© Lemon squeezer
One day before the doors opened for MWC 2024, Barcelona was under the Chinese flag. On February 25, Honor and Xiaomi organized two grandiose conferences a few kilometers from the Fira, the venue welcoming hundreds of exhibitors from the global mobile show. Two two-hour events during which the two manufacturers unveiled their new flagship smartphones.
In the right corner, Honor presented its Magic6 Pro, an ultra-premium model sold for 1 300 euros. In the left corner, Xiaomi officially launched the Xiaomi 14 and 14 Ultra, smartphones sold from 1,000 euros. Technically, all these models have nothing to envy of market references. Behind a polished design, they contain the best technologies of the moment and ensure photography, a criterion of choice in the premium segment.
This strategy marks a turning point in the history of mobile telephony. Until now (apart from a few attempts), Chinese manufacturers have mainly focused on models with unbeatable value for money, with robust technical specifications for unbeatable prices. But that was before.
From volume to value
“A 200 euro smartphone meets the needs of the French& #8221; the former manager of Xiaomi France explained to us in 2021 during a large format interview. At the time, Xiaomi was already gaining significant market share with impressive sales volumes. Three years later, this statement no longer really makes sense.
Consumer behavior has changed a lot with, firstly, a renewal of their smartphone later: around three years compared to two years previously. The sales figures demonstrate it: according to the IDC firm volumes fell by 11% in 2022 and by 3.2% in 2023. In a mature market, manufacturers are therefore selling fewer smartphones.
At the same time, ultra-premium models are enjoying incredible success. And it’s Apple that benefits from it. The American company has exceeded all expectations: for the first time in history, it has dethroned Samsung in the year 2023.< /strong> Phenomenal growth which can be explained by its ultra-premium positioning.
On average, we spend 350 euros per year on our smartphone. This figure barely exceeded 200 euros in 2021. Consumers therefore renew their smartphones less often but are also prepared to pay more.
Chinese manufacturers therefore have every interest in seeking to create value on each product sold. Moving upmarket is inevitable to generate more margins and continue to grow. QED.
Reworking the image
You need much more than a product expensive to find a place in the premium segment. Chinese manufacturers must indeed restore their image. The latest leaders in the industry, Huawei and OPPO, had managed to position themselves as serious competitors to Samsung and Apple. Without the American embargo decided by Donald Trump, the first would undoubtedly be in the top 3 in the world, see number 1.
OPPO, on the other hand, suffered a more disastrous fate. The company had managed to position itself well on the European market, before experiencing a dark year. The fall in sales and a conflict with Nokia over a patent issue pushed it to close its business on the Old Continent. If the brand has announced a return “in all the countries where it was present”, it has not yet detailed its strategy.
For Xiaomi, focusing on ultra-premium implies profound changes. The company is in fact rightly identified as a challenger to Samsung and Apple, the brand to which we turn to find a cheaper model even if it means making some technical sacrifices. Before the American embargo, Honor (which was still owned by Huawei) opted for the same strategy.
For these two outsiders, turning to ultra-premium therefore implies working on its image. No longer the inexpensive Chinese brand for small budgets but a reference brand from entry to high-end. A major challenge that involves taking your time and gaining the trust of business partners.
“Huawei's setbacks and OPPO have cooled distributors and operators who have lost confidence in Chinese brands, told us a professional in the sector at MWC. They are afraid to invest and see everything stop overnight he added.
📍 To not miss any news from Presse-citron, follow us on Google News and WhatsApp.