Within 5 Years, A Majority Of Americans Will Own A Chinese Smartphone

Recode detailed last week how China-based Huawei is looking to conquer the American market with its attractive $399 smartphone, the Honor 8.

Related Link: If Apple Can Target Chinese Market, Chinese Companies Can Target The U.S. Market

Huawei, one of China's most notable smartphone manufacturers may find it difficult to compete in the American market, not only because of a lack of brand recognition in the West, but because it won't be the only Chinese firm looking to conquer the market.

According to Bloomberg Gadfly's Tim Culpan, within the next five years, the majority of American consumers will actually own a Chinese-branded smartphone.

Culpan noted that other than Apple Inc. AAPL and SAMSUNG ELECTRONIC KRW5000 SSNLF, Chinese brands "rule the global smartphone market." He added the trend is irreversible and its only a matter of when, not if, the trend will become a reality in the American market.

Related Link: If Apple Can Target Chinese Market, Chinese Companies Can Target The U.S. Market

In fact, Apple and Samsung's global market share now stands at 33 percent, marking a decrease from 42 percent. The market share that the two companies have lost has been indeed picked up by Chinese brands, including Huawei, Oppo, Vivo, ZTE and Xiaomi.

Xiaomi's Advantage

Culpan suggested that Xiaomi, the "richly valued upstart," is best positioned to "dip its toes" in the lucrative U.S. market. The company even acquired around 1,500 patents from Microsoft Corporation MSFT, which could erase concerns that its phone is merely a copycat of Apple's iPhone.

"What's significant about a Xiaomi move is that along with the brand, the company is likely to bring the same business model that emaciated profits in the Chinese smartphone market: namely, direct online sales, social media-focused marketing and razor-thin margins,"Culpan added.

Finally, Culpan pointed out that Apple and Samsung have reason to be concerned. The two companies collectively account for 59 percent of the U.S. market but now need to "face the fact that U.S. smartphone industry has passed its zenith."

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