Apple and Samsung both announced a decrease of market share yesterday, what are the consequences of this loss of market share for themselves and for competitors?

Apple and Samsung both announced a decrease of market share yesterday, what are the consequences of this loss of market share for themselves and for competitors?

Market share losses are signs of long-term problems that require strategic adjustments. For tech giants like Apple and Samsung, this is an early indicator of future opportunities in a new market - wearable technology.

Why? To retain their existing share of high-end smart phone market, a truly revolutionary product will need to be developed and be integrated with the existing high-end smart phone user experience. This means a wearable device that will alter the way we use our smart phones (e.g. health monitoring, nutrition management). Samsung has already started working on wearable devices and in this month, they have released two smartwatches and an activity tracker. The world's largest online retailer, Amazon, just launched a new section for wearable device shopping where consumers can learn more about the possibilities of wearable technology - a clear sign of the next big thing in digital technology.

The loss of market share is also an indicator of both tech-giants problems in the entry-level smart phone market.

The iPhone5C was a flop for the low-end smart phone market. It is a cheaper iPhone but not cheap enough. With 2^nd tier brands like Xiaomi and Huawei entering the mid to low-end market, Apple and Samsung will need to continue to drive true innovation in this market segment and offer truly competitive prices. This will have to be faster than the growth rate of these 2^nd tier smart phone brands in the market.

As for the competitor brands, they will continue to enjoy the free-rider effects just by studying the market leaders’ technology and strategies. They will still be able to provide quality smart phones at unbelievable value-for-money prices at their local market. Perhaps this is why the patents infringement lawsuit is so important to Apple as a message to the rest of the other players in the market. And perhaps that is why Xiaomi never compared itself as China’s Apple but more like Amazon where they monetise their audience quickly through selling services to its users.

Now, the winner shall be the one who has the more popular hardware and the backend infrastructure that can support convenient services like e-commerce and mobile payments in our daily activities. Too bad iPhones don’t come with Near Field Communication (NFC) chips. Yet. There are already many NFC-enabled mobile phones in the market, but there was never one that had a large enough consumer group that could drive the need for NFC-enabled point-of-sale systems on the supply side.