Monday, February 29, 2016

Samsung and Apple should fear China – The Economist

Manufacturers of smartphones Chinese are wreaking smartphone market as powerful (or almost) as the high ranges of the industry leaders, but at much lower prices.

to say that the shiny new smartphone from Samsung, the Galaxy S7, was one of the stars of the last edition of the Mobile World Congress in Barcelona is not exaggerating. Perhaps it was the product most excitement generated at the international fair of mobile, helped by a staging of the South Korean company that did not skimp on resources (including dished out 5,000 virtual reality glasses for attendees to follow the presentation, which included the star appearance of another star MWC, Mark Zuckerberg, founder of Facebook).

it would be unfair not to also say that the new Samsung mobile is a small technological wonder. It has included a camera with aperture F / 1.7 and autofocus system similar to professional cameras Canon dual type; You can have up to 232 GB of storage has recovered thanks to the microSD card, and carries a liquid-cooled system to function as a powerful handheld console, without heating. But the question now arises market -past surf MWC- is whether this powerful smartphone will be able to pull the results of Samsung with the same impetus that made the Galaxy S4 and S5.

The almost unanimous answer is no. As Apple has also failed with his last Super iPhone 6S. The Cupertino company suffers, like South Korea, stagnation in the sale of its mobile-known, as was recognized in late January. Apple said then that in the first quarter of its fiscal year had sold 74.8 million units of iPhones, an increase of only 0.5% over the same period last year. It was the worst figure since the device premiered in the summer of 2007. And something similar has happened to his rival Samsung, which in January announced a drop in profit of 40% in the last quarter of 2015. The S6 had failed save the company accounts. And worse, Samsung executives warned that 2016 will be a difficult year. And Apple also anticipated that this quarter would fall iPhone sales by 15%, causing its first drop in revenues since 2003

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Both companies suffer from the slowdown in sales of smartphones, like LG, Sony and HTC (over the last two stops not speculate possible abandonment of the business of smartphones), because people no longer renew their mobile as often as before. First, because they feel they do not need, because already have in their pocket phones powerful enough to need replacing. And second, because the latest models presented by these companies not prove as revolutionary as when at the time you wanted to change mobile because theirs was not touch or because the processor model was not able to manage the myriad of apps that arise in the market. Now the S7, even with improvements, or the iPhone 6S, are too much like their predecessors.

Currently, smartphones have entered a stage of maturity where it is already difficult to surprise the user. “You almost have to put legs on the phone to achieve”, said these days in Barcelona the director of a manufacturer of smartphones. And this is a serious problem for accounts Samsung, Apple, LG, Sony and HTC. And not only that. Another challenge hits these companies: Chinese smartphone makers are planting the smartphone market as powerful (or almost) as the high ranges of the industry leaders but at much lower prices. This magic formula to add quality, design and low price begins to be increasingly attractive for a customer much more trained in technology and more rational purchase time. The user does not seem to be willing to pay a premium for devices with features that believes not need.

It is true that there will always be people who can afford and want a supermóvil of 700 euros or more. People who choose quality brands also give an emotional component, but it seems that most users are looking for and smartphones to provide satisfactory, optimal experiences, which cover spare their needs without paying extra for it. And it seems that there is now the business; in powerful mobile, attractive in design and coming to the market for between 200 and 400 euros. And that they have understood Chinese firms, as demonstrated at Mobile, concluded last Thursday

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Xiaomi, for example, showed what will be his flagship for 2016, MI5, a terminal that will compete directly with high-end Android and the latest iPhones, but that only cost 300 euros. The Galaxy comes S7 719 euros and the iPhone 6S of 750 euros.

Chinese companies have lost their fear of Apple and Samsung. While Xiaomi VP Hugo Barra, compared his new smartphone with the latest wonders of the US and South Korea. Other manufacturers, such as Coolpad and ZTE also showed mid-range phones for between 159 and 200 euros. And Oppo, also with the same philosophy, did not present a moving again, but if a technology that allows you to charge your smartphone completely in just 15 minutes.

Given this scenario, what can the major manufacturers? Bring disruptive innovations (LG has tried with its first modular mobile) and diversify, such as Samsung, which has stepped on the accelerator with virtual reality

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