The cell phone industry is very competitive because same products and services are being offered with different features, giving multiple options to buyers to choose from. Customers want better services at low costs, bundled up features in just one cell phone such as text messaging, camera, internet browsing etc.
The cell phone industry’s growth and profitability entirely depends upon innovative technology, providing improved and better services to customers. Many companies claim that their customers are completely satisfied with the services being offered, whereas the reality is much different. Consumers frequently complain about network error, irresponsive customer services or ridiculous penalties from exiting a contract.
Like any other industry, cell phone industry was also hit by the recent recession but the good news is that it is finally reviving now. According to Tina Teng (2010), senior analyst for iSuppli Corp cell phones ended 2009 with shipments of 1.15 billion units. While this number is lower than what it was in 2008 but it has been noted that sales picked up mainly in the fourth quarter of 2009. The Top 5 players accounted for 77% share of the total handset market.
The global market continues to thrive on consumers replacing old sets with new ones. Nokia Corp. undoubtedly remained the market leader, shipping 126.9 M handsets, capturing a 37.9% market share. Samsung Electronics Co. Ltd was a runner-up, which introduced its own smart phone operating system and captured 20.6% market share. The remainder of the Top 5 is rounded out by LG Electronics, in third place with 10.1 percent share; Sony Ericsson in fourth, with 4.4 percent share; and Chinese giant ZTE, whose impressive 77 percent growth from the earlier quarter vaulted it into fifth place, with a 4.0 percent share.
1. Rivalry: The competition between cell phone companies is quite tough since all of them are fighting an intense price war. Most of them have chosen ‘low price’ strategy