The one barrier China’s smartphone companies can’t seem to break

China’s smartphone market is hot and getting hotter, and over the last couple of years we’ve seen domestic companies rise to the top of the sales charts. True, Apple grabbed the China smartphone crown in this most recent quarter on the back of its iPhone 6 and 6 Plus launch, but on a broader time scale Chinese brands like Xiaomi, Huawei, and Lenovo are the kings of China’s smartphone market.

But the rise of Chinese brands in the smartphone market does have its limit. There is one place that Chinese brands, at least for the moment, simply can’t go. One barrier that no one has been able to successfully break. That barrier? RMB 3,000.

RMB 3,000，or about US$480, seems to be the point beyond which Chinese consumers stop buying Chinese brands. Comparing sales on ecommerce platform Tmall, for example, nearly all of Huawei’s top-selling phones fall well under the RMB 3,000 limit. The same is true of Lenovo – in fact, Lenovo’s top smartphones are nearly all under RMB 1,000. Compare that to foreign companies like Apple and Samsung, who both have very pricey handsets among their top sellers.

Granted, a big part of that is intentional: the Chinese companies are targeting a different section of the marketplace. Xiaomi, for example, doesn’t even make a smartphone that costs more than RMB 3,000 (though it does have a phablet in that price range). But when China’s smartphone brands have tried to go high-end, it hasn’t worked particularly well. Lenovo’s highest-priced phones, for example, are among its worst sellers. With a couple of exceptions, Huawei’s high-price handsets are among its worst performers too.

RMB 3,000 is the luxury line

So why are high-end Chinese phones not selling? Is it simply a reflection of differing target markets, or are Chinese handset makers forced to target lower-end markets because domestic consumers don’t associate Chinese brands with luxury or high quality?

Anecdotally, at least, it’s the latter. I asked a few Chinese friends why they thought domestic phones don’t tend to sell well past RMB 3,000, and got several variations of the same basic answer: once you’re spending that much anyway, why not just spend a little more to get an iPhone? A China Business News article on the phenomenon makes the same basic point.

Whether the phones of Apple and Samsung are actually better quality than their cheaper domestic alternatives is a separate question. But very few seem to dispute that they have more brand appeal if you’re looking for a smartphone that’s going to double as a status symbol. In fact, a recent report from luxury market researcher Hurun shows Apple and Samsung rank among the ten most desirable luxury brands for both men and women in China.

In contrast, not a single Chinese tech company made either list. Until China’s smartphone makers can establish that kind of brand cachet, it’s likely that they’ll continue to be beaten by top foreign brands in the high-end market.