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China's Huawei Catching Up With Apple, Samsung Smartphone Sales (livemint.com)
From a report: Chinese smartphone maker Huawei managed to gain ground on Samsung and Apple in terms of global market share last year, following the problems encountered by the two giants, the Gartner consultancy group said on Wednesday. Over the year as a whole, the Chinese maker saw its sales leap by 26.7 percent, while the South Korean and US rivals both saw their sales decline by 4.3 percent, Gartner said in a study. As result, Huawei was able to increase its share of the smartphone sector to 8.9 percent in 2016 from 7.3 percent a year earlier, while Samsung saw its market share shrink by two full percentage points to 20.5 percent and Apple's contracted to 14.4 percent from 15.9 percent. "Chinese makers succeeded in winning market share over last year and Huawei now seems to be the main rival to the two giants, even if the gap remains large," Gartner analyst Annette Zimmermann told AFP.
while other manufacturers will come in and sell something similar with slightly less features for vastly lower costs
There are two forces there. One is the general luxury effect--a luxury item has a smaller audience, and lower demand means bigger margins and higher prices (fewer potential consumers at cost means higher risk and higher barriers to entry, constricting competition). Apple manages to hold this one all on its own by being the only iOS supplier, whereas anyone can make an Android phone; other makers are facing a high barrier to entry using a non-Android OS because they have to compete in a Smart Phone market which is dominated by iOS and Android, and they don't have anything to show for it due to all the apps being for iOS or Android (see: Windows Phone 7--hence why Microsoft wants the apps to be cross-platform with Windows 10 and Windows Phone 10, as they have the desktop market and can build a phone OS app store base to try to pry their way in).
The other is just leading-edge technology and its cost. When you get into newer technology, you hit something like scarcity. I typically describe scarcity as a matter of scaling: if you can ramp up production by 10% for a 10% increase in cost (i.e. labor), you're not seeing scarcity; whereas if ramping up by 10% means expending 12% more cost, you've crossed into scarcity territory. Leading-edge technology can either be completely-different and high-labor or it can be an incremental advance that exceeds proportional cost. Squeezing more storage onto NAND, for example, requires a 14nm process instead of 22nm, whereas the 22nm process is stable (98% yield) and the 14nm process isn't (25% yields)--thus you need 400% more labor per viable chip, yet those chips store about 57% more, so cost more per unit storage. As the 14nm process exceeds 70% yield or so, it'll become cheaper per unit storage than 22nm. QED.
Your top-tier tech generally has those leading-edge technologies, or something appreciably close. They boast brand-new 8+8 homogeneous-architecture SOCs with huge amounts of on-die RAM, 3D NAND, the latest screens, and the latest high-end camera sensors. They push the cost way up and talk about all the features they have--all stuff that's going to be standard in the next generation 6 months from now, when those components are cheaper; but we can let people call Samsung and LG "Apple Immitators" for "cloning the iPhone" months after iPhone did it first.
Your low-cost, $300 phones generally have current-gen tech, which is pretty impressive. Cheap phones can have lagging tech because they're trying to squeeze costs out, but then you get a way-out-of-date $200 phone because a 90%-efficient process isn't that much more expensive than a 98%-efficient process.
The nice thing about making a $300 phone is not everyone can afford an $800 phone; you have a big market to work with. That also means you face competition, whereas Apple and Samsung are competing for fewer voting dollars at the top-tier range and don't have to worry about every cheap Chinese manufactory releasing a top-quality phone comparable to their flagships. Instead we see the OnePlus Three--competitive, but it's not a brand-new iPhone or Galaxy and is more a problem for the mid-tier market. That mid-tier market has lower margins, and also has stability in that it has many players and isn't going to sharply-divert to a new one unless they found a way to make the same tech 20% cheaper; whereas the upper-tier market has stability in that any new competitor is trying to divert fewer people from a high-end luxury device which is essentially purchasing identity, and so has a slim chance of making a stable profit largely contingent on convincing people to identify with someone other than Apple or Samsung.
Honestly, imagine GM releasing a Tesla competitor. It's $85,000. It's about on-par with an $85,000 Tesla Model S. What sets you apart from your friends? How do you feel about driving a Chevrolet--an el
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BOTH have been perfect. My first Huawei phone was the Mate2, less than $300 dollars off Amazon. I bought it sort of as a joke. I was waiting for the stupid invite for the Oppo/OnePlus phone. I had the Mate2 for about a week before the OnePlus One invite came. Ordered it with the intention of sending the Mate2 back, since the specs for the mate2 were: 720p screen, SD400 chip, 2gb ram, 4,000mAH battery, Adroid 4.3 Jelly Bean, and the OnePlus had a HUGE advantage in specs. I got the OnePlus, and yes it was a good phone, but the battery life of the Mate2 won me over, along with the larger screen. Yes, from a BENCHMARK, the OnePlus blew it out of the water, but, running the same apps, same launcher (Nova Prime) on both phones I couldn't see a huge difference. Both were snappy, but the Mate2 had a 2-3 day battery life. I don't run games, just phone, text, web, Mp3's, streaming music etc. In that aspect, the Mate2 was perfect. Sold the OnePlus One about a week later. But...but...but...the Mate2 was "saddled" with an older version of Android. So? It was rock solid, very smooth, stable, which I take over bleeding edge any day of the week. My company uses the web for service calls and what not, so I don't have time to deal with force close, reboots and what not. I never turn my phone off. It runs 24/7 and I'd run for 3-4 months easy between reboots. Huawei skipped KitKat and went straight to Lollipop 5.1 for the Mate2. When the Mate8 was announced/released in 2015, the price was NUTS...600 bucks or more. I said no way. When the Mate9 was released this past November, the price on the 8 dropped to around 399/425 so I bought one. It's just as rock solid and stable on Marshmellow 6 as the Mate2 was on 5.1 Lollipop. Granted, with the faster processor and brighter screen, I don't get 2-3 days battery life, but you can get 2 days usually. Android 7 is suppose to come within the next 30-60 days for my version, but I'll hold off a bit. The reports on XDA show some of the early releases are having a glitch here and there with bluetooth, which I use 100% of the time. Huawei has a great phone, and should be considered when making a decision on a new phone.