Chinese companies enter global smartphone market

August 25, 2014

Both Apple and Samsung are poised to introduce new smartphones in early September. It’s a yearly ritual that highlights the intense competition between the two leading phone makers, each vying to outdo the other. Most expect Apple to release an iPhone design with a larger 4.7-inch display and Samsung to release a Galaxy 5 with a more substantial enclosure.

But while these two companies are fighting it out, they’re beginning to face serious competition from some fast-growing competitors in China. I got a preview when I was there in July and saw how many consumers were moving away from Samsung and Apple and buying new products from Chinese phone makers, specifically Xiaomi and Huawei.

These companies were offering phones unlike what I’d previously seen in China — not the poorly made crude knockoffs with buggy software, but solidly constructed devices that look and work much like Samsung models. All of these phones run Android, the free operating system from Google.

Surprisingly, they are less than half the price of comparable Samsung models. Where a Samsung Galaxy or Note costs about $650, these phones retail for $150 to $300, and come unlocked.

China’s Huawei is now the world’s third-largest phone manufacturer, behind Samsung and Apple. Xiaomi has captured 21 percent of the sales in China compared to Samsung’s 23 percent, Apple’s 16 percent and Huawei’s 8 percent, and is expected to be No. 1 in sales in China this year. Huawei, focused more on the international market, is forecast to sell more than 100 million phones worldwide this year, double from last year. Both of these companies offer a wide variety of models, with most under $300.

I’ve been testing one of Huawei’s latest models, the Ascend Mate 2. It looks much like the Samsung Note with its thin profile and large 6.1-inch display. It’s in the phablet category, measuring 6.34 by 3.33 by 0.37 inches and weighing 7.13 ounces. That compares to the latest Note 3 measuring 5.95 by 3.12 by 0.33 inches and weighing 5.93 ounces. The Note, it should be noted, also has a digitizer that allows writing with its included stylus.

But as a full-featured phone, the Huawei is a bargain. Its display is a high-quality LCD (720 by 1280 pixels, 241 ppi), and a 13mp camera with autofocus, face and smile detection, geo tagging for selfies and Skype.

It’s powered by a Qualcomm Snapdragon 400 quad core processor, has 16 GB memory expandable using up to a 64 GB micro SD card. One of its biggest features (literally) is a whopping 3,900 mAh non-removable battery that provides about two days of use. That compares with the Note’s 3,200 mAh cell and the iPhone with 1,450 mAh.

The Mate2 fully supports AT&T, T-Mobile and any GSM provider in the United States. This includes some of the no-contract MVNOs (mobile virtual network operator) such as Straight Talk, Cricket, and MetroPCS. I tried the phone on a Net 10 MVNO and the phone worked well.

The phone makes a few compromises. The display has about a third lower resolution than a top Samsung phone, yet in my use the display was plenty sharp for reading text and showed no pixilation.

Because Google provides the software, operationally there’s very little difference between this phone and other Android models. Each company offers its own user interface on top of the basic Android design. I preferred the Huawei UI over Samsung because its interface was simple and more iPhone-like, and it wasn’t loaded up with lots of crapware and hard-to-use utilities, something Samsung is notorious for doing. As a result, the Huawei is truer to Google’s reference design.

I found the phone’s size had both pluses and minuses. I liked the fact that the keyboard is larger and I made far fewer typing mistakes than on my HTC with a 5-inch display. It was also easier to browse and read websites such as The New York Times. On the other hand, the phone can barely be used with one hand. Huawei adds a clever utility that provides soft keys such as “back” and “home” to the edge of the display that make it easier to access with one hand.

As to support, Huawei says phones sold in the United States through the website will come with up to a two-year warranty, including U.S.-based customer support over the phone, and free return shipping. The phone is not sold through any carrier partners, only on GetHuawei.com and Amazon.com.

Clearly, this is one of the best phone bargains I’ve come across. Both Huawei and Xiomi have full lines of phones, most of which offer big savings over other Android makes.

What does this mean for the future? I would expect these companies to hurt Samsung most of all, who has led the Android phone market. Apple also needs to be wary. This is the start of full-featured, powerful smartphones at prices unimaginable just a few years ago.


Baker is the author of "From Concept to Consumer," published by Financial Times Press. Send comments to phil.baker@sddt.com. Comments may be published online or as Letters to the Editor.

More Phil Baker Columns

Chinese companies enter global smartphone market

Both Apple and Samsung are poised to introduce new smartphones in early September. It’s a yearly ritual that highlights the intense competition between the two leading phone makers, each vying to outdo the other. Most expect Apple to release an iPhone design with a larger 4.7-inch display and Samsung to release a Galaxy 5 with a more substantial enclosure.

Essential gadgets for the connected traveler

My wife and I just returned from a two-week vacation visiting Oslo, Bergen and the fjords in Norway, and several towns in Normandy and the Loire Valley in France. I was able to try out some products — not to make work more efficient, but to help make our vacation run smoothly. We carried a MacBook, iPad, and two phones, a Verizon iPhone and T-Mobile HTC One.

Why canít the US build consumer electronic products?

I recently returned from a short trip to Shenzhen, the large Chinese city less than an hour’s drive north of Hong Kong. When anyone wonders why we don’t build consumer electronic products in the United States, the one-word answer is Shenzhen.

When two phones are better than one

Ever since I discovered T-Mobile’s ridiculously low-cost International service, I’ve been carrying a T-Mobile phone (HTC One M8) along with my Verizon iPhone 5s.

San Diego Stock Exchange

U.S. Markets

Index Value Change
{{name}} {{value}} {{daychange}}
Updated: -/-/---- -:-- --

San Diego Stock Exchange

Best Performers

Company $ Chg % Chg
{{companysymbol}} {{changefrom}} {{percentchange}}

Worst Performers

Company $ Chg % Chg
{{companysymbol}} {{changefrom}} {{percentchange}}
Updated: -/-/---- -:-- --
Subscribe Today!