Flagship phones 2018: The impact of budget phones on flagships
12:00 AM, October 22, 2018 / LAST MODIFIED: 04:22 PM, October 26, 2018

The impact of budget phones on flagships

Flagships or high-end smartphones are devices which have the qualities and refinements often found lacking in most budget devices. And while that had been the case for a really long time, budget smartphones have slowly become a force to be reckoned with, thanks to cheap Chinese manufacturing schemes. And with how premium some of these budget devices look and feel, some have even gone on to becoming dubbed as “flagship killers” making it a scary time to be Apple or Samsung.

The difference in quality between these budget devices and flagships are slim to sometimes none, which has left the big companies with the adage of offering much more than just the typical beefed up specs sheet glass sandwiches.

Through aggressive marketing and buzzwords, flagship phones remain important to consumers as being the top of the line devices with the best features. But with more and more $200 to $300 smartphones cropping up, and with the kings of budget devices Xiaomi, OPPO and Huawei gaining a huge chunk of the mobile market share, it begs the question of how it affects Samsung, Apple, Google and others, and what tactics flagship manufacturers are willing to adopt in today's saturated mobile market. And Google might be the only company right now with a winning formula on their hands.


The pure flagship experience from Google

The only pure flagship manufacturing companies are Apple and Google. Unlike Samsung, Huawei or OPPO which have budget devices and subcategories of phones, Apple and Google only release high-end phones with high price tags to boot. Google, although a fairly recent player in the game, managed to sell 3.9 million units of the Pixel 2 in 2017. They currently hold 1.94% share of total mobile phone sales and while it isn't something to boast about, Google's goals were to push Google Assistant and its AI features through the Pixel and not to attain global dominance. The phones are marketed as the smartest android experience and the camera does the marketing for itself and it shows. This and the unique look and experience of the Pixel series have garnered Google a lot of success. Google's on the up and up with the Pixel, only time will tell if they will be able to break out of the niche crowd and into the budget phone dominated mainstream crowd.


But what about Apple?

While Apple's famous tagline “If you don't have an iPhone, then you don't have an iPhone” is the source of a lot of their success, they have been losing out in parts of the world where they were the clear victors not too long ago. The iPhone is popular because of its streamlined software experience, brand image, and loyalty. The downturn, however, started with the release of the iPhone X which broke the $1000 barrier as a mainstream flagship. This and the rising demand for budget devices and competing flagships left Apple in the dust.

Apple's been one of the two dominating forces for a long time, until July 2018, when Huawei surpassed them as the second largest mobile phone manufacturer and distributor in the world. Apple relied on marketing and regional dominance with the iPhone, going as far as controlling the important Chinese market for a long time. But with a poor second quarter of sales in 2018, and an impressive showing from locals Huawei, Xiaomi, Vivo and OPPO, Apple now sits on the fifth spot over in China. Out of the top five, Apple's the only one which relies on the high-end formula alone.

The other flagship manufacturers have however started focusing on both sides of the market, the flagship and the budget side.


Cheaper subsidiaries and models

The times are changing and Samsung has already expressed their worries regarding diminishing profits from their flagship phones sales this year. They are at the top currently and they owe a lot of their success to their J and A series phones. These devices aren't as feature packed as the S series but are still a bang for the buck. Huawei, being another manufacturer of high-end devices, runs their equally flashy Honor subsidiary which releases well tuned mid-range devices at a fraction of the cost. The same goes for OPPO and Vivo who not only released the two biggest flagships of the year namely the OPPO Find X and the Vivo Nex S, but they have had cheaper lines of phones for years with which they gained importance in the Chinese and the Indian market.

Maintaining regional dominance

One of the most unique flagships of this year is the OPPO Find X. The company chose Europe as their destination for introducing the phone to the new audience. This all happened in a continent where OPPO was relatively unknown, where the company had no real lines of distributors and retailers safe for a few. The price, which is set at $1150, is too much for the Asian market but it's proved to have been less of an issue for the European market and to consumers in the west as well. The budget-friendly selfie experts hadn't released a flagship in over four years, but when they did, they did so to great impact. In a staggering twist of fate, the OPPO Find X had actually sold out within the first 15 minutes of its launch racking in around $15 million alone just from sales.

All phones, flagship or not, are marketed specifically to regions these days. This allows companies to set prices in the $1000 mark if they know of its dominance in higher income regions of the world. One Plus started in India and China with budget devices and grassroots marketing, and once it gained enough dominance on this side of the world and enough relevance on the other, it slowly increased the prices of their devices and marketed the One Plus 5T and the One Plus 6 more aggressively as a flagship killer in the UK and the US till finally gaining flagship status.

 As companies like Xiaomi, Umidigi, and the Elephone release competitively priced phones and gain distributors around the world, Apple's trying to once again get a hold of China. Huawei and Samsung hold the majority of the sales in the large Chinese market. It's important to note that Huawei can't import to the Apple-dominated America. This left them alone to focus solely on China and Europe where they are currently the highest selling phone manufacturers. Region matters and even more so if you're trying to sell a $1000 dollar phone.


The local trend

The market in Bangladesh is an entirely different beast where the demand for flagship only exists among a small group of people. According to StatCounter, Samsung holds the top position with 32.24% of the market with Huawei, Oppo, Symphony and Xiaomi all holding a combined 22.4% of the market. The rest is made up of feature phones with T9 keyboards and off-brand Chinese smartphones. While Apple and Samsung promote their flagship devices each year, most people opt for Samsung's J series and older generation iPhones because people want the brand name but can't afford to splurge.

With the advent of technology and access to cheap manufacturing, phones take less time to produce and ship to consumers. This and the zero profit mentality of Chinese manufacturers gave way to a lot of budget devices. As $300 phones start rolling out with Snapdragon 845 and 6 gigs of RAM, are the days of the flagship numbered, or will brand loyalty, wide consumer interest for “premium quality” give the high-end devices its own pantheon only reserved for the elites?

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