2/18/2009 4:25:00 PM
The cluttered handset market
Mobile World Congress may lack the excitement of previous years, but it has been more interesting than ever as a window into the coming months for the device market. Smartphones, touch-screens and applications are themes of optimism, and yet there are some very twitchy folk among the big name handset brands.
Expectations are that the device market will shrink by between 5% and 10% in 2009. It coincides with a new wave of hungry Far Eastern manufacturers raiding the market. Acer, Huawei, Hyundai, possibly ZTE and even HTC and Toshiba (which are further up the development process) will be disruptive and bring down average prices. And that’s not even including the curveball of Hutchison’s INQ.
But the biggest concern comes from a company which didn’t even bother turning up. Apple appears to have terrified Sony Ericsson, Nokia and Samsung after it opened up the consumer smartphone category with a single handset last year. Expensive iPhone-like smartphones featured prominently in Barcelona this week. Despite the growth of smartphones, there simply isn’t enough room for the number of competitors vying for the top end of the market.
The handsets on display in Barcelona indicated an economic and competitive reality of 12 to 18 months ago – the lead time required for handset development. The danger now lies in what Apple could do in the mid to low-end market. Apple’s next chapter as a manufacturer is likely to happen this year, and it will likely be a mid-range, sub-£200 ‘nano’-style device.
Experts say compromising on either memory, camera, screen size or 3G ought to allow Apple to meet this price bracket, and to be given away for free on £15 per month contracts or for £150 on prepay. The prospect of that combined with the Far Eastern new entrants will cause serious damage to at least one established manufacturer this year.