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Smartphone Industrial Analysis

Project
Smartphone Industry

What Is a SMARTPHONE?

Mobile phone with more advanced computing capability,


connectivity, advanced multimedia capabilities and the
ability to install third-party software than basic features
of phone.

Smart Phone and Feature Phone

SMARTPHONE

FEATURE PHONES

Uses of smartphones?

Text Messaging/SMS
Email
Social Networking
Streaming Online Music
Video / Mobile TV
Mobile Banking
Location Based Services/GPS

Applications
Web Browsing
Mobile Shopping
Barcode or QR Scan
NFC/Mobile Wallet
Games
News

History
1995 The first smartphone, the IBM Simon
1996 Nokia launched Nokia 9000
In early 2000, the Ericsson R380 was released by Ericsson Mobile
Communications, and was the first device marketed as a
"smartphone
The first catalyst of the expansion of the smart phone market was
the release of RIMs Blackberry series in 2001.
The impetus for the expansion of the smartphone market was the
release of Apples innovative iPhone in July. 2008.

Major Events in History


1996 First Windows CE Handheld PC devices are introduced.
2000 Symbian becomes the first modern mobile OS on Ericsson R380.
2002 Microsoft's first Windows CE (Pocket PC) smartphones are introduced.
2007 Apple iPhone with iOS is introduced as an iPhone.
2008 OHA releases Android 1.0 with the HTC Dream
2009 Samsung announces the Bada OS with Samsung S8500.
2010 Windows Phone OS phones are released.
2013 BlackBerry released BlackBerry 10.
2013 Google release Android Kitkat.
2014 Microsoft release Windows Phone 8.1 in February 2014.
2014 Apple release iOS 8 in September 2014.

Classification of Smartphones
Lower End Below 12k
Mid Range - 12K to 24 K
High End Above 24 K

In terms of Money

Trend in market
Hardware Trend
RAM, MEMORY, SCREEN, BATTERY,
Shape, Size and type of Smartphones

Software Trend
Utility
LTE 2G 3G 4G
Price

Major OS Platforms

Major Companies

Smartphone market size and value


4.55 Billion Mobile Phones are there worldwide
SMARTPHONE
1.75 Billion
38.4%

FEATURE PHONES
2.8 Billion
61.6%

The global smartphones market is


estimated to reach $150.3 billion in
2014 from about $55.4 billion in 2009.

Sales figures (in millions of units)

Year

2011
2012
2013

Android
(Google)

219.52
451.62
758.72
2014Q1 229
2014Q2 255

iOS (Apple)

89.26
130.13
150.79
43.7

Windows
(Microsoft)

8.77
16.94
30.84
6.2
7.4

According to Coda Research Consultancy:


Total sales volume is 234 m
units in 2010 and expected
to be 619 m units in 2015
Total volume are forecast
to reach 1.8 billion units in
2018.
A 12.7% CAGR for the 20132018.

Smartphones hold 10 % market share among Indias mobile


phone using population
Below $200 smartphones accounts for 4/5 of total Indian
smartphone sales.
In 2014, an astounding 450 million smartphones are likely to be
shipped in china alone .
Smartphone shipments will double between now and 2018
within key emerging market including India, Indonesia, and Russia.

Local companies are sacrificing profit margins to build market


share in India, which counts 914 million mobile users.
India is now the quickestexpanding smartphone market
globally and 3rd-largest market after china and the U.S.

Smartphone shipment by OS

Factors for Market Growth


The Popular Wi-Fi configuration and 3G telecommunications
are considered the largest components behind the
optimistic growth forecast for the smartphone market.
Advanced Operating systems with more computing like
activities.
Enabling users to seek information instantly.

Market dynamics
Industry is a duopoly.
High financial concentration in 1 company
Samsung dominates the Android ecosystem.
Established manufacturers are being squeezed.
Smartphone designs have reached a plateau.

Current market analysis


The newly formed competitive structure of the
smartphone market can be divided into three market
segments:
(1) Hardware manufacturing
(2) Operating systems
(3) Content

1. Smartphone manufacture hubs


Huawei
Produces optical network transmission equipment in a plant in Chennai of South India and
manufactures wireless network equipments while\refraining from elaborating the investment
amount for the plant.
Huawei also has started the building of self-developed research and development park in Bangalore.

Lava
U.P based mobile handset company.
The company also has a manufacturing plant and intends to start end-to-end manufacturing of
mobile phones soon.
Lava is also planning to set up a full-fledged R&D center in Bangalore soon.

Karbonn
Mobile handset manufacturer based in Bangalore.
Collaborated with leading semiconductor companies for their handsets.
Exports its handsets to Africa, South Asia and Middle East countries.

Lemon
Working with ODM and OEM partners.
Innovation center in north India to design and develop handsets as per
trends in the Indian market.

LG
Established in 1997, (South Korean Company).
Market leader in consumer durables and recognized as a leading
technology innovator in IT and mobile communications business.

Started in 2004, manufacturing unit in Haridwar in 2005.


Presently Bringing handsets to India market from China under a
contractual manufacturing from a local vendor.

Micromax manufacturing company located in Gurgaon.


It has over 23 national and international offices.
Micromax with a 19.1% share is the 2nd largest smartphone brand in terms of
shipments, closely following Samsung (25.3%).

Motorola
US cellphone manufacturer Motorola has its handset manufacturing
facility at Sriperumbudur, Chennai.
This includes GSM and CDMA mobile devices and networking equipment
such as base stations and system controllers.

Samsung
Global leader in semiconductor, telecommunication, digital media and digital
convergence technologies.
Leading producer of digital TVs, semiconductor chips, mobile phones and TFTLCDs.
Has its mobile manufacturing unit in Noida (U.P) as sixth overseas manufacturing
unit in the world.

Spice
Spice is one of the first Indian mobile device players.
has multiple interests in the telecom, media and retail space.
manufacture at its plant at Baddi, Himachal Pradesh.

ZEN MOBILE
Aim- To provide quality products and services to customers in India,
Started operations in 2009. It has tied up with a China based ODM, but it
designs phones locally.
Actor Amitabh Bachchan is its brand ambassador.
Local manufacturing is also one of its priorities and Zen is working towards
starting manufacturing locally.

2. Operating systems

Smartphone market has shifted from hardware to software:


Google, Apple, Blackberry, Microsoft have become the leaders in this
market for developing and providing operating systems to cell phone
manufacturers.

iOS Vs Android
Android devices have exceeded iOS,
continuously winning increasing market
share.
Android users purchases lower cost
devices compared to Apple.
Android might command the market,
but Apple has a grip over that smaller
part of the market share who is willing
to spend.
Android might have the quantity, But
Apple has quality consumers.

3. Content
Content developers form another competitive axis because content is
provided to application stores.

Forecasts and analysis: Asia pacific


Developed AsiaPacific: 96% of handset
sales will be smartphones in
2018
Emerging AsiaPacific: 47% of connections
will be smartphones by
2018, and the market will continue to grow
steadily beyond the forecast
period
smartphone
non smartphone
Smartphones share

Indian Smartphone Market Analysis


Indian market is owned by

Samsung and Micromax.


Market share of them combined is
52% of the Indian market .
Micromax can be the leader in Indian market.

How Micromax become Indian market leader


It launched his phone in every range.
Despite manufacturing of smartphone by itself they relied on several
individual units worldwide like
Borrow technology from SHENZHEN , CHINA.
Sponsorship of cricket tournaments in asia pacific make it popular amongst
them .
It attracts over 130000 outlets in india across 560 districts.
Always rely on Free android for their phones
Use pricing strategy of amazon in which price of final product is equivalent
to the individual components

- Large customer base


- Brand name
- Technology

- Low manufacturing Base


- Focus on too many
products

- Rising 3G uptake
- Growing rural numbers
- Growing tablet market

- Competition
- Rapid change in technology
- Saturated market in
Developed countries

Porters 5 forces Analysis


The threat of substitute products
3
Ts

The threat of existing Rivals

3
Ts

The threat of new entrants


The bargaining power of customers
2 Bs

2 Bs

The bargaining power of suppliers

Threat of Substitutes
Low Buyer inclination to substitute
High switching costs
High price-performance ration (value)

Intensity of Existing Rivalry

Fast Industry growth rate


Low Product differentiation:
High margins
Brand identity
High diversity of rivals
Large industry size
Exit barriers are low

Threat of New Competitors


Strong distribution network required
High capital requirements
High sunk costs limit competition
Strong brand names are important
Advanced technologies are required
Industry requires economies of scale
Entry barriers are high
High switching costs for customers
Patents limit new competition

Bargaining Power of Suppliers


Large number of substitute inputs
High competition among suppliers
Critical production inputs are similar
Volume is critical to suppliers

Bargaining Power of Customers

Increasing Buyer volume


Increased price sensitivity
Low threat of backward integration
Low Product differentiation
Low dependency on distributors

China Vs India

Majors in the market and their products

contribution

The Indian mobile economy is growing rapidly and will contribute


approximately $400 Billion to Indias GDP.

Global GDP Contribution

Supply chain

Present Market share

CONCLUSION : Smartphone Industry


o Tremendous technology has transformed the world.
o Exploded into market and became a part of popular culture.
o Revolutionized the communication between people.
o Instant access to information.
o Very popular due to its versatility.
(Advanced Photo sharing, Games, Internet services etc.)

o Parallel growth required so the product remains relevant.

o Constantly changing society will undoubtedly evolve


smartphones.
o Move with demands, otherwise entire industry will suffer.
o Endless opportunities.
o Applications give Smartphones an extra edge.
o Future is promising to the growth rate of industry.

Issues with Smartphone

Battery Life
Environmental
Worker conditions
Social
Legal/Patent war
Security
Disturbing sleep

ORIGIN OF OTHER INDUSTRIES


Accessories Screen Guards, Phone Covers,
Earphone, Memory Cards etc.
Speakers, Data Cables, Power Banks etc.
Telecom Services (3G and 4G)
Application Industry

Employment status
Smartphone industry opens up so
many Jobs Domains and Helps in
the growth of Different
Industries and thus Creates a
huge margin of Jobs worldwide.

o In 2015, developed markets will almost complete their


transition to smartphones.
o Android remains the dominant operating system over the
forecast period.
o Smartphone market has become most competitive and
complex.
o Smartphone industry is dynamic.
o low margins for the majority.

Adverse effects of smartphones

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