Mobile Phone Handset Marketing

Introduction

The market for mobile phone handsets globally is very competitive. Global smart phone sales hit 1.74BN year ending 2012 according to the research company Strategy Analytics. Recently Microsoft purchased the mobile division of Nokia for £4.6bn. This purchase signals Microsoft's move into the handset market. Currently (August 2013) Microsoft hold 3.3% of the operating system market with Blackberry now in fourth place with 2.7%. The handset market is now set to become more competitive. Microsoft is now in place to introduce apps that will further support the windows operating system under the Nokia brand. The graph below shows the global market share of smart phone manufacturers


Global Smart Phone Market Share Diagram

The Impact Of Smart phones

Manufacturer such as Nokia, Sony Ericsson , Samsung and Apple are fighting for the share of this global market sales. Smart phones are one of the main reason why there has been a sudden surge in handset sales. In 2010 Research from Gartner ( Nov.10 2010) showed Nokia had the largest global market share with 28.2% a fall from 2009 of 36.7% This has fallen even further in 2012 to 19,1%. Samsung is now the market leader with 22% market share. An excellent product strategy with the Samsung Galaxy brand has allowed them to beat Nokia in this global market. Apple has a 7.5% market share up from 5%, this is not bad for a company that really only has sells improved versions of the same product.

Independent manufacturers, especially those from China and India are slowly eating into the market share of brand leaders. Organisations like Hooey and ZTE have approximately 3% market share.

Table 2 - Worldwide Mobile Phone Sales to End Users by Vendor in 2012 (Thousands of Units)

The table below examines how global market share has changed from 2011 to 2012, the most prominent feature is the rise of Samsung and the fall of Nokia. and the increasing popularity of Chinese players.

This article will focus on the main marketing strategies and principles behind the selling of mobile phone handsets.

Company 2012 Units 2012 Market Share (%) 2011 Units 2011 Market Share (%)
Samsung384,631.222.0315,052.217.7
Nokia333,938.019.1422,478.323.8
Apple130,133.27.589,263.25.0
ZTE67,344.43.956,881.83.2
LG Electronics58,015.93.386,370.94.9
Huawei Technologies47,288.3

2.740,663.42.3
TCL Communication37,176.62.134,037.51.9
Research In Motion34,210.32.051,541.92.9
Motorola33,916.31.940,269.12.3
HTC32,121.81.843,266.92.4
Others587399.633.6595886.933.6
Total1,746,175.6100.01,775,712.0100.0

Common Marketing Strategies Used Within the Mobile Phone Handset Industry

Segmentation Strategies

Handset designed with different features are aimed at different target segments. Blackberry have been very successful in positioning their brand amongst the business segment. However, with the introduction of Blackberry chat (or BB chat as my students call it) The Blackberry has now become popular amongst the teenage market.

Many mobile phone handset manufacturers are now incorporating social networking features as a key part of their targeting strategy. Smart phones now incorporate direct access to Facebook or Twitter. Lets be honest, social networking is not just for teenagers, Facebook has 500 million users, and with broadband on phones now bundled within contract packages Smart phones are becoming more attractive to a wider target audience for Blackberry. With the introduction of the Z10 and Q10 by Blackberry these phones focus on social networking integration appealing to a wider audience.

Design Strategies

Design of a product differentiates it from its competitors. Mobile phone handsets have changed over the years. Phones are a fashion accessory as much as they are a communication device. Apple with the iPhone have innovated the way phones are designed. The shape of phones have also changed from standard handset, to slide phones, to flip and now to touch. Samsung with the Galaxy S3 and Galaxy S4 are now leading the way with the design of their phone.

Features

A question I ask myself often is what is the core purpose of a mobile phone? Obviously it is a communication device. However, when customers now look for a particular handset the question of clarity of sound does not venture into their purchase equation. A mobile phone has become much more, a mini personal computer, a music device, a camera, an organiser, a movie player. Handset manufacturer are adding more and more benefits to mobile phones and charging a little extra for these benefits. This is added value at its best.

Exclusive Deals

Some handset providers tie themselves to a particular network for a set period of time. When the iPhone was first launched within the UK it was only available on the O2 network, allowing O2 to charge a premium for the monthly contract. The exclusive deal lasted for two years within the UK before other network providers were allowed to sell the iPhone. This created a rush for the anticipated phone, encouraging some users to change network providers and move to O2.

Smart Watches and Smart phone Accessories

Samsung has launched Galaxy Gear, a smart watch that works in conjunction other Samsung Galaxy products. The watch needs to be paired with an android device for its full potential to be used. Wearers are then able to see screen alerts, make voice calls, and run various apps. This smart watch is a clever way of expanding the Galaxy brand by adding an accessory that users can buy that will change the experience of using their original android based product. The smart watch is designed to be fashionable , it has been described as a fashion icon by Samsung. Samsung's current rival is Sony's smart watch 2 which uses the near-filed communication (NFC) and retails at £130. Gartner research suggests that the global wearable computer market will be worth £6.5bn pounds ($10bn) by 2016.

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