With Alcatel, Blu, Freetel and others, competition is heating up in sub-$300 U.S. smartphone market
LAS VEGAS -- "We're not in the market to compete with Apple," explained Ian Chapman-Banks, global president for Japan-based smartphone maker Freetel. The company last week announced its plans to enter the U.S. smartphone market in the first quarter with a range of new Android and Windows 10 smartphones priced between $50 and $300. "Nobody owns that space yet," Chapman-Banks explained of the sub-$300 smartphone market in the United States.
Freetel is not alone in its U.S. ambitions. While Apple and Samsung battle for the high-end of the smartphone market, manufacturers ranging from Alcatel to Blu to Kyocera are hoping to cut into the roughly 30 percent of the U.S. smartphone market that Apple and Samsung do not control -- a market that Chapman-Banks said generally sits below $300 per phone.
"There's no real market leader" in the sub-$300 space, Chapman-Banks explained.
Indeed, Freetel, Alcatel, and Blu each sought to make a mark on the U.S. market during last week's Consumer Electronics Show here. Alcatel OneTouch, the handset brand of Chinese electronics maker TCL, announced T-Mobile would soon sell its new $139.99 Fierce XL smartphone running Windows 10. And Blu announced the new $199 Vivo 5 and the $149 Vivo XL, unlocked phones sporting a Celltick-powered Android user interface.
A Blu representative told FierceWireless the company sells roughly 10 million smartphones a year globally, and around 35 percent of those are sold in the U.S. market through MVNOs, retailers and online outlets. But how does Blu plan to compete with the U.S. market's top five smartphone players, which according to comScore are Apple (with 43.1 percent of the market), Samsung (with 28 percent), LG (9.6 percent), Lenovo's Motorola (5.3 percent) and HTC (3.4 percent)?
"Design and price," the Blu representative said simply.
Freetel's Chapman-Banks plans a similar strategy, boasting that the company's designs and customer service would set it apart from the competition. Freetel was largely formed by the management team responsible for Dell's Streak-branded phablets. When Dell exited the smartphone market around three years ago, Chapman-Banks and other Dell smartphone executives founded Freetel in Japan to continue designing and building smartphones. Last year, Freetel sold 1 million smartphones and expanded into Cambodia, Mexico and elsewhere.
In the United States, Chapman-Banks said the company hopes to grow its marketing and executive team and eventually sell its dual-SIM phones through wireless carriers and other outlets. "There's a lot of similarities between the U.S. and Japanese market," Chapman-Banks explained, pointing to the powerful role that wireless carriers enjoy in both markets.
And at least some wireless carrier executives said they are open to new handset suppliers. John Dywer, the new president of AT&T's Cricket-branded prepaid business, said the company is always looking for new, high-powered inexpensive phones to sell to its customers. Cricket currently sells phones from major brands like Apple and Samsung but also from smaller vendors like ZTE, Alcatel and Kyocera.
Article updated Jan. 13 to correct handset maker information.