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Slow Innovation At Apple Sees Its Fast-Moving Chinese Rivals Gaining Share In Wealthy Markets


09/20/2017


Slow Innovation At Apple Sees Its Fast-Moving Chinese Rivals Gaining Share In Wealthy Markets
Driven by better designs and lower prices, best chance yet to conquer developed markets has been presented to Asian rivals of iPhone maker Apple by slowing innovation at the U.S. giant, retailers and consumers say.
 
Phones from China’s Huawei and Oppo, and Samsung Electronics already possess almost all of the features that Apple last week unveiled in it new iPhones such as wireless charging, an edge-to-edge screen and dual cameras.
 
Apple’s challengers are tilting at the luxury market, offering similar features for less money even as Apple must convince buyers to fork out nearly $1,000 for its high-end model.
 
Chinese vendors now control nearly half the global mobile market as they have upped their quality game even though they were formerly seen as churning out cheap phones with copycat innovation. And some loyal Apple users have also been won over by then by using a canny mix of promotion, advertising and retail reach and by cramming high-end features into affordable devices.
 
“Huawei is seen as a relevant competitor to Apple and Samsung (by) covering all major price points and placing big investments in marketing and sales,” said a spokeswoman for MediaMarktSaturn, Europe’s biggest electronics retailer.
 
She said Huawei, ZTE, Lenovo and TCL - all Chinese firms - were among the top-10 best-selling smartphones in its stores.
 
According to CLSA, Chinese manufacturers now export 40 percent of their smartphones, almost double the number just three years ago even though their rapid growth has been fueled by strong domestic sales.
 
And poised to overtake Apple as the world’s second-largest vendor is Huawei, whose smartphone shipments to Europe jumped more than 50 percent in the first half of this year.
 
Ahead of its “RealAIphone” launch next month, an advertisement using a clown to poke fun at Apple’s facial recognition feature that unlocks the new iPhone showcased the Chinese firm’s confidence on show in a short Facebook video ad.
 
With artificial intelligence-powered features such as instant translation and image recognition, Huawei plans to unveil its top-of-the-line Mate 10 phone on Oct. 16, And media reports speculate that the phone will undercut the iPhone on price and will have an edge-to-edge screen.
 
other Chinese firms are also looking to crack the high-end smartphone market with their growing scale and the flattening of hardware improvements.
 
For example, with features like a sleek, all-ceramic ‘unibody’ design and 12-megapixel front camera, Xiaomi unveiled a full-screen phone this month. The special edition Mi MIX 2 retails for $720. Also in order to embed ultrasound sensors under smartphone screens to improve the touch function, Xiaomi, Oppo and Vivo are working with Qualcomm.
 
“Chinese brands with growing scale, access to the same supply chain, rising components buying power, aggressive marketing and value-for-money offerings have stalled Apple’s growth rate and nullified the differentiation points,” said Neil Shah, research director at Counterpoint.
 
Few experts see Apple fans switching from the iPhone X to Huawei’s Mate 10 and Apple maintains a healthy market share lead over Chinese rivals in the premium segment.
 
“The biggest challenge they (Chinese firms) face would be proving to consumers their products and brand are worth paying that much for,” said Xiaohan Tay, an analyst at research firm IDC.
 
“Apple has taken years to build that premium brand image, and Samsung too. If they can pay a little more to purchase an Apple or Samsung phone, most consumers may still continue to do that.”
 
(Source:www.reuters.com) 


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