Samsung will inevitably go into recession in the smartphone battle

Abstract: Ben Thompson, author of this article, was originally titled "Smartphone Truths and samsungs inevitable decline". After Samsung released its dismal two-quarter earnings, many people were shocked and surprised by the shock, and in my opinion, the smartphone market

Ben Thompson, author of this article, was originally titled Smartphone Truths and Samsung's inevitable decline.

After Samsung's disappointing two-quarter earnings, many people were shocked--and I was surprised by the shock that, in my view, the smartphone market is big, but the predictability is strong as long as it captures the following keys:

1/Everyone has a smartphone: I think this is understandable, and is the most important and fundamental point.

2/Most buyers will put the price in the first place: mobile phones from luxury into necessities, but also reduce the pressure on consumer prices. There are two reasons:

Low-income buyers, even if they are not interested in consumer electronics and computers, still have a demand for mobile phones and are bound to look at Low-cost models.

High-income buyers have no love for consumer electronics and computers, as well as the need to use mobile phones. Cheap phones are also a good choice if necessary.

In other words, the average price of mobile phones will continue to drop, and high-end markets will still exist, albeit with a relatively small share.

3/The number of figures is far more important than the percentage: Despite the market share, people's first reaction is the size of the percentage; in fact, the real numbers are more convincing. For example, the 2013 IPhone market share was "just" 15.5%, but it sold more than 150 million units worldwide. This huge number is sufficient to support the IOS ecosystem.

4/High-end market is always there: it is like someone buying a mobile phone is to communicate and get information, some people buy a mobile phone is to spend more money to buy high-end products. Like cars, smartphones are also about appearance, performance, and user experience. Mobile phones, like automobiles, are both symbols of identity and necessities of life.

5/in absolute terms, high-end smartphones aren't that expensive: they're still analogies to cars. The cheapest Mercedes (in America, for example) is 29900 dollars, equivalent to 46 times times that of the IPhone 5S. An IPhone 5S price is 3 times times Moto G, and the absolute price difference is only 500 dollars. And if you buy a car with a Mercedes-Benz 1/3, the absolute price difference will reach 20,000 dollars.

6/Low-end mobile phone quality significantly improved: Moto G is a very good model, to meet the daily needs of many people. However, the region's low-end market is more developed, thanks to MediaTek's blessing, which has a lower price and more stable performance. At the same time, the overall supply chain is constantly improving, again pulling down the price of each part of the handset, even the cheapest products, quality is not bad.

7/'s Rich App Store is the key to competition: There are more sophisticated app stores than IOS App store and Android's Play store, and the addition of Windows Phone and the Amazon Fire APP store has certainly made the market more lively. In this regard, the 28 principle also applies, that is, 20% of the app to meet 80% of the user needs. In other words, the real cause of user differences is in that tiny 20%. Of course, you would say that some users don't care about the difference, but it is possible that this is a group of users with minimal help for revenue and ecosystems.

8/ Operators are important, at least for high-end users: there are a lot of users (especially in the mature market), the operator has a high degree of loyalty, they will only choose the carrier network support models. Conversely, those who frequently switch carriers (or use dual-SIM cards) are typically in a lower-income market with lower-end shares.

9/Screen size can not be underestimated: the size of the screen is the basic choice of mobile phone important factors. Although large-screen mobile phones in the overall market is not high, but in the high-end market share is not low.

10/software is important: over the years, analysts have treated computers equally, regardless of the operating system. Now they look at mobile phones like that. In fact, Apple is making hardware even more unique because of good software. Many people buy iphones or Macs, largely directed at Apple's own operating system, because they cannot understand this, and there are all sorts of apple-dead talk.

Software based differentiation extends from the operating system to the app. In the eyes of high-end users, the quality of the app is very important, and iOS in app quality is much better than Android, for three reasons:

The

App Store is still better commercially, especially in non game categories, with a low level of fragmentation and easier development of iOS apps; most developers and designers of premium apps are more likely to be iOS;

Although Android is fast catching up on gaming apps, more iOS screen sizes add to the difficulty of application development, but these three categories are not to be overlooked.

Look at the Samsung side and see why Samsung's bad two-quarter earnings were expected. Samsung has built a healthy high-end business through these three areas:

is almost applicable to any operator; 2. The pioneer of large screen mobile phones; the production of high-quality hardware, and low-end models to pull off a significant gap;

And these advantages have been or are disappearing:

after two years of silence, Apple has been a powerful global extension of the iphone's availability (availability); As noted above, the hardware gap between high-end and low-end handsets is diminishing; more handset makers are starting to enter the big-screen market, and Apple is no exception;

In China, the world's biggest market, Samsung's troubles are much more than this: the brand image and distribution channels that Samsung spends billions of of dollars to build are easily done by millet. In addition to millet, Lenovo's future is also bright.

In a word, Samsung's most fundamental problem is that it uses hardware to beat out the bit, ignoring the difference of software based. As a result, it can only be reduced to a price victory. What happens, Samsung might as well talk to HP or Dell?