Guest Post By Richard Webb , Directing Analyst, Mobile Devices, at Infonetics Research
As the analyst responsible for tracking the mobile broadband devices market at Infonetics Research, I have been asked to participate as a judge for the smartphones category at the Mobile World Congress industry awards taking place in February 2012.
As I considered where to place my vote, I had to consider each phone’s functionality, aesthetic appeal, performance, value-for-money, and other criteria. This became increasingly tricky, because not all smartphones are trying to appeal in the same way to the same user. This sounds obvious, but of late, differentiation in this segment has become much more marked due to the market entrance of a new breed of smartphone.
A Segment Emerges: The Low-End Smartphone
Previously, all the focus of innovation in the smartphone market had been at the top end: making smartphones even smarter, faster, flashier . . . and more expensive. Functionality comes at a price and the drive from vendors had been to exceed the capabilities of its competitors, confident in the belief that early-adopters would not be able to resist.
But this focus has changed. Not completely, because of course there is still much attention being paid to making smartphones better than ever: the dream of the ‘ultra-smartphone’ (whatever exactly that might mean) still spurs vendors on to new heights. But there is now a discernible counterpoint to the likes of the iPhone and the Galaxy: the ‘low-end’ smartphone.
With the emergence of smartphones such as the Huawei Blaze, Motorola Defy and the ZTE Skate, launched this year at price-points around $150, the focus is no longer on maximizing functionality, but optimizing functionality: the low-end smartphone doesn’t try to do everything, but instead does enough. Enough, that is, for people for whom the array of capabilities of smart smartphones, and also the cost, is excessive. The low-end smartphone competes on price, not on being a cutting-edge must-have gadget.
This shift of emphasis acknowledges there is a degree of overkill in the segment – many smartphones are capable of far more than we ask of them. But higher functionality might be equated with lower user-friendliness – smarter phones are fine, but if we do not use all the functionality we are paying for, does this represent value?
Barriers to Mobile Broadband Adoption Are Lowered
Cheaper smartphones are appealing. Not only do lower prices bring these smartphones into the price range of a larger potential market, but less functionality actually makes them appeal more. Focusing on a basic range of features (email, browsing, MP3, photos, applications) can be a good thing; these are the features most used by the majority of smartphone users. High-end features such as 3D video are not for everybody, and over-complexity can be a barrier to adoption.
Low-end smartphones should combine well with the emergence of shared data plans to drive mobile broadband adoption. In a recent whitepaper by Infonetics Research (All in the Family: How Shared Data Plans are Driving New Requirements, October 2011 ), we noted that mobile operators will offer plans giving users a ‘pool’ of data to be shared between multiple devices, or multiple users, to give greater flexibility in terms of usage and devices.
As smartphones get simpler and cheaper, users want more devices, but not necessarily more data plans. Not only are separate data plans per device expensive, they also frequently give users a higher total data allowance than they can actually use; however, shared data plans and low-end smartphones share a synergy that counters this: value-for-money.
Infonetics forecasts that approximately 15% of all smartphones will be sold as part of a shared data plan by 2015. It will become an increasingly important method for selling smartphones, particularly for new mobile broadband adopters looking for simplicity – exactly the demographic for whom low-end smartphones might appeal.
One Day, All Phones Will Be Like This!
This is not a ‘dumbing-down’ of the smartphone segment, just a focus on optimizing smartphones in terms of the right functionality at the right price point for the right market segment. At some point all mobile phones will be smartphones. With low-end smartphones driven by Huawei and others, we are certainly getting closer to that reality.
As for which smartphone will win the Mobile World Congress award . . . find out in Barcelona in February 2012!
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About Richard
Richard Webb is a highly sought-after analyst, consultant, writer and speaker who has been covering telecom markets for 13 years, including WiMAX since shortly after its inception in 2001, making him one of the industry’s foremost WiMAX experts. As a directing analyst with Infonetics Research, Richard authors and co-authors numerous market share and forecast reports, service provider surveys, and Continuous Research Service (CRS) opinion pieces on WiMAX, LTE, 4G, mobile broadband, FMC, microwave, mobile backhaul, and phones and devices (mobile, FMC, WiFi, smartphones).