Nokia, BlackBerry, and Apple all enjoyed a period when they dominated the smartphone market. These companies were successful not only because of good hardware. What kept Nokia and BlackBerry dominant for so such a long time was software and a proprietary operating system, with proprietary services supported by a good third party app ecosystem.
While a large number of manufacturers could build excellent smartphones, without an operating system and ecosystem of services and apps to back it up, even the best piece of hardware would be a mediocre device.
Then came Android. Google’s Android is free and open source. It was embraced by manufacturers like HTC, Huawei, LG, Motorola, Samsung, Sony and ZTE. Over the past four years it has developed an ecosystem of services and apps which can only be rivalled by Apple’s iOS. But, unlike Apple’s iOS, any manufacturer can now build a credible smartphone offering by installing Android on it. As growth in the smartphone market is dependent on stronger smartphone adoption in developing countries, Android’s free and open nature threatens to take the smartphone market into uncharted territory.
Knowing the importance of this market, last year, Microsoft relaxed the rules on Windows Phone manufacturers to allow for the creation of the Nokia Lumia 510, a lower cost smartphone designed for emerging markets. Recently, there has been speculation that a cheaper iPhone will be launched this year to try to reach a broader market. But it is not lower cost offerings of established Android manufacturers that Nokia and Apple need to worry about. There are new players on the field.
In Nokia’s last earnings call, Nokia CEO Stephen Elop placed emphasis on what he called the new dynamic. Mr. Elop said “unbranded Android and forked Android players continue to emerge from China and India creating new dynamics both within and increasingly outside of Asia.”
Manufacturers in China build ODM phones. These are marketed as off-the-shelf devices to resellers, who sell under their own brand names. Examples of these players are India’s Karbonn Mobile, Malaysia’s i-Mobile and Cherry Mobile in the Philippines. These companies concentrate on marketing these off-the-shelf smartphones in their home countries, but several have even started to branch out to neighboring countries. There are literally dozens of these new smaller players.
Most of these players are new, or at least new in the smartphone business. They are making brisk sales because of low priced Android devices. Cherry Mobile’s Omega HD 2.0 is an example of how inexpensive these new devices are. For about US$200, the Omega HD 2.0, gives you an Android smartphone which has a 5-inch display. It runs the current version of Android 4.2, Jelly Bean. The 5-inch display is an IPS unit with an HD (720 x 1280 pixel) resolution. Powering the phone is a MediaTek chipset, with a 1.2 GHz quad core processor, and 1GB of RAM and an HSPA+ modem. Performance levels are comparable to last year’s HTC One X with a quad core Tegra 3 processor. The phone is also thin, at just 8.8 mm and is reasonably well built. Less impressive Android phones, are for as little as US$60.
Image Credit: Yahoo News Philippines
Android opened up the field to new set of players. For the consumer, more choices is always a good thing. For the established companies, this new dynamic threatens to push the bigger players out of the low cost smartphone market altogether.