Open your wallets, the march of the new smartphones begins
While Mobile World Congress, the go-to place to see and hear new product announcements from smartphone suppliers, is about to begin (2/27), Samsung is taking the high road and setting its own dates and formats for the release of its 2017 flagship Galaxy S8 smartphone, likely a result of a more careful and extensive testing cycle after the disastrous Note 7 calamity. Samsung will show off the S8 in New York on March 29th, but will not launch the phone until April 21st, while rival LG Electronics will use the more traditional Mobile World Congress setting to show off its G6 smartphone on February 26th, with actual sales starting on March 10th, a full 42 days earlier than Samsung. If you are very desperate, you can pre-order the LG G6 staring on March 2, while Samsung has yet to set a pre-order date for the S8, although the whisper is April 13th.
While we poke fun at the drama associated with the release of new smartphones, this will be an unusual year for smartphones generally. Worldwide sales growth has slowed, and competition from Chinese vendors has forced major brands to compete at three price points rather than one over the last few years, and even the upstart Chinese vendors (Xiaomi - pvt) are seeing themselves losing share to the ‘new’ upstarts, OPPO (pvt) and Vivo (pvt).
But the real key this year, and trailing into 2018 will be the 10th anniversary of the iPhone and the release of the iPhone 8/X/whatever later this year. Given the significant delay between current releases and the iPhone release (no official date yet), the smartphone market, we see little near-term impact from the potential iPhone on the S8 and G6, but given the potential for a ‘break-through’ 10th anniversary Apple product, there could be a more rapid decline in non-Apple smartphone sales as the Apple release gets closer. While Apple has done little on an official basis to encourage potential converters to wait for the new iPhone, the tech press seems to devise a new feature, button (or lack thereof), display, size, and ‘concept rendering’ on a daily basis.
From Apple’s perspective, what could be better? Free brand advertising on a major scale without having to commit to anything from a production standpoint, and a degree of free market research on such potential features from the world of Apple sycophants, with the average smartphone buyer/converter thinking about maybe holding off that upgrade until they can get a look at the new iPhone. But there is a catch, and while we expect the iPhone 8 line to set new unit volume records, the ‘feature bar’ for Apple continues to get higher with each new press revelation. Apple will have to prove it can do more than a ‘slightly better than what is out there’ product and find a way to truly innovate the iPhone in ways that are both beneficial to the user and ‘flashy’. This is not an easy task in a highly competitive and maturing market, even for a marketing giant like Apple, and the success or failure of such a product line will impact the entire smartphone market in its most important 4th quarter holiday period. While we expect this mantra has been emblazoned on the foreheads of all Apple product developers for many months, we hope that Apple’s perspective is larger than buttons and cameras, or 2018’s smartphone market will be another one of slightly larger screen sizes and slightly thinner phones.
While we poke fun at the drama associated with the release of new smartphones, this will be an unusual year for smartphones generally. Worldwide sales growth has slowed, and competition from Chinese vendors has forced major brands to compete at three price points rather than one over the last few years, and even the upstart Chinese vendors (Xiaomi - pvt) are seeing themselves losing share to the ‘new’ upstarts, OPPO (pvt) and Vivo (pvt).
But the real key this year, and trailing into 2018 will be the 10th anniversary of the iPhone and the release of the iPhone 8/X/whatever later this year. Given the significant delay between current releases and the iPhone release (no official date yet), the smartphone market, we see little near-term impact from the potential iPhone on the S8 and G6, but given the potential for a ‘break-through’ 10th anniversary Apple product, there could be a more rapid decline in non-Apple smartphone sales as the Apple release gets closer. While Apple has done little on an official basis to encourage potential converters to wait for the new iPhone, the tech press seems to devise a new feature, button (or lack thereof), display, size, and ‘concept rendering’ on a daily basis.
From Apple’s perspective, what could be better? Free brand advertising on a major scale without having to commit to anything from a production standpoint, and a degree of free market research on such potential features from the world of Apple sycophants, with the average smartphone buyer/converter thinking about maybe holding off that upgrade until they can get a look at the new iPhone. But there is a catch, and while we expect the iPhone 8 line to set new unit volume records, the ‘feature bar’ for Apple continues to get higher with each new press revelation. Apple will have to prove it can do more than a ‘slightly better than what is out there’ product and find a way to truly innovate the iPhone in ways that are both beneficial to the user and ‘flashy’. This is not an easy task in a highly competitive and maturing market, even for a marketing giant like Apple, and the success or failure of such a product line will impact the entire smartphone market in its most important 4th quarter holiday period. While we expect this mantra has been emblazoned on the foreheads of all Apple product developers for many months, we hope that Apple’s perspective is larger than buttons and cameras, or 2018’s smartphone market will be another one of slightly larger screen sizes and slightly thinner phones.
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