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Smartphone Suppliers Seek Differentiation, Niches

LAS VEGAS — Smartphone suppliers will focus on product differentiation to gain share in a maturing smartphone market.

Some suppliers will focus on market- expanding niches such as kids’ smartphones, and others will focus on high-performance but low-priced smartphones targeted to price-conscious consumers who subscribe to prepaid services that don’t subsidize handset costs.

Here at International CES, attendees will find ZTE pursuing differentiation through a phone that offers dual-screen multitasking of any two apps, not just apps designed for dual-screen use. Techno Source and KD Interactive, the makers of Kurio Android family tablets, are launching the first Kurio phone for kids. And Alcatel OneTouch is showing an Android phone with speedy octacore 1.7GHz processor and 5-inch Full- HD display but with HSPA+21 cellular data, not LTE, to make it more affordable.

Underscoring market maturity, consulting company Chetan Sharma pointed out that almost 90 percent of handsets sold in the U.S. in the third quarter were smartphones, helping boost smartphone penetration of the cellular subscriber base to 64 percent.

Despite such market maturity, there’s still a potential for “plenty of growth” because the 64 percent of phone users who are using smartphones is concentrated in only 40 percent of households, the company said.

That growth will be slower in 2014 than it was in 2013 on a percentage basis, though unit volumes will still be up, said Display Search senior analyst Tina Teng. Juniper Research forecasts slower smartphone growth worldwide in 2014, particularly in maturing markets.

In a maturing market, said Juniper, “differentiation becomes vital to continued success, and the strategies used to achieve differentiation need to be different for maturing and emerging markets.” Increasingly, suppliers “will be required to anticipate customers’ future needs whilst at the same time creating new needs that customers will find desirable.”

Meantime, some suppliers will push to expand the smartphone market with low-cost but highly featured, high-performance smartphones as Motorola did late last year in unveiling the Moto G, a 3G smartphone offered in GSM/HSPA+21 and CDMA EV-DO Rev. A versions. Though delivering only 3G speeds, it comes with speedy quad-core 1.2GHz processor and 4.5-inch 720p HD display. The phone became available in November as an unlocked GSM/HSPA+21 model at $179 for the 8GB version and $199 for the 16GB. Motorola said the phone appeals to price-conscious smartphone buyers who have had to settle for older obsolete smartphones or for cheap new phones with “second-rate technology.”

“The last few years have been about selling top-of-the-line smartphones,” said analyst Jeff Kagan “The next few years should be about selling a lower-cost version and welcoming in vast new numbers of subscribers.”

In the U.S., Futuresource Consulting found smartphone unit shipments rose 31 percent in 2012 to 119 million, rose an estimated 13.4 percent in 2013, and are forecast to rise 9.6 percent in 2014 to 148 million units.

In dollar value, U.S. shipments rose 14 percent in 2012 to $33.8 billion, an estimated 8.3 percent in 2013, and are forecast to rise 4.9 percent in 2014 to $38.4 billion.

Here’s what select suppliers at CES will bring to this market:

Alcatel OneTouch, the TCL Communications brand, is launching its first smartphone with octa-core processor, the Idol X+, which features dual stereo speakers, 7.9mm thickness, and narrow bezel on the left and right sides.

The company was also expected to announce a deal with a North American carrier to offer three devices.

Both announcements are designed to reposition the company as a provider of smartphones.

The HSPA+21 Idol X+ is an Android 4.3 phone with 1.7GHz octa-core processor, 5-inch FullHD IPS display with 440 ppi and 170-degree viewing angle, 13.1-megapixel 1080p main camera, 2-megapixel 1080p front camera and 2,500 mAh battery. It will be available in yellow, red, Slate, black with brushed aluminum frame and back-cover spin effects, and white with back-cover spin effects.

Thanks to the octa-core processor, the delivers smooth web browsing, immersive game play and compelling 3D graphics while also being battery-efficient, the company said. The new processor reduces power consumption by 18 percent compared with a quad-core CPU when FullHD video is decoded, the company said. The phone allocates each web page tab to a different CPU for smooth and fast browsing, the company noted.

DDM Brands, the Miami-based maker of Yezz-brand phones, is bringing two more Android smartphones to market, both intended for unlocked sales and targeting consumers who want fashionable phones at a modest price. Both feature dual SIMs and operate on the T-Mobile and AT&T networks. Prices haven’t been set.

The company’s products are available through the online stores of Sears, Amazon, Ebay and Newegg.

The new Andy A6M is the brand’s largest multi-touch screen phone with 6-inch qHD IPS display, 9mm-thick body, 1.2GHz quad-core processor, Android 4.2, 13.1-megapixel main camera, 5-megapixel front camera, and choice of back covers, including a back cover with an active front flip and a screen protector.

The Andy 4M is the brand’s smallest multi-touch screen phone with qHD 4-inch IPS display, 9mm-thich body, 1.2GHz dual- core processor, 8-megapixel main camera, and 1.3-megapixel front camera. It comes with silicon screen-protector case.

Techno Source and KD Interactive, the makers of Kurio Android family tablets, are launching the first Kurio phone for kids. The 3G Android smartphone features parental controls and safety features, such as the ability to manage phone usage and limit online access. The phone’s Kurio Genius Internet filtering system features advanced security levels and daily auto-updates covering more than 450 million websites in 170 languages.

The parental controls are built into the device, so no subscription is required.

Other parental controls include app management, time-control features, phone directory control to restrict who kids can call or be called by, and usage controls that limit the number of data and text messages.

Geo-location and geo-fencing capabilities let parents know where their kids are and get alerts if a kid leaves a designated area. Parents also get remote control of the phone’s settings, and they can remotely lock a phone and erase its contents in case of theft.

The Android 4.2 phone features multi-core processor, 1GB RAM, 4-inch 480 by 800 screen, front and rear-facing cameras, Wi-Fi, Bluetooth, GPS, FM radio, 8GB of internal memory and a 32GB MicroSD slot.

ZTE’s latest smartphone in the high-end Grand series is the LTE-equipped Grand S II LTE, whose 5.5-inch FullHD screen delivers dual-screen multitasking of any two apps, not just apps designed for dual-screen use.

The company’s first phone with dual screen compatibility lets users move between incoming calls, music controls, unread messages, event reminders and the like.

Other suppliers’ dual-screen phones work only with select apps, ZTE said.

Other features include triple-mic noise reduction for clearer voice calls, and a 3,000 mAh battery offering 200 hours of standby and 300 minutes of talk time. It comes preloaded with a short-range file sharing solution called Live Share. MyDrive uses voice-recognition technology from Nuance to limit distracted driving.

Other key features include 5.5-inch FullHD display, Qualcomm Snapdragon 2.3GHz quadcore CPU, 2GB RAM, 16GB embedded memory, 13-megapixel 1080p main camera and 2 megapixel 1080p front-facing camera.