How Are Chinese Android Phones So Cheap?
Android phones from China offer top specs for a low price. But how? Here's what you need to know about cheap Chinese phones.
When you think of buying a new smartphone, the first two names that come to mind are Samsung and Apple. The two tech giants are age-old business rivals renowned for driving tech innovation with their bleeding-edge products and services.
But as new Chinese brands enter the tech arena, the competition is skyrocketing like never before—as new challenges, opportunities, and concerns emerge. Here's the truth behind the sudden explosion of Chinese brands and why you should care.
The BBK Electronics Empire
There's a good chance you have heard of at least one brand among OnePlus, Oppo, Vivo, and Realme—undoubtedly so if you live in Asia. All of these emerging brands are subsidiaries of the Dongguan-based Chinese umbrella company BBK Electronics, founded by Duan Yongping.
Depending on where you live, you have either never heard of BBK or it is a household name you are all too familiar with. This multinational conglomerate became the world's largest smartphone manufacturer in Q1 2021 outperforming even the most well-known tech giants.
BBK may not be a globally-known name, but its subsidiary brands are marking their territory in the tech world, and fast. So fast in fact that the sub-brands of these subsidiary companies are now becoming separate full-fledged independent companies.
For instance, Realme is a former sub-brand of Oppo. And iQOO, a sub-brand of Vivo, is on the same path to becoming independent. On paper, these subsidiary companies may indeed seem distant, but they communicate and collaborate with each other rigorously—sharing ideas, expertise, and strategy.
The Genius of Chinese Phone Makers
When you zoom out and look at the big picture, you realize the genius behind these Chinese phone makers. You see, the more subsidiary brands in the market communicating and sharing resources and expertise with one another, the easier it is to avoid losses. This is because a hit taken by one brand can be absorbed by the others—dispersing the effect.
This is perhaps one of the biggest reasons for BBK's massive success. To understand how the giant is changing the tech industry, it's more convenient to see its subsidiary brands as a unified effort instead of treating them as separate entities. To do so, let's take a closer look at the Q1 2021 Global Smartphone Market Share statistics.
The collective market share of three of BBK's subsidiaries (Oppo, Vivo, and Realme) totaled an impressive 25%—beating giants like Samsung at 22%, Apple at 17%, and its close rival Xiaomi (also a Chinese brand) at 14%. Also, let's not forget that we haven't added the market share of OnePlus to the equation, and BBK is still the biggest smartphone maker in the world.
If you've noticed, Xiaomi and BBK follow the exact same strategy when it comes to market penetration: divide and conquer. The same is evident with Xiaomi's brands like Mi, POCO, Redmi, and its partly-owned brand Black Shark, all of which are geared towards serving a specific audience and a specific purpose.
In the case of BBK's brands, Oppo and Vivo are positioned as innovative brands the ones that invest in R&D and come up with new technologies. OnePlus is positioned to offer a premium smartphone experience at competitive prices. And Realme is positioned as a budget-friendly brand for price-conscious buyers.
How Chinese Brands Rival With Tech Giants
If you have been keeping track, you must have noticed how almost all Chinese brands seem to be targeting a very specific goal: selling large volumes of value-for-money products to price-conscious buyers to establish authority. There are three key elements to note in this goal: audience, strategy, and message.
Audience
We know that the buyer of today is educated, and have the tools and knowledge needed to get the most out of their money. This is especially true in the highly competitive Asian market with its hyper-elastic demand where Chinese brands offer great value to build repute.
A hyper-elastic demand simply means that a minimal change in the price of a product has a massive effect on the number of units demanded of that product. Chinese brands take advantage of this phenomenon by slashing their prices to suffocate the local competition as soon as they enter a new market.
Strategy
Since Asia has such a massive population, primarily from China and India, brands have the advantage of playing by the numbers. They can afford to sell their devices for a smaller profit margin if it means the devices will sell in large quantities.
For budget-oriented brands like Redmi and Realme, profiting on hardware is not the goal. They profit instead on their in-built ads and pre-installed bloatware apps.
So, the logical way to achieve that goal is to get their phones in as many hands as possible, using a ton of celebrity endorsements and event sponsorships. In addition, they opt for the 2nd-mover advantage to avoid the risk of investing in R&D on innovations that might fail.
Message
One of the biggest advantages of having multiple subsidiary brands is that each one can be used to create, market, and exploit a unique brand image. Let's take OnePlus, for example. When it first started out, it positioned itself as an enthusiast brand with catchy taglines like "Never Settle" and "Flagship Killer".
The company listened to feedback and offered a premium smartphone experience at great prices. Now, years later, OnePlus has evolved into a mainstream brand. The point here is that Chinese brands tend to be more community-focused and customer-centric which is a brilliant strategy for the fast-paced Asian market.
How Chinese Brands Save Costs
We saw how Chinese manufacturers benefit from keeping a low profit margin on their phones, but that's only half the story. They also save costs by taking advantage of low labor costs in China to cut down their cost of production.
In addition, they enjoy lower shipping charges since their primary target market is nearby Asian countries such as India, Nepal, Bhutan, Indonesia, and more. This also makes it easier to set up overseas manufacturing facilities to avoid heavy import duties.
All of these savings are then passed on to the consumer by making the product cheaper. In comparison, targeting faraway markets like the US and Canada would require a much higher cost of customer acquisition.
Would You Buy From a Chinese Brand?
Chinese brands may not be everyone's first pick, especially if you live in the US. But in a fast-growing market like India, they are marking their territory rather quickly. So much so that they're driving away international brands and have completely wiped out local competition.
But these great value-for-money smartphones come at a cost. If you own a Chinese smartphone, especially a budget one, it's hard to get rid of the built-in ads and bloatware—some of which you can't disable—that eat memory and result in a poor OS experience.
On top of that, there's a growing concern in the tech industry about Chinese brands spying on their users, as is suggested by the US-China clash and the 2019 Huawei ban. As great of a value that Chinese brands are providing, this is something worth considering if you're thinking of buying from one.
10 Non-Chinese Brands of Smartphones in India
India is the largest mobile market in the world with 135.26 crores population, Also is most popular destinations for technology, electronics and smartphone companies. Here is the list of best brands of Non-Chinese mobile phones available in India by Country.
Pixel by Google – United States
Pixel smartphone brand by Google is an Android operating system based phone with best smartphone camera, unlimited cloud storage, unlockable bootloader, IP68 water and dust resistance.
Pixel 4 is the latest smartphone by Google along with Pixel C, Pixelbook, Pixel Slate and Chromebook series laptop of as well as Pixel wireless earbuds, Pixelbook Pen and Pixel Stand.
iPhone by Apple – United States
Apple Inc is the most popular American technology company and also one of the top five best Big Tech companies in the world alongside Amazon, Google, Microsoft and Facebook.
The iPhone line of smartphones are best-selling smartphones worldwide, iPhone SE 2 is the latest designed smartphone by Apple Inc.
Nokia – Finland
Nokia Corporation information technology and electronics company has headquarters in Espoo, The company has operated in so many different industries and known to be a trendsetter in mobile industry.
The Nokia company mobile and smartphones are major contributor to the mobile telephony industry in the world.
Samsung – South Korea
Samsung is a South Korean company and its popular affiliates include chipmaking, electronics, heavy industries and information technology.
Samsung Electronics is the largest manufacturer of mobile phones and smartphones, also has developed 5G capable smartphones.
LG – South Korea
LG Electronics is another famous South Korea electronics company with four different business units, Mobile, Electronics,Entertainment and Home Appliances.
The company manufactures mobiles, curved smartphones under the brand name LG, G series of tablets and Smart watches.
Sony – Japan
Sony Corporation is a Japanese company and its diversified business includes entertainment, gaming, television, video games and smartphones.
Sony Mobile is wholly owned subsidiary of Sony Corporation, created Android smartphones under the Xperia.
Panasonic – Japan
Panasonic Corporation is also a Japanese company and also one of the largest electronics producers from Japan along with Sony, Hitachi, Toshiba, Pioneer and Canon Inc. Eluga is the latest series of mobile phones by Panasonic
BlackBerry – Canada
BlackBerry brand of smartphones are designed and marketed by Research In Motion, now known as BlackBerry Limited. The Canadian company has partnerships with TCL Communication for designing mobiles under the name “BlackBerry Mobile”.
HTC – Taiwan
HTC Corporation is a popular Taiwanese consumer electronics company that designing and manufacturing laptop and mobile phones. The HTC was once in the competition with Apple and Samsung, htc desire, wildfire are the popular smartphones from htc and the company also launched 5G hub, vive and phone for blockchain and cryptocurrency.
Asus – Taiwan
AsusTek Computer is another popular Taiwanese mobile brand that currently holds a big mobile market in India, after Chinese smartphones.
The company known for the ZenFone series of Android smartphones released in India on 19 under the name Asus 6Z. Asus products not only includes mobile phones but also desktop computers,monitors, servers, workstations and laptops.
China smartphone shipment in Q2 2022
In June 2022, the domestic mobile phone market shipped 28.017 million units, a year-on-year increase of 9.2%, and the cumulative shipment in the first half of the year was 136 million units, a year-on-year decrease of 21.7%, according to the latest report of China Academy of Information and Communications Technology (CAICT).
Among them, the shipment of smartphones in June was 27.478 million, with a year-on-year increase of 9.1%.
5G mobile phones shipped 23.027 million units in June, with a year-on-year increase of 16.3%, accounting for 82.2% of mobile phone shipments in the same period.
Domestic brand mobile phone shipments in June were 24.514 million, a year-on-year decrease of 0.5%, accounting for 87.5% of mobile phone shipments in the same period; in the first half of the year, 115 million mobile phones were sold, a year-on-year decrease of 25.9%, accounting for 84.5% of mobile phone shipments in the same period.
China IoT market to account for 45% of global spend by 2025
China smartphone market share in Q2 2022
In the second quarter of 2022, China’s smartphone shipment reached about 67.2 million units, a year-on-year decrease of 14.7%, according to data from IDC. In the first half of the year, the domestic smartphone shipment totaled about 140 million units, a year-on-year decrease of 14.4%.
Honor ranked first in domestic market shipments in the second quarter, and Vivo ranked second. In the first half of the year, the domestic shipments of foldable smartphones exceeded 1.1 million, with a year-on-year increase of about 70%.
China smartphone market share in Q1 2022; Apple has 16.7% share
In the first quarter of 2022, China’s smartphone market saw about 74.2 million units shipment, a year-on-year decrease of 14.1%, according to data from IDC.
The impact of the continuous rebound of the epidemic on consumers’ budgets and the small upgrading range of new products have led to the continuous downturn of market demand.
The more uncertain overseas market prospect has led many mobile phone manufacturers to adopt more stable and conservative operation strategies, and the market will face great challenges throughout the year.
Oppo ranked first in terms of domestic smartphone shipment market share in the first quarter, followed by Honor, with a very high year-on-year increase, Vivo in the third place, Apple in the fourth place, and Xiaomi in fifth place.
At the same time, the negative impact of the current domestic epidemic on the logistics and supply side of the mobile phone market is relatively controllable, which brings about the delay in meeting part of the demand.
If there is no additional positive stimulus, the capacity of China’s smartphone market may fall below the 300 million mark in 2022, according to IDC.
Vivo has the largest market share of 19.7% by total smartphone sales, according to Counterpoint, followed by Oppo (18%), apple (17.9%), Honor (16.9%), Xiaomi (14.9%), and Huawei (6.2%). In the first quarter, domestic mobile phone sales fell 14% year-on-year to 74.2 million.
Smartphone shipment in China up 1.1% in 2021; Apple has 15.3% share
In 2021, the total shipments of mobile phones in China’s domestic market totaled 351 million, a year-on-year increase of 13.9%, according to China Academy of Information and Communications Technology (CAICT).
In 2021, the shipments of domestic brand mobile phones in China totaled 304 million, a year-on-year increase of 12.6%, accounting for 86.6% of the mobile phone shipments in the same period. In other words, nearly 87 people buy domestic mobile phones among every 100 people’s purchase.
In 2021, 5G mobile phones shipped 266 million units, with a year-on-year increase of 63.5%, accounting for 75.9% of mobile phone shipments in the same period. In November and December 2021, 5G mobile phones accounted for more than 80%.
In 2021, 329.3 million smartphones shipped in China, with a year-on-year (YoY) growth of 1.1%, according to IDC.
Throughout 2021, 404 new models of smartphones were listed, with a year-on-year increase of 11.0%, accounting for 83.6% of the number of new models listed in the same period. It can be seen that functional phones still have a huge audience.
Top 10 Smart City Forecast in China 2022-2025
Apple and Vivo took the top spot in the last quarter of 2021 and the full year 2021, respectively. Honor continued its momentum in Q4 2021 and gained another spot from the previous quarter. More intense competition is coming in 2022 according to IDC.
In 2021, Apple’s smartphone shipment reached more than 50 million and it also had the largest growth among the top 5 vendors. Honor continued its growth in Q4 2021 with the launch of the Honor 60 series and X30 series in December.
Vivo ranked first in full-year 2021 and achieve a better market position in the >US$400 market and online channels.
Oppo ranked the second spot in 2021, with the K, Reno, and Find series achieving a higher share of its portfolio compared to last year. In Q4, the launch of the Reno 7 series also strengthened Oppo’s position in the US$300-500 price segment.
Xiaomi ranked third in 2021.
In 2021, the Chinese market shipped 1.5 million foldable smartphones with only 0.5% share.
Get an overview of China’s mobile apps market here.
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