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The reason why Chinese mobile phones are so cheap "scares" the US

Huawei's arrest of leadership highlights the growth of Chinese companies in other markets by overcoming classic American companies.

Chinese smartphones started to get market bills in the last two years. In fact, in the list of the first five manufacturers this year 2018 Huawei surpassed Apple and came second, just below Samsun – according to the IDC report after the end of the second quarter.

This Chinese society – which now sees one of its top executives and the daughter of the founder of the company Huawei, imprisoned in Canada – has 15.8% of the market, up 40.9% in the last 12 months. In the list of the first five, there are two other companies of the same origin, Xiaomi and OPPO, overtaking "giants" like LG, HTC and Motorola.

Huawei is not the only one with problems in a large country in the north: Xiaomi has to circumvent licensing and patent issues. They also said they expected mobile phone sales in 2019, although they are selling accessories in 2015.

How did the miracle of a mobile phone become in the Great Wall?

One of the most famous reasons is Low labor costs. In addition, we add that companies such as Xiaomi, Huawei and Meizu are making their own businesses, while Apple and Samsung depend on Chinese retailers such as Foxconn.

On the other hand, hardware is very good but not a tipFor example, they choose Mediatek instead of Qualcomm because they are cheaper and are made in China. In the past, Japan Display or LG screens were cheaper than AMOLED, as explained on Androidpit. Anyway, in recent versions, it has changed, and Huawei, for example, comes with cameras on the front and Xiaomi is increasingly improving its offerings, although they maintain an entry-level mobile phone strategy like M1.

Marketing "low cost"

Another great point in favor is that prefer to sell their products through e-commerce – The OnePlus case is paradigmatic and has created many fans around the world – which makes it possible to reduce the price by avoiding large distribution costs.

In this sense, the Chinese saves in marketing: while large brands are doing many events that attract attention, while brands such as Xiaomi – one of the most successful at the moment, besides the complications of public opinion: the expected US dollars of 100 million awards and is just over $ 50 million – bet on social networks and word of mouth, One last piece of information in this regard: production is limited, which means that if you do not get it at the start, it will not be reached later; such as the Xiaomi Mi4 sold out in 37 seconds when launched in 2014.

However, when it was introduced to the world market, Huawei decided to include a spokesperson such as Lionel Messi on markets like Argentina, as well as a Boca Juniors jersey. But how did he decide not to grow in the country, with the rise of the dollar in recent months his position in the local market suffered. They are now considering links with local manufacturers and also maintaining aggressive corporate and government network sales strategy.

Low rate of profits and a lot of research

The Xiaomi Hardware Division's yield never exceeds 5%, while Apple always strives to make this number between 30% and 40% and goes up with accessories such as charging cables or network costs. Apple Watch.

On the other hand, for Huawei, there is a research and development strategy for which it spends $ 12 million in 16 research and development centers. There, they developed quality cameras, the first artificial intelligence processor and long-lasting batteries.

Diverse strategy

The clearest example a broad growth strategy It is Xiaomi, which sells even shoes, but also intelligent watches, appliances such as washing machines. Hardware supplies 21% of its revenue, while 63% comes from smartphones. In addition, Huawei is still talking about smartphones, tablets, laptops, home appliances, and cloud services.

Xiaomi also sells as many services as advertising, accounting for between 4 and 9% of its total revenue. And in India, along with the entity called KreditBee, it provides personal loans to those people who have their computers using their own MIUI – Android "retouched" operating system. The interest rate is 3% per month and the amount must be refunded over a 15 to 90 day period.

Cheap are expensive

In the middle of this year, Kaspersky Lab's report found that some low-cost computers have pre-installed malware that can display user ads without the ability to avoid or collect personal information to sell them to third parties (or combine both violations to show you ads based on your data).

Likewise, a pre-installed Trojan has been found that allows criminals to advertise in the operating system ads to devices from relatively large developers such as ZTE, Archos, Prestige and myPhone. In the next survey, it was found that OnePlus and BLU smartphones had pre-installed spyware that collected sensitive personal data that was sent to third-party servers.

To make things worse, most participating manufacturers will appear as verifiers on the official Android site. which means that preinstallation of malware is becoming more and more common practice.

"As phones contain more and more personal data, including those that are considered sensitive, it is important for users to choose not only on price, but also on privileges of security and privacy. A surprisingly cheap smartphone may be more expensive when the manufacturer installs the malware that displays the ad, which shares sensitive information with third parties and disrupts the required functionality of the device, "said Santiago Pontiroli, Kaspersky Lab Security Analyst at Infotechnology.

In this sense, further research published by Avast states that they can find factory-installed malware in over 100 top-ranked brands such as ZTE, myPhone and Archos, which are in more than 90 countries to spread this kind of practice to all countries .

On the other hand, and returning to the question of the daughter of founder Huawei Meng Wanzhou, who is detained in Canada, US justice suspects that, at least since 2016, a Chinese company has shipped products originating in the USA to Iran.

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