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Smartphone market to reach saturation soon

Posted: 15 Dec 2014 ?? ?Print Version ?Bookmark and Share

Keywords:mobile communication? smartphones? wearables?

Apparently, Apple has taken the same marketing strategy already. In September, the U.S. tech giant launched its new smartphone models, iPhone 6 and iPhone 6+, together with its first wearable gadget, the Apple Watch. Although the phone and the watch are each sold separately and without a discount, it is clear the company is trying to grow its revenue beyond smartphones.

However, not all brands will venture into wearable devices. Kaur says that vendors are taking different routes to drive revenue from areas other than hardware. One interesting model she points out is Xiaomi. According to her, the Chinese brand makes money not only through hardware but also through software, services, accessories and even Xiaomi-branded toys.

Kiranjeet Kaur

Kaur: Vendors take various approaches to drive revenue from areas other than hardware.

"This may be a challenge for pure hardware vendors competing in the budget smartphone market when they compete against players who are able to squeeze margins on hardware but still remain profitable," she says.

Looking for other moneymaking ventures may be the trend, but for now, mobile phone vendors continue to prove value of their products amidst this highly competitive market. And doing so depends much on the consumer and the price segment.

Kaur explains that brand and performance are the key factors at the high-end and in mature markets. On the other hand, vendors have adopted myriad strategies in the lower-end segments, and these include aggressive channel promotions, endorsements, extensive distribution network and quick adaptation to local demand.

"For example, i-Mobile in Thailand quickly built the DVB-T2 enabled smartphone when the TV standard was launched in the country that helped the vendor ramp up its shipments," Kaur says. "Similarly, Cherry Mobile in Philippines has effectively used star endorsements to create appeal in the consumers' mind."

- Stephen Padilla
??EE Times Asia

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