LAB University of Applied Sciences

Faculty of Business Unit

Degree Programme in International Business, Lappeenranta

Nikolai Sedov

Global Android Smartphone Market:

Strategy Recommendations

Thesis 2020
Abstract
Nikolai Sedov
Global Android Smartphone Market: Strategy Recommendations, 55 pages
LAB University of Applied Sciences
International Business, Lappeenranta
Thesis 2020
Instructor: Jaani Väisänen, LAB University of Applied Sciences (Senior Lec-
turer)

The purpose of the research is to provide recommendations on business strate-

gies for participants of the global Android smartphone market.

The recommendations were developed through a descriptive and exploratory re-

search of various related topics – first, the market was overviewed in general,
then, products, pricing and general strategies of the case companies were ana-
lysed. The main theoretical concepts used were David Aaker’s market analysis
dimensions, Wiley Encyclopaedia of Management’s market competition spec-
trum, part of the 4P “Marketing Mix”, Joel Dean’s “Pricing Policies for New Prod-
ucts” and Porter’s Generic Strategies. The information was obtained from sec-
ondary sources.

The conclusion chapter presents an overview of the market, products, pricing,

and strategies of the case market leader companies. From there, some general
recommendations for other market participants and potential new entrants are
provided.

Keywords: Smartphone, Android, Market

2
Table of Contents

1 Introduction .................................................................................................. 4
1.1 Background............................................................................................ 4
1.2 Objectives and Questions ...................................................................... 5
1.3 Scope..................................................................................................... 6
1.4 Theoretical Framework .......................................................................... 7
1.5 Delimitations .......................................................................................... 7
1.6 Methodology .......................................................................................... 8
1.7 Structure ................................................................................................ 9
2 Literature Review ....................................................................................... 10
2.1 Previous thesis publications................................................................. 10
2.2 Market Analysis Literature ................................................................... 11
2.3 Case Companies Literature ................................................................. 13
2.3.1 Product and Price Review ............................................................. 13
2.3.2 Porter’s Generic Strategies ........................................................... 14
3 Empirical Research .................................................................................... 15
3.1 Market Analysis ................................................................................... 15
3.1.1 Size and Growth ............................................................................ 16
3.1.2 Market Structure and Profitability .................................................. 17
3.1.3 Market Trends ............................................................................... 22
3.2 Case Companies Product and Price Review ....................................... 26
3.2.1 Samsung: Products ....................................................................... 27
3.2.2 Samsung: Price ............................................................................. 30
3.2.3 Huawei: Products .......................................................................... 32
3.2.4 Huawei: Price ................................................................................ 33
3.2.5 Xiaomi: Products ........................................................................... 35
3.2.6 Xiaomi: Price ................................................................................. 37
3.3 Strategies............................................................................................. 38
3.3.1 Samsung ....................................................................................... 38
3.3.2 Huawei .......................................................................................... 39
3.3.3 Xiaomi ........................................................................................... 41
3.3.4 Strategy Analysis and Recommendations ..................................... 42
4 Conclusions ............................................................................................... 46
4.1.1 Findings......................................................................................... 46
4.1.2 Self-Reflection ............................................................................... 48
References........................................................................................................ 50

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1 Introduction

The topic of the research is strategy recommendations for the global smartphone
market of Android devices. It is carried out as a study of the market and a case
study of the year 2019 three market leaders by shipments worldwide (Canalys
2020) – Samsung, Huawei and Xiaomi. The research will examine some aspects
of their products, pricing and strategies. From the market overview and case ex-
amples, general recommendations will be given to other market participants.

The topic has been chosen out of the author’s personal interest. The author fol-
lows the smartphone market news, reads internet articles on the subject and
watches the competition of different smartphone brands. Having certain
knowledge of the market has helped the author observe some research gaps in
public knowledge, and the topic of the factors of strategic advantage in the recent
years does not appear to be well-studied. It is worth noting that while the
smartphone industry (like many other similar markets) has many gaps in public
knowledge, it is most likely that the market stakeholders conduct extensive re-
search, but the findings are largely kept within the companies’ own intelligence,
unreleased to the public.

The smartphone market is indeed worth researching – it is a market with large

sales volume and significant growth potential. According to statista.com (2020),
the global smartphone sales volume in 2018 were estimated at around $522 bil-
lion, and a stable growth trend is observed over the recent years. Smartphones
are undoubtedly a very relevant item for consumers and the smartphone market
is expected to continue growing in the years to come, albeit, as for spring 2020,
the coronavirus pandemic is adversely affecting virtually any industry, and the
smartphone market is no exception.

1.1 Background

As described in Encyclopaedia Britannica, a smartphone is “a mobile telephone

with a display screen (typically a liquid crystal display, or LCD), built-in personal
information management programs (such as an electronic calendar and address

4
book) typically found in a personal digital assistant (PDA), and an operating sys-
tem (OS) that allows other computer software to be installed for Web browsing,
e-mail, music, video, and other applications” (Hosch 2009).

Nowadays, the term “smartphone” is familiar to virtually anyone. It is, undeniably,

a technological and a social phenomenon that influences daily lives of ordinary
people, allowing for instant access to information and offering significant compu-
ting powers, while fitting into a regular pocket.

The global smartphone market is a relatively young yet ever-growing market. In

early 2020, the number of smartphone users was recorded at over 3 billion, and
it is expected to grow further. Despite showing some signs of stagnation, the mar-
ket still has significant potential due to rather low market penetration rate in many
countries, including India and China, where it is below 70 per cent. (O’Dea 2020.)

The smartphones are commonly seen as successors to the so-called feature

phones, whose functionality was not usually extended far beyond the basic phone
call and text message features. IBM’s Simon, first sold in 1994, is now regarded
as the first smartphone in history, although it was not called a smartphone at the
time (BBC News 2014). However, it was not until 2007 that smartphones rose to
prominence, when Apple introduced the iPhone. Following Apple’s success,
other manufacturers hurried to enter the market. Since then, the market has seen
extensive growth and has changed significantly.

1.2 Objectives and Questions

The purpose of the research is to provide general business model guidelines for
smartphone market participants, with the guidelines based on the strategies of
the market leaders. Analysing the cases of market leaders may be useful to other
market participants for improving the competitiveness. This is to be done through
research in various stages. First, the Android smartphone market overall is to be
analysed based on several analysis dimensions. Analysing the market is neces-
sary to provide background for analysing the case companies. Next, part of the
marketing mix – products and pricing – of the three market leaders (Samsung,
Huawei, Xiaomi) are to be reviewed. From the findings, the strategies of the three
case companies are to be analysed based on Porter’s Generic Strategies.

5
The concept of Porter’s Generic Strategies is a well-known model and suits well
for analysing business strategies in general. The theory model of this concept
requires understanding of products and pricing, but, for example, the “Place” and
“Promotion” parts of the Marketing Mix are not necessary.

The research findings might be useful to existing market participants, potential

market entrants, any smartphone market stakeholders (e.g. investors) or other
researchers.

The main research question is what business model recommendations may be

given to the smartphone market participants. The answer depends on the re-
search findings that provide answers to the additional questions, which are set
as following:

1. What are the size, structure, profitability and trends of the global
smartphone market?
2. What are the characteristics of products of the market leaders?
3. What are the pricing policies of the market leaders?
4. What strategies do the three market leader companies pursue and why?

1.3 Scope

The research subjects are the global Android smartphone market as a whole and
the three market leaders by shipments of 2019 – Samsung, Huawei, Xiaomi –
analysed as competitors with competing products, which, within similar price
ranges, differ in performance, value of components and overall value.

The research will start by analysing the Android smartphone market as a whole
through available secondary information. The market analysis will rely on David
Aaker’s dimensions: actual and potential market size, market growth, market prof-
itability, cost structure, distribution systems, trends and developments, key suc-
cess factors (Aaker & McLoughlin 2010, pp. 61-62). The research of each dimen-
sion will depend on availability of secondary information.

6
Then, the market leader manufacturers will be analysed for their strategy and
marketing. The key concepts for this stage of the research will be Porter’s Generic
Strategies and Marketing Mix (4P).

1.4 Theoretical Framework

The research, on its various stages, will be based on the framework of certain
theories of market research and marketing.

The market analysis will loosely rely on David Aaker’s market analysis concept
with various dimensions, such as market size, market growth rate and market
profitability. Various internet sources of secondary data will be used to evaluate
the smartphone market as a whole. Market Structure and Competiton in general
will be examined based on the concept of competition spectrum from Wiley En-
cyclopedia of Management.

For analysing the market leader companies, several theories will be used. The
“Product” and “Price” parts of the popular model of 4P Marketing Mix will be used
to generally describe what the case firms offer and what their pricing policies are.
For this concept, the 2012 publication by Meera Singh in the Journal of Business
and Management will be relied on, although reviewing the products does not re-
quire adherence to strict theory. The pricing will be evaluated based on Joel
Dean’s 1976 “Pricing Policies for New Products” publication. Based on the find-
ings and other secondary information, their strategies will be evaluated based on
the model of Porter’s generic strategies, relying on publications of Michael Porter
himself and Peter Wright’s 1987 “A refinement of Porter’s Strategies”. This con-
cept would be used to classify the strategies of the business as either cost lead-
ership, differentiation or focus.

1.5 Delimitations

The research will have certain delimitations. It will concern various stages of the
research process.

The first delimitation is the target market. The focus of the research is the portion
of the market affiliated with handsets based on the Android platform, i.e. the por-

7
tion of market affiliated with Apple’s iOS and other operating systems is not ac-
tively addressed, albeit the Apple will be mentioned within the market analysis,
as it occupies a large portion of the market and may not be overlooked. The rea-
son for narrowing the focus to Android-associated market is the fact the Apple’s
ecosystem, iOS, is proprietary. In contrast to open-source Google’s Android plat-
form, iOS is restricted to use solely by Apple. Thereby, currently the only apparent
way for new market entrants or existing participants to engage in competition and
attempt to increase their market share is to address their efforts towards the mar-
ket of Android devices.

The second delimitation regards the manufacturers to be analysed. The research

will include the three annual Android smartphone market leaders in Europe,
based on the revenue: Samsung, Huawei and Xiaomi.

The third delimitation concerns the complimentary products market. Nowadays,

manufacturers are increasingly investing into the markets of such products as
wrist bands, wireless earphones or wireless chargers, marketed as smartphone
accessories. These are not included in the research.

In general, the goal of the research is to analyse the strategies of the case com-
panies and develop recommendations. Business strategies are comprised of var-
ious dimensions and are influenced by various factors, and some of them may
not be within the scope of the research. The research will consider some aspects
of the strategies and marketing, product-specific key selling points, competitive-
ness of technical components, performance ratings, but certain less measurable
concepts, such as brand awareness and brand equity, will not be evaluated in
their entirety, as the strategies and the actions required to influence such factors
are more subtle and are not always possible to directly analyse and develop
guidelines upon.

1.6 Methodology

The research will be qualitative and involve content analysis of data from various
secondary sources, such as business reports, industry reports, internet articles
and previous research. As the research involves analysing a large market with

8
the population of users counted in billions, personal gathering of statistically sig-
nificant and reliable primary data is not feasible for a student. At the same time,
primary sources (detailed industry reports, extensive statistics) are not accessible
and are restricted by paywalls, often as high as several thousand U.S. dollars.
The research therefore depends on secondary sources, such as business reports
and internet publications, that summarize and analyse information from primary
sources.

The methodology may be described as descriptive and exploratory research. The

descriptive part of the research is where it is concerned with describing phenom-
ena (Adams et al. 2007). A large portion of the research will be aimed at simply
describing the existing situation within the market and its participants, describing
their strategies and offerings.

The exploratory part is the research into phenomena, meant not only to simply
describe but to also answer the question why (Adams et al. 2007). The explora-
tory parts of the research are the part that will explore the strategies of the market
leaders further, the part that will attempt to uncover why the market is structured
one way or another.

The exploratory research will be carried out as an application of general theories

on the cases within the study – from the available information the strategies of
the market leaders will be classified within the theoretical framework of the “Mar-
keting Mix”, Porter’s generic strategies.

1.7 Structure

The first chapter of the thesis, concluded by this subchapter, is the introduction.
It presents what the thesis aims to achieve, explains the scope and theoretical
framework, clarifies research questions, delimitations and methodology, and pro-
vides some general information on the subject.

The second chapter will present a more detailed review of the sources and the
theoretical framework. It will explain the theoretical concepts sourced from scien-
tific publications, as well as it will mention the previous research on similar sub-
jects.

9
The third chapter will present the actual analysis, i.e. application of the theoretical
concepts to the case of the smartphone market and the three case companies. It
will include descriptive presentation of previous research findings and primary
findings of the analysis of secondary sources.

The last chapter will summarize the conclusions. The research findings will be
described in the first sub-chapter and my personal reflections will be presented
in the second sub-chapter.

2 Literature Review

This chapter will address the previous research and the theoretical concepts used
in this work.

It will begin by referring to previous thesis publications that assisted me in under-

standing the structure of thesis research. Then, theoretical concepts will be pre-
sented and reviewed.

The aim of the thesis is to analyse the strategies of the market leaders based on
the concept of Porter’s Generic Strategies, and this is to be done through analys-
ing the market as a whole and the case companies specifically. Analysing the
market gives understanding of the market as an environment where the case
companies operate, and understanding of this environment is necessary for un-
derstanding the companies’ strategies. Analysing the products and pricing of the
firms gives allows to describe and classify their strategies.

2.1 Previous thesis publications

There are various thesis/dissertation publications in open access that study

smartphones e.g. as devices in the context of psychology or information security.
However, the research of smartphone market, as well case studies of smartphone
manufacturers, do not appear to be so abundant.

One of the works on a similar topic that I have found to be relevant is a Bachelor
Thesis work “Samsung Smartphone Market Strategy”, submitted by a student of

10
Turku University of Applied Sciences in 2013. On the initial stage of planning the
thesis work, this publication was helpful as an example of similar work, providing
an idea of how a smartphone manufacturer may be studied through secondary
data. The work included such concepts as the marketing mix and Porter’s Generic
Strategies, which were also adopted in this research.

2.2 Market Analysis Literature

The goal of analysing the smartphone market is to find various characteristics

thereof, the knowledge of which may be important for analysing the case compa-
nies. Understanding such qualities of the market as its size, structure, profitability
and trends gives an understanding of the environment in which the case compa-
nies operate. Fulfilling the main objective of this research is establishing the fac-
tors of competitive advantage of the case companies, which requires an under-
standing of their strategies. One of the components of a business strategy is a
determination of the product market in which the business is to compete (Aaker
2001).

As the market analysis is not the primary objective of the research and only
serves as the background for analysing the business environment, it will not be
carried out in depth, and will only explore the general parts of the theoretical con-
cepts.

The market research will loosely rely on the guidance of David Aaker’s dimen-
sions. The concept of market analysis, as explained in “Strategic Marketing Man-
agement” is primarily targeted at determining “the attractiveness of a market to
current and potential participants” (Aaker 2001). However, within this research its
objective is merely to analyse the market as the environment in which the existing
market participants operate. For that purpose, the useful concept is the market
analysis dimensions: actual and potential market size; market growth; market
profitability; trends and developments (Aaker 2001). Relying on these concepts
allows for a well-structured description of market.

The most important characteristic describing the size of a market is the total sales
level. It is suggested to source estimates of a market size from government

11
sources, trade association findings, financial sources of market participants.
(Aaker 2001.)

After establishing the size of the market, the next important dimension is the
growth rate. Knowing what the size may be in the future is important for estimating
effectiveness of current strategies. If the market is expected to grow overall, then
market participants may expect sales growth even without increasing market
shares, and it means less price pressure. On the other hand, declining markets
bring opposite expectations – shrinking sales and more price pressure. (Aaker
2001.)

Market profitability analysis means estimating average profit levels in the market.
David Aaker’s market profitability analysis relies on Michael Porter’s Five-Factor
Model of Market Profitability. However, this model is too complicated for a general
analysis. Instead, the market structure spectrum from the Wiley Encyclopedia of
Management will be used to describe the market competition. The spectrum in-
cludes several market structure types, such as perfect competition, oligopoly and
monopoly. To classify the market as one of the types, the number of firms and
degree of differentiation are to be considered. From the market structure type, it
is possible to give a rough estimation of profitability.

Another important element of market analysis are the market trends. Describing
the market trends means describing what is likely to change in the future and
what developments market participants are pursuing.

It is important to note that the smartphone market is usually divided into various
price segments. There is no universally accepted classification, but there are ap-
proximate ranges that are more or less homogeneous. For example, Counter-
point Research classifies the market into five segments: Entry ($0-150), Mid/Me-
dium ($151-300), Mid-High ($301-400), Affordable Premium ($401-600), Pre-
mium ($600+) (Mishra 2019). This research will rely on a more approximate def-
inition, whereby products priced below ~$200 are to be considered low price en-
try-level, products priced at ~$200-$600 – mid/medium-range, and ~$600+ – pre-
mium.

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2.3 Case Companies Literature

This section reviews the theory used for analysing the case companies through
analysing their products, pricing, and overall strategies. The product review will
be done as a description of the existing products, their branding and differentia-
tion and will not strictly rely on theory. Pricing will rely on Joel Dean’s 1976 con-
cepts of skimming, penetration or market pricing The overall strategies are as-
sessed within the concept of Porter’s Generic Strategies.

2.3.1 Product and Price Review

“Product” and “Price” are part of the well-known marketing mix concept. The con-
cept describes “the combination of different marketing decision variables being
used by the firm to market its goods and services” (Singh 2012). The basic “for-
mula” is called “4P”, standing for Product, Price, Promotion and Place. It offers a
simple and memorable way to describe the foundation of marketing in a business
as a “set of marketing tools that the firm uses to pursue its marketing objectives
in the target market" (Kotler 2000).

The Product part is a physical product or service offered to consumers. The prod-
uct is essentially “a combination of different attributes”, such as colour, design,
technology, usefulness, value, i.e. any characteristics significant for consumers.
The Price part is “the amount the consumer must exchange to receive the offer-
ing” (Borden & Marshall 1959) and may include the prices at any stage of sales
and through any channels. In this research only prices of end sales will be exam-
ined. (Singh 2012.)

While analysing “Place” and “Promotion” parts would provide valuable insights
into the business of the case companies, reviewing their product and price poli-
cies is sufficient to classify their strategies.

The pricing of certain products or product lines will be classified as “skimming”,

“penetration” or “market pricing” strategies, as classified by Joel Dean in his “Pric-
ing Policies for New Products”, published in Harvard Business Review in 1976.
Skimming prices are relatively high (Monroe 2003) or “high in relation to what
most buyers in a segment can be convinced to pay” (Nagle et al. 2011), while

13
penetration prices are relatively low (Monroe 2003), or “low relative to perceived
value in the target segment” (Nagle et al. 2011). Market pricing strategies keep
the price close to the market average. Another important characteristic is whether
the pricing follows the market average, or evolves below or above. (Spann et al.
2015.)

2.3.2 Porter’s Generic Strategies

After evaluating Xiaomi’s products and pricing, their strategies may be classified
wider. The main theory concept used for that purpose is Porter’s Generic Strate-
gies, identified by Michael Porter in the books “Competitive Strategy” and “Com-
petitive Advantage” from 1980 and 1985. Namely, the three strategies are overall
cost leadership, differentiation and focus strategies. The concepts of these strat-
egies are well-known in the business environment and are suitable for a general
overview of the business strategies.

Cost leadership refers to a strategy of producing products at low costs with little
differentiation and standardized products. The target group of consumers is usu-
ally wide and not strictly defined. This strategy involves such elements as “ag-
gressive construction of efficient-scale facilities”, significant cost reductions. De-
spite the priority of minimizing costs, quality and service may not be overlooked.
(Porter 1980.)

Differentiation may be described as a strategy of making a company’s offerings

different or unique within the industry, and not primary aimed at price-sensitive
buyers. However, the products or services within this type of strategy are still
aimed at a wide consumer audience. There are many possible ways to differen-
tiate offerings, such design, brand image, technology, or features. (Porter 1980.)

Focus strategies are those that target the needs of specifically defined target
groups of consumers who are fewer than the target audience of the two previous
strategies. The premise of this type of strategy is being able to serve a strategic
cluster of the market more effectively than competitors who target broader audi-
ence. This means a firm achieves certain differentiation through better meeting
the needs of their target groups, or offers lower costs for their target groups, or
both. (Porter 1980.)

14
According to Porter, failing to develop a strategy in at least one of the three di-
rections is “an extremely poor strategic situation”, and a firm “stuck in the middle”
is likely to suffer from low profitability.

The framework was further contributed by other writers. Peter Wright, in his 1987
“A Refinement of Porter’s Strategies”, explains that there are limitation bounda-
ries regarding the choices of strategies, primarily in terms of the size of the firms
and access to resources. Larger firms with easier access to resources are likely
to primarily opt for cost leadership or differentiation, while smaller firms are largely
confined to pursuing focus strategies. If larger firms decide to pursue a focus
strategy, it is not likely to be their only adoption. (Wright 1987.)

Another important point of the traditional concept is that the cost and differentia-
tion strategies are usually incompatible, i.e. achieving a cost leadership involves
the emphasis on cutting costs, which usually requires standardizing the offerings,
making it impossible to effectively differentiate the products. However, as argued
by some researchers, hybrid strategies may also be possible. Notably, Porter is
said to have revised his ideas in 2007 and have accepted the existence of hybrid
strategies (Prajogo 2007).

According to Wright, adopting a focus strategy as a single option is usually not a

viable option for larger firms. It may be therefore assumed that all large manufac-
turers within the smartphone market focus on either cost leadership or differenti-
ation. They may also adopt a hybrid strategy with elements of both strategies.

3 Empirical Research

3.1 Market Analysis

This section presents the empirical research of the market. Market size, growth,
competition structure, profitability and trends are to be examined.

15
3.1.1 Size and Growth

The size of the smartphone market may be expressed in different ways. Most
commonly, market size is expressed in annual revenue. In 2019, the market was
valued at $714.96 billion, and it is projected to surpass $1350 billion by 2025
(Mordor Intelligence 2020).

The history of the market demonstrates consistent growth of unit shipments to

end users, albeit in 2019 a slight decline was recorded. It has been projected to
continue growing, however, the coronavirus pandemic might bring the annual fig-
ure to a decline in the end of 2020. Figure 1 demonstrates the history of unit
shipments to end users with 2019 and 2020 figures as projections.

Figure 1. Worldwide Smartphone Unit Shipments to End Users (O’Dea 2020)

According to DataM Intelligence (2020), the market is expected to grow at a

CAGR (Compound Annual Growth Rate) of 12.20% from 2020 to 2027. Notably,
in 2020 the market is likely to decline due to coronavirus pandemic. However, this
effect is most likely to be temporary and the innate upward trend of the market is
expected to continue once the pandemic is over. This means that the market
participants may, on average, expect an increase in sales.

16
However, as noted by Mordor Intelligence (2020), the market growth is reaching
the plateau stage due to high penetration levels and lengthening replacement
cycles. On the other hand, it is argued that many countries, including China and
India – world’s two largest markets, have penetration levels below 70 per cent,
which may present considerable growth potential.

It may be therefore concluded that the overall growth trend is likely to remain
positive, albeit it might be slowing down. However, this may vary significantly by
the region, with sales in some business areas growing and stagnating or falling
in others. The major market participants may expect sales volumes to grow (if all
else remains unchanged). The overall sales growth should have a positive impact
on price pressure. However, it is important to note the negative effects of 2020
coronavirus pandemic. While it is not possible to predict the impact precisely as
of now, as the situation has not been resolved yet, in 2020 the market is likely to
experience a temporary decline, and therefore a temporary increase in price pres-
sure.

3.1.2 Market Structure and Profitability

Analysing the market structure and profitability allows to see a more detailed pic-
ture of the market. Figure 2 below represents various market structures that may
observed in different markets, such as perfect competition, monopolistic compe-
tition, etc. (Knight & McGee 2012).

Market Structure Number of firms Degree of Comments

differentiation

Perfect competition many zero Fragmented, commodity-like

Monopolistic or many some Multiple niches, Localised

imperfect competition competition

Oligopoly - Some to very few Low Commodity-like with scale

undifferentiated economies e.g steel

Oligopoly - Some to very few high Strategic interdependence

differentiated Large segments
Dominant firm One to very few high Price leadership, high entry
barriers, competitive fringe

Monopoly single Not applicable Natural monopoly due to very

high scale economies

Figure 3.11
Market Structure; the Broad Spectrum for Competition
17
Figure 2. Market Structure: the broad spectrum for competition (Knight & McGee
2012)

As seen from the Figure 2, to classify the smartphone market it is first needed to
estimate the number of participating firms and the degree of differentiation.

It may be said that the number of firms within the smartphone market is rather
large. For reference, a popular technology website GSM Arena lists about a hun-
dred smartphone brands (although some of them may be owned by the same
companies). Another website, Phone Arena, lists over a hundred manufacturers.
However, it is important to note that the market is dominated by only a few man-
ufacturers, whether considering the smartphone market as a whole, or only the
market of Android devices. The figures below will demonstrate the overall struc-
ture of the market.

Figure 3 demonstrates the shipments and the corresponding market share of the
whole smartphone market. It should be noted that the report includes Apple as a
market participant. However, Apple does not manufacture Android smartphones
and is therefore not counted as one of the market leaders.

18
Figure 3. Worldwide Smartphone Shipments and Market Share (Canalys 2020)

Based on the data from Figure 3, the market share for Samsung, Huawei and
Xiaomi within the Android market may be calculated by excluding Apple. It should
be noted that the smartphone market also consists of a small percentage of
smartphones based on operating systems other than Android and iOS, which is
not indicated in the report. However, the market share corresponding to those
shipments is minor and does not exceed 2% of all shipments (Statcounter 2020).
Therefore, due to the lack of information and the small numbers, this may be
neglected. Figure 4 demonstrates the market share calculated within Android
smartphone market (also including other minor operating systems).

Vendor 2019 Ship- 2019 Market 2018 Ship- 2018 Market

ments Share ments Share

Samsung 298.1 25.5% 293.3 24.9%

Huawei 240.61 20.6% 206.01 17.5%

Xiaomi 125.5 10.7% 120.6 10.2%

Others 504.5 43.2% 557.4 47.3%

Total 1168.6 100% 1177.2 100%

Figure 4. Worldwide Android Smartphone Shipments and Market Share

As demonstrated by the figures above, the smartphone market is dominated by

a small number of firms. About as much as 72 per cent of the whole smartphone
market is occupied by five largest firms. In the market of Android devices, four
major participants occupy a combined share of about 65 per cent. It may be there-
fore said that the number of significant market participants is rather small, which
suggests that the market has characteristics of an oligopoly.

19
The other characteristic of the market to examine is the degree of differentiation.
The product differentiation is a condition whereby “products are not perceived as
equal on each of the product characteristics, including price”. A differentiated
product offering is “perceived by the consumer to differ from its competition on
any physical or nonphysical product characteristic including price”. (Dickson &
Ginter 1987.)

The example of low differentiation from Figure 2 is commodity markets, e.g. steel.
Certainly, it may be easily observed that the smartphone market is more differen-
tiated than commodity markets, as the offerings sport a rather large variety of
features advertised to consumers. Some examples significant technological fea-
tures available in smartphones are display, resolution, processor, RAM, storage,
front camera, rear camera (Kalyani 2018). Other significant dimensions of differ-
entiation are branding and pricing.

It may be therefore induced that the smartphone market may be classified as a

differentiated oligopoly. This implies that some characteristics of the market may
be deduced. Oligopolies often result from “patented innovations or from taking
advantage of economies of scale to produce at low average cost”, which may
essentially provide significant benefits to consumers, but increase the price pres-
sure for market participants and create substantial entry barriers (OpenStax Eco-
nomics 2016).

The profitability within oligopoly largely depends on the degree of competition. In

such markets, participants “do not typically produce at the minimum of their av-
erage cost curves”, and, lacking intensive competition they may also lack incen-
tives for innovation and high-quality offerings (OpenStax Economics 2016). This
also means they may afford to charge substantial price premiums. However,
within the Android smartphone market the competition is known to be rather in-
tense. As explained further, Apple and its iOS-based products are an exception.

The difference between Apple and other smartphone market participants is very
notable. While Apple’s industry unit sales are about 15 per cent, its operating
profit captures over 80 per cent of that of the whole market. At the same time, left

20
altogether with about 20 per cent of the market operating profit, Android
smartphone vendors are not nearly as profitable. (Takakuwa 2019.)

Interestingly, in the fourth quarter of 2016, Apple’s share of the total profit in the
smartphone market was recorder at 104 per cent, as some other producers
showed negative results and lost money (Reisinger 2016).

The conclusion that follows from such profit asymmetry is that the customers of
Apple, as compared to Android customers, are likely to be less price sensitive
and tend to have higher purchasing power. Those purchasing Android
smartphones, reversely, might often be more concerned with the price. This is
confirmed, for example, by a survey conducted by Slickdeals in 2018 – iPhone
users’ average salary was $53,251, with Android users earning an average of
$37,040 (Cision PR Newswire 2018).

One of the reasons behind the profit asymmetry is the entry barriers. While An-
droid has been historically licensed by Google (free of charge) to any manufac-
turers that meet certain requirements, Apple’s iOS has been restricted to devices
produced by Apple itself. This has led to abundance of offerings from various
vendors on the Android smartphone market and consequent price pressure, while
the market portion controlled by iOS devices has been solely that of Apple. And
while the intensifying competition among Android manufactures affects Apple as
well, as their users may see Android devices as a replacement, it still allows Apple
to dominate the industry operating profits.

As explained by Kentaro Takakuwa (2019), the effect of the fierce price competi-
tion on the Android handset market forces the prices to decline towards the mar-
ginal production cost. Subsequently, the profitability of Android smartphone man-
ufacturers continues to decline.

It is also suggested that over time the smartphone market has evolved into a
Stackelberg structure, whereby Apple is the market leader, setting the direction
and enjoying high profits, while the rest of the market participants are following
the moves of the leader (Feng & Yu 2019). However, in the recent years Apple
has also been sometimes criticized for lack of innovation and increasing similarity
of its product line. Arguably, other market participants do not always simply follow

21
the decisions of Apple, but contribute to the innovation on their own and have
their own strategies. This means that the market structure and profitability within
the Android market may be also shaped by the actions of its participants, albeit
within certain limits.

It may be concluded that the market of Android smartphones is a differentiated

oligopoly with substantial price pressure. The only vendor of the whole
smartphone market that enjoys high profitability is Apple, which does not belong
to the Android market. Intense price competition among manufacturers of Android
handsets over the years has been driving the selling prices down and severely
limiting the profits. This is not likely to change in the near future, unless, for ex-
ample, Android vendors develop highly differentiated products that would allow
to increase the price premiums. Another scenario that would ease the price pres-
sure is a significant portion of Apple customers switching to Android devices,
bringing their higher purchasing power.

Profitability may also vary in different price segments. Typically, lower price seg-
ments present consumers that are more price-sensitive and are looking for higher
value for the price they are ready to pay.

3.1.3 Market Trends

This section addresses some trends and projections within the smartphone mar-
ket that may affect the current strategies and decision-making. Specifically, the
average selling price, price segment sales trends and technological features are
examined.

3.1.3.1 Average Selling Price

As known, smartphone is an electronic product containing integrated circuits as

its major component. It is thereby argued that the price trend of the smartphone
market should follow Moore’s law, which implies that the cost of integrated circuits
declines in an exponential manner (Feng & Yu 2019).

However, this is not supported by the price trend over the past several years.
According to projections by Statista, the global ASP (average selling price) of

22
smartphones will increase from $282 in 2016 to $317 in 2021, and the same pos-
itive trend is expected within the market of Android handsets (O’Dea 2020). In
2018, ASP grew by 9 per cent year-over-year, which was the highest growth rec-
orded so far (Mishra 2019). The growth contribution was mostly made by the pre-
mium price segment.

Figure 5 displays the trends over various segments in 2018. As seen from the
graph, the most growth was recorded in the premium price segment of $600 and
above. Some growth was also recorded in the mid-range of $151-300.

Figure 5. Net Sales by Price Bands in 2018 (Mishra, V. 2019)

However, the ASP growth does not reject the power of Moore’s law. As the costs
of the key components continues to decline, the cost of making the same
smartphone decreases every year. Some potential reasons behind the ASP
growth might be intensifying differentiation of products through using innovative
and more expensive technologies, investing more into marketing or research and
development, or charging higher price premiums in the high-end segment. For
example, one of the key components of a smartphone is the CPU chip. Technol-
ogy websites claim that the price for a Snapdragon 865 5G CPU is about 50%

23
more than that of the 4G counterpart (Banerjee 2020). The growth the mid-range
segment might be a sign of the effects of the Moore’s law – it may be speculated
that phones that are good enough to satisfy many consumers are becoming
cheaper and fall into the mid-range category.

This is supported by Strategy Analytics’ statistics of the best-selling Android

phones in the first three months of 2020. According to the research powerhouse,
the market of Android handsets “is increasingly dominated by more affordable
models”. As commented by a publisher Jon Porter on “the Verge”, only one of the
six smartphones belongs to the premium price segment. The author then specu-
lates that users are becoming increasingly price-sensitive and want affordable
“value-for-money” devices, and that the Android market is “entering a post-pre-
mium era”. (Porter 2020)

Thereby, while the ASP of Android smartphones has been and might continue
increasing, there is evidence that the innate production costs are, in fact, declin-
ing, according to Moore’s law. The ASP is distorted by the high growth in the
premium segment where vendors charge the highest premiums. Despite the pre-
mium segment growth, it may be said that “value-for-money” smartphones that
most consumers find attractive are becoming cheaper and growing in popularity,
as shown by the growth in the mid-range segment and by the fact that most of
the best-selling Android smartphones are in the mid-range price segment.

It may be therefore argued that further growth may be expected in the mid-range
price segment. The growing popularity of affordable smartphones and the in-
creasing value these devices offer to consumers (allowed by decreasing costs of
key components) may increase the overall price pressure on the smartphone
market, as it may become harder for vendors to justify the higher prices of pre-
mium smartphones in the future.

3.1.3.2 Technological Features

There are certain technologies and features that many of the smartphone manu-
facturers are actively researching and investing into. Following these trends is of
vital importance to the vendors as neglecting them may result in falling short of
competitors and losing market share.

24
Perhaps, the largest trend in terms of anticipations and attention is the adoption
of commercial 5G networks. As Huawei reported in the end of 2019, over 60 car-
riers had then introduced 5G networks and more than 180 devices with 5G sup-
port had been released. Huawei projects that by 2025 58 per cent of the world’s
population will have access to 5G. (Huawei Investment & Holding Co., Ltd. 2019.)

It may be indeed observed that an increasing number of smartphone models offer

5G-support in 2020, including the latest product by Samsung, Huawei, Xiaomi
and other major vendors.

Another trend that has caught attention of the public and the manufacturers is the
foldable devices. Speculations of such developments actively emerged in 2018
with significant media attention. For example, as reported by technology news
media the Verge in January 2018, LG had filed for a patent for a “mobile phone
with a flexible display which can be folded in half.” Another internet news source
CNET reported in November 2018 that Samsung had presented its first foldable
smartphone and shared its plans to launch mass-production within months. Since
then, many other vendors have launched efforts into development of such de-
vices, and some have released the products. For instance, as of May 2020, Gal-
axy Fold is available to consumers in Finland at a price of €1600-2100 (as may
be observed from price monitoring services, such as Hintaseuranta.fi). But, ap-
parently, in 2020 foldable devices remain rather expensive for the mass market,
priced well above the average selling price within the market, as well as above
the prices in the premium segment.

Another increasingly popular feature is the higher refresh rate of the screens. As
known, the refresh rates of the visual displays are measured in Hertz (Hz), with
one 1 Hz reflecting one update of the screen image within a second. So far, the
industry standard for most commercial displays has been 60 Hz, meaning that
the displays would refresh the picture 60 times per one second. In 2019-2020,
more and more models come with higher refresh rates of 90Hz or 120Hz as one
of their key selling points. Some recent examples listed on the technology website
Android Authority are Samsung Galaxy S20, OnePlus 7T, Realme X50 Pro 5G,
Asus ROG Phone 2, Google Pixel 4 XL.

25
Multiple camera setups and increasing sensor resolutions is also a noticeable
development of the recent years. Unlike just a few years ago, in 2020 practically
any smartphone in mid-range and higher price segments sports more than one
rear camera. At the same time, the resolution of the main sensor in some models
already exceeds the point of 100 million pixels (megapixels). Some phones with
a camera powered by a 108-megapixel sensor are Samsung Galaxy S20 Ultra,
Xiaomi Mi 10 Pro, Xiaomi Mi Note 10, Motorola Edge Plus. Interestingly, Xiaomi’s
Mi Note 10 is referred to as a mid-range device (for example, by a popular tech-
nology website TechRadar). It is indeed priced closer to medium range than pre-
mium segment, starting from €499 in Finland’s internet retail store verkko-
kauppa.com. This might be another example of smartphones becoming increas-
ingly competitive within more affordable price categories.

3.2 Case Companies Product and Price Review

This section will review the products of the three firms and the pricing strategies
used. Product sections aims to describe the product in terms of their branding
and differentiation. Price sections describe the pricing policies as either skim-
ming, penetration, or market pricing.

Samsung, founded in South Korea in 1938, is a company with long history. As of

2020, Samsung is the world’s largest smartphone manufacturer based on the
shipment count. It may be said that Samsung has a strong brand image that
spans across many technology-related markets.

The second largest vendor of Android smartphones is Huawei. Founded in China

in 1987, it is also a well-known company with an established brand image and a
significant market share.

The third case company is Xiaomi, which is also based in China. It is a relatively
young company, founded in 2010. Despite its “young” age, Xiaomi has managed
to achieve substantial growth, being world’s fourth largest smartphone manufac-
turer in 2019 (third in Android market).

26
3.2.1 Samsung: Products

In 2020, Samsung offers their smartphones in a clear line-up. The major product
lines are branded as Galaxy S, Galaxy Note, Galaxy A and Galaxy M. The first
two offer premium (flagship) model at higher prices, while the latter two are
formed of more affordable offerings. Galaxy Z Flip and Galaxy Fold are two other
lines that offer innovative designs, but these have not reached the popularity of
the traditional smartphones yet. Only the major line-ups “S”, “Note” and “A” are
examined in detail to simplify the research.

The Galaxy S series is where Samsung intends to offer the most. As described
on the company’s official website, “if it's innovative, the Galaxy S Series has it in
spades. Revolutionary cameras. A battery that wirelessly charges other batteries.
An expansive display that clears the way for your creative vision” (Samsung
2020). As may be observed, such terms as “innovative” and “revolutionary” are
used to describe the product of the line. The offered specifications are highly
competitive. Some features of the latest flagship model, Galaxy S20 5G (as well
as S20+ and S20 Ultra), are latest high-end processors – Exynos 990 or Qual-
comm Snapdragon 865, AMOLED displays with 120Hz refresh rate support and
multiple camera setups with up to 108-megapixel sensor resolution. One appar-
ent key feature is the “100X Space Zoom”, as marked at rear side of the
smartphone. (Samsung 2020.)

The overall trend of sales volumes within the Galaxy S-line may be described as
decreasing. It may be worth mentioning that in the earlier years of the Android
market, the brand “Galaxy” was sometimes synonymous to Android smartphones
altogether, denoting some very high popularity of the Galaxy phones. As de-
scribed by South Korea Electronics Industry Media “The Elec”, the sales of Gal-
axy S-smartphones have been steadily declining over the years. It is also re-
ported that “Samsung has also radically cut its demand for the S20 parts.” (Lee
2020.)

One of the apparent reasons behind the struggling sales of the latest S-series
model is the coronavirus pandemic, which affects all of the market. It may also
be speculated that as Samsung consolidates their efforts towards the affordable

27
segment with the launch of Galaxy A-series and its “value-for-money” offers, and
at the same time keeps increasing the price tags for every new flagship model, it
becomes harder to convince the consumers to pay the higher prices for flagship
devices.

The Galaxy Note series is another product line of high-end smartphones. As may
be seen from the description the official website, it offers highly competitive spec-
ifications, similarly to Galaxy S series. The distinction is an addition of a stylus-
pen that may be used for handwriting or drawing. Apparently, the primary in-
tended audience of Galaxy Note products are business customers, as may be
seen from one of the product webpages on the company’s website.

The official description of the Galaxy A series is as follows: “The Galaxy A series
has everything you want in a smartphone, like high-capacity, fast-charging bat-
teries , multi-lens cameras and Infinity Displays—at the incredible value you de-
serve.” One of the key terms here is “the incredible value”, indicating the more
affordable pricing of the line. At the same time, it is emphasized that the products
of the line do offer competitive features. One of the products of the line, Galaxy
A51, has been named as the world’s best-selling Android smartphone of the first
quarter 2020 (6 million units shipped with 2 per cent market share).

Evaluating the products from the Galaxy A-series technologically, it may be said
that Samsung does not appear to offer particularly innovative products in this
product line. If compared to the offers of such competitors as Xiaomi, it may be
noted that similarly priced products of Samsung technically offer less. For exam-
ple, Galaxy A41 smartphone, offered by a Finnish retail store Gigantti for a price
of €299 in May 2020, sports such features as a MediaTek Helio P65 processor,
64 GB internal memory and a 3500-mAh battery. The popular benchmark service
Antutu, whose analytics are intended to give an estimate of a smartphone’s per-
formance, gives Galaxy A41 a score of 183200. At the same time, Xiaomi’s
Redmi Note 8 Pro, while price in Finland at €279, offers 128 GB storage capacity,
MediaTek Helio G90T processor and 4500-mAh battery. The Antutu score of the
phone is 291742. Even though the experience that smartphones deliver to users
is usually subjective and is a matter of taste, it may be assumed that most users

28
would agree that Xiaomi’s offering would have, technologically, noticeably more
to offer at the same price.

It thereby appears that Samsung does not strongly differentiate their products in
lower price categories with technology and innovation. Rather, it appears that the
differentiation mostly relies on the strong brand image. However, judging from the
figure 6 below, which represents the best-selling smartphones of the first quarter
2020, this strategy seems to be effective so far.

Figure 6. Best-Selling Android Smartphones Q1 2020 (Strategy Analytics 2020)

As may be observed from the chart, three of the six top-selling devices are Galaxy
A-series products, and one is Galaxy S-series. A report by Canalys claims that in
Q2 2019, out of 18.3 million units shipped by Samsung in Europe, over 12 million
were A-series devices. It may also be speculated that despite lower shipments
count, Galaxy S-series remains the priority for Samsung due to higher profitabil-
ity.

Samsung also addresses the latest industry trends with offering some foldable
devices. However, as of 2020, these remain very expensive, and the technology
is not yet thought to have matured enough for the mass market.

29
3.2.2 Samsung: Price

The two major high-end lines are Galaxy S and Galaxy Note, and the products in
the line are priced accordingly. According to a popular internet tech website An-
droid Authority, Galaxy S20 was priced starting from $999 at the release in the
US, $100 more than the previous model. The difference is even more striking with
the price of the very first model of the S-line, which was about $400. (Brown
2020.)

This idea of the pricing structure may be obtained from the cost breakdown of the
products. It is estimated by a technology analytics company TechInsights that the
cost of making Samsung Galaxy S20 Ultra 5G is $528.50 (Yang & Fontaine
2020). Although this does not account for such expenses as marketing, it is evi-
dent that the final price, which is well above a $1000 mark, is significantly above
the product costs. For example, in May 2020, the device is offered in Finland by
Elisa at a price of €1399.

The assumption that Samsung’s flagship lines are priced with rather high premi-
ums is further supported by depreciation statistics provided by trade-in analytics
company BankMyCell. According to the data, 10 latest (as of late 2019) Galaxy
S- and Note series devices lost roughly from 35 to 49 per cent of the initial value
when traded in. This suggests that the flagship smartphones may be priced well
above their innate value.

Thereby, the pricing of the “S” and “Note” is relatively high and may described as
a skimming price strategy, whereby the vendor’s (Samsung’s) intention is to offer
superior products at prices significantly higher than market average. As dis-
cussed in the “market trends” section of market analysis, the ASP of smartphones
in the recent years has been around $300 mark, while the release price (US) of
the latest Galaxy S20 was starting from $999. It is important to note that as a
premium product, Galaxy S20 smartphone undoubtedly costs significantly more
to product than an average smartphone. As explained previously, the production
costs of the most expensive version (S20 Ultra 5G) are estimated at $528.50,
which is already much higher than the market ASP. However, the production

30
costs alone are obviously not the only cost driver with these products, and a re-
markable price premium is likely to be present. Also, as is the case with most
products in the higher-priced products on the smartphone market, the price sub-
sequently experiences a substantial decrease, as the market is very dynamic,
and new and superior models are frequently released. Significant price de-
creases may be another sign of price skimming.

The pricing of the “A”-series follows the opposite model – the prices are relatively
low or moderate. The description of the series on the official website includes: “a
unique yet affordable package” (Samsung 2020).

Due to lack of public information on the production costs of the Galaxy A-series
devices, it is harder to analyse the price premiums Samsung includes in the price
tags for these models. The Wired, an online magazine, groups the latest A-series
offerings into three price groups, $110-180, $250-400 and $500-600, which may
be described as low (entry-level), medium and upper-medium. While these prod-
ucts are substantially cheaper than flagship offerings, they are aimed at offering
the “incredible value” and providing competitive features, as mentioned in the
“Product” part. For example, some of these phones offer support for 5G networks.

As the selling prices are significantly lower than those of high-end devices, it may
be assumed that price premiums are lower as well. As the prices of various mod-
els vary in different ranges, it is not possible to classify the pricing of these models
as either “penetration” or “market pricing”. Some of the models are priced lower
than ASP (which, as discussed previously, is estimated to be around the $300
mark in 2020), and some significantly higher. The pricing of A-series may there-
fore be described as a combination of penetration and market-pricing.

As mentioned previously, Samsung’s products in lower price categories do not

offer as much as products of some of their competitors at similar prices. A possi-
ble conclusion that may be made from the comparison of similarly priced Xiaomi’s
and Samsung’s offerings is that Samsung’s devices have lower production costs.
It may be therefore assumed that even in the lower priced market segments,
Samsung prefers to keep its profit margins above the minimum and is not likely
to use penetration pricing. However, as the exact production costs of Galaxy A-

31
series are not known, it may also be possible that Samsung is less efficient at
optimizing the costs than Xiaomi, and is actually pricing the products with minimal
profit margins.

Thereby, Samsung’s overall approach to pricing may be described as a combi-

nation of various strategies. Most of the unit sales come from the more affordable
Galaxy A-series, which are most likely priced with market-pricing strategies,
whereby Samsung does not raise the prices too high, but still keeps the profit
margins above the minimum. The higher-end Galaxy S- and Note series are likely
to be the most profitable ones with their skimming prices. Generally, across all
price segments, Samsung seems to refrain from lowering its profit margins to the
minimum. This may be explained by the strong branding of Samsung – as is usu-
ally the case with stronger brands, customers tend to see certain value in their
products and are ready to pay higher prices Overall, Samsung is effectively cap-
turing their market share in both lower and higher price segments of the market.

3.2.3 Huawei: Products

Huawei’s smartphones are branded under various product lines. However, the
differentiation does not appear to be as clearly set as with Samsung’s devices.
The official website of Huawei lists several product lines: Mate, P, Nova, G, Y and
Honor (Huawei 2020). As may be judged from the company’s website Mate- and
P-series are high-end series. Other lines appear to be targeted as lower price
segments.

However, the Mate- and P-series are not exclusively premium, and various prod-
ucts within the lines are priced at very different points. As an example, Huawei
P40 Pro 5G is priced at €1049 in Finland’s verkkokauppa. This price puts the
product into the premium category and suggests a profit margin above average.
The high-end products of the P-series seem to largely rely on a differentiation
point of the smartphone camera – in partnership with a camera company Leica,
Huawei develops innovative high-end cameras.

Another example of the high-end series is Huawei P30 Pro. At the launch, its
price in the US was set at $899.90 (as seen from various media reports of the
time, for example, from TechRadar website). These price tags indicate that these

32
smartphones may be placed in the upper-price category. At the same time,
Huawei P Smart Pro, which belong to the same branding line, is priced within the
medium range: Finland’s verkkokauppa offers the product in May 2020 at €298.
The difference indicates a lack of clear price differentiation between product lines.

Overall, Huawei also offers many models at more affordable prices. Unfortu-
nately, there is no public information on what specific smartphones by Huawei
are the most popular. Some of the more affordable models offered by most retail
stores in 2020 are Huawei P Smart, P40 Lite, Nova 5T.

Similarly to Samsung, Huawei addresses the emerging industry trend of foldable

smartphones. As is the case with Samsung, the technology behind these devices
have not yet matured to be affordable in the mass market at prices a significant
number of consumers would be willing to pay.

3.2.4 Huawei: Price

Huawei appears to pursue certain profit margin goals. In 2017, according to a

report by Reuters, Huawei announced that it targeted a net profit margin of 7%.
This may be called a rather moderate profit margin. As seen from Huawei’s 2019
annual report, the net profit margin was recorded at about 7.3 per cent.

For comparison, the overall net profit margin of Samsung in 2019 was about 9.5
per cent (however, this figure includes Samsung’s overall profitability across var-
ious different divisions) (Samsung 2019). This means that Huawei’s profit margin
within the business as a whole is slightly lower, which might suggest lower price
premiums in their products than those of Samsung as well.

In a 2019 teardown report by Nikkei Asia, the cost of components of Huawei P30
Pro was estimated at $363.83, with the final retail price at launch ($899.90) more
than double that number. This suggests skimming pricing with high profit margins
in the premium product category. However, it is not possible to make a certain
conclusion on how high Huawei rises the final prices above all of the costs. For
comparison, Samsung’s current most expensive flagship device (May 2020),
priced at €1399 in Finland, is noticeably more expensive than Huawei’s €1049
Huawei P40 Pro.

33
According to an independent study by Gao Guanghui (2018), Huawei’s pricing in
the higher price segment is a combination of different types of pricing. Mainly, to
improve the sales, products are priced with cost-oriented pricing strategy, mean-
ing that certain desirable levels of profit are pursued. This seems to be in line with
Huawei’s announcement of targeting a 7 per cent net profit margin. Overall, in
the premium market, Huawei does not seem to have a very clear pricing strategy
and targets both profit and sales volumes. While its profit margins seem to be
lower than those of Samsung or Apple, its prices still may not be called very low
penetration prices.

The products offered within lower price ranges (e.g. Huawei P Smart Pro at €298,
as mentioned previously) may not have as high profit margins as the premium
products by definition. In this category, Huawei offers products that are competi-
tive enough technologically. As discussed previously, within similar price ranges,
Xiaomi’s Redmi Note 8 Pro was able to offer more than Samsung’s Galaxy A41.
Technologically, with P Smart Pro, Huawei appears to be slightly superior to Sam-
sung and fall slightly behind of Xiaomi. Antutu performance benchmark of P
Smart Pro scores 283500, placing it slightly behind Xiaomi (Samsung: 183200,
Xiaomi: 291742). It also sports a slightly weaker battery than Xiaomi. In some
other features Huawei’s product may be called superior: the screen is slightly
bigger than Xiaomi’s and the “Pop-Up” camera technology in contrast to Xiaomi’s
notch camera. Overall, it may be said that devices are largely on par with each
other. Even though comparing these features does not directly translate into the
product manufacturing costs, it may be speculated that the costs of Xiaomi Redmi
Note 8 Pro and Huawei P Smart Pro are similar. As the latter is priced slightly
higher, it may be also assumed that its price premium is higher as well.

These findings are supported by the Huawei’s CEO Ren Zhengfei statements –
in 2010, he announced that his long-term view of the strategy is to focus on the
quality of product rather than simply on lowering prices. In fact, he mentioned that
it would be important to avoid lowering the prices significantly and not “corner”
Western companies through lower prices. (Zhengfei 2010.)

Therefore, it may be concluded that Huawei employs various pricing models in

various segments accordingly. It may be using price skimming in the premium

34
segment, although still pricing their flagship devices lower than its nearest com-
petitor Samsung. In lower price categories, their pricing may be described as
“reasonable”, not very high, but not very low either. However, it seems to univer-
sally refrain from lowering prices too much and to avoid penetration pricing. It
may be thus speculated that Huawei’s pricing is generally close to market-pricing.

3.2.5 Xiaomi: Products

Xiaomi’s products, again, are differentiated within different product lines – Mi, Mi
Note, Redmi and Pocophone (as listed on the official website). The flagship line
is Mi series; Mi Note appears to be a more affordable line; Redmi series is known
to be strongly positioned as a cheaper, “value-for-money” line; Pocophone is an
upper-mid-range line. Additional brands are Black Shark and Meitu, targeted at
gamers and female users (Xiaomi 2019).

The multi-brand strategy is explained in Xiaomi’s 2019 Annual Report. Since Jan-
uary 2019, Redmi and Xiaomi (Mi) are intended to be developed as separate
brands with separate strategies. Xiaomi is positioned in mid- and high-end mar-
ket, focused on advanced technologies and sold through both online and offline
channels. Redmi series’ main target is price-performance ratios and it is sales
are focused on online channels (meaning lower costs).

As of May 2020, the “maximum” flagship offerings in the Mi line are Mi 10 and Mi
10 Pro, with the latter priced at about €999 (~$1100) in Europe (CNET 2020). Mi
10 Pro may be called one of the best Android smartphones of the time, judging,
for example, from its Antutu benchmarks. The figure below is the five highest-
ranking Android smartphones in May 2020.

35
Figure 7. Five highest-ranking Smartphones by Performance (Antutu 2020)

As seen from the ranking, Xiaomi’s Mi 10 outperforms Samsung’s flagship prod-

uct S20 Ultra 5G. While it does not necessarily mean that Xiaomi’s product is
better in all ways, it gives an estimation, which shows that the devices are at least
very comparable to each other. At the same time, it may be noted that Xiaomi’s
product is considerably cheaper than Samsung’s.

In lower price categories, Xiaomi offers, for example, Mi Note 10 in the upper-
mid-range. Launched in 2019, the most notable selling-point of this smartphone
is 108-megapixel camera sensor. The selling price in Europe at the launch was
around €549 ($609) (Mashable 2019). In May 2020, this device remains the only
smartphone in the mid-range category with a 108-megapixel camera sensor.

The medium and entry price ranges are addressed by the Redmi series, which,
as mentioned, is focused on price-performance ratios. As shown previously within
the analysis of Samsung’s product (Figure 6), Redmi 8 and Redmi Note 8 were
among the best-selling smartphones in Q1 2020. Also, it is revealed in Xiaomi’s
2019 Annual Report that Redmi Note 7 shipped more than 1 million units in less
than a month. Redmi Note 8 Pro was mentioned previously in comparison with
Samsung’s Galaxy A41 and Huawei’s P Smart Pro – by specifications and per-
formance, Xiaomi’s device was ahead of Samsung’s and approximately equal to
Huawei’s. However, Xiaomi’s product was priced slightly below both competitiors.

36
Interestingly, according to Xiaomi, their products are not at the core of their busi-
ness. The company describes their business model as a “triathlon” model – hard-
ware, internet service and new retail (Jun 2018). In 2014, Xiaomi’s Vice President
Hugo Barra claimed that the company is “an internet and a software company
much more than… a hardware company” (Treadgold & Reynolds 2016). Thus,
the company regards their hardware products as a way to sell their core service
offerings, instead of their core competence.

3.2.6 Xiaomi: Price

As discussed, Xiaomi describes its model as a “triathlon” of hardware, internet

service and new retail, whereby the hardware is not a core offering but rather a
way to sell their services. However, while not being the only company that offers
additional services along the smartphones as hardware products, Xiaomi sets
their pricing policy aside from the competition.

In 2018, Xiaomi’s co-founder Lei Jun announced that the profit margin of the
whole company’s hardware business, including smartphones, will never exceed
5 per cent. This was explained as part of their business model, whereby products
would be sold at prices close to cost. By doing so, the company aims to earn
long-term support and trust of the users. Apart from keeping the price premiums
minimal, Xiaomi also aims to reduce the costs by focusing on online distribution
channels and increasing the cost efficiency of offline channels.

This is supported by Xiaomi’s 2018 Annual Report, where the pledge to maintain
the hardware profits below 5 per cent is repeated. The overall mission is de-
scribed as “to relentlessly build amazing products with honest prices to enable
everyone in the world to enjoy a better life through innovative technology”. The
company applies the term “honest” to their pricing, further emphasizing their low-
price model.

Apparently, the pledge to maintain a low hardware net profit (and low price pre-
miums) applies to their whole hardware business, with no distinction between the
high-end and low-end smartphone market, albeit the price premiums may be ex-
pected to vary. As an example, Redmi devices (low- to mid-range segment) may
be expected to have even smaller price premiums than other product lines, as

37
Xiaomi emphasizes the price-performance ratio of these devices, and their target
groups are more price-sensitive.

It may be therefore said that with their smartphone products, Xiaomi universally
employs aggressive penetration price strategies. However, Xiaomi does not rely
on pricing as its sole advantage, but rather uses it as a part of a wider strategy.

3.3 Strategies

This section, based on the findings of product and price analysis, will evaluate
the strategies of the three firms based on the concept of Porter’s Generic Strate-
gies. As discussed within the theory, smartphone market vendors are likely to
focus on either cost leadership or differentiation, or pursue a hybrid strategy with
elements of both strategies.

As discussed within the market analysis, the Android smartphone market may be
described as a differentiated oligopoly with intense competition, substantial price
pressure and relatively low profitability. Also, the Android market tends to have
consumers who are, on average, more price-sensitive than consumers in iOS
(Apple) market. Therefore, it may be expected that most successful vendors ad-
dress the higher price-sensitivity of the market even if they offer differentiated
products.

3.3.1 Samsung

Samsung is a company with a strong brand image that operates in a wide range
of industries. As described previously, it offers various product lines in all price
segments.

It has been said that Samsung appears to avoid minimizing their price premiums
and relies on the strong brand differentiation even in lower price segments. The
Galaxy S- and Galaxy Note series offer premium devices at prices that appear to
include relatively high price premiums. These product lines are intended to be
differentiated by high-end features and sometimes innovative technologies. For
example, the latest model, Galaxy S20 Ultra offers what Samsung markets as a
“100x Zoom”. With these products, Samsung clearly intends to differentiate their
offerings and follows a differentiation strategy.

38
Some products are apparently intended at more specific target audiences. Gal-
axy Note series is marketed as a product for business-related people. Foldable
smartphones with the very latest unique technologies are aimed at tech-savvy
early adopters of new technologies. Thereby, as an additional strategy, Samsung
pursues a focus on some more narrow consumer groups.

The strategy is less clear with the lower-end market. While the Galaxy A-devices
are substantially more affordable than premium smartphones, Samsung prices
them above its major competitors Huawei and Xiaomi, likely relying on the strong
brand image. It may be therefore suggested that Samsung’s primary intention
here is to offer differentiated products with prices above average. While the price
premiums are apparently not very high and Samsung takes a low-cost position
with relatively moderate pricing, it may be more of a reaction to aggressive pricing
of the competition rather than Samsung’s own initiative to pursue cost leadership.

Thereby, it may be suggested that Samsung’s major strategy is differentiation,

universally based on the strong brand image, and in the premium category, also
on the features and technology. Focus strategy may be noted as an additional
policy with some products. In the lower-end market, price pressure is likely to be
forcing Samsung to lower the prices, however, Samsung refrains from pricing its
products below average.

The major reason behind Samsung’s strategic choice may be its strong brand
image which allows to successfully compete on the basis of differentiation. Sam-
sung’s users recognize the brand and are ready to pay the price above the market
average. The pricing in the lower-end segments is likely to be significantly af-
fected by the price pressure, but the brand differentiation allows Samsung to re-
tain its positions.

3.3.2 Huawei

Huawei is 2020’s world’s second largest smartphone manufacturer and it may be

seen as the major challenger for Samsung (and Apple). Huawei’s branding, dif-
ferentiation and pricing appears to be less clear than those of Samsung: in the
same product lines, there are both mid-range and premium devices.

39
According to Huawei’s reports, the company is generally pursuing a 7 per cent
profit margin. This is a relatively modest margin, lower than that of Samsung but
higher than that of Xiaomi.

As mentioned, Huawei’s CEO Ren Zhengfei has express his strategic vision of
aiming to develop products of higher quality and to avoid excessively lowering
the prices. Zhengfei stated that the company does not have a strategic intention
to “corner” the competition through low prices. Thus, it may be inferred that
Huawei does not pursue cost leadership strategies of gaining an advantage of
the lowest prices.

Indeed, the company’s and CEO’s statements indicate Huawei’s strategic desire
to focus on better, differentiated products. This may be supported by the products
Huawei offers in the premium segments – for example, the P-series smartphones
are differentiated with innovative cameras co-developed with Leica.

However, Huawei does not appear to have as strong brand image as Samsung
does. Historically, Huawei has been known as Samsung’s competitor that began
with aggressive pricing to gain its market share. While its recent strategy and
actions indicate a switch to stronger product differentiation and less focus on cost
leadership, it may be suggested that Huawei is not yet able to fully rely on the
differentiation strategy like Samsung does.

It may be also suggested that Huawei employs elements of focus strategies – for
example, its strongest differentiation point in the flagship devices has been the
camera, which appeals to photography-enthusiasts. It has also offered foldable
smartphones, addressing the innovative-minded consumers.

In general, Huawei’s strategy may be described as a hybrid of product differenti-

ation and cost leadership with additional focus strategy. The company’s strategic
vision indicates pursuit of stronger product differentiation.

However, it would be important to note that Huawei currently faces a challenge

of having its access to Google services limited due to political reasons. It may be
a significant threat to Huawei’s business, and Huawei might have to make radical
changes within its strategy and business model. As of 2020, Huawei remains the

40
second largest vendor within the Android market, but its position may be affected
by the situation. This may force Huawei to adopt either a new differentiation strat-
egy or an aggressive cost leadership.

The strategy choice of Huawei may be explained by a weaker brand image than
that of Samsung. Historically, Chinese brands have been universally seen as in-
ferior to brands based in other countries. While the situation has changed, it may
not be yet said that Huawei has achieved a brand image as strong as that of
Samsung, forcing Huawei to attain a hybrid position.

3.3.3 Xiaomi

Xiaomi is the third case company. As described, Xiaomi pursues a very clearly
defined strategy, whereby its hardware (smartphones including) business is seen
by the company not as their core business, but a tool for selling their other ser-
vices. In fact, representatives of Xiaomi have referred to the company as a ser-
vice business

Xiaomi claims that it targets to keep its net profit margin below 5 per cent in order
to offer “honest” prices to consumers. It has been emphasized that the company’s
smartphones are sold at prices close to their manufacturing costs. This is done
in order to earn trust and support of their users, who are also the audience for
their service business.

In general, Xiaomi’s business model is different from traditional models. Treating

the hardware business as a channel for selling services may be compared to the
service-based models of such companies as Google and Facebook. These com-
panies offer their services completely free of charge to consumers while making
large profits on advertising. For that reason, Xiaomi’s smartphone business may
not be directly classified as either differentiation or cost leadership, as the busi-
ness model itself is very different from the traditional ones – direct profit does not
play a key role in Xiaomi’s smartphone business.

If the hardware business is analysed per se, the aggressive pricing policy and
innovative cost-saving measures employed by Xiaomi (focus on online channels,
marketing savings) suggest a strong preference for the cost leadership. However,

41
it may not be said that Xiaomi’s products are completely standardized and are
not differentiated. In fact, in terms of technology and features, the smartphones
offered by the company are often on par or even superior to more expensive
products of their competitors, in all price segments. This suggests that Xiaomi
pursues a hybrid strategy of cost leadership and differentiation.

Some of Xiaomi’s sub-brands (Black Shark, Meitu) target more narrow consumer
groups – gamers and female users. Hereby, the focus strategy is pursued as an
addition to the main business line.

Thereby, Xiaomi’s hardware business follows a hybrid of cost leadership and dif-
ferentiation. An additional focus strategy is employed to target some smaller con-
sumer groups. In general, the strategy of the smartphone business is not isolated
but is a part of a larger service-based model.

Xiaomi’s strategies may be seen as a very innovative way to adapt to the low
profitability and intense price pressure of the Android smartphone market. Xiaomi
has had the strategic vision to recognize the challenges of improving the profita-
bility within the Android market by traditional means. As a young company, it
would not be likely to be able to challenge such giants as Samsung and Huawei
with stronger brand images and successfully differentiate itself. Attaining a cost
leadership strategy, on the other hand, would allow for a higher chance of gaining
some market share, but the profitability within the competitive Android
smartphone market would not be high. Moreover, competing solely on the price-
basis is inherently weaker strategically. Xiaomi’s service-based model, on the
other hand, allow to successfully employ a hybrid strategy that addressed both
the price-sensitive consumers and the highly competitive market, while creating
profits through a business model wider than just hardware.

3.3.4 Strategy Analysis and Recommendations

This section will provide an answer to the primary objective of the research –
develop general recommendations for other market participants or new entrants
to the global Android smartphone market.

42
As pointed out previously, the global smartphone market, and, specifically, the
Android handset market, may be classified as a differentiated oligopoly. It is dom-
inated by a rather small number of firms – in 2019, within the whole market just
the five largest manufacturers occupied over 70 per cent of the unit shipments
count. The oligopoly is differentiated, and, within the Android portion of the mar-
ket, the competition is intense and the price pressure is high.

Most of the industry profits are captured by Apple, which is focused on the pre-
mium segment of the market. Apple’s products use iOS – a proprietary platform
restricted to the company’s own products. This means that it is impossible for
other manufacturers to use iOS in their own devices. They are therefore left with
two options – use the open-source Android operating system or some other plat-
form. However, as the market is currently heavily dominated by iOS and Android
with most of the mobile software developed for the two platforms, competing with
these platforms would be extremely difficult.

This implies that the most viable option for other market participants is to use
Google’s Android in their smartphones. The market of these devices, despite be-
ing largely differentiated, offers rather low profitability – as mentioned, most of the
profits are captured by Apple. This leaves Android smartphone vendors with a
low share of market profit divided among the many of them.

Most of the market participants use traditional models, and pursue differentiation,
cost leadership, or both strategies at once to some extent or another. Among the
three leaders, Samsung is focused on differentiation, Huawei pursues a hybrid
strategy, while Xiaomi uses an unusual strategy of shifting most of the profits
towards the additional services sold to their customers (albeit, the hardware part
per se, which includes selling smartphones, is also a hybrid of differentiation and
cost leadership with a focus on the latter). It may be said that Samsung, as a
large corporation, had had significant brand image potential even before entering
the smartphone market, and its success may be largely attributed to that factor.
Huawei, while not as well-known to the global market, has been able to grow itself
within the smartphone market using a strategic combination of cost leadership
and differentiation.

43
Notably, Xiaomi is also the youngest company of the three, founded in 2010. Ap-
parently, it has been successful, having achieved one of the highest positions in
the market within a decade. By shifting the strategic focus towards making profit
in the service business and limiting the hardware net profit to a maximum of 5 per
cent, Xiaomi has been able to offer their products at lower prices. As the cost
savings have been mainly achieved from limiting the price premiums (as well as
from optimizing sales channels), the quality of the products has not suffered, and
thus the offerings have not been inherently inferior to the competition. Thereby,
Xiaomi has been able to attract many smartphone users and capture a significant
market share. This business model may be compared to models of such innova-
tors as Facebook and Google, who offer their digital services to individual cus-
tomers for free while making tremendous profits.

One recommendation for other market participants may therefore be to further

analyse the example of Xiaomi and implement some parts of its business model
in their own. While the success of the other two market leaders may provide val-
uable examples as well, it may be speculated that relying on the more traditional
model of directly profiting from hardware sales would make it very difficult to
achieve success in a very competitive environment. A focus on differentiation
strategy is something that is usually easier for companies with an existing brand
image, while the cost leadership in a market with low profitability would yield very
low profit margins. Therefore, shifting the profits elsewhere, to some additional
service or product sales, would allow to efficiently differentiate the products while
maintain lower costs and prices, i.e. to combine differentiation and cost leader-
ship with maximum efficiency.

It should also be noted that there are certain boundaries for strategic possibilities
that depend on a firm’s size, investment capacity, access to resources. Normally,
larger firms with bigger resource pools mainly pursue differentiation or cost lead-
ership strategies, while smaller firms often only have a choice of targeting narrow
markets with a focus strategy (Wright 1987). The primary reason for that is the
requirement of the first two strategies for large investment requirements, capital-

44
intensive technologies, large production volumes, economies of scale and “incre-
mentally increasing learning curve” (Hout et al. 1982; Allan & Hammond 1975;
Abernathy & Wayne 1983; Boston Consulting Group 1976).

It may be therefore suggested that new market entrants with limited access to
economies of scale, large production capacity and investments for capital-inten-
sive technology pursue a focus strategy with a clearly defined narrow group of
customers. By serving specific needs of specific groups more effectively, smaller
firms may capture the interest of these groups without as much focus on costs as
with the other strategies. These specific customers may overall be less-price sen-
sitive and look for offerings that meet their requirements better.

For the larger firms, on the other hand, it may be suggested that they try to com-
pete with the market leaders pursing the differentiation, cost leadership or hybrid
strategies. One very beneficial aspect of differentiation would be a strong brand
image, which, if lacking, may also be sometimes purchased. However, with ac-
cess to large amounts of investment resources it may be possible to develop
competitive advantage points within any other differentiation or cost leadership
dimensions, such as outstanding technological features, new and unusual design
concepts, or lower prices. As suggested, the efficiency of these strategies may
be maximizing by adopting a business model similar to that of Xiaomi, whereby
the profit-seeking is shifted away from the hardware sales.

45
4 Conclusions

4.1.1 Findings

In this section, the findings of the research will be summarized and the research
questions will be answered.

In the market analysis section, it was described that the smartphone market was
valued at $714.96 billion in 2019 with projections to surpass $1350 billion by
2025. The market structure may be described as a differentiated oligopoly with
significant competition and price pressure. Profitability, in general, is not high –
most of the premium smartphone market is captured by Apple, while Android
smartphone vendors mostly compete for consumers that are more price-sensi-
tive. However, the market is expected to grow overall, which may relieve the price
pressure to some extent.

The major market trends are an increasing Average Selling Price and growing
mid-range and premium segments. According to Moore’s law, the costs of core
components of smartphones continue to decline, which makes competitive
smartphones more affordable. However, the average selling price continues to
grow as the innovative technologies become more expensive.

The major technological developments are 5G networks, foldable devices, high

refresh rates of screens and multiple camera setups with increasing sensor res-
olutions.

The strategies of the three leaders of the Android smartphone market reflect the
market structure. All three market leaders are present in all price segments, but
they pursue different strategies.

Samsung, largely relying on the strong brand, follows a clear differentiation strat-
egy. It does not lower its price too much in any price category, looking for some
price skimming. Despite weaker technological differentiation in the lower price
segment, Samsung manages to achieve high sales volumes, with Galaxy A-
smartphones leading the rankings of best-selling smartphones in early 2020.

46
Huawei’s strategy appears to be less defined than that of Samsung, being more
of a hybrid of differentiation and cost leadership. While not being able to fully
avoid competing on the price basis, it also offers strong and differentiated prod-
ucts, and is able to successfully compete and gain significant market share. How-
ever, Huawei is currently being challenged by its ban on the use of Google ser-
vices, which may affect the company’s strategies in the future.

Xiaomi offers the most unique strategy out of the three leaders. Being a young
company, Xiaomi was able to achieve fast growth through a hybrid of product
differentiation and cost leadership. While this model does not bring significant
profit solely through the hardware business (in fact, the target profit promise is
below 5 per cent), Xiaomi aims to collect the profits mainly though an innovative
service-based model, whereby smartphones are seen primarily as tools for sell-
ing internet services to users.

The general suggestions for other market participants or new entrants depend on
the size and the resource pool of a firm. Overall, all participants are limited by the
low profitability of the Android handset market and its intense competition.
Smaller firms may find the focus strategy with narrow, specific target audiences
to be the most viable option, as pursuing other strategies requires large invest-
ments. Bigger firms may be able to compete within the broad market using differ-
entiation, cost leadership or a hybrid strategy, but successful operation and com-
batting the intense competition would require very strong selling points. As the
smartphone market is developing very quickly, and some innovations and trends
are constantly changing the market, it may be suggested to invest into differenti-
ation through one of these trends, such as development of foldable devices.

Another recommendation that may be given to other market participants is to fur-

ther examine the business model of Xiaomi and implement some of its elements
in their own models. Competing with the established industry giants with strong
brand images is very difficult even for large firms, and even with proper differen-
tiation the profit potential is limited due to the nature of the Android smartphone
market. Cost leadership, while potentially achievable, is even less likely to bring
high profits in the highly competitive Android handset market.

47
However, a business model that is able to utilize the hardware sales for achieving
profit through additional services may be able to offer the most potential, as it
would be the most efficient for combining differentiation and cost leadership. Tra-
ditionally, cost leadership and lower pricing would mean standardized, inferior
products for the sake of cost reductions. However, setting an initial low profit tar-
get for hardware sales (as the profits are expected from additional sales) would
allow to price the products at very low prices while offering high-quality products
that may be just as well (or even better) differentiated that the competition. This,
as seen from the example of Xiaomi, is achievable and may be a factor of suc-
cess.

4.1.2 Self-Reflection

To evaluate the validity of my own findings, I would note that while I have tried to
follow the standards of good academic practice, some of the conclusions I have
made throughout the research may be affected by my own ideas and opinions.

For example, I could not say that the product analysis of the case companies has
been performed as extensively as it should have been. To support the sugges-
tions and conclusions in that research section, only a few examples of the
smartphone models have been used, and the conclusions largely relied on my
own knowledge of the market, branding and smartphone technology.

It is also important to note that the theoretical framework of the research does not
encompass the entirety of the business models and strategies the case compa-
nies use. Analysing Porter’s Generic Strategies through products, branding and
pricing only gives a general overview of the case companies’ operations while
overlooking much of other strategy- and marketing related concepts.

My overall opinion on the research findings is that it may be, for the most part,
only stating the evident facts and providing descriptions of the current situation of
the smartphone market. The problem for making truly novel conclusions and sug-
gestions on this stage of the research is the limited access to industry-related
information (extensive industry reports are behind paywalls) and the limited time
resource of me as a student. However, it is my hope that the findings may still be

48
useful to those interested in the smartphone market for one reason or another,
be it investors, potential entrants, or researchers.

49
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