Some people are berating Microsoft for pursuing Tango, a version of Windows Phone that supposedly targets low-end handsets. A recent report from analyst Morgan Keegan reveals why that strategy may be brilliant.
According to Keegan, China will soon surpass the US as the largest market in the world for smartphone sales. China, India and other similar emerging markets have smartphone penetration of about 20-30 percent, which is well below the 60 percent and above we see in developed countries like the US. This disparity means the emerging market will be the next great gold rush for companies like Samsung, Nokia, Apple and RIM.
Currently, Samsung is the leader in these developing countries and recently edged out Nokia for the first time last quarter says Keegan. Apple is also growing in this area, though Tim Cook recently made it clear that Apple is not interested in making a cheap iPhone. Like Nokia, RIM’s growth in this market is also falling.
Nokia, however, could turn this around with a series of inexpensive Windows Phone handsets. Windows Phone has a snazzy UI and Nokia has a powerful brand name in these less developed markets. An inexpensive phone whose hardware and software work well together could be a big seller and help boost the struggling Finnish company.
Emerging markets will be the new Wild West and it will be exciting to see how this market develops in the next five to ten years. It will also be interesting to see how it influences other markets as it grows.