Sample Essay

Another important factor in as far as the economic environment of the smartphone is concerned is the rising competition. This has been heightened by the entry of new players such as Google, who are challenging the dominance of older and more-established players. Additionally, emerging competition from low-end vendors such as Huawei and ZTE (both from China) is likely to lead to pressures on margins, as the other mainstream players cut their prices to compete effectively (Arthur, 2011). Other products such as PDA’s, MP3 Players, iPods, and laptops also offer some competition to the smartphone.

The UK market has also been segmented according to income levels, with three distinct segments identifiable. These include: the high tier, mid-tier, and low-tier segments.  High tier segments spend more on handset devices and on tariffs (over £35) followed by the mid-tier and low tier segments respectively (ComScore, 2011). Even though the smartphone is currently perceived as a luxury item (which means that ownership of the smartphone should be highest in the high-tier segment), the mid-tier and low-tier segments in the UK are the fastest growing segments (ComScore, 2011). According to ComScore (2011), adoption rates for the mid-tier and low-tiers stand at 76%, compared to just 60% for the high tier.

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