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Smartphone O.S. Market Analysis

Presented By Ehab Hesham & Mostafa Abdelfattah

Tentative outline of research

Objectives. Introduction: Market Volume Market Share. Market Type. Company Portfolio. Our Product. Factors affect Supply.

Factors affect Demand. Supply. Demand. Elasticity Conclusions

There is no such thing as a free lunch!

Android Operation SystemGoogle Android OS is one of the little examples of a micro industry that affect and change the market type of the whole macro industry The Smart Phone Market Before Android OS had a very few producers which was mainly Apple And Palm web OS and Nokia It was an example for Oligopoly Market Due to Android OS Many new producers begin to enter the market of Smart Phones like Samsung, Motorola, LG, HTC and Sony

Operating Systems (O.S.) Types

(1) Proprietary OSs developed in-house by smartphonemanufacturers Ex. Apple, RIM, and HP/Palm

(2) Licensable OSs allow any manufacturer to use the OS for adevice they produce Ex. Windows Mobile and the recent Windows Phone 7 made by Microsoft.

(3) Open source OSs give the smartphone manufacturer accessto an existing operating system that is free, and freely customizable Ex. Android, Symbian OS and MeeGo

Google Android OSIn August 2005, Google acquired Android Android is a Linux-based operating system for mobile devices such as smartphones

and tablet computers. It is developed by the Open Handset Alliance led by Google. It is an open source model that enables any manufacturer to take it and implement it for free on their hardware. This model gives manufacturers low cost of entry, and customizability with which to differentiate their phones.The combination of these characteristics has made Android increasingly popular with manufacturers, as evidenced by its wide acceptance and majority market share.

Google Android OS The Android Marketplace is large and growing (over 450,000 apps), giving the consumer many options for expanding the capability of their smartphone. Additionally, Android is open, and so apps can be installed on an Android phone from any place the user desires, i.e., they are not limited to Android marketplace. phones are available on all service providers. Because the OS is

customizable,

The Android Version Historyon 5 November 2007,

The Android beta was released

on 23 September 2008, Android 1.0 the first commercial version of the software, was released. The first Android device was HTC Dream (G1) On 30 April 2009,

The Android 1.5 named Cupcake was released The Android 1.6 named Donut was released

On 15 September 2009, On 26 October 2009, On 20 May 2010,

The Android 2 named clair was releasedwas released

The Android 2.2 named Froyo

On 6 December 2010, On 22 February 2011,

The Android 2.3 named Gingerbread was released The Android 3.0 named Honeycomb the first tablet-only Android update

On May 2011 Android Nexus

4.0 named Ice Cream Sandwich was previewed and On 19 October 2011 Ice Cream Sandwich was released and officially launched at the Galaxy

60

OS Market Share over last 2 years

50 40 30 2010 0 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Android Symbian iOS RIM

O.S. Market Competition

The Market of Smartphones OS is a Monopolistic Competition Market, as Many sellers : ( Google, Apple, Microsoft, RIM , Symbian, ..).Slightly differentiated products:Symbian OS, ). ( Android, iOS, Windows Phone, RIM OS,

The Price:

Each seller may set price for its own product or decide to be the

only user for his OS in his own produced devises or even offer it for free for any producer.

Factors Affecting Android OS SupplyUnlike the most of other smartphone OS that has Confidential model Approaching phone, Android Needs having large numbers of choices smart phone manufacturer.

The number of sellers:The smart phone OS producers are limited due to the barriers to entry smartphone market that are relatively high including

The Technology:

Rapid innovation necessary for a rapidly changing market, where customers are very price conscious, rivalry among firms in the OS smartphone market is fierce

1- Economies of Scale 2- Intellectual Property 3- Brand Loyalty

Factors Affecting Smartphones Demand

Aesthetic Stylishness/Look/Color Weight and Size Perceived Prestige

Software Functionality Ease of use Operating System/Openness Browser capability Built-in/Exclusive Apps Availability of Apps/App Store Sync with Contacts and Mail Support for Enterprise Services

Hardware Functionality Camera(s) Battery Life Quality/Resolution of Screen Keyboard Type Microphone and Speakers GPS Tethering

Other Price of Device

Service Compatible Networks Quality and Speed of Network Price of Service (Voice and Data)

Apps. As a main factor affecting demandSoftware applications, or apps, are a significant part of the smartphone market today. Every smartphone operating system has an online store where apps can be purchased and downloaded to the smartphone to extend the functionality of the smartphone. These purchases can be made directly from the phone, and include very diverse functionality: games, over-the-internet radio, exercise trackers, maps and GPS navigation, note taking, word processing, etc.

Apps constitute a complementary product to the smartphone, withthat runs the app store.

cross-

elasticity of demand, and are an source of revenue for the company

Apps. As a main factor affecting demandConsumers find great value in apps because of the additional functionality that they can obtain from their smartphone. Manufacturers promote apps because they are valuable both for the revenue that they get from selling apps (if the app store is for a proprietary to the manufacturer) and for the effect of consumer lock-in, While many apps are available for free from the app stores,AndroidGoogle Play

Apple

The App Store

RIM

BlackBerry App World

HP/Palm webOS Windows Mobile Phones Windows Phone 7 Devices,

Palm App Catalog

Windows Mobile Marketplace

Windows Phone Marketplace

Expenses are involved in developing mobile apps

The developing fees that the developers must pay to the manufacturers to be able to produce a new app affect strongly the growth and the diversity of the apps available for every OS99$/Year for Apple

OS Market Share In Q3 20113% 2% 1% 53% Android Symbian iOS

99$/Year + 99/App for Windows Marketplace

25$ for Android Marketplace

11% 15%

That directly affect the demand for the devices

RIMBada Microsoft Others

17%

The more the growth of an App. Market, The more the demand for its devices, As it is very clear above

Google Android OS Demand% of consumers planning on buying a smartphone next 90 days who say Google Android is the OS they would prefer40% 30% 20% 10% 0% 30%30% 21% 37%

6% 1% 2% 2% 3% 4% 4% 3%

Prefer Android

Google Android OS demand50% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

A Survey of which mobile OS would you prefer to have on your next Smart phone

38%

37% 30%

5% 6%

2% 1%

0% 0%

Jun. 2010 Survey

Sep. 2010 Syrvey

Google Android OS Supply Google Android OS is available for many Smartphones manufacturers

This Make it available for many users at different Prices with different hardware specifications

The Price Elasticity of Demand

The Smart phones Demand Seems To be Perfect Elastic thats due to Availability of large numbers of close substitutes in addition to this it still seems to be Luxuries for most of customers and also the narrowly Defined Market.

The Price Elasticity of Supply

The Android OS supply seems to be perfect elastic as it is a renewable and free product and its duplication cost nothing

ConclusionThe smartphone OS market is rapidly changing, with constant product introductions, quickly evolving technology and designs, short product life cycles, aggressive pricing, rapid imitation of product and technological advancements, a highly price sensitive consumers. No one firm in the market has sufficient market Power to control prices, resulting is strong rivalry and competitive pricing. The barriers to entry are high due to the existence of patents, high fixed costs and economies of scale, regulation, and brand loyalty. The individual market participants engage in attempts at product differentiation, some being more successful than others. The smartphone OS market is likely to be significantly different in as short a time as 1-5 years.