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.


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.

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39 Comments

36. gigaraga

Posts: 1454; Member since: Mar 29, 2013

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

35. flipjzn

Posts: 257; Member since: Jun 22, 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.

31. Loubielou

Posts: 603; Member since: Jul 11, 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

29. wilsong17 unregistered

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

30. neela_akaash

Posts: 1239; Member since: Aug 05, 2014

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

34. Ashoaib

Posts: 3309; Member since: Nov 15, 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

25. Iodine

Posts: 1518; Member since: Jun 19, 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.

23. sip1995

Posts: 1771; Member since: Feb 07, 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......

22. B-power

Posts: 258; Member since: Feb 22, 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.

19. LikeMyself

Posts: 631; Member since: Sep 23, 2013

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

18. Napalm_3nema

Posts: 2236; Member since: Jun 14, 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.

21. joey_sfb

Posts: 6794; Member since: Mar 29, 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.

17. xperiaDROID

Posts: 5629; Member since: Mar 08, 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.

15. SnowWhite

Posts: 3; Member since: Aug 20, 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.

16. xperiaDROID

Posts: 5629; Member since: Mar 08, 2013

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

33. Ashoaib

Posts: 3309; Member since: Nov 15, 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

13. iluvsonynokia

Posts: 161; Member since: Aug 27, 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)

12. marcski07

Posts: 600; Member since: Apr 25, 2014

HTC? popular? LOL

9. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 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?

11. ArtSim98

Posts: 3535; Member since: Dec 21, 2012

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

32. Ashoaib

Posts: 3309; Member since: Nov 15, 2013

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

20. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

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

6. NationGuettaTR

Posts: 38; Member since: Dec 28, 2013

Android in the Acidland lol

4. mayur007

Posts: 593; Member since: Apr 10, 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

8. LetsBeHonest

Posts: 1548; Member since: Jun 04, 2013

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

39. mayur007

Posts: 593; Member since: Apr 10, 2012

i waiting for oppo's

3. techmac

Posts: 3; Member since: Aug 20, 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

2. NokiaFTW

Posts: 2072; Member since: Oct 24, 2012

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

5. vuyonc

Posts: 1093; Member since: Feb 24, 2014

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

26. neela_akaash

Posts: 1239; Member since: Aug 05, 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)....

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