Major shakedown coming in mobile phone market

LG, Motorola and Samsung advised to change course.

The current mobile phone market is facing a major shakeup in the coming four years, with many current established players getting left behind as the market moves to smartphones.

Delegates at Semicon 2009 heard how the market for smartphones is growing rapidly and cannibalising other sections of the consumer electronics market.

However, some of the biggest names in the industry are not ready and will be left by the wayside, according to Gartner’s principle research analyst Jon Erensen.

“There’s a huge shift going on in the market,” he said.

“Some of the existing players will find it difficult to catch up. Expect a major shakeout in the market.”

He said that the smartphone had now reached a technological level where it was a suitable platform for a whole variety of applications. Phones that are built around single functions, like music, are being replaced by smartphones and the platform was also stealing sales from the consumer electronics industry in general.

However, successful smartphones needed to have both strong hardware and functional software. Some of the biggest mobile phone providers are lacking crucial software expertise and will suffer in the years ahead.

Erensen named LG, Motorola and Samsung as the companies with most to fear. Apple was looking strong and Nokia has been buying mobile software companies to augment its offering and so should prosper.

By 2013 he forecast that smartphones would be showing an average of 28.7 per cent compound annual growth, compared to -2.1 per cent for low-end phones and -4.5 per cent of enhanced phones.