Apple Inc out, home brands in

First lady Peng Liyuan was spotted taking pictures with a home-made smartphone during a State visit to Germany last week with her husband President Xi Jinping. A year ago, the gadget in Peng's hand was an iPhone 5.

The first lady's "change of appetite" puts the spotlight on a less-highlighted business: inexpensive made-in-China smartphones with special features.

Peng's Nubia Z5 Mini, a darling work of Shenzhen, Guangdong-based ZTE Corp, is empowered with a 13-mega-pixel rare camera with such features as taking panorama images.

"Photo-taking capability is the most highlighted function of Z5 because it's honestly the only strength of the product," said Li Kuan, a freelance consumer electronics critic.

"Single selling point will bring price advantages to such a product and will be easier to get positive feedback from target buyers," he said.

The price tag of an entry-level Z5 Mini is below 1,500 yuan ($240).

A number of Chinese manufacturers are also betting on similar strategies to gain foothold in the segmented market.

OPPO, another Chinese brand, released Find 7 series featuring high-quality image taking and rapid charging features. The price of Find 7 is less than 3,000 yuan.

Xiaomi Corp, a seller of "cool" and "trendy" phones armed with an indigenous operating system, has become a favorite among millennials.

Most of the products with unique features are in the price range of 1,500 yuan and 3,000 yuan, said Li.

"Devices lower than 1,500 yuan are for basic needs such as web browsing and companies usually provide full functions in 3,000-yuan-plus products," Li said.

When Apple CEO Tim Cook unveiled the much beloved iPhone 5S in the second half of last year, many had expected a sales nightmare for local vendors.

Chinese makers were dwarfed in front of the powerful and well-designed new iPhone at a time when they were also facing strong competition from South Korea-based Samsung Electronics Co Ltd. Pessimists worried that 2014 will see local smartphones been swept out of the mainstream market and overseas companies will enjoy high profit margin.

Three months into the "death year", local manufactures are finding themselves thriving in the niche market of mobile phones with special functions.

Chinese buyers are paying increasing attention to home-made brands, according to a study by a consumer research company of zol.com.cn, the nation's largest electronics information platform.

Ratings of local companies, such as ZTE, OPPO, Xiaomi Corp, Huawei Technologies Co Ltd and Lenovo Group Ltd, have seen a surge in 2013 compared to the previous year.

Instead of avoiding face-to-face challenge from Apple and Samsung, Chinese smartphone makers have found new ways to beat the competition, analysts said.

"Customers in China are more rational than three years ago and tend to find a balance between price and frequently-used functions," said Lv Junkuan, a Gartner analyst.

The shift in the purchasing habit will bring local vendors opportunities to tap into some detailed market demands such as young people who like to take selfies or commuters who want to watch videos in subway, Lv said.

Zol.com.cn also found that smartphoens priced below 3,000 yuan captured nearly 70 percent of consumers' attention last year and half of the buyers were looking for properly functioning devices between 1,000 yuan to 3,000 yuan.

Wang Yan'en, a researcher at the website, said the average price of smartphones sold in China was on a steady decrease since 2011 because of rapid update in technology and fiercer competition.

The average price of a smartphone was 2,321 yuan in 2011 while the price slumped to 1,773 yuan last year.

The price was dragged by huge sales volume of inexpensive home-made devices.

Prices of smartphones made by Lenovo, Xiaomi and Huawei are significantly lower than their overseas rivals, such as Apple and Samsung.