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Thursday, 28 February 2013 10:47

Chinese fated to take over smartphones

Written by Nick Farrell



Inscrutably

The days of western dominance over the manufacture of smartphones are fast coming to a close with China taking control of the market.

Manoj Kohli, chief executive of Indian operator Bharti Airtel told the Mobile World Congress in Barcelona that there is a battle that could favour low-price Chinese manufacturers like Huawei and ZTE over market leaders Samsung and Apple. Kohli said emerging market consumers were ready to leapfrog basic phone models and go straight for smartphones, but that prices could not come down fast enough.

What will happen next is that there will be a rise in low-price smartphones which could knock out market leaders Apple and Samsung, which are known for their top-end models. Huawei and ZTE have built share by bringing features pioneered by Apple and Samsung such as touch screens, fast processors and better cameras to the market at prices around $100.

Lenovo's Chief Executive Yang Yuanqing told Reuters that the outfit has become the fifth-biggest smartphone maker in the world by almost exclusively focusing on China. It is now expanding able to expand into Indonesia, India and Russia in a bid to appeal to the rising middle classes there.

Yuanqing said that the biggest problem for Apple and Samsung is that they need subsidies from network operators in Europe and the United States, hiding the cost of around $500-600 over a two-year contract. Such deals are much harder in emerging markets.

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