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Cheap smartphones put pressure on Apple

2:20 PM, Jan 9, 2014   |    comments
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Alistair Barr
USA Today

LAS VEGAS - One of the reasons investors are concerned about Apple can be found in the back booths of this year's International CES technology conference: cheap, powerful smartphones that are a viable alternative to the iPhone for some consumers, especially in Europe and fast-growing developing markets.

These phones are often made by Chinese manufacturers for other companies, which put their own brand names on the devices. Some brands mentioned by these manufacturers included Polaroid in Europe, Fly in Russia, Yezz and BLU in Latin America.

Some of the phone makers here said they are also selling their phones under their own brands too, mostly in China.

The phones run Google's Android operating system and often feature multicore processors from Taiwanese chip company MediaTek. They cost less than $200, and some are priced below $100. This compares with more than $500 for Apple's iPhone 5s.

The cheaper phones may lure some price-conscious consumers, but they are also attractive to wireless carriers that can more easily give the devices away as part of two-year contract plans.

"Our phones are now good enough," said Cedar Zhang, an overseas director at Shenzhen Eycom Technology, a tech manufacturer headquartered in the Nanshan district of Chinese city Shenzhen. "In Europe, they have embraced this. We sell to carriers in Latin American countries like Mexico and Brazil, too."

At CES, Zhang showed several smartphones made by Shenzhen Eycom, including the flagship Eton I6, which has a 5-inch display, a 1.3 GHz quad-core MediaTek processor running Android 4.2 and an 8-megapixel camera.

The retail price of the Eton I6 in China is the equivalent of about $300, but Zhang said this will drop to about $200 in three months as the company keeps up with price cuts from rivals including Samsung Electronics and Xiaomi, a hot Beijing-based smartphone maker.

"Xiaomi is a killer on price," Zhang said in an interview with USA TODAY at CES.

Such price competition has some investors worried that Apple may have to come out with cheaper iPhones to keep sales strong, particularly outside the U.S., and that could cut into the company's profit margins.

China Telecom, the country's third-largest wireless carrier, recently cut contract prices for the iPhone 5s by about 15%. The cost was still 4,888 yuan, or about $807, according to Bloomberg News.

Here are some other, cheap smartphones that were on show at this year's CES:

-- The MID5006 from Maysun Info Technology, which costs about $190. It has a 5-inch display, an eight-core 1.7GHz MediaTek processor running Android 4.2, front and rear cameras, GPS, LTE and Bluetooth.

-- The Jeko JK808 from China's DOME Group, which costs $110. It has a 4.66-inch high definition display, a quad-core 1.5 GHz MediaTek processor running Android 4.2 and front and rear cameras.

-- The PM968 from Shenzhen Unitone Electronics Co., which has a 5-inch display, a quad-core chip and costs less than $150. Unitone also offers two other smartphones that cost less than $100: The PM976 which has a 4.5-inch display and a dual-core chip and the PM971 which has a 3.75-inch display. All three run on Android.

-- Hasee Computer Co. was showing a new model called the F60, which has a 6-inch display, a quad-core MediaTek processor, 2GB of RAM and 32GB of storage. It will cost about $160, according to Daimon Huang, international sales manager at Hasee.

Hasee had other smartphones on show at its CES booth, with prices and specifications scribbled on notes stuck to the top of the devices. One cost $139, the other $69.

 

USA Today

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