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2015 Innovation and Volume Strategies – CES to kick-off new devices next week


Happy New Year from Smith & Associates and all of us at Smith MarketWatch!

With the new year in hand, we're already packing our bags to head out to the International Consumer Electronics Show (CES) 2015 starting next week in Las Vegas, NV. As we wait to see what the industry has to display and entice consumers with new devices, vehicle advances, and innovative solutions (chipsets, services, and applications alike) we are watching the early advances in the highly competitive smartphone and tablet market.

Global strategies to gain importance

Clearly, 2015 will demand global strategies of leading consumer electronics (CE) OEMs. We see this already in the emerging economy markets with Samsung, Apple, Xiaomi, Huawei and Lenovo, especially (as discussed early this week). Clearly, with the move into other BRIC markets by Xiaomi, Huawei and Lenovo, we are sure to see additional competition and movement from Motorola and Nokia who have long held leadership positions in lower-priced markets globally.

Every year we've seen emerging markets hold the promise of having a break out year and starting 2015, the hope and forecast is really no different. Although there continue to be global economic concerns of various types regionally and globally, the increasing dominance in people's lives of electronic devices, and smart wireless devices especially, is widening the difference in direction for GDP trends and economic forecasts from CE demand and purchases. Connecting via the internet and having internet-enabled services in your hand is imperative in today's world. Perhaps this year, it is not the issue of economic recovery, but the issue of true demand that will tip the scales and open up the emerging markets for greater electronics industry growth.

Volume reigns and crowns new leaders

The shift of smartphones into a central role as a fundamental need/purchase globally also translates into volume growth globally. Volume is powerful along the semiconductor and electronics supply chain, and being a leader in the Chinese market in 2015, as well as in the other BRIC markets, India in particular, is a potential game changer. Xiaomi is currently in the limelight when it comes to who might take the top spot in China, and with their marketing eyes set on sister BRIC markets, Brazil and India, this rapidly rising OEM could change the global smartphone standings. That sort of disruption could put Xiaomi in a new negotiation position with the global electronics supply chain, where volume orders speak loudly and curry better pricing and line utilization for market timing.

India and Brazil are close behind China, not just in massive population (and volume) numbers, but as emerging economies ripe for increased (low-cost) smartphone growth in 2015+. As the new, top competitors Xiaomi, Huawei and Lenovo increase their efforts in China and Asia to unseat Samsung and Apple, especially, for smartphone leadership, they are also turning their experience and marketing strategies for emerging economy consumers to India and Brazil. With price being a critical factor in emerging markets, these new players have a solid foothold in the competition for market share. But there are the other domestic brands in the national markets that add to the competition, again, these three OEMs have experience competing in local, emerging markets where leading-edge chips are not necessarily leading sales pitches.

How 2015 will (re-)shape the industry both for smartphone OEM leadership positions and for supply chain attention and negotiation power will really be the story to watch. For the industry as a whole, this competition and push is positive and will support sustained growth and an expanding footprint into the emerging market consumer's pockets.

Lisa Ann Cairns, Ph.D.
Written on Friday, 02 January 2015 12:17 by Lisa Ann Cairns, Ph.D.

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