Smartphone wars shift from gadgetry to price

  • Share via facebook
  • Tweet this
  • Bookmark and Share
(Getty Images - Photo for illustrative purpose only)

(Getty Images - Photo for illustrative purpose only)

The mobile phone industry is now looking to the fast-growing demand for smartphones priced at $100 or below as the market for fancier high-end devices has become saturated, but not all handset makers are able or willing to trade down.

Much of the talk this week at the Mobile World Congress in Barcelona, the industry's biggest annual trade fair, has turned from the latest big screen, premium-priced devices to the new, entry-level smartphones that analysts say now overwhelmingly represent the industry's best hope for growth.

"All the phones now look the same," said industry analyst Ben Wood of CCS Insight after surveying the eight vast halls of phones and other mobile gadgets on show.

"The ability of top brands like Samsung, Apple and Nokia to differentiate themselves is getting harder," he said.

Growth in global smartphone shipments will fall sharply this year and keep slowing through 2018, with average prices dropping significantly as the demand shifts to China and other developing countries, market research firm IDC said earlier on Wednesday.

So now phone makers are touting new, low-cost devices which are intended to retail at near $100 or below. This class of device has some but not all the features of the current top end smartphones, which sell for several hundreds of dollars and until this year drew nearly all the media attention and marketing spend at Barcelona.

Early leaders in this new market are Chinese players, some with global brand names and others who remain virtually unknown outside China, who have made huge strides in acquiring the technical and design expertise that enables them to now drive down the costs without necessarily sacrificing quality.

The biggest winners so far look to be Huawei , Lenovo, TCL Communications and still unfamiliar upstarts like Gionee, Oppo and CorePad that are poised to become big international names in the coming years, said Wood.

All benefit from having a home field advantage in China, the world's largest phone market.

This shifting landscape has already forced Nokia, the former mobile world-beater now struggling to stay relevant, to adopt Google's Android software to gain entry to the low-end smartphone market, despite Android being an arch rival of Nokia's new-owner-to-be Microsoft.

Launching the 89-euro ($120) Nokia X, Stephen Elop, chief executive of the Finnish group, called the sub-$100 range, "a massive opportunity" with that segment of the smartphone market now growing four times faster than the rest of the market.

Wood said Nokia's move spoke volumes about the pressures the whole industry was feeling.

"The cheaper end of the smartphone market has become such a big opportunity that, eventually, Nokia had to go to a rival software system -- Google's Android," he said, describing the move as "hugely controversial, but necessary".

Article continued on next page...

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
The truth about social media growth

The truth about social media growth

If you needed proof that social media is one of the most effective...

1
Top 10 Ramadan Apps

Top 10 Ramadan Apps

Salma Awwad picks out the best apps in the market

Top 10 apps to download in Dubai

Top 10 apps to download in Dubai

Arabian Business lists the most essential mobile applications...

Most Discussed