Smartphone prices are dropping

This week is a Smartphone week with the Mobile World Congress in Barcelona. This congress is the industry`s biggest annual trade fair. Everybody at the congress is talking about the smartphones. So, what`s up in this business industry?


The problem with all the smartphones is like the car industry. Their all look the same, which means it is hard to differentiate themselves from the competitors. The strongest brands in this industry is no doubt Apple and Samsung.


It is predicted that the growth in global smart phone shipments will fall sharply in 2014 and keep falling for the next four years. The average price will drop sharply as the demand shifts to China and other developing countries.


More low-cost devices are coming out to the market to retail at near $100 or cheaper than that. Those devices has a lack of some of the features of the top models, which is more expensive. It is the low-cost Chinese players with enough technical and design expertise that is now coming to the market and draw down the prices.


We are talking about brands like Huawei (the world`s third biggest phone maker), Lenovo, TCL Communications and more unknown brands like Oppo, CorePad and Gionee that is poised to be big known brands in the coming years. All of them coming from the world`s largest phone market.


China`s ZTE Corp are searching for tech solutions to reach the $50 price target, but the strong demand is pushing up the cost of the components which is a surprising twist in an industry more familiar with falling material prize as technology evolves.


Components like screen display, keyboards and memory are key hardware components wich is important to differentiate them all from the other smartphones. Alcatel`s Onetouch brand owned by TCL launched a new sub-$100 smartphone this week.


I don`t think you can expect to see Apple and Samsung selling their smartphones for $100 or lower the coming year. Nope. Forget it.


Reports today:


  08:30 AM ET Core Durable Goods Orders (MoM)
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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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