The Smartphone Market: Who Gains The Most?

The Global Smartphone industry is massive, it is estimated that by 2020 there would over 6 billion mobile phones in use, of which over half would be smartphones. People all over the world, in the remotest of places, are able to connect with anyone and with great ease with the use of smartphones, which have become increasingly cheap as time has progressed. The industry has come a long way since 2007 when Steve Jobs stood in front of an audience wearing his trademark black turtleneck holding a device, he called the iPhone.

So, what does the world of Smartphones look like today? Who leads the global market and which makers are the ones to look out for? The main companies in the market for many years been Apple and Samsung. Chinese manufacturers such as Huawei, OPPO and Xiaomi have also caught up in recent years while HTC, Nokia and Blackberry have altogether faded away from the mix completely.

Samsung has for the past many years been the global market leader, leading its main competitor ‘Apple’ with a healthy lead. A lot of Samsung’s business comes from the ‘cheaper’ budget handsets that they make, allowing them to eclipse Apple with ease as Apple’s iPhone a premium device and they do not really cater for the ‘low-budget’ segment of the market. Why is this an issue? A vast majority of the world’s populace lives in the developing world with median incomes not very high, but with increased internet connectivity, most people desire to have smartphones to be able to connect with the world, this is where Apple loses out against Samsung.

Apple, however, has been recently eclipsed by the Chinese phone manufacturer ‘Huawei’ to become the world’s second largest phone maker by total sales. Huawei has been able to penetrate into emerging markets by producing high-quality budget phones and has also started to make high-end premium devices as well, being able to take advantage of the highly skilled, yet cheap labor available in China. Huawei, suspected of being used by the Chinese state for spying is still not allowed to be marketed in the United States, which has deprived the company of a very large market from which they can only gain, perhaps with time they can also cross that barrier.

Huawei’s rise poses great competitive challenges to not only Apple but also Samsung where it wrestles from it the market share of the low-end devices but is also in the battle for premium devices. Huawei outdid Samsung by launching a cutting edge ‘fold’ dual display phone before Samsung was able to launch their own – not much can be said about the market success of this device but the fact that Huawei is able to invest such a large amount into researching and developing a premium cutting-edge device before Samsung goes to show how tough the market would be in the years to come.

Challenges from Huawei are not the only ones Apple is concerned with, Apple has long had a problem of procuring supplies for its flagship iPhones. The major provider of screens for Apple’s iPhones is Samsung. So, the more iPhones Apple sells, the more screens Samsung sells. So perhaps Samsung gains the most? Being the market leader but also supplying to competitors so also benefitting off of their competitor’s sales.

But who loses? You’re probably thinking ‘Apple’ or other competing phone makers like ‘OPPO’ or ‘Xiaomi’, but no, that is not it. With the increase of smartphones and other such devices all over the world, it is still the society which loses, while perhaps also benefitting at the same time from increased connectivity. Why is this the case?

Smartphones and other such computing use precious minerals such as tin, gold, tantalum, and tungsten. Some of the more premium products use rarer minerals as well. With the wider use of smartphones, the demand for these minerals increases leading to more unsustainable exploitation of mineral resources all over the world. Uncontrolled exploitation of minerals has already caused a great deal of environmental ruin, but to make matters even worse a lot of these minerals are sourced from regions of conflict. What do we mean by regions of conflict? Quite simply places where there is an active war that ravages, and militia groups or local war efforts are supported by the trade of these precious minerals -case in point Congo and Rwanda.

The higher the demand for these mineral resources, the easier it is for violent militias to entrench themselves into these regions and keep the conflict going on for a longer period of time. A similar connection can also be made with the copper and gold reserves in the Reqo Dik and Saindak regions of Balochistan, Pakistan. Companies such as Hewett Packard (HP) have started to become more observant about their supply chains in order to avoid sourcing of minerals from conflict zones, however, the extent of which they’re able to do this is very marginal.

Another major problem is ‘E-Waste’. What is e-waste? Quite simply old electronic devices or parts of them that have no use anymore. People often dispose of their old phones in an improper manner, which also contributes to this ‘e-waste’. Which is often just piling up landfills and has no productive use. In the US alone, more than 100 million computers are thrown away with less than 20% being recycled properly. The EPA estimates as much as 60 million metric tons enter landfills every year.

Most electronics that are improperly thrown away contain some form of harmful materials such as beryllium, cadmium, mercury, and lead. What is the solution to this? Better recycling methods in the world so that parts which can be salvaged are used by corporations, people using their electronic devices for a longer period of time -not replacing phones just for the sake of replacing them or keep up with the trend.

In emerging markets such as Pakistan, companies such as Samsung, Huawei, OPPO and Xiaomi lead the market with their cheap and affordable handsets. Internet connectivity is still nevertheless low, and the know-how of operating devices connected to the internet is also not that widespread in a largely agrarian society. The environmental impacts tend to hit much stronger in places like Pakistan because little to no mechanisms or policies exist to dispose of electronic waste in an environmentally sustainable manner. In attempts to purchase cheaper products, the populace allows for the exploitation of labor in China and the sourcing of valuable minerals from Balochistan and Africa in a way that does not benefit the local population present there.

There is much to be gained with the proliferation of cellular devices with cheap and reliable internet access as the population can access communication in a way that they never could, access e-banking services such as EasyPaisa, JazzCash and what not. There is a lot to be gained from this growth in telecommunication, as users and as producers, it is important that the gains are made in a sustainable manner. The world will be a much better place with greater access to technology, perhaps the path to this development can also be a green one.