Chinese Smartphone Makers Ready to Challenge Apple Inc.

Technology - Mohit Shah - Dec 15,2017

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chinese smartphone makers ready to challenge apple inc

A large number of companies from China have expressed an interest in entering the U.S. smartphone market, especially Apple Inc.

Apple has a lot at stake in the U.S., where it is the leading smartphone maker. The Chinese handset makers are targeting the U.S. market at an opportune time. As the smartphone market in the world's largest economy begins to slow, domestic manufacturers are looking overseas and see potential in the U.S. Technology giants including Huawei Technologies Co. and Xiaomi Corp. are in talks with U.S. wireless operators about selling flagship smartphones to American consumers as soon as next year. Xiaomi executive, Wang Xiang said that the firm aims to roll out phones in the U.S. within two years.

According to market analysts, it’s not an easy task to make its presence in U.S., i.e. home turf of Apple. One of the biggest challenges for China's tech giants is building a brand in a market where Apple has a 41 percent market share. Consumers in China and other emerging markets are also more likely to buy a handset outright, making cheap devices very attractive. But in the U.S., contracts with mobile carriers are the dominant method of buying a phone, meaning users can slowly pay for premium devices.

Presently, the U.S. smartphone market is dominated by Apple and Samsung Electronics Co. Since most phones are purchased through carriers, it’s nearly impossible for a manufacturer to gain serious market share without support from AT&T or Verizon, the two largest U.S. wireless networks. In the recent past, Apple makers have been insulated from competition by strong support from carriers, which used to fund its expensive iPhones and lowered the upfront price for customers.

Well-known players such as electronics giant Lenovo and mobile infrastructure titan Huawei are ongoing to invest in expanding their products into the U.S. Meanwhile upstart handset group Xiaomi has opened an international online store to sell its low-cost accessories and said smartphones would follow in the future.