Two very interesting things have happened over the last two weeks: Honor smartphones started selling on Jumia Kenya and Xiaomi confirmed that its “flagship killer” smartphone, the Pocophone F1, is on its way to Kenya.
See, here’s the thing. Both the Pocophone F1 and the Honor smartphones represent something new in our understanding of the mobile device market and, particularly, the smartphone market.
What happens when you are an already established smartphone player but still see an opportunity to further advance your interests? A few things can happen. Like, for instance, you can just debut a new smartphone series. Like Tecno did with the Spark last year and sibling Infinix followed with the Smart series in the same year.
Others have resorted to starting whole new phone companies that have specific focus and which go directly against their already existing brands while not paying any homage to those existing brands or trying to associate with them. That is, actually, the case when it comes to Tecno, Infinix and itel in Kenya and Africa and OPPO, Vivo and OnePlus, elsewhere in the world. In both instances, the three companies fall under one umbrella organization.
In the case of Tecno, Infinix itel, and the Snokor brand that we’ve not heard much about since its debut almost 3 years ago, that is the Transsion Holdings Group, the biggest mobile phone vendor in Africa – not just smartphones, mobile phones! In the case of OPPO, Vivo and OnePlus, that happens to be Chinese conglomerate BBK Electronics. In this arrangement, each company has its own unique design ethos and language, product roadmap and goals and targets. In the case of OPPO and OnePlus, the two BBK Electronics company that share a lot in common since the founders of the latter previously worked in the former, even have OnePlus borrowing OPPO’s superior accelerated charging technology, VOOC, and rebranding it as Dash Charge and passing it off as their own without any care in the world or the former being threatened that OnePlus would steal its market edge and thunder.
Or, like is increasingly the case at the moment, you can create an entirely new brand that seeks to live its life outside the shadow of the parent company, create a new fanbase and leave its own mark in the eyes of its users but still while drawing inspiration from the mother brand. This is what we call the sub-brand and that is where the upcoming Pocophone F1 and the Honor devices fall.
Actually, this sub-brand business is why Huawei happens to restrict Honor smartphones to certain markets. You see, Huawei as both a company and a mobile device brand, has a huge brand recognition across the board. Many times, that brand recognition works in its favour as consumers are able to relate to it and can trust it with their money. Other times, as is the case in key Western markets like the United States, Europe and Australia, that brand name can often come across as a curse. In the said countries, there have been efforts over the years to convince consumers to avoid Huawei products for fear of spying by Beijing. While I wouldn’t want to get into the nitty gritties of that right now, it obviously leaves a marketer in a dilemma.
There is also the bit where we have to factor in time. Times are changing and so are the people. Personally, I have grown up in an era where Samsung has been the consumer electronics brand to beat, at least locally. That is true for the entire time I have been a teenager and a young adult. In my childhood, it is a Japanese consumer electronics giant, Sony, that hogged all the attention and stole my heart and soul. There was no Hisense, there was no TCL, heck, there was no Huawei or OPPO or Xiaomi! Today, there are all these new brands that did not exist just 8-10 years ago, not even a long time ago. Yet they are coming up with desirable products that the young people of today want and are interested in spending their money on. You can’t sell your decades-old big brand name to that crowd. So, what do you do?
Either come up with a brand new smartphone line, like BBK Electronics did 5 years ago with OnePlus or create a new smartphone series under your already existing device lineup like Samsung has done time and again. Remember the Samsung Galaxy Young? You’ve obviously come across the Huawei Y series, the successor to the Huawei Ascend Y smartphones. OPPO’s F series also clearly fits here.
Both approaches work so well when it comes to both differentiating consumer interests (feature-wise) as well as factoring in consumers’ spending power by region. There are certain features an American user will detest that someone in India or Kenya, by virtue of location and how they live their lives, will find interesting. This is where smartphone companies realize that not even having market-specific variants, where just one or two things are tuned for the locals, can save them. A good example here is Huawei’s Nova smartphone series.
Even better, device makers can opt for the route that Huawei took with Honor and that Xiaomi has recently taken with the Pocophone: create a sub-brand. You see, a sub-brand comes with its own face, identity and focus. In the case of Huawei’s Honor sub-brand, the focus is on just delivering bang for buck. Very good-looking, feature-packed smartphones at competitive prices. The competitive pricing is what’s important here as, it is not any different from what the mother company, in the case of Honor, Huawei, charges for similar products. A Huawei smartphone that is the direct equivalent of an Honor device costs just as much. In fact, the only difference between the two, as one is bound to find out, is the regions where they are both available. Not much else. The device and the software is almost always the same.
There is a reason for that. Sub-brands are mainly for creating and reaching out to a new set of fans/users who the traditional mother brand would either not be able to net or struggle to attract using its known name. However, unlike a separate company and brand like in the case of Infinix and Tecno, the sub-brand uses pretty much the same resources as the mother brand to come up with the final product. The difference ends up being in the branding and the final product presentation. The sub-brand is also usually keen not to cannibalize the bread and butter of its mothership. For instance, Huawei keeps flagships to itself while allowing its own branded mid-range devices to freely go against those from its sub-brand in the market. Simply put, sub-brands are a way of a big brand “disrupting” itself before someone else does it.
At times, the whole point of a sub-brand may be to enable its mother brand compete at a level where it’s, traditionally, at a disadvantage thanks to increased competition. Much as there are other factors, that was still the case for Huawei’s Honor and, today, that’s the case for Xiaomi’s Pocophone. The Pocophone is meant to allow Xiaomi to be able to compete with compatriot BBK Electronic’s seemingly unbeatable OnePlus brand. For many reviewers, the OnePlus 6, the company’s latest device, has everything that most users would want in a 2018 smartphone worth its name without paying the insane monies that Samsung is asking for its latest world beater, the Galaxy Note 9.
Closer home, and this is not tied to smartphones, Safaricom has done something similar with BLAZE, “the youth network”. Safaricom continues to be the Safaricom that you know but it has an entire product set that, while tied to it, works in its own ways and serves its subscribers in its own way which is slightly different from the norm.
This is both genius from a marketing perspective as well as beneficial to the rest of us who just want a good deal every now and then. For instance, what would be your excuse for not spending more on a smartphone when the Pocophone F1 exists? That it has a notch doesn’t count.