Qualcomm Inc is another example of a company that has joined the competition in the low-end market.
The increasing demand for smartphones in emerging economies helped Qualcomm to open up the low-end market. More Qualcomm-powered models are expected to join the market this year, according to Wang Xiang, president of Qualcomm Greater China.
Since the company launched its products targeting the low-end market late last year, nearly 30 types of smartphones had been released as of June. There were also more than 100 models in development that will enter the market soon, industry newspaper Communications Weekly reported on June 12.
"China's low-end WCDMA smartphone market is a vast blue ocean for cell phone makers. A chip with a fair performance and a reasonable price will enable its manufacturer to make huge profits," said the newspaper.
China's high-end market is dominated by global brands such as Apple and Samsung. The local companies have to dive into low-end markets where the profit margin is also lower because of the increasing number of competitors.
A number of Chinese Internet companies started to tap into the smartphone market this year, a move that will further stir up competition in the sector.
Tencent Holdings Ltd released six smartphone models targeting student customers. Baidu Inc, China's most-used search engine, introduced two smartphone models running on its self-developed mobile operating system.
Qihoo 360 Technology, an anti-virus company, teamed up with three manufacturers including the nation's home appliance giant Haier Group to offer new models to the market. "As an Internet company, Qihoo has more than 100 million users and we are good at online marketing. Both of our specialties can help mobile phone makers explore the market and boost sales," said Zhou Hongyi, chief executive officer of Qihoo 360.
Almost all the devices provided by the Web companies were priced lower than 2,000 yuan ($314), less than half the price of an iPhone 4S.
"The competition in the low-end market is poised to grow as more businesses enter it and telecommunication carriers start to cut subsidies to lower-end smartphone makers," said Hao from the academy of telecomunication research.
