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Cheap Smartphones Quietly Becoming Popular In the US

An anonymous reader writes: Bloomberg reports that ZTE and its cheap Android smartphones have been grabbing more and more of the market in the U.S. It's not that the phones are particularly good — it's that they're "good enough" for the $60 price tag. The company has moved up to fourth among smartphone makers, behind Apple, Samsung and LG. That puts them ahead of a lot of companies making premium devices: HTC, Motorola, and BlackBerry, to name a few. ZTE, a Chinese manufacturer, seems to be better at playing the U.S. markets than competitors like Xiaomi and Huawei, and they're getting access to big carriers and big retailers. "Its phone sales are all the more surprising because it's been frozen out of the more lucrative telecom networking market since 2012. That year, the House Intelligence Committee issued a report warning that China's intelligence services could potentially use ZTE's equipment, and those of rival Huawei Technologies, for spying. Huawei then dismissed the allegations as 'little more than an exercise in China bashing.'"

34 of 209 comments (clear)

  1. Nokia 635 by avandesande · · Score: 4, Interesting

    35$ on amazon it is a great phone

    --
    love is just extroverted narcissism
    1. Re:Nokia 635 by msk · · Score: 3, Funny

      Why don't you post with your account?

    2. Re:Nokia 635 by avandesande · · Score: 3, Insightful

      Really? I think it works great. Android feels like junk in comparison.

      --
      love is just extroverted narcissism
    3. Re:Nokia 635 by hairyfeet · · Score: 4, Funny

      If you want a cheap Windows phone? BLU makes several models and you can get the quad WinPhone with a GB of RAM for just $91 and those displays are quite nice.

      I personally prefer Android myself so i picked up the BLU Studio Mini LTE with the same display and I have to say I'm VERY happy. Good screen, not a single crap app installed, KitKat was ready to download on first boot,good battery life, MicroSD slot for keeping my media, I really have zero complaints with this phone.

      So I'd say the rise of the "cheap" smartphones is easy to explain...many of us don't give a shit about using phone brands as status symbols and the new so called "cheapies" do everything we want our phones to do so why would I spend 3-5 times the cost to have a big name label?

      --
      ACs don't waste your time replying, your posts are never seen by me.
    4. Re:Nokia 635 by Anonymous Coward · · Score: 2, Insightful

      I used a 635 for a week; now my daughter uses it. I actually thought that the Windows Phone OS part was pretty nice, at least as good as iOS or Android. And the phone itself was pretty nice too, if the camera had a flash I would have no problem with the hardware really. The problem was that there were a number of apps that I was used to on Android which were not available. That's the Achilles heel of that phone.

    5. Re:Nokia 635 by ThatsMyNick · · Score: 2

      Nope. That one has a 512 MB RAM, and 4GB internal memory (Win 10 is likely going to require 8 GB, despite what that amazon page says). If you want a cheap & good windows phone, you get a Lumia 640 for $79. The sunlight readability feature alone is worth it.

    6. Re:Nokia 635 by willworkforbeer · · Score: 3, Funny

      Why don't you post with your account?

      Why don't you get naked, climb a chain link fence, and gash your nutsac open when you swing your leg over the top?

      Assumes facts not in evidence, i.e. presence of said scrotum.

      --
      Pretending this is my office full of bitter coworkers..
    7. Re:Nokia 635 by The-Ixian · · Score: 3, Interesting

      I agree with this.

      A cheap Android phone is unusable, whereas a cheap Windows phone is snappy and elegantly simple to use.

      --
      My eyes reflect the stars and a smile lights up my face.
    8. Re:Nokia 635 by FlyHelicopters · · Score: 2

      So I'd say the rise of the "cheap" smartphones is easy to explain...many of us don't give a shit about using phone brands as status symbols and the new so called "cheapies" do everything we want our phones to do so why would I spend 3-5 times the cost to have a big name label?

      You shouldn't, for a label...

      But don't kid yourself, a $500 phone is in fact more powerful than those $90 phones are. Now, you might not need the power, and if so, then don't pay for it.

      The chip in a Galaxy S6 or iPhone 6 is indeed more powerful than the chips in the $90 phones, as is the GPU, and they have more RAM and storage. They also tend to have nicer screens, better cameras, etc.

      Is there more profit in those phones? Of course, they are probably $250 phones being sold at huge profit margins, but they are in fact better phones, from a technical point of view.

      I've tried the cheaper phones, frankly, the service costs the same either way, a few hundred dollars every two years is a trivial expense to have a nice phone that does everything, plus I like Siri. :)

    9. Re:Nokia 635 by ThatsMyNick · · Score: 2

      no carrier app crap, quad core with a GB of RAM and 8GB of storage and it asked when I put in my MicroSO if I wanted to save my apps to SD, hassle free.

      Lumia 640 does all of this BTW. It has one AT&T Music app and if I remember AT&T contacts. You simply long press it, click uninstall, and it is gone. The concept of locked apps doesnt exist in Windows phones. It is quad core with a GB of RAM, 8 GB of storage, when you put in a MicroSD, you can go to the settings and set apps to be installed to SD card hasslefree (it doesnt ask on it own, but it is 2 clicks away, and one time).

  2. Could Xiaomi take over? by HalAtWork · · Score: 4, Interesting

    I've purchased several of their entertainment and networking products before, they are of extremely high quality and aesthetically pleasing as well, at ridiculously low prices. If they step up their marketing presence in the west they could easily dominate. I'm sure that would be met by legal opposition from Apple, Samsung, etc. though, who knows how they would fare against that.

    1. Re:Could Xiaomi take over? by pushing-robot · · Score: 4, Insightful

      They might, but not for long.

      The problem with Android is that manufacturers are basically franchisees of a Google product. They are allowed to put in better or worse processors and screens and batteries and cameras but that doesn't differentiate their brand; any competitor can do the same. As such, Android phones are a commodity: the moment a manufacturer tries to turn a profit, a new competitor comes in with no margins and cuts their legs out from under them.

      Samsung did the best job of anyone trying to differentiate their phones, and as such was the only profitable Android manufacturer for several years. But even they are losing market share rapidly to the likes of Xiaomi and Huawei and their profits have fallen off a cliff in the past couple years.

      So... could Xiaomi take over the Android market? Sure, as long as they're willing to lose more money than everyone else. Could they topple Apple? Not likely. If people are willing to pay for a $650 iPhone over a $150 Android, they'll likely pay for a $650 iPhone over a $100 or $50 Android. Apple has the luxury of differentiating itself as a product and reaps the benefits.

      Don't get me wrong, I have no issues with Android as a platform. I own Android devices, I enjoy many things about them (and my list of dislikes shrinks each year), and I think it's wonderful a relatively open platform has seen such widespread adoption. So far, Android manufacturers' loss has been Android users' gain, but if those losses continue I fear Android may follow the PC industry's race to the bottom: Many manufacturers could abandon the platform while those remaining steadily cut quality and pursue 'alternate revenue streams' like trials and ads and other paid placement. I hope I'm wrong, though.

      --
      How can I believe you when you tell me what I don't want to hear?
  3. Consider the current state of smartphones by Anonymous Coward · · Score: 2, Insightful

    My smartphone is five years old (HTC Droid Incredible, considered the best phone on the market at the time I bought it). Even though it only supports 3G and will never be updated beyond Android 2.3.4, it still browses the internet at acceptable speeds with a modern browser (Firefox). Smartphones have been at "good enough" for quite some time now.

    1. Re:Consider the current state of smartphones by TWX · · Score: 4, Insightful

      I've been running a Samsung Galaxy SII SGH-T989 since it debuted, so it's past the four-year mark. I've updated it to 4.1, would be nice to go higher but not that worried so far. We had to replace my wife's because twice now her power button got stuck engaged and the phone kept power-cycling; I took the phone apart both times and beat on the power switch to get it to let go but she needed more reliable, so we picked up a Galaxy Core for something like $130. It's basically just the SII with some mild improvements and a couple features removed that she doesn't miss.

      I'm not sure what I'm going to do when it's time for mine to be changed. Mainly I'm looking at connectivity first and foremost, as not all phones have all bands that the carrier can use. I want the most bands so that I can have stronger signal for better battery life. Beyond that, the fancy phones are nice, but I can't say that I'll actually use all of the features they offer. I don't need video on the go, I have bigger devices that can do that far better. I don't know that I need a 20 megapixel camera, I have an SLR and it takes far better pictures than any cell phone camera will, but admittedly the SLR is not on my person during my whole waking day.

      There is a good argument for a simple, basic multifunction phone that doesn't cost a whole lot and provides a solid experience, even if it's not the flashiest or the fastest or the highest resolution.

      --
      Do not look into laser with remaining eye.
    2. Re:Consider the current state of smartphones by bob_super · · Score: 4, Interesting

      I will soon need to upgrade my old phone, and I'd just like a upgrade, they want to change everything:
      Current one: 3.7" with slider qwerty keyboard and a 3-day removable battery. Fits in all my pockets, because it's thick, not tall.
      Desired one: 4 to 4.5" 720p to 1080p with slider qwerty and a 3+ days battery. Maybe with wireless charging. Thickness under 2 cm, weight irrelevant.
      Available stuff: thin massive flimsy with 1440p 5 to 6" and fingerprint reader designed to look cool when it pokes out of your pocket. Soft keyboards which speak twit, but not three languages at once.

      I can't be the only person in the world who wants something that fits in my pocket and lets me type fast with tactile feedback.

  4. And if you don't like bloatware... by Art+Popp · · Score: 3, Interesting

    ...there are some other interesting things you can do with your inexpensive smartphone. I have a couple of these:
    https://developer.mozilla.org/...
    For use in development with this:
    http://www.rangenetworks.com/p...
    And it may enable SCADA and text message coverage of farms and places that will never get commercial GSM coverage at an incredible pricepoint.

  5. Market share != $$ by danaris · · Score: 5, Interesting

    The article does mention, toward the end, the common problem all of these low-cost handset makers have: ZTE has expanded its US marketshare by 50%, but only seen its revenue increase by 4%.

    Apple is making plenty of money on smartphones. Samsung is making some money on smartphones. Everyone else is either barely scraping by, or losing money on the category.

    Really makes you wonder why they do it sometimes...and why none of the other smartphone makers even seem to be trying to crack the actually-making-money part of the market.

    Dan Aris

    --
    Fun. Free. Online. RPG. BattleMaster.
    1. Re:Market share != $$ by MatthiasF · · Score: 3, Insightful

      There can only one manufacturer with overpriced, over-hyped, over-marketed smartphones with a simple name even a toddler could remember. All the rest just don't have what it takes to cheat millions out of paying 30-60% more for poorly-designed crap.

    2. Re:Market share != $$ by Grishnakh · · Score: 4, Insightful

      Maybe because some money is better than no money. Foreign companies likely don't think the way US companies do: these days in the US, if a large company can't be #1 or #2, with an insanely-huge profit margin, they just throw in the towel and go chase after something else (usually failing, whereas they would have made a lot more money just sticking in there and making lower profits as #3, #4, or #5). In other countries, they don't always have this mentality. What's wrong with being #5 and making a small profit while your employees have good jobs and your executives have handsome salaries? Maybe the shareholders won't like it as much, but who cares; if you're a large enough company, you shouldn't need outside investment anyway.

      Also, these other companies could be taking the long-term view: it's better for them to hang around and outlast the others, and wait for them to make a misstep, or for people to get sick of their high prices.

    3. Re:Market share != $$ by larryjoe · · Score: 3, Interesting

      This reminds me of a reported conversation between Clayton Christensen (Innovator's Dilemma) and Morris Chang (of TSMC):

      “You Americans measure profitability by a ratio. There’s a problem with that. No banks accept deposits denominated in ratios. The way we measure profitability is in ‘tons of money’. You use the return on assets ratio if cash is scarce. But if there is actually a lot of cash, then that is causing you to economize on something that is abundant.”

      So, Samsung's 15% of worldwide profits is still around $6 billion, and Xiaomi's 1% is still $500 million. This is only a problem for MBAs and shareholders but not for the longevity of the a company's operations.

    4. Re:Market share != $$ by FlyHelicopters · · Score: 4, Interesting

      Apple products are generally overpriced, but that doesn't make them poorly-designed crap.

      Actually, quality of design is one of their high points.

      I think they could do much better with the Mac, I'd love to be a Mac customer, but not at their prices. I do however own an iPhone and an iPad and like them both.

    5. Re:Market share != $$ by FlyHelicopters · · Score: 2

      You don't own OS X, you licence it under an agreement. To install it requires that you accept that agreement.

      This is very well established legal doctrine. You're welcome to install Linux on that Dell machine, but you have no rights to install an OS that you don't own, and you don't own OS X.

  6. I have a ZTE 9810 by gfxguy · · Score: 4, Interesting

    So, being on a budget, and buying phones for the whole family (wife + 2 teenage kids), a couple of years ago I got us all new phones. The wife and kids needed the closest thing to a status symbol we could afford, so they got Samsung S3's; I don't care and saved like $100 getting the ZTE 9810. My screen is bigger, the battery lasts longer, and everything works fine on it. The only difference was memory (8GB vs 16), which is a problem because I hardly have anything installed and run out of memory really easily (external card helps, but doesn't fix the problem). But on the whole I like my phone just as much as they like their's because I don't care about brand names.

    The S3's all have charging problems, too. The mini USB connectors just have a problem making a good connection.

    I had to replace one recently - despite plans to get everyone new phones this Christmas, so I opted for one of the cheapest I could get. My wife, the biggest complainer in the bunch, got a $50 phone as a temporary replacement, and isn't complaining.

    --
    Stupid sexy Flanders.
    1. Re:I have a ZTE 9810 by gfxguy · · Score: 2

      Why, no, the thought hadn't crossed my mind. Thank you so much for setting me straight.

      What they learned was I got a cheap phone and bought myself other stuff for that Christmas, and ALL they got were phones - most of which ended up not working as good as mine. If it makes you feel better, this coming Christmas my daughter already asked to get a cheaper phone so she could get something else. Life's little lessons are often learned better from experience than lecturing from a parent.

      --
      Stupid sexy Flanders.
  7. ZTE Maven specs, not noted in the story summary by Futurepower(R) · · Score: 2

    ZTE Maven

    Pros
    Quad core processor
    Fast mobile data support (4G)

    Cons
    Low pixel density screen (218 ppi)
    Too little RAM memory (1024 MB RAM)
    Battery is not user replaceable
    Low-resolution camera (5 megapixels)
    The camera lacks autofocus

    GSM phone, works only on AT&T and T-Mobile. Other countries are mostly GSM.

    Battery is not user replaceable: Throw away the phone if the battery is defective or at end of life? I would not buy a phone that won't allow a new battery.

    If it is possible to carry extra batteries, fully charged, there are circumstances where that is convenient. For example, when hitchhiking through Europe, and staying a week or two in a city, it is possible to get a local SIM so that people you meet have a local number they can call.

  8. Re:ZTE... by Grishnakh · · Score: 3, Insightful

    Don't forget, the top phone brands are all busy neutering their phones by removing all the most useful features, such as an SD card slot and a removable battery. What kind of idiot would pay $600+ for a phone without these basic features (besides an Apple customer)? It's a perfect opportunity for a cheap brand to build a customer base by having these features.

  9. Re:ZTE... by nblender · · Score: 2

    Guess i'm an idiot. I haven't ever wanted to put an SD card in my phone because I don't store anything significant on the phone... So far my phone is dying in ways that suggest the battery will outlast the rest of the phone ... I dunno, maybe the battery is replaceable but who cares?

    Calling someone an idiot if they don't want the same things that you do is a bit arrogant, don't you think?

  10. exFAT requirement for SDXC certification by tepples · · Score: 3, Insightful

    Don't forget, the top phone brands are all busy neutering their phones by removing all the most useful features, such as an SD card slot

    The SD Card Association already did that, by requiring SD licensees to license Microsoft's exFAT patent or not be able to use cards bigger than 32 GB.

  11. CDD guarantees userland openness by tepples · · Score: 2

    Only devices meeting the CDD (Android's compatibility definition) are eligible to include Google Play Store. One of the CDD requirements is that the user be able to adb install homemade APKs.

  12. Cut out the middle men by ThatsNotPudding · · Score: 3, Funny

    "We install the backdoors and trojans on the factory floor ourselves, and pass the savings on to you!!"

  13. Is this a huge surprise? by fuzzyfuzzyfungus · · Score: 2

    Pre-'smartphone' the US market was dominated by whatever cheap crap the carriers could get stamped out for them at lowest possible cost, typically with their specially en-worsened firmware flashed onto it. They wanted something that could be sold as 'free with contract' at lowest possible cost, and there just wasn't much incentive to attempt to use handsets as a differentiatior because all the carriers had access to basically the same OEMs, and consumer expectations were low.

    Once smartphones hit, with Apple's AT&T exclusive showing the value of a proper 'flagship' device, and the prospect of getting a customer onto a data plan being very, very, compelling; the enthusiasm of carriers for dumbphones dropped substantially; but they still had exactly the same 'we need an endurable handset as cheap as possible for customers who don't otherwise care' incentive. Since they really want you to walk out with a data plan, they've shifted focus to the low-end Androids and iPhone 5c(if the customer insists), rather than the developing-world-special $20 phones; but they still want to pay as little as possible for those basic shelf-stuffer phones.

    Plus, as with computers, the usability of the cheap seats has gotten surprisingly adequate. Still not as good as the ones that cost 2-6 times as much; but it is certainly no longer the case than anything under $200 refutes a loving god if you try to use it.

  14. This is why Qualcomm is in trouble by Snotnose · · Score: 3, Interesting

    They blew it a year or two back when Apple announced their new chip had 64 bits, QC was sitting there with only 32 and 64 not on the drawing board. Then they botched their first 64 bit chip, now Apple/Samsung have taken the high end smartphone market. Neither uses a QC chip anymore.

    On the other end, QC just isn't organized to make cheap chips. They have too much management, too much bloat, too many side products that don't pan out (Digital Cinema, MediaFlo, Mirasol, etc).

    What's really sad is upper management, starting with Paul Jacobs I suspect, drove the company into the ground. Now they're laying off 15% of their workforce (minimum, speculation is there will be another wave or two after this month's layoff), while Paul and Steve are raking in 8 figure salaries and bonuses.

    /QC employee '96-'08
    // Friends still there tell me it hasn't been fun there for 3-4 years now
    /// Best job I ever had. sigh

  15. Not mine by p51d007 · · Score: 5, Interesting

    I've been using a Huawei Ascend Mate2 for almost 18 months. NOT ONE problem. Very little junk added, easy to remove. $300 got me a 6.1" screen, snapdragon 400, 720p screen, 2gb ram, 4,000mAH battery,ext SD card, JB4.3 Laugh all you want at the specs....IF FLIPPIN' FLIES! Most stable smartphone I've ever had. Just updated at the end of June to LL 5.1.1, they skipped KK4.x It goes 3-4 weeks easy without having to reboot to make it "snappy" again, with heavy use, 2-3 days on one battery charge without having to use silly battery "savers". Photos through the 13mp camera are EXCELLENT. Signal (straight talk at&t towers) is as good as any of my previous phones. The size puts some off, but I love the screen. (dell streak 5>galaxy note1>Mate2). This phone turned me off of the locked down, feature stripped, carrier bloated, over priced "flagships" for good!

  16. Re:ZTE... by Grishnakh · · Score: 3, Informative

    The swappable battery isn't just for people who burn through their battery in a day and need to swap it. It's also for people whose battery goes bad and they'd like to replace it. With a non-removeable battery, you either need a new phone or have to pay $$$ to have it swapped professionally. With a swappable battery, no problem, just buy a replacement somewhere and pop it in. There's no really good reason not to have it; the Galaxy S5 even manages to be waterproof with a swappable battery.

    Would you buy a car where the tires couldn't be changed? It's not like you have to do it often, and some tires can go nearly 100k miles now.