The Ever-Shifting Balance of Power in the Smartphone Industry

The concept of owning a device capable of displaying all the knowledge of the world in the palm of one’s hand seemed ludicrous only a few decades ago. Today, as cell phones and handheld devices have become “needs” rather than “wants”, the idea is increasingly being taken for granted. The mobile phone industry is one of the largest in the world in terms of total volume of sales and gross revenues. Breakneck competition among the numerous firms operating therein guarantee that nearly all companies invest heavily in their attempts to create products that are able to stand out in the increasingly saturated market. Although this ensures that the end consumer is the primary beneficiary, saturation in the industry is causing many firms to look towards replacement devices that can eventually substitute the modern smartphone altogether. With over eight major operating systems being operated by over 50 major hardware manufacturers, to say that this particular industry is thriving would be a gross understatement. As is the custom in any dynamic market, the industry leaders in terms of popularity among the target audience, change often. The early 2000s saw the open source operating system “Symbian” rule the smartphone scene, a few years later it was apple’s iOS that became the standard setter. Now, with over 600 million units being sold worldwide each year, Google’s Android OS is the new claimant to the smartphone operating system throne.
However, unlike many other industries producing consumer goods, the smartphone industry is one whose success is dependent on not just the operating system manufacturers, but also the OEMs or the hardware providers. Historically the company that has been performing the most illustriously is the Finnish hardware manufacturer Nokia. With unparalleled sales figures in nearly all its product ranges, Nokia was once an industry titan. The times have changed. The hardware manufacturing throne has since shifted to Samsung, with apple at a distant second place. It was not long ago that Apple held complete dominion over the handheld devices industry. The iPhone proved itself to be the benchmark all other hardware manufacturers based their products on. With never-before-seen hardware and software features beautifully integrated in an astoundingly well-built shell, it was no surprise that Apples smartphone division saw unprecedented sales and an increasingly loyal consumer base.
The situation hasn’t been as kind to the Silicon Valley based company as of late. Apple’s market share has declined and iOS is quickly being overrun by android in Europe and North America. Many believe the reason behind this fall from grace to be the lack of any real innovation after Steve Jobs’ passing. As the competition constantly improves the quality of nearly all components of its devices each year, Apple has only been seen giving its iPhone range incremental upgrades as of the last few years. Certain analysts, however, claim that this is subject to change in the years to come, as Apple is rumored to unveil iPhones with larger (4.7” vs. the current 4.0”) screens and heftier processing chips. The recent aesthetic overhaul of iOS 7 also made quite a few ripples in apple’s consumer base. It wasn’t received as expected and mishaps such as the Apple Maps debacle resonated quite poorly with iPhone users.
Apple was also unable to gauge demand for its lower cost 5C device. The phone, for all intents and purposes, failed to establish apple among the lower segment of the market. Despite having an extremely well-conceived plan for the 5C, apple failed with its execution. It was overpriced and price was the one thing it was supposed to have as an advantage over its competitors. The lower and midrange market segments are still devoid of Apples presence and increasing competition from rival firms Samsung, HTC, LG and Huawei are not making the job of penetrating this particular stratus of the market any easier for apple.


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