Android’s growth is now coming from cheap, no-name smartphone manufacturers in China, according to Needham analyst Charlie Wolf.
In a new research note, which Philip Elmer DeWitt at Fortune summarized, Wolf points out that Samsung’s share of the Android market has stalled at 40%.
Since the start of last year, the category of “other” Android manufacturers has been growing, going to to ~25% from 10% over that period.
Wolf explains the “other” category: “Most of these companies, located in China, have entered the market with low-end, cheaply produced Android phones that are not much more expensive than feature phones. Indeed, most buyers of these phones use them as feature phones.”
This has a few implications for the smartphone market.
- For Samsung, it’s further evidence that it’s bumping into the same kinds of problems hitting Apple. It’s reaching a saturation point for what it can do. Overall, Samsung’s smartphones are growing, but the growth is slowing and the high end market is saturated for Samsung.
- Microsoft wants to attack the low-end of the market to win new users, but that’s going to be pretty hard when no-name manufacturers are pumping out super cheap Android phones. Nokia has a $150 smartphone, which is a good deal, but it’s twice as expensive as what these “other” companies are making.
- Android’s market share may not mean a lot if people are using those phones as feature phones. Unless Google can figure out how to get these people downloading apps, and searching the web, winning these users isn’t all that valuable.
- For Apple, it supports not going too low-end with a low-cost iPhone. There’s no way Apple is going to compete at the low-end. So, it may as well go mid-tier with its low-cost iPhone.
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