If you want to ride the growth in the smartphone industry, the most obvious choice is to buy the shares of any of the tech giants producing smartphones like Apple or Samsung. However, a drawback of direct investment is that you are unswervingly exposed to the risks which come with the launch of new devices.
One of the latest examples in this regard is that of Samsung which held the title of No. 1 smartphone manufacturer for quite a while. Unfortunately, the Samsung Note 7 exploding disaster and a bribery scandal in South Korea have made the company to slowly give away its dominance to Apple.
On the other hand, Apple is profiting on Samsung debacle and earned 92% of the industry profits in the fourth quarter of 2017. With the launch of iPhone 8 and iPhone X, it is all ready to capture record earnings for itself.
Amidst all this race between the smartphone giants, is it okay for the startups to venture all their money into the smartphone industry? Of course, and the best way to cash on your investments is to devise a strategy which captures all the biggies in the market including Apple, Samsung, Nokia, Microsoft, Google, and Research in Motion.
According to Android News: the world’s smartphone penetration stands at 50% and is going to increase to 60% by 2020. Developing countries including Brazil and Indonesia have a smartphone penetration rate lower than 25% whereas, in India, it is only 13%. This can be taken as a good sign because the three countries combined represent 24% of the population of the world so there is still a lot of room for growth.”
Companies Investing in the Smartphone Sector
The following companies are investing in the smartphone industry and profiting through the hike in the smartphone sales:
After the Samsung Note 7 mishap, the company is ready to strike back with its latest installment in the Note series. A number of positive Samsung Galaxy Note 8 Reviews are circulating on the web giving a chance to Samsung to become the market dominators one more time. It already has a plan to invest $18.6 million dollars in the home country for next-generation smartphone displays and to maintain its lead in microchips. Samsung makes 46% of its revenue from consumer electronics and the remaining 54% comes from smartphone sales.
Accounting for 65% of company sales, Apple’s iPhone has a market share of 45% but the company has still managed to capture a whopping 92% of the industry profits. There is no denying that the major benefit for Apple was the strong sales of iPhone 7 plus after Samsung had to recall Note 7.
Holding patents in the areas of CDMA (Code Division Multiple Access) and OFDMA (Orthogonal Frequency-Division Multiple Access), Qualcomm earns a significant amount of cash from them. K.C. Ma who is the director of the George Investments Institute at Stetson University in Florida says, “Qualcomm is the clear market leader in wireless chips, with a leading market share position in 4G LTE chipsets and relationships with every prominent smartphone maker.”
There is no denying that it is Facebook which has been the ultimate winner in the smartphone revolution. It boasts the highest number of users for its four brands including Facebook (1.9 billion), Facebook Messenger and WhatsApp (1.2 billion), and Instagram (600 million). Thus, the more people indulge into the smartphones, the more profits for the company.
Apart from being the world’s largest contract electronics manufacturer, Jabil has also ventured into supply-chain management, repair services, and logistics. It has seen a growth of about 60% in a year and stands to benefit largely from the next big tech wave. The Internet of Things will provide numerous more advancement opportunities to the company.
This company is known for microwave transmission equipment which is used primarily by the telecom companies. During the first quarter of 2017, its revenue saw an up of 27% as compared to Q1 of 2016. The company has customers on every continent except for Antarctica thus, it plays on the growth of the smartphone industry.
“Deutsche Telekom owns 67% of T-Mobile, worth $36 billion,” says the technology portfolio manager on Covestor, Barry Randall. The company spreads beyond Germany and US as it functions in multiple countries around the world. The revenue of the company has seen a growth of 6% in 2017.
Future of the Smartphone Industry
Internet of Things
Our lives are going to be changed dramatically by the Internet of Things as it intervenes more and more into our lifestyles. From smart homes to connected cars, everything would be accessible through the screens of our smartphones. The Gartner Inc. has estimated that there were 6.4 billion IoT devices in 2016 and the number can increase to 20.8 billion in 2020. So, this makes the growth in this sector inevitable.
VR Performance of Samsung Galaxy Note 8
The AR and VR are taking the world by storm as they have truly integrated themselves in the tech and marketing worlds. Samsung is the sole bearer of this technology in its smartphones letting its users view the broader horizons of various spectrums. Introducing the latest gear for its Samsung Galaxy Note 8, there is nothing which can stop the company from coming out of the exploding Note 7 mishap.
Another first my Samsung is on its way as the company has already filed for the patents of foldable Smartphones. It is set to introduce the first model in this regard in the year 2019 that will be able to look like a pocket mirror and can be opened and closed like a notebook.
There is no denying that there is an oversaturation of various phone models in the smartphone market. Companies like Apple and Samsung need to keep innovating so that they can meet the demands of the changing world dynamics. As of now, the future looks promising with all these companies set to earn huge profits from their future investments.