The Smartphone Industry Analysis 2012 Essay Example | Topics and Well Written Essays - 1000 words

The Smartphone Industry Analysis 2012 - Essay Example (Cromar, 2010) The smartphone market is characterized by perpetual innovation and constant new product development. No one company has considerable market share so all the companies are constantly evolving technology in order to remain competitive and not to be driven out. (Brownlow, 2012) Smartphones and tablets have very short product life-cycle due to constant improvement in technology, aggressive pricing and rapid imitation. The barriers to entry in this industry are very high due to patents, high start-up cost, regulations and economies of scale. In the smartphone industry there are many drivers which deliver success and in order to stay in business and maximize value for the company it is important to know what factors guide the company towards excellence. The smartphone industry is very fleeting, therefore companies need to be on their feet and constant research and development is needed to come up with the most innovative features that would appeal to consumers. This should b e in line with the market demand, but innovation is a key competitive force in the smart phone industry. Secondly, the product needs to be reliable and should deliver on its promises. Having a reasonable battery life is important along with good reception. This would make the consumer brand loyal if their expectations are met. Also, good customer support service is mandatory to be competitive. Thirdly, the product created needs to expandable such that it allows third party applications to run and is not very restrictive in nature. Timely software updates also reinforce a brand’s image. Another competitive force would be that the product should be user friendly, and the interface should be designed in order to facilitate consumers and should not be time consuming. Lastly for a company to remain competitive they should have great financial capability in order to respond to the fleeting market demand and have the finance for product development shifts, marketing and acquisitions as well. (Gartner, 2010) One of the best ways of evaluating the attractiveness of an industry and gauging its performance is through the Michael Porter's five force model. This model ensures that a holistic analysis is performed which considers all the possible threats and provides a true picture of the external environment of an industry. The industry according to this model is quite profitable as only two threats are strong and can be removed via good coordination. The smartphone industry is marked with the threat of rival sellers. All the major competitors have pretty much the same strategy and use innovation to excel and make promising products. Also, these companies are financially strong and stable and have immense budgets for promotional campaigns and intense research and development. Another common feature of this industry is the greater ability for acquisitions which dirty dig the share quickly off the android. Because the industry is progressing at a fast rate, some shift ing in market share without long term results can exist. (Analysys Mason, 2012) The threat of new entrants is moderate because the barriers to entry are many. The global distribution of technology is limited to the leading technology companies and they have patented their hall of fame products. The only