Click to Skip Ad
Closing in...

Samsung is now getting squeezed from all sides

Samsung Vs. Xiaomi Smartphone Sales

Chinese smartphone sensation Xiaomi has started to expand into new markets aggressively and its new Redmi 1, with its astonishing specs, is a sign of just how dangerous it may be to Samsung and other dominant brands.

With a price of just 7,000 rupees ($120) this is the most important new phone to hit the Asian phone market. Companies like Motorola have had a lot of traction with this price — the Moto E is one of the leading $120 phones right now in India with strong specs like a 4.3 inch display, a 1.2 GHz dual-core processor and a 5-megapixel camera. This is a strong package for the price but Xiaomi’s Redmi 1 simply blows it out of the water.

This hot new Chinese budget phone offers a 4.7 inch IPS display, an 8-megapixel rear camera, a 1.6 megapixel front-facing camera and a 1.6GHz quad-core processor. These are astounding specs for a $120 device. It is important to note that Samsung has already watched Motorola’s market share in Asia soar as the Moto E is soundly beating its Samsung S Galaxy Duos 2, which are more than 10% pricier. The Moto E has outshone the Duos 2 partly because the more expensive Samsung model features a slightly smaller 4-inch display.

Now Xiaomi is debuting a model with a far bigger screen, a higher megapixel camera and a more advanced processor at the same exact price point as Moto E. In addition, Xiaomi’s brand new Note is debuting at a $160 price point, with a 5.5 inch display, a 13-megapixel camera and an octa-core processor. That is the kind of value for money that the more established brands simply cannot deliver as they try to protect their profit margins.

One day soon, Xiaomi will start rolling out these killer cheapies in United States aggressively. At that point, consumers can get a huge phablet with a cutting-edge processor and a high-end camera at a non-subsidized price that is lower than the 2-year contract price of branded models with similar specs. This might be a killer angle for T-Mobile in its bid to lure Verizon and AT&T contract subscribers into its no-contract deals.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.