Dead and (Black)-Buried: A critical assessment of the global smartphone market

 Yesterday, I was sent this brilliant critical analysis of the global smartphone market by Ryan Cook who is Head of Division at a leading and high performing FE college.

 This really is gold dust for those students who are studying BUSS3 or for anyone who wants an insight into the current situation in the global smartphone market.

 Enjoy:

 In the last couple of weeks, my students and I have been working hard to get up to speed with the rigours of the buss3 syllabus and in particular the skills required to aid the smooth transition from AS to A2. The reality is that all of them appear to have crossed the threshold with apparent ease and some of the work they have produced has been nothing short of wonderful. Tweeting images of their work this last week or so has produced an influx of questions and enquiries from colleagues about what we are doing in class and why we appear to be exploring the marketing topics. 

 My rationale for this is the rather simple held belief that the marketing plan (http://www.tutor2u.net/blog/index.php/business-studies/comments/buss3-the-marketing-plan-in-fewer-than-1000-words) and its constituent parts is the theme from which the entire buss3 paper is derived. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 For many students grasping a comprehension of the difference between functional activities and strategic actions is the biggest cognitive challenge facing their progression from AS to A2. The key to cracking this is a thorough understanding of the marketing plan and its application to real life.

 The great news is that examples are abundant and one industry in particular offers all the drama of a Hollywood blockbuster. This drama does in fact begin not far from the Hollywood hills in the state of California. On the 10th of September Apple unveiled their latest iPhone offerings and with it a window to their strategic intentions. 

 The release of the iPhone 5S and 5C models (http://www.bbc.co.uk/news/technology-24034507) are a statement of intent if ever there was one. Apple are clearly focused upon a corporate objective (stage 1 of the marketing plan) on capturing market share particularly in China where the IOS operating system accounts for a measly 8% market share. Combine this with the fact that Apple’s market share falls significantly behind Android handsets in both the UK and US markets too and suddenly you start to wonder if the iPhone is actually as popular and as impossible to live without as Apple would have us believe! Clearly Apple have been alerted to this alarming fact following their on-going market analysis (stage 2 of the marketing plan) and some strategic urgency has fuelled the latest R&D splurge which has given birth to the latest incarnation of the iPhone. Apple are often cited as a great example of an organisation that are said to be ‘product orientated’ rather than ‘customer orientated’ as they apparently create demand rather than satisfy it. The data simply doesn’t support this and their strategy (stage 3 of the marketing plan) of market development (Ansoff) in China supported by their efforts to further penetrate the UK and US markets points to an organisation which has adopted a more scientific approach to the (“create something awesome and wow the marketplace”) one often mooted by their supporters.

 It could, in fact, be suggested that Apple’s continued ‘success’ is as much a product of ineffective competitors as it is shrewd marketing practices. The almost complete inability of Blackberry, Nokia and Sony to bring anything to the table is becoming something of a laughing matter. On the 21st of September Blackberry announced a planned reduction in their workforce  (http://www.bbc.co.uk/news/business-24184753) of 4500 and a projected loss of £621m! Although sustained poor R&D investment and lack of innovation are often cited as the causes for their continued misfortune it is as much a result of the delayed release of the Z10 model, which represented an error in implementing their marketing strategy (stage 4 of their marketing plan), and the on-going problems with their flagship, and once USP, BBM messaging service. Put simply, Blackberry has been slow and sloppy. 

 Nokia’s turmoil continues and the strengthening of bonds between Nokia and Microsoft, (http://www.bbc.co.uk/news/business-23947921) which once promised to save Nokia from a ‘burning platform’, appears to be a marriage made in hell. As Ballmer and Elop both prepare to exit side stage it will be left to someone else to pick up the pieces of a deal seemingly motivated by desperation and self-preservation rather than reasons of ingenuity and a genuine belief that they are building a market leader of the future. Not so much slow and sloppy, more the blind leading the blind.

 The final twist in this tale of woe comes from Sony. With the imminent release of their Xperia Z1 they will surely be hoping that their fortunes are about to change. Remember it was only a year ago that Sony CEO Kazuo Hirai described the smartphone market as “front and centre” when asked about the importance of the market in Sony’s long-term strategy. The cultural problems at Sony are well known (http://www.tutor2u.net/blog/index.php/business-studies/comments/organisational-culture-strategy-and-performance-in-fewer-than-1000-words) and the biggest manifestation of this has typically been what Miles and Snow would refer to as a ‘reactor culture’. It may be the case that their often sluggish actions may serve to benefit them as during the time taken to produce, what is set to be, another mediocre offering Nokia and Blackberry have continued to shoot themselves in the foot. 

 With all of this playing out in the background Samsung continue to go about their business quietly and effectively. Whilst their rivals battle with internal operational problems, changes of leadership (Apple, Sony, Nokia and Microsoft all within the last few years) and poor decision making Samsung continue to innovate (http://www.bbc.co.uk/newsbeat/23973666) and tighten their grip on the lucrative Chinese market. With this in mind and the fact Android handsets represent 88% of the Chinese market the challenge for Apple, Nokia, Sony and Blackberry looks pretty tough.  Bear in mind that with domestic producers such as XIAOMI (http://www.bbc.co.uk/news/technology-24042226) and Huawei further intensifying the rivalry a fight to the death appears to be on the cards. One thing is for certain, the market won’t sustain the current level of supply. It is therefore down to effective marketing strategy or luck if failure is to be avoided. 

I know which one I would opt for.