More and more cheap smartphones coming

Smartphone market in Finland used to be controlled by Nokia and Symbian devices. Nokia is still the clear number one, but interesting devices from other vendors and holes in Nokia’s portfolio have brought more competition. Especially Apple iPhone and Android phones from Samsung have succeeded in the monthly top 10 rankings operators have started publishing.

A very interesting phenomenom is the invasion of very affordable Android smartphones from Chinese vendors Huawei and ZTE.

Senior services executive Panu Lehti from Elisa, one of the three mobile network operators in Finland, estimated already last November we would see new smartphones coming to market for even less than 150 euros by the summer 2011. My news piece is in Finnish  (use Google to translate it into English. It’s far from an exact translation, but you get the idea,)

This has actually come true already during this spring with ZTE Blade which they are now sellng for about 5,6€/month on 24 months subscription, or about 118€ in cash.

New Android phones from Huawei.

New Android phones from Huawei. (These images are not in same scale.)

 

Another Chinese vendor Huawei has got several models to the Finnish market, of which Ideos X5 is the most affordable one, I believe. For example Elisa is selling it for as low as 8,6€/month on 24 months subscription or about 190€ in cash.

Three weeks ago I met Hubert Hu the country manager of Huawei in Finland. I was surprised to learn they already have about 35 employes in Helsinki, and over 100 in their Nordic head office in Sweden. They’re building a business here with operators on mobile radio networks, backbone networks supporting them, and also selling USB modems and smartphones. They also plan to compete with Cisco in enterprise networking, Hubert Hu said.

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Elisa’s Panu Lehti predicted last November devices are evolving so fast that features will come from high-end to mid-range and from mid-range to low-end smartphones every six months. For example, even the cheapest ZTE Blade model has a 5 megapixels camera, integrated GPS, 3G (HSPA data access) and WLAN support. Of course, the most affordable devices usually have lower build quality with more plastic, and cheaper components, such as slower CPUs and less memory (RAM).

Huawei also has one of first 4G (LTE) USB modems that also supports 3G (WCDMA / HSPA) networks. It's not available yet in Finland, because operators are just starting their commercial services.

Huawei also has one of first 4G (LTE) USB modems that also supports 3G (WCDMA / HSPA) networks. It's not available yet in Finland, because operators are just starting their commercial services.

I asked Hubert Hu, how aggressive are they going to get with pricing. He denied dropping prices would be their strategy to gain market share. According to Hubert Hu, Huawei is targeting for good combination of features, quality and tempting pricing.

Interestingly Hu also told Huawei will start making its own brand more visible, Until now especially their USB modems (or “mokkulas”, as they’re called in Finland) are sold mainly with operator branding. Huawei has many Android smartphones, for example one with a QWERTY keyboard and one with a large screen, which Finnish operators still haven’t sold. They’re also having dicussions about their 7-inch Android tablet.

I got the impression Huawei is hoping to follow, in some near future, the example of HTC, the Taiwanese vendor which used to be mainly an ODM subcontractor for mobile operators. HTC has changed their strategy quickly, because just four years ago they sold only a small amount of Windows Mobile devices directly themselves with the Qtek brand. Nowadays they are heavily pushing their HTC brand and htcsense.com cloud service, with print and TV ads even here in Finland.

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Sorry about the Chinese sidetrack, back to smartphone prices:

Samsung, the number two in smartphone market share in Finland, has been focusing on the high-end with the Galaxy S  as their best selling device. However, they have also had to bring more affordable models, such as the Samsung Gio for as low as 118€ or about 5,6€/month with 24 months subscription.

Research VP Carolina Milanesi from Gartner said a few weeks ago in a smartphone and tablet seminar in Helsinki they expect the low-end of smartphones to become as cheap as 75 dollars (or 52 euros) by 2012 mainly driven by Android devices. Gartner does not expect Apple to launch a cheap iPhone, but to focus on high-end models.

Nokia is expected to respond to this new competition with more affordable Symbian Anna and later Symbian Belle devices, as the latest rumours of Nokia 500, 600 and 700 series devices suggest. Nokia does not comment product speculations and I don’t usually want to spread just rumours, but those models would seem logical after recent Nokia 702T and T7 announcements for China Mobile.  (Read here translated from Chinese into English.)

In April I had an interesting discussion with CTO of Nokia Rich Green (a 60 minutes interview; luxurious). We mostly talked about their transformation from Symbian to Windows Phone, and a little bit about MeeGo too. Nothing very new there anymore, because things change quickly. His strongest point about Windows Phone competition was that Nokia can and will differentiate from other Windows Phone vendors both with software and hardware. Green mentioned especially new material technologies coming to devices. Nokia is also appreciated for good cameras and QWERTY keyboards in many models.

This is not news anymore, but I’ll mention it as a reminder. President of Microsoft’s Windows Phone Division Andy Lees said in Mobile World Congress (MWC) back in February Nokia can customize the platform, but so that it will remain familiar to those too who have used WP devices from other vendors. Rich Green also said they have agreed about this, and  it’s an important part of building the ecosystem. (My news piece in Finnish, or translated into English. I try to put less links in Finnish in the future.)

I also asked Green whether he believes smartphones will continue to get even cheaper going forward. “I tend to think the device prices will go down, but the total outlay from the user (or the amount of money spent by consumer) will remain the same.”

Green estimated service prices ro rise to compensate the fall of device prices. “People will pay for that (services). They will have to, because it’s a part of their quote ’digital service plan'”, and he believed Nokia is strong in this area for example with Navteq maps and navigation services. More and more important stuff for smartphones will reside in the cloud.

Green also made an interesting point that Google would have wanted Nokia as their partner to get to smartphone market in developing markets.

Gartner’s Carolina Milanesi said again in Helsinki that Nokia would have made a mistake by switching to Android, because Google would have cornered them solely as a vendor of cheap smrtphones.

3 kommenttia artikkeliin ”More and more cheap smartphones coming

  1. Who wants to trust a Chinese network company? What do they do with our data? Do we really know who owns Huawei or ZTE? Of course, they probably are as suspicious about European or U.S. companies over there China.

  2. get me a decent smartphone at a hundred bucks and virginmedia’s low cost plan and i’ll be happy

    one more thing. the smartphone having less power and stuff is ok, but i don’t want one that breaks

  3. Soon we’ll have a Huawei and / or ZTE smartphone with a powerful CPU for under 100 euros. Amazing. And later we will see a dual-core Android device for less than 400 euros.

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