Smartphones: a fast-moving segment

Enrique Dans. Professor. IE Business School

20 February 2013

The world of smartphones is one of constant innovation, with new handsets and operating systems emerging all the time, making for very diverse strategies and more competition.

The smartphone market is getting really interesting. It’s dynamic, fast-evolving, with constant innovations and presentations of new products, and competitors prepared to take their battles into the courtroom.

The market is now a ferocious duopoly comprised of Apple’s iOS and Google’s Android. In the US, Apple is the clear leader: 63% and 84% of smartphones sold by Verizon and AT &T respectively are iPhones, while Android dominates the global market with 75% compared to Apple’s 15%.

In this scenario it is tough to be No. 3. Microsoft launched Windows Phone 8, attractive handsets with a reasonable number of applications available, but the market’s reception was decidedly frosty. It didn’t even manage to secure 2% of the market. Customers were simply not interested. Meanwhile Ubuntu or Firefox OS proposed new alternatives which were doubtlessly interesting, while old timer RIM reinvented itself as BlackBerry and launched two new handsets and a completely reengineered operating system.

I thought that the BlackBerry handset that I tried was very competitive, and certainly not technologically lacking, which is the impression a lot of people had of the previous version. But is a good handset enough to bring the company back into the running? Everything is related to everything else. More sales means more programmers creating more applications, and a more attractive platform, which means more operators will offer the handset.

Whether or not BlackBerry regains lost ground will depend not only on the efforts it makes to create a competitive handset and operating system, but also on other factors beyond its control. Customers are increasingly unpredictable, and BlackBerry’s centralized and controlled administration system is at odds with the BYOD  (Bring your own device) trend, whereby  people with other companies get to decide the handsets they want to use. The more diversity there is, the more diverse strategies there are, the more competition, and the more innovation. The smartphone segment is now enormously strategic. And definitely very fast-moving.

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