Smartphone O.S. Market Analysis

Presented ByEhab Hesham & Mostafa

Abdelfattah

Tentative outline of research

• Objectives.• Introduction:• Market Volume• Market Share.• Market Type.• Company Portfolio.• Our Product.• Factors affect Supply.

• Factors affect Demand.

• Supply.• Demand.• Elasticity• Conclusions

“There is no such thing as a free lunch!”

Android Operation System

Google Android OS is one of the little examples of a micro industry that affect and change the market type of the whole macro industry

The Smart Phone Market Before Android OS had a very few producers which was mainly Apple And

Palm web OS and NokiaIt was an example for Oligopoly Market

Due to Android OS Many new producers begin to enter the market of Smart Phones like Samsung, Motorola, LG, HTC and Sony

(1) Proprietary OS’s developed in-house by smartphone manufacturers Ex. Apple, RIM, and HP/Palm

(2) Licensable OS’s allow any manufacturer to use the OS for a device they produce Ex. Windows Mobile and the

recent Windows Phone 7 made by Microsoft.

(3) Open source OS’s give the smartphone manufacturer access to an existing operating system that is free, and freely

customizable Ex. Android, Symbian OS and MeeGo

Operating Systems (O.S.) Types

In August 2005, Google acquired Android

Android is a Linux-based operating system for mobile devices such as smartphones and tablet computers. It is developed by the Open Handset Alliance led by Google.

It is an open source model that enables any manufacturer to take it and implement it for free on their hardware. This model gives manufacturers low cost of entry, and customizability with which to differentiate their phones. The combination of these characteristics has made Android increasingly popular with manufacturers, as evidenced by its wide acceptance and majority market share.

Google Android OS

The Android Marketplace is large and growing (over 450,000 apps), giving the consumer many options for expanding the capability of their smartphone.

Additionally, Android is open, and so apps can be installed on an Android phone from any place the user desires, i.e., they are not limited to Android marketplace.

phones are available on all service providers. Because the OS is customizable,

Google Android OS

on 5 November 2007, The Android beta was released

on 23 September 2008, Android 1.0 the first commercial version of the software, was released. The first Android device was HTC Dream (G1)

On 30 April 2009, The Android 1.5 named Cupcake was released

On 15 September 2009, The Android 1.6 named Donut was released

On 26 October 2009, The Android 2 named Éclair was released

On 20 May 2010, The Android 2.2 named Froyo was released

On 6 December 2010, The Android 2.3 named Gingerbread was released

On 22 February 2011, The Android 3.0 named Honeycomb the first tablet-only Android update

On May 2011 Android 4.0 named Ice Cream Sandwich was previewed and

On 19 October 2011 Ice Cream Sandwich was released and officially launched at the Galaxy Nexus

The Android Version History

Q1 2010 Q3 2010 Q1 2011 Q3 20110

10

20

30

40

50

60

AndroidSymbianiOSRIM

OS Market Share over last 2 years

The Market of Smartphones OS is a Monopolistic Competition Market, as

Many sellers : ( Google, Apple, Microsoft, RIM , Symbian, ……..).

Slightly differentiated products: ( Android, iOS, Windows Phone, RIM OS, Symbian OS, ……… ).

The Price: Each seller may set price for its own product or decide to be the only user for his OS in his own produced devises or even offer it for free for any producer.

O.S. Market Competition

Factors Affecting Android OS Supply

Unlike the most of other smartphone OS that has Confidential model Approaching phone, Android Needs having large numbers

of choices smart phone manufacturer.The number of

sellers:The Technology:

1- Economies of Scale2- Intellectual Property

3- Brand Loyalty

The smart phone OS producers are limited due to the barriers to

entry smartphone market that are relatively high

including

Rapid innovation necessary for a rapidly changing market,

where customers are very price conscious, rivalry among firms in the OS smartphone market is

fierce

Stylishness/Look/Color Weight and Size Perceived Prestige

• Hardware Functionality Camera(s) Battery Life Quality/Resolution of Screen Keyboard Type Microphone and Speakers GPS Tethering

Factors Affecting Smartphones Demand

• Aesthetic

• Service Compatible Networks Quality and Speed of Network Price of Service (Voice and Data)

• Software Functionality Ease of use Operating System/Openness Browser capability Built-in/Exclusive Apps Availability of Apps/App Store Sync with Contacts and Mail Support for Enterprise

Services• Other Price of Device

Software applications, or “apps,” are a significant part of the smartphone market today.

Every smartphone operating system has an online store where apps can be purchased and downloaded to the smartphone to extend the functionality of the smartphone. These purchases can be made directly from the phone, and include very diverse functionality: games, over-the-internet radio, exercise trackers, maps and GPS navigation, note taking, word processing, etc.

Apps constitute a complementary product to the smartphone, with cross-elasticity of demand, and are an source of revenue for the company that runs the app store.

Apps. As a main factor affecting demand

Apps. As a main factor affecting demand

Android Google Play

Apple The App Store

RIM BlackBerry App World

HP/Palm webOS

Palm App Catalog

Windows Mobile Phones

WindowsMobile

Marketplace

Windows Phone 7 Devices,

Windows Phone

Marketplace

Consumers find great value in apps because of the additional functionality that they can obtain from their smartphone. Manufacturers promote apps because they are valuable both for the revenue that they get from selling apps (if the app store is for a proprietary to the manufacturer) and for the effect of consumer lock-in, While many apps are available for free from the app stores,

The developing fees that the developers must pay to the manufacturers to be able to produce a new app affect strongly the growth and the diversity of the apps available for every OS

Expenses are involved in developing mobile apps

That directly affect the demand for the devices

The more the growth of an App. Market, The more the demand for its devices, As it is very clear above

99$/Year for Apple

99$/Year + 99/App for Windows Marketplace

25$ for Android Marketplace

52%17%

15%

11%

2%1%1%

OS Market Share In Q3 2011

AndroidSymbianiOSRIMBadaMicrosoftOthers

Google Android OS Demand

Jan. 2

008

Mar.

2008

Jun. 2

008

Sep. 2

008

Dec. 2008

Mar.

2009

Jun. 2

009

sep. 2

009

Dec. 2009

Mar.

2010

Jun. 2

010

Sep. 2

0100%

10%

20%

30%

40%

1% 2% 2% 3% 4% 4% 3% 6%

21%30%30%

37%

% of consumers planning on buying a smartphone next 90 days who say Google Android is the OS

they would prefer

Prefer Android

A Survey of which mobile OS would you prefer to have on your

next Smart phone

iPhone OS Google Android

BlackBerry OS

Windows Mobile

Palm/Web OS

0%5%

10%15%20%25%30%35%40%45%50%

50%

30%

5%2% 0%

38% 37%

6%1% 0%

Jun. 2010 Survey Sep. 2010 Syrvey

Google Android OS demand

Google Android OS Supply

Google Android OS is available for many

Smartphones manufacturers

This Make it available for many users at different

Prices with different hardware specifications

The Smart phones Demand Seems To be Perfect Elastic that’s due to Availability of large numbers of close substitutes in addition to this it still seems to be

Luxuries for most of customers and also the narrowly Defined Market.

The Price Elasticity of Demand

The Android OS supply seems to be perfect elastic as it is a renewable and free product

and its duplication cost nothing

The Price Elasticity of Supply

The smartphone OS market is rapidly changing, with constant product introductions, quickly evolving technology and designs, short product life cycles, aggressive pricing, rapid imitation of product and technological

advancements, a highly price sensitive consumers.

No one firm in the market has sufficient market Power to control prices, resulting is strong rivalry and competitive pricing. The barriers to entry

are high due to the existence of patents, high fixed costs and economies of scale, regulation, and brand loyalty.

The individual market participants engage in attempts at product differentiation, some being more successful than others.

The smartphone OS market is likely to be significantly different in as short a time as 1-5 years.

Conclusion