There's Something Wrong In Android Land

By Archean
Sep 29, 2014
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  1. There's Something Wrong In Android Land

    The entire world wants a smartphone. Smartphones were bigger than toasters. Bigger than TVs. Families wanted not one but one each. Smartphones are big. Literally.

    But something funny happened with the business. It split in a weird way.
    The wealthy eyeballs all got Apple phones. So the really big profits all vanished from the market. But then at the low-end of the market, there was competition. Really, really serious competition. Those people who wanted a cheap phone, could go to anyone and get the same thing. So the only way to compete was to make an even cheaper phone.

    It was like a force of nature. Like gravity. Prices just spiralled down. And suddenly no one was making money. HTC – great phones -Makes a loss.

    Sony – world-class cool designs – makes a bigger loss. Sony are now considering shuttering their phone division because it cannot scrape a profit.

    Every single Android handset maker was losing money. Sometimes losing billions in a year.

    With just one gravity-defying exception.

    Thanks to the most the incredible upward thrust of its marketing engines, Samsung managed to overcome gravity. It alone was profitable. Spending $14bn a year on marketing, it could escape the downward spiral.

    And then, last year, it too started to falter. The top end of the market lost ground to Apple, the bottom end lost ground to low-cost local manufacturers like Xiaomi and MicroMax. This year it looks like Samsung will have it even tougher. Peak Samsung has happened. It too is going into free fall.

    So this solution to a business problem has become a business problem.

    Last week, Android looked out the window and said. Now I am become Death, the destroyer of brands.

    Don't think selling hardware is profitable enough in the longer run, hence, the continuous cycle of loss for most android OEMs. The solution, perhaps lies in cutting Google's cord and forking out their own brand of Android, and providing most of the allied services (if not all), by ditching Google, which will take lots of money and effort. But IMHO is a way which will succeed depending upon 'local' aspects present in the offered solutions.

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