In 2009, mobile phones were one of the hottest selling commodities in the worldwide market. An estimated 1.2 billion units were sold across the world, the combined total of (back then) leading brands like Nokia, Samsung, Motorola, and LG. Two of those brands hail from South Korea (Samsung + LG), Motorola from the USA, and Nokia from Finland.
Chinese companies were focusing on domestic sales, and their mobile phone exports were limited to nearby neighbors such as other Asian or Middle Eastern nations. Something changed in the past few years, however, and Chinese smartphone manufacturers are quickly becoming global giants.
The leading phone brands of 2016, in order: Samsung, Apple, Huawei, Oppo, Xiaomi. Those last 3 brands are Chinese-owned, achieving a combined 17% of the global market. How did this happen? It starts with the recent demand for low-cost, 4G compatible phones. Phone technology has hit a peak, mostly due to “incremental innovation” and, to a lesser extent, the lack of a real need for ultra-performing smartphones. Average consumers honestly don’t need 16GB of RAM to browse Facebook, watch YouTube, or play Agario on our devices.
While Samsung and Apple have been flagship brands for a long time, their price-points have put them into a “luxury brand” category, for little good reason. Major brands may be trusted to have the top specs and latest technology, but Chinese brands have lately been matching or exceeding these specs at more affordable prices. It’s the beginning to make Apple and Samsung the “Loui Vuitton handbags” of the phone industry – stylish branding in name only.
Here’s a comparison of a top-rated Chinese phone vs the Samsung Galaxy S7:
Xiaomi Mi 5 ($300): 5.15” screen, Android 6, Snapdragon 820, 4GB Ram, 16MP rear camera, 3000mAh battery.
Samsung S7 ($670): 5.1” screen, Android 6, Snapdragon 820, 4GB Ram, 12MP rear camera, 3000mAh battery.
As you can see, they are nearly exactly the same in technology, though the Xiaomi has a camera with more MPs and is less than half the price of the Samsung. This is because a majority of the parts used in cellphones are made up of rare earth materials, and currently, China produces around 97% of the world’s rare earth materials.
Rare earth materials include things like tungsten, neodymium, yttrium, europium, and a variety of other materials that are incredibly useful in technology-building. Neodymium is used in headphone magnets, for example, while indium is applied to touch-screens. With China sitting on the world’s supply of these materials, a massive mining workforce, and decreased global demand for rare earth materials with a simultaneous increase in price, China is able to hoard their raw materials and start putting them into their own branded technologies, at a fraction of other global manufacturer’s costs.
Thus, while flagship brands will continue pumping out their latest phone models, and the Western market will continue buying them due to brand name or carrier restrictions, China is fast behind them with equal or better phone specs at half the price for consumers – and why not? They already have all the factories and workforce necessary, having been manufacturing electronics for global brands for many years. Logically it makes sense for their own brands to start being competitive in the global market, and by the looks of it, China made the smart choice.
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