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TheStreet Open House

Coolpad's Smartphone Is Hot in China but Little Threat to Apple, Samsung

Stocks in this article: SSNLFLNVGYAAPL

GUANGZHOU, China (TheStreet) -- About one in 10 smartphones sold in China is a Coolpad, a brand with little name recognition in other countries.

In February, consumer IT market research firm IDC picked Coolpad as one in a “crowded list of vendors jockeying for position” this year. Its market share in China, where 700 million people use smartphones, had surpassed all but Samsung (SSNLF) and Lenovo (LNVGY) as of the first quarter of 2013. In March this year the Coolpad was ranked as China’s No. 2 4G phone.

Read More: Apple Looks to Juice Declining iPad Sales With IBM and Biz Apps

The developer, Yulong Telecommunications, says it pushes out 60 million units a year.

When I traveled to China this week, I wanted to find out more: What exactly is cool about it, and will it follow the developed-in-China, iPhone-like Xiaomi phones by breaking the ice in other countries?

Answers point to more heated sales in China but, in the long term, not threatening high-end favorites such as Apple (AAPL) or Samsung.

I first found few Coolpad handsets on display, compared to their Android peers, in the electronics-mad metropolis Guangzhou. The Coolpad brand stands out only in terms of price, sometimes as little as 780 yuan ($127), vendors told me.

When I tried the latest model Coolpad, its F1 8297, I found it hard to distinguish it from Huawei’s most recent model, a 750-T01. They both run on Android 4.2 and 8-gigabyte processors. Screen sizes are an identical 5.5 inches.

The Coolpad easily runs hot for a smartphone (so much for the name), cautions one seller of multiple brands.

The handsets are unlikely to grow outside China, I was also told. They lack the branding, distribution and intellectual property expertise to make it except in a few countries near China, says Neil Mawston, global wireless practice executive director at Strategy Analytics in the U.K. He picked (low-income) Russia as a possible taker.

Otherwise, Mawston calls the Coolpad “a niche smartphone player outside the home market of China for the foreseeable future.”

Read More: Tesla May Be More Valuable Than Ever Imagined

So it’s not one of those sleeping success stories you hear about.

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