With the smartphone market looking to emerging markets for growth now that most developed markets have reached saturation, the Android OS is positioned to further dominate in these markets much the same way Microsoft dominates the computer business.
The flexibility to develop devices at multiple price points and feature sets, as well as to customize devices and software for regional and cultural differences, puts Android OEMs at an advantage over high-end focused Apple.
OEMs wanting to develop a high-to-low full-brand strategy in an emerging market have flexibility for their high-end options as well. Huawei, for example, has partnered with Leica to add better camera capability to its high-end phones. And in some emerging markets where low cost is the most important factor, newcomers like Micromax quickly became a top smartphone supplier in India by selling $150-$200 models in one of the world’s hottest smartphone markets.
In contrast, Apple, which has always produced high-end products with finely-tuned proprietary software and hardware, has successfully built its famous brand as the high-quality, high-end choice. It may not find its footing in these emerging markets where most consumers can’t afford full-featured smartphones, and those few who can, may prefer regional brands with slightly lower price tags.
Since the early days of the personal computer market when Apple chose a closed system where it controlled hardware, software, marketing and manufacturing as opposed to Microsoft’s OS licensing model, it has consistently produced highly-acclaimed products that commanded higher prices. It has done the same with its smartphones and consistently recorded some of the highest profit margins in the business.
It appears as if the flexibility offered to OEMs by Android may result in Apple being a niche player in emerging markets. The era of growth of the high-end smartphone market may be coming to a close.