As the mobile revolution continues to accelerate, key players in the mobile communication manufacturing market have emerged as industry leaders. Among these industry leaders are Apple, HTC, Samsung, Motorola, Sony Ericsson, LG Electronics, and Nokia. The rivalry in this industry as extremely strong – based primarily on differentiation through features and performance offered by devices manufactured by the players outlined above.
Companies in this industry are constantly attempting to innovate and create new value for their consumers through new technology. The demand for mobile devices has been steadily growing for more than 10 years – this steady growth in consumer demand also fuels intense rivalry among competing organizations. The mobile device manufacturing industry is unique in that the success of its products is a partial result of the key choice of what operating system the mobile device should be based on.
As an example, Apple produces devices that only run on their own operating system, iOS. Samsung, HTC, and many other organizations have adopted Google-sponsored Android as their operating system of choice. Windows has begun to release its Windows 8 operating system for mobile devices, which Nokia (among others) has adopted. There are also several other smaller operating systems in use today, but none have gained competitive traction.
The operating system itself is extremely significant for a number of reasons, including: •Each operating system is equipped with unique features and helps to differentiate between various mobile devices •The capabilities for extensibility for each operating system is different, thus varying third-party software can be overlaid on top of the operating system to enhance the performance and experience of the mobile device •Switching costs can be both low and high – the switching cost is low when a consumer purchases a new cell phone that is running the same operation system.
However, the switching cost is much higher if a consumer switches to an operating system in which they are not familiar. As well, mobile carriers like T-Mobile, Sprint, and AT&T help to lower switching costs by subsidizing new mobile device purchases in exchange for the purchase or extension of mobile carrier contracts.