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The Race for 3rd Place in the Smartphone Space

The Race for 3rd Place in the Smartphone Space

We are still very early in the smartphone game. Leadership may change from time to time. It already has changed once. Five years ago, the leaders were BlackBerry and Nokia. Then Apple and Google stepped on the stage and stole the show. Now BlackBerry and Nokia are shadows of their former selves, trying for a comeback. This marketplace has changed very quickly, and it will likely continue to do so.

By Jeff Kagan E-Commerce Times ECT News Network
06/06/13 5:00 AM PT

We have been watching the big guys battle it out for the last few years. Apple's iOS vs. Google's Android on the operating system side, and Apple's iPhone vs. Samsung's Galaxy on the handset side. However little attention has been paid to No. 3. Which company is No. 3? I'll be you don't even know. Yet No. 3 could transform the industry over the next few years.

It seems we've been following the big guys for so long, we forgot about all the other players. The industry seems to be settling into two parts -- Tier I and Tier II. There are quite a few Tier II players, and we are just in the early innings of this game. Leadership in the Tier II space seems to change on a regular basis. What that says to me is there is not one strong third place leader yet -- but that could be changing.

So, whether you ask which company is No. 3 or which company is No. 1 in Tier II, there are quite a few to consider, both new and existing brands. Let's take a look.

Foxconn and Firefox

Mozilla's Firefox OS will soon enter the smartphone space. Foxconn agreed to make a number of brand new handsets running the Firefox OS. Foxconn is that company in Taiwan that makes the iPhone and other things Apple. By the way, it also makes smartphones for a wide variety of companies like Sony, Huawei and ZTE, which will also be working with Mozilla on devices running the new Firefox OS.

Foxconn is one of those winners in wireless that very few have ever heard of. Mozilla chose well. However, while Foxconn is a huge smartphone maker for many brands, Mozilla's Firefox OS is new and untested. I expect a big coming-out party for Firefox OS as it breaks into the market later this year on smartphones offered in Latin America and Europe.

Firefox is not competing in the U.S. market yet. I think Mozilla hopes to get a good running start elsewhere. Whether it will succeed and when it will enter the U.S. marketplace are the next questions. Let's hope it does.

Lenovo's Ambitions

Lenovo may soon launch a new line of smartphones running Windows Phone 8. It already offers a number of Android smartphones. With its Lenovo Reach cloud product, its customers will have an advantage in that they can store information online rather than on a hard drive, making data accessible across platforms and devices. It's just like what Apple is doing with the iCloud and Microsoft with its cloud. This is a growing segment.

Lenovo wants to enter the U.S. smartphone market within a year, but it won't be easy to crack, as there is already plenty of strong competition. It has been very successful in China and elsewhere, so I expect it will come on strong in this marketplace.

Microsoft, Nokia Register

Microsoft's Windows Phone operating system is on smartphones like the Nokia Lumia. Both Microsoft and Nokia have been struggling in the smartphone space, not moving the needle much. Today there are plenty of Lumias on the market, though, and in the last quarter, the Windows Phone OS suddenly seemed to be catching on.

A few months ago, the Windows Phone OS was at roughly 3 percent market share, but now it's at 5 percent. That's a good jump in just a single quarter. Who is the real winner? Is it Microsoft or Nokia? The answer is both. Can Microsoft and Nokia keep it up? Well there is a slice of the customer pie that likes Microsoft Windows Phone. Perhaps they are the same group who like Windows 8.

Perhaps these are the people who want a similar experience on their laptop, tablet and smartphone. Whatever the reason, Microsoft and Nokia are starting to gain some traction. Let's see if they can keep this up.

BlackBerry and All the Rest

Don't think competition for that No. 3 spot is just between these few companies. There are others who want to break in and succeed as well. BlackBerry is now back in the game with its BB10 OS, carving out a niche with its first new devices.

We don't know how well it will do compared to the competition, but it may be holding its own and even growing a bit lately. Many of its existing customers really like the new tech. I hope that is enough to trigger a long-term growth spurt.

There are quite a few other devices either here or coming soon from companies like Sony, Huawei, HTC, ZTE, LG, Motorola, Kyocera and many more.

The More the Merrier

This marketplace can only benefit from more successful competitors. Success for any of these companies will be a matter of building strong demand by innovating with both their technologies and their brands.

It all depends on ideas. What's hot today and what's going to be hot tomorrow? Wireless is changing from a tech business to a fashion business. It will face the same challenges as fashion retailers like Abercrombie & Fitch with all the ups and downs in a rapidly changing market.

Keep your eyes open for companies waking up and starting to hustle. Samsung has soared in the last few months. In the mind of the customer, Samsung has arrived.

Which company will be next to catch the growth wave? Keep your eyes open, because it will happen quickly.


E-Commerce Times columnist Jeff Kagan is a technology industry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at jeff@jeffKAGAN.com.


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