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In Price and Value, Chinese Phone Makers Outpace Apple in Much of the World

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BEIJING — To most Americans, the names are unfamiliar, maybe a little hard to pronounce: Huawei, Xiaomi, Oppo, Vivo.

They are China’s biggest smartphone brands. Around the world — although not in the United States — they are making the handset business brutally competitive. This week, after Apple warned of disappointing iPhone sales in China, industry observers said that devices from the Chinese brands were a major culprit.

As the phone market in China reaches saturation and sales shrink over all, the country’s hardware makers are pushing hard, and increasingly winning fans, in places like France, Germany, India and Southeast Asia, where consumers find that the phones can do just about everything an iPhone can do at a fraction of the cost.

Apple sits comfortably atop the market in many countries, including China, for the highest-end handsets. But companies like Huawei have started to do elsewhere what they have done in China, competing with the iPhone on experience and value and luring customers with price comparisons that make them rethink buying Apple’s signature product.

The cost difference is notable: In China, an iPhone XR starts at around $950, while Huawei’s top-end handsets start at about $600, and Xiaomi’s comparable models start at even less. The iPhone XS starts at around $1,250.

Companies like Huawei and Oppo have made improvements in features and overall quality that are enticing many wealthy Chinese people, said Mo Jia, an analyst in Shanghai for the technology research firm Canalys. Chinese brands’ aggressive marketing and sales campaigns in Europe indicate that the companies believe consumers there who have traditionally used iPhones will do the same thing.

“Maybe it won’t happen this year or next year,” Mr. Jia said. “But Huawei is going in that direction.”

In its pursuit of the European market, Huawei (pronounced “HWA-way”), which has its headquarters in Shenzhen and is now the world’s No. 2 seller of smartphones, has gone far beyond the phone store. Huawei has sponsored summer concerts in Greece, teamed up with Lithuania’s basketball federation and backed a “China Festival” in Cologne, Germany. Vivo sponsored last year’s World Cup in Russia.

Xiaomi (pronounced “SHAO-mee”), which is based in Beijing and was founded in 2010, seemingly came out of nowhere to become the No. 4 mobile brand in Europe early last year, according to Canalys. The gadget maker has also become the top seller of phones in India, in part by opening hundreds of stores in rural areas.

Clément Blaise, a 25-year-old banker in northern France, has an iPhone for work and a Xiaomi as a personal phone. He said he needed to recharge the Apple device “all the time” but could go two days without charging his Xiaomi.

“We have this false, preconceived idea that Chinese brands are not as good, that their products are of cheap quality,” Mr. Blaise said. “But the price gap leavens the fears. For 150 euros” — around $170 — “what do you risk anyway?”

Chinese phone makers have not made similar inroads in the United States. The American government has worked for years to stymie the sale of Huawei’s smartphones and telecom-network equipment, after a congressional inquiry in 2012 deemed Huawei a potential vehicle for cyberspying by the Chinese government. The Trump administration has urged Western allies to do the same.

Security concerns have not dissuaded some buyers across the Atlantic. Giannis Vassilopoulos, a college student in Athens, said he had been bombarded by Huawei ads during his recent travels around Europe. He said he had bought a Huawei phone because the brand felt more familiar, more European even.

“Seeing Huawei in the middle of London makes it look immediately more Western,” he said.

Apple still has a hold on consumers in many places. Announcing the sales slump in China this week, the company’s chief executive, Timothy D. Cook, said Apple expected to set revenue records in wealthier countries like Germany, Italy, the Netherlands, South Korea and Spain and in some emerging markets like Malaysia, Mexico, Poland and Vietnam.

In China, though, Apple’s market share has been declining, and the company is clinging to the No. 5 spot in smartphone shipments, according to the market research firm Counterpoint. An Apple spokeswoman declined to comment.

China became the world’s largest smartphone market over the past decade as rising incomes coincided with an explosion in mobile technology.

People in China rely on handsets in an all-encompassing way, using them to rent bikes, sign into gyms and pay restaurant bills. The market is increasingly saturated, and there are fewer people in China who do not have an advanced device. But there are also new economic reasons to buy locally make goods: Consumers who are replacing or looking to upgrade are dialing back in light of China’s slowdown.

Today, mainland China’s top smartphone seller is Huawei, whose handset line includes midrange devices and higher-end models with all the latest features. Vivo and Oppo, brands owned by the same Chinese parent company, are next. And then comes Xiaomi, whose phones, smart home devices and even sneakers command a passionate fan base.

Samsung of South Korea, which sells more smartphones globally than any other brand, has only around 1 percent of the market in China.

Feng Yin, a 32-year-old engineer, has an iPhone now, but he is considering switching to a Huawei device.

“In the past few years, the technology in Apple’s phones has not had any big breakthroughs, while the technology in domestic phones has gotten better and better,” he said while browsing in a Huawei store in Shanghai on Friday. “The difference is getting smaller.”

Apple products have long been seen in China as conferring on their owners the ultimate in cachet and cool. But Chinese companies have used slick marketing and celebrity endorsements in hopes of giving their products more personality, while promoting advances in camera technology, battery life and microchips.

On Friday, Xian Longfei, a restaurant chef, and a friend were at an Oppo store in Shanghai. When it comes to cellphone brands, Mr. Xian, 35, has tried many: Nokia, Motorola, Samsung and three different iPhone models. He switched to an Oppo a few months ago.

He acknowledges that Apple’s devices still seem better on the whole. But so many of his friends in Shanghai and people in his hometown are Oppo users. And the price — around $400 on sale — was hard to beat.

Also, he said, holding up his pink handset, “the form factor is pretty.”

Another factor working against Apple in China is the dominance of WeChat, a messaging, social media and payments app used by more than a billion people. It works on Google’s Android operating system as well as Apple’s, making a phone’s software less of differentiating factor.

“Why would people pay such a high price for an iPhone,” asked Kiranjeet Kaur, an analyst for the industry research firm IDC, “if, from a hardware perspective, there isn’t much of an upgrade from Huawei and, from a platform perspective, there’s nothing to lock people in?”

In Europe, buyers of Chinese brands describe undergoing a sort of conversion. Irritating flaws in their iPhone or Samsung devices lead them to seek alternatives. Presented with unfamiliar Chinese products, they initially have doubts. But after a while, they get hooked.

When Alessandro Del Mastro, 33, bought a Huawei handset in southern Italy three years ago, he was skeptical.

“My friends teased me that it was not going to last, like most Chinese products, but we were all wrong,” he said.

Faruk Kaya uses an Apple iPhone and tablet but, as a salesman at a Berlin electronics store, he encounters German customers who prefer Chinese brands.

“Now you can get a smartphone with the best photo and audio quality for about half the price of an iPhone or a Samsung,” he said.

Gregory Lauseiro, a telecom executive in Paris, bought his eighth Huawei phone last summer. He has turned his 56-year-old aunt, Christine Jankowski, into a believer, too.

“I wasn’t really worried about the fact that it was a Chinese brand,” Ms. Jankowski said of her Huawei phone. She added: “We know that they make amazing technological products.

“If I had to buy a Chinese a frying pan, I don’t know,” she said. “But a phone?”

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