The smartphones industry that has seen accelerated growth rates in recent years is now beginning to witness saturation set in. Further, while the top few brands set the benchmarks and took lion’s share of the market, there have been other brands that have come in, among whom, some struggled to stay afloat or make their presence sufficiently felt while others found a foothold with smart positioning.
The industry is witnessing rapid frequency of new launches from different brands which makes it a challenge to ensure success of each model launched. Even the leaders cannot predict how successful their latest flagship model would turn out to be.
TP-Link, one of the recent entrants in the smartphone market has unveiled the latest Neffos series smartphones that establish the company as a serious contender in the mobile space.
Manoj Mordani, Head of Retail Business at TP-LINK sharing his view on the challenges in the volatile industry says, “The nature of the smartphone industry carries with it the continuous problems of short product life cycles, rapid technological advancements, a decreasing new user market base, a large presence of limitations and substitutions and numerous barriers of entry- such as stiff competition and strong brand loyalty. These problems require companies to be constantly and consistently ahead of current trends and consumer demands in order to produce the latest products in a timely manner.”
The smartphone market is maturing and has brought in changes in patterns of consumer purchases. Many buyers are those looking to refresh the device they currently own or those looking to buy a second device. Further, they are more discerning about value as they are more familiar with features what they are looking for.
Manoj adds, “Smartphones have short product cycle these days because the buying pattern in smartphone industry also has changed; earlier consumers were using featured phones like Nokia but with Smartphone evolution, the consumer thinking has transformed. Nowadays, people change mobiles every 3-6 months depending on what new the brand has to offer. Brands are under severe pressure to keep changing designs or come with new features as customer demands are increasing. Customer reliability on a smartphone these days is very high and with higher expectations, brands are forced to keep coming with new designs and models with higher specs.”
Naushad Abdulla, co-founder and Managing Director of MAGNUS and Telelink Communications says, “Product life cycle for Smartphones is a lot shorter now which brings new opportunities and challenges for manufacturers. Towards the end of product’s life, we see severe discounted prices, sometimes making is very challenging to maintain profitability. Middle East is more of an upgrade market, customers have a tendency to change devices within 12 months and upgrade to new and better variants. This trend is not limited to the high-economic class but also in mid and lower end segments. At Magnus Telecom, we make our best effort to launch futuristic products so that we remain in the top-chosen brands during upgrade decisions and customers associate our products as new-age.”
As demand in matured markets saturate, the focus for several brands is moving towards the emerging markets.
Naushad elaborates, “The global smartphone market is in transition, moving from a high growth spurt towards a phase of stabilized long term growth. The adoption of smartphones is nearing its peak in the developed countries, with majority sales now being generated from upgrades to a better device rather than first-time buying. The growth engine is shifting towards the emerging markets which are poised to benefit from widespread first-time adoption of such devices.?The year 2015 recorded the highest worldwide smartphone shipments till date but will pick up growing at around 2017 and 2018 backed by economic revival.”
He adds, “The top end Android and iOS devices remain unaffordable by a majority in developing economies while the mature markets like the U.S., China and Western Europe which have been absorbing the premium models are now slowing to single-digit growth. Going forward, the sale of top-end models and brands will be driven more by innovation and upgrades.”
Expanding on what consumers currently expect from a smartphone, Manoj says, “Users are moving towards a complex and rich mobile experience made of communication, entertainment, and productivity services. The demand for smartphones is being fueled by a consumer desire for ultimate converged devices that support functionalities such as touchscreen, camera/video support, dual SIM card, Wi-Fi, and integrated GPS. The design of the smartphone can change a person’s opinion about it. If the design is aesthetically and ergonomically pleasing, then the customer will be more likely to buy it.”
TP-Link’s latest Neffos X1 and the Neffos X1 Max focus on pushing the boundaries of smartphone design, imaging prowess, mobile security, and processing performance. Among the features they include is Real-time Night shooting, so even in low light, the image users see is the image they capture.
Like several mid-range brands, MAGNUS is positioning itself as an affordable smartphone brand that offers features that meet its target consumer’s expectations.
The emergence of mid-tier brands is widening the range of choices available for consumers as they get to experience and own a smartphone at a very affordable price.
“Smartphones have become centric to human life with people spending over 3 hours a day with their phones. There has been a visible shift in the consumer demands towards good design and high specifications together coming at affordable price points. Within the phones specifications, the phones cameras and battery are two of the top performance areas for customers. With the emergence of local and regional brands, customers are now benefiting to see a wider range of phones to choose from. Magnus Telecom has also aligned its product portfolio to suit these customer preferences. The InfinityG10 from Magnus Telecom is one such stylish phones with the right specifications and 4G/LTE capability for effective mobile internet experience,” says Naushad.
The brand’s main focus is on emerging markets such as Africa and the Middle East.
Naushad adds, “We have already started to penetrate Africa as our first priority and successfully launched in African countries such as Kenya, Tanzania, Uganda and geared up for Western African customers such as Nigeria and Ghana. Emerging market’s biggest buying segment lies in feature packed economic phone segment and hence knowing the consumer behavior, we are well equipped with growing mobile trend.”
Magnus is prepared to launch its range of 4G devices starting from as low as US $50. Among its products plans is a new Magnus range, the InfinityG10 and a new feature packed economic segment 4G model bravoZ25PLUS LTE which Magnus claims will also give great value and new 4G experience to our valued customers
As more brands emerge in the smartphones market, profitability challenges will also come to the fore if the supply exceeds demand. At the end of the day, the brand that has a more focused go to market strategy will emerge among the winners.