Mobile Insider is a monthly publication that examines the most important trends in mobile. Each issue focuses on a specific trend, breaking it down to its essential elements and distilling it to an easy-to-digest 5-page format. Mobile Insider is part of Mobile Innovation Economics - a full service that tracks and evaluates major trends and translates them into actionable insights, helping you shape your strategy according to the market dynamics.
This issue of Mobile Insider was first published in April 2012 and discusses the commoditisation of the handset market and the possibility of an Apple-Samsung duopoly.
The launch of the iPhone fundamentally changed the basis of competition, eliminating players without a vibrant ecosystem (i.e. iOS or Android). Android then commoditized the production of smartphones, reducing the importance of economies of scale that had made Nokia a leader in the past and sending market concentration in a plunge.
To sustain profitability in the commodity smartphone market, OEMs need to create a tailored value chain. Apple has done so by innovating at each point of the value chain. Among all other OEMs, only Samsung has created a unique value chain configuration by integrating across hardware production and capturing profit at multiple links of the value chain. Together Apple and Samsung capture more than 80% (and rising) of the profits in the handset market.