The first mobile operator in the world will reduce by nearly one-third the budget to subsidize the purchase of smartphones it sells. A decision that should encourage Chinese manufacturers such as Lenovo and Xiaomi
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Bad news for Apple and Samsng that focus on the Chinese market for their development. Indeed, already undermined by the rise of local brand Xiaomi smartphones such as the two world leaders could eventually have more difficulty to attract Chinese consumers.
In case the new trade policy has just decided the biggest operator in the Middle Kingdom. China Mobile which boasts no less than 790 million subscribers at the end of June to Thursday it would cut the budget it spends to subsidize the purchase of a phone by its customers.
The current budget will be cut by more than a third, from 34 billion yuan (about 4.1 billion euros) originally budgeted at only 21 billion yuan (2.5 billion euros).
direct result of this decision, the high-end smartphones offered primarily by Samsung and Apple may become out of reach for many Chinese consumers . These could then turn to other brands, starting with the Chinese Lenovo and Xiaomi. They offer devices that offer very respectable performance for often less than half those of Western competitors.
Lenovo and Xiaomi best position
Samsung appears to have to be the main victim of this change since the South Korean manufacturer has just been overtaken by Xiaomi the Chinese market. Xiaomi, launched in 2010, held the second quarter 14% market share, ahead of Samsung, which had only 12%, as the firm Canalys.
But Apple could also be penalized because China Mobile sells the iPhone since the beginning of the year after a deal that took more than six years of negotiations. And because of its size, the Chinese operator is probably the one that flows more smartphones to Apple in the market.
Pressure regulator Chinese
China Mobile’s decision is not entirely a surprise, however, was was expected. can be explained by at least two reasons. The first appears policy. Recently in fact, the Chinese regulator has decided to force the three main operators in the country (China Mobile, China Telecom and China Unicom) to lower their marketing expenditures in an aggregate amount of $ 6.4 billion over three years coming soon.
One way to encourage local manufacturers but also to ensure a good level of profits for Chinese operators. China Mobile has also released mixed results: net profit has indeed fallen by 8.5% year on year in the first half of 2014 And even though the operator racked up over the same period over 23 million new customers.
In any event announcing the budget cut in the right direction for the company. Borse side to Hong Kong, the title China Mobile has reached its highest level since Thursday nearly six years.
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