These signs all indicate that as an industry, smartphones have begun to mature, and companies with first-mover advantages have become increasingly unable to obtain excess dividends. In other words, the freshness of consumers has passed, and while demand does not change, it will be more sensitive to price factors. Like the high-end PC market in the past, the mobile phone market will move towards average profits and even losses as the profit-making period ends, until the next epoch-making innovation emerges.
Apple and Samsung occupy the top of the industry chain and take almost 100% of the profits. Of course, it is abnormal. It depends on when the abnormality can be broken. Now, this time is coming. Apple seems to have been aware of the crisis since last year, so it only has plans for a cheap iPhone, and Samsung ’s penetration into the lower end of the industry chain has never stopped. While not wanting to give up the high-end market, it is also staring below. This is not so much an ambition of the two companies as it is a preparation for their future challenges.
The high-end smartphone market is a piece of fat that everyone wants. After Apple and Samsung successfully killed HTC and Nokia, the challenge is not smaller but bigger. Because the profit margin of the entire industry chain is moving down, some manufacturers with certain strengths, such as Huawei, are actively penetrating upward at lower prices. If Apple and Samsung do not actively defend against this trend, they will be at a disadvantage in future competition. Consumers ’price sensitivity is sometimes obscured by the aura of innovation, but most of the time, people still care about whether prices are cheaper.
The Chinese market will become a decisive force for smartphones in the future, because smartphones in China have passed the cottage period and industrial upgrading has been carried out to a certain extent. Today, at least five Chinese companies are targeting Apple and Samsung, and they will face fierce confrontation with the two in the mid-to-high-end market. The direct consequence of the competition is that the price will not be able to sustain and the high-end smartphone market will shrink in the future. It was even eliminated.
When Huawei, Lenovo, Xiaomi and other companies continue to introduce innovative products, and the price is only half of Apple and Samsung phones, what will happen? Of course, users who like Apple and Samsung products will still buy their favorite brands, but those incremental users in the smartphone market will consider more in terms of cost performance, and the consumer concept will be more mature. The current leader in the high-end mobile phone market, Will increasingly lose control of the new generation of consumers, thereby losing long-term development momentum, especially for manufacturers like Apple.
The highest-end and lowest-end aspects of the entire mobile phone market seem to be of little relevance, but they actually complement each other. Low-end, high-quality and low-cost smartphones will have an effect on the price of the upstream high-end market. As the hardware continues to update and the minimum prices continue to drop, the high-price guarantee strategy adopted by Apple and Samsung will eventually fail. Samsung and Apple, no one has the courage to give up the benefits that can still be obtained today and move to the downstream, which will bring more space and opportunities to other manufacturers in the market.
Apple and Samsung are losing their advantages in the Chinese market. Apple ’s market share has declined in the past few years and is now stable at less than 8%. Samsung ’s market share in China is also less than 20%. The implication of these figures is that the rise of domestic manufacturers will inevitably have a major impact on Samsung and Apple, and will even ruin the concept of high-end smartphones.
As a mass consumer product, smartphones are divided into high-end and low-end from the market level, which is not rigorous in itself and is a product of marketing strategy. Just like in the PC era, the hotspot people still pursue is technology and innovation. When the industry is formed, the amount of innovation will suddenly decrease. At this time, the competition is only the price and performance of the product. Everyone will work together towards better performance and lower prices, until this kind of product increases in popularity, but it is not so high in people's eyes, out of reach.
From this perspective, it can be inferred that Apple and Samsung will not adjust their strategies this year and forcefully enter the downstream of the industrial chain, and the future road will become narrower and narrower. Time will prove that consumers are far less loyal to brands than mobile phones in terms of prices.
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