Gartner: expect mobile disruption, strong wearable growth through 2015

nismo-watch

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Right now, the global smartphone market seems pretty set: Samsung and Apple are top of the pile and a bunch of Chinese players, including Huawei, Lenovo, and Xiaomi, are fighting for what’s left of the pie. But things can change very quickly. We’re all well aware of the travails faced by BlackBerry in recent years. And Nokia, once the largest mobile player on the planet, doesn’t even feature in the current smartphone landscape. So even though things seem pretty settled, there is still plenty of space for mobile disruption in 2015.

According to technology research house Gartner, while Apple had a very successful 2014 and a record fourth quarter, the Cupertino-based giant will have to come up with something innovative in 2015 to replicate such record sales. Price leaders such as Chinese Whitebox vendors, will continue to profit from growing smartphone demand in emerging markets.

It estimates the installed base of smartphones was 50% in Latin America and 30% in Sub-Saharan Africa in 2014, which shows a sizable opportunity for users to upgrade their feature phone to their first smartphone in 2015. We expect an even more intense competitive mobile phone market in 2015 as vendors deal with the new uncertainty of currency shifts in the Euro-zone that could lead to price increases.

Even with that uncertainty, and despite already high levels of smartphone penetration, Gartner reckons that Europe could be a major locus for mobile disruption. One example of a company that could achieve big things this year is Wiko, a French smartphone manufacturer majority-owned by Chinese technology group Tinno Mobile.

Read more: Your old phone could be refurbished, end up as part of 120-million strong market by 2019

“The phenomenon of Wiko is interesting,” says Gartner research director Annette Zimmermann. “A completely unknown vendor two years ago has entered the European mobile phone market. It is now among the top five smartphone vendors in France and has recently introduced its products in Germany. The success factors of Wiko are local marketing, good channel management and a product offering at an affordable price range of 100-150 Euros”.

“Undeniably, she adds, “competitive features and decent quality attract buyers on a tighter budget, who are not after a global brand. In this scenario, consumers only want an Android device that runs all the apps they want at a cheaper price”.

As Gartner points out, another interesting debut in the mobile phone market was that of Kodak, which launched in partnership with Bullit Group its first Android smartphone at CES last month. As the name suggests the product is marketed around strong imaging capabilities, easy photo sharing and printing with a custom user interface.

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“While Kodak is a well-known brand,” Zimmerman explains, “it is not easy to enter the mid-tier segment of the smartphone market where other strong brand names compete. Microsoft has developed one of the best camera phones in the past three years and continues to put high emphasis on this capability in its high-end and mid-tier product portfolio. It will be interesting to see how Bullit Group/Kodak successfully advertises its new smartphone in Europe”.

Prepare for the year of the wearable

Wearables are already having a major impact on many areas of our lives, from business, to health and fashion.

Gartner says that’s not about to slow down either. The research house expects strong growth in wearables in 2015 with smartwatches and fitness bands and other trackers to reach nearly 70-million units, up 38% from 2014.

Read more: The future of wearables: nail art, expressive hats and a smoke machine

What wearables are unlikely to do, in the next five years, is replace the smartphone. Far more likely is that they will remain a complementary device to the existing portfolio of devices.

“This year should be an interesting year for wearables,” says Zimmerman. “While the wearables market is currently a relatively low penetrated market, it has the opportunity to grow in double-digits in the long term. Gartner forecasts sales of wearables to reach 514-million units in 2020”.

“From a vendor’s perspective the Apple Watch is bound to trigger more awareness for wearables, and Samsung, Sony, Lenovo and others will have to come up with more attractive products to compete,” she says. “Aside from the hardware, vendors will emphasize their ecosystems as well as finding synergies in adjacent markets”.

According to the Gartner research director, Samsung, Google, Apple and Microsoft are ready to build out entire health platforms that are intended to attract partners in the healthcare and fitness industry. “This initiative will trigger new business models, but will also stir up the discussion on how best to protect the sensitive data that is being collected from wearables,” she says. “In addition, there is still room for improvement for most vendors to create more sophisticated apps and ecosystems around wearables”.

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