Ubiquitous Smartphones

THE NEW REMOTE DEVICES ARE CHANGING WORK AND CONSUMPTION HABITS EVERYWHERE IN THE WORLD

by Nicoletta Corrocher, Dept. of Management and Technology, Bocconi
Translated by Alex Foti

The growing diffusion of smartphones is changing consumer habits in terms of communication, multimedia content, and purchasing process. And these hand-held digital devices are having an increasing impact also on the way people work, thanks to the development of enterprise mobile management applications.

The market for smartphones keeps growing at breakneck speed: in 2013, global sales reached 968 million units, +42.3% with respect to 2012, for the first time breaking the 50% barrier of the total of cell phones sold around the world, especially due to the growth of the Latin American, Asian, and Eastern European markets. Samsung is global market leader, with 31% market share, followed by direct competitor Apple with 15,6%), and, at a great distance from the first two, Huawei and LG Electronics, with market shares of 4.8% each. If we consider the market from the point of view of operating systems, Android’s primacy is uncontested: Google’s OS for mobile phones has a 78.4% market share, compared to the 15.6% market share of Apple’s iOS.

The innovative strategies adopted by the two market leaders – Apple and Samsung – have been markedly different. Apple, with its own proprietary system (iOS), introduced only six new products between 2006 and 2012, while Samsung marketed 159 new smartphones equipped with the industry’s open-source operating system (Android). Over time, the number of new products put on the market has grown, due to the entry of new firms such as HTC, Huawei and ZTE, while new functions have been added to smartphones.

Apple achieved great success with the design of the iPhone, but this has not been the end of the story. Companies are constantly investing in the technological development of devices, and their software in particular, which is fertile ground for the integration of various multimedia apps. By doing so, they offer consumers a widening range of options. A recent work of ours (G. Cecere, N. Corrocher, and R. D. Battaglia, “Innovation and competition in the smartphone industry: is there a dominant design”?,Telecommunications Policy, 2014, in press) shows that in spite of growing convergence on certain features – touch screens, Wi-Fi connectivity, micro-Usb ports, product differentiation strategies stay very aggressive and are not only guided by design (e.g. screen size), but also by user interfaces and operating systems, as shown by the recent legal battle pitching Apple against Samsung over usability and design patents. From this point of view, the development of projects for modular smartphones – Project Ara by Google and PuzzlePhone by Circular Devices – could be a further push toward the differentiation of products and an opportunity of market entry for new firms, with significant benefits for consumers in terms of product variety.