Even at home, China handset brands battle for acceptance
Friday, July 5, 2013 at 4:51PM 
Led by Huawei and ZTE, Chinese handset players might be exporting to the world, but they can’t make the A-list in their home market.
Domestic brands have virtually a zero market share above the key 3000 yuan ($489) threshold, according China’s biggest mobile phone retailer D.Phone.
That applies even to Huawei and ZTE, both in the worldwide smartphone top 5 and both betting heavily on building global handset brands, Beijing newspaper Jing Hua says in this analysis (zh).
Huawei’s Ascend P6, just launched in a high-profile event in London, is on sale at €449 (3600 yuan) in Europe, yet Chinese consumers can buy it for a mere 2688 yuan. At this price the product has no profit margin, according to Huawei handset chief Richard Yu.
ZTE last year priced its Nubia Z5 at 3456 yuan and the titanium version at 7890 yuan, but neither sold well.
In a frank admission (and that might invite the attention of regulators in other markets), Lenovo vice president Feng Xing acknowledges that:
... managers from leading brands like Huawei, Coolpad, ZTE and Lenovo often get together, and the central topic of discussion is how to make products profitable.
Against this, the optimistic view is that the sector has come a long way. Sun Changxu, an analyst at market research firm ESM China, points out that ten years ago, when domestic brands briefly dominated the device market, they were mostly using Korean solutions.
“But now Chinese enterprises can design and build extremely good products, making them much more competitive.”
But in the eyes of demanding Chinese consumers, that's not enough. “[T]heir understanding of brands is mostly embodied in face and price. A high price embodies quality and brand," says another analyst, Yang Haifeng.
China market, handsets in Mobile Devices