After one of the worst years in the history of the smartphone market, Chinese smartphone makers are trying to enter the high-end device market to challenge the dominance of Apple and Samsung.
Chinese smartphone makers are showing off some major platforms and products after unveiling stunning new products at the Mobile World Congress MWC 2023 in Barcelona, Spain.
Last month, Oppo, which ranks fourth in the global smartphone market, launched a foldable smartphone called Find N2 Flip, which has a price tag of more than $1,000. Then it was followed by its great competitor, Xiaomi, with my phone (Xiaomi 13) Mi 13 and (Xiaomi 13 Pro) Mi 13 Pro, which cost more than $ 1,000.
Honor, a subsidiary of Chinese telecom giant Huawei, has launched its foldable smartphone (Magic Vs) at a price of $1,690 for global markets.
The expensive phones represent a shift in strategy from Chinese companies that have excelled in recent years by offering affordable devices with similar specifications to flagship phones.
"Many companies like Oppo, Xiaomi, OnePlus, Vivo, Realme, etc. are keen to show their commitment to work with Apple and Apple together, Samsung has proven itself in the competition," CCS Insight's director of research (Ben Wood) told CNBC via email. The market and the two companies increasingly dominate global sales.
After smartphone shipments last year fell to their lowest level since 2013, Chinese companies have changed course. But the share of high-end smartphones worth more than $800 will increase from 11% in 2020 to 18% in 2022.
Apple and Samsung together dominate this category. However, the opportunity is lucrative for Chinese companies looking to improve their profit margins.
The strain on high-end devices also coincides with China's reopening after it abruptly dropped its strict rules to prevent COVID-19 in December. This made it easier for executives, who have been largely stuck in China since early 2020, to go abroad.
It also coincides with a new push for Chinese companies to expand their global reach. In 2022, Chinese smartphone manufacturers Realme, Oppo, and Xiaomi will lose market share in Europe, while Apple and Samsung will remain relatively flat. Now that the local economy has reopened, Chinese companies are hoping to change that.
"The lifting of the lockdown marks a 'new beginning' for companies that manufacture and export to clients around the world where they meet face-to-face and can expand relationships...and opportunities. and function," Neil Shah, partner at research firm Counterpoint Research, told CNBC via email.
"So over the next 12 months, we will continue to see a boom in Chinese business and an influx of Chinese tourists, which will further their global strategy," Shah added.
I think Chinese smartphone makers still have to work hard if they want to firmly establish themselves in the high-end mobile space. Huawei made an exception and achieved success in the field of smartphones and finally became the number one country for smartphones. The year 2020, before the US sanctions, decimated the smartphone sector.
Analysts say Xiaomi, Oppo, Honor and other Chinese rivals face a number of challenges in the flagship hardware space, not least of which is brand awareness, especially as the Chinese company spends "big money" on promotional activities.
But according to (Shah), the biggest problem is sustainable profitability, as he said that Apple and Samsung dominate the most diversified markets, for example: the United States and Europe. He noted that Chinese brands are also unable to build profitable software and service companies like Apple, which brings them huge profit margins.
Shah said, “With shrinking volume, profitability is the biggest challenge because the market segment that Chinese companies are targeting (low and mid-range phones) is shrinking.