Xiaomi the difference: Chinese smart device maker vows to disrupt UK market

Xiaomi launched Mi 8 Pro, the first time it has unveiled new products outside of Greater China, a sign of its ambition to expand in more mature markets.

At a Hollywoodian event (as almost all smartphone launches are nowadays) in Barbican Centre on Thursday, Xiaomi became the latest Chinese smartphone maker to introduce their latest products in London, following recent launches by Huawei and OnePlus. The company unveiled Mi 8 Pro, an upgrade version of its Mi 8 model launched earlier in China.

After registering impressive growth in India and other markets in Asia, as well as consolidating its position in China, Xiaomi, like some other Chinese brands, is eyeing the mature markets for new growth. Western Europe is an attractive option as the market is not flooded with hundreds of smartphone brands as in India and China, and there is a sizeable open market that is easier for new brands to set a foot in instead of having to crack the carrier market as in the US.

“Today we witness a new chapter in Xiaomi’s global expansion journey, underpinned by our global ambitions. We are thrilled to make great strides by announcing our arrival in the UK,” said Wang Xiang, Senior Vice President of Xiaomi Corporation.” By bringing a range of our amazing products at honest pricing we want to offer more choices and let everyone in the UK enjoy a connected simple life through our innovative technology.”

The newly launched Mi 8Pro and its predecessor share exactly the same hardware and software, powered by Qualcomm’s Snapdragon 845 CPU, 6.21” AMOLED display (yes, need to go to the second decimal digit), 8GB RAM and 128GB onboard memory,12MP+12MP AI dual camera on the back, and 20MP selfie camera, Dual 4G SIM, Dual frequency GPS (to minimise coverage dead zones, like near tall buildings), infra-red facial recognition (to unlock with facial ID in the dark).

On the software side, Xiaomi overlayed a light MIUI skin on top of the latest Android release, plus a couple of its own preloaded apps (browser, messaging, etc.). Presumably the main point is not how many people will use its apps but rather to gather usage data. The Xiaomi executives did stress the number of active MIUI users in the world and in Europe (its products are already being sold in Spain, Italy, and France). It has also preloaded a MS Office suite, one of the first offers Microsoft made to the Android ecosystem back in 2016.

Under the spotlight was its photography technologies including the so-called “4-in-1” super-pixel, that is combining 4 pixels into 1 to take in more light, therefore to capture more details even in low light environment. Also being boasted is the speed the phone focuses (using the so-called Double Pixel Auto Focus, DPAF, technology, demonstrated in a video as faster than both the iPhone XS and the Samsung S9+). Nowadays, no presentation of smartphone cameras is complete without talking AI, and Xiaomi is no exception. The main talking point here was on the analytics capability to separate foreground from background, making post-shot processing easier.

The only genuine upgrade the Mi 8 Pro offers over the Mi 8 looks to be the fingerprint reader. It is at the back of the phone on the Mi 8, but is upgraded to on-screen reader on the Mi 8 Pro.

All the bells and whistles aside, what Xiaomi most wanted is to stand out in two areas: design and price. It is clearly successful in one, maybe less so in the other. Xiaomi claimed to go down the minimalist route for its design, claiming that it was inspired by the exhibits at the Helsinki Design Museum. It even got the director of the museum to go on video to endorse an earlier product. But what it got to show its innovative design on the new product is a transparent back-cover where the upper part of the inside of the phone is visible. But to those of us old enough to remember the 1990s, this is more a retro than inno. Swatch’s Skeleton series, anyone?

Xiaomi Mi 8 Pro_Front resized Xiaomi Mi 8 Pro_back resized

But when it comes to pricing the strategy is much bolder and more likely to succeed. Xiaomi broke through in the device market in China in 2011 by offering smartphones with decent specs at a very affordable price. This strategy has carried them through ups and downs all the way to London. The Mi 8 Pro will be retailed at £499.99. This is vastly lower than other smartphones with comparable hardware specs. Xiaomi is clearly targeted at the so-called “affordable premium” segment.

On the distribution side, Xiaomi started in China exclusively using online distribution channels. There have been followers with mixed success, but at the same Xiaomi is also diversifying to brick-and-mortar retail outlets in markets like India, Malaysia. Xiaomi also aims at a mixed channel strategy in the UK, it opens its own online shopping channel, getting online and offline channel partners (Amazon, Currys, Carphone Warehouse, Argo, John Lewis, etc.) on board, as well as opening its own authorised retailer in southwest London on 18 November. It also tied a partnership with 3UK, though Xiaomi executives would not tell more details of the terms or the packages 3 plans to offer.

Also introduced to the UK market at the event are a smart wristband (Mi Band 3, main feature being its display larger than previous generations) and an electric scooter, to deliver the “ecosystem” story—the executive stressed Xiaomi is more than a smartphone company. On display in the experience area were also smart speakers, set-top boxes, smart kettle, and smart scale.

Our overall feeling is that, the Mi 8 Pro smartphone is decent but not fantastic. However the price point Xiaomi sets it on is disruptive. This strategy has worked for the company in China and other Asian and European market, taking them to commendable market positions and financial success. It may stand a chance.

Xiaomi event pic2

How will Xiaomi’s launch into Europe impact the smartphone market?

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Steve Pappas, VP, Asset Value Recovery Services at HYLA Mobile, examines the likely effect of Xiaomi entering the European smartphone market.

The European smartphone ecosystem has welcomed a new player, Xiaomi, who has made an aggressive play for the market. The Chinese smartphone manufacturer has already gained a good portion of market share too thanks to its portfolio of cheaper devices, which seem to be appealing to price-conscious European consumers. The company’s Senior Vice President, Wang Xiang, has even stated that the operator’s differentiator is its “premium product” without the “premium price”.

Traditionally, consumers have invested in the latest and greatest smartphones as soon as they hit the market. Large players such as Apple and Samsung have brought new models and technologies to the industry each year, and we have seen national newspapers cover the queue of fans waiting outside brick and mortar stores to get their hands on these latest devices.

But today, consumers are holding onto their devices for longer, and in fact, are waiting 2.8 years before considering an upgrade. This trend can be attributed to the rise in device prices over recent years, along with a perceived lack of innovation from consumers.

So, with this in mind, and with Xiaomi now entering the European smartphone market with a more affordable alternative, what will this mean for the industry, its players, and their customers?

A new era for the mobile device market  

Mobile analysts have described Xiaomi’s devices as “looking like an iPhone, performing like an iPhone, but half the price of an iPhone”. In fact, its flagship Mi 8 model released in May has been described as brazenly copying the iPhone X, with similar features such as facial unlock and iOS-like Animojis. And at a much lower price point of £350, Xiaomi will be hoping to draw favourable attention from Apple fans unwilling to pay the £999 price tag of the iPhone X.

According to CCS, more consumers are searching for alternative means to secure a smartphone. More than half are on SIM-only contracts, which have been found to be better value, compared to purchasing a device and SIM separately. CCS’s research also revealed a growing interest from consumers in second-hand and refurbished devices.

For the cost-conscious consumer, it can be difficult to turn a blind eye to a device that can offer close to everything Apple can, without the hefty price tag. It’s entirely possible that we could see some Europeans seduced by the cheaper alternatives offered by Xiaomi, and move themselves away from their decade-long relationship with the likes of Apple.

But is Xiaomi ready to take on the likes of Apple?

Xiaomi appears to be a strong contender, having a 10.57% market share in Asia— not far behind Apple, who has a 13.14% market share. Now with its eyes set on the West, Xiaomi’s market share has grown by over 999% in the first quarter of 2018, as recorded by analyst firm, Canalys.

While Xiaomi is still in the early days of its European expansion, having only recently announced its expansion into Britain in May, is now the time for Apple and other manufacturers to reconsider their current marketing plans? We have recently seen Apple announce a “less-expensive” iPhone in September, the iPhone XR, as well as an even more expensive device the XS MAX. The lower cost device has been priced at £700—but this is still a considerable amount more than a Xiaomi device, which is priced anywhere between £300-£500, depending on the storage size.

But there is method behind Apple’s madness. With the launch of Apple’s latest devices, the manufacturer is able to target a slightly broader audience. First and foremost, with a more affordable device, Apple could tempt the cost-conscious consumer to upgrade to a newer device at a more reasonable cost, that could be made even less-expensive by trading-in an older device.

Secondly, consumers know that Apple is a premium brand; no matter the price, some customers will always be willing to pay the cost for the latest device. And that’s what it comes down to. People are invested in the Apple brand, and there will be some that always will be. What it boils down to is whether consumers are ready to try an unfamiliar brand, even if they know its capabilities and price?

There’s no doubt that consumers are searching for lower cost alternatives to secure the latest mobile device, whether that be through purchasing the device and SIM separately, purchasing a pre-owned device, or using their old device to offset the cost of a new one. The cost-conscious consumer is happy to hold onto their device for longer, and shop around for the best deal on the market in order to make the rising cost of owning a smartphone more affordable. And while Xiaomi’s entry into Europe has the potential to disrupt the status quo of the market, we won’t see dominant players, such as Apple, be overtaken just yet.

International markets pay off for Xiaomi

Xiaomi has released its quarterly figures with breakthroughs in the Indian and Indonesian markets paying off for the budget smartphone manufacturer.

Over the last three months, Xiaomi reported total revenues of roughly $6.6 billion, a year-on-year increase of 63%, while profit stood at $826 million, a rise of 46%. Comparisons for the first six months accounted for an even healthier boost to the coffers, with total revenues up 75% and profits boosted by 57%.

Looking at the individual business units, smartphones accounted for the lion’s share of cash. The second quarter brought in roughly $4.5 billion, a year-on-year rise of 58%, with the team pointing to both an increase in volume of shipments and average selling price. Sales volume for the quarter reached 32 million units, up 43% compared to Q2 2017, with IDC estimating the brand was the fastest growing of the major global brands.

Over the last couple of weeks, Xiaomi has been claiming headlines with victories in the developing markets. Firstly, usurping Samsung for top spot in India was somewhat of a coup, but capturing 22% of the shipments across the second quarter in Indonesia (compared to 2% in 2017) perhaps indicates Xiaomi is going to be a genuine contender on the global scene. Progress can also be seen in Western Europe with launches in France and Italy, and the team claiming shipments across the continent grew 2700% compared to the same period in 2017. Overall, the international markets accounted for 36% of total revenues.

While Xiaomi is attempting to build foundations in the budget markets internationally, in China the premium smartphone market is the big target. In mainland China, average selling price of devices increased over 25% year-on-year in the second quarter of 2018, led by the Mi 8 launch, which sold over 1.1 million units in the first month. This might be a market which has gone through a tough couple of months, though Xiaomi believes China will return to growth in 2019, and is keen to streamline the portfolio to maintain progress in the premium devices segment.

Over in the smaller business units the story was still a successful one. Revenue from the internet services segment grew 63.6% year-on-year to $580 million, primarily focused on the Chinese domestic market. The IoT and lifestyle products segment grew 104% year-on-year in revenue to roughly $1.5 billion, with  smart TVs growing over 350% year-on-year. The team also claim to have about 115 million connected Xiaomi IoT devices, excluding smartphones and laptops, representing 15% quarter-on-quarter growth. 1.7 million users own more than five Xiaomi IoT devices, offering the beginnings of a successful convergence model.

For some time there have been questions over whether Xiaomi can offer a genuine threat on the global stage, though these numbers do seem to offer credibility to the challenge.

Xiaomi taking big steps on the global stage

After taking the lead in the Indian market, Xiaomi has continued the solid progress by snapping up second spot Indonesia, another one of the world’s most lucrative markets.

According to estimates from Counterpoint Research, Xiaomi has collected second place in the market share rankings for second quarter shipments (22%), only trailing behind worldwide leader Samsung (25%). Indonesian smartphone shipments grew 25% annually and 5% sequentially during Q2 2018, partly due to seasonal demands, but also down to the consumer becoming more entwined within the digital economy.

“The overall tech ecosystem in Indonesia is more robust as compared to a year ago,” said Tarun Pathak of Counterpoint Research. “With smartphone users all set to cross the 100 million mark this year, it presents an opportunity for the players in the mobile ecosystem to tap the growing demand of digital consumption. Users have now started migrating from entry level smartphones to mid-tier smartphones which has increased the replacement rate over the past few quarters.”

Xiaomi might have had a bit of a wobble during the end of 2016 and the beginning of 2017, but that looks to be nothing but a distant footnote now. Aside from leading the Indian market for the last two quarters for shipments market share, progress in the Indonesian market provides an excellent foothold in a digital economy which will only go upwards. While other brands are scrapping to capture the minimal profits in the developed markets, the Xiaomi strategy seems to be focus on the areas where smartphone penetration is low. The massive profits might be years down the line, but patient brand-building is a proven strategy.

Offering users entry-level smartphones begins the relationship, and with a broad portfolio of mid-range devices, Xiaomi can take users on a journey to the much hyped digital society. With smartphone penetration increasing, data tariffs becoming cheaper and digital services becoming more prevalent, it won’t be too long before lives are dominated by the small screen. Creating the relationship with the consumer now will serve Xiaomi very well in the long-run.

The success of Xiaomi has been partly put down to the success of the Redmi series through both offline and online channels, allowing it to lead the sub-$150 device segment. This segment still accounts for more than 50% of the overall market, while the $100-$150 sub-segment was the fastest growing price band across the quarter. The price is starting to creep up, which will start to make Indonesia attractive to other brands who operate at the premium end.

Looking at the premium end of the market, Apple currently has less than 1% of the market, though owing to a globally renowned brand increasing this share once the consumer is ready to spend bigger won’t be much of a challenge; there don’t seem to be many markets Apple can’t dominate. Xiaomi is attempting to create a position for itself at the top-end of the scale with the launch of Poco, but it will have considerable work to do to make sure it can compete with the likes of Apple and Samsung at the branding game.

Building the foundations in the developing markets before scaling the customer up through the low- and into the mid-end device portfolio is a sensible way to do business. Xiaomi is making powerful steps on the global stage through gradual relationship building.

Xiaomi sets its eyes on premium market with Poco

Having stormed to the top of the Indian smartphone rankings, Xiaomi is now chasing down premium customers with the launch of Poco,

The device, which will hit the shelves on August 22, takes Xiaomi out of the low- to medium-end market, putting the brand in direct competition with the likes of Samsung and Apple. The product does look the part, but the question of whether Xiaomi has a strong enough brand to live in the premium world is iffy.

According to the leaks, the Poco F1 device will have a 6.1-inch FHD+ display, 6GB or 8GB RAM with 64 GB, 128 GB or 256 GB storage. It will have a dual-rear camera as well with 12MP+5MP combination, a 20MP front camera and a larger 4000 mAh battery. It will also feature the latest Qualcomm Snapdragon 845 processor, with marketing focusing on speed and performance.

While Xiaomi has been performing exceptionally well in the budget smartphone market, recent IDC figures suggest it is now leading in the highly lucrative Indian market, its success in the premium market is a completely different story. Devices such as Mi 5 and Mi Mix 2 have performed pretty poorly with Xiaomi struggling to exert any influence on a market dominated by Apple, Samsung and more recently, Huawei.

The tricky aspect here is the brand. Premium devices are better performing than lesser products, but the brand is what genuinely convinces consumers to part company with such vast number of reddies. Apple has the premium brand which is associated with high-value, as does Samsung. These are brands which are continually exploring how much they can charge customers before the pinch point is hit, such is the power of the brand. Xiaomi is currently associated with the low-end market, a perception which will have to change if it wants to see any success.

Playing with the big boys is much more than a high-performance device, it’s all about image. It will be expensive to create and maintain this image, and Xiaomi’s willingness to sign cheques in the advertising and sponsorship world might dictate success here.

Tencent is aiming to do a Spotify with its entertainment and music business

The China based internet company Tencent, listed on the HKSE, is planning to spin off its music and entertainment subsidiary and list it separately on an exchange in the US.

The chairman of Tencent, Ma Huateng, also known as Pony Ma, made the announcement on Sunday 8 July, one day before Xiaomi’s trading started on the HKSE. Despite the initial price was set at the bottom end of the estimated range, Xiaomi’s share price still closed the day 1.2 percent lower than its opening price, having recovered from a heavy loss of close to 6 percent earlier in the day.

In an interesting twist, Xiaomi’s CEO Lei Jun felt the share price was depressed by the on-going trade disputes between the US and China, when he spoke to the CNN. Meanwhile, the company’s President and Co-Founder Lin Bin told CNBC that the trade war is not a major concern “as Xiaomi had not done much business in the U.S.”

Although Xiaomi is a profitable business, its thin margin (capped at 5 percent by its owner on its hardware business, which accounted for roughly 90 percent of the whole business) made investors deem the price too high.

In comparison, the global leader in streaming music, Spotify, launched its IPO in April this year on NYSE. The price rose by 13 percent on its opening day, rising to $149.01 from the initial offering of $132, despite Spotify being a loss-making company. It was traded at $175.70 when the market closed on Friday 6 July.

We can only wait for Tencent to disclose the profit and loss of its Music and Entertainment group in the run-up to the IPO, but the group, which gets all its business from China, has reported healthy growths. Its paid subscriptions, mainly for video and music, grew by 24 percent to 147 million during the first quarter of 2018, and its total video revenues grew by 85 percent year on year.

The limited appetite on the Hong Kong market, especially when the channel to China-based investors, the instrument called CDR, is hard to come by, in contrast to the enthusiasm to invest in the future on the US market, may have helped tilt the decision by the Tencent board to go for the US stock market.

Xiaomi IPO was compromised by Chinese regulators

Chinese smartphone maker Xiaomi’s initial plan for a dual listing in Shanghai and Hong Kong was hamstrung by the draconian requirements from Chinese regulators.

According to Bloomberg, which cited sources familiar with the situation, Xiaomi failed to address the long list of questions China Securities Regulatory Commission (CSRC) asked, including demand for more information disclosure and profitability projections. This resulted in the company’s decision to scrap its plan to offer Chinese depositary receipts (CDR) at the same time as its IPO in Hong Kong.

This was a blow on two fronts. For Xiaomi, listing on the Hong Kong Exchange and pricing at the lower end of the expected range only raised $4.7 billion, less than half of the $10 billion it had expected to bring in. Market reaction was also lukewarm. The retail part of the offering was 8.5 times oversubscribed, compared with the hundreds of times oversubscription of other recent Chinese offerings in Hong Kong.

CDR was devised to provide a channel to the Chinese investors, in particular the retail investors, to buy into the fast growing Chinese successes. Therefore, for CSRC, the failure to get Xiaomi as the first high profile Chinese company to offer CDR on the Chinese market and IPO overseas simultaneously must be viewed as a setback to its ambition to stamp its authority on the global financial market.

More worrying for CSRC in the future, this could cause the other Chinese companies lining up to offer CDR as well as IPO to rethink their strategies. According to Bloomberg, the questions deemed by CSRC not addressed adequately by Xiaomi are very different from what is required on the Hong Kong market and are asking for much more detailed information to be disclosed. This means companies will find it easier to meet the demands for an overseas IPO than a listing on the domestic markets.

For Xiaomi though, not all doors are shut. In its new prospectus Xiaomi said it would “conduct a CDR offering in mainland China at an appropriate time in the future.” When or whether this will happen remains to be seen.

IPO fails to Xiaomi the money

The initial public offering of Chinese gadget giant Xiaomi seems to has raised considerably less cash than it hoped.

Bloomberg reports that Xiaomi priced the IPO on the Hong Kong exchange at the lower end of its expected range, resulting in a mere $4.7 billion being raised and pricing the company at around $54 billion, far less than had been hoped at the start of the year.

Bloomberg spoke to James Yan of Counterpoint Research, who offered the following analysis: “Xiaomi’s exceedingly thin margins from hardware significantly drags down its valuation for potential investors. I expect it to invest more in the smartphone unit, especially on international expansion. It also needs cash to beef up its ecosystem in markets like India. All those fronts are extremely capital-intensive.”

Another apparent hit on investor enthusiasm was Xiaomi’s decision not to do whatever the equivalent of an IPO is in China for whatever reason. This in turn meant it was going to raise less money and thus be able to reinvest less, hence reducing its investor appeal.

Xiaomi has done a great job of reclaiming market share it lost a year or so ago (see below), but the mere fact it had to do so is a reminder of how volatile the smartphone market is. Combine that with the company’s apparent Apple-style reliance on a captive installed base to flog other stuff to and the great job companies like OnePlus are doing of competing with it directly and you can see why the investment case is far from clear cut.

Xiaomi launches $6 billion IPO in Hong Kong

Chinese gadget giant Xiaomi has launched its initial public offering in the Hong Kong stock exchange that could raise over $6 billion.

2,179,585,000 shares will be on offer at a price range of HK$17 to HK$22 per share. If they all sell at the upper end of that range that will value the company at around $70 billion and raise around $6 billion. A proposed listing in China has been shelved for now.

“Today we present ourselves to you as we prepare to enter a new stage in our journey,” said Lei Jun, Founder, Chairman and CEO of Xiaomi. “We are an innovation-driven internet company committed to the principle of ‘amazing products at honest pricing’.

“Leveraging our unique ‘triathlon’ business model, we maintain excellent design and outstanding quality in our products, while pricing our products as close as possible to cost by selling them to users through highly efficient online and offline new retail channels. We then provide our users with a range of comprehensive and engaging internet services.

“Xiaomi’s achievements so far illustrate the strength and resilience of our model. Within seven years of our founding, our annual revenue exceeded RMB100 billion, achieving a growth rate that many traditional companies are unable to match.

“We believe that the potential of our global business is limited only by our imagination. With our unique ecosystem model, we have mobilized many like-minded entrepreneurs, and we are not only changing industries in China, but also elsewhere in the world.

“Fundamentally, the Internet is all about transparency, efficiency, and equality. We want to allow everyone to enjoy the benefits of technology. That is the goal that all Xiaomi employees and I are working tirelessly for.”

The triathlon business model simply refers to Xiaomi’s involvement in hardware, internet services and ecommerce all at once. In that sense it’s often compared to Apple, but it has only recently started to embrace third party sales channels. Xiaomi plans to spend the money raised equally on R&D, other investments and global expansion.

Xiaomi triathlon

Western European smartphone market nosedives – Canalys

Market researcher Canalys has published its Q1 2018 smartphone numbers for Europe and they indicate a severe contraction in its richest markets.

Overall European smartphone shipments fell 6.3% year-on-year according to Canalys’ research, but it was very much a game of two halves, with Eastern Europe growing by 12.3%, driven largely by Russia, while Western Europe fell off a cliff, down 13.9% annually. The overall drop for the continent was the biggest ever for a single quarter.

“This is a new era for smartphones in Europe,” said Ben Stanton of Canalys. “The few remaining growth markets are not enough to offset the saturated ones. We are moving from a growth era to a cyclical era. This presents a brand-new challenge to the incumbents, and we expect several smaller brands to leave the market in the coming years.”

Canalys Europe smartphone Q1 2018 1

This would appear to mirror the broader global trend of consolidation in the smartphone market, with the top vendors gaining market share at the expense of the long tail. Samsung is the number one vendor but is having its own long tail attacked by Huawei and Xiaomi as cheaper phones increasingly offer much of the performance as flagship ones.

“It is not all gloom for the smaller players,” said Lucio Chen of Canalys. “Xiaomi and Nokia, under HMD Global, are both relatively new entrants to the European market, but have stormed to fourth and fifth place.

“Xiaomi is working closely with distributors, such as Ingram Micro and ABC Data, to drive products into retail stores. HMD has taken a different approach, using its operator relationships on the feature phone side to get its new smartphones ranged across Europe. But both Xiaomi and HMD Global have the benefit of being privately owned.

“As Xiaomi has shown, private companies have an incentive to operate at a substantial net loss to drive smartphone shipments, boosting market capitalization before IPO. But this is not sustainable in the long term, and both Xiaomi and HMD Global will eventually have to shift their revenue and cost structures, as the top three have now done, toward profitability.”

Canalys Europe smartphone Q1 2018 2

The nature of the component manufacturing business means that what used to be premium specs have become commoditised, which is the main reason for the shift towards cheaper phones even in rich countries. Now you can get a phone with a quality screen, camera, processor, etc for far less than the price of an iPhone X or whatever.

“Dual-SIM is also a growing specification trend in Europe,” said Vincent Thielke of Canalys. “It has taken longer to take hold than elsewhere in the world, because operators are paranoid about ranging dual-SIM phones, as it opens up the opportunity for competitors to sell lines into their installed base. But due to the growth of dual-SIM through retail channels, especially through brands such as Huawei and Wiko, operators are being forced to re-evaluate their portfolios and consider dual-SIM. Vendors are reacting too, and Samsung has made an explicit push to bring dual-SIM to more of its devices in more of its channels in 2018.”

Canalys Europe smartphone Q1 2018 3

The one vendor that seems to be impervious to the eddies and currents of smartphone fashion is Apple. While its brand is peerless, the fact that Apple has its own platform is probably the main reason it’s so much more resistant to commoditisation. When comparing Android devices specs are likely to be a more significant consideration then when choosing between Apple and Android. This is probably the main reason why Apple’s margins are so much higher too.