The “Others”

Techrice has a good recent post on China’s army of hardware vendors creating competitive Android smartphones. Benedict Evans has also written about this some weeks ago, and I will borrow the category name from his eye-popping chart as the name of this post.

Having spent a week back in China, I’ve had a chance to witness first hand the Android devices commonly tracked as “Other” in market share reports. A good friend of mine showed off his Jiayu G3 and quizzed me on the price. I guessed 2000 RMB (a bit over $300), since this was the price point for a mid-high level phone in my memory, and the production quality of the device (I didn’t know the brand at the time) seemed quite high. I lowered my bid a number of times before he finally said, “it’s under 1000 RMB.”

When I got home that night, I did some quick browsing of Jiayu’s website. Interestingly, this small vendor from the west of China (registered in Shaanxi province, hardly a place renowned for consumer electronics, as far as I know) is on the brink of releasing its latest flagship device in its most premium line, the G series. The upcoming G4 boosts a quad-core CPU, a gorgeous 4.7″ screen, and a 13MM pixel back-camera. It’s not exactly the Samsung Galaxy S4, but it will be on sale at a fraction of the price – I couldn’t find the exact price, but based on the marketing positioning, it should be around 1000RMB (roughly $150).

Jiayu is obviously not the only game in town. On its community forum, enthusiastic supporters of the brand were quick to dismiss the upcoming iocean X7, which seemed to be a hot competitor of the G4. So I went over to the iocean site for the product to check it out. The X7 boosts some equally impressive specs – the same quad-core 1.2GHz CPU and a 1920*1080 resolution 5″ screen (which is a PPI of 443, even higher than the Galaxy S4 I believe?).

Now, both of these devices are not live on the market yet, so the exact price points are not known, and whether they actually are as advertised remains to be seen. However, there are already a few things worth commenting on.

First, the heated e-commerce wars in China of the past few years, as well as the prevalence of Taobao (which popularized shopping online), has meant that it is legitimately possible for a Chinese hardware startup to try direct selling smartphones online, as opposed to navigating the deeply complex offline handset retail landscape. This doesn’t mean that offline handset retail is unimportant; it just means the entry barrier has been significantly lowered.

Second, in my opinion these devices reaffirm the argument that it is near impossible to achieve differentiation in Android manufacturers based on hardware. It seems that any vendor worth his salt can create sexy devices, with design inspirations from the leading brands such as Apple and Samsung. And the moment the top brands reveal their latest hardware design, you can be sure that players like Jiayu / iocean (of which there are many) will take note. (After all, the current hardware paradigm revolves around a big piece of touchscreen-glass – how different / unique can your design be?) This is why Samsung is trying so hard to introduce software features unique to its hardware, as the specs alone do not justify the price premium.

Third, it’s exciting to see Chinese companies pick up so quickly the marketing execution skills of global brands. Both Jiayu and iocean’s websites were clean and minimalistic, which could be taking a cue from Apple. It was also funny to see these local brands copy each other in terms of marketing tactics – Jiayu and iocean used the same icons where they list out their shipping and return policies (7 day free return, 15 day exchange etc.). But beyond website design, these companies are also savvy enough to build and leverage their consumer community – both companies’ discussion boards seem to be quite active, with vocal posters discussing topics ranging from software/games to debating how their phones stack up against the competition. Jiayu’s discussion board gets 10,000 posts a day, which is not a trivial number by any measure – and this community approach is certainly distinctive compared to the big brands (which usually don’t offer a general discussion forum, and instead only a customer support board).

To sum it up – I will enjoy following up on this topic and watching to what extent these scrappy Chinese hardware companies can impact the market. This could be a very exciting year.

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