Apple, Samsung, and Huawei are all playing in a relatively new market, the smartphone market. It is surprising to think that Apple only released their first Iphone ten years ago. And for the last ten years, the smartphone market has been growing rapidly seeing a growth rate of over 75% once in 2010. Finally, these sales are starting to slow down now that the market is becoming more saturated. New features such as waterproof phones, bigger screens, and harder glass are not enough to draw in the same type of growth we have seen.
In addition, new hinted features such as foldable glass and additions to virtual reality are too far away to become a reality in the near future. So what is the future of growth in the smartphone market? Evidence shows that the software might be where the revenue will continue to grow. Apple Store and Apple Services revenue grew by 24% this last year. That’s a number we are more familiar with if we compare it to the small 0.6% growth of the smartphone market.
Experts also say that the smartphone may be seeing a change in its future functionality as well. With Amazon’s Alexa with Echo, Google’s personal assistant, and Apple’s Smarthome, Smartphones are seeing their role changing to the hub of the house.
With all of the features that a smartphone has, it is essentially becoming the universal tool with communicating with surrounding technology.
Samsung is slowly recovering from their Galaxy Note 7 disaster. The Galaxy Note 7 was a larger phone that was well reviewed until a battery problem was discovered. The battery was exploding. This obviously posed many problems and Samsung responded with having to recall three million devices at an expense that reached upwards of five billion dollars. Overall, this was an unintended product positioning that may have affected the way consumers look at Samsung today.
Now, in an attempt to reposition their name back in the positive light for consumers, Samsung has delayed announcing their Galaxy 8 which was usually announced around the end of February at an event in Barcelona. Although they have discontinued the Galaxy Note 7, the wide variety of products that Samsung creates puts their product image at risk. If another debacle does arise, the quality of Samsung in the mind of consumers will deteriorate quickly. Some of the products at risk include televisions, washing machines, and laptops. Obviously, Samsung is now walking on some thin ice.
Nevertheless, they also seemed to bounce back from the battery debacle with strong numbers. Samsung reported their highest quarterly earnings in three years this past quarter with booming sales in smartphone components. A statistic that I did not expect considering how recently the debacle occurred. Cliff Maldonado of BayStreet research says “It could have been a disaster for Samsung, but it wasn’t that bad”.
Obviously, Samsung will be much more careful with its future products in the coming years. The publicity was so bad that some airlines were announcing before flights that any owner of a Samsung Galaxy Note 7 needed to remove the device from the plain immediately. Luckily for Samsung, this notice before every flight has been removed but it is still prohibited to bring the device onto any aircraft.