Smartphone dedication is the future, dumbphone portfolios to slide

Posted on by Mike Evans

Horace Dediu of Asymco today:

The market dynamics are such that I think non-smart phones will disappear entirely from branded portfolios in 3 to 5 years.

Vittorio Calao, CEO of Vodafone today:

In three to four years’ time we won’t be talking about smartphones any more because every phone will be a smartphone and dumb phones [that can only call and text] will no longer exist.

In his post earlier today, Dediu demonstrates how manufacturers with diversified portfolios, including dumbphones, are big on quantity but small on profits. Smartphone vendors, with 16 percent of the market, generated 75 percent of the industry’s profits. And the biggest profit centre of all is Apple. As smartphone penetration grows, vendors with a diversified portfolio will see their average price and profitability slide. In the chart above only the profitable diversified companies are shown. The loss-making manufacturers, including LG Sony Ericsson and Motorola, are excluded. 

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