China’s leading smartphone brands, after dominating the world’s budget segment, are rushing to go premium in search of growth.
In Southeast Asia, Apple and Samsung together make up more than 90% of the market for smartphones over $600, according to data from market intelligence firm Canalys. Yet “brands like Xiaomi, vivo, Oppo, and Transsion dominate the lower price segments,” Sheng Win Chow, a smartphone analyst at Canalys, says.
“Affordable and competitive pricing” is helping Chinese brands penetrate emerging markets—not just Southeast Asia, but also Africa and Latin America, notes Will Wong, senior research manager with IDC’s Asia-Pacific client devices group.
But he warns that after successfully amassing market share in more budget-friendly segments, “it’s now or never for Chinese brands to target the premium segment.”
“The global smartphone market has entered a mature stage that’s only expected to log low single digit growth in the long term,” Wong says. That means that Chinese brands will need to grow on the basis of selling better phones, rather than more phones.
And Southeast Asia presents a good opportunity for these budget brands to crack a premium market that’s long been Apple and Samsung’s playground. Both Wong and Chow point out that the region’s growing economy means a rising class of consumers keen to upgrade their devices.
Stepping into the premium segment
Last week, Oppo, a Chinese smartphone manufacturer, launched its latest foldable smartphone at a launch event held at Singapore’s Marina Bay Sands casino.
The “Find N5,” priced at 2499 Singapore dollars ($1870), is clearly a premium product. The phone is a rival in terms of features and quality to Samsung’s Z6 foldable phone, released in October. For instance, Oppo boasted during its launch event that its Find N5 was thinner when folded and also offers better battery capacity.
Oppo is already Singapore’s third-most popular smartphone brand, says Billy Zhang, president of overseas marketing, sales and services. Singapore’s consumers, while small in number, have a high-level of disposable income and are open to trying new premium products, he adds.
Besides Singapore, Oppo is also one of the top brands in the Philippines, Thailand, and Indonesia, according to IDC. That makes Southeast Asia a “fortress” for Oppo, Wong says, and a good launchpad for the brand to break into the premium market.
“Oppo has been one of the key Chinese vendors that promptly brought the latest GenAI and foldable features to the market with competitive prices,” he adds.
Other leading Chinese smartphone makers are also expanding their presence outside their home market.
Last week, Huawei marked the international rollout of its trifold smartphone at an event in Kuala Lumpur. The Malaysia launch was the first consumer electronics event the company’s held outside of China since the U.S. Slapped sanctions on it in 2019.
HONOR, formerly Huawei’s budget smartphone division, is also focusing on Southeast Asia, planning 10 “experience” stores selling mid-to-high-end products in Indonesia, according to the South China Morning Post.
Apple, too, is trying to expand its consumer base. Last week, the company unveiled the iPhone 16e, the successor to the budget iPhone SE. Yet, at $599, Apple’s lower-end phone is still pricey, costing over $150 more than the iPhone SE. By comparison, Oppo’s Reno 13, one of the brand’s latest higher-end smartphones, costs $597.
