Sunday, February 21, 2016

Porter's 5-Force Analysis of the Smartphone Industry

An Industry can be best analyzed using Porter five force analysis. Porter five forces analysis is a tool to analyze the different forces acting within an industry. These forces may affect all the organizations functioning  within the industry. This framework may be used to determine the attractiveness of the market. The smartphone industry is analyzed below.

Competitive Rivalry

The industry has huge customer base of 968Million worldwide. The Industry is growing at rate of 28-30% worldwide and at 168.8% in India.It is to be noted that all the major players of the industry have been backed by the Tech giants, who's revenue(2013) is given below.

Ex: Apple ($170.910 Bn) ,Samsung($268 Bn), Microsoft($77.85 Bn), Google($59.82 Bn ), Nokia ($40.176 Bn), RIM ($ 11.073 Bn), LG  ($45.246 Bn), Lenovo ($29.57 Bn)

This means that every vendor is a strong contender in the battle. And also all the vendors are Tech Giants with high Technological Competitiveness. Thus it can be said that the competitive rivalry within the Smartphone Industry is high. 

Consider the table below table of market share. 

 Period     Samsung    Apple      Huawei    Lenovo     Xiomi        LG   Others
Q2 201424.90%11.70%6.70%5.20%5.10%4.80%46.70%
Q2 201332.20%13.00%4.30%4.70%1.80%5.10%40.70%

Source : IDC

Clearly the top players are Samsung, Apple, Huawei, Lenovo, Xiomi and LG. Samsung is a dominant player in the smartphone market with nearly 25% market share in the second quarter of 2014. This share has come down from 32.2% from a year before. Apple has lost 2% from previous year to settle down at 11% in the second quarter of 2014. Xiomi has emerged as a new leader in the smartphone market which has seen increase in market share from 1.8% to 5.10% in just one year. 

From the above table it seems that Apple and Samsung are tough competitors to each other for number 1 position. Both run different Operating Systems and have different technologies to offer yet compete for the similar customer base.

Is apple's loss Samsung's gain ? Does Samsung compete with Apple or it targets other android hardwares ? Will apple's culture of tight integration between hardware and software pay off in the long run ?  Is this a zero sum game ?  Answer is unclear.

Quarter Android iOS Windows BlackBerry Other
2014 Q2 84.73% 11.68% 2.46% 0.50% 0.63%
2013 Q2 79.27% 13.20% 3.68% 2.88% NA
Source : IDC
Consider the above global smartphone market share. Samsung is the dominant player from last four years.  

Power of Suppliers

The important suppliers of smartphone Industry are The SOC manufacturers, i.e System On Chip. There are more than 80 SOC Manufcaturers including Qualcom, Samsung, AMD, NVIDIA Intel etc. There's high competition among SOC suppliers and hence bargaining power of suppliers is low.

Power of Buyers

There is a huge consumer base (of 968Million in 2013) for smartphone industry. This consumer base is not concentrated and hence cannot exert any threat in terms of bargaining power to the Industry.

On the other hand, there are many alternative options to consumers like Phablets, Tablets etc which are available at similar prices compared to smartphones. From this point of view, it can be said that, the bargaining power of buyers is moderately high.

Power of Substitutes

There are many alternatives to consumers like Phablets, Tablets etc. which are available at almost similar price compared to smartphones. Consumer may switch to these products any time. From this point of view it can be said that, the bargaining power of buyers is moderately high. As we can see from the following projection, the share of Phablets  in the Smartphone Industry is increasing. This means that there is a possibility of users switching to Phablets in the future.

The tablet Industry has been growing at CAGR of 36% with 233Million units sold in 2013. It can be projected that by 2017 a total of 1.093Billion units of smartphones could be sold. Thus smartphone Industry has threat from both Phablets and Tablets.

Again this need not be true always because, the history reveals that IT Products are highly perishable and Innovation keeps happening. This means that a new Product might suddenly pop up and pose threat to all the Industries discussed above.

Power of New Entrants

The New Entrant need not be a new Company; rather it can be an established firm entering a new firm. In the smartphone Industry there are well established players like Apple, Samsung, Nokia, LG, Lenovo etc. New entrants need to have sufficient Technology and Patents to fight in the Industry. The new entrants also need to have Brand value to fight with the established Firms. Thus the threat of new Entrant in Smartphone Industry is relatively low.

From another perspective, the Indian Smartphone vendors like MicroMax, Karbonn etc had no brand value when they entered the market. They were like Chinese cheap products in the Indian market. But today these brands are posing sever competition to global brands like Samsung. 

Apple Inc. Reveals San Bernardino’s Big Terrorist iPhone Blunder

Apple Inc. just revealed another twist in its fight against FBI. The iPhone firm is now claiming that law enforcement made a big error in handling the iPhone of one of the terrorists involved in the San Bernardino shooting, and this resulted in the let go of an opportunity of getting into the shooter’s iCloud account, says a report from CNN.

Apple wants to help, but it can’t

Apple is claiming that the iCloud password was changed just hours after the shooting, and this prevented the iCloud backup, which may have revealed more information on the suspect and the attack. The iPhone belonged to San Bernardino County, which gave it to its employee – Syed Farook, one of the shooters in the San Bernardino shooting

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Saturday, June 18, 2011

B.E graduate bags TCS Best Student award

MANGALORE: A student of N.M.A.M Institute of Technology was given the Tata Consultancy Services (TCS) Best Student Award here on Saturday.
Sushrut Tendulkar, who graduated in B.E(Information Science), was among 100 students in the country to win the award.
His performance was judged throughout his four years in college both in academics, cocurricular and extra curricular activities.
TCS selects 50 colleges across the country to give an award to its best student every year.
A sum of Rs. 10, 000, gold medal and a certificate were presented to him. This award is being given by TCS only for top colleges in the State and N.M.A.M. Institute of Technology is one among them.
The award is part of their Accreditation Interface Programme.
Speaking at the award ceremony, Arun G.K, Campus Recruitment Lead, TCS, said Indian industry had high expectations from students.
"You have to realise your potential. This is what we tell our people in the company," he said.
"We give guidelines to the 50 colleges and they select their best student. There are 13 criteria for selecting a student for the award. We hold periodic meetings with the staff members of the colleges to keep track of the student's performance," said Arun G.K., TCS.

Saturday, August 7, 2010

Microsoft Introduces

The Microsoft Live Labs has introduced a free new tool called that allows users to take and share high-resolution web-images. The service converts the image to “Deep Zoom” format, which allows users to zoom the image around no matter how large it is. According to Redmond, Washington-based Microsoft, runs on “Windows Azure and enhances the experience with Microsoft Silverlight.”
One of the best features of is its ability to take more......

Monday, July 19, 2010

Why Microsoft’s PC-Inspired Cloud Strategy Might Work

I wrote a few weeks ago that “Microsoft taught the world how to succeed in PC and business software, but it might [be] teaching the world how to not succeed in cloud computing” However, that’s a fate it could avoid if it just delivered on a clear vision. As I point out in my weekly column for GigaOM Pro, it looks like Microsoft has decided on that vision: Treat cloud computing like it treated the PC business.
With the announcement of Windows Azure Appliances (WAP), Microsoft is once again looking to server makers to sell its software, but now it has added service providers to the mix too. If it’s to make Windows Azure the Windows operating system of cloud computing, its “OEM” partners will be the key.    more........

Common SSH Commands or Linux Shell Commands

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This document is a tutorial on how to install MySQL on an Andew Linux system. Assumptions …. Welcome to the MySQL monitor. Commands end with ; or g. …
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Rackspace goes open source with cloud platform

Data center and cloud infrastructure service provider Rackspace is expected to announce Monday the release of a new open-source offering that will allow users to build and launch their own internal and hosted clouds.
Dubbed OpenStack, the new Apache-licensed project will feature several cloud infrastructure components, including a fully distributed object store based on Rackspace Cloud Files, the company's highly scalable storage engine.
In addition to the initial offering, a scalable compute-provisioning engine based on the NASA Nebula cloud technology and Rackspace Cloud Servers technology is expected to be available later this year.   more......