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United Kingdom : Smartphone Innovation is Slowing Down, as Samsung Struggles to Differentiate [TendersInfo (India)](TendersInfo (India) Via Acquire Media NewsEdge) While the Galaxy S5 is an evolutionary product, there is not enough in there to make people upgrade from the 4. It doesn't push the envelope in any real way; we are in a sort of stasis now when it comes to smartphone innovation. We are going to see sustaining improvements as the market reaches maturity. That is not to say that smartphone innovation is finished, but much of the innovation is going to come from the introduction of sensors into the phone, and the improvements in software, and how the phone will interact with the range of wearable devices. The innovation will move away from hardware towards the kinds of services and platforms that are enabled on the phones. Services such as ordering taxis, mobile payments, and location-based services will add value on top of the smartphone platform. High-end - Extreme pressure from Apple, less differentiation In the premium segment, Samsung's scale and supply chain strength is less of an advantage. The key to success in this segment is differentiation, and as the market has matured it is less about features and more about design and brand. As competitors such as HTC, Huawei and ZTE catch up quickly on design, brand differentiation is critical, as well as the omnipresent Apple, its success with the premium line comes down to a huge marketing budget and a huge spend across the channel. Low-end - BOM falling to less than $20 Margins are coming under continuing pressure and price leadership has been difficult to maintain in emerging markets with OPPO, Wiko, Micromax, all producing handsets in the $100-200 segment. The bulk of Samsung's business, despite the high profile nature of its Galaxy line, is in the mid to low end. This is where Samsung is losing share as other cheaper manufacturers build capacity and experience, and can utilise lower labour costs. The bulk of growth in the market will come at the $200 and less price points, and these segments are simply less profitable than the high-end. For Samsung this means increasing pressure on margins. Long-term - Value and profit will be captured higher up the stack with apps and services Margins are coming under continuing pressure and price leadership has been difficult to maintain in emerging markets with OPPO, Wiko, Micromax, all producing handsets in the $100-200 segment. The bulk of Samsung's business, despite the high profile nature of its Galaxy line, is in the mid to low end. This is where Samsung is losing share as other cheaper manufacturers build capacity and experience, and can utilise lower labour costs. The bulk of growth in the market will come at the $200 and less price points, and these segments are simply less profitable than the high-end. For Samsung this means increasing pressure on margins. (c) 2014 Euclid Infotech Pvt. Ltd. Provided by Syndigate.info, an Albawaba.com company |