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How Do You Differentiate In The Android Commodity Market

HTC posted another grim set of results last week, so bad that the company says that it will no longer be offering financial guidance for future performance. Sony also struggled this quarter, once again dipping heavily into the red as its sales fell - a result of chasing profit not volume according to the company.
Samsung may have posted a healthy $2bn profit last quarter, but there's no guarantee that this is anything more than a dead cat bounce in a run of progressively worse quarters.
The problem for each of these companies is the need to sell premium smartphones in an Android market where anybody can (and  does) start pitching pretty good handsets. Huawei, One+, Asus, ZTE and many, many others are pushing out phones that are good enough.
Pairing Google's standard Android platform with hardware reference designs and a little bit of customization makes it easy to build a device that meets a customer's needs at a reasonable price.
So where's the motivation to buy premium?
HTC has delivered three generations of its metal unibody One handset. None have been a success. Sony is now onto its fifth generation of waterproof, premium Xperias and they're still a rare item.
Only Samsung's Edge phones appear to be breaking the mould - and that's entirely down to a ground breaking curved screen that serves no real purpose other than to look fantastic.
As I've said time and time again, the Android premium market isn't big enough to support the number of players currently pursuing buyers.
HTC, in particular, cannot afford to be in the premium market. If it wants to survive - and I think every right-minded person would want them to - they need to abandon the high end, high margin market and concentrate on selling into the bargain basement and mid-range markets where Chinese OEMs in particular are having great success. More phones at less profit should be a mantra for the company.
The recently announced One A9 could have been a must-have phone had it been polycarbonate and $200 cheaper. At $499 it has no hope. At $299 it was a sure-fire hit.
Sony too must move away from the idea that it has to build handsets that retail for the same price as the iPhone. It has the knowledge, intelligence and experience to bring these phones to market at the same quality, but at an attractively discounted price when compared to Apple. The Sony brand may have lost most of its shine, but its still a very recognizable name.
Part of its problem is the naming convention. The Z5 Compact competes with the standard iPhone, but judging by its name you wouldn't think so. Rename the phones Z5 and Z5 Plus and price them $150 cheaper than Apple's equivalent.
Which should leave just two players in the Android premium game. Google and its Nexus line; and Samsung with its Galaxy S and Note phones.
Google can sell the Nexus precisely because it's a Nexus - guaranteed updates and pure Android are a big draw for some Android buyers.
Samsung has the scale and owns the technology to produce innovative handsets that stand out in the commodity market. It's screens are beyond anything else on the market and it's finally found a way to deliver the bundled software and features that make Android better rather than just prop up the spec sheet.
Samsung also sells so many low- and mid-range handsets that it benefits from economies of scale across its whole range.
Right now HTC, Sony, Samsung and Google make seven of the ten best handsets you can buy today. Just because you can buy them doesn't mean you will though.