which shows politicle mentallity?

posted on 20 Aug 2014, 07:28 2

20. joey_sfb (Posts: 2877; Member since: 29 Mar 2012)


Xiaomi provide the right spec at the right price. End of story.

posted on 20 Aug 2014, 05:48 2

12. marcski07 (Posts: 360; Member since: 25 Apr 2014)


HTC? popular? LOL

posted on 20 Aug 2014, 05:51 1

13. iluvsonynokia (Posts: 110; Member since: 27 Aug 2013)


MANY ARE SATISFIED WITH XIAOMI ,GIONEE etc,THEY ARE ALSO WILLING TO BUY LATEST MODELS FROM THESE COMPANIES ,ACTUALLY THEY HATE LOW AND MIDRANGE PHONES FROM NON CHINEESE OEM, AM SURE CHINEESE COMPANIES WILL RULE (am also interested in testing an chineese phone)

posted on 20 Aug 2014, 06:01

15. SnowWhite (Posts: 1; Member since: 20 Aug 2014)


XiaoMi, Lennovo, ZTE = garbage. Never buy anything from a Mainland company of any kind if you can. Buy foreign, buy local. Avoid all things from the PRC.

posted on 20 Aug 2014, 06:15 5

16. xperiaDROID (limited) (Posts: 5399; Member since: 08 Mar 2013)


Sorry bro, I'll definitely get a Chinese phone someday.

posted on 20 Aug 2014, 14:35

33. Ashoaib (Posts: 1837; Member since: 15 Nov 2013)


lolz... today's environment is kinda politicle... apple crap bcoz is USA... xiaomi, lenovo, ZTE = garbage bcoz these are chinese... well f*** this bs... just say apple is cr@p bcoz it is cr@ap if we analyze the hardware, not bcoz of its origin... same goes to other oems

posted on 20 Aug 2014, 06:28 2

17. xperiaDROID (limited) (Posts: 5399; Member since: 08 Mar 2013)


If there are manufacturers that offer phones with high end specs on low price, it's only the Chinese manufacturers.

And that's why I like these Chinese manufacturers, they don't need us to pay so much for the advertisement fees, while the big bros like Samsung, HTC, LG, Sony, Apple etc. raise up the price like "U MAD BRO?".

So, I wish the best to these Chinese manufacturers especially Xiaomi and Huawei, they are the two of my most favorite Chinese manufacturers.

posted on 20 Aug 2014, 06:39 1

18. Napalm_3nema (Posts: 893; Member since: 14 Jun 2013)


It is easy to keep your prices low when your manufacturing costs are low and you don't have to pay patent fees for IP you are using. If this happens in. China, expect the WTO to get involved.

posted on 20 Aug 2014, 07:35 1

21. joey_sfb (Posts: 2877; Member since: 29 Mar 2012)


China is fearless. WTO my foot! The biggest hypocrite are the west.

Solve your own racist issue before finger pointing on others.

Only certain board of fools will believe that an American CEO would solve their N company problem.

The joke is on them.

posted on 20 Aug 2014, 07:14 2

19. LikeMyself (Posts: 267; Member since: 23 Sep 2013)


Ah the beauty of dictatorship! At least they 'protect' the local manufacturers unlike democracy which is full of hypocrisy and selfishness!

posted on 20 Aug 2014, 07:48 1

22. B-power (Posts: 43; Member since: 22 Feb 2014)


I woulod love if Xiaomi came to Europe. Here in the Netherland you won't see much more as Samsung,Apple,Htc, Huawei and Nokia. Most people don't look farther than the brand.

posted on 20 Aug 2014, 09:05

23. sip1995 (Posts: 801; Member since: 07 Feb 2014)


If Nokia, Apple, Samsung, HTC and Sony use their patents to earn money from Chinese OEMs , then they can be in a better position......

posted on 20 Aug 2014, 10:27 1

25. Iodine (Posts: 321; Member since: 19 Jun 2014)


So they want to restrict the sales of all non Chinese phones including the iPhone (made in China.....) a phone for which Chinese are selling internal organs to buy.... Good luck.

posted on 20 Aug 2014, 13:07

29. wilsong17 (Posts: 865; Member since: 10 Mar 2013)


Yea buy the Chinese phone have to be replaced every 6 months

posted on 20 Aug 2014, 13:33 1

30. neela_akaash (Posts: 140; Member since: 05 Aug 2014)


How many Chinese phones have you baught and replaced...?

posted on 20 Aug 2014, 14:42

34. Ashoaib (Posts: 1837; Member since: 15 Nov 2013)


I purchased chinese phone last year by ditching my iphone 4s.. I replaced it last month after using 10 months without having any fault and I replaced it with another Chinese Huawei... Chinese are easy on pocket so easy to replace not bcoz they have something wrong

posted on 20 Aug 2014, 14:14 1

31. Loubielou (Posts: 208; Member since: 11 Jul 2012)


Apple are going to be under more Pressure than the Others with the Pricing of there New iPhone 6 4.7 an 5.5 inch Phones,an if the Camera on there new phones does not Offer no Competition to High End Android phones,plus the Battery inside the iPhone 6,it might make Android more Popular with Consumers not be Able to buy there new phones

posted on 20 Aug 2014, 15:16

35. flipjzn (Posts: 140; Member since: 22 Jun 2012)


That sucks. China lowers its production costs to attarct and take all the jobs which causes closure of lots of manufacturing companies abroad.
Now they want everything for themeselves.

posted on 20 Aug 2014, 17:11

36. gigaraga (Posts: 865; Member since: 29 Mar 2013)


Because they release flagships at low prices? No. Definitely no. Nice picture by the way.

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