The following is a summary of the article:
The smartphone has been reduced from the old technology product upstart to the current mass product
In the past five years, smartphones that can use applications and surf the Internet have experienced leaps and bounds, and the industry generated sales of $ 293.9 billion in the past year alone. At present, the number of smartphone users worldwide has exceeded 1 billion. Since more than half of mobile phone users already use smartphones in developed countries such as the United States, and consumers in emerging economies such as China tend to have more affordable smartphones, the demand for high-end smartphones is weakening.
According to estimates by market research agency IDC, the average price of smartphones has dropped from US $ 450 to US $ 375 since the beginning of 2012. The price reduction has threatened the revenue and profit margins of leading manufacturers such as Apple and Samsung, and Nokia, Blackberry and other manufacturers who hope to turn over through the new machine are even more miserable. However, later competitors such as Huawei and Lenovo, which are leading low-end brands, benefited from this.
Michael Morgan, a senior analyst at market research firm ABI Research, said: "The good days of the high-end smartphone market are long gone. Chinese companies that are well versed in low-margin survival are already ready for the upcoming market situation Ready for the game. "
Stephen Dukker, the former CEO of cheap PC supplier EMachines, said that the decline in the average selling price of smartphones is similar to the PC industry in the 1990s. According to IDC data, millions of consumers at that time wanted to experience the Internet, so they bought cheap PCs from other manufacturers such as EMCines, which reduced the once stable PC price from $ 1898 in 1996 to $ 1026 in 2002.
A little chill
Apple and Samsung, which rely on the production of high-end smartphones, have already felt a chill in the market. In June, as analysts lowered sales expectations for Samsung's new flagship smartphone Galaxy S4, its market value subsequently evaporated by $ 25 billion, and this loss even exceeded Sony's market value. The Galaxy S4's bare metal price is around $ 630.
Kevin ResTIvo, an analyst at IDC, said the market is now focusing more on prices.
Taiwan ’s largest smartphone maker HTC ’s second-quarter sales and profits fell short of analysts ’expectations, mainly due to disappointing sales of its latest flagship smartphone, HTC One. HTC One bare metal is priced between $ 600 and $ 700. On July 12, major operators lowered the selling price of the poorly sold BlackBerry's latest model, the Z10, from US $ 200 to US $ 50, and the model was only released in six months.
iPhone is no longer crazy
Apple will announce its third-quarter results on July 23. According to analysts, its revenue is expected to be the same as the same period last year. The main reason is the decline in iPhone sales. If it is as expected by analysts, Apple will record its worst performance since the second quarter of 2003.
T. Michael Walkley, an analyst at market research firm Canaccord Genuity, last month lowered its iPhone sales forecast for the 2014 fiscal year from 18.1 million to 17.3 million. Apple spokeswoman Natalie Kerris declined to comment on iPhone sales.
Lower prices and products with lower profit margins are starting to weigh on Apple ’s profitability. According to market research firm ISI Group analyst Brian Marshall (Brian Marshall), Apple ’s iPhone 5 for operators is priced at about $ 600, with a gross margin of more than 50%. But in recent years, some of Apple ’s old iPhones have sold millions of units, and the gross profit margin of these products is about 35%. In the second fiscal quarter ended in March, Apple's gross profit margin fell to 37.5% from 47.4% in the same period last year.
Chinese Enterprise
The profits of the smartphone industry will appear more in emerging markets, and many local consumers urgently need to buy their first smartphones.
Analyst Restivo expects that 384 million smartphones will be sold in China next year, with prices below $ 200 accounting for about 66% of them. In contrast, the US market will sell 153 million smartphones next year, and only 14% of those will cost less than US $ 200.
Huawei, which mainly sells civilian smart phones, is gradually winning the market, relying on the price tag, which mainly suppresses competitors such as HTC, BlackBerry and Nokia through price reduction. According to Huawei executives, even if the price of Huawei's smart phone is as low as $ 100, its mobile phone division, which is only two years old, can still be profitable.
Lenovo, the world's largest PC manufacturer, is also implementing a low-price strategy, and it is becoming China's fastest-growing smartphone maker. A Lenovo executive said that the low-cost strategy works well in the smartphone field because some competitors' products are ridiculously expensive.
In order to adapt to changes in the market, Apple is currently making some adjustments. Recently, Apple launched an iPhone trade-in program to increase iPhone 5 sales. David Yoffie, a professor at Harvard Business School, said that if Apple does not respond, it will lose more market share. Youfei also said: "As growth is increasingly dependent on emerging markets, Apple will not only satisfy its existing share. A strategic change is definitely necessary and they will not stay where they are."
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