In the smartphone market, we've seen a few critical data (and possible tipping) points in the past few months alone.
This was followed by a host of downgrades on Samsung last week. The word
on the street now is that the high-end smartphone segment is slowing
down. Financial analysts are acknowledging that they made hopelessly
optimistic forecasts for smartphone sales, according to a Reuters’
report on Sunday (June 16).
Meanwhile, last Wednesday (June 12),
Spreadtrum Communications Inc., a China fabless, raised its revenue
estimates for the current quarter due to higher demand from low-cost
smartphone makers, sending its shares up 23 percent in extended trading.
Connect all these data points together, and you begin to perceive a shift in the power dynamics of the mobile industry.
1. The high-end smartphone market is saturated.
2. The good old days of believing that Samsung and Apple can do no wrong in advancing the smartphone market are over.
3. Low-end smartphones are the new norm on the global cellphone market, effectively replacing feature phones.
4. Winners of the low-end smartphone segment are nobody who previously won with feature phones or high-end smartphones.
Differentiating one high-end smartphone from another is hard enough.
Distinguishing one low-end smartphone from another is like telling ants
As if to downplay a massive wave of downgrades on its
company, Samsung announced today (June 17) that it will start selling
the LTE-Advanced 4G version of its Galaxy S4 smartphones in Korea as
early as this month.
While higher-speed data transmission should
be welcomed by many consumers, let’s not forget that the network
infrastructure to support the new data transmission standard isn’t
broadly available. Counting on LTE-Advanced penetration to increase the
Galaxy S4 sales is a stretch by any measure.
totally new emerges (i.e. screen technologies, longer battery life,
etc.), winners in mainstream smartphones (read: low-end smartphones) are
likely to be companies who can differentiate mostly on price and on
lower margins (read: Chinese OEMs).
You are not alone feeling as though you’ve been tipped over.
Tipping point or inflection point... I think we all get what Junko is trying to say here! The point she is trying to make is that the market is really in low-end smart phones where majority of the developing countries are the playing field. That needs radical re-engineering of both the handset and the subscription model (which is largely pay-as-you-go) innovations.
Smartphone is quickly becoming a commodity, just like semiconductor. Samsung and LG will continue grow because they also make the key components of smartphones, like MPU and display, they just won't get the same level of profit as they have now. The market share of Chinese companies, like Huawei and ZTE, will continue to grow. They will repeat Lenovo's story in handheld market.
I used to buy Nokia phone after Nokia phone, then I started getting lemon after lemon. In my opinion that's what filled Nokia. Even before smart phones I switched to LG just to get a reliable phone that I knew I could make a call with and not have it drop out.
"... transportable computing platform"
That would be my ideal device, as I alternate between a home-office and an office-office. A phablet sized device with real grunt and terabyte storage, capable of docking into multiple large screens, keyboard and mouse.
I don't see the cloud as useful, because it will always be slower than local storage, and I work with large files.
"I believe Apple will adapt their price to where they maximize overall profit."
And the question is what that price may be. I've seen suggestions elsewhere that they would bring out cheaper models to increase market share, but I'm skeptical.
Part of the problem is that Apple is a victim of its own success. The market rewards growth with high stock prices, and Apple's is in the ionosphere. But it's looking like the high end of the market is saturated. There is still a substantial iPhone market, but that's more replacements and upgrades than new sales. Everyone is waiting for Apple's next blockbuster category creating product, like the iPad, and if it doesn't have one, the stock will be hammered.
"When adequate processing power for cloud computing interfacing is dirt cheap, then it will just be built into the user I/F and there will be no need for a carry-all processor unit."
And what will the user I/F be? Something like Google's Chromebook seems to be the direction such things will go. But cloud access is not universal. What happens if you don't have it? What if you are someplace where there isn't a wifi hotspot, and maybe you can't use a smartphone as a modem? Speaking personally, I'd want at least some processing and storage capacity. I might not be able to use if for everything I did, but I could use it. The device won't need to be really powerful, but will need to be more than a thin client.
Agreed on the disadvantages of mobile devices for may sorts of taks, and it's why I prefer not to do such things with them. But we're systems guys who do that sort of thing. What does the average smartphone user do with a computer? Largely, things you *can* do on a phone, and increasingly, users are.