Indian, Chinese manufacturers' rise a threat to Apple, Samsung

Global consumer internet and mobile companies will increasingly need to work with companies like Xiaomi, Micromax, Lenovo, Huawei, ZTE, Coolpad and Karbonn, if they don't want to miss out on mobile's next growth phase in emerging markets, says a new report from BI Intelligence.

According to the report, Indian and Chinese smartphone manufacturers are classically disruptive as they manage to produce products that are "good enough," at a fraction of the cost of comparable models from premium brands.

India's smartphone market is dominated by global major Samsung and home-bred handset makers Micromax and Karbonn, who together accounted for over 60% of the smartphone market.

The local brands -- which quickly caught on to the growing demand for big, bright screens and dual-SIM facilities -- are now aiming higher producing 4G LTE smartphones many ofwhich have the same processing power as premium devices from Apple and Samsung.

Here are some key points from the report :

* Major local manufacturers now account for two-fifths of China's smartphone market, and one-fourth of India's. Xiaomi already sells four of the top 10 best-selling Android devices in China, and operates one of the top five app stores.
* Combined, the top five manufacturers in China and the top two in India are now shipping about 65 million smartphones every quarter, more than Apple, and coming close to drawing even with Samsung.
* These local manufacturers wield influence in various ways. They run their own successful app stores, mobile operating systems, and mobile services. They also hold the keys to which apps are preloaded on their phones. When BlackBerry wanted to take its BBM messaging service for Android into India, it signed a deal with Micromax.
* The local manufacturers are not provincial outfits producing knock-offs, as some might be inclined to assume. But their main competitive tool, for now, remains price. Local manufacturers in China and India match the features of more expensive devices and manage to produce comparable hardware at a fraction of the price. A Micromax handset comparable to Apple's iPhone 5C costs less than one-fourth as much.
* Xiaomi has used a four-point strategy in its three-year rise to produce four of the most popular phone models in China.
* These manufacturers will continue to expand overseas, in search of new growth opportunities. Micromax is in Nepal, Bangladesh, and Sri Lanka. Xiaomi has its eyes on Malaysia and Brazil. Huawei is already in the US.

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