As Apple revenue falls for the second year in a row, many publications and sources are reacting as if this is a crisis in the making. While Apple has indeed sold fewer iPhones as compared to previous years, its smartphone business is not suffering nearly as much as Samsung, which has seen long falls in the sales of its flagships, the ‘S’ and ‘Note’ line. While a lot of this can be explained by the general smartphone slump in the developed world- people buy technology that is closer to perfect and so upgrade less often- both companies have taken major hits from Chinese competitors. Namely: Huawei, Xiaomi, and Oppo.
India, on the other hand, is one of the fastest growing smartphone markets in the world. ‘Desi’ companies had, for a time, made successful leaps in the market. Companies like Micromax and Lava were very popular between the early to mid-2010s. And then, it all fell apart(detailed breakdown from Indian Tech Youtuber ‘iGyaan’). To avoid a complicated- and convoluted- explanation of why that happened, I shall briefly summarise. Indian companies went to OEMs (Original Equipment Manufacturers) based China and bought pre-designed, poorly functioning, cheap products and branded their company logos onto them. For a long time, these were the only available budget options on the Indian market. This allowed them to build a reputation as superior to the relatively poor Samsung devices. However, Chinese competitors entered the market having been wildly successful in their home market. Thus, they used their larger resources to squash the “quick-buck” model of their Indian counterparts, eventually hitting it big in the country. In fact, Vivo- a former OEM for some Indian companies- decided they’d rather sell their own branded hardware in India.
Prior to all this, Samsung owned the attention of Indian consumers, but not anymore. Although, their market share is still higher, but rapidly shrinking. While they have made commendable efforts in the country, their product- like its Indian competition- lacks quality. With a reputation for inconsistent performance and aesthetically unappealing design, they have seen many users flock to their Chinese counterparts.
These firms have been successful because they provide great value with genuinely phenomenal design and features relative to the prices of their phones. And in India, price dictates consumer preferences. Due to measly wages provided to the majority of the population, people require as much quality as they can possibly receive for the lowest figure possible. Xiaomi, Oppo, and Huawei are large companies that have performed stellar in their homeland of China, and so have the backing of solid R&D departments that have managed to build budget flagships that boast heavy specifications, with just the right compromises irrelevant to the tastes of the Indian consumer.
For example, Xiaomi delivers a decent camera experience. While it does not hold a candle to the heavyweights like Apple’s iPhone, Google’s Pixel, and Samsung’s ‘S’, it is a world of difference from the offerings of the budget market just two years ago, which were akin to taking pictures with a potato. With all these companies, you would find moderately strong chipsets, hefty batteries, solid constructions of metal and/or glass. It is important to stress that these do not compete with the flagships. They do well to tarnish the mediocrity wrapped in plastic that was once promoted as a smartphone in our country.
This cleverly combined with great marketing strategies that capitalize on young Indians’ requirement for impressive sounding “tech specs”. Want a 40 Megapixel camera? Want a massive 5000 ‘MaH’ battery? The flagships only offer 12MP and 3500 MaH. Many youths don’t understand that the quality of the individual parts come into play, as well as the heavy reliance on powerful software to back it, which many of these budget phones lack. Instead, they are enamored by the ‘specs’. To their credit, these ‘specs’ are not half bad.
Chinese OEMs initially made their foothold in the country by selling online, often partnering with Amazon and Flipkart. This removed many costs of physical trade, allowing them to undercut their competitors by large margins. Using that as a stepping stone, the now popular companies have opened many physical stores in the various cities across India. It seems that a ‘Mi’ or ‘Vivo’ billboard is on every other street. ‘Samsung’, on the other hand, is more and more uncommon
So where does this leave the Silicon Valley behemoths? Here, Apple’s products are akin to Louis Vuitton jumpers and Balenciaga sneakers, and so will never really compete in a market where most people have an income equivalent to a few thousand dollars, and Google, while not having the same reputation, matches Apple in pricing. It doesn’t help that these players suffer heavy tariffs. Their products are not even assembled in the country, costing $400 more to consumers than their counterparts in the USA. It can be assumed that they are looking to attract wealthy buyers, and not focused on the “budget” market. As of now, the only true competitor against the Chinese giants is Samsung. They attempt to look pretty in every price bracket. Their prices aren’t affected by tariffs (Assembled in India), and they have attempted to make a comeback with bang-for-buck offerings. They really are catching on, even emphasizing online sales. However, with a public already swept off their feet by Chinese Smartphone makers, the situation looks grim. It seems Xiaomi and Huawei are all set to rule the Indian mobile phone landscape- for now.