Competitive Strategies of the Smartphone companies in Emerging Markets

Presented by: Arsalan Lodhi

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Outline
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Introduction to Smartphone Definition Smartphone industry Development Industry Evolution: Players Success Factors Introduction to Emerging Markets Define Emerging Markets Characteristics of Emerging Markets Major Emerging Economies BRICS and Four Asian Tigers Strategies of Smartphone companies in Emerging Markets Related Examples

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Smartphone

Built on amobile computingplatform, with more advanced computing ability and connectivity First smart phones mainly combined the functions of apersonal digital assistant(PDA) and a mobile phone orcamera phone

Modern smart phones have high-resolutiontouch screens,web browsers,Wi-Fi, music playersandmobile broadband. Run onmobile operating systems(OS) E.g.Apple'siOS,Googl Microsoft'sWindows Phone,Nokia'sSymbian,RIM'sBlackBerry

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1992 the first Smartphone

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Industry development

Industry development

The widespread adoption of 3G networks and price erosion has resulted in a significant growth of Smartphone in the consumer market.

The two fundamental market trends driving the next-generation Smartphone are Mobile Internet and Mobile Multimedia.

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Smartphone Market Opportunities An in-Depth, Global Analysis of Smartphones, Chips & Operating Systems http://www.fwdconcepts.com/Smartphones/

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Key Players

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 technology company on the planet

Presence in more than 100 countries globally. 5/7/12

Industry evolution: players

Google
Google is in the smart phone market through its Operating system, Android, used in HTC, Samsung etc Recently purchased Motorola Mobility World's leading operating system provider for mobile phones. Android is most popular 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, the company's cash hoard and renewed focus on "mobile" put it in a strong position to lead 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 five people two are still not sure of what smart phone to buy. 5/7/12

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 a decrease of about 30%. Nokia has recently reached a multibillion dollar deal with Microsoft (MSFT) to use its operating system.

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Success Factor
HRA Model of Success Factors

3-Emerging Markets

Constant R & D Effective Marketing and Communication

2-Marketing

Timely entry and emphasis in emerging markets

1- Technology

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Emerging Markets

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Defining Emerging markets

Emerging markets include those which have reached a minimum level 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, emerging market economies are referred to as fast-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 5/7/12

Major emerging economies

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BRIC

Largest economy in South America Well developed agriculture, mining, manufacturing and service sector Amongst the ten largest economies of world Important industries are textiles, chemicals, iron ore, steel and motor vehicles.
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Capital - Brasilia

203.4 million population

GDP growth: 3.5%

BRIC

Largest country in terms of area 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
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Capital: Moscow

143 million population

3.7% GDP growth

BRIC

Fourth largest economic system in terms of purchasing power Development in agricultural, service and industrial sector Increase of 85.1% in FDI Main reasons for booming emerging market

Capital: New Delhi

1.21 billion population

Perfect competition market Higher standard of living Medical facilities infrastructure

GDP growth rate of 8.5%

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BRIC

Biggest economy after USA Predicted to become largest economy in this century Unemployment rate of 4.1% Per capita income: US$ 2000 Slow but steady economic reforms
11.7% GDP growth rate 1.341 billion population Capital: Beijing

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Four Asian Tigers

Four Northeast Asian countries South Korea, China, Japan and Taiwan - have grown into major players in the global information technology (IT) industry but the term Asian Tigers 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 rates and rapid industrialization

Hong Kong and Singapore have become world-leading international financial centers, whereas South Korea and Taiwan are world leaders in manufacturing information technology.

Korea's Samsung Electronics had a 21 percent market share and LG Electronics 9 percent 5/7/12

Four Asian Tigers

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

A vast network of small- and medium-sized suppliers, which enables easy procurement of parts at lower prices, as well as quick and tailored response to clients' orders

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Strategies in the Emerging Markets

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Strategies in Emerging Markets

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Most analysts expect that majority of that growth will be for lower-priced

Strategies in Emerging Markets

offerings in emerging markets. Its a challenge to companies like Apple and

Google 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 its plans expand its market. Attract customers who seek a capable Smartphone, but who are not willing to pay the premium price

Samsung's Smartphone sales grew 600 percent sequentially, due primarily to its low-end products in China and Latin America.

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Lowered Price Offerings

Strategies in Emerging Markets

"Smartphone makers are increasingly moving down the value chain to target the low-end segment and attract mass customers, especially those in China and India," said Lee Seung-woo, an analyst at Shinyoung Securities.

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Lowered Price Offerings

Strategies in Emerging Markets

Low-cost semiconductor technology has pushed down the price of a basic Smartphone to below $100 in emerging markets over the past year.

Outsourcing Technology Sharing CHEAP MODELS VS CHINA COPYCATS

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Emphasis on Price controls

Facebook Partners with Orange to Bring Smartphones to Emerging Markets

To bring cheap cellphones with dedicated Facebook functionality to emerging markets in Africa and Europe. Orange will release three devices with a special "F" button for unlimited Facebook access to 15 countries starting To increase its presence worldwide to people that may not have access to a computer but access the Internet solely through mobile devices. Alcatel's series of Android phones

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Strategies in Emerging Markets

Blackberry was first in the market ,while other high tech companies were trying to imitate the new Blackberrys smart phone features and design, Apple did the unthinkable.

Standardization and Globalization

Standardization gives the advantage to converge its efforts towards the development of specific standardized applications and on the other hand it maintains the customer satisfaction in every place on the globe.

Adapt your Strategies!

Innovation, 5/7/12 Differentiation and redefining

Strategies in Emerging Markets Customer Preferences

Nokia has identified aspects of African lifestyle, such as the love of music and fashion to personalize aspects of individuals into the handsets Marketing Strategies Differentiation& Communication being done in the local languages Pakistan smart ban raha hai ,Aap kab ban rahay ho Product Portfolio and Quality More features being added continuously, Longer talk times, large displays and durable designs Time to Market Billions spent on the launch and carefully planned E.G. Dual Sim by Nokia

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Marketing

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Strategic Alliance with local operators In country manufacturing facilities Local warranties Numerous new sales offices and stores Improved distribution channel

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Market Penetration

References

http://business.mapsofindia.com/india-m

http://www.economywatch.com/internati

http://www.economywatch.com/indianec

http://www.economywatch.com/world_ec

http://www.slideshare.net/guestbaefb5/e

http://www.ntt.com/business_e/feature/g

http://www.ftpress.com/articles/article.as

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http://internationalinvest.about.com/od/g

References
http://www.investopedia.com/terms/b/bric.asp#axzz1mSY3a8A7 http://scotttaylor.eu/strategy-analysis-nokia/

http://www.theatlantic.com/international/archive/2012/02/5-lessons-from-th

http://beta.fool.com/tdalmoe/2012/01/23/smartphone-usage-expands-emer

http://seekingalpha.com/article/287955-4-smart-phone-companies-which-on http://www.mobiledia.com/news/105033.html

http://www.readwriteweb.com/archives/facebook_partners_with_orange_to

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References

http://blogs.hbr.org/govindarajan/2011/05/smart-phone-a-reverse-innov

http://economictimes.indiatimes.com/tech/hardware/samsung-targets-e

http://wearedevelopment.net/2011/12/07/a-success-and-a-failure-in-th

http://readperiodicals.com/201201/2562864001.html#b#ixzz1mTvY6Q

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Thank You
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