A Case Study of Mobile Phone Companies
- KAzI NAJIB ASHrAf
- Chief CreAtive OffiCer At PlAYtOrium
- BLOGGEr | INNOVATOr
i ventured into the wonderful world of mobile phones in 1998 when my mentor and friend helped me get a job interview with Motorola. it went great, and I was shortlisted for the final selection. Motorola was the shining star of the mobile world at that stage with its Star Trac flip phone, a runaway success that saw people would queue up for the beautifully crafted device; i did not get that job then, but looking back it still sends a chill down my spine thinking over the sharp rise and fall of those inspirational and aspirational “Mobile brands” that happened within a decade. i ended up working for another great company, siemens Mobile, but we were always a second tier brand in the market.
the market leaders during the late 90’s were ericsson, Nokia, and Motorola. back then, the traits of a great device were:
- small size (ericsson was a master of this
- craft)
- Friendly Menu (Nokia) / ericsson Mobiles
- had the worst user experience
- Common Charging Pin (Nokia)
- design (Nokia and Motorola)
- Color display technology (samsung)
those who were around the days of plenty would remember sony, lG, Panasonic, alcatel, sharp, siemens, sagem, and benQ to name a few. these brands were targeted towards certain markets and were considered second-tier brands.
somehow, some of these companies lost touch with consumers and had to merge in order to survive; sony-ericsson and benQ-siemens were a result of mergers. others just disappeared altogether – alcatel, sagem, Panasonic and others shut down business. benQ-siemens couldn’t survive a year primarily due to the clash of taiwanese and German cultures, and sony ended up taking over the sony-ericsson venture. No one was really bothered about the fact that the first color display and slider phone was invented by siemens, and the great r&d culture of the organization ended up spreading over the entire industry.
Motorola became a victim of its own success after the launch of its raZr series of products during its peak in 2006, the company had a 29% global market share, breathing down Nokia’s neck (who then occupied 32%). Motorola lost this share in a mere 2 years, and ended up disappearing from the competitive arena altogether because they just couldn’t evolve their design beyond the raZr form factor. a new phenomenon of standalone MP3 players started creeping into the market, and suddenly apple made an appearance with the iPod. however, the MP3 player market was still a niche at the time, and people did not pay attention to it as a major game changer.
WHAT HAPPENED TO THE MOBILE BUSINESSES?
brands started disappearing and margins thinned out. Rather than twenty-five, there were just a handful of brands left to trade. Many companies went out of business while others diversified, and then something magical happened.
THE SMART PHONE ERA
symbian became the top name in the game, followed by blackberry, android, Microsoft and apple. Nokia, sony-ericsson, Motorola and a few other manufacturers made a wild bet on symbian and lost out badly, eventually sacrificing themselves altogether. the giants of yesterday were a thing of the past, and no other industry saw the rise and fall of brands as did the mobile telephone market.
THE SHOW STEALERS
when the dust settled, blackberry, apple, android and Microsoft remained. the world of mobile phones suddenly became flat, and the focus shifted from design to the operating systems. blackberry did great for a few years and then collapsed under their own self-importance as if everything they did was good for humanity and nothing could ever replace their business users. the bbM messaging platform also became a hit among younger audiences. riM, the parent company of blackberry somehow forgot about the growing importance of apps and the changing market that was shifting towards touch screen devices. all of blackberry’s touch screen phones were a disaster, however, eventually bringing the whole company face down.
in the meantime, windows bought Nokia mobile to lacklustre market results, and consequently is still licking its quite expensive wounds.
the game rests with apple and and Google now.
apple is trying its best to convince the world that the iPhone 7 is somehow different from its predecessor, while Google, with it’s insanely popular android operating system, stands laughing at every other mobile brand like samsung, lG, htC, sony, huawei and white labels. No matter which android device you buy, it provides the same functionality and performance and the only difference being processor speed, camera and size of the display. even blackberry has announced an android device, which is like having apple announcing a windows device. weird stuff.
WHAT ‘S HAPPENING TO THE BUSINESS HOUSES DEALING PRIMARILY IN MOBILE DEVICES?
brands have shrunk further and margins have catastrophically eroded, forcing more and more businesses to close down. Mobile phones became a commodity quite a few years ago and the companies that failed to realize the changing trends kept losing and fading like Motorola and their ilk.
WHAT’S NEXT?
this is another turning point in the history of this technology where a few more brands may meet their logical end in the next year or so, driving more people and brands out of business.
this is now a war between ios supporting only one device, the iPhone, in the $550-750 price range, and android with a multitude of devices ranging from $30-700. its anybody’s guess to what the mobile landscape will look like in a few years’ time. either apple has to open the ios to more manufacturers or it may shrink to nothingness as there is an extent to which you can play with one flat screen device. Consumers also have a short memory span as explained above and would not hesitate to switch their allegiances to an upstart brans. like Nokia, apple could be buried by the sands of time.
CONCLUSION FOR THE TRADEr
Diversification in the mobile software ecosystem is the answer to any organization depending completely on mobile handsets. it is not about the body, but the soul of the device now. Marketing activities, promotions, and dealer programs have to revolve around apps. Network operators, in terms of data services, dealers, and retailers have to jointly provide a winning proposition to the end user in order to win their trust and to retain them. Failing to move in this direction would see a correction in the market that would have irreversible consequences.
today we are not really concerned with the brand of everyday goods that we use, and unless the mobile industry realises this fact, it will not matter to consumers whether or not they purchase a mobile device from the same aisle of the supermarket as the cooking oil.