Cellphones, is the market oversaturated?

Just read that Siemens is announcing their cellphone division’s fate on the 27th, and Panasonic is losing money. We also have seen Sony merging with Ericsson but not doing well either. Then there are new brands like BenQ which offically separated from Acer and growing pretty fast.

Cellphone market seems to be pretty happening. Do you think it will become like car industry where a few dominates the whole, or will more new brands emerge to share the pie?

I think the auto industry is a bit unique because the cost of manufacturing a car is so high, and the fewer cars you sell, the more each unit costs to manufacture due to the wide array of manufacturing techniques in each unit.

I could see cell phones going more the way of footwear, eyewear, and timepieces where ther are several dominant players and then a lot of little distinct brands. Also in these industries often times the same factories produce products for many brands and Brand identy becomes a selling point.

In other words several brands would share mechanicals and each would have their own shells. The timepiece industry is the epitomy of this type of model. You can buy stock watch guts from several manufactures and mold, cast, or CNC your own shell and viola, you have your own brand. Most snow goggles are made at one of like three factories as well.

I think while being a cellphone brand is one thing, being a leading cellphone brand is another. Judging the nature of cellphones being short lived, the returns is so little that I don’t think smaller companies can ever afford to do decent R&D. Only large companies like Nokia and Motorola can have a firm stand. You can’t imagine how many generic models of cellphones there are in Asia. Most of them are not playing by technology, but by useless gadgets like new colors, graphics or even just the little hanging deco that comes with the package. Or even ring tones and things with appeal that won’t last for more than 5 minutes.

I don’t know how people look at this, but I just don’t think it’s worth entering the market if you know you don’t have something very unique to offer.

If you’re talking about handsets, then in the US it’s way UNDERsaturated. There’s very little choice out there courtesy of the major carriers: Cingular, Verizon, T-Mobile, Sprint, Nextel… (Elsewhere Vodaphone.)

If one of them doesn’t pick up your phone, then forget it. You’re not going to make that phone. Now realize how few carriers there are and how few phones they each offer and you’ll realize how few consumer choices there really are.

The big 3 (Nokia, Samsung & Motorola) really only have a handfull of customers when you think about it. When I was at Motorola it took me a while to realize that when people talk about “the customer” they don’t mean the user, they mean the carrier. When one of those customers buys, they buy big. But imagine if one year none of those customers picks one of your models: you’re f’d. Just look at Motorola last Christmas when they couldn’t get their cameraphones out (lucky for them the v300, v400 v600 “Triplets” were worth the wait and they sprung back.)

That’s why I love GSM: buy whatever phone you like and pop-in your SIM card. Have a different phone for every purpose or every day of the week. Why not!? If GSM was the dominant standard in the US you’d see a much healthier handset market.

The other big problem is that US consumers have been taught to believe that $300 phones cost $50. This was great when there wasn’t much saturation and carriers just wanted your contract, but now everyone’s got a phone. Now it’s all about “churn,” so what do you do? More price-wars, “in networks,” “family plans” and other gimmicks.

In Asia, people change cellphones like dress. They will get a phone for a month and trade it in for a newer one. Thanks to GSM. I think people should enjoy the same freedom here.

To think about it, no one can be more retro than me when it comes to cellphones. I am still using Nokia 3210 when I go back. I got this phone when my sister went for a newer one, and has been using it since 16 yrs old. That’s almost 7 years ago. I got the charger for it, and it works just fine. It’s also got the best interface I have used.

Now, why did Nokia succeed with that? I think it’s got to do with their company direction. They saw cellphones as something more than just an electronic device, and saw its potential to become a fashion trend.

I think we need a new trend, that cellphone isn’t just a superfical decoration to the christmas tree we wear, or simply a quick means of communication. People are trying to integrate PDA functions into cellphones or vice versa. My dad has one, but he uses it for his business. I don’t know how many people will actually need it though.

I don’t know if the market is saturated, but I can tell you one thing: at the low end at least, there are some real bad interfaces out there. My wife finally got our first cel for Christmas, a Nokia. We had used her mom’s AudioVox alot before that.

To my surprise, the AudioVox had a FAR superior interface. Volume was clearly located (although unmarked, something that exists FAR too much in cel phones), and the keyguard/vibrate buttons were just one punch away, and those buttons were clearly marked.

This Nokia though is a pig. It looks better than the AudioVox, as it mixes metallic silver, metallic blue and a 20% cool grey, versus the AudioVox’s single silver colour. Also, the battery in the Nokia is stored under a cover, that makes it look a little sleeker. The interface though is horrible. Many things are hidden in mysterious sounding menus (like profiles, settings, phone details. Where do I find the ring volume…actually I still haven’t). The buttons are not all that clear either. The speaker volume is located right on the front, but it’s not clear to me.

I know that this tirade will probably amuse those phone connoisseurs out there, but the worste part is, I’m probably not all that unusual.

In the other threads raised here, certainly the slow pace of acceptance of a single standard, like GSM, certainly is hurting user choice. Perhaps this will change though as GSM seems to always be increasing in popularity.

Finally, I agree with Yo in that the phones will probably end up being just standard units with different designs placed around them. I’m sure that already happens alot more than we think.

I’m with you. I switched from an inexpensive Samsung flip, yo the the black and metal Sony Ericson a little over a year ago. The usability of the cheap Samsung was way better. Easy to adjust volume and easy to switch to silent and you could put the ringer at a low volume and still have vibrate on.

With the Sony, a lot is burried in menues. It I get a voice message, I also get a text message telling me I have a voice message. You have to scroll through several menues to go through it all. A menue has to be opened to put it on silent, and several have to be opened to adjust ringer volume. The finish on the Sony degraded very quickly as well.

I’m going back to Samsung when I can. This thing still works though so I don’t want to trash it.

I’ve been avoiding “upgrading” my phone for the simple reason that none of the new phones are actually good at being a phone. They all take pictures and one can even Fastap it’s way into my heart, but so far, none are better my old Audiovox. This unit has buttons that feel like buttons, a menu that can be eaily navigated and most important, actually sounds like the person I’m supposed to be talking to. The new Nokia phones sound like a bad piezo buzzer, the new Samsung and LG phones have buttons that are surface flat, and the one Moto available from my carrier is prone to dropped calls (how? my Mom has one).

I would pay real money for a phone with good buttons, big phone book, cheap PC cable for backing up (USB?), good audio and good RF capability.


I dont know if its true, but i heard someone say, that cellphones can be used to buy stuff from vending machines in Japan.
Anybody know about that?

And pay for bus fares in Korea.

PurplePeople: you mean to say that you use your phone for talking to people? Pfft, how last Thursday.

I’ve been avoiding “upgrading” my phone for the simple reason that none of the new phones are actually good at being a phone.

To paraphrase John Heffron, the comedian.

“You got the phone that sends messages, the phone that takes pictures, the phone that takes videos, the phone that surfs the web…how much for the phone that f*ckin works, I’ll take that on, the one I can talk to someone for more than 15 seconds and not have to say, can you hear me now.”

i agree with Molested Cow, ppl in Asia change cell phones like hell…it is like changing clothes everyday !!! I have seen people buying Nokia 6260 and then changing to 7610, that is only after one week when it hit the markets. Here, people believe in those extra gadgets…flashy phones are a hit…with camera, big screen, foldable and revolving screens, slip-in and out covers, air messagings (like the one in Nokia 3220), FM radios, Mpeg players, inbuilt mp3 players, gaming phones, blue tooth, infra red (even if they dont have to use it ever!),…phew the list goes on and on.
The best part is that user gets the freedom to choose the handset and not the service provider ! But what next is the biggest question mark … what will the phone manufacturing company come with…what will be that extra feature they have to provide in their cell phone to beat the competition ???
To me, the cell phone market of India seems to be beyond its saturation point and now consumer is pretty confused amongst the brands to choose from !!!

The market is oversaturated with garbage phones.
I like Motorola, Nokia, and Siemens phone designs and quality.
GSM is the way to go.

I agree with Molested Cow. In the asian market people change phones like underwear. And it’s so cheap over there that even street vendors selling cigarettes have phones with a cam and video cam that enable them to take videos for as long as 15 minutes. There are lots of restrictions here in the U.S. as far as FCC is concern and it’s one of the reason why U.S. market is behind in terms of the latest designs and technology.

You can still have a well designed, quality phone without all the very latest technology of 2 mpxl camera, etc.

Motorola is trying to do that with the V3 Razr.
Nokia tries to do it, many times failing but puting forth and effort in design.