Skip to main content

Why Smartphone Competition will Escalate in 2013

According to the latest market study by Informa Telecoms & Media, the smartphone market will start to diverge and sales will become dominated by two distinct categories -- low-end devices (priced below $150) and high-end devices (priced above $250).

Overall, the pricing trend is downward. More expensive smartphones will find their market share shrinking from 85 percent of total smartphones sold in 2011 to 33 percent in 2017.

In contrast, the low-end smartphones will gain significant new market share during the coming years to account for just over half (52 percent) of all the smartphones sold in 2017.

The smartphone market is undergoing change -- whereby demand will be increasingly polarized between expensive and heavily-subsidized handsets, and affordable devices targeting the emerging markets.

As a result, smartphone competition is becoming more intense.

The average smartphone price will drop from $188 in 2011 to $152 in 2017 -- as a result of balancing the huge demand for entry-level smartphones in emerging markets with the demand for super-smartphones in developed markets.

The average gross margin for a device is expected to remain flat -- in the range of 20 -25 percent. This is because smartphone vendors will increasingly be under pressure to absorb the cost of innovation while keeping up with price competition.

Informa believes that in order to remain profitable, some vendors will have to continue to reduce their operational costs, while others will struggle to maintain profitability.

"As the market develops, the supply chain will increasingly be divided between two camps -- the innovators who will continue to introduce new features and high-performance components to the market place and followers who will take this innovation to the mass market in later years," said Malik Saadi, principal analyst at Informa Telecoms & Media.

These changes will push some established manufacturers to reposition themselves in the new environment and come out with more effective handset-pricing strategies.

Only a few manufacturers will have the ability to operate right across the market, the great majority will have to focus on particular segments to reduce cost and maximize margins.

The established vendors will find it hard to adapt to the new smartphone landscape -- as this could take them away from their core business, servicing the core high-end smartphone market.

These smartphone vendors will have to make a strategic decision to either fight in the high-end segment, or alternatively face stiff competition by assemblers and Chinese ODMs in the low-end segment.

Popular posts from this blog

Big Data Analytics Revenue to Reach $215.7 Billion

Across the globe, more leaders seek actionable insight from the customer data they've stored in huge data lakes. Worldwide spending on big data and business analytics (BDA) solutions is forecast to reach $215.7 billion in 2021 -- that's an increase of 10.1 percent over 2020, according to the latest worldwide market study by International Data Corporation (IDC). Moreover, BDA technology investment will likely gain momentum over the next five years as the global economy recovers from the COVID-19 pandemic. The compound annual growth rate (CAGR) for global BDA spending over the 2021-2025 forecast period will be 12.8 percent. Big Data Analytics Market Development "As executives seek solutions to enable better, faster decisions, we're seeing relatively healthy BDA spending across all industries. Leveraging data for insights into everything from internal business operations to the customer journey is top of mind and of strategic importance," said Jessica Goepfert, vice

Why Cloud Fuels Net-New Digital Business Growth

CEOs and Line of Business (LoB) leaders seek the fastest path to meaningful digital transformation advancement. Meanwhile, investment trends in cloud computing infrastructure continue to expand the capabilities, accelerating growth across all segments within the public cloud services market. According to the latest worldwide market study by Gartner, the four key trends are cloud ubiquity, regional cloud ecosystems, sustainability or carbon-intelligent cloud, and automated programmable cloud infrastructure. "The economic, organizational and societal impact of the pandemic will continue to serve as a catalyst for digital innovation and adoption of cloud services," said Henrique Cecci, senior research director at Gartner . "This is especially true for use cases such as collaboration, remote work, and new digital services to support a hybrid workforce." Global Cloud Computing Market Development Hybrid, multi-cloud and edge computing environments are growing and setting

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente