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.