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With well over a hundred new phones coming out every year it’s no wonder that the smartphone market feels like it’s getting pretty crowded. However, in this world of over-abundance some phone manufacturers appear to be taking another route to success: focusing on ‘hero’ devices that are likely to capture the hearts and minds of a wide range of consumers.
Offering a comparatively small range of products with a broad market appeal is by no means a new approach: after all Apple has been very successfully following it for the past 10 years. There is no doubt that consumers’ appetite for smartphones is increasing: based on Compete’s Q2 2011 Smartphone Intelligence survey 58% of respondents owned a Smartphone compared to only 30% in Q2 2010. Furthermore, wanting a phone with more features was the most popular primary reason to begin the shopping process (Figure 1) and for an average consumer the “must have” list of what his/her phone needs to be able to do consisted of 10 features (beyond the obvious ability to make calls and send text messages). However, 70% of shoppers only considered one or two phone models during their entire research process, suggesting that consumers want more features in one phone rather than model variety.
Given the overall ‘functionality surge’ in the Home Electronics and Home Appliances industry with TVs increasingly doubling as internet browsing devices this trend is not all-together surprising. So it makes sense that more manufactures are following Apple’s route and are focusing on few devices with better and broader functionalities.
One example of such a manufacturer is Motorola. Over the past few years the company underwent some fairly drastic changes in management, market strategy and device portfolio rationalization. Compared to April 2008 the number of Motorola models available via carrier websites had declined 40%; however, based on Compete’s interest-to-portfolio-breadth metrics, it had close to no impact to its ability to drive online device interest, indicating that the “less is more” approach is indeed working. Motorola is not the only one embracing the trend: it looks like HTC is looking at the “less is more” approach as a solution for its disappointing end-of-year results and declining market share. In its public announcement last week the manufacturer vowed to deliver fewer but better devices, becoming another OEM to follow suit with Apple. For HTC, who currently lists 51 (!) phones on its website, and has had a rather short product cycle (HTC Amaze 4G was released on T-Mobile only 120 days after its predecessor, the Sensation 4G) this definitely is a big strategy shift. It is too early to tell whether this approach will work for HTC as well as it did for Motorola but we will continue to monitor the online interest-to-portfolio-breadth as the year progresses.