The rest of 2012 will be very challenging for smartphone makers asthey struggle to find ways to differentiate their "black slabs,"Richard Kramer, managing partner at Arete Research, said during theopening address at the Open Mobile Summit conference in London. Smartphone sales will total between 750 million and 800 millionunits and add up to over US$230 billion during 2012, according toKramer. However, Apple, Samsung Electronics and HTC are the onlyvendors making money, he said. "This problem is going to get worse in 2012," said Kramer. The underlying issue is that the phone vendors have a massive issuewith differentiation, while new entrants are expecting lower profitmargins. The mobile phone industry has in the past three yearsmoved to making products that for the average consumer all looklike flat black slabs, Kramer said. The end result is that the PC market model is coming tosmartphones, according to Kramer. At the same time costs, includingpatent licensing and marketing, are going up for the phone vendors,which makes the current situation even scarier, he said. To save themselves, vendors are going to have to change. "I see this industry moving into what I call the "after hardware"phase. We have done hardware, and we all have high-speedtouchscreen smartphones in our pockets," said Kramer. One of the ways vendors are hoping to differentiate themselves isby integrating the smartphone with other types of devices,including the TV. For example, Sony is hoping to revitalizesmartphone sales by taking advantage of its other consumerelectronics products. But that isn't going to happen overnight, according to SteveWalker, chief marketing officer at Sony Mobile Communications, whotook part in a keynote panel at the Open Mobile Summit. "We don't converge everything all at once. The consumer doesn't gointo a mobile phone store and say I'd like to buy convergence,please. But what they do is start with one thing and then connectit to another, and maybe they try a few services, and before youknow it things are really starting to work together," said Walker. When phones look the same, brand becomes very important when peopleare standing in the store about to pick a new phone. But just a well-known brand isn't enough, according to Walker. Theproduct still needs to live up to the brand image if the consumeris going to buy a phone from the same vendor again, and moreimportantly recommend it to friends, he said. The smartphone market isn't just about high-end smartphones for theU.S. and Europe, according to Kramer. What is happening in emergingmarkets is just as interesting, and just as consumers in theseparts of the world have bought cheap phones they will increasinglybuy cheap smartphones, which will cost below $100, going forward. "Emerging markets will be about 60 percent of smartphone sales nextyear," said Kramer. For example, Vodafone is about to launch the Smart 2, which willoffer the same performance as a high-end smartphone did three yearsago, according to Vodafone's group terminals director PatrickChomet, who also took part in the discussion. Smartphones in emerging markets will increasingly be co-brandedwith some sort of Web service, while tablets will become thelow-cost computing platform, according to Kramer. Two terms often used in the smartphone market that Kramer isn't abig fan of are "commodity" and "open". When Kramer hears commodity he thinks of corn, copper and wheat,not something that an R&D department spends nine months todevelop; he believes that something that is truly open has becomemyth. The likes of Apple, Google, Facebook and Amazon aren'tinterested in it, according to Kramer. "None of these guys want open ecosystems," said Kramer. Send news tips and comments to mikael_ricknas@idg.com. The e-commerce company in China offers quality products such as 4D Theater System , 3D Theater System, and more. For more , please visit 4D Cinema System today!
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