Three years ago mobile phones conceived, designed and built in China by Chinese brands were pretty awful. The case for the prosecution: Exhibit A – Huawei Ascend P2, which to give context was launched within a few months of the much loved Samsung Galaxy S4.
But like with so many other industries and product categories, the Chinese are quick learners. In this instance it can be attributed to two interconnected factors :
- All of the familiar western brands, constantly pushing to raise the bar in the face of intense competition, have their products manufactured, and in some cases engineered in China. They provided the Chinese with the perfect education on how to create and deliver great mobile phones.
- Without wishing to over stereotype, the thing the Chinese do best is to take something which works, duplicated it, and in the process create something just as good, but faster for a cheaper price.
2016 has seen the launch of the Huawei P9 – the first genuinely premium smartphone to be created in and exported from Shenzhen.
OnePlus have brought much needed innovation to the category with their distribution strategy, and with the OnePlus 3 they have delivered an outstanding product with a price tag nearly half that of the equivalent Samsung (£329 vs. £609).
It will be interesting to see if brands like Xiaomi and LeEco can overcome obstacles, including IPR, to successfully enter the western markets. For Xiaomi VP Hugo Barra (headhunted from Google) that is certainly on the agenda. These highly disruptive, ultra aggressive companies, whose strategy is to capture market share as quickly possible by creating and selling flagship products at cost (or even sub-cost), bank on generating profit later in the consumer journey through upselling elements like services.
In the end, for most of us, the basic rules of economics win out. If someone offers you two things, largely the same, one for a third of the price of the other, in 99% of cases there will only be one outcome.
Don’t be surprised if on the back of your next, next phone there are the words, “Designed and Made in China”.