The big squeeze as industry predicted to contract

The big squeeze as industry predicted to contract

The other night I counted four Samsung television ads in quick succession – phones/tablets, smart camera, smart television and an eco-cool washing machine. It was certainly an impressive tour de force of marketing from a company telling the world they’re at the very cutting edge of technology.

Alongside the cash Samsung is splashing out on marketing, Apple’s incredible pre-sales figures for its iPhone launch continue to show the domination of these two manufacturers.

So, where does this leave the other manufacturers that are being stumped at every price point by these two, squeezing their market share? Finding a solution to this is important if consumers are to continue having a wide choice. And this has been brought into even sharper focus, as predictions grow of a contraction in the mobile market.

A recent Analysys Mason report argues that growth in mobile data traffic will not be enough to stop a contraction within the mobile industry in western economies. It says that data revenue growth is already offset by tariff rebalancing and, together with the loss of core voice and messaging revenue to over-the-top players, and some erosion of operators’ position in device distribution, this contraction could be severe. The report says Western Europe is forecast to have the lowest growth rate in mobile data out of the eight world regions, and argues that tiered pricing was already having a significant effect on growth rates. Mobile data traffic is forecasted to grow at a Compound Annual Growth of just 29% from 2012 to 2017. Device saturation, delays in availability of 4G, but above all the greater propensity of consumers to use Wi-Fi, are the main barriers to growth in the region.

And with Samsung and Apple dominating, other manufacturers have a real battle on their hands as they explore new strategies and attempt to differentiate their products.

They’re also investing heavily in training retail staff to understand and impart the philosophy behind their products. As one senior manufacturer said: ‘The truth is that we’re all battling against the big two, and how we overcome their domination is the big test.’ 

Written by Mobile Today
Mobile Today

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