Cheap Chinese Phone Face New Threat From No Other Than Apple
Cheap Chinese phone brands are facing a new threat, Apple according to sources in Japan.
Tokyo-based research company Fomalhaut Techno Solutions conducted a teardown analysis of the iPhone SE against rival models and found the SE to be a bargain.
This they claim is a threat to brands such as Huawei, ZTE (the manufacturer of Telstra devices) Oppo, Realme, TCL and Xiaomi especially in the local Chinese market where the Apple brand is seen as premium status symbol.
The low-cost iPhone SE was launched last month, in an attempt to win market share from Chinese rivals with observers claiming that the $749 Apple model is superior to many of the Chinese brands that consumers are walking away from because of issues associated with COVID-19.
Analysts claim the cheap Apple offering is low priced device that punches much above its weight.
The big value difference is the liquid crystal display and battery, that are similar to the iPhone 8. One Japanese publication described it as “a family car equipped with a supercar’s engine,” as the company shifts its strategy from purely focusing on selling high-end models.
Tokyo-based research company Fomalhaut Techno Solutions conducted a teardown analysis of the iPhone SE against rival models.
“The iPhone SE has nearly the same exterior, board and display as those on the iPhone 8,” said Director Minatake Kashio.
Fomalhaut estimates that the component costs of a 64-gigabyte SE are $217, or 18% lower than those for the iPhone 8.
The unlock key to the significant price reduction lies in the display. The iPhone SE has a 4.7-inch LCD panel, which is the same size and resolution as that on the iPhone 6 released in 2014.
That is a stark contrast to Chinese makers, including Huawei Technologies and Oppo, which have been using organic light-emitting diode panels even on low-cost smartphones.
In addition, the iPhone SE has a battery capacity of about 1,800 milliamp hours which is seen as a big improvement.
Apple adopted the same-class batteries in its main iPhone 11 series released last year.
The iPhone SE allows users to watch up to 13 hours of video on a single charge, shorter than iPhone 11’s 17 hours, according to Apple.
The company has also slashed camera costs by installing a sensor similar to the iPhone 11’s main camera, and about the same size as those on the iPhone 8.
While the iPhone SE has better camera functions, including defocusing when shooting people, the company has done this with image processing technology rather than camera components.
Under the bonnet the iPhone SE has a state-of-the-art A13 processing chips, which is the same processor used in the iPhone 11 series.
Japanese analysts claim that the low-cost Apple offering is ‘critical’ for the Company coming out of the COVID-19 epidemic.
According to Fomalhaut’s estimates, the iPhone SE’s cost rate stands at 54%, compared with the iPhone 8 and the iPhone 11’s cost rates of 38% and 48%, respectively.
U.S. research firm IDC said that, Apple accounted for 13.9% of global smartphone shipments in terms of volume in 2019, down 1 percentage point from 2018.
In the face of increased competition from Chinese rivals, which have a competitive advantage in low-cost smartphones, and worsening consumer sentiment amid the novel coronavirus pandemic, the iPhone SE is crucial for Apple’s bid to regain some lost ground in the global smartphone market.
But some Apple suppliers expressed concerns. “It makes no sense if high-end models lose ground to the less profitable iPhone SE and are not sold well,” said an executive of a parts maker.