For quite a while, the smartphone segment of the mobile market has been a very profitable one. Of course, every Tom, Dick and Harry in mobile manufacturing have gone after a piece of that cake as a result.
The logical thing is that the smartphone market then becomes gradually less competitive. What happens when the smartphone market becomes bigger than the feature phone market? What happens when it becomes significantly bigger?
Already, one amazing company that has ridden strictly on the smartphone market (and made good money from it for two straight years) has reported a decline in profits.
But that’s not all. News has it that the company expects to see more of the same in the first quarter of 2012 with net profit expected to continue sliding.
We shall have to keep observing things, but simple economics suggest that as competition stiffens in the smartphone market, profit margins will dip. Sooner or later.
How fast it will happen is the question. Comments please.