Innovation barrier next hurdle for smartphone (2)

The Chinese names have risen largely on their ability to develop lower-cost models selling for as little as $100 or less. Such models have been one of the main drivers behind the broader market's explosive growth, attracting cost-sensitive consumers who might otherwise have to spend several months' salary for a new iPhone or Samsung Galaxy phone.

The Chinese names have succeeded largely on their ability to control costs by relying on foreign technology, including chips and Google's free Android operating system. But history has shown that this approach often results in cutthroat competition, as barriers to enter the market are lowered and many products are often hard to differentiate from one another.

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