Smartphone sales may be set to top 420 million units in 2011, but some handset makers are poised to do far better than others when it comes to high-end devices IMS Research has revealed.
Though smartphones currently make up 28% of all handset sales, only a few handset makers like Samsung, HTC and Apple have gone all-in to succeed in the smart-space. Meanwhile, others like LG and Nokia are hedging their bets with not-so-smart offerings aimed at the low end, while entry level smartphones from rivals become cheaper and cheaper.
With IMS predicting the shipping of one billion smartphones by the end of 2016 – one of every two mobile handsets sold – deciding to manufacture non-smart phones, with lower margins, may prove to be a rather dumb policy.
“Clearly one of the key dynamics of the mobile handset competitive environment in recent years has been the inability of many traditional market leaders to recognize and adjust to the growing smartphone tier,” said analyst Josh Builta of IMS’ Mobile Technologies Group.
“The reasons for these failures vary and include everything from poorly designed and manufactured devices, unsatisfactory user interfaces, and portfolios that don’t offer products with a differentiating feature,” he went on.
This can be said for Korean phone maker LG, who despite being the third largest OEM in the world only sells a limited number of smartphones, giving it a paltry three percent share of the total smartphone market last year.
Finnish phone-maker Nokia has also stumbled in the smartphone space, seeing huge drops in market share throughout the last couple of years, prompting it to dump its homegrown Symbian operating system for Microsoft’s Windows Phone OS, which has yet to make its debut on Nokia hardware. This delay has resulted in Nokia dropping even further down the smartphone ladder, shipping just 16.7 million “smart” devices in 2Q 2011, 34 percent less than in 2010.
Indeed, mistakes from the big boys of mobile have opened the space up to smaller, perhaps more obscure vendors, like China’s Huawei and ZTE.
LG rival Samsung, however, has thrown itself unabashedly into the smartphone space, from high end to low end, and is seeing the dividends pay off. The company has diversified its strategy, using Android on its smartphones in the higher end and homegrown Bada operating system on the lower end, with some Windows Mobile thrown into the mix for good measure. This has led to Samsung increasing its smartphone market share from about three percent in 1Q 2010 to over 13 percent in 1Q 2011.
