Boston, MA 04/10/2014 (wallstreetpr) – The Smartphone market is highly competitive as price and size create competition among different products. Millions of customers are either looking for cheaper (less than $300) or widescreen smartphone. So, the mature markets are losing sales due to a reduction in prices. Top vendors such as Samsung, Apple Inc. (NASDAQ:AAPL), Huawei, LG and Lenovo are losing their market share as cheaper brands improve their market position to 39.3% in 2013. The increase was due to high potential customers from countries like India, China and Indonesia.
IDC estimates that the average-selling price for the smartphone continues to fall and expects to be ~$260 by 2018 due to increasing in more buyers from emerging market. It will give opportunities for other vendors as manufacturing costs are likely to drop in coming years. But, Apple’s iPhone remains the expensive brand over other smartphones.
Apple’s position
The industry is seeing strong growth in the emerging market that will attract key vendors to offer cost-effective products. Apple may lose its position in a growing market, either they need to offer old model at discounted price or sell a product below market price. Apple Inc. (NASDAQ:AAPL) has launched iPhone 5C at $100 to target customers from emerging markets; however, the product is unsuccessful despite its lower prices and colorful models. But, in recent quarter (1Q2014) ended in December 28, 2013, Apple sold 51 million iPhones, up by ~7%, compared to prior year quarter.
Margin pressure
Apple Inc. (NASDAQ:AAPL) is already experiencing margin pressure due to decreasing in market share and keeping away from mass market of smartphones. The margins may further reduce with more features and launch of widescreen gadgets. Apple Inc. (NASDAQ:AAPL) is unlikely to change its pricing over iPhone as its competitors. The Company will offer products with innovation in designs such as wide screen and additional features.
