Competition Analysis of Mobile Communication Industry - Smartphone in China
Date Issued
2015
Date
2015
Author(s)
Huang, Chao-Ying
Abstract
China has become the largest smartphone market in the world with more than 400 million smartphone sales per year. Not only China dominates worldwide smartphone market, China local brands have evolved to become major players in global market. After hyper growth from 2010 to 2014, China smartphone sales started to slow down at the 2nd half of 2014. The penetration rate of smartphone exceeded 90%. Average selling price is on a declining trend. Severe price competition is now a major challenge to all the brands in the market. International brands are facing a difficult situation as local brands became dominant with their high spec and low price strategy. Except Apple enjoying premium price position with its unique proposition, international brands like Samsung, Sony and HTC are losing market share as well as profitability. The objective of this thesis is to analyze industry data and market information, formulate the trends and the reasons behind brands’ up and down, and to discuss possible strategy for smartphone manufacturers. In essence, smartphone industry is no longer a competition on technical capability or hardware cost among competitors. Content, mobile services and apps are the driving forces behind user’s adoption of smartphone. These 3rd-party content and services are not part of the supply chain of smartphone manufacturers but play a critical role affecting the entire industry. They complement the sales of smartphone. The competition evolves from hardware sales to whole ecosystem. This thesis will examine the role of complement, their influencing power and how smartphone manufacturers may leverage and cooperate with complement providers to create more value. Theory and models from five forces model and disruptive innovation will be applied to analyze industry competition and understand why international brands were unable to sustain their industry position, and how local brands were able to replace existing leaders in less than three years. This thesis will also address the challenges and opportunities to smartphone manufacturers with Value Net and Co-opetition analysis.
Subjects
mobile communication industry
smartphone
five forces model
value net
co-opetition
six forces model
disruptive innovation
Type
thesis
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