The PC market looks at its weakest in a very long time – with sales dropping like we’ve never seen them drop before – and the traditional PC makers are hurting badly. Clearly smartphones and tablets are where the action is and where all the profits are being made. But this market is moving really fast with the Android charge having put even Apple somewhat on the defensive.
The question is, where are smartphones and tablets going to be in a couple of years or more? Is Samsung/Android going to trump Apple or will Apple pull something else out of the bag that puts them well ahead of the field again. Or is there another new technology that can reset the balance and redefine what customers prefer again?
Lessons from the past
Looking back at the transformation in computing over the last decade and a half, it's clear that the balance of power (products that really mattered) has gone from the desktop computer (largely assembled) to the laptop (mostly branded). Over the last five years it has changed again and the smartphone is clearly the dominant computing device in our lives. Even the tablet is usurping the laptop's position and relegating it to a distant 3rd place in the market for computing devices. That the smartphone has cannibalised the MP3 player and the point-and-shoot camera is just an interesting footnote, which emphasises its importance in our current computing universe.
Globally PC shipments are either falling or slowing down
But there is an interesting lesson in the way that desktops developed in India – from a brand-dominated category to an “assembled” product with several combinations of hardware and software that you could combine to meet your needs. It took a major shift from desktop to laptops for computing majors to regain control and margins from smaller assemblers who had become dominant. In a cost-conscious environment – which describes most of the developing world – the rules that apply do not favour traditionally strong brands. And this is why Android has made such great progress in a category that Apple virtually created and still dominates in the more ‘developed’ markets.
A market waiting for an upstart
“Developing” markets are much friendlier to upstarts who understand and cater to their needs with more care than established players. The unprecedented success of homegrown phone brands in India (and in China too) shows that even Samsung needs to watch its back and protect against ‘customised kit phones’ from Micromax, Xolo, Karbonn, iBall and others.
The presence of OEM manufacturers who develop pretty decent Android smartphones quickly and allow the middle and lower end customers to accept them as a viable choice has made this market easier for the upstarts to get into. All they need to do is undertake some visual customisation for differentiation and they are most of the way to having a product to market to cost-conscious consumers. This means that with Apple's approach of consolidating markets (few models) and Samsung’s model of fragmenting them (so many variants) there is still hope for the daring.
So what if the smartphone space evolves like the desktop place only backwards? Instead of going from assembled to proprietary products (in a sense), what if someone decides to use the already existing phone-kits and a smart website (a la Dell) that lets you build your own customised smart phone? Sure there is hardware standardisation that’s needed for this to happen, but that doesn’t seem completely impossible either.
Assembling your own phone? Sounds crazy?
As the markets and hardware for smartphones matures, we are seeing new mobile OS options from pretty well know alternative software houses – Mozilla and Ubuntu. Given their experience with software, it’s not too much to expect a pretty good mobile OS from them. While getting app developers on board is going to be easier said than done – what if new standards make cross compatibility possible across mobile operating systems. There is some early work that seems to be happening in that direction too.
OSes like Ubuntu could drive the trend of assembled smartphones
Imagine if you could select a basic model kit (based on a certain motherboard and chassis) add generic RAM, Bluetooth, Audio/Video, a QUALCOMM Dual Core processor, Gorilla glass, OLED display, camera and pick a preinstalled OS of your choice. This may not be the ideal choice for most average phone buyers but would appeal to enough people to offer a credible middle-level performance option (maybe 15 to 20k) which you can live with without forking out the 40-45k that a top-of-the-line, branded smartphone demands. And there is no particular reason why this won’t work for tablets.
Sounds like an impossible task? Well it looks like the upstarts in India have figured out how to do a large part of this at some scale anyway. All that seems missing is someone with the right sourcing and manufacturing management capabilities to implement the next step - a smart application that helps customers figure out a compatible set of options that make sense for them.
Sure, this may never happen, but it doesn’t cost me to imagine…