With a futuristic image posted on China's social media, smartphone brand Vivo announced it will launch a new sub-brand: iQOO.

For now, we don't know much about the phone. But we do know that you're supposed to pronounce it ay-koo, that it will compete at the higher end of the market, with a price of around US$750 -- and that it’s already causing quite a stir in China. Vivo fans have already created a rap song to go along with it.

The company told Abacus that iQOO was created for “the most discerning and demanding demographic with the highest expectations of mobile phone performance” -- lending some weight to suggestions that iQOO is a gaming phone.

Check out iQOO on Amazon

What this futuristic fake city has to do with Vivo’s new phone, we have no idea. (Picture: Weibo)

Sub-brands seem to be all the rage these days in China. Huawei has Honor. Oppo has Realme. ZTE has Nubia. And Xiaomi has not one but three sub-brands: gaming phone Black Shark, affordable flagship Poco and budget Redmi -- which became independent in January.

Of course, some of you may wonder if sub-branding really works: Just look at the mediocre results Lenovo has had with Motorola. Last year has seen many new sub-brands pop up in China, some with similar names (I'm looking at you Redmi and Realme) so it's not surprising that people are getting confused.

But it turns out Chinese smartphone makers are pulling it off quite well. In one month, Xiaomi sold 1 million units of the first Redmi handset launched under its independent brand. And Huawei's Honor V20 has achieved the same, far exceeding Huawei’s own expectations.

The reason might be that sub-brands usually mean cheaper phones, and cheaper phones are good for the one market in the world where smartphone sales are rising

Global smartphone shipments fell 4 percent last year, according to IDC, with China dropping even more at 10%. But one country was doing quite well: The Indian smartphone market grew 14.5 percent in 2018. And it turns out much of that rise was fuelled by online sales of budget phones, particularly ones from China, including sub-brands Realme, Redmi, and Honor. Vivo is currently among the top 5 smartphone brands in the country.

With that in mind, it’s interesting to see Vivo pursue to the high-end with its sub-brand, not the budget side. 

But it does fit the company’s pattern of experimenting with new ideas. There was the phone with a pop-up selfie camera and the one that’s has screens on the front and back. Lately, it also showed off a handset with no ports or buttons.