BEIJING, March 29, 2012 /PRNewswire-Asia/ -- On March 26th at 3:00 p.m. BJT, China's Chongqing Guohong Technology Development introduced a new handset called Shuidi, which comes with mainstream configurations and is sold at only RMB698 (approx US$100). An industry insider said that the product launch paves the way for the company's foray into the Chinese and global mobile phone markets. According to data available, most smartphones are sold at US$200 to US$300, and Shuidi is the first of its kind with a low price of US$100, leaving little room for profit.
What's the true purpose of the US$100 smartphone rollout?
Unexpected launch of US$100 smartphone
The availability of the Shuidi smartphone is almost unexpected and overturns the previous authoritative analysis.
According to recent research conducted by Informa Telecoms & Media, 81% of all smartphones shipped in 2011 were sold at a wholesale price above US$300; however, this proportion is expected to decline to below 50% in 2016. Sales of mass-market smartphones will grow from 41 million in 2010 to over 206 million units in 2016. Informa does not expect ultra-low-cost smartphones, those priced below US$100, to hit the market any time before 2013.
Since its launch, the Shuidi smartphone has significantly changed the landscape in China and has experienced dramatic growth in sales. The fever will probably spread to the U.S. and global mobile phone markets soon. The device will undoubtedly have a worldwide impact, and the analysis conducted by Informa Telecoms & Media may prove to be incorrect.
Strong support; Excellent quality
Then what on earth supports Shuidi, which has the most popular configuration, in being sold at such a low price? Data on Chongqing Guohong Technology Development, the manufacturer of Shuidi, was specially collected for analysis.
Data shows that Guohong Communications Digital Group Co., Ltd. is a high-tech digital conglomerate integrating communication terminal, internet terminal, as well as the research & development, manufacturing, and sale & service of personal mobile electronic products. It was founded by China Sichuan Changhong Group (SCG), a famous home appliance company in China, in March 2005 with an investment of RMB 200 million (US$31.7 million) as one of SCG's pillar industries to enter the 3C market. The newly born Guohong regards communication as development direction, and military grade quality and technology strength as its core. The Shuidi handset, on this basis, has the qualities demanded of a military product and is produced with excellent material picked from best materials.
A group with strong backing forces has always been in a field with brilliant development prospects in China, and also has the strength to trigger challenges in its industry. SCG, as an expert performer in the home appliance industry, provides Guohong Technology with a shield for entering the mobile phone industry. The US$100 Shuidi smartphone may be the bridgehead for home appliance makers including SCG to get a good start in marching into the smartphone market, making consumers expect excellent tactics to come.
Of course, it is good for handset users to buy good stuff at a low price anyway. Probably no one would refuse.
