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Full-scale smartphone war in 2014

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 14 Jan 2014
Smartphone makers are armed and ready to win consumers into their folds in 2014.
Smartphone makers are armed and ready to win consumers into their folds in 2014.

The smartphone war that has escalated steadily with the entry of new players and advances of old, is expected to continue in full force this year, as companies continue to compete for the top spot - on both the market ladder and users' lists.

The new year has barely shaken off the beach sand and rumours around new devices expected in 2014 have already started circulating, with flagship follow-ups from giants Samsung and Apple featuring notably.

Samsung is expected to release the new Galaxy S5 in the first quarter of the year, while Apple's new iPhone (6) - initially thought to be on the map for around September - is now rumoured for unveiling as early as May, according to some reports.

Then, on the local front, there are the likes of Alcatel One Touch, as well as a new venture born from a partnership between local firms Seemahale Telecoms and CZ Electronic Manufacturing - not to mention SA's darling BlackBerry - all planning to win the country's mobile-hungry population over in 2014.

According to the latest statistics from World Wide Worx, Nokia still has the lion's share of mobile users in SA - largely due to feature phones, which are increasingly being snubbed in favour of low-cost smartphones.

Armed forces

Whichever way the local smartphone war will go this year, analysts suggest contenders are armed and ready.

Mike Sharman, owner of digital communications agency Retroviral, says "it's a full-scale war". He expects to see Samsung continuing to spend hard in an effort to both capture new and hold existing smartphone customers.

"[I expect to see] greater Android adoption (specifically Samsung), due to its media spend. Samsung is everywhere in SA."

MD of World Wide Worx, Arthur Goldstuck, sees Samsung's salvoes securing the manufacturer's place in the local high-end market. "Samsung will continue to lead the market at the high end, thanks to a combination of an efficient and predictable release roadmap, compelling devices that lead market demands, and an aggressive roadmap."

He says Sony will continue to gain ground at the upper end, with "high-quality and highly-desirable devices". Apple, he says, will likely maintain a niche at the top end of the market, but will fail to win substantial market share, because of its inability to address the needs of the mid-range market.

In terms of SA's low-end smartphone market, Goldstuck notes Nokia is facing a "massive onslaught" from Samsung, Alcatel and several made-in-Africa brands, but is winning in the upper feature phone and entry-level smartphone market with the Asha range.

"[Nokia's] Lumia 520 is also a formidable player in the low-end smartphone market, where it is eating a lot of BlackBerry's lunch. BlackBerry is maintaining its strength in the youth market, and in mid-range smartphones, but is losing the high end."

The results of World Wide Worx's Mobility 2014 survey show Nokia has a 44% market share among adults in local cities and towns. Nokia's share has dropped from 50% in the past 18 months, while BlackBerry gained from 18% to 23%, and Samsung clawed up to 19% from 18% of the local market, says Goldstuck.

Tech analyst Liron Segev, from TheTechieGuy.com, says 2014 will continue to see "big names" releasing new products, because they do not have a choice. "Other brands such as Alcatel and Huawei are snapping at their heels."

He says, while there is currently a move towards higher-end smartphones in SA, there is a very entrenched market that continues to buy Nokia and BlackBerry devices. "Not BlackBerry 10, but the older devices," notes Segev.

Marketing gold

The most valuable piece of artillery for smartphone war contenders, say analysts, is marketing.

Goldstuck says, in order for any smartphone maker to make significant waves of change in terms of brand preference in SA, much will come down to marketing. "We can expect HTC to continue vanishing as they fail to match quality of marketing to quality of product."

Speaking about the comeback of Alcatel One Touch with its own branded phones, Goldstuck says it depends largely on how the company markets the phones.

"The flagship smartphone delivers great value for money, as does the entry-level keyboard feature phone. The One Touch 3000 is the perfect phone for someone who wants a BlackBerry-style keyboard, but can only pay a few hundred rands. The OneTouch Idol is a great high-end smartphone for the budget conscious. The rest is up to Alcatel itself."

Sharman says Alcatel One Touch has its work cut out for it, considering the South African market knows Samsung, BlackBerry, iPhone and Nokia. "South Africans are sceptical - if new entrants are to compete with the established players, they will need to invest substantially on the media buying front. Limited brand awareness on the consumer front equals limited trust."

Segev says, when it comes to converting local minds to other brands, "it's all going to boil down to one thing: marketing".

He says brands like Huawei have "amazing devices at a fraction of the prices of the high-end devices" - but people need to know about them and ask for them by name. "If not, sales people will continue to push the devices they know how to sell, like Samsung and Apple."

Alcatel One Touch, he says, is also at the mercy of marketing when it comes to winning South Africans' minds. "Alcatel is doing an amazing job at the low end, where price is the biggest factor. Alcatel phones are of great quality and offer the smartphone experience at a low price point. It will take marketing to move up in the very well established market."

Segev expects this year to see two new mobile battlegrounds: "The battleground in the smartphone world will be shifted. It is no longer about the hardware but the battle will be about software and battery life."

Regarding the Seemahale/CZ Electronic smartphones and tablets - expected to be priced around R2 500 and R3 500, respectively - Segev says consumers are more likely to go with a brand they trust. "When a device is priced lower than other devices, there has to be a reason. Inferior quality or older components are the typical reason for this.

"South Africans have been burnt in the past by buying cheaper, imported, non-name-brand devices from the Far East and they will be sceptical."

Reiterating the value in marketing, Goldstuck says Seemahale's planned devices are no longer low-cost devices. "When Acer and Lenovo are producing cheaper tablets, this kind of pricing could be the Achilles' Heel of newcomers. BlackBerry, Nokia, Huawei, Samsung and Sony are all producing cheaper smartphones."

The only real way to compete, he says, is to "produce dazzling devices and market the guts out of them".

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