Maria Montero

Realme, Honor, Poco and more: smartphone sub-brands are …

The smartphone business is sinking.

For the fifth consecutive quarter, global sales plummeted in the fourth quarter of 2018. Reports suggest that these results predict further declines and analysts expect this year to be no different.

But if some recent trends are any indication, phone makers have focused on ending the decline. Companies have aggressively started exploring several new and experimental avenues to spark interest again and, more importantly, convince users to upgrade. And one of them, as it turns out, is dividing the product lines into sub-brands.

The rise of the sub-brand.

Poco, Realme, Honor, iQOO, Xiaomi, Oppo, Huawei and Vivo sub-brands.

In recent years, smartphone sub-brands have emerged in droves. Despite speculation, however, he has been a fairly successful pivot for many. Oppo has achieved climb back up the leaderboards in India with Realme. Huawei’s Honor has remained one of the most consistent presences in the budget segment for nearly half a decade. Little Xiaomi has bagged numerous accolades since then Its introduction in 2018.

On the surface, though, it’s hard to see the ins and outs of the sub-brands. After all, it seems to be a valid argument for asking why a well-established company wouldn’t take advantage of its current brand and instead spend resources to create a new one from scratch.

It becomes even more complex when you consider the fact that the smartphone market is no stranger to these dual-brand strategies. A host of manufacturers have tried the approach in the past without much luck. Remember when Lenovo sold phones under the names Lenovo and Moto? Or when Micromax and Yu were the village talks.

Smartphone sub-brands: why now and why not at all?

Today’s smartphone industry is full of options and opportunities for original equipment manufacturers (OEMs). There are a number of channels that you can adopt to sell and promote. There are a multitude of new technologies that you can pack into your products. There are a lot of niche audiences that you can address. Of course, a brand does not have to invest in each and every one of those aspects.

But with a stagnant market, they need it. And while they do that, they don’t want to fail either. Well, they are fine with failure, it just shouldn’t affect the reputation of the main brand. A reputation that took years to establish and that’s where a secondary brand comes in.

The new arm allows the company to execute a new strategy while dissolving risk if it ever comes to that. It’s almost like building a brand name litter box to test an unproven plan.

“Sub-brands are generally launched to move away from the positioning of the main brand or to move towards a different pricing strategy, without the risk of impacting the established positioning of the main brand. It also helps to infuse a certain freshness around the brand in the market with new products under the new sub-brand, new messages. This is very important in the smartphone market, especially in a very competitive market like India. In that sense, the intentions of the brands that launch sub-brands are quite clear: to stand out in the market, test the response to new product lines with new prices, etc. ”Said Navkendar Singh, research director at IDC.

The differentiation factor, therefore, plays a critical role for sub-brands to thrive. It is imperative for motive and allows the company to change gears in case its strategy does not work as intended.

For example, Xiaomi Poco operates on the higher end of the budget spectrum, away from the thriving phone maker Redmi series.

“Both brands create phones for a different target segment. While Huawei through its product launches is aimed at a premium user, Honor has focused its energies on bringing innovative products for young people in an affordable price band, “Suhail Tariq, CMO, Honor said in an email interaction. on why Huawei decided to have a sub-brand.