Tech

China’s tech companies are slowly overtaking Apple and Samsung on the global smartphone market

It’s easy to get lost in the specs and features included in the stellar releases of the new iPhone XS and Galaxy Note 9 models.

For as long as most of us can remember, both Apple and Samsung have dominated the smartphone market. According to recent reports, however, Samsung mobile sales have been on a steady decline, dropping 13% points in the last business quarter itself. Even Samsung has acknowledged its failures in this field. While their smartphone sales still remain higher than most, it is clear that they are regressing. As for Apple, their iPhone XS might have been a success in North America, but its sales have been relatively flat in other markets such as India, Europe, or China.

Chinese smartphone brands and their recent flagships

Meanwhile, Chinese smartphones are on the rise. Huaweis shipments have gone up 32.5% in the last quarter and have surpassed Apple (for the third time) to become the worlds second-largest smartphone brand. Other Chinese tech giants like Xiaomi, OPPO, ZTE and OnePlus have steadily grown in popularity, specifically in mid-to-low range markets.

A plethora of Chinese phone brands have been on the rise in the past few years. Although many have made their presence known in the market, listed below are the major flagships that have either been released recently or are set to be released in the near future.

1) OnePlus 6T

OnePlus6T model, launched on October 30, is one of the best flagships in the mid-level price range market. Unlike some of its foreign competitors like Apple and Samsung, they have released an in-screen fingerprint sensor for more efficient mobile security. The phone will also be waterproof and have wireless charging capabilities, similar to all other major smartphones on the market.

oneplus 6t smartphone black all anglesWhile prices may have gone up by OnePlusstandards, $550 for an up-to-date smartphone with similar capabilities as an iPhone XS or Galaxy Note 9 seems to be worth it.

2) Xiaomi Mi 8

Xiaomis recent flagship was released in 2018. The device has a see-through back panel that gives a peek into the devices internals, such as its Snapdragon 845 processor. Its about 7.6 mm thick and weighs 177g.

It will also have a 6.21-inch Super AMOLED touchscreen that has 1080 x 2248 resolution and 402 pixel per inch density. Apart from an in-display fingerprint scanner, there aren’t any additional details on the screen.

The phones storage system is quite developed, with 128 GB of storage space and 8 GB of RAM. It will also last a while, with merely 1.5 hours needed to charge the device.

The price ranges depend on the specific flagship you want, but prices only go as high as $499.99. A huge part of Xiaomis appeal has been its ability to offer up-to-date specs and features at a remarkably lower price than some of the other bigger brands in the industry.

photo of xiaomi hardware

3) Huawei Mate 21 Pro

The Huawei Mate 21 pro model made headlines when tech media begun to comment on its massive screen (7.2 inches from corner to corner), The Mate 20 also is equipped with a small Dewdrop notch cut into a 6.53 RGBW HDR display and runs a 2,444 x 1,080 resolution in an 18:7:9 aspect ratio.

It will have superior charging features, allowing you to completely charge your phone in under an hour. In addition, its Reverse Charge feature will allow you to charge someone else’s phone through your own.

Unlike some of the other prominent Chinese models, Huaweis flagships are in a similar price league as Samsung or Apple. This is not surprising, considering Huaweis hardware and sales are in similar leagues as Samsung or Apple at this point.

Nonetheless, the Huawei Mate 21 Pros price is likely to be in the range of $1039, still an improvement from the iPhone XS Maxs price of $1,449.

new huawei phone

Why are Chinese tech companies more appealing?

In China

This one shouldn’t be surprising. It is not abnormal for a company to perform well domestically and earn high revenues in its own market. However, until around 2016, Apple and iPhone products had a massive stronghold on the Chinese market. Before 2016, it was common for China to account for over half the companys total smartphone sales, yet now accounts for half its year-to-year shrinkage in sales.

Apple’s steady decline over the past few years can be attributed to a few factors. Perhaps the most obvious cause has been the governments recent crackdown on foreign distributed content. As a result, many of Apples media services were banned, decreasing the value of a lot of Apples products.

 

Secondly, the Chinese economy has moderately slowed over the past few years, likely meaning most people will be weary of spending over a thousand US dollars on a foreign-made phone. In China, iPhone consumers tend to be highly-paid professionals, hardly the majority of the population. This means that unless Apple is able to put up truly innovative models (without raising the price to exorbitant rates), it’s unlikely to keep people engaged there. This is especially true when people can purchase Xiaomis model phones for under $200 for certain models, a low-end price market Apple just cannot compete in. 

The future for China is clear. Based on recent sales data, it’s likely that competition for the market will be between domestic smartphone producers rather than foreign companies. Huawei, Chinas most popular phone company abroad, is already experiencing these effects as smaller/cheaper brands challenge its position in the mid-price-level price sector.

In India

In India, although most foreign phone sales still go to Samsung, companies like Huawei and Xiaomi are making massive inroads. Huawei registered around 51.4 million shipments, amounting to 16% of Indias market share. Xiaomi and Oppo also did quite well, accounting for 8% and 9% of the market share respectively. While Samsung still was the most successful of the foreign brands, accounting for 20% of the total market share, Apple experienced severely low shipment rates, accounting for only 10% of Indias smartphone market.

Chinas success in Indias market can be attributed almost exclusively to economics. Shipments from other Asian countries like South Korea and China tends to be much cheaper than from US companies such as Apple. As Apple has raised its recent flagship prices even further, it seems out of reach for the average Indian consumer.

In addition, Indias economy has been greatly affected by Nationalist economic initiatives encouraging its citizens to buy domestically made smartphone brands such as Micromax or Tata. Therefore, phones will need to offer both similar prices and superior services if they are to garner support in Indian markets.

In Europe

In Europe, it seems as if fewer and fewer people are inclined to purchase smartphones. In 2018, overall smartphone sales fell by 6.5%. In Europe, Samsung sales fell by an astonishing 15.4% and Apple sales by 5.4%, although they remain the continents top selling brands.

However, despite the turmoil in the smartphone business across Europe, both Huawei and Xiaomi experienced massive spikes in growth. In 2018, Huaweis shipments increased by 40%, representing a continent-wide interest in their products. In addition, Xiaomi, who only started selling its phones in Europe two years ago, is now one of the continents top vendors behind Apple, Samsung, and domestic counterpart Huawei.

Problems ahead (specifically in North America)

Notwithstanding successes in China, India, and Europe, every major company seeks to break into North American markets. However, for numerous political reasons beyond the companiescontrol, this just hasnt been possible.

Despite being a major player in the smartphone industry overseas, Huawei has been largely cut out of the US market since 2012. At that time, the US House Intelligence Committee issued a report warning telecommunications providers against purchasing networking equipment from Huawei, citing potential company ties to the Chinese central government. Just last year, Huawei was on its way to signing a US carrier agreement, but news broke in January that AT&T and Verizon had backed away from plans to sell Huaweis phone because of pressure from the US federal government.

In addition to Huawei, US authorities have been especially tough on ZTE, another major Chinese smartphone manufacturer that at a time was the 4th largest handset seller in the US. On April 6, 2018, the US Department of Commerce ordered US suppliers to halt all selling of phone manufacturing components to ZTE, over failure to comply with US-led sanctions on Iran and North Korea. 

As a result, ZTE has since ceased operations. This could be a death sentence for ZTE, who relies heavily on US chipmakers for parts.

Perhaps the only Chinese company with some hope in the region is Xiaomi. At the moment, its smart TVs and accessories are available in US markets, but not its handsets. Xiaomis weak patent portfolios may have kept its smartphones out of the country in the past, but it has recently formed patent-sharing agreements with Microsoft, Qualcomm, and Nokia in order to sell their products without fear of litigation troubles. However, their phones still have yet to go on sale in the United States.

Overall, based on the current US administrations attitude towards China and Chinese manufacturers, it seems unlikely that they will break through to the US market. This will remain one massive failure that Chinese tech giants will likely not be able to solve for the time being.