The Looming Brand Battles in Consumer Electronics

The consumer market boils down, plain and simply, to brand. Brand matters and is arguably the single most important thing when it comes to consumers. Yes, making great products must accompany this, but the brand plays a huge role in perception, consumers self-identity, aspiration, and a host of other things which may be more psychological than physical.

I jokingly tweeted this chart with the remark “the global battle to be a consumer electronics brand disguised as a smart phone sales race.”

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While there are five companies on this list, at the moment, the only three I believe have a shot–from a global viewpoint–are Samsung, Apple, and Huawei. However, as Under Armor has shown us, if the recipe is concocted correctly, new entrants can rise and challenge the dominant brands in any segment. In fact, there are quite a number of parallels between consumer packaged goods brands, sports brands, fashion brands, and other categories when you dig into them. First, it is never a winner take all market. Second, there are only a handful of truly global brands in each category.

When it comes to being a global consumer technology brand, it is likely we need to conclude such a company must play in many categories in consumer tech. However, the smart ones to play in may not be the most obvious ones today. For example, TVs may become a thing of the past. So a major question for any new brand entrant could be if they should make a TV or focus on what’s ahead which may disrupt TV. This question is tricky because a company looking to establish themselves as a brand must do so within the categories of the day, while established brands can focus more resources toward the future. For example, Huawei is not in a number of consumer electronics categories Apple and Samsung play in. So they have more work to do in the areas where Apple and Samsung are established which will take away from their focus/efforts/resources in preparing for the categories of tomorrow. LeEco, Xiaomi, etc., will all face similar challenges as their first priority remains establishing credibility and consumer trust in the categories of today. This is a leading factor in remaining optimistic about the future ability of Apple and Samsung to remain relevant and competitive in the areas of consumer technology. Brands are both very hard to build and very hard to compete with. Brands are also much more difficult to disrupt than a product or a category.

The appeal of being a global CE brand makes sense. After all, the consumer electronics industry is an approximately 220 billion dollars in revenue per year in the United States alone and nearly 400 billion worldwide. These numbers only reflect the current landscape of consumer tech and don’t include the size of the market once technology invades nearly every type of consumer product (including cars) and household appliances (IoT).

The global consumer market is a complicated one and it will be a tempting mountain for many to climb only to find the journey too tumultuous before they give up or die.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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