Smartphones in one year: Project Ara (Opinion)

Project Ara, the modular handset

Smartphones have come a long way since their inception; though the idea of a portable device with internet connectivity and calling features has been around since the 1980s, it was not well received until 2006, with Blackberry’s new devices such as the Curve and Pearl. It revolutionised the way mainstream society viewed portable electronic devices and our uses for mobile phones. However, Blackberry did not enjoy this success for long, with the launch of the revolutionary iPhone, from Apple. It incorporated a touchscreen, and only 4 buttons. People were amazed by the fluidity of a device which essentially had nothing but screen on the front face. Apple’s market share grew rapidly, for example, increasing 626% globally in the smartphone sector, between the last quarter of 2008 and the first quarter of 2009.

The smartphone industry proved itself unpredictable once more in 2010, with Android’s new ‘Gingerbread’ overtaking iOS in the US, having already overtaken iOS in markets such as South Korea in 2009. With this saw the rise of OEMs such as Samsung, LG and HTC. Apple released the iPhone 4, a beautifully designed phone with ‘Retina display’ which yielded a positive response from the consumer market. Blackberry’s RIM was still going strong, however, failing to generate sales. 2010 also saw Microsoft’s attempt to tap into the smartphone market with Windows Phone, which did not meet good reception.

 

Android Gingerbread
The home interface of Android gingerbread – image source: http://developer.android.com/about/versions/android-2.3-highlights.html

In 2011, with the release of Android 4.0.4, or ‘Ice Cream Sandwich’, Android phones finally started to be perceived as high-end, mainly due to the refreshed, sleeker interface Ice Cream Sandwich brought, and the smoother user experience, thanks to ‘Project Butter’, in Jelly Bean, 4.1. Android’s market share grew further to 36% in the US, placing them in a comfortable first position in terms of market share. Samsung also released the hugely popular Galaxy S2, and Apple released the iPhone 4S, which brought in Siri, a voice controlled assistant. By this point, Blackberry’s market share in the US decreased to less than that of Android and iOS.

 

Ice Cream Sandwich
The home interface of Android Ice Cream Sandwich – image source: http://developer.android.com/about/versions/android-4.0-highlights.html

Fast forward to 2014, where 80% of the world’s smartphones run on Android, and where Samsung is the biggest producer of smartphones internationally. Android Kit Kat brought performance and aesthetic improvements to Android, and Apple’s iOS got its long-awaited makeover in iOS 7 – which produced mixed opinions. HTC and LG gained a significant amount of market share, with the One M8 and G3 respectively, in markets such as the US, Europe, South Korea and Australia. However, it came as a shock that less popular manufacturers such as Huawei, Lenovo and Xiaomi had superceded manufacturers such as LG, Sony and HTC in the global market. This reiterated the influence that the Chinese market had on global business, and its sheer size.

The sudden entry of China into the smartphone market was expected, but not to the scale which it has. Not only have the consumers in China played a huge role in the global market share of OEMs, but their manufacturers such as Huawei, Xiaomi, Lenovo, Oppo, and more recently, OnePlus, have given the traditional smartphone manufacturers such as Samsung a real dilemma. Samsung is rapidly losing profits; quarterly projections going down by numbers such as 40% and 60%, and LG and HTC are struggling to keep their heads above the water. Chinese manufacturers are beginning to build great devices such as the OnePlus One, or the Xiaomi Mi3, with high-end specs, but sell for half the price of their counterparts of traditional OEMs.

 

OnePlus One
The ‘flagship killer’ OnePlus One, from OnePlus – image source: http://oneplus.net/

I believe that next year will be pivotal in the smartphone industry; due mainly to the speculated release of the modular phone; Project Ara.

Project Ara will be the ‘next big thing’. It can be tailored to the needs of the individual, therefore, has the capacity to be a high-end or mid-range device. The concept of not having to buy a new handset every time a new chipset comes out, or when the screen is cracked, is intriguing. If marketed and manufactured well by Google, it will cause the idea of the ‘complete handset’ totally redundant.  Consumers will only buy a new processing package, insert it into their modular phone, at only a fraction of the cost of buying a totally new handset.

This will pose a serious concern for current manufacturers. Instead of building complete handsets, companies will look for ways to monopolise the industry for a certain part of the modular phone. For example, Samsung and LG may both aim to control the displays of Project Ara, while Qualcomm with the chipsets. Unless the business can achieve a monopoly or duopoly of such industries, they will experience severe losses, provided that Project Ara is successful.

What must also be considered is the third-party, non-authorised manufacturers. These will be extremely popular in markets such as China, which, as proven before, is a market crucial to the survival of a consumer-oriented business. These ‘pirate’ manufacturers will provide parts of lesser quality, however, cheaper price, and can cause a formidable dent in the income of respective manufacturers.

The potential repercussions of the launch of the Project Ara platform to the smartphone industry are concerning. If it is as popular as it is believed it will be, it will result in the complete monopolisation of the smartphone market with Android, and with only one handset. It will minimise variation, innovation, originality and creativity; the smartphone industry will be extremely static. Therefore, I can hope another company will reciprocate Project Ara in an equally fantastic product, in order not to let Google singularly rule the industry, and maintain the dynamic, multifaceted environment of the smartphone industry, which is ultimately what renders the sector as stimulating as it is.

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