Global smartphone sales are stalling… so why is Oppo launching a new brand?

Former Oppo executive now leads independent spinoff Realme, debuting in India

Smartphones

Karen Chiu

Published: 7:45pm, 31 Jul, 2018

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This article originally appeared on ABACUS

2018 doesn’t look like the best time to start a new smartphone brand.

Around the world, fewer people are buying new handsets. In the first quarter, worldwide shipments dropped year-on-year, with China’s numbers dipping to a level not seen since 2013.

Sure, there’s no shortage of new models vying for our attention. But the truth is that in many markets, there just aren’t as many first-time buyers anymore -- while existing owners need better incentives to switch.

But Oppo is doubling down on a new brand called Realme -- now helmed independently by Oppo’s former Global Vice President Sky Li. Back in May, it released its first device, a budget smartphone called Realme 1 that costs up to US$204.

THE NEXT BATTLEGROUND

So what makes Realme think it’s a good idea to launch now?

While China and other major markets are highly saturated, there are other places where the competition is only beginning to heat up.

Chinese phone makers, having cemented their places on home turf, are looking to India as the next battleground. Much like China a few years ago, India has a large rural user base eager to upgrade from feature phones, as well as a growing middle class looking for solid smartphones at reasonable prices.

Online sales have been key to winning new users, according to IDC senior market analyst Upasana Jhoshi. Xiaomi, locked in a fierce fight with Samsung for the number one spot in India, often uses flash sales to generate hype around new products.

In comparison, Oppo focused largely on sales in physical outlets -- and it’s trailing behind. OnePlus, aimed at premium sellers like Apple and Samsung, has been more successful in establishing a fanbase through online channels -- but it isn’t even among the top five in India.

To gain ground, Oppo sorely needs something exciting.

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TARGETING MILLENNIALS

In India, Realme seems to be trying something both familiar and different. On one hand, it followed the tried-and-tested tactic of focusing on online sales: Its first phone was available exclusively on Amazon India, and it was said to have sold out in two minutes.

At the same time, Realme is trying to differentiate itself from Oppo, Vivo and OnePlus by gearing itself towards young people -- specifically those who want to buy a good-looking device with premium specs without breaking the bank.

“Let the youth from all over the world enjoy the pleasant life brought by technology and beauty at a more reasonable price,” CEO Li wrote about Realme’s mission on Weibo.

The tactic of focusing on young people isn’t new. Huawei’s sub-brand Honor -- the fifth biggest smartphone seller in India with 3% of the market share -- is also going after the same user base.

It remains to be seen how well that will work out for Realme. Realme already managed to clinch 1% of the market in the last quarter, according to Counterpoint Research. But as IDC’s Jhoshi notes, the first Realme phone didn’t look that much different from Oppo’s devices.

Still, Realme says they already have plans to release their next product before the end of this year. As to where it will be available? Realme told us that India will remain the focus for now.

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