HTC and Lenovo announced a round of large-scale layoffs in an attempt to remain profitable amid consolidation in the smartphone market. Tech giants Samsung and Apple have made it particularly difficult for smaller players to generate enough revenue and profit to stay viable, forcing many to streamline their operations.
While specifics surrounding where the job cuts will come from have not been announced, HTC has stated that it will be dropping 15% of its workforce, or more than 2,000 jobs. Lenovo will cut 3,200 non manufacturing roles, most likely from its mobile business group. The company’s restructuring efforts are in part a reaction to Lenovo’s poor performance in the first quarter of this year, according to a report by AppleInsider.
What both companies are undergoing is emblematic of a larger ongoing shift in the mobile sector:
- Over the past few years, Samsung, Apple, Huawei, and Xiaomi have quickly emerged as the dominant smartphone manufacturers, cornering the high- and low-end markets for smartphones in almost every country.
- Samsung and Apple, which lead the pack in shipments, are aimed at the premium price point market. They dominate in wealthier countries such as the US and the UK. The two tech giants still hold a combined 43% of the global smartphone market.
- Huawei and Xiaomi lead the mid- to low-end price point for smartphone devices, concentrating primarily on emerging markets like China, India, and Brazil. Combined, these two low-end smartphone vendors account for almost one-third of China’s massive smartphone market in Q2.
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If rival smartphone vendors are unable to compete against the likes of Samsung and Apple, their best bet is to shift focus to emerging market countries, where mobile devices are just starting to proliferate. However, Samsung and Apple have already set their eyes on India and Brazil. Their presence will make it increasingly difficult for small vendors, like Lenovo and HTC, to capture first-time buyers in these emerging markets.
Here are other stories you need to know from today’s Mobile INSIDER:
- Samsung unveils Galaxy S6 Edge Plus, Galaxy Note 5
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- Companies in the news: Blackberry, Facebook, Cisco Systems
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