Smartphone Industry
Essay Preview: Smartphone Industry
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In the smartphone industry, the threat of rival sellers is strong. There are five major competitors in this industry and all are highly profitable organizations seasoned in the art of innovation and competition. Each of these main competitors is stable enough to use its cash reserves in promotional campaigns or strategic acquisitions to swipe market share from the Android. Since the industry is growing so quickly, some shifting in market share without long term results can exist. (Tudor, & Pettey, 2010)
Less than 3 years ago, RIM faced little to no competition from the likes of industry heavyweights, Google and Apple. Today, the story is different. RIM faces intense competition from Apple and Google, but also from emerging vendors like HTC and traditional device makers like Samsung, Motorola and LG, all late entrants to the Smart phone market, but fast catching up. RIM is not sitting still. It is hitting back with new devices, plans for iPad like tablets, overhauling the much maligned User Interface on its devices, and revamping its OS. In short, RIM is reinventing the company, as it enters a new phase in its evolution from an email device vendor to a soups to nuts end-to-end mobile services and solutions company. While this transition was inevitable considering the fact that the industry landscape has changed so precipitously over the past two years, it needs to move faster into new territories to address emerging market opportunities while delivering workhorse style durable devices that provide exceptional value to consumers and enterprises.
For hardware manufacturers and carriers, although there is a switching cost between different OS, having killer applications is more important than the OS, therefore they are inclined to choose a platform that has better applications, and are willing to switch to a better one if the situation changes. Also, due to the intense competition of cellphone market and its expansion in developing countries, nowadays manufacturers and carriers can only make a small profit from end users. Therefore they can only afford a little cost on the OS. This pushed Google to make Android a loyalty-free product.
For software developers, the popularity of the online application store usually decides their potential profit of creating and selling software for that OS, thus the bargaining power of the price of online store is diverse: Apple has the largest store that can keep their listing price at $99 for each developer, while Google has to set the price at a lower $25, so as to attract more developers.
Rivalry: Intensive
As mentioned before, the market of smartphone OS is growing rapidly, with two dominant players taking up the largest share and several aggressive competitors that have strong capital support. Major competitors are all using the strategy of online application store to provide a better user experience of