Report: Consumers Are Getting Tired of Expensive Phones

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A few years ago, the best smartphones on the market might cost you $ 500 or $ 600 if purchased without a carrier subsidy. My, how times have changed. The best phones from companies like Samsung and Apple now cost about twice as much, and a new report from Gartner suggests consumers are getting fed up. According to Gartner, emerging Chinese brands are growing larger thanks to their comparatively low price tags and improving designs.

Samsung and Apple still rank as the number one and two phone makers by volume, although Apple has stopped reporting iPhone sales numbers in anticipation of recent sales declines. Gartner estimates that Apple moved 64.5 million in the fourth quarter of 2018, which is 12 percent lower than the previous year. CEO Tim Cook told investors that iPhone revenue had fallen 15 percent, a steep decline but within industry expectations. Samsung says revenues were down about 11 percent at the end of last year and has also warned of continued sales slowdowns.

As the biggest players lose ground, newer Chinese smartphone makers are ascendant. Gartner estimates that Huawei’s market share has reached almost 15 percent, a four percent increase from last year. That puts it just behind Samsung (17 percent) and Apple (16 percent). Huawei makes phones at various price points, but they’re usually at least a few hundred dollars less expensive than Samsung and Apple.

Huawei’s growth comes at a time when it’s under intense scrutiny in the US. The company’s CFO and the firm itself are being charged with conspiring to violate Iranian sanctions, and US intelligence agencies have expressed concern Huawei network equipment could be hosting Chinese spying technologies. However, the US is a tiny sliver of Huawei’s overall business. The company’s last attempt to launch a flagship phone in the US fell apart when AT&T and Verizon backed out of the Mate 10 release at the behest of Congress.

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Consumers may be looking for alternatives as smartphone prices keep creeping higher, and Huawei is not the only company offering more budget-friendly options. Other Chinese firms like Oppo, Xiaomi, and Vivo are also on the rise, offering hardware that’s comparable to Samsung or Apple with a much lower price. Gartner says that consumer sentiment about the brands is shifting, too. People are increasingly proud to carry a Xiaomi phone like they used to be with Apple devices.

Selling $ 1,000 phones isn’t completely wrecking the leading OEMs, but it might not be a sustainable strategy. Samsung’s decision to launch a nearly $ 2,000 foldable phone suggests it’s not ready to learn that lesson, though.

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