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Smart Wars Reshuffle Leaders: Smart device competition heats up globally as markets shift away from high-end devices


Quarterly reports are slowing somewhat and factory ramp ups are increasing, reminding us that summer is winding down now and our attention turns to the next big market guidance point, back-to-school sales and the 3Q14 devices.

Global demand shifts challenge smartphone OEMs

Recently, Samsung reported troubling device sales numbers and caution going forward while Samsung components divisions were far more positive and poised for growth. Meanwhile, the supply chain is buzzing with the various ramp ups by Apple as it readies for a September release of the new, and reportedly larger, iPhone 6 device.

At the forefront of smart phone competition strategies is the need to address the changes in the global smartphone marketplace that is becoming saturated in the high-end, developed markets, while significant new competitors, such as Xiaomi and Huawei, present significant market challenges in emerging and developing markets. The issues of demanded features (speed, power, etc.) along with internet access and 3G and 4G LTE capability coupled with price and product market appeal are making the smartphone competitive landscape very challenging, even (perhaps especially) for leading OEMs like Samsung and Apple in the emerging markets.

Global leaders reshuffled

As recent reports show, the highly competitive smartphone market is being reshuffled with Chinese OEMs now boasting three of the five leading global device positions: Xiaomi, Huawei, and Lenovo and rounded out by South Korea's Samsung and the US's Apple.

While Samsung reported smartphone sales are challenged by weakening demand in the developed markets, Sony recently reported their expectation that smartphone sales will not likely show a profit as the tightening competition narrows. New global strategies are being presented in advance of Apple's expected September iPhone 6 debut. Market strategies for smartphones are decidedly focused on the newer markets in the emerging economies where there is greater chance for market expansion because of the saturation in the developed economies. However, in these new markets, the competition from local brands and regional leaders is much greater than in developed markets where brands such as Xiaomi and Huawei are still less known. However, these new regional leaders are definitely taking pages from the leading OEMs' handbooks, introducing popular wearable devices, notably similar to Fitbit and related products to monitor health and fitness, as well as competiting toe-to-toe with components from memory, power and connectivity but coming in at significantly lower prices.

The question that we will be considering is whether or not 3Q2014 will be the break out point for the emerging market consumer for smart wireless devices, or whether there is still hesitation among consumers. No matter what happens, it is clear that continued innovation along with lowered ASPs is in demand.

Lisa Ann Cairns, Ph.D.
Written on Friday, 01 August 2014 10:47 by Lisa Ann Cairns, Ph.D.

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