Enterprises don’t like surprises from vendors. Managers must direct their business to the technology vendors that will succeed and avoid those that are likely to fail. In this context, the news this past week from Apple, Sony, Microsoft, and Samsung on mobile devices is interesting.
First, Apple has told its manufacturers to prepare for an initial production run of 85 to 90 million devices. Last year, the initial production run was 70 to 80 million units. This increase is noteworthy because the new iPhone is expected to feature minor updates rather than a major redesign. While it is possible the additional production is planned for the China market, it is worth noting that Apple is planning for a big ramp-up in its sales.
Second, Sony Mobile President and CEO Hiroki Totoki addressed rumors that his firm would not abandon smartphones like it did with PCs last year. According to Gartner, Sony is the 10th-largest phone vendor, and the business is losing money. However, Totoki said, “Smartphones are completely connected to other devices, also connected to people’s lives—deeply. And the opportunity for diversification is huge. We’re heading to the IoT (Internet of Things) era and have to produce a number of new categories of products in this world, otherwise we could lose out on a very important business domain.” This means that dropping smartphones would mean losing a critical foundation for other related products with smart homes, smartwatches, and countless other connected devices. “In that sense, we will never ever sell or exit from the current mobile business,” Totoki said.
Unlike Apple, Microsoft’s smartphone sales have plummeted after purchasing Nokia. As a result, it will take a $7.6 Billion write off and it will lay off 7,800 employees. In addition, Samsung Electronics saw its second-quarter revenues drop 8.4 percent from last year. These results are thought to be the result of weaker smartphone sales, with the recent launch of its flagship Galaxy S6. The Apple iPhone 6 was the best-selling phone in the US in the three months ending in May, and the iPhone 6 Plus was in fifth place. This leaves Samsung in second and third place with its Galaxy S5 and S6. Ultimately, it gives the Korean company an overall share greater than Apple’s.
No one expects Sony, Microsoft or Samsung to go out of business, but enterprise buyers want to limit the number of devices they support. The best way to do this is to avoid approving devices for employees or buying inventory of devices that employees don’t want. For now, Apple and Samsung are safe bets.