OPPO, Vivo and Xiaomi go to the middle segment. Why won't it help

In the past few months, Chinese smartphone manufacturers have been in a deep crisis: OPPO's sales,

Vivo and Xiaomi fell by about 20%, Huawei by 35%.Smaller companies, such as Honor, Transsion, and Motorola, manage to grow, but either at the expense ofThe main reason for the decline is a steady decline in demand for smartphones in China itself, where they were sold less in April-June than in the same period in 2013.Add to this the anti-Chinese hysteria in India (look, Vivo has been accused there of seeking to undermine sovereigntycountries!) and the crisis in Eastern Europe (well, you get the idea).But today we are not going to talk about the causes, but about the consequences.

As Digital Chat Station said today,Chinese companies have decided to leave the top segment, curtailing many flagship projects for 2023. Most likely, we are talking primarily about OPPO and Vivo - they already did something similar in 2015-2017, when only Xplay and OnePlus were among the top devices in their range. In addition, rumors about the greatly simplified Xiaomi 13 also fall into this outline - albeit with top-end hardware, it will not seem to become a full-fledged flagship. According to the insider, instead of trying to create premium smartphones, Chinese market leaders will focus on creating mid-range devices. A small problem: most likely, this will not help.

The fact is that mid-range smartphones inbasically not in demand. I'm not talking about mid-budget phones for three hundred bucks like the Redmi Note lines and the younger Galaxy A, of course they are sold in tens of millions - and, obviously, OPPO, Vivo and Xiaomi will not exchange their flagship ambitions for them. I'm talking about the $400-$700 segment, which, according to IDC, accounts for only 10% of the global market and just under 20% of the Chinese market. For comparison, the $700+ segment in the world accounts for more than 20% of sales. Moreover, both in China and in the whole world, the share of “strong middle peasants” is steadily declining: people either prefer a full-fledged flagship, or tend to more budget models.

It can be assumed that due to the development of modelsmiddle-class Chinese hope to reverse this trend. But, frankly, I do not believe in this adventure. Yes, in 2015-2017 it worked, and OPPO R and Vivo X were among the most popular smartphones in the world. But smartphones have changed since then, and models costing around $300 meet the needs of most users. If people buy expensive gadgets, then for the sake of status, and the middle peasants OPPO and Xiaomi are unlikely to fit in this role. So, it seems to me, having encountered problems in the flagship segment, the Chinese are moving into an even less promising category. Well, I wish you luck.

© Oleg Lazarev.