Wiko: The Smartphone Game Changer
A new wave of phone manufacturers is creating an increasingly diversified phone market challenging the dominance of Samsung and Apple. One such challenger is mobile manufacturer Wiko which has taken the French market by storm.
Wiko launches high-spec, high-design smartphones at low prices
A new wave of phone manufacturers trading on spec-and-design at low prices is creating an increasingly diversified phone market, challenging the dominance of the giants Samsung and Apple. One such challenger is Wiko which has taken the French market by storm.
With a range of high-design, high-tech, and high-spec mobile and smartphones in the sub-$250 market, Wiko is taking advantage of the increasing number of consumers refusing to pay for expensive monthly contracts and top price phones. The company offers a wide range of models from the cheapest, Ozzy, which offers a 3.5-inch screen, a 2 megapixel camera, and retails at $80 (€70) (a tenth of the cost of a new iPhone), to the high-end Highway models which are thinner than an iPhone 6 or Samsung Galaxy S6 at 5.1 mm, and offer an 8 megapixel Sony sensor, a 5 megapixel front camera, and a 4.8-inch HD screen.
Taking the French market by storm
In France, the manufacturer is now the second largest selling smartphone producer after Samsung, with 17% market share. Outside of France, Wiko shipped a further 1.9 million devices which accounted for the second half of its $400 million (€350 million) turnover in 2014.
A Franco-Chinese operation
The self-titled ‘Game Changer’ was founded in 2011 as a Franco-Chinese operation: it is majority-owned by Chinese technology group Tinno Mobile, where phones are mass-manufactured; French telecoms entrepreneur Laurent Dahan runs the head office in Marseille with responsibilities for design, marketing, and international development.
The combination allows Wiko to take advantage of both low Chinese manufacturing costs and expertise in the trends and movements of local markets.
Strong local marketing
Indeed, Wiko has penetrated the closed smartphone market in large part thanks to strong local marketing. Rather than spending big on advertising, it has focused on attracting younger customers (85% of Wiko consumers are under 35 years old) via social media and viral word of mouth. At launch the company specifically targeted “bloggers and geeks” to generate and spread interest online. The strategy has been effective.
The ‘Made in France’ reputation (no matter that the brand is actually manufactured in China) has also been an important factor in Wiko’s success in a country where buying home-grown is key.
Low costs popular around the World
Looking to become a major smartphone player, Wiko is now present in 22 countries around the world, including Thailand, Nigeria, Kenya, and Saudi Arabia. In Europe it claims 4% – 5% of the market share (present in 13 countries), except Portugal where it holds 16%.
Looking across the channel
In 2015, Wiko’s key target is the UK. But while the UK is as keen as any other country for low prices, it’s very different to the French market where Wiko has seen its most significant success.
In France, while operator contracts are cheap, the cost of a handset is rarely subsidised. In 2009, French regulators challenged the “unhealthy dominance” of Orange, SFR, and Bouygues Telecom by selling a fourth 3G (later 4G) license to Internet service provider Free. Free Mobile disrupted the market by undercutting competition with cheap unlimited contracts but without a discount on the phone. Wiko fills the gap.
In the UK, however, operators do offer highly subsidised handsets in exchange for long-term contracts; as a result, very few Britons pay the full $600-$800 cost. Potentially Wiko will only challenge the pay-as-you-go market.
The right time to win over the UK market?
But that may be about to change. Approaching market saturation, competition between UK operators is growing, and sales are dropping (down 10% in 2014). The price of a handset is likely to drop next; in anticipation Apple has already introduced a low budget version of its iPhone 5C.
The new consumer will be looking for faster networks, better functionality, and a better user experience alongside price. This is what Wiko already trades on, and so the timing might just be about right.