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/

    http://www.fwdconcepts.com/Smartphones/http://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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    http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/
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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

    http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/
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    http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/
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    Strategic Alliance with local operatorsIn country manufacturing facilitiesLocal warrantiesNumerous new sales offices and storesImproved distribution channel

    http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/http://www.fwdconcepts.com/Smartphones/
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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