LG, Huawei and Sony are some of the biggest names in global technology, with the kind of market strength many rivals can only dream of. Now this expertise is helping them as they grow their smartphone markets
How to capture the hearts and minds of the region’s lucrative smartphone consumer base is at the heart of many an R&D strategies and investments. The resources and legacy of some of the biggest names in ICT keeps them in good stead as competition heats up.
Whether with design or technology, differentiation is key to standing out from the rest of the crowded pack. Brands are wont to trumpet their USP whatever it is with an eye on a discerning consumer base.
D.Y. Kim, President of LG Electronics Gulf FZE attributes this to a more selective customer today. “End-users today are research driven when it comes to purchasing a smartphone,” says Kim, adding, “This means the only way to stand out is through product differentiation, which we excel at due to our innovative designs. You will find that with the majority of our designs, we create a device that is instinctive and feels like a natural extension of the body.”
Kim also contends that making a loyal customer out of a buyer is a much more engaging affair. “We believe the consumer buying decision making is not necessarily at one point in time. From a marketing perspective, we see that as a journey with different touch points. So at the point a consumer gets exposed to our technology, we should be able to start delighting him through what we convey to him.”
“Later on at the point where he is looking to change his phone, we should be able to communicate differently. It is not the just the moment of purchase when the product needs to be heavily promoted at the point of sale. Our communication needs to be equally distributed across the customer’s journey so that the consumer is properly informed to make a conscious decision,” Kim adds.
With smartphones available to cater for every imaginable demographic, brand affinity, features or price are the top consideration for different categories of consumers.
LG’s Kim notes that the company’s typical end-user has evolved over the last few years. “We have noted a trend in the U.A.E. among the 20 years and above consumer, that shows that end-users are less price sensitive in purchasing a smartphone when all the specifications they require are met and the smartphone has the latest possible features. So for us, specifications are definitely more important,” Kim explains. The UAE especially has a particularly tech-savvy smartphone user community, who know what they want and are willing to spend for it.
“Additionally our tie ups with local operators have allowed U.A.E. end-users to get the best of both worlds with easy monthly payment plans for LG phones,” Kim explains.
On its part, Huawei’s strategy in the region is to offer a variety of smart devices at varying price points making it affordable for anyone to have a feature-packed smartphone, says Ashraf Fawakherji, VP of Huawei Device Middle East. This has helped Huawei increase its brand recognition in the region, which rose from 52% in 2013 to 65% in 2014, Ashraf adds.
Although crowded with newcomers, the smartphone market has shown to be particularly partial to established and household names in the technology industry. Sony is a case in point.
Spyros Gousetis, Director Marketing, Customer Unit, MEA Sony acknowledges that the Brand competes in the high end tier and the mid-end tier markets. The reason behind this strategy being the technological legacy the brand can call upon to drive its mobile agenda.
“We have pioneering technologies when it comes to displays from our Bravia line of televisions, digital imaging, audio technologies including noise cancellation, waterproof feature and gaming etc which are the differentiators in our phones. The high end is where we would like to compete and we are good at this. Entry level segment phones do not necessarily need to include these features,” Spyros says.
Huawei’s core expertise has been developed by over 25 years working with the leading Telecoms operators around the world providing next-generation networking technology. “Through our work as a telecom network provider we have developed a strong understanding of both operator and consumer requirements. This has always put us in a strong position compete in the consumer sector supplying various components for consumer electronics,” Ashraf said.
In 2011, Ashraf explains, Huawei decided to brand all its consumer products and approach the consumer directly launching the first Huawei devices. “Our regional consumer strategy is to focus on the customer experience, providing advanced and innovative technologies at affordable prices. This has been working well for us so far and we look forward to continued successes as we move through 2015,” Ashraf adds.
Everyone acknowledges that the modern smartphone customer is much more tech-savvy and more likely to explore options that offer better specs, all other factors being equal.
Sony’s Spyros concurs. “We have seen consumer awareness and preferences rising steadily and significantly. Camera, battery life & technology, waterproof design are all features the consumers today look for. A lot of consumers are also aware of specs including processor speeds. Our market research of what consumers want corroborates with our sales results. Across all markets, we are also seeing clear preferences for the craftsmanship of our phones,” says Spyros.
For LG, Kim says the company invests significantly in research to really understand the end-users. “Through our ‘learning from you’ ethos, we capture, review, understand and implement consumer feedback which ensures that we create products that truly meet consumers’ needs and lifestyle,” Kim explains.
For instance, unlike other smartphone brands that have invested in fingerprint technology, LG G3 features a Knock Code which allows users to gain instant and secure access to their homescreen by tapping a 2-8 point customized pattern anywhere on the display using just one hand. LG realized, Kim says, biometric technology is susceptible to environmental variables and does not offer the high levels of security that consumers demand.
With the growing demand for a phone-and-camera combination device LG also developed the OIS+ camera that is designed to quickly and easily capture images as they occur, not necessarily when users want them to occur, the company says. “The camera is powered by a Laser Auto Focus that measures the difference between the camera and the subject-even in low light- with a laser beam and cutting down on the time it takes to focus,” Kim explains.
Huawei’s Ashraf agrees that consumers are certainly becoming more tech savvy and buying trends show that features such as distinctive design, the type of glass used for the screen or the types of processors used for example, are beginning to play a bigger role in the decision making process.
“One of the most interested trends that we have seen develop amongst Middle Eastern consumers is that they want faster devices with bigger screens, allowing them to view HD content and conduct their daily tasks with ease,” Ashraf says.
Huawei, Ashraf adds, views itself as a company at the forefront of technology innovation. One of the ways to remain customer centric is developing in-depth research into what Huawei’s customers want so that the company can develop relevant devices that deliver what they need in line with market trends. “We recognized that people wanted bigger screens so we launched the Ascend Mate 2, with a 6.1 inch screen as well as Huawei’s latest quad-core MediaPad 10 FHD, which boasts a 10.1-inch high definition IPS display,” he adds.
Huawei recently unveiled a new range of flagship 4G LTE-enabled devices. These include the world’s slimmest 7-inch phablet titled the Huawei MediaPad X1, Huawei’s first wearable ‘talk and track’ companion titled the Huawei TalkBand B1, a fresh 8-inch entertainment tablet dubbed the Huawei MediaPad M1, a new addition to the brand’s booming 4G smartphone line-up—the Huawei Ascend G6—as well as the world’s first LTE Cat6 Mobile Wi-Fi device.
The Android scene has been particularly competitive over the last couple of years with major brands all experiencing marked growth as the once dominant Samsung continues to fray.
Spyros says: “We have been experiencing growth in the region over the past three-four years in the double digits. The Z series particularly has seen a lot of consumer traction. We have seen routinely the ‘Z’ series benchmarked favourably against the flagship series of our competitors,”
Spyros explains that Sony is now among the top two or three across the six focus markets in the region from across Turkey, GCC and South Africa. “Customer awareness is high as is the preference for our designs, which in turn reflects favourably on the sales,” Spyros adds.
Huawei continues to grow with worldwide sales revenue for its Consumer business group increasing 30% year-on-year to USD 12.2billion, crossing the ten billion mark for the first time. Shipments grew 7.8% to a total of 138 million devices in 2014, including 75 million smartphones, representing a year-on-year increase of 45%.
“Our focus on premium mid- to high-end products has resulted in significant achievements in a number of areas including product R&D, brand awareness, channel development and growth in market share which further consolidated Huawei’s number three position in the global smartphone market,” Ashraf said. The increase in shipment followed the regional launches of Huawei’s flagship products such as the P7 and Mate 7 smartphones.
The global influence of Huawei has continued to grow, and Huawei has become the first mainland Chinese company to successfully enter Interbrand’s Top 100 Global Brands of 2014 list. Huawei is also one of the fastest growing smartphone device brands in the Middle East.
The networks in the region, typically on top of the technology developments, drive a lot of smartphone trends in the region.
Ashraf observes that the extended availability of high speed mobile broadband connectivity teamed with the region’s growing demand for innovative handheld technological devices has created significant opportunities for smartphone vendors in the Middle East.
“Last year, experts estimated that smartphones now account for nearly two out of every five phones in the Middle East,” Ashraf says, adding “We anticipate that globally many mature markets will see less of an increase year-on-year, while in emerging markets like the Middle East will see volumes continue to increase at a rapid pace”.
As the next generation 4G networks become more accessible in the region, more consumers are migrating from feature phones to smartphones. This development has created the perfect environment for technology vendors, such as Huawei, looking to market high quality and feature packed affordable smartphones, Ashraf contends.
One of the most important global markets for smartphones, the Middle East is a key testing ground of the changes in market dynamics in the Android space. The Android market is now more open providing more players with space to innovate and compete. The region’s tech savvy population can only benefit.