economy - Mobile phones: going for the high end

Shaun Rein tells about his experiences as he tries to replace his Mitsubishi mobile phone by a new one. Mitsubishi has left the China market, as have many of their foreign competitors, because they could not make sense out of the Chinese consumer.

The saleswoman told me that I should buy a cheap Samsung at about $250 USD because it was a pretty good phone for the price if I did not want to buy a PDA or a fancier phone. I bought the Samsung, which did not seem too cheap to me, and gave it to my wife. I am now using her Mitsubishi, which is still working.

Chinese youngsters spend a relatively high percentage of their income on mobile phones. The effects is similar to the car market. When Chinese consumers find a luxury product financially within their reach, they go for the top and buy rather a Buick than a Volkswagen.

Afterthought: This kind of wrong assessment is actually so common, you wonder why companies are still not geared for this kind of reaction by the Chinese users. I recall that when Medtronics set up their production facility in Shanghai in the 1990s, they initially produced there their cheapest models pacemakers for the domestic market. But those who get a pacemaker are the relatively more wealthy patients who would rather have the more expensive, US-produced medical devices.