Can You Survive the Economics of the Smartphone Industry?

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Consumer Chief of China’s Huawei Technologies has stated that the smartphone industry is obligated to consolidate as the large investments needed to continue to be competitive means that only a few firms will be successful in the long term.

Chief Executive of Huawei’s consumer business group, Richard Yu, has stated that anyone at this particular stage in the industry’s history which had less than 10% market share was losing money.

According to market surveys from Strategy Analytics and IDC, Huawei is the world’s 3rd largest smartphone manufacturer with a 10.2% market share in the fourth quarter.

Moreover, Apple Inc. stood to have 87% of global smartphone industry profits in the December quarter according to sources. This stemmed from a mix of iPhones alongside the launch of the new iPhone X during the December quarter.

Yu also went on to say that smaller Chinese vendors were consolidating however most would cease to exist as they simply did not have enough resources to invest in the required levels of research and development, marketing and branding that is needed to gain global scale.