Re­sist­ing the com­modi­ti­za­tion of smartphones

HWM (Malaysia) - - FEATURE -

By he smart­phone busi­ness is no longer the same as be­fore as the av­er­age sell­ing price of de­vices con­tinue to fall and fea­ture sets be­com­ing in­creas­ingly sim­i­lar. Man­u­fac­tur­ers are all adopt­ing stan­dard spec­i­fi­ca­tions ei­ther dic­tated by the chipsets of­fered by low-cost SoC ven­dors or stan­dard parts that pro­vide OEMs with bet­ter cost ad­van­tage. No mat­ter how you look at it, there’s lit­tle dif­fer­en­ti­a­tion re­main­ing in to­day’s main­stream and bud­get de­vices. At the end of the day, the fo­cus is re­ally on price.

But some man­u­fac­tur­ers are not in­ter­ested in rac­ing to the bot­tom with brands that fo­cuses only on bud­get smartphones. They know all too well that once they start to de­scend and com­pete in that mar­ket seg­ment, it’ll be a con­tin­ual down­ward spi­ral to­wards the com­modi­ti­za­tion of smartphones.

Smart­phone man­u­fac­tur­ers like Sam­sung re­cently noted that although mar­ket com­pe­ti­tion is stiff, it would con­tinue to of­fer pre­mium prod­ucts with the use of higher qual­ity ma­te­ri­als, thin­ner unique de­signs and ex­cep­tional hard­ware like higher res­o­lu­tion dis­plays across its port­fo­lio of prod­ucts.

HTC, on the other hand, be­lieves that there are still a lot of room left for unique dif­fer­en­ti­a­tion and firmly thinks that the com­modi­ti­za­tion of smartphones would not hap­pen any­time soon. Not­ing how smartphones are highly per­sonal de­vices, HTC doesn’t think that con­sumers would set­tle for generic-look­ing prod­ucts.

The re­cent launch of the Sam­sung GALAXY S6 and HTC One (M9) demon­strated how both com­pa­nies are try­ing to set them­selves apart from their com­peti­tors with more pre­mium spec­i­fi­ca­tions and greater lux­u­ri­ous feel to the smart­phone’s build. While Sam­sung has fi­nally re­placed its cheap plas­tic fin­ish in its flag­ship se­ries with glass, HTC kept their de­sign DNA and im­proved on its alu­minum fin­ish­ing. Although both com­pa­nies have a very dif­fer­ent ap­proach to their de­sign, they have one thing in com­mon - de­sign and prod­uct per­son­al­iza­tion ranked high on their list of pri­or­i­ties.

Still, smart­phone man­u­fac­tur­ers are not rest­ing on their lau­rels. Pres­sured by dwin­dling sales and low­ered profit mar­gins, man­u­fac­tur­ers are now look­ing be­yond smartphones for the next source of rev­enue. Popular brands like Sam­sung, LG and Sony have al­ready started ven­tur­ing into the smart­watch space while Ap­ple has only just re­leased the Ap­ple Watch this month. How­ever, that’s not the only trend that th­ese com­pa­nies are bet­ting on.

Be­yond smart­watches and fit­ness bands, man­u­fac­tur­ers are now eye­ing the lu­cra­tive yet un­tapped mar­ket for VR head­sets. Sam­sung is al­ready on their sec­ond it­er­a­tion of the Sam­sung Gear VR that works only with the Sam­sung GALAXY S6 while HTC an­nounced the HTC Re Vive, a new VR head­set tar­geted specif­i­cally at gamers. One thing in com­mon with th­ese two com­pany’s strat­egy is that they are not go­ing into this alone. Sam­sung is build­ing its Gear VR head­set in col­lab­o­ra­tion with Ocu­lus VR while HTC is part­ner­ing with Valve. The ap­proach is not sur­pris­ing be­cause both tech­nol­ogy part­ners have the tech­ni­cal know-how and con­tent to sup­port the prod­ucts while it’s ob­vi­ous that Sam­sung and HTC are only play­ing the role of a hard­ware de­vel­oper and man­u­fac­turer. Still, it’s not an un­com­mon part­ner­ship given how An­droid smartphones heav­ily de­pend on Google for its soft­ware and apps ecosys­tem.

Be­sides Sam­sung and HTC, Sony is also in­vest­ing in the VR mar­ket with Project Mor­pheus. An­nounced early last year, the prod­uct has been work-in­progress with a launch date set some­where in 2016. It’s not clear if the prod­uct is go­ing to be ex­tended be­yond gam­ing on the PS4 but un­like Sam­sung and HTC, Sony is en­ter­ing the VR mar­ket by it­self.

There seems to be no lack of op­por­tu­ni­ties and prod­uct di­ver­si­fi­ca­tion seems to be the main strat­egy for smart­phone man­u­fac­tur­ers to re­main rel­e­vant in this com­pet­i­tive mar­ket­place.

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