Smith Market Blog

September Heating Up: Increased competition rises for smartphones and tablets


The Fall unveiling of the newest round of consumer electronics devices is quickly approaching as we anticipate the upcoming Apple releases in September, to name one highlight. Market watchers are rumoring that Apple will be releasing similar sized iPhones and iPads for the coming Fall to existing models, but with improved displays that offer better resolution and lighter weight, among the leading new features.


Noteworthy is the shift by Apple targeting multiple market points simultaneously. This change in strategy is telling not only of the wider market strategies we've seen unveiled this year, but also of the growing competitive arena for mobile devices and the positives such growth is having on components.

Growing sizes and diversification strategies

Looking ahead, as the Wall Street Journal, among others, have reported, Apple has been working with component manufacturers and testing new display and device sizes that could already foretell next year's differentiators. With Samsung's continued success in both the smartphone and tablet sectors, and it's "all things to all people" strategy, Apple is looking to counter with an equally compelling strategy that includes expanded device sizes, more personalized features, and possibly device categories.

Of course the current buzz is focusing around the upcoming device releases this Fall. We are seeing a revisiting of the news from 1Q13, after Mobile World Congress (MWC) in Barcelona. At MWC, the leading strategic challenge was identified as successfully targeting "the next billion" consumers to continue the phenomenal growth mobile has seen to date. With this strategy, the diversification of smartphone and tablets into new price and feature ranges, as well as expansion to new regions and emerging markets, gained significant momentum. Nokia's presentation at MWC of a wider range of mobile devices to meet more markets was an important foreshadowing of where the remaining 2013 market is going and where we'll remain in 2014.

The push for reaching both higher- and lower-priced markets simultaneously by addressing respective feature and pricing demands is an important next phase in the smartphone and tablet commoditization. Pushing open the range of devices, where competition has already been fierce, now increases the points at which new competitors might venture into the mix.

Component growth stemming from competitive expansion

One important offshoot of the increase in number of competitors is the increased in component demands and differentiators. While tablets are shrinking in size, smartphones are stretching, these respective device changes are increasing the number of display sizes on the market – presenting more options for consumers and an expanding competitive market for manufacturers.

DisplaySearch forecasts that tablet "[s]hipments of tablet PCs are expected to reach nearly 364 million worldwide in 2014, more than doubling the projected 177 million shipments of standard notebook PC and ultra-slim PCs." The increased size options for tablets is similarly increasing the size of the anticipated market for these devices, with new purchasers being attracted from market sectors and regions previously unreached.

Among the leading differentiators is the screen size differences, as DisplaySearch notes: "Tablet PCs with screens smaller than 8” will account for 59% of the market (166 million units) in 2013, but they will account for 63% (277 million units) in 2015. New tablet PC screen sizes will include both 8" and 7.5" sizes, and manufacturers are expected to focus on tablets with prices that are attractive to middle-income buyers."

iSuppli's most recent market review supports the positive impact these new screen sizes is having on the continued growth and health of this hot device market:

Booming demand for low-priced 7.x-inch products helped shipments of panels used in media tablets to more than double in in the first quarter […].

[…]With the increasing number of panel makers, the average selling price (ASP) of tablet PC touch panel modules is falling at a fast rate. In the first quarter of 2013, average pricing of 7.0-inch tablet touch panels fell to $15.60, down a sharp 16 percent from $18.60 in the first quarter of 2012. Pricing for 7.0-inch touch panels dropped by 7.5 percent from $15.60 in the fourth quarter, the largest sequential percentage decrease of any size.

In the smartphone category, barely a month ago LG Display unveiled its ultra-slim full HD LCD panel for smartphones, reviewed by iSuppli. "The new panel is a 5.2-inch Full HD (1920x10080) IPS LCD display with a thinness that measures at just 2.2mm. This display supports the growing trend of display thinness as means for differentiation in the smartphone displays market."

As new displays for high-end smartphones are touting unparalleled visual quality alongside of thinness and lightweight features, there are also important movements in the smaller, 3.5" feature phone displays. These low-priced displays for mid- to entry-level devices had been in short supply during 2Q13, but have since begun to see more normalized availability in the market, as noted by DigiTimes, among others. Importantly, as these displays indicate positive growth momentum for an increasing range of devices to a widening market globally, we are simultaneously seeing LCD- and IC drivers increase in demand, along with other components in these Bills of Materials (BoMs).

In short, moving into the Fall quarter, competition in the smartphone and tablet sectors continues to build particularly pushing to diversify to entry-level and lower-priced devices as well as an expanded regional reach to meet the demands of emerging market consumers. These are all positives for component and device manufacturers alike.

Lisa Ann Cairns, Ph.D.
Written on Wednesday, 21 August 2013 11:38 by Lisa Ann Cairns, Ph.D.

Viewed 16412 times so far.
Like this? Tweet it to your followers!

Latest articles from Lisa Ann Cairns, Ph.D.

Hits: 16413


TrackBack URI for this entry

Comments (0)

Write comment

Copyright 2012 N.F. Smith & Associates LP.  All Rights Reserved.  View our Privacy Policy.

PlagSpotter - duplicate content checker tool


Contact Smith

Live Help