Does It Make Sense To Be A Smartphones Vendor In 2020?

Four years from now, 2020 is a long time for any industry, especially for a rapidly growing smartphone industry. With technology advancements, specifications for phones have transformed from landline to mobile, from mobile to feature mobile phones, and from feature to smartphone. It is a universal truth that what ever rise ultimately sees a downfall.

Tech enthusiasts always have a thirst for new specifications and they are the ones who create transformational mindsets among the mass. The urge for new technology in a tech enthusiast is never ending. To fulfill the demands of gadget lovers, tech vendors have created new specifications over the years. Likewise, smartphone enthusiasts have an urge to get their hands on the latest specifications of smartphone market.

Also Read: India To Have 810 Mn Smartphone Subscriptions By 2021: Report

How is the 2016 smartphone market?

According to Research Analyst firm Gartner smartphone growth was at its peak in 2010, with the highest growth rate of 73 per cent .The global smartphone market is, however, sputtering in 2016.

According to experts, the smartphone market has reached 90 per cent penetration in the mature markets of North America, Western Europe, Japan and Asia Pacific, slowing future growth. Furthermore, users in these regions are not replacing or upgrading their smartphone as often as in the previous years.

The smartphone market will no longer grow at the levels it has reached over the last seven years,” said Roberta Cozza, research director at Gartner.

Apple is most likely to see its first “down” year for the iPhone, as reported by IDC. It expects “low single digit growth” in the United States, Western Europe, and China while Japan and Canada are expected to contract by 6.4 percent and 6.9 percent, respectively.
Also Read:Make In India’ Devices Pushing Smartphones Sales: CMR

The slowdown comes with the large markets being generally saturated, and consumers keeping their handsets longer, because they are paying the full price without a subsidy from carriers.

“Consumers everywhere are getting savvy about how and where they buy their smartphones,” said IDC’s Ryan Reith.

Since mature markets are saturated, the focus for many vendors is on India and China. “India has the highest growth potential,” said Annette Zimmermann, research director at Gartner. “Sales of feature phones totaled 167 million units in 2015, 61 percent of total mobile phone sales in India.”

Smartphones are expensive for users in India, but with the average selling prices (ASPs) of low-end models falling; Gartner estimates that 139 million smartphones will be sold in India in 2016, growing 29.5 per cent year over year. ASPs of mobile phones in India remain under $70, and smartphones under $120 will continue to contribute around 50 per cent of overall smartphone sales in 2016.

Gartner ends by saying that at least one “nontraditional phone maker” could become a top five player in China by 2018. With the cost of low-end smartphones plummeting and the market becoming saturated, it’s not unreasonable to see that. For instance, a giant like LeEco or Tencent could offer almost free handsets much like Amazon does with its Fire tablets: as a trojan horse to hook you in to its other businesses.

It is predicted that downfall in the smartphone market will also sway channel partners who are in the smartphone business. With the brand and technology partners earning point will also to diminish. Before to face further loss partners can transform their business model by introducing advanced technology sales in business.

Also Read: Oppo, Vivo Replace Incumbents As Top 5 Smartphone Vendors

The question is: Almost everyone who can afford/wishes to have a smartphone already has one. Now, what next?

The slag in the number of smartphone sales can be estimated due to consumers fulfillment with the product. It is expected that there may be a technology shift from smart phone to smart watch, Virtual Reality (VR) Systems and Augmented Reality. As for tech enthusiasts, who always look for new technology and specification to enhance their life, their interests are gradually shifting.

Augmented Reality (AR) can be effectively used on a smartphone or tablet (as well as other dedicated devices such as head-mounted displays [HMDs]). For example, users can hold up a phone to a sign and see it translated, hold a tablet in front of equipment, or use AR smart glasses to see the equipment’s maintenance instructions.

Opportunities are also emerging for a VR system to be used in business settings: businesses can use mobile VR as a marketing device to deliver personalized product experiences or as a tool to communicate with employees. Training and education are also great user cases — with the virtual world being a mockup of equipment or situations to simulate a real-life situation. We expect that in 2018, 26 per cent of HMDs will be designed for business use.

While the current appearances of AR and VR are new, better display technology, improvements in sensing and tracking hardware and software for things such as motion, gesture, head and eye tracking, and real-time graphics will increase interest and adoption. Burgeoning developments in 360-degree and depth-sensing imaging will provide enhancements to and the availability of environmental mapping capabilities. In addition, 3D and 360-degree imaging devices can further accelerate this trend. HMDs using AR and VR are expected to sell 40 million units by 2020, which provides the highest revenue opportunity, together with smartwatches.

Also Read: Smartphone Sales Soar In India: IDC

Therefore, by 2020 it is certain that smartphone vendors will become smarter and will evolve their business strategy by introducing new technology with their brand name to fit in the need of their consumers. Since consumer need is highly unpredictable, vendors have only two options left – either to move forward with new specifications in smartphones or to transform the smartphone technology and present a new technology in the market which is faster than smartphones.

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