There’s no profit at the low end of the business. Apple and Samsung account for basically 100% of profits made on smartphones, and everybody else is either treading water or bleeding money.

The iPhone SE sells for US$400, and I’m sure Samsung has similar offerings at or below that price point, which is a huge pressure for low-end phones. A third party estimates the parts alone to cost $217, so you have $183 to pay for software, assembly, packaging, marketing, wholesale discounts, warranties, customer service, and various other business expenses. But did you think you can just match Apple’s price? Oops, you might have to sell it for $50 or even $100 cheaper because you’re not Apple.

So do you really want to play with Chinese competitors in this price range where you’re talking maybe a few dollars per phone in profit at most?