Every new generation of mobile technology has resulted in huge disruption with market leaders stumbling, losing position and in most cases never recovering their former glory. Will 5G be any different? Probably not, according to Strategy Analytics smartphone consultants.
The latest report Winners and Losers In a Disrupted 5G Future concludes:
- It is highly likely that the current top 3 smartphone vendors globally (Samsung, Huawei, Apple) will see their share decline.
- With each new generation (GSM, WCDMA, LTE) we have seen major changes in design language and use cases. Generation-led design changes have disrupted the status quo on numerous occasions.
- Nokia peaked in 2G and lost 1/3 of its share in 3G and disappeared in the 4G world.
- Motorola lost four-fifths of its global handset market share in the transition from 2G peak to 3G peak.
- Samsung grabbed opportunity in the transition to 3G, doubled its share, expanded to be a global leader with a “first with tech” brand claim.
- Chinese vendors burst onto the global stage in 4G with Huawei surging to #2 globally with its fast follower, affordable tech mantra.
Strategy Analytics has identified two main groups of vendors in the fight for 5G: Adaptive Local players and Global Scale Seekers. Chris Ambrosio, Director Consulting notes “Adaptive Local Players like Sharp, ZTE and more recently Sony have consolidated cost basis and a smaller, localized market presence. These vendors need to be more agile in how they market their brands and link features and technology to drive local brand value. Being able to align technology and feature choices with mobile operator needs is critical to survival but profits are possible if SG&A costs are managed effectively.
Cliff Raskind, Director Consulting adds “The second group for 5G is Global Scale Seekers. These players like Xiaomi, Vivo and OPPO have expanded their presence beyond local or domestic markets by establishing sales, marketing and distribution resources in enough markets to scale above 80M units and have established profit centers. Xiaomi is cash rich, has strong presence in China and India and Europe and soon will be competing strongly in the Americas with a broad range of smart devices. Deep marketing pockets and best in class consumer insights outside of China will be critical”
Ken Hyers, Director of Emerging Device Technologies comments “Smartphone vendors face a complex transition to 5G and to new foldable, rollable designs simultaneously at a time when consumers are increasingly reluctant to spend $800-$1000+ for incremental improvements. Competition on the basis of technology advantage will be extremely challenging and inevitably short lived without a healthy portfolio of intellectual property holdings. 5G represents opportunities for new vendors to emerge and for long time industry strugglers to reinvent themselves while current market leaders face reinvigorated competition.”