The current smart phone market is rapidly evolving as these technologies become ubiquitous in our daily lives. It makes for an interesting case study of how the timing and continued development of a product can influence the sustainability of a venture. Smart phone makers and those who support the technology must constantly be on their toes to ensure that they maintain their current market niches while also pursuing aggressive growth through marketing and technological innovation. In general, this competition is thought to provide value to consumers while pushing smart phone makers to remain competitive on pricing. To businesses, the real value in smart phone production is selling the largest volume possible.
These two articles highlight many of the issues which may come into play this year as established players seek to remain profitable. The technologies they have created will be transitioning from cutting edge to commonplace. One expert’s opinion suggests that there will be more incentive to provide common platforms which will facilitate innovation, lower costs, and put smart phones in the hands of the last hold outs.
Much like the operating systems war in the late 1980’s and early 1990’s, there are currently 5 major smart phone OS platforms. Although competition and niche marketing allowed this to be profitable early, network externalities may force future growth in a different direction. The number of common OSs will decrease significantly within the next year or two. It is also very possible that certain producers may be driven out of the market entirely as some smartphone makers growth may be dulled as the market becomes more saturated.
As discussed in this week’s reading, the considerations go beyond simply developing the best product and more to do with retaining customers. An entrepreneur must focus on timing and be selective in the features of a product, all while sustaining a profitable infrastructure around the product. The predictions presented in the articles here are heavily reliant on network externalities which favor compatibility and open source products. However, it is uncertain as to when these effects (very present in Android products) will overpower the emotional appeal of the Apple brand or the high utility offered by Blackberries. Although backed with significant resources, Microsoft’s OS may be too late to the game to gain significant market penetration.
A significant number of Verizon customers using Android phones may prefer iPhones:
2010 smartphone OS market predictions:
http://www.techrepublic.com/blog/tech-manager/4-potential-smartphone-scenarios-for-2010/3021
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