In both rich countries and poor ones, cheaper smartphone brands are making inroads. Demand for pricey phones, mainly in developed economies, is slowing, but that for less expensive devices is booming. People buying their first smartphones today, perhaps to replace a basic handset, care less about the brand and more about price than the richer, keener types of a few years ago.
The cheaper smart phones will become cheaper still. At Mobile World Congress, an industry jamboree in Barcelona at the end of February, Mozilla, a non-profit company best known for Firefox, its web browser, announced that smartphones running its operating system, Firefox OS, on Spreadtrum chips would go on sale with a target price of only $25. Mr Hussmann reports that the bill of materials is less than that. (Telenor is among the operators backing the new phone.)
It is not only at the bottom that competition is intensifying. In China, points out C.K. Lu of Gartner, another research company, OPPO and Vivo, two local brands, both increased their market shares last year despite focusing on phones priced at 2,000 yuan ($320) or more. Fancy phones can also polish a brand. Huawei, another Chinese company, has been trying just that; Wiko’s top-of-the-range smartphone costs €349.
Samsung is doubtless wise to this. Hence its attempt to push beyond the smartphone, into smart watches and wristbands, connected domestic appliances and the business market. Mobile-phone brands have been brittle before: ask Ericsson, HTC, Motorola and Nokia. Samsung has spent bucketloads building its name. It will not want to be usurped by the Wikos of the world.
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