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BlackBerry Dispels Any Remaining Doubt That The Market for Smart Phones in 2013 is Saturated

IraMichaelBlonder
IraMichaelBlonder
October 1, 2013

If we still needed proof the market for smart phones in late 2013 is saturated, Blackberry provided us with that evidence in a press release published on September, 20, 2013, BlackBerry announces preliminary second quarter fiscal 2014 results and provides business update.

The key point made in this release, for me, amounts to an excerpt from the first bullet in the list at the open of this PR piece: ” . . . pre-tax inventory charge of approximately $930 million to $960 million resulting from the increasingly competitive business environment impacting BlackBerry smartphone volumes”. I couldn’t have asked for a more concise, absolutely to-the-point, depiction of what I’ve been claiming for the last couple of months. The market for smart phones is, certainly, ” . . . increasingly competitive . . .” Further, the manner in which the environment is ” . . . impacting BlackBerry [and I claim many other vendors of these devices] smartphone volumes” is decidedly negative.

Carriers are giving smart phones away. Manufacturers are encouraging trade-in rebates as a method of reducing the acquisition cost of these phones. There are, literally, more smart phones per person already seeded into the market than I even care to think about.

With the BlackBerry press release in hand, one can do a better job of deciphering Apple’s recent set of announcements about the cut of the market they’re actually chasing. Certainly it’s easier for them to compete for the very high end of the market, where consumers have deep pockets powered by a driving ambition to be the first in their pack with yet another new smart phone, than to really go through the pain and hand to hand combat of building a highly attractive low cost smart phone for developing markets.

In fact, the kind of work Lenovo looks like it’s doing in China and other emerging markets is the real revolution in technology, if there is one for these devices. I respectfully contend what Apple’s doing on the high end is a pretty easy playbook to learn if you’re already king of the hill. So why mess with the really hard stuff?

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

Commodities
  • Ira Michael Blonder calls on over thirty five years of experience marketing, promoting & selling tangible and intangible products and services within his consulting practice. He has first hand experience with several very early stage businesses targeted to Fortune 100 customers. The common thread between these early stage efforts is that product and/or service offerings incorporated computer technology. He is an excellent choice for a CEO in need of a trusted advisor as products, promotion and sales are planned.

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