Competition grows fierce among low-cost smartphones

Global smartphone manufacturers are turning to affordable smartphones below one million won in an effort to address falling demand and meet the increasing consumers’ needs for value for money, which are new challenges brought by COVID-19.

The smartphone industry said Tuesday that Apple plans to launch its low-end smartphone model in major global markets including the United States later this month for the first time in four years since 2016. It is said that Apple’s new Apple product will be called iPhone SE named after its original model, which was released in 2016. The iPhone SE is expected to be launched in May in South Korea.

The new model is likely to have a 400-dollar price point. It features an LCD instead of an OLED, which is a default feature of Apple’s smartphones with higher price points, and supports LTE to keep the price low.

According to Strategy Analytics, Apple sold 10.2 million smartphones in February, 36 percent down from 16 million units in January whereas other major smartphone manufactures saw a decrease less than 10 percent. This explains why some people say that Apple will focus more on its low-end lineup to respond to recent market changes.

Meanwhile, Chinese manufacturers who have a competitive edge in the low-end market are adding more features to existing models or lowering prices to solidify its position in the market. At 2,399 yuan, Huawei’s Honor 30s 5G, which was released last month, features a 20x zoom quad camera, promoting competition in the market. Xiaomi will also launch the “Redmi Note 9S” next month at a 200,000~300,000 won price range.

Samsung Electronics and LG Electronics are also strengthening their low-end lineup. Samsung Electronics seems to focus on its affordable line “A Series” as it released A11, A31 and A41 last month in some countries. LG Electronics has increased ODM in China while reducing production costs to have an advantage over its competitors. “With consumer sentiment on the decline, the competition in the low-end market would remain fierce until late this year or early next year,” an industry source said.


Hyun-Seok Lim lhs@donga.com