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Making a Smartphone World

It's a smartphone world, and becoming more so every day, especially in parts of the world that are finally able to access and afford this kind of technology. 

While Brazil, Russia, India, China and South Africa (BRICS) win attention for their promising smartphone adoption and potential growth, simply because the sheer size of their populations and untapped opportunities, dozens of other countries are in various stages of embracing technology in the form of a handheld device. And, that will continue to have far-reaching supply chain implications as component makers and OEMs strive to reach billions of people waiting to be part of the smartphone revolution. 

In Thailand, for instance, where I had the pleasure of taking a long, slow walk through the country in January and February, it looks likes high-end Samsung phones have won the affection of most people, with ZTE, Apple, and LG showing up less frequently in people's hands. In Thailand, which is much further along the development curve than its immediate neighbors, affordable, fast 3G and 4G mobile Internet and WiFi connectivity have become widespread commonplace, even in rural areas; and like in the U.S. and Europe, Thais seemingly spend much of their day looking at their small screens with ear buds in their ears, if rides on the Bangkok metro reveal and observations of coffee shops indicate how people pass their time. Click on the image below and see some of the sights that I saw that show just how quick technology adoption has been.

An Insiders View of Smartphone Customers in Burma

All photos courtesy: Jennifer Baljko

All photos courtesy: Jennifer Baljko

 

Across the border in Myanmar/Burma, a smartphone trend is obviously blossoming as well. Advertisements for various telecom operators are plastered all over the newly-opened country, where sweeping changes are promised after recent elections, and mobile phone and accessory shops occupy most of the storefronts in any given city (they many even outnumber the number of roadside eateries that takes up most sidewalk space). Smartphones are quite popular now, shop owners there told me, and young people and older people alike are quickly latching on to applications like Facebook and Viber; I was frequently asked for my Facebook details, a reflection of how eager people here want to connect with the outside world that was closed off to them for years.

The difference here compared to Thailand, though, was the kinds of phones people were buying. While Samsung phones (namely the Galaxy J7), a costly option for many people in this economically challenged country, show up frequently enough, companies like Vivo, Huawei, Oppo, Kenbo, and Singtech–and some others I hadn't heard of before last month–are proving to be the affordable gateway technology in this country on the edge of transition.

And, the technology they are getting for their money isn't so bad. Many of the phones, which hail from places like China, Singapore, and even Myanmar/Burma, are running on recent Android OS platforms, have 5-8MP rear cameras and 2-5MP front cameras (some higher-end ones have 13MP rear cameras), motion gesture features, various kinds of sensor technology, and 1.2-1.3GHz quad-core processors (higher-end ones tout using Qualcomm octa-core SoC products), and one or two gigabytes of RAM (with some models having 8 to 16GB ROM). The price points are helping convert the masses into loyal users, with decent smartphones starting at about $100 and ranging up about $280.

 “These are fair prices for people living here,” a Burmese mobile phone shop owner told me. Many others added that while Internet connectivity may still be slow and networks are still be laid out around the country, it's a vast improvement from a handful of years ago when Internet access was a far-off dream, something other countries had and they didn't.

What's happening in Southeast Asia is reflective of global trends. A February 2016 report from Pew Global survey indicates that smartphone ownership and Internet usage continues to climb in emerging economies. Smartphone ownership rates in emerging and developing nations climbed from a median of 21% in 2013 to 37% in 2015, according to Pew. And overwhelming majorities in almost every nation surveyed report owning some form of mobile device, even if they are not considered “smartphones.”

So, even though phone makers may publicly talk about the maturing smartphone market and slowing sales because of higher penetration rates in wealthier, more developed countries, I'd argue that perhaps many phone makers are not scanning their horizons well enough for new opportunities. In many emerging markets, new customers want what the Western world has. Economically, one day, they may get there. In the meantime, though, the electronics supply chain owes it to people in these markets to deliver products they can afford. They're starting point is slightly different, but their adaption could be swift and mighty.

What's your supply chain play in emerging markets where people are waiting in the wings for technology?

1 comment on “Making a Smartphone World

  1. docdivakar
    April 12, 2016

    An overwhelming majority of the population in the developing economies never got an opportunity to acquire landlines for communications, moved directly to mobile phones. So your statement “…new customers want what the Western world has…” is partially true! If you recall, many developing economies had already adopted 3G phones while those of us in N. America were still using 2G. The latter group was a captive consumer base for telcos to 'monetize' their older infrastructure for the longest periods possible! Many of us were wishing for what India and China had in mobile phones… of course it changed with 4G/LTE. Future iterations will be almost concurrent in adoption, in my opinion.

    It will be interesting to see how the smart phone market evovles when utilitarian internet of things take hold in developing economies. Because most people in developing economies spare no efforts to get the most out of their investments… often their livelihoods depend on these phones / comm devices.

    MP Divakar

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