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June 7, 2012

The Importance (and Danger) of Smartphones

HeadlineArticle_iPhoneApple Inc retained its smartphone market leadership in 2011 despite a strong challenge from Samsung Corp’s Galaxy range of smartphones, with the latter being just a mere 0.5 percentage point reach of the former. Samsung made an effort to launch its flagship product, Galaxy S III in May 2012, months ahead of iPhone 4S’s successor which is currently not available yet. The early launch date will help Samsung gain a competitive advantage and Euromonitor International projects Samsung to overtake Apple in 2012. Click to tweet!

The battle for smartphone supremacy is set to become more interesting with Facebook reportedly looking to launch its own branded smartphone while Research in Motion struggles on to arrest its sales decline. This latest Facebook initiative would be welcomed by the telecommunication companies who are looking to grow their revenues by enticing existing prepaid subscribers on low price voice plans to upgrade to smartphones tied with higher value data plans. A low cost Facebook phone would help the telecommunication companies avoid having to heavily subsidize the phone while Facebook can, in turn, establish close relationships with users who are using mobile devices to access their Facebook accounts. Users’ usage behavior and preferences gathered will also help the company better tailor its advertising offerings to companies.  Additionally, Facebook can reap revenue from apps and other services purchased via the Facebook phone.

Smartphone usage is deeply entrenched in modern consumerism, with sales of smartphones seeing substantial year-on-year growth and is projected to overtake those of feature phones in 2013. Consumers in China and India are the biggest savers of the Asia Pacific region as compared to consumers in the US and UK. However, consumers in these emerging markets are willing to spend on smartphones and often purchasing them at full retail price whereas consumers in developed markets tend to purchase smartphones at subsidised rates as part of a timed contract. At the same time, the usage of smartphones is expanding beyond browsing the internet and running apps. It could replace cash as a payment tool, for instance, with Canada at the fore front of this development as well as a gaming platform.

However, over-reliance of smartphone has its social pitfalls as excessive smartphone use has also been cited as cause of breakdown in interpersonal relationships and a number of divorce cases, as reported in Malaysia. Family and friends talk to each other less even when they are sitting together, preferring to seek the solitude of their mobile phones. Mobile phones have indirectly caused divorces with incriminating evidence of infidelity like text messages and emails discovered on their spouses’ mobile phones. 

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