Inside the Smartphone Industry. Ashley Campion Wes Kincaid Stephanie Lanter Michael Riggen John Hutchens Nathan Frost Claudia Martinez. What is a Smartphone?. A Smartphone is a mobile device offering highly developed features beyond a classic mobile phone Computer-like functionality
- The threat of new entrants is low since start up costs for a cell phone service provider are extremely high. A great sum of money must be invested to attain the economies of scale, and it is difficult to enter the market with existing firms already operating on cost and differentiation strategies.
- Releasing a product early will enable one to capture the largest market share, establish partnerships, erase barriers to entry, and dim the chances of competition.
- Phones are changing dramatically and what consumers want is cheap and efficient. Buyers have high bargaining power and will usually pay for what the consumer’s value the most.
- Will switch for innovative products and good ratings
- Companies within the industry compete on innovation and new applications.
- Consumers would more than likely not switch between a new product due to contract fees and the cost of purchasing a new product.
- Price reduction attract more customers
Manufacturers: Google, MSFT
1. Consumer Market
2. Corporate Market
Existing Rivalry in the Industry
- Internet prediction in 2004
- As consumers increase the demand for more features offer in the service, also, the network capacity
Replacing Communication Tools:
- Companies raising their research to meet consumers needs
-Example: battery running-off and still having 4hrs of talk time, lighter in weight and thinner
- Quantitative research on mobile phone users reveals that there is currently no such thing as a Smartphone market
- The assumption that the mobile market will develop in the same way as the personal computing market did
- About half of the sales of Smartphone are through employers (as opposed to retail channels)
- Manufacturers adding multimedia and other entertainment features to compete
- but segmentation suggest to add communication services like, advanced voice and video e-mail, white-boarding etc.
- Example: Super-smart Smartphone mated into a desktop cradle that hooks up to peripherals like a common all-garden PC. An intelligent dock that would have networking built-in, a USB hub, some sort of communications hook-up, and its own processor, memory, and operating system. It could be connected to an external monitor and keyboard, and would react when a Smartphone was placed into it.The “Smart Interface System for Mobile Communications Devices”, would work as much as a desktop PC does now.
Impact of Competitive Forces
Unattractive Forces in the Smartphone Industry
Is This an Attractive Industry in Which to Participate?
Since 1998, 30% increase in the number of people in United States who own cell phones
Innovation played big part
Progression: (brick phone flip phone Smartphone)
Average life of a cell phone is only about 18 months
Probably not skyrocketing levels of growth, but still growth potential
The iPhone’s release put Apple ahead in Smartphone industry (327% growth) the year it came out
Frontrunner in Smartphone industry until Apple released the iPhone
Hopes to pick up speed with new Google phone Android
Known for brick phone
Has Smartphone, but hasn’t seen successful growth in Smartphone industry
Worldwide: Preliminary Smartphone Sales to End Users by Vendor
Florida teen sent over 35,000 text message in a month- twice
Texting While Driving
Electronic Magnetic Fields Can Cause Tumors (preliminary research)
Competing on innovation
Big players like Apple and RIM BlackBerry have huge lead
Smartphone companies could differentiate by Dell style customization of cell phones
Or reduce the amount of EMF’s emitted from phone
*Apple’s success in one year could happen with any company