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Ofcom says mobile contracts should ditch inflation-related price rises

Ofcom says mobile contracts should ditch inflation-related price rises

UK telecoms regulator Ofcom wants to ban inflation-related rises in phone and broadband contracts. Instead, it says any potential mid-contract price rises should be set out in pounds and pence.
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Global smartphone market is set for recovery, says new forecast

A new forecast from research specialists Canalys shows the smartphone market is set to recover next year. Worldwide shipments declined by 12% last year but that decline is expected to slow to 5% this year.
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Vodafone and Three plan to merge their UK businesses

Vodafone and Three plan to merge their UK businesses

New Hutchison/Vodafone network would be biggest UK operator

Vodafone Group plc and CK Hutchison Group Telecom Holdings Limited have agreed to combine their UK telecommunication businesses, respectively Vodafone UK and Three UK. The merger will create a large new network operator to compete with Virgin Media O2 and EE.
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UK mobile payment service Paym to close in March 2023

UK mobile payment service Paym will close on 7th March 2023. The service, which allowed users to make and receive payments using their mobile phone numbers, was launched in 2014.
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Qualcomm legal action moves forward in the UK

Qualcomm legal action moves forward in the UK

Which? seeks payout for Samsung and Apple smartphone owners

Consumer protection organisation Which? has been given permission by the UK's Competition Appeal Tribunal to represent Apple and Samsung smartphone buyers in a legal case against chip manufacturer Qualcomm.
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Opinion Articles

Friday, April 18, 2014

Smartphone innovation is slowing down, as Samsung struggles to differentiate

Lawrence Lundy of Frost & Sullivan writes:

While the Galaxy S5 is an evolutionary product, there is not enough in there to make people upgrade from the 4. It doesn't push the envelope in any real way; we are in a sort of stasis now when it comes to smartphone innovation. We are going to see sustaining improvements as the market reaches maturity. That is not to say that smartphone innovation is finished, but much of the innovation is going to come from the introduction of sensors into the phone, and the improvements in software, and how the phone will interact with the range of wearable devices. The innovation will move away from hardware towards the kinds of services and platforms that are enabled on the phones. Services such as ordering taxis, mobile payments, and location-based services will add value on top of the smartphone platform.

High-end - Extreme pressure from Apple, less differentiation
In the premium segment, Samsung's scale and supply chain strength is less of an advantage. The key to success in this segment is differentiation, and as the market has matured it is less about features and more about design and brand. As competitors such as HTC, Huawei and ZTE catch up quickly on design, brand differentiation is critical, as well as the omnipresent Apple, its success with the premium line comes down to a huge marketing budget and a huge spend across the channel.

Samsung are now completely unable to differentiate on the software side with Google driving Android consistency. 25% of Android handsets sold in China last year did not include Google services, and therefore were not as valuable to Google. The company is therefore preventing fragmentation of Android, making it even harder for Samsung to truly differentiate itself.

Low-end - BOM falling to less than $20
Margins are coming under continuing pressure and price leadership has been difficult to maintain in emerging markets with OPPO, Wiko, Micromax, all producing handsets in the $100-200 segment. The bulk of Samsung's business, despite the high profile nature of its Galaxy line, is in the mid to low end. This is where Samsung is losing share as other cheaper manufacturers build capacity and experience, and can utilise lower labour costs. The bulk of growth in the market will come at the $200 and less price points, and these segments are simply less profitable than the high-end. For Samsung this means increasing pressure on margins.

Long-term - Value and profit will be captured higher up the stack with apps and services
A long term view would ask where does Samsung see itself in the value chain in the internet of things. Profit will be captured at the data and app layer rather than the hardware layer which is where Samsung's competitive advantage lies. The proliferation in internet-enabled devices will offer vast hardware opportunities for Samsung, especially with its expertise manufacturing hardware such as refrigerators, washing machines, and TVs. Samsung already has the largest portfolio of hardware, and it has a huge opportunity to connect these and really add value for the customer. However, Samsung does not have the internal software and machine learning capabilities to provide best-in-class solutions in the post-mobile world.

Lawrence Lundy is an ICT Consultant for global consultancy Frost & Sullivan.
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Recent Podcasts

Mobile World Congress, manufacturers, mergers and much more

Podcast - 5th March 2014

This week's programme begins with some of the biggest news stories that came out of Mobile World Congress.

Iain, James and Mark then move on to the other headlines from the past few days, including Boeing's secret agent smartphone, Apple's plans for mobile in-car entertainment, a new structure for Telefonica and new technology for mobile payments.

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Voice-enabled mCommerce with Tony Ballardie of Capito Systems

Podcast - 28th February 2014

London-based Capito Systems won a place on this year's Smart UK Project shortlist, guaranteeing them entry to Mobile World Congress 2014. And when they arrived, they won the international Barca Starta competition as well.

In this podcast we talk to CEO Tony Ballardie about the company’s 'natural language' voice control, which can be integrated into almost any mCommerce application... from gambling to ticket purchases.

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Dr Kevin Curran talks about the future of mobile technology

Podcast - 27th February 2014

Dr Kevin Curran, Reader in Computer Science at the University of Ulster, joined us during Mobile World Congress to offer his well-informed opinion about trends in mobile technology.

We talked about a wide range of topics, including battery life, disposable tablets, wearables, m-health, 4G fragmentation, connected furniture, M2M security, the rise of video and the IEEE.

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Mobile World Congress 2014: an introduction

Podcast - 25th February 2014

James Rosewell and Mark Bridge report from Mobile World Congress 2014 in Barcelona.

In this podcast they talk about all the major mobile manufacturer announcements, including Nokia's new Android-based phones and Sony's newest high-spec devices.

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James Corden at the Global Mobile Awards

Podcast - 25th February 2014

One of the highlights of Mobile World Congress is the Global Mobile Awards - and this year the event was hosted by James Corden: actor, comedian, TV presenter and one-time promoter of Windows Phone.

Here's how he introduced the ceremony, with jokes about Facebook, BlackBerry, Steve Jobs and the gestures required to control an iPhone.

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