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.'"

Comments

Nokia 635

[avandesande]

35$ on amazon it is a great phone

Re:Nokia 635

[hairyfeet]

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?

Could Xiaomi take over?

[HalAtWork]

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.

Re:Could Xiaomi take over?

[pushing-robot]

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.

Market share != $$

[danaris]

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

Re:Market share != $$

[Grishnakh]

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.

Re:Market share != $$

[FlyHelicopters]

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.

I have a ZTE 9810

[gfxguy]

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.

Re:Consider the current state of smartphones

[TWX]

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.

Re:Consider the current state of smartphones

[bob_super]

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.

Not mine

[p51d007]

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!