A lot of the smartphone industry’s focus, at least here in the US, is spent on Apple and Samsung products, which fight for every smartphone buyer’s attention. Outside of the US, however, there are many competitors.
Many phones are already made in China, and they are distributed here, such as Apple’s iPhones and Motorola phones, a brand owned by Lenovo. But what we are talking about here are Chinese brands of phones that have not seen wide distribution in the US. Brands like Oppo, Huawei, and Xiaomi push the limits of what a smartphone can do.
Blocking China can lead to fragmented 5G market
With China-US trade relations still tense, efforts to cut out Chinese vendors such as Huawei from 5G implementations may create separate ecosystems and consumers could lose out on benefits from the wide adoption of global standards, as demonstrated with 4G.
Thanks to the Trump Administration’s adversarial stance, Chinese smartphone companies have struggled to sell their products here in the US during the past four years. That administration believed companies such as Huawei were acting as agents of the Chinese government and were therefore deemed national security risks. Restrictions were placed on these companies that either outright prohibited their products from being sold in the US or made it difficult for them to be sold here by preventing US companies — such as Google, Microsoft, and Qualcomm — from doing business with them.
Meanwhile, other countries have been enjoying these phones. Huawei has a strong following in the EMEA region, and Honor, which was recently divested from Huawei, has a strong following in EMEA and South America.
Oppo and Xiaomi are massive smartphone companies in China’s domestic market. The technology they are using in those phones is outright amazing; in many respects, they are not just on par with what Samsung is doing but also exceed the Galaxy phones’ capabilities. Oppo, for example, has introduced not just 120Hz but also accurate 10-bit color representation in the display on its Find X3 Pro screen — as well as a “microlens” that allows for very detailed close-up photography.
There’s been some — shall we say — confusion about whether or not OnePlus and OPPO are the same company. They use the same manufacturing facilities and there are some financial ties between the respective owners, but they do operate as two separate companies. I would say OPPO is more of a higher-end phone than OnePlus due to camera complexity and display technology in use. Considering its diverse product portfolio, the company is trying to be more of a Samsung competitor.
OnePlus has done a great job of keeping up with Samsung and Apple, by providing a phone that costs hundreds less than the competition, and it has been an effective utilizer of the direct sales model. My ZDNet colleague and Jason Squared co-host, Jason Cipriani, feels that the OnePlus 9 Pro is probably his favorite Android phone at the moment, over the much more expensive Samsung S21 Ultra. OnePlus makes excellent devices, and it’s a product I recommend to a lot of folks looking for a well-engineered, value-packed Android device. And, right now, it is the only Chinese company besides Motorola/Lenovo that is selling phones in the US.
The first company to get whacked by a US import ban was ZTE. Arguably the company deserved to get fined and its products banned from the US because it violated US export restrictions. But the company bounced back a bit, had a management restructuring, and started to sell its equipment in the US again after about four years. However, the company has once again incurred the US government’s ire because the company recently accepted an award from the Chinese military — and now, both ZTE and Huawei are companies classified by the Federal Communication Commission as security risks due to ties to the Chinese military apparatus.
The Huawei and ZTE situation is unfortunate in multiple respects because it’s not just the consumer who cannot access these less expensive and highly competitive products — it’s also the carriers trying to build out 5G networks in more rural areas.
Also: How China, Brexit, and the US derailed global 5G wireless
It’s not just the AT&T’s, Verizon, and T-Mobiles of the world that are trying to build out infrastructure for 5G in the US. There are many smaller carriers in less-populated areas that are not serviced by the larger carriers. But the smaller carriers can’t afford to buy equipment from Qualcomm, the leading supplier of 5G carrier equipment; Huawei and ZTE’s stuff is much less expensive. The US government has now made it impossible for carriers to use federal subsidies from an $8.3 billion fund to buy equipment from Huawei and ZTE, putting the carriers in an awful spot. If they can’t purchase carrier equipment, they aren’t going to sell handsets either.
While Huawei and ZTE battle the US government, Lenovo-owned Motorola continues like a good soldier, making budget-friendly phones that sell like crazy throughout the world. I think, at least with the G7/G8/G9, Motorola has produced solid value devices, especially in the sub-$200 price point. They are especially popular on prepaid services and lower-budget carriers like Cricket. I happen to think the company is excellent with industrial design innovation in the higher-end space but not always the best when executing on the actual tech. The Razr, I believe, was a bit too ambitious and maybe a bit underpowered, but the hinge folding design it came up with was quite impressive.
Competition is essential in the consumer electronics industry. In North America, we are quickly approaching a point where there isn’t much choice or competition in the smartphone space. You have Apple, and now you have Samsung, essentially, and Motorola is left in the mass market Android space now that LG has abandoned its smartphone business. Google’s Pixel is a tiny player in the overall market. I don’t consider Microsoft’s business to have any real impact yet, assuming it continues after what I would call a less-than-stellar launch of the Duo.
I could recommend that consumers take matters into their own hands, by buying Chinese phones from out-of-country marketplaces like AliExpress. But, right now, that would be terrible advice. The overall negative feelings toward these Chinese brands have permeated US carriers. There is no guarantee that these devices will work on a US network even if the phones themselves were designed to work on US and global 4G LTE and 5G bands, such as those with Qualcomm’s latest 5G chipsets.
I recently encountered this problem while trying to get an Oppo or a Huawei phone to work on Cricket — the company outright refuses to allow them to register with its network. This is even though, since 2014, Cricket has been owned by AT&T and uses AT&T’s network, and I was previously able to get both these phones to work on AT&T 4G LTE. At least, they work for now.
These products cannot function in the US, aren’t marketed in the US due to hostile policymaking, or are outright banned out of unsubstantiated fear. It is a tragedy to US consumers, as it is artificially increasing consumer electronics costs due to unfair and stifled competition.
With a new presidential administration in place, we have the opportunity to return relations between China and the US to something more resembling what we enjoyed 10 or 20 years ago. There’s no reason to continue this animosity — especially now that the COVID-19 virus is being pushed back and trade between our two countries is more important than ever. Yes, we need to figure out how to deal with China’s military and expansionist goals — as well as how to continually manage potential threats to our national security and the supply chain — but we must work to create an international trade environment that fosters competition and a free market as well.
Should we allow Chinese phone brands like Huawei, ZTE, Oppo, and Xiaomi to be sold directly to US consumers and operate without restriction on our 5G carrier networks? Talk Back and Let Me Know.
