The global smartphone market is essentially made up of three companies – Apple, Samsung, Huawei, and everyone else. And it will shrink.
We recently learned that LG may be leaving the smartphone business, pointing to years of losses in this division of the electronics giant.
The ebb and flow of device manufacturers is usually of little interest to those of us just looking to find the best phone. Who cares if manufacturer X has problems standing out as long as I can buy a new iPhone or Galaxy S model every now and then?
Even companies with a history of Apple and Samsung need rivals to move forward. And with the troubles Huawei faced due to the U.S. ban, competition is disappearing at a terrifying rate.
Let’s look at Apple’s decision a few years ago not to include the headphone jack on its new iPhones. Samsung resisted this trend in its own flagships – until it gave way. Now we haven’t found any Galaxy S or Galaxy Note models with a headphone jack. The current Galaxy S21 is delivered without microSD card slots, which Apple does not have on its iPhones either. And after Samsung criticized Apple’s decision not to include a charger in the iPhone 12, Samsung did exactly the same with the Galaxy S21.
Right now it’s difficult to confuse the iPhone 12 with the Galaxy S21. However, some of the differentiators between the two smartphone brands are gradually disappearing.
In this article you will find:
The Apple-Samsung duopoly in numbers
Nobody denies the fact that Apple and Samsung are the top phone manufacturers. According to CounterPoint Research, Apple had a 40% market share in the third quarter of 2020 versus Samsung’s 30% (in the US).
(Photo credit: Counterpoint Research)
We don’t have fourth quarter numbers yet, but Apple’s share is tending to grow as the company posted record phone sales in the last three months of the year due to the launch of the iPhone 12.
“Smartphones are a mature product category and the US market has been in a duopoly with Apple and Samsung for years,” said Avi Greengart, founder and chief analyst at Techsponential. “This is not ideal for consumers, but both companies face significant competitive pressures in markets outside of the US and are helping to protect consumers from stagnation.”
When devices are in competition worldwide and the competition remains healthy.
– Tuong Nguyen, Gartner
If we look at the overall results, Huawei is the second largest phone maker between Samsung and Apple. And other companies have generous portions of the global market, according to the analysis firm IDC. “The big picture is that device manufacturers around the world are competing and the competition remains healthy,” said Tuong Nguyen, senior analyst at Gartner.
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Fierce competition on low-cost cell phones
Apple and Samsung may have the most attention from users looking for high-end smartphones, but there is one market segment where these manufacturers are overshadowed by others. Mid-range phones have been in the red for several years as phone manufacturers seek to attract budget-conscious buyers.
“We’re seeing more options with lower prices,” said Greengart. The iPhone SE is Apple’s cheapest device for $ 399, but Apple hasn’t cut prices, Greengart added, as “vendors like TCL, OnePlus and Google try to expand the market for mid-range devices.”
This was the secret for phone manufacturers looking to escape the shadow of Apple and Samsung. Get maximum premium features in a phone while keeping the overall price competitive against the market leaders. The entire OnePlus business model seems to be designed around this point, both with its flagships and, in particular, with the affordable OnePlus Nord that launched last year.
Can phone manufacturers still be innovative?
This is a sign that phone manufacturers have room to innovate with their own devices, despite the iPhone and Galaxy flagship leading the way in the smartphone space. This could lead Apple and Samsung to keep looking for new features and improvements for their phones even though the smartphone market is quite stagnant right now.
Neither company wants to be a step or two behind the competition.
– Ramon Llamas, IDC
“Both [Apple and Samsung] Highlight how fast their processors are, how big and brighter their screens are, and how sophisticated their cameras are, “said Ramon Llamas, research director for mobile devices and AR / VR at IDC.” None of the companies want to be incremental or a step or two behind the competition. “”
The phone screens are a great example of how market leaders are continuously trying to improve the user experience, especially in the case of Samsung.
The prospects for smartphone innovations
Because of this, we should be a little worried that the dominance of Apple and Samsung could slow the pace of innovation in the smartphone market. Advances will happen, but it’s a matter of how fast they will arrive if there is no real competition.
“We have reached a point in this market where innovations have been gradually introduced,” said Gartner’s Nguyen. “The next big use case is what will change these dynamics – just as smartphones have dramatically changed the market for mobile technologies. The question is what the application or combination of applications will be.”