Why Some Smartphones Are Cheaper Than Their Expensive Rivals?

Ever wondered why some Chinese companies are able to give you a smartphone loaded with high end specs and decent build quality, at a price significantly less than what the reputed brands do? We did some digging on this question and discovered variety of reasons to justify this, and following are some facts we can conclude so far, so you can make your decision on buying smartphones with lower costs.

Why Chinese Smartphones Are Cheaper?

Components

Components of the smartphones are quite expensive and they add up significantly to the final price of the product. Companies like Xiaomi have a found a way to bring the price of the components down. Each component is ordered in a huge quantity and also for a longer period of time. Their smartphones are sold for over 12 months’ time, due to this they keep on buying components from their suppliers and therefore the supplier is able to cut some amount and bring the price of the components down. Therefore, they are able to keep the prices of their raw material as low as it can get.

Some of the major component remains similar in the upgraded version of the smartphone; therefore manufacture doesn’t have change the production pipeline to keep up with the demands. Some brands prefer to buy the components from companies that are comparatively newer, or offer more specs for less price. For example, MediaTek sells their chipset at comparatively lower price than Qualcomm. Therefore, it does help in bring down the price of the smartphones manufactured with those processors.

Online-only Marketing

Traditional companies like Samsung or HTC have huge distribution chain worldwide. Therefore, there are a lot of people involved between the company and the final consumer. A big chunk of profits has to be divided in these middle chains which significantly increase the prices of the smartphones reaching the retail stores.

The newer companies have ditched this marketing plan and have gone ahead with Online-only marketing with terms like ‘Flash Sale’. This not only saves a lot of money which would be spent on the distributor chains but also brings down the advertising cost down.

OnePlus has does exactly that and without making any compromises on their devices, they have been successful in bringing down the price. In their infographic, they have shown exactly how they did it.

The smartphone is directly sent to the customer and there is no middlemen waiting to make a profit out of it. This thing alone affects the final price of the smartphones to a large extent.

Fewer/ Third Party Service Center’s

Companies also have set up fewer service store’s to help out the customer. While not everyone like that but given the fact that today’s transport network is much stronger than what it was a decade ago, you get faster services and any hardware problem is solved quickly. In collaboration with third party companies, they have set up a collection centers in tier 2 and tier 3 cities and bigger service facilities at tier 1 cities, making it convenient to manage, cheaper to operate and easy to track for customers. I once had my display replaced back from one such HTC collection center, which they promised would take less than 15 days, and it arrived on day 3. I received all tracking and updates with SMS, which was unexpectedly well done.

Also adding to that fact is that most consumers buy a new smartphone at least every 2 years (and many of them every year), and given the quality of hardware used, it is very hard to have a major hardware issues with most of the smartphone today within that period. Therefore, having fewer service stores isn’t much of an issue.

Worker Wages

Most number of companies have their components being manufactured in China and there’s a reason for it. In the salary of one American worker, they can have at least four Chinese workers working for them. That directly translates into more volumes of work being done in that budget. Therefore, as they have to pay very less for the manufacturing process you can pass that on to the consumer without minimizing  profits.

Recently, some Chinese smartphone makers who have lowered the price of their smartphone further below by shrinking their profits. This can be devastating to other companies or even to themselves as well in long run.

But due to this, you can now see smartphones coming out with excellent quality and high end specs at half the price of a reputed old-school manufacturer.

Build Quality

As the smartphone makers claim that their smartphones are made with great build quality as promised, but what we can’t see is what’s inside the device. There are some compromises made on the internal components which help reducing the price but can be harmful to you in long run.

There is a term used frequently known as SAR. It means specific absorption rate, simply put, it indicates the maximum amount of radiation absorbed by out body when the device is near us. It generally happens during speaking on the smartphone. While the maximum permissible SAR value limit is 1.6 W/Kg, the lesser it is, the better is for our health.

If you take a close look at all the smartphones manufactured by the reputed brands as well as the new companies, you will find a great deal of difference in the SAR values of the smartphones they offer. While the smartphones coming from reputed companies have an SAR value less than 1 W/Kg, the ones coming from new makers, which usually offer their smartphone at much low price, have an SAR value greater than 1 W/Kg. Although it is less than the permissible limit, it clearly shows the compromise made by some manufacturers in their quest to offer the cheapest smartphone. If popular brands can keep the SAR values lower, their is definitely a great attention paid to create the design a smarphone with not only great outer build quality, but their combination with signalling antennas, so they expose user to least radiation. Clearly, this amount of research and quality control for every unit, cost bigger and trusted brands more, so they deserve to charge you more for the device that some Chinese brands offer at lower cost.

The detailed discussion on electronics level is out of the scope for this article, but you can find some fiery debates on SAR topic here  on Qura – How dangerous is a high SAR value in mobile phones?

Should You Buy High SAR Smartphones?

While these are the main reason’s due to which we observe a price difference in the smartphones having the same specs, there maybe several other minute details and internal reason’s that vary from company to company and way they procure their raw materials.

One of the key takeaways we wanted you to take from this discussion are, while other things like low manufacturing and marketing costs can be ignored, one must seriously consider SAR values while buying the next smartphones. If you are in love with some smartphone that has higher SAR but under permissible limit, try to keep it far away from you while you sleep or simply turn ON the Airplane Mode. Alternatively if you are on tight budget, settle for smartphones with low specifications instead of risking your health in long run.

I hope this has been a worthwhile read for you, and if you find it helpful please share it with your friends and family!

1 Comment

  1. Avatar
    Payal Roy Choudhury October 15, 2016

    very nicely explained !

    Reply

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