Cheaper cellphones target younger people

Innovation Works' co-founder Wang Hua gives a speech during the Geekpark Innovation Festival in Beijing on Jan 11, 2014. [Photo/Geekpark.net]

A three-year old playing with a mobile device and a five-year old talking through a mobile communication app are common sights in China.

Younger customers have inspired mobile device makers to race towards their future potential, even though they have less spending power and are likely to buy a cellphone for about 1,000 yuan ($165).

Huawei Technologies mid and low-end brand, Honor, targets its younger customers. The Honor 3C was offered at a starting price from 798 yuan ($132) in December 2013, and is only available online. When it was first launched, in a matter of seconds about 30,000 units of its quad-core 5-inch model sold out, according to the company.

And a few weeks later the well-known Xiaomi Technology Company quickly lowered its quad-core 4.7-inch screen Hongmi cellphone to 699 yuan from 799 yuan on January 7.

Wuxi Maimaibao Information Technology Company joined the price wars on January 8 with its 899 yuan quad-core 5-inch screen DaQ Q1.

Zhang Xiaowei, CEO of Wuxi Maimaibao Information Technology, speaks during the DaQ Q1 cellphone news conference in Beijing on Jan 8, 2014. [Hao Yan/chinadaily.com.cn]

Currently, the DaQ Q1 6.9 mm thickness makes it the thinnest among those at similar prices.

And as expected late comer models can and will be ready in months which will only stir the market again.

The attractiveness of the younger customers lies in their behavior, which is strongly dependant on cellphones. This younger demographic is predicted to consume a greater amount of mobile devices once they become tomorrow's major spending power.

The latest cellphones are predicted to be the key link to that growing market, even as demographic changes occur.

Innovation Works' co-founder Wang Hua said huge opportunities are happening in China's mobile Internet sector while younger customers replace current customers.

However, low prices may only be just enough to grab the attention of younger customers and not enough to stimulate sales.

Zhang Xiaowei, CEO of Wuxi Maimaibao Information Technology, said, "a 500 yuan cellphone is like a meal, just enough to feed you; those between 800 and 1,000 yuan will satisfy you, but if you are seeking better enjoyment, you will be looking at phones that cost about 2,000 or 3,000 yuan."

The younger demographic is significantly different from older consumers in areas such as behavior, habits and thinking.

In researching customer preference and needs, companies have gone to great creative lengths to develop their own unique approach to gain a better understanding of emerging markets.

DaQ employees and even product managers immersed themselves with potential customers by going undercover, according to Zhang Xiaowei. Some even managed to get hired at a manufacturing company, and lived with several targeted potential customers spending days on end with them just researching and listening.

Many companies, including Xiaomi and Maimaibao, have built an online forum to collect feedback from customers, so as to make timely improvements. Now, these mobile device manufactures do not have to wait for the next product and can easily revise their software and improve hardware on future batch of productions.

Lei Jun said 20 percent of his time at work is spent on the company's forum tracking user feedback, suggestions and advice.

"In keeping customers oriented, everything comes in a throng," said Lei Jun.