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Tuesday, July 21, 2015

U.S. Smartphone Market is Now Ready for Disruption

Historically, the competition within the mobile handset marketplace has been unrelenting. Prior success was never a guarantee of future prospects -- just consider the rise and fall of Motorola, Nokia and BlackBerry. The ongoing battles in the American smartphone arena were indicative of this trend.

However, there's been a noteworthy shift in consumer sentiment. U.S. smartphone demand in Q2 2015 dropped steadily and has declined by 8 percent, compared to June 2014, according to the latest market study by Argus Insights. Consumer interest has apparently peaked. What happened?

With data compiled from approximately 622,000 consumer reviews since January 2014, their study reveals that despite the introduction of the new flagship phones from Samsung and Apple customer acceptance of the latest iPhones, overall consumer demand and interest has fallen off significantly.

"This last quarter showed a very dramatic decline in consumer interest in the available smartphones in the U.S. market, and even the latest Samsung flagship phones barely made a difference in overall excitement," said John Feland, CEO at Argus Insights.

That said, Samsung and Apple maintained top spots in terms of consumer interest during the second quarter, ending June 30, 2015. In April the Samsung Galaxy S6 and S6 Edge were introduced, giving a boost to the company, though perhaps only because of ongoing retailer promotions.

In addition, there was sustained interest in the older Samsung Galaxy S5 and Note 4, however this mild Samsung demand came at a time when overall consumer interest was falling, so it came at the expense of other handset manufacturers -- not as an increase in overall U.S. consumer demand.

In the ongoing battle for the hearts and minds of smartphone customers between Apple and Samsung, American consumer data reveals that despite the release of two flagship phones, Samsung failed to gain new momentum.

While the new Samsung Galaxy S6 and S6 Edge created an initial influx in demand, those gains quickly fell off, and Samsung saw less happy, less interested flagship product users. During the same time, Apple saw some positive attention for the iPhone 6 and even the older iPhone 5S.

As reflected in the consumer review analysis, Samsung's recent effort to refresh their line of handsets was met with a dwindling volume of lackluster reviews. Meanwhile, Apple is apparently keeping their notoriously faithful customers somewhat satisfied -- even as the company's product innovation seems to have plateaued.

All this insight leads me to one conclusion; the U.S. smartphone market is truly ready for a significant disruption. Now's the time for the introduction of new thinking and design innovation. Who will unseat Apple from its throne? Will it be one of the emerging Chinese manufacturers? We'll have to wait and see.