Current Trends Within the Mobile Phone Sector - Essay Example

Current Trends Within the Mobile Phone Sector An Analysis of Current Trends in the Mobile Phone Sector Globally, technology is expanding at a rapid and exponential pace to the point that it is difficult to keep up. Perhaps in not industry or sector or the economy is this as best represented as within the business of mobile phones (Aghamirian 2013). In fact, with every new release of a mobile phone, consumers are greeted with a host of new features and uses for the phone that did not exist in the previous version. This has bought about the reality that a particular phone purchased today may become obsolete a mere year down the road. Whereas in years past, the average mobile phone user spent very little actually using their phone, the first noticeable current trend is towards more time actually the phone itself. This is obviously a recent phenomenon with the advancement of the smart phone,which now has capture as much as 70 percent of the entire mobile phone market in many Western countries (Azizi 2012). Because of this, it is found that the average mobile phone user now spends as much as seven hours more per month with their phone than they did just a mere year ago. This trend is further reflective of the reality that mobile phone devices themselves are much more ubiquitous today than they were in yesteryear, as they can do so much more for us than was ever really envisioned. In fact, this trend leads one to believe if the actual word ‘phone’ will be replaced in the future, as the devices do so much more than allowing for just simple voice to voice communication, the likes of which many today do not even consider to be the primary use of the mobile phone in the first place. Individual consumers and organisations alike are beginning to learn new capabilities and demanding more for their mobile phones, which is certainly setting a trend for future competitiveness within the industry itself for years to come. One leader researcher for consumer trends notes that people today, globally, are looking for and expecting a new experience with the technology that they purchase and utilise in their daily lives (Borges 2012). Within this discipline, mobile phones are at the cutting edge of a technological revolution because so many people depend on them for their productivity and communication needs today. A further trend in the mobile phone industry that is expected to continue in the coming years is to fit a need that consumers have to interact with the technology that is at their fingertips. Most consumers today are looking for devices that fit the shape of their hands and that respond to their touch, which incorporates and ease of use factor that seems to be the latest and greatest trend around the world. In this regard, mobile phones of the future will turn into educational tools, replacing the television and even classroom instruction as the primary means of teaching young children critical academic concepts, such as furthering the development of language and math skills. This trend in mobile phone technology will continue to met by the refinement of the devices themselves to better fit the hands of young children and accommodate their need for a touch assisted and activated phone (Appelbaum 2010). Adults are learning through the use of phones as well, as today’s grown up figure uses the phone to receive recommendations on where to go in a new city, get directions to an important business meeting, receive necessary information required to prepare for an upcoming presentation or meeting, in addition to numerous other uses. All of this equates to the trend that mobile phones are now with the average individual at every waking moment, being utilised in a variety of different mediums and in ways that continue to expand exponentially each year. One trend in mobile phone technology that has not yet taken off is in relation to media and advertising. While an increasing number of mobile phone users are using their devices to watch videos and other forms of Internet based media, advertisers have not yet adequately developed a mechanism by which they can tap into this seemingly limitless market. This is one trend that is certainly poised for radical change in the coming years. Currently, the amount of time that individual consumers spend viewing various forms of mobile media is vastly disproportionate to the share of advertising that mobile phones themselves seem to attract (Beyers 2014). The current trends indicate that people spend in excess of 38 hours per month on their phones, and this continues to increase as more features are being added to new model. Even with that figure, however, only roughly 4 percent of advertising spending globally is currently accounted for on mobile phone devices. This indicates that the future of mobile phone technology will encompass more advertiser friendly features, such as those via various applications on smartphones, that capitalise on unique and creative ways of reaching the consumer with noninvasive advertising and promotional campaigns. To date, there are relatively few companies that have developed an advertising budget solely devoted to mobile phone mediums, even though mobile viewing is on tap to be the future of the advertising industry. Currently, there are some barriers to effective advertising on mobile devices that are mostly the result of technology related hindrances that prevent certain types of ads from being viewed properly (Damoiseau, Black, & Raggio 2013). Once mobile phone manufacturers and software developers are able to offer new products and services to fit this niche, however, then current trends indicate that the entire way consumers view media will change, and this will mean that way that companies reach the consumer with their products will shift right along with it. 2. Critical Evaluation of Two Leading Mobile Phone Companies Perhaps the two leading global mobile phone manufacturers today are Apple and Samsung. These two lead companies within the industry comprise fully two-thirds of the American market alone, and well over half of consumers globally own one of these two brands. While many may believe that Apple leads the pack due to their advertising presence, the reality is that Samsung currently leads the global mobile phone market, but Apple is right at their heels. While other companies have attempted to enter into the smart phone and mobile phone market on a broader scale, it has become increasingly difficult to compete with either Apple or Samsung (Darroch & McNaughton 2013). At the same time, however, it has become increasingly difficult for these two companies to keep up with another and to meet the ever increasing demands of todays globally connected consumer. With technology continuing to expand at a rapid rate, mobile phone providers must stay ahead of the curve by providing products that are equipped with software mechanisms that are easily upgradable, in addition to developing physical products that are modern and chic enough to appeal to the fickle consumer of today. This is no easy task, which has resulted in a new model being unveiled annually, which has certainly served to fuel the industry to record growth and profits worldwide. Samsung has recently been having some struggles worldwide based on their smartphone sales when measured against Apple, and they have had less than stellar earnings reports in recent quarters as a result. They have, however, been able to retain their position as the world’s largest mobile phone manufacturer, which is calculated based upon adding sales of smart technology enabled phones and features phones combined, largely based on their global name recognition and their ability to consistently insert new product lines into the marketplace (Denzin & Lincoln 2015). Currently, Samsung is focused on bringing its latest model, the Galaxy S6, o the global market in a direct attempt to compete with the latest release by Apple of the iPhone 6Plus and iPhone 6. Samsung, a South Korean manufacturer, appears to be lagging behind Apple in terms of integrating new technology and features into their phones as of late, when in previous years they were seen to be the leaders in that regard. Apple, for example, is already rumoured to have the iPhone 7 developed and in the final testing phases suited for a possible release date as early as the final quarter of 2015. This will almost certainly enable Apple to gain back even more ground in the global mobile phone market that it had gradually lost in the first few years of this decade (Gibber & Leibold 2012). Current statistics reveal that the sales of mobile phones world wide continue to rise. In fact, in the first quarter of 2015, sales over the previous year rose by 8%, amounting to just over 445 million mobile phones being sold, of which just under half were either manufactured by either Apple or Samsung, as previously mentioned. Perhaps a mildly troubling sign for Samsung, however, is that while it sold nearly 100 million units in the first quarter of 2015, that was a drop from the 113 million it sold during the exact same quarter one year ago. During the same quarter, Apple saw its sales increase from roughly 47 million mobile phones sold in 2014 to just over 61 million in 2015. As reflected previously, all other mobile phone makers really pale in comparison. Currently, Microsoft has a grip on third place in this industry, but it continues to be decimated by Apple and Samsung in terms of units sold and customer satisfaction. In fact, in line with Samsung, Microsoft saw its share of the global mobile phone market sink somewhat in the first quarter of 2015. During the same period in 2014, Microsoft sold some 47 million mobile phones worldwide, but that number slipped to just under 34 million units in the first quarter of the current year, reflecting a 28 percent decrease in global sales. It is not just smart phone sales by Microsoft that are affected either, as the company continues to lose ground in the feature mobile phone market as well, meaning that it now just attracts roughly 8 percent of the global mobile phone industry in terms of sales, which is a record low for them. All of this data indicates that both Apple and Samsung are well positioned for future growth within the mobile phone industry, which is rather remarkable considering the standing that they already have attained within the global marketplace (Gerber & Geib 2013). Recent trends in the mobile phone industry are certainly leading to record numbers of smart phone purchases by consumers, as reflected by the reality that worldwide sales of smart phones increase some 21 percent in the first quarter of 2015 when compared to the same time period just one year prior in 2014. Within this particular sector of the mobile phone industry, however, Apple does appear to still be trailing behind Samsung somewhat, but Apple also appears to have developed a laser like focus on reversing this trend in the near future. Within the smart phone sector of the mobile phone market, Samsung still shipped a staggering 83 millions smart phones globally during the first quarter of 2015, reflecting nearly 24 percent of the entire market worldwide. The troubling trend to notice of this company, however, is that in the first quarter of 2014, Samsung had a full 31 percent of the global smart phone market, indicating that Apple is continuing to make up ground in this area (. Perhaps another troubling indicator for Samsung, given its roots and headquarters in the Asian nation of South Korea, is the reality that it continue to lose ground and face numerous challenges throughout the Asian continent. Globally, however, analysts do note that Samsung has begun to see its performance stabilise to the point that it was able to once again overtake Apple once again become the largest smartphone manufacturer and seller in the world, when measuring the volume of units sold. Apple itself shipped out more than 61 million smart phones during the first quarter of 2015, which represents 18 percent of the global market. The figures just mentioned reflect a 15 percent increase over the same time period from 2104. A concern for Samsung moving forward, however, is that Apple has manage to capture a considerable portion of the Chinese market, and this is still growing. Chinese consumers are purchasing new iPhone 6 and iPhone 6 Plus models of Apple products in record numbers, and they do not appear hesitant in the least to upgrade with each new release. If Samsung cannot develop a similarly positioned mobile phone product to compete with Apple in the world’s most rapidly expanding market that is China, trouble could be looming on the horizon for the company, particularly in terms of maintaining its grip on the number one position in the industry. In contrast to Samsung, Apple’s most recent earning reports seem to indicate that the mobile phone division as the company is poised for consistent growth moving forward, as evidenced by its recent quarter that saw over 61.2 million phones sold worldwide. This comes a decade after the original iPhone Smart phone first debuted, illustrating that the consumer is still willing to buy new models and upgrades as they become available. As Apple and Samsung are the major players in this particular industry, they are the ones best positioned with the financial capital and name recognition required to continue to retain existing customers, and add new ones. Within China, there are several competitors currently entering the mobile phone market, both showing some signs of success, but nowhere on the scale where Apple and Samsung would feel in the least bit threatened in the short term. Lenovo is currently thirds in terms of global units sold at just under 19 million total, with Huawei a close fourth at 17.3 million. This puts Lenovo-Motorola at a 5 percent of the global smart phone industry during the first quarter of 2015, once again in third place. The troubling trend for this, and other, competitors is that this reflects a two percent decline from just one year ago. In Lenovo’s case, it appears that it is suffering for a highly competitive growth industry within China that incorporates LTE technology, and its partner company (Motorola) has been struggling for sometime in its home base of North America, and within its largest market of India. By contrast, the Huawei corporation is showing continued signs of growth, grabbing its own five percent share of the global smart phone market during the first quarter of 2015. The company itself continue to expand its online presence throughout the entire mainland of China, in addition through partnerships that it is developing with retailers across the African continent. This has enabled Huawei to become somewhat of a powerhouse within the developing world, which is a market that Apple and Samsung has largely neglected to this point. Time remains to tell, however, whether this position will shift if and when Apple and Samsung decide to pour more of their time, energy, and resources in these areas of the world as well. Apple, for example, has recently mentioned that it has been analysing its own quarterly results. It has noted the growth being experienced by Apple throughout China has been nothing less than extraordinary. In fact, China is now the second largest market in the world for Apple, only training the Americas. Even this could soon see China overtaking the Americas in terms of number of units sold, as the recent quarter saw iPhone sales in Greater mainland China come in at just under 17 million, in comparison to just over 21 million in the Americas. While the upcoming release of the Galaxy S6 by Samsun has certainly been reviewed well by both the media and corresponding analysts, it would need to become hugely successful in order to hope to stunt the recent growth that Apple has been experiencing lately (Gupta 2014). 3. An Assessment of the Current Competitive Positioning of Aforementioned Companies When considering the concept of competitive advantage, one must consider the qualities that one company possesses that positions itself for long term growth relative to other companies in the same industry. The concept of competitive advantage certain is useful in terms of encouraging long term fundamental investors to continue expressing confidence in progressive companies, such as that found in Apple and Samsung. It is, however, often difficult to discern exactly where one company has such an advantage over their competitors and how long that advantage might well last. In the case of Apple and Samsung, however, this task is made a bit easier given the reality that they are so far out ahead of the competition that they find themselves really only competing against each other. This, in and of itself, gives them each a competitive advantage that is certainly unparalleled in the global mobile phone sector. Samsung has recently been having some struggles worldwide based on their smartphone sales when measured against Apple, and they have had less than stellar earnings reports in recent quarters as a result (Luo & Tung 2013). They have, however, been able to retain their position as the world’s largest mobile phone manufacturer, which is calculated based upon adding sales of smart technology enabled phones and features phones combined, largely based on their global name recognition and their ability to consistently insert new product lines into the marketplace. Currently, Samsung is focused on bringing its latest model, the Galaxy S6, o the global market in a direct attempt to compete with the latest release by Apple of the iPhone 6Plus and iPhone 6. Samsung, a South Korean manufacturer, appears to be lagging behind Apple in terms of integrating new technology and features into their phones as of late, when in previous years they were seen to be the leaders in that regard. Apple, for example, is already rumoured to have the iPhone 7 developed and in the final testing phases suited for a possible release date as early as the final quarter of 2015. This will almost certainly enable Apple to gain back even more ground in the global mobile phone market that it had gradually lost in the first few years of this decade. Current statistics reveal that the sales of mobile phones world wide continue to rise. In fact, in the first quarter of 2015, sales over the previous year rose by 8%, amounting to just over 445 million mobile phones being sold, of which just under half were either manufactured by either Apple or Samsung, as previously mentioned. Perhaps a mildly troubling sign for Samsung, however, is that while it sold nearly 100 million units in the first quarter of 2015, that was a drop from the 113 million it sold during the exact same quarter one year ago. During the same quarter, Apple saw its sales increase from roughly 47 million mobile phones sold in 2014 to just over 61 million in 2015. As reflected previously, all other mobile phone makers really pale in comparison. Currently, Microsoft has a grip on third place in this industry, but it continues to be decimated by Apple and Samsung in terms of units sold and customer satisfaction. In fact, in line with Samsung, Microsoft saw its share of the global mobile phone market sink somewhat in the first quarter of 2015. During the same period in 2014, Microsoft sold some 47 million mobile phones worldwide, but that number slipped to just under 34 million units in the first quarter of the current year, reflecting a 28 percent decrease in global sales. It is not just smart phone sales by Microsoft that are affected either, as the company continues to lose ground in the feature mobile phone market as well, meaning that it now just attracts roughly 8 percent of the global mobile phone industry in terms of sales, which is a record low for them. All of this data indicates that both Apple and Samsung are well positioned for future growth within the mobile phone industry, which is rather remarkable considering the standing that they already have attained within the global marketplace (Luo 2014). 4. Reflection This assignment and module has proven most effective as it has enabled to gain a perspective of how modern day consumer needs are being driven largely by technology. Something as basic to human organisation as a telephone continues to be driven by feature rich applications, ever light models, and a propensity to outdo competitors with new technology that there is seemingly no end in sight. Two worldwide companies were highlighted, and they certainly reflect the lion’s share of this particular industry, but they are by no means the only players in the business. In the end, any company who can gain a certain level of name recognition with a particular demographic group, and can provide the consumer with the features and ease of use that they desire, will have a role to play in the future. The Chinese firm of Huawei, for example, has capitalised by the lack of interest in the developing world to this world expressed by the major phone manufacturers, and they have risen to become the world’s fourth largest smart phone maker. That has solidified in my mind the power of developing a niche. One does not have to be the largest to be successful. With a bit of ingenuity and forward progressive thinking, the marketplace can be opened in new and profitable ways. References Aghamirian, B. (2013) Effects of customer knowledge management’s eight factors in e-commerce. Journal of Management Science and Engineering, 7(4), pp. 1-11. Akhavan, P. and Heydari, S. (2007) CKM approach to gain competitive advantage. Journal of Modiriate Farda, 18(1), pp. 24-40. Allameh, S. (2012) Analysis of relationship between knowledge management and customer relationship management with customer knowledge management. International Journal of Academic Research in Business and Social Sciences, 2(10), pp. 65-77. Anton, G. (2010) A study of competitive advantage services. In C. A. Brebbia (Ed.). Management Information Systems. Retrieved from www.witpress.com. Appelbaum, S. H. (2010) The competitive advantage of organizations learning. Journal of Workplace Learning, 12(2), pp. 1-20. Azizi, S. (2012) Competetive advantage in e-commerce. Journal of Cement Technology, 51(2), pp. 29-32. Barney, J. B. (2009) Firm resources and sustained competitive advantage. Journal of Management, 17(1), pp. 122-129. Borges, M. (2012) Knowledge management. An overview of European reality. Management Research News, 30(2), pp. 100-114. Bose, R. (2000). Knowledge management capabilities and infrastructure for e-commerce. Journal of Computer Information Systems, 42(5), pp. 40-40. Breyer, R. (2014). Research in marketing. The Journal of Marketing, 13(2), 232-253. Damoiseau, Y., Black, W., and Raggio, R. (2013). Brand creation vs acquisition in portfolio expansion strategy. Journal of Product and Brand Management, 20(4), 268-281. Darroch, J. and McNaughton, R. (2013) Beyond market orientation-knowledge management and in the innovativeness of New Zealand firms. European Journal of Marketing, 373(4), 572-593. Deirdre, O’Loughlin. (2014). A study of the degree of branding standardization practiced by food and drink export companies. Irish Marketing Review, 12(1), 46. Denzin, N. & Lincoln, Y. (Eds.). (2015). Handbook of qualitative research (2nd ed.). Thousand Oaks, CA: Sage. Dibb, S., and Carrigan, M. (2013). Social marketing transformed. European Journal of Marketing, 47(9), 1376-1398. Doole, I., and Lowe, R. (2012). International marketing strategy (6th ed). Thomson Learning. ISBN: 978-1-4080-0. Garcia-Murillo, M and Annabi, H. (2012) CKM. Journal of Operational Research Society, 53, pp. 875-884. Gerber, H. and Geib, M. (2013). Knowledge enabled customer relationship management: Integrating customer relationship management and knowledge management concepts. Journal of Knowledge Management, 7(5), pp. 107-123. Gibbert, M. and Leibold, M. (2012) Five styles of CKM and how smart companies sue them to create value. European Management Journal, 20(5), pp. 459-469. Gorry, G. and Westbrook, R. (2013) Customers, knowledge management, and intellectual capital. Knowledge Management Research and Practice, 11(1), p. 92. Granell, D. H. and Wheaton, J. E. (2014). Online data collection: Strategies for research. Journal of Counseling and Development, 82(4), 387-393. Gusapri, J. (2008) Customer means customer. Quality Digest, pp. 35-38. Gupta, A. (2014) An empirical study of consumer switching from traditional to electronic channels: A purchase-decision process perspective. International Journal of Electronic Commerce, 8(3), pp. 131-161 Hollensen, S. (2010). Global marketing: A decision-oriented approach (5th ed.). Pearson Education. Luo, Y., and Tung, R. (2013). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(4), 481-498. Luo, Y. (2014). Dynamic capabilities in international expansion. Journal of World Business, 35(4), 355-378. McDonald, M. (2014). Marketing plans: How to prepare them, how to use them (6th ed.). Butterworth-Heinemann: Oxford. Nah, F. (2012). Knowledge management mechanism in E-Commerce: A study of online retailing and auction sites. Journal of Computer Information Systems, pp. 42-45. Nysveen, H. and Pedersen, P. E. (2014). An exploratory study of customers perception of company web sites offering various interactive applications: Moderating effects of customers’ Internet experience. Decision Support Systems, 37(1), pp. 137-150. Read More