comepetitive strategies of smart phone companies in emerging markets
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CompetitiveStrategies of
the Smartphonecompanies in
EmergingMarketsPresented by:
Arsalan Lodhi
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Outline
q Introduction to Smartphone Definition Smartphone industry Development Industry Evolution: Players Success Factors
q Introduction to Emerging Markets Define Emerging Markets Characteristics of Emerging Markets Major Emerging Economies BRICS and Four Asian Tigers
q Strategies of Smartphone companies inEmerging Markets
Related Examples
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Smartphone
Built on a mobile computing platform, with more advancedcomputing ability and connectivity
First smart phones mainly combined the functions ofa personal digital assistant (PDA) and a mobile phoneor camera phone
Modern smart phones have high-resolution touchscreens, web browsers , Wi-Fi, music players and mobilebroadband.
Run on mobile operating systems (OS) E.g. Apple's iOS, GooglMicrosoft's Windows Phone,Nokia's Symbian, RIM's BlackBerr
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Industry development
1992 the firstSmartphone
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Industry development
The widespread adoption of 3Gnetworks and price erosion hasresulted in a significant growth ofSmartphone in the consumer market.
The two fundamental market trendsdriving the next-generation
Smartphone are MobileInternet and Mobile Multimedia.
Smartphone Market OpportunitiesAn in-Depth, Global Analysis of Smartphones,
Chips & Operating Systemshttp://www.fwdconcepts.com/Smartphones/
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Key Players
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Industry evolution: players
Apple Second quarter of 2011 Apple shipped 20.3 million smart phones making it the market
leader in the smart phone world, wrestling the leading position from Nokia.
Apple earned record revenue of $28.57 billion in Q3 2011 with net profit $7.31 billion.Increased its revenue by 82% and profit by 125% during the same period.
iPhone sale grew at a record 142% year-over-year making it the most valuable technologycompany on the planet
Presence in more than 100 countries globally.
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Industry evolution: players
Google
Google is in the smart phone market through its Operating system, Android, used inHTC, Samsung etc
Recently purchased Motorola Mobility
World's leading operating system provider for mobile phones. Android is mostpopular and most widely used smart phone OS, having a share
of about 38.1% of the smart phone market.
Slowly but gradually increasing its market share globally.
Google's phones have not been runaway successes like some of its other products, thecompany's cash hoard and renewed focus on "mobile" put it in a strong position tolead the phone hardware market too.
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Industry evolution: players
Blackberry
Research In Motion(RIMM) is known for Blackberry.
RIMM has seen its smart phone market share decline in the
second quarter of 2011 to 11.6% from 17% in the same quarter
last year.
However, its revenue during the same period has increased.
Overall its not all gloomy for RIMM as recent market survey in US shows that out of fivepeople two are still not sure of what smart phone to buy.
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Industry evolution: players
Nokia
Once the giant of the telecommunication industry is struggling.
Continuously losing its share to bigger rivals like Apple, Google and Blackberry.
Nokia was a leading smart phone company with 38.1% market share in Q2 2010.Now, in Q2 2011, this share has been reduced to 15% and shipments have seen adecrease of about 30%.
Nokia has recently reached a multibillion dollar deal with Microsoft (MSFT) to useits operating system.
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Success Factor
HRA Model of
Success Factors
Constant R & D
Effective Marketing and Communication
Timely entry and emphasis in emerging
markets
3-Emerging Markets
2-Marketing
1- Technology
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Emerging
Markets
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Defining Emerging markets
Emerging markets include those which have reached a minimumlevel of GDP and are in the growth phase of the development cycle but
whose economies are vulnerable to internal or external threats
Countries, whether small or large in size, are considered to be emerging
markets due to their developments and reforms. Today, emergingmarket economies are referred to asfast-growing economies
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characteristics
Markets and cultures are demanding
High rate of Emigration to the developed world
Limited Income and Space
Populations are Youthful and growing
Distribution channels are weak
Markets are changing rapidly
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Major emerging economies
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BRIC
Largest economy in SouthAmerica
Well developed agriculture,
mining, manufacturing andservice sector
Amongst the ten largesteconomies of world
Important industries aretextiles, chemicals, iron ore,steel and motor vehicles.
Capital - Brasilia
203.4 millionpopulation
GDP growth: 3.5%
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BRIC
Largest country in terms ofarea
Ninth most populous nation in
the world Large manufacturing
capacities, notably in metals,food products, and transport
equipment. Third largest exporter of steel
and aluminium
Capital: Moscow
143 million population
3.7% GDP growth
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BRIC
Fourth largest economic systemin terms of purchasing power
Development in agricultural,
service and industrial sector Increase of 85.1% in FDI
Main reasons for boomingemerging market
Perfect competition market
Higher standard of living
Medical facilities
infrastructure
Capital: New Delhi
1.21 billion population
GDP growth rate of8.5%
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BRIC
Biggest economy after USA
Predicted to become largesteconomy in this century
Unemployment rate of 4.1%
Per capita income: US$ 2000
Slow but steady economic
reforms
Capital: Beijing
1.341 billionpopulation
11.7% GDP growthrate
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Four Asian Tigers
Four Northeast Asian countries South Korea, China, Japan and Taiwan - have growninto major players in the global information technology (IT) industry but the term AsianTigers refers to South Korea, Hong Kong, Singapore and Taiwan
Expanded their production bases and increased their contract manufacturing to access
lower labor costs and large markets in emerging economies.
These nations and areas were notable for maintaining exceptionally high growth ratesand rapid industrialization
Hong Kong and Singapore have become world-leading international financial centers,whereas South Korea and Taiwan are world leaders in manufacturing informationtechnology.
Korea's Samsung Electronics had a 21 percent market share and LG Electronics 9percent
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Four Asian Tigers
A vast network of small- and medium-sized suppliers, which enables easy procurementof parts at lower prices, as well as quick and tailored response to clients' orders
The common characteristics of the Four Asian Tigers are:Focused on exports to richer industrialized nations
Sustained rate of double-digit growth for decades
Non-democratic and relatively authoritarian political systems during the early years
The ranks of GDP (by nominal) List of countries by GDP (nominal) of South Korea,Taiwan, Hong Kong, and Singapore are 12th, 21st, 36th, and 44th, respectively.
A high degree of economic freedom. Hong Kong, Singapore, Taiwan and South Korea are
1st, 2nd, 26th, and 36th respectively on the Heritage
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Strategies in theEmerging Markets
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Strategies in Emerging
Markets
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Strategies in Emerging
MarketsMost analysts expect that majority of that growth will be forlower-pricedofferingsin emerging markets. Its a challenge to companies like Apple andGoogle as they will face tests as lower-end Smartphone use expands.
Apple is reportedly preparing to release a cheaper 8-gigabyte iPhone 4, hinting at itsplans expand its market.
Attract customers who seek a capable Smartphone, but who are not willing to pay thepremium price
Lowered Price Offerings
Samsung's Smartphone sales grew 600 percent sequentially, due primarily to its low-endproducts in China and Latin America.
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Strategies in Emerging
Markets
Lowered Price Offerings
"Smartphone makers are increasingly moving down the
value chain to target the low-end segment and attractmass customers, especially those in China and India,"said Lee Seung-woo, an analyst at Shinyoung Securities.
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Strategies in Emerging
Markets
Emphasis on Price controls
Low-cost semiconductor technology has pushed down the price of a basicSmartphone to below $100 in emerging markets over the past year.
Outsourcing
Technology Sharing
CHEAP MODELS VS CHINA COPYCATS
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Facebook Partners with Orange toBring Smartphones to Emerging
MarketsTo bring cheap cellphones with dedicated Facebook functionality to emerging markets inAfrica and Europe.
Orange will release three devices with a special "F" button for unlimited Facebook accessto 15 countries starting
To increase its presence worldwide to people that may not have access to a computer butaccess the Internet solely through mobile devices.
Alcatel's series of Android phones
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Strategies in Emerging
Markets
Innovation, Differentiation and redefining
Blackberry was first in the market ,while other high tech companies were trying toimitate the new Blackberrys smart phone features and design, Apple did theunthinkable.
Standardization and GlobalizationStandardization gives the advantage to converge its efforts towards the development ofspecific standardized applications and on the other hand it maintains the customersatisfaction in every place on the globe.
Adapt your Strategies!
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Strategies in Emerging
Markets
Marketing
Customer PreferencesNokia has identified aspects of African lifestyle, such as the love of music andfashion to personalize aspects of individuals into the handsets
Marketing Strategies
Differentiation& Communication being done in the local languagesPakistan smart ban raha hai ,Aap kab ban rahay ho
Product Portfolio and QualityMore features being added continuously, Longer talk times, large displays anddurable designs
Time to MarketBillions spent on the launch and carefully planned E.G. Dual Sim by Nokia
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Strategic Alliance with local operatorsIn country manufacturing facilitiesLocal warrantiesNumerous new sales offices and storesImproved distribution channel
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References
http://business.mapsofindia.com/india-
http://www.economywatch.com/internati
http://www.economywatch.com/indianec http://www.economywatch.com/world_e
http://www.slideshare.net/guestbaefb5/e
http://www.ntt.com/business_e/feature/g
http://www.ftpress.com/articles/article.a
http://internationalinvest.about.com/od/
http://www.fwdconcepts.com/Smartphones/http://internationalinvest.about.com/od/gettingstarted/a/What-Are-Emerging-Markets.htmhttp://internationalinvest.about.com/od/gettingstarted/a/What-Are-Emerging-Markets.htmhttp://business.mapsofindia.com/india-market/emerging.htmlhttp://www.economywatch.com/international-organizations/bric.htmlhttp://www.economywatch.com/indianeconomy/indian-economy-overview/http://www.economywatch.com/world_economy/china/http://www.slideshare.net/guestbaefb5/emerging-markets-presentation-882656http://www.ntt.com/business_e/feature/g_project/data/emerging02.htmlhttp://www.ftpress.com/articles/article.aspx?p=404802&seqNum=3http://internationalinvest.about.com/od/gettingstarted/a/What-Are-Emerging-Markets.htmhttp://internationalinvest.about.com/od/gettingstarted/a/What-Are-Emerging-Markets.htmhttp://www.ftpress.com/articles/article.aspx?p=404802&seqNum=3http://www.ntt.com/business_e/feature/g_project/data/emerging02.htmlhttp://www.slideshare.net/guestbaefb5/emerging-markets-presentation-882656http://www.economywatch.com/world_economy/china/http://www.economywatch.com/indianeconomy/indian-economy-overview/http://www.economywatch.com/international-organizations/bric.htmlhttp://business.mapsofindia.com/india-market/emerging.html -
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References
http://www.theatlantic.com/international/archive/2012/02/5-lessons-from-t
http://www.investopedia.com/terms/b/bric.asp#axzz1mSY3a8A7
http://seekingalpha.com/article/287955-4-smart-phone-companies-which-o
http://www.mobiledia.com/news/105033.html
http://beta.fool.com/tdalmoe/2012/01/23/smartphone-usage-expands-eme
http://scotttaylor.eu/strategy-analysis-nokia/
http://www.readwriteweb.com/archives/facebook_partners_with_orange_to
http://internationalinvest.about.com/od/gettingstarted/a/What-Are-Emerging-Markets.htmhttp://internationalinvest.about.com/od/gettingstarted/a/What-Are-Emerging-Markets.htmhttp://internationalinvest.about.com/od/gettingstarted/a/What-Are-Emerging-Markets.htmhttp://www.theatlantic.com/international/archive/2012/02/5-lessons-from-the-rise-of-the-brics/253045/http://www.investopedia.com/terms/b/bric.asphttp://seekingalpha.com/article/287955-4-smart-phone-companies-which-ones-you-should-buyhttp://www.mobiledia.com/news/105033.htmlhttp://beta.fool.com/tdalmoe/2012/01/23/smartphone-usage-expands-emerging-markets/1128/http://scotttaylor.eu/strategy-analysis-nokia/http://www.readwriteweb.com/archives/facebook_partners_with_orange_to_bring_smartphones.phphttp://www.readwriteweb.com/archives/facebook_partners_with_orange_to_bring_smartphones.phphttp://scotttaylor.eu/strategy-analysis-nokia/http://beta.fool.com/tdalmoe/2012/01/23/smartphone-usage-expands-emerging-markets/1128/http://www.mobiledia.com/news/105033.htmlhttp://seekingalpha.com/article/287955-4-smart-phone-companies-which-ones-you-should-buyhttp://www.investopedia.com/terms/b/bric.asphttp://www.theatlantic.com/international/archive/2012/02/5-lessons-from-the-rise-of-the-brics/253045/ -
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References
http://economictimes.indiatimes.com/tech/hardware/samsung-targets-
http://wearedevelopment.net/2011/12/07/a-success-and-a-failure-in-th
http://blogs.hbr.org/govindarajan/2011/05/smart-phone-a-reverse-inno
http://readperiodicals.com/201201/2562864001.html#b#ixzz1mTvY6
http://www.readwriteweb.com/archives/facebook_partners_with_orange_to_bring_smartphones.phphttp://www.readwriteweb.com/archives/facebook_partners_with_orange_to_bring_smartphones.phphttp://www.readwriteweb.com/archives/facebook_partners_with_orange_to_bring_smartphones.phphttp://economictimes.indiatimes.com/tech/hardware/samsung-targets-emerging-smartphone-markets-unveils-four-new-smartphone-models-under-its-flagship-galaxy-line/articleshow/9717044.cmshttp://wearedevelopment.net/2011/12/07/a-success-and-a-failure-in-the-smartphone-industry/http://blogs.hbr.org/govindarajan/2011/05/smart-phone-a-reverse-innovati.htmlhttp://readperiodicals.com/201201/2562864001.htmlhttp://readperiodicals.com/201201/2562864001.htmlhttp://blogs.hbr.org/govindarajan/2011/05/smart-phone-a-reverse-innovati.htmlhttp://wearedevelopment.net/2011/12/07/a-success-and-a-failure-in-the-smartphone-industry/http://economictimes.indiatimes.com/tech/hardware/samsung-targets-emerging-smartphone-markets-unveils-four-new-smartphone-models-under-its-flagship-galaxy-line/articleshow/9717044.cms -
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Thank You
http://readperiodicals.com/201201/2562864001.htmlhttp://readperiodicals.com/201201/2562864001.htmlhttp://readperiodicals.com/201201/2562864001.html