Chinese may have edge in emerging market dash for smartphones

Wed Feb 27, 2013 1:09pm EST
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By Paul Sandle and Harro Ten Wolde

BARCELONA (Reuters) - The next billion people to connect to the internet in developing countries will do so largely via smartphones, prompting a battle that could favor low-price Chinese manufacturers like Huawei and ZTE over market leaders Samsung and Apple.

Fixed-line telephone networks are often weak in emerging markets and building new ones is expensive, and so smartphones are becoming a vital way to connect populations to the web and bolster economic growth.

Consumers in markets from Nigeria to Indonesia are hungry for features now standard in the United States and Europe that allow them to tweet or watch video on the go.

The challenge for smartphone makers is offering those features at a price local populations can afford.

Manoj Kohli, chief executive of Indian operator Bharti Airtel, said emerging market consumers were ready to leapfrog basic phone models and go straight for smartphones, but that prices could not come down fast enough.

"People in the developing world are going straight to the mobile Internet," he said in a keynote session at the Mobile World Congress in Barcelona.

The focus on low-price smartphones could step up the challenge to market leaders Apple and Samsung, which are best-known for their top-end iPhone and Galaxy S3 models.

Lenovo, known for its PC business, has quietly become the fifth-biggest smartphone maker in the world by almost exclusively focusing on a single market: its home country China.   Continued...

Visitors look at devices at ZTE booth at the Mobile World Congress in Barcelona, February 26, 2013. REUTERS/Albert Gea