Smartphones are a tough sell – ask Darwin
IT'S been a busy few weeks in the telecoms sector. On the network side of things, O2 Ireland has been sold to 3 pending regulatory agreement, while we all know about the blockbuster Vodafone/Verizon Wireless deal. The actual mobile phone business has seen a couple of big developments as well, but not for the right reasons. BlackBerry is up for sale with no sign of a buyer, while on Tuesday Microsoft bought Nokia's hardware business for the knockdown price of €5.4bn.
The explanation for the collapse of Nokia and BlackBerry has been the growth of Apple's iPhone and the Google Android operating system. Samsung is the leading user of Android, and the South Korean firm is now a legitimate rival for Apple globally.
That being the case, why is Samsung holding a developer conference in Seoul in November to prove there is still room for growth in the smartphone business? The website Business Insider claimed the meeting was "to persuade (sceptics) that smartphones aren't dead". And that might not be too far off. The smartphone sector overall isn't dead, of course, but margins are falling and fewer people are upgrading their model every year.
Apple's sales have plateaued, but smartphones are arguably more important to Samsung. They provide about two-thirds of the conglomerate's profits, and those earnings have plunged 13pc in the last quarter.
Even for the winners in a Darwinian business, smartphones are proving a tough sell.