China’s saturated smartphone market saw another victim on Tuesday, as Chinese media reported the extreme downsizing of domestic smartphone company IUNI, which cut around 60 percent of its staff. IUNI is a wholly owned subsidiary of fellow smartphone vendor Gionee Communications Equipment Co. Ltd.

“After this round of layoffs, the only employees left will be product development and marketing staff. IUNI has given up on the domestic market and its core business will now focus on the overseas market,” stated a IUNI employee in an interview with Tencent Tech (link in Chinese).

The Shenzhen-based company’s product line includes the 999 RMB (about $153 USD) N1 smartphone, another cheap-but-decent smartphone currently a dime a dozen in China’s smartphone market. In addition to the N1 and IUNI’s other budget phones, such as the U1 and U2, the company has also developed its own OS called the IUNI OS. Reminiscent of Xiaomi, the company has also branched out into other, somewhat baffling, product verticals, including water bottles, pillows, backpacks, and stationary.

Both IUNI and Gionee are feeling the squeeze of China’s saturating smartphone market, like many other budget android vendors. In March, Chinese smartphone company Dakele suspended its R&D and marketing operations, due to increasing competition in the market and “unexpected capital shortage”, according to the company’s founder, Ding Xuhong. In 2015, Xiaomi reported a dip in semi-annual sales figures for the first time since the Chinese smartphone company started disclosing them in 2013.

Like more established smartphone companies, such as Huawei and ZTE, IUNI is trying to shift its brand toward “tasteful” smartphone users, who are willing to shell out more money for premium smartphones. Last November,IUNI launched an English version of its website and announced its plans to expand overseas. However, forIUNI, the overseas market will be just as much of an uphill battle as the domestic market. Last month, Huawei launched the P9 and P9 Plus, two high-end handsets that are part of a long-term collaboration between Huawei and Leica Camera, a German optics company.

A spokesperson from IUNI could not be reached in time for comment.

Image credit: IUNI

Eva Xiao

Eva Xiao is a tech reporter based in Shanghai. Contact her at eva.xiao@technode.com or evawxiao (wechat & twitter).

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