The mobile device market has morphed into a battle similar to what the domestic wireless carrier market has become over the past several years: two dominate players, with a handful of smaller companies fighting over the scraps.
That battle has seen the rise in dominance of Samsung built on its Galaxy smartphone lineup, propelled by its chase of Apple and its iPhone line. Those two giants make up around 80% of all mobile device sales in the United States, leaving just 20% to be fought over by smaller rivals.
As for those fighting for the scraps, many are familiar names that have at one time or another garnered a larger share of the overall market. Motorola, BlackBerry and Nokia have seen their stock fall precipitiously over the past several years, while up-and-coming competitors like HTC, Huawei and ZTE have brought new blood into the mix.
One company that has managed to actually gain share among second-tier device makers is Kyocera, which according to ITG Majestic was No. 4 in mobile device market share in the Unites States for October at 4.6%. That would be No. 4 ahead of those “big names,” including Motorola, Huawei and BlackBerry. According to Gartner, Kyocera grew its U.S. market share from 3.7% in 2010 to the No. 5 position for full year 2012 at 4.7%. That placed it ahead of such names as HTC, Research In Motion (now BlackBerry) and Nokia.
Kyocera noted that its gain in market share is due to a different approach to the U.S. market. While others chase the “big two” with high-end smartphones, Kyocera targets the mid- and low-tier segments catering to consumers still looking for feature phones or at smartphones that don’t necessarily need all the latest hardware and corresponding higher prices.
“We are not in the business to go head-to-head with Samsung and Apple right now,” explained John Chier, director of marketing at Kyocera. “But we have carved out a good niche and feel like we can defend our position.”
Kyocera, which is controlled by Japan-based mega-conglomerate Kyocera Group, made a name for itself in the U.S. market in late 1999 picking up Qualcomm’s handset business. That move gave the company a strong footing in the CDMA-based device market that Qualcomm initiated with its development of the wireless technology. Kyocera looked to quickly capitalize on the acquisition by bringing to market some of the first smartphones like the 6035 and 7135 models that ran Palm’s PDA operating system.
However, efforts to garner independence through an initial public offering were stymied and Kyocera Group decided to bring its U.S. operations back into the fold. The move, combined with some ill-timed battery issues, slowed Kyocera’s domestic development. The company slowly lost shelf space at the market’s largest operators, being relegated to providing entry-level devices to second- and third-tier operators and emerging no-contract players.
Kyocera seemed to have re-found itself through an agreement to provide Sprint Nextel with its Dura line up of rough-and-tumble devices serving the carrier’s CDMA-based push-to-talk models, followed up by acquiring entrenched Sprint device supplier Sanyo. While never seen as cutting edge, the Sanyo lineup at Sprint was known for its durability.
Kyocera has since built on that “real-world” niche with its waterproof Hydro and ruggedized Torque line of smartphones. Those devices may lack the latest in specifications, but they include enough power and features for most consumers while also providing durability should they find themselves flying out of a customer’s hands.
The device maker has seen its most recent market share growth on the back of gaining access to new carrier partners in the United States, including Verizon Wireless and T-Mobile US. The deal with T-Mobile US seemed most interesting for Kyocera as it was its first domestic agreement with a GSM-based operator having throughout its history been relegated to CDMA-based carriers.
“GSM opens up a whole new world internationally for us,” explained Chier. “We did have market share in Latin America and other regions that had CDMA, but that eventually went away. It’s hugely significant now to have a GSM device to offer.”
While competition across the domestic device space is not expected to lessen, Kyocera remains confident that its niche approach to the market will allow it remain as one of the second-tier names fighting for market share.
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