October 17, 2016

How Chinese smartphones could overtake Apple and Samsung in the U.S.

By Team Ventev Topic:

You’re probably familiar with Apple and Samsung—most of you use one of their phones. But have you heard of Xiaomi and Huawei? You will soon, if you haven’t already, and in a year or two, you might even have one of these Chinese smartphones in your pocket.

Skeptical? It’s more likely than you think. The phones are go-to devices worldwide, are cheaper than the flagship iPhones and Galaxy devices, and offer more choices than the typical American phones. Here are some of the reasons you may want to keep an eye on these newcomers.

The Plan: Why Chinese manufacturers are headed stateside

In a world controlled by Samsung and Apple, the idea of the Chinese toppling their domain sounds ridiculous. And while the two smartphone giants do hold 59 percent of the U.S. market, worldwide they only control a (falling) 33 percent. The next four top competitors? All from China.

Until now, these Chinese manufacturers have been dominating emerging markets like China, India, and Southeast Asia, but now they have their sights set on the U.S., a move that could get you some high-quality hardware at a fraction of the price you’d typically pay.

But why now? One reason is the recent split between carriers and phone manufacturers. As carriers drop the idea of giving you a free phone with a long-term contract, these Chinese phone manufacturers finally have an in.

The Pros: Low cost, flexibility, and extra battery life

Besides their low prices, Chinese smartphones have one big advantage over their American counterparts. Rather than the one-size-fits-all, race-to-the-top philosophy championed by Apple and Samsung, companies like Xiaomi, Meizu, and ZTE have created phones that emphasize different aspects of the mobile experience.

For example, an iPhone has the best camera, the best display, the best processor available. One of the Chinese manufacturers, however, might build a phone centered on a super-powerful camera and sacrifice a little bit of speed to bring the price down.

Another phone could have amazing battery life, but a display that’s a year behind the curve. The mix-and-match approach allows consumers to choose what’s important to them, rather than just choosing between the two (expensive) standards offered by the current industry giants.

In certain areas, Chinese phones blow the competition away. Take the Lenovo Vibe P1. It has a 4,900 mAh battery—for only $160. That’s over double the 1,816 mAh battery in an iPhone 6, which costs about $550. So while the iPhone may have an edge in other areas, the Lenovo handset could be a smarter buy for someone who just wants better battery life.

And when it comes to battery and charge, the newest models of most Chinese-manufactured phones have adopted USB-C, meaning that even if you choose to switch between brands over the years, you won’t be stuck jumping from cable to cable each time you make a change. They’ve already implemented the current “future standard” of charging and data transfer, so you’ll be set to go for a while if you invest in a good cable.

Beyond the prioritizing of certain features, the huge savings come from selling their devices online, forgoing advertising, and keeping profit margins razor thin. Many of them have never been seen on brick-and-mortar shelves.

The Catch: What could hold up this new influx of devices

Of course, it’s hard to make any transition perfect. There are four potential challenges that Chinese smartphones might have to stare down:

1. Carriers revolting. They could revert back to the old system to push people into buying phones from Apple and Samsung, which will often adapt or tweak their software to the standards of the carrier’s network.

2. Network issues. In some cases, the phones might not be compatible with U.S. networks without some intense fiddling or sacrifices. You may be stuck using compatible 3G, for example, since China uses a different form of 4G.

3. Unknown support systems. Chinese manufacturers have yet to come up with a viable system for customer service and support in the United States.

4. Legal jargon. Patent laws are much stricter in America than most other countries, meaning that Apple or Samsung may attempt to block the phones by suing. While the new phones aren’t knock-offs of the iPhone or Galaxy models, their designs are similar enough to kick up a fight, if the dominant companies wanted.

The transition may not be seamless, but most of the roadblocks will probably be fixed with prolonged exposure to the American marketplace and trial and error along the way.

The Point: Chinese smartphones are a “when,” not an “if”

It may not be too shocking to see Chinese devices aggressively pushing into the United States within the next twelve months, and even gaining some huge recognition. And that wouldn’t be a bad thing; some diversity in the market could prop up the idea of the mid-class smartphone. Their popularity in the rest of the world has been growing—so why shouldn’t it here?

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