Narrative: Maturing Smartphone Market
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Narrative: The Maturing Smartphone Market (Jan 24, 2017)
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★ Lenovo Reports Q2 Loss, Flat Smartphone Sales (Aug 18, 2017)
HMD Global Launches First High-End Android, Nokia 8 (Aug 16, 2017)
NDTV’s Manish Singh has an interview with the head of consumer electronics sales for Amazon in India which provides several interesting insights on trends around smartphone sales there. It seems Amazon’s sales of smartphones in India have risen dramatically in India over the past year, up 100% overall but up by far higher percentages in the smaller cities around the country. Perhaps more importantly, Amazon is finding that a smartphone is often the first purchase a customer makes through the site, but in many cases turns the customer into an Amazon convert, with many other purchases following that first positive experience. In a sense, this is the equivalent of Facebook or Google pursuing strategies to expand internet access: the efforts are designed to create new potential customers who are more likely to be loyal to Amazon, though this would be even more effective if Amazon launched its own devices, something NDTV has previously reported it was working on. The piece here also talks about Amazon’s strategy of offering the broadest possible range of devices and brands while also securing the odd exclusive including phones from OnePlus and a particular model of the iPhone. That’s an interesting strategy in a market where a majority of smartphone sales are still made in offline retail, but online is an increasingly important channel. Overall, some good insights into both Amazon’s India strategy and the Indian smartphone market. Also worth noting: this separate story from NDTV on the new Nokia 6 (from HMD Global) hitting 1 million “registrations” (effectively a soft pre-order) on Amazon’s website in India, which is running some special promotions and bundles around the phone.
Essential, Android founder Andy Rubin’s fledgling smartphone outfit, has announced additional funding from companies including Tencent and Amazon, but still refuses to say exactly when its smartphone will go on sale, saying only that a date will be announced in a week or so. It’s also announced that Amazon and Best Buy will be the retail partners for launch, while Sprint was announced earlier as the exclusive US carrier partner. If you’ve read any of my previous pieces on Essential, especially the first one, you’ll know how skeptical I am that an effort like this can succeed. The market is so mature at this point and the distribution and other battle lines so clear that breaking in with yet another Android phone will be a real challenge, one further exacerbated by what’s going to be limited distribution on the weakest carrier in the US. The funding is therefore intriguing, because it suggests these backers see something in the phone that I don’t. Importantly, it’s Amazon’s Alexa Fund specifically that’s making that company’s investment, something the Journal piece I’m linking to here doesn’t dig into at all, but which suggests that the phone will major on Alexa integration, something hinted at earlier by Andy Rubin as part of a statement about the phone’s ecumenical approach to voice assistants, but not made explicit. And backing from both Foxconn and Tencent is intriguing in the context of a phone that’s mostly being launched in North America for now. Recent conversations I’ve had suggest Amazon’s smartphone sales business is going very well, but of course many of its sales are of the kind of low-end prepaid handsets people buy outright anyway rather than the higher-end premium hardware Essential will be selling. I continue to be very bearish on Essential, but at least it sounds like we might finally see the hardware hit the market soon.
Motorola Z2 Force Reviews Highlight Tradeoffs (Aug 3, 2017)
New smartphone shipment and market share numbers are out for Q2 from various analyst firms, and they all show the same broad pattern: somewhere between a modest decline and modest growth year on year for the market as a whole, modest growth for Apple and Samsung, and strong performances by three Chinese vendors, with Huawei making significant gains in the number three spot. IDC, Strategy Analytics, and Canalys among others differed slightly on the exact shipment numbers, while Strategy Analytics seems to find another 20 million or so shipments somewhere compared with the others. The top four spots have now remained unchanged for over a year, with the exception of Q4 last year, when Apple briefly pipped Samsung for the number one spot, though this quarter Xiaomi’s resurgence squeezed Vivo barely out of the top five. Huawei got within a few million of Apple’s sales total for the first time off the back of pretty strong growth, but Xiaomi had by far the fastest growth (which you already know if you’ve read two earlier pieces on Huawei and Xiaomi). The broader picture has Chinese vendors dominating the top ten, though these firms only report the top five in their public releases: by my count, Chinese vendors take seven of the top ten spots, with Apple, Samsung, and LG the only exceptions. And those Chinese vendors rely enormously on the Chinese market for their sales, while several have no presence in the US at all, meaning that the smartphone market is increasingly fragmented globally, with different players taking the lead in different parts of the world.
via Android Police