The best smartphone manufacturers in China are ready to challenge Apple Inc. on its own ground after dropping the iPhone maker on their own market.
Huawei Technologies Co. and Xiaomi Corp. are in talks with US operators on selling flagship smartphones to US consumers next year, according to people close to the case. Phone manufacturers are negotiating with carriers, including AT & T Inc. and Verizon Communications Inc., said people, asking not to be identified because the case is private. The talks are still fluid and it is possible that no agreement will come to fruition, they said.
Apple has a lot at stake in the United States, where he is the leading maker of smartphones. In the past years, it was isolated from the competition thanks to strong support from carriers, who subsidized its expensive iPhones and reduced the initial price for customers. These subsidies or rebates have disappeared because the carriers have opted for telephone financing that spreads the costs over two years.
Huawei has already tried to sell its flagship Mate 9 phone in the US via ecommerce sites like Amazon.com, but working directly with wireless partners would give a wider presence to mobile phones in China, websites carriers and television commercials. Huawei is in talks to sell a flagship line through US carriers, but the Chinese company also plans to sell the Mate 10 device via ecommerce channels, according to people.
Xiaomi leader Wang Xiang said the company was planning to deploy phones in the United States within two years, but noted that the process of work by specifications with each operator was taking time. Xiaomi is also weighing the opening of retail stores in the United States to build its brand and sell its trackers, thermostats and fitness vacuum cleaners before a phone launch, he said. These products are already sold online in the United States, Verizon, AT & T and Huawei declined to comment.
Chinese handset manufacturers are targeting the US market in a timely manner. US carriers are reducing subsidies, so that consumers are paying more and more for the full price, in some cases over $ 1,000, for high-end phones. Chinese rivals often sell much cheaper phones. Huawei's Mate 9 was on sale at Amazon.com for $ 400 on Thursday.
The US phone market is dominated by Apple and Samsung Electronics Co. Most phones being purchased by operators, it is virtually impossible for a manufacturer to gain market share without the support of AT & T or Verizon, the two largest US wireless networks.
Telecommunication companies supported the challengers. Verizon sells Google Pixel phones and Sprint offers the Essential handset of Andy Rubin exclusively. ZTE Corp., another Chinese phone maker and up to now one of the most successful in the US, sells its Axon dual-screen model in the US via an agreement with AT & T.
Apple regards China as one of its most important markets, but sales have declined in recent years. Apple shipped 8.8 million iPhones in the third quarter in China, ranking behind Huawei, Oppo, Vivo and Xiaomi, IDC estimated last month. This gives Apple just under 8% of the Chinese smartphone market, compared with just over 33% for Huawei and Xiaomi, according to the IDC report.
Yet this is an improvement. Apple experienced six successive quarters of declining iPhone sales in China before the third quarter, while it had a 40% increase year on year, according to the company from Canalys studies.
Tim Cook, President and CEO of Apple, spoke for the first time at the World Internet Conference of China in Wuzhen this month, highlighting the importance of the market.
Still, some analysts are skeptical that Apple's rebound may last. Although he has recently introduced his iPhone X 10th birthday, the $ 1,000 device costs a lot more than most competitors.
"Apple's growth this quarter is only temporary," said Mo Jia, analyst for Canalys researcher. "The high price of the iPhone X will hurt sales in China."