It’s Raining Tablets & Smartphones!!
Jyoti is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
There was a time when a computing device that was slower than a calculator used be of mammoth size. Then gradually the computing device evolved. It started getting faster, meaner and smaller. This was the time when your computer could sit on a desk or on your lap. But then innovation didn't stop there. Technology evolved and today a computing device can rest on your palm or fit into your pocket and that too at half the price. These are the days of Smartphones and Tablets.
The mobile industry was revolutionized by Apple’s (NASDAQ: AAPL) iPhone and iPad, then came Samsung with Galaxy Tab and the S-series, after that Nokia (NYSE: NOK) decided to try its luck with Lumia. Amazon (NASDAQ: AMZN) came with its e-reader Kindle that actually had a fiery start, and Google (NASDAQ: GOOG) was not far behind with the announcement of Nexus. Then came Microsoft (NASDAQ: MSFT) with its first ever hardware device – Surface and now to the surprise of all, comes Toys R Us with its “Tabeo.”
Toys R Us has decided to target the potentially untapped market for children. They have introduced the Tabeo with lesser specifications and priced it moderately in view of allowing kids to create the demand in front of their parents for this beautiful tablet. The tablet would not hurt the pockets of the parents too much as the with their moderate cost of $150 (One of the lowest amongst all the tablets).
What is the reason for such a herd mentality?
The explosive growth in the industry has attracted these investors either by choice or by force. Let’s take a look at the way this industry has been growing:
|Year||Android (Google)||Blackberry (RIM)||IPhone (Apple)||Palm/WebOS (Palm/HP)||Symbian (Nokia)||Windows Mobile/Phone (Microsoft)||Bada (Samsung)||Other||Total||Growth %|
* Figures in millions unit sold
**2012 - Growth figures based on Expected Growth
***Data from http://www.wikipedia.org
The reason why I say it is by force is because this growth has already resulted in a complete technology drift towards a new direction. The number of footfalls in the local markets has reduced, causing many top retailers like Wal-Mart and Target to bear massive losses. The same is the story with Toys R Us, but they acted smart by targeting an untapped sector (the Kids section).
What is next in store?
The players are continuously changing their game plans, coming with improved service to continuously attract their customers. Apple latest iPhone, known as iPhone 5 or “The New iPhone,” is said to be the best of its breed. The phone is supposed to exceed the expectations and boost the revenue of Apple. With its improved design and applications, this should be the eye-catcher.
Nokia, a market leader once upon a time, has not given up despite the tough competition. They recently announced the launch of Nokia Lumia 920 and Lumia 820. This is by far the most improved phone of Nokia. The biggest question is, are these improvements good enough to compete with an iPhone? The real disappointment for the fans of Nokia of late has been its software. Each of these fans have one question – Why is Nokia not shifting to Android?
Nokia is using the operating system provided by Microsoft – Windows 8. Microsoft for ages has only been known for licensing its software to the hardware companies and has made a fortune by doing so. But this time to everyone’s surprise, they are coming up with their own hardware for the launch of its tablet – Surface. This is a big move because it is difficult to move from your comfort zone and enter into a completely new territory. Will they repeat the show or will it be a big boo-boo?
Amazon.com, the world’s largest online retailer, understood the need of the people and came up with a tablet, which is one of its own kinds. Kindle – an e-book reader has already been a huge hit. The reasons why it has been so successful, is because of sleek design and look along with its affordable pricing. With increase in popularity and a decent market share, they are now slowly catching up with iPhone, not in terms of sales figures, but with the features (though they still behind).
Why am I talking about the biggest search engine, Google, in this article? This is because it holds the biggest market, in the smartphone industry in terms of the software used. The android software provided by Google, has been one of the prime reasons of success for Samsung’s Galaxy (by far the biggest competitor for Apple). But this is not all, if they can make the software then why not try out the hardware? This is what has brought about the invention of “Nexus.” It is expected to be priced in the range of Kindle, with a collection of applications exceeding Kindle. Will it kill the market for Samsung and Amazon?
Is this industry reaching saturation already?
Well the figures do not show any such signs of saturation. The growth is expected to continue in 2013 with the figures reaching the mammoth number of 650 million units.
Projected worldwide sales of Internet access devices, 2010-2014 (quantities are in the millions of devices)
The smartphones are expected to be smarter, have bigger and better display, improved camera and thousands of new applications to attract more customers. The pace at which the technology is moving, what other revolutions can we expect from this industry?
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jyotiadvisor has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, Google, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, Google, and Nokia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.