The smartphone market in the US basically boils down to three companies – Apple, Samsung and everyone else. And everyone else may be about to shrink.
Recently, a report claimed that LG can close down the smartphone business, referring to years of losses for that division of the electronics giant. That report appeared shortly after LG made a splash at this year’s CES show a rollaway phone suggests how difficult it is for smartphone manufacturers other than Apple and Samsung to capture persistent interest from US phone buyers.
The ups and downs of device manufacturers will normally be of little interest to those of us who just want to find best phone out there. Who cares if Phone Maker X struggles to break through as long as I can get a new iPhone or Galaxy S model so often?
But even companies with lists of Apple and Samsung need rivals to push them forward. And you could argue that the two-horse show, which is the American smartphone market these days, allows a sense of similarity to creep into the latest flagship devices.
Take Apple̵
To be sure, you will not confuse the iPhone 12 with the Galaxy S21 soon. But some of the different factors between the two smartphone brands are starting to disappear.
Apple-Samsung duopoly by numbers
No one will dispute the fact that Apple and Samsung are the leading phone manufacturers in the United States, according to figures from Counterpoint research, in the third quarter of 2020, Apple had a market share of 40% to Samsung’s 30%. The second largest player was LG, with a share of 13%, while other phone manufacturers accounted for 11% of the market.
We do not have figures for the fourth quarter yet, but you would think that Apple’s share would only grow, given that the company liked record telephone sales the last three months of the year driven by the release of the iPhone 12.
“Smartphones are a mature product category, and the US market has been in a duopoly with Apple and Samsung for years,” said Avi Greengart, founder and lead analyst at Techsponential. “This is not ideal for consumers, but both companies are under significant competitive pressure in markets outside the United States, and it helps protect consumers from stagnation.”
Handset manufacturers are competing globally, and competition remains healthy.
– Tuong Nguyen, Gartner
In fact, when you consider the whole world, Huawei is the second largest phone manufacturer, squeezed between Samsung and Apple. And other companies together have the largest share of the global market, according to figures from research firm IDC. “The bigger picture is that handsets are competing globally, and competition remains healthy,” said Tuong Nguyen, a senior lead analyst with Gartner.
There is another factor that hangs over the US phone market, where many still buy their devices through the phone operators that offer their wireless service as opposed to picking up the best unlocked phones. “US operators also play a strong porter role. As much as they want alternatives to Apple and Samsung, they have also not been willing to open their shelves to Chinese suppliers,” said Greengart.
Competition among budget phones
Apple and Samsung may ask for the most attention for people looking for flagship phones, but there is one segment of the market where they are overshadowed by other players. Midrange phones have been lively in recent years, as phone manufacturers try to attract budget-minded customers.
“We see more alternatives to lower price points,” Greengart said. The iPhone SE is Apple’s cheapest device at $ 399, but Apple has not gone any lower in terms of prices, Greengart added while “providers such as TCL, OnePlus and Google are trying to expand the market for medium-sized devices.”
Motorola and Google have been particularly successful in making waves. Motorola’s affordable G-series with phones has aroused great interest from consumers by focusing on specific features such as battery life in case Moto G Power. Google’s Pixel flagship had not managed to attract much audience before the company rolled out A-phones – first Pixel 3a, and so Pixel 4a – which delivered high-end camera performance at a lower price.
This has been the secret for phone makers who want to escape the long shadow of Apple and Samsung. How many premium features can you squeeze into a phone while keeping the overall price competitive in relation to what market leaders charge? OnePlus’ entire business model seems designed around this whole point, both with its flagships, but especially with the affordable OnePlus Nord Phones started rolling out last year.
Can phone manufacturers still innovate?
This is a sign that there is room for telephone manufacturers to establish their own devices, even though the flagships iPhone and Galaxy consume a lot of oxygen in the smartphone area. And that may just push Apple and Samsung to keep finding new features and improvements for their phones, even though the smartphone market is quite mature at this point.
None of the companies want to be branded showing step-by-step improvement from their previous models, nor be a step or two behind the competition.
– Ramon Llamas, IDC
“Both [Apple and Samsung] “Repeat over and over again how much faster their processors are, how much bigger and brighter their screens are, and how much more sophisticated their cameras are,” said Ramon Llamas, research director for mobile devices and AR / VR at IDC. None of the companies will be branded showing gradual improvement from their previous models, nor be a step or two behind the competition. “
Phone screens are a good example of where market leaders have tried to elevate the user experience, especially in the case of Samsung. Last year Galaxy S20 introduced 120Hz refresh rates to Samsung’s flagship, and subsequent releases have seen the company add dynamic updating that adjusts depending on the task you perform.
Faster refreshing screens mean smoother scrolling and a better overall experience, forcing Apple to respond in kind. In fact, refreshing screens are reportedly on the feature list for iPhone 13 scheduled for release later this year.
Phone manufacturers have also tried to make their mark with cameras. Newer Galaxy phones have seen Samsung put up the megapixel rating on the main sensor – it Galaxy S21 Ultra has a 108MP camera as its primary shooter – while increasing the zoom capabilities of the camera phones. Apple, in turn, has emphasized software enhancements, introduced and enhanced features such as Smart HDR, which enhances photos you take even in challenging lighting, and Deep Fusion, which evokes the finer details of photos.
Of course, you can make the case that the camera enhancements in iPhones and Galaxy devices may not have come so quickly without Google putting pressure on Apple and Samsung. Although Pixel phones may not have a large share of the market share, they have undoubtedly introduced many new opportunities for mobile photography, with the latest Pixels ranking among best camera phones. Apple and Samsung would certainly be motivated to upgrade the cameras every year without Pixel, but the extra competition certainly does not hurt.
The prospects for smartphone competition
Therefore, consumers may be forgiven if they are a little worried that the dominance of Apple and Samsung may reduce the pace of innovation in the smartphone market. Progress will still be made, but it is a question of how quickly they will come without the threat of widespread competition.
“We have reached a point in this market where innovations have come step by step,” said Gartners Nguyen. “The next big use case / application is what will change this dynamic – much in the same way that smartphones changed the mobile phone market significantly. The million dollar question is what the application or combination of applications will be.”
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