Google Captures 28% of smart phone market share. – A technology adoption case study

By  Chris Pinter                                                                                                     

Developing disruptive technology is an exciting place in the world of technology development.  As you may remember several years ago there was only one company who produced a smart phone.  This of course was Research in Motion (RIM), who produced the blackberry.  The next player was Apple with their Iphone series of smart phones.   Last year Google released its new Android smart phone.  The Iphone, blackberry and the Android phones all currently hold approximately 28% of the market share. [1]

Wait a minute….. Google is very new in the mobile cellular phone market. How did they do that?  You may be asking yourself “What did Google do to capture 28% of the market share in just 15 months?”[2]  It is really simple, actually when you consider the target audience and the thirst the market has for new smart phone technology.   The smart phone market is growing at a rate of 6% per quarter during the last year.  Google entered the market at the right time to optimize its growth potential.   Today nearly 41% of cell phone users have a smart phone, leaving 59% of users using other types of cellular telephones. [3]

There is a fair amount of unknowns to work with and it helps to have luck on your side but strategic planning and an understanding of the technology market place can help a company effectively and profitably enter the market place.   One of the tools that the corporations use to understand the market place is the Technology Adoption Curve.   The Technology Adoption Curve is used in all technology industries to describe the market place and the section of the market each company finds itself in.  Knowing where your company is on the curve helps you better identify your target market and the risks related to competing in that market.

There are five stages to the adoption curve and depending on how new the technology is and how well it is adopted by the market determines what your approach is to marketing.  The innovators are hungry for new technology and love to get the latest gadget, even if it does not meet all of their needs or even be fully functional. The early adopters like products that have been around a little bit so it is not as risky in buying technology that might not have all of the value the customer wants. Research In Motion pioneered the smart phone technology and enjoyed a 100% market share of a rather small pie.  Early majority users and late majority users describe the next two stages and make up the bulk of the populations.  This is the space where Google introduced its Android phone and now other manufactures are coming online to enjoy this market segment. Eventually the technology will be replaced by something better and the love for the smart phone will wane.   The technology companies are hoping this does not happen for some time of course.   When it does the laggards will be the only ones still interested in safe and old technology.

Technology Adoption Curve

Looking at the graph above, you can see the ‘Adoption Chasm”.   This is the tipping point where a technology becomes something everyone must have.  If you can successfully cross the chasm you are on the road to success.

When developing new technology it is important to understand where your company’s technology is situated on the Technology Adoption Curve.   When you are operating before the chasm competition is generally light, customers are few, technology is functional at best and the financial risk is high as your CFO is freaking out about the amount of money being spent and the little that is coming in.  When you are operating after the chasm, competent competition seams to appear out of the air, your technology is hot, keeping up with manufacturing deadlines is tight and everyone is generally happy you exist including your CFO and shareholders, who are smiling ear to ear.

Apple successful bridged the chasm with the help of its past successes and by watching Research In Motion go through the innovation stage of the Technology Adoption Curve.  Google timed their entry into the market place just when everyone decided that a smart phone was something they just had to have.  Other companies, such as Microsoft, Nokia, Motorola and some ten other manufactures have joined the party as well, with a deep desire to make money and get a piece of this pie, which has grown substantially since the days the pie was consider a niche market owned by one player Research In Motion.

In closing, we need to remember that disruptive technology does indeed create something very unique and innovative.  When and how you release your technology is an important strategic decision your corporate team will need to make and is dependent on your company’s ability to deliver, its risk tolerance, marketing capabilities and the competitive landscape.

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[1] http://www.theinquirer.net/inquirer/news/2023536/iphone-failed-increase-apples-smartphone-market-share

[2] http://www.zdnet.com/blog/btl/how-will-smartphone-market-share-figures-be-impacted-by-launch-of-verizon-iphone/44349

[3] http://blog.nielsen.com/nielsenwire/online_mobile/mobile-snapshot-smartphones-now-28-of-u-s-cellphone-market/

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