KEY MOBILE TREND: commoditization, MediaTek
Sorry smartphone industry, you are not going to escape the fate of just about very other segment of the consumer electronics biz.
Relying on the value of the brand? That will certainly buy you some time. But when all devices look and act alike, pricing power fades, margins thin out, and market shares shift. Just look at the leading U.S. television set maker, Vizio. Who? That's my point exactly.
Some recent stories for your consideration:
- Eric Schmidt: the $70 smartphone is almost here >>
- BLU Products quad-core, dual-SIM Androd for $229, plus other low-costers >>
- MediaTek to see revenues rally 50% sequentially in March (sorry, no free link, but believe it).
- Neo's N003 is “world’s cheapest 1080p 5-inch smartphone” unlocked at $145 >>
- MIT Tech Review: “Apple and Samsung, beware. Practically anyone can make a smartphone these days.” >>
Yes, some guys you have never heard of are selling millions of smartphone enabled by IKEA-like chipset solutions that are assembled in optimized Chinese factories using off-the-shelf software. For years I was concerned about what I called the “supermarket brands,” that is, operator-labeled devices using white-box solutions. There were certainly some big hit devices with Vodafone and T-Mobile labels, more so in developing markets, but consumers did tend to migrate toward big brand names.
But when your neighbor, Frank, can start selling Android-based “Frank-o-phones” on Amazon.com, you had better find some more WOW to stuff into your devices. And some more adjacent business opportunity. For feature phone vendors, this is a trend which can really smart. Get ready to get down (in price).
What to do? Don't worry, I have solutions.
From MIT Tech Review Article:
“Cheap phones: Workers assemble $65 smartphones at Guo Wei Global Electronics, one of hundreds of small Chinese factories now building mobile computers.”