So there's "serious money" to be made in the high-end but the only viable markets are the low-end and mid-range? That's absurd. There is certainly a contested high-end Android market because Samsung, LG, HTC, Lenovo and Motorola have all dabbled in it. What non of them have done is taken and held it with great products after great product.
Reread what I wrote, you completely missed the point.
Noone but Samsung (and to a much lesser extent Lenovo) is making any serious money at the high end for Android. And even Samsung is starting to see reduced profit in the high end.
Meaning noone but Samsung and a very few others to a significantly lesser extent are making any serious money from the high end in Android. Not that there is serious money in the high end. And yes, there is, but it's limited. And pretty much mostly split between Samsung and Apple with little left over for other handset makers. At least not in even remotely as much volume as those two.
I also don't see evidence of Android phones shifting to low-mid range, I see now evidence of contraction of the high-end Android market, nor would it make any sense unless Android phone buyers are somehow genetically, culturally or economcally disposed to buy cheaper handsets that people buying high-end iOS or Windows Phone handsets.
Really? And where have you been living.
http://www.utsandiego.com/news/2014/dec/08/smartphones-prices-declines-forecast-Android-Apple/
The average smartphone price will reach $297 this year, but that’s predicted to drop to $241 by 2018, according to IDC.
In the U.S. and other developed markets, smartphone prices on average are not expected to drop much, according to IDC. Most U.S. consumers don’t pay for the full price of the phone anyway because of subsidies offered by wireless operators.
In emerging markets such as India, however, average smartphone prices are predicted to drop from $135 this year to $102 in 2018, according to IDC.
Google’s Android operating system will maintain more than 80 percent market share worldwide for smartphones shipped over the next four years, IDC said.
But because of falling prices, Android’s revenue share is predicted to fall from 67 percent today to 61 percent in 2018.
Meanwhile, IDC says Apple will continue to command top dollar for its smartphones. So Apple’s iOS operating system will gain market share based on revenue from now until 2018 – rising from 30 percent to 34 percent.
The average price of all smartphones (iOS, Android, BB, Windows Phone, etc.) will reach almost 300 USD. But is predicted to continue dropping. And if you read further, you'll see it's because while Android will continue to expand on it's share of the market, it'll do so while eroding it's ASP, because almost all growth is now in the budget and mid-range. Hmmm, kind of like the PC market, no? Meanwhile iOS is predicted to grow their ASP gaining marketshare based on revenue, at the expense of losing marketshare based on sales volume. Compared to Android losing marketshare based on revenue, but gaining marketshare based on sales volume.
And that isn't an isolated report. It's fairly unanimous from multiple sources.
For example, from an older source,
http://www.eweek.com/mobile/smartphone-sales-near-saturation-point-in-mature-markets-idc.html
According to the report, worldwide smartphone shipments are expected to surpass 1 billion units in 2013, representing 39.3 percent growth over 2012. While a number of trends co-exist in the global smartphone market, none have more of an affect on driving market growth than the steady decline in average selling prices (ASPs).
and
In 2013, IDC said it expects smartphone ASPs to be $337, down 12.8 percent from $387 in 2012. This trend will continue in the years to come and IDC expects smartphone ASPs to gradually drop to $265 by 2017, the report projected, thanks in part to the multitude of low-cost devices running Google’s Android operating system.
Compare that to the forecase for 2014 above. It's declined from 387 USD in 2012 to 337 USD in 2013 to 297 USD in 2014. Yet the market continues to grow. Does that indicate that the high end is growing substantially compared to budget and midrange?
I can continue to dig up more sources, like Samsung revising their smartphone forecasts due to high end handset sales tapering off and increased pressure from Chinese manufacturer's on the low end. As well as the ASP of their phones being eroded leading to lower margins and lowered revenue forecasts. But, back to your reply, for now.
Again you seem to be pigeon-holding a set of OS users. My first laptop was a cheap HP, my second an expensive Sony Vaio, my third a very expensive Dell XPS2, my fourth a relatively inexpensive 12" Apple PowerBook G4. There, and have always been, expensive Windows PCs but the problem with Windows PC, a problem somewhat shared by Android handsets, is that the basic perceived value has been decimated by multiple manufacturers racing to the bottom in terms of pricing. But this does not mean that there still doesn't exist a nice juicy high-end market although traditionally that was gaming and as game sales show, that's a shadow of it's former self on Windows.
What part of ASP (average selling price) of the entire Android market and Smartphone market and PC market do you not understand? Yes, obviously there are still individual SKU's that command a premium. But they are mostly a stagnant (either slow growth or slow decline) market segment for PC and close to being stagnant for smartphones. It doesn't matter if you've been buying expensive PCs, because I'm not talking about individuals. I'm talking about the market as a whole.
And Sony's problem, like everybody's problem, was trying to do everything. There was no focus and they were spreading themselves trying to accommodate the low, medium and high-end of the market. When you drop, in particular, the low-end devices you don't have as many considerations about whether your software/firmware platform will run well (or at all) on cheap ass devices. You have less devices to support overall, you can then provide better after-sale support. One of the biggest downsides to Android is the lack of significant OS updates (without jailbreaking) and it's not all the fault of Google and the carriers. But when's the incentive when profits are so low to start with? The vast majority of Android handsets are fire-and-forget in terms of support.
Actually, Sony's problem is that they are abandoning the only growth markets in Android smartphones because they cannot compete in the low end with the Chinese manufacturers. They are mistakenly trying to hold onto the high end Android market where there is little to no growth potential and where the majority of the market is owned by Samsung. And because they are using the same OS as those Chinese manufacturers, there is little to differentiate yourself from them other than in build quality at higher price points in the budget and low end. And just like how that failed with many PC manufacturers, it is also failing for Sony. And just like in the PC market if you try to only go for the high end, you're quite likely to fail with no presence in the budget and midrange. By the time Dell and HP learned their lesson they had already let Asus and Acer catch up to and sometimes surpass them. While other's just folded. We'll start to see more of that in the Smartphone market going forward.
Oh and it's not "everybody's problem." There are plenty of Android smartphone vendors doing well and experiencing growth. It's just that they happen to predominantly be Chinese manufacturers who are now experiencing meteoric rise at the expense of established non-Chinese Android manufacturers. Xiaomi for example. Hmmm, much like Asus and Acer of the 2000's in the PC market and much like Samsung and LG in the TV market during the same timeframe. You grow by starting at the bottom. Forcing out entrenched players that attempt to cling to the high end. Like Sony, Panasonic, Sharp, Toshiba, etc. in the TV market when faced by Samsung, LG, and Vizio. Or like RCA and Magnavox in the 70's when faced by Sony, Panasonic, Toshiba, etc. History is rife with examples of this sort of market dynamic. Honda, Toyota, Nissan, and Mazda all did the same to established car brands in the 70's as well by dominating the budget segment and working their way up in to the premium segment.
TL
R - Sony doesn't have much chance of holding onto their smartphone division.
Regards,
SB
