Chinese smartphone makers are noticeably changing their strategy from low-priced to high-priced handsets. It can be interpreted as an indication of their belief that instead of low-cost products, a premium strategy is now necessary, as the Chinese smartphone market starts to reach its saturation point.
According to industry sources on May 12, the price of the latest models released by Chinese handset makers is higher than US$100, or more than previous models.
As an illustration, Huawei set the price of its flagship smartphone P8 at US$560, US$60 higher than the P7. The weight of smartphones sold for over US$300 per unit increased from 4 percent in Jan. 2014 to 21 percent in March 2015. On the other hand, the proportion of smartphones sold below US$100 decreased from 24 percent to 21 percent during the same period.
The price of the Grand S3, ZTE's latest model, is set at US$480, more than US$80 higher than its predecessor.
Lenovo's Vibe X2 is sold for US$399 per unit. Its price is US$130 higher than that of the Vibe X. Xiaomi's Mi 4 is priced at US$312, nearly US$100 more expensive than the previous model.
China's smartphone penetration rates are estimated at 90 percent, according to overseas media outlets, including the Wall Street Journal. It indicates that the era of the low-priced strategy for smartphone distribution is gone.
On top of that, Chinese handset makers' competitive advantage in technology has recently improved greatly. Therefore, it has become essential for them to break away from the image of low-priced phone manufacturers to compete with big players like Apple and Samsung in the global market.