NEW DELHI: Chinese handset makers Xiaomi<\/a>, Oppo<\/a> and Tecno<\/a> have begun pushing into the higher end of the smartphone market<\/a>, potentially hotting up competition in a section that has been a battleground between Apple<\/a>, Samsung<\/a> and OnePlus<\/a>.
The three brands have announced high-end smartphones-some at the ongoing Mobile World Congress-with differentiated, feature-rich offerings in a bid to build brand equity and act as challengers. They are also looking to cash in on rising average selling prices in India, at a time when the volume-driven, entry-level segment is slowing.
The devices<\/a> which will be soon available in India are priced over Rs75,000 each.
However, market trackers remain sceptical of the volumes these brands may generate in the luxury segment, where brand equity plays a big role in conversion to sales.
NEW DELHI: Chinese handset makers Xiaomi<\/a>, Oppo<\/a> and Tecno<\/a> have begun pushing into the higher end of the smartphone market<\/a>, potentially hotting up competition in a section that has been a battleground between Apple<\/a>, Samsung<\/a> and OnePlus<\/a>.
The three brands have announced high-end smartphones-some at the ongoing Mobile World Congress-with differentiated, feature-rich offerings in a bid to build brand equity and act as challengers. They are also looking to cash in on rising average selling prices in India, at a time when the volume-driven, entry-level segment is slowing.
The devices<\/a> which will be soon available in India are priced over Rs75,000 each.
However, market trackers remain sceptical of the volumes these brands may generate in the luxury segment, where brand equity plays a big role in conversion to sales.
“The Chinese brands know they won’t be able to sell much of these luxury products. They are launching to showcase that they can also innovate, but in India and even globally, it’s tough for these brands to sell devices in the premium space, since they lack the brand equity in that segment,” said Navkendar Singh, associate vice president, IDC India.
TechArc’s chief analyst Faisal Kawoosa said the Chinese handset brands no longer see themselves as copycat brands, and have their own capabilities and R&D to showcase.
These companies may also look to emulate Apple’s success in India where the iPhone maker had doubled its market share in the last two years, Kawoosa said. “Everyone is trying to create alternatives in that segment, as the disposable income for users in that segment has grown in the last few years,” Kawoosa said.
Xiaomi, Oppo and Tecno did not respond to emails seeking comment.
In the segment above $500 (about Rs 40,000), Apple holds 60% share of the market, while Samsung holds 21%. OnePlus is the only Chinese brand with a significant (12%) market share, as per IDC India.
The segment also witnessed the fastest growth--55% year-on-year--going from 2% of the overall market to 4% by the end of 2022, as per IDC India, which may have let brands smell an opportunity.
That said, there could be roadblocks ahead as the premium segment is not expected to grow as much in 2023 as it did last year.
“Majority of the potential in the luxury segment has already been consumed in the last one or two years, and users will hold on to their purchases for at least two years,” Kawoosa said.
To be sure, financing schemes have made it easier to buy pricier smartphones in India, said Counterpoint Research’s senior analyst Prachir Singh. He said there is both a push and pull factor for the Chinese handset brands in the premium segment, as they have been steadily going up the price ladder, aided by the financing schemes.
This comes with smartphone brands shifting their strategies from a volume-driven approach to a value-driven one in an attempt to maximise the bottom line, said Singh.
“The way to win in this segment is through cost leadership,\" Singh said. “If Samsung is pricing a device at Rs 1 lakh, if you can bring a similar offering at Rs 70,000 or below, then we might see a push in their favour.”
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