Wednesday, 23 November 2016

Strategies of chinese smartphone companies

Do powerful budget smartphones come to an end?

Nowadays there are many Chinese companies which are launching smartphones at very affordable price. These smartphones are really good and offer very good value for money. They have great displays, good built quality, great premium build and many more powerful features which make these smartphones a value for money. People actually like these smartphones very much because theses smartphones are offering very powerful features at very cheap rates and so these smartphones have a great demand in market. There are many smartphones launching from the last 3 years which offer many good features at very cheap rates such as one plus series, redmi note series, Lenovo K series and much more. And in 2016 redmi note 3 is the most affordable smartphone with really great features and this also breaks all records.


But have we ever thought how these companies manage to sell their smartphones at very affordable rates. How they give so much premium features which other companies like Samsung, htc failed to give in the smartphones in same price segment? How they make profits? Or they sell their smartphones by incurring losses? These questions arise in our minds about these smartphones which I will answer today. So let's get started...

These companies have a slightly different strategy. These companies actually don't have that much profit from their smartphones. As these companies are new they want to make a stand for them in this new market, so that people came to know about their smartphones and about their brands as they are new. These companies are actually thinking that the audience which are buying their smartphones will again buy their smartphones after 1 or 2 years when they want to upgrade their smartphones. There are many companies like this such as xiaomi, Lenovo, leeco, one plus and many more.

Actually these companies are claiming that they are not selling their smartphones at great profits now as to make a stand in new market. Even some companies are claiming that they are even selling their smartphones at losses which means that smartphone's building cost is more than it's selling price. So actually some of the companies are now increasing the prices of their smartphones, they are launching new smartphones at higher price. This thing is fair enough because company have to also get some profit and all work for profit only. These companies are one plus and Asus. And even after increasing their smartphone's price they are able to sell their smartphones like one plus 3 is a super hit smartphone.

But on the other hand their are still companies like xiaomi and Lenovo which are still launching their smartphones at a very affordable rate. So it would be interesting to see that whether they will do the same thing as one plus and Asus or they will continue to do what they are doing now.

The companies like Samsung have already settled in the world. They know that people are going to buy their smartphones at which price they want to launch them. Actually these companies may not be spending much to build their smartphones but there are other many costs which these companies have to face.

First of all these companies have a very great team as compared to the new partners like xiaomi and one plus, which don't have that much great team. So the company has to pay a large number of people. Also Samsung spend a lot in it's research and development department which increases the cost of phone. These companies also do a great advertisement to sell their smartphones. They give their ads in newspapers, hoardings, internet, magazines and by many more means. These companies also has a very good after sales services as these companies have many service centers all over the world, this also increases the cost of phone.


Most of the new partners only made their smartphones available online, these are not available in offline mode. They deal with the online retail venders like flipkart, amazon, snapdeal and pay them some amount of phone's cost. But the companies like Samsung made their smartphones available at online mode as well as offline mode. So as these are also available offline, this also increases the cost of the phone. To make these smartphones available in offline market there are many middlemen between the company and the retail shop. So all these middle men have to get some profit. As the mobile passes by these middlemen it's cost keeps on increasing. So as it reaches us it's cost has increased much, which is not the case with the new smartphone partners. So this is also one of the reason of high cost of these smartphones.

My opinionMy opinion is that the strategy of these Chinese companies and other new partners don't work in India. Actually people in India are very money minded. They want their smartphones really good but don't want to spend a lot on their smartphones. So they started buying these companies' smartphones. Due to which the sales of these smartphones go higher. But these companies are thinking that people will buy their smartphones even if they will increase their phone's price after 1 or 2 years. But this strategy doesn't work in India. Let's think if Asus launches a smartphone in India with mostly same specs as a Samsung's smartphone and with just a very less price difference, people of India will definitely go with Samsung's smartphone as it has very big brand name and good after sales service. Why people will spend their money on a Chinese smartphone which is offering the same specs as a Samsung's smartphone with in same price segment. So these companies have to apply some different strategies to secure their company's future.


Share on Google+