After launching its first smartphone across the UK, Europe, Middle East, and Asia in 2022, Nothing is now provisionally entering the US smartphone market by launching its Phone (1) via a Beta Membership program. This marks a significant milestone for Nothing as the US is a large, untapped smartphone market for the OEM. The US smartphone market, though, is vastly different than other markets across the world.
Compared to the UK, European, Middle Eastern, and Asian smartphone markets, the US smartphone market is a different ballgame entirely as it is dominated by Apple. Industry reports suggest that Apple owned over 55% of the US smartphone market by the end of 2022, with Samsung coming in second with just under 30%. This changes dramatically amid users under the age of 34, with the majority owning an iPhone. Key reasons for this are the iPhone’s deep and seamless integration with other Apple products and its iMessage service, which are key factors for retaining existing users and attracting new ones.
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An ecosystem of products and services is essential
A common trend across all the major smartphone OEMs is the offering of a large ecosystem of products and services. A smartphone positioned within such an ecosystem is a more compelling alternative than one that isn’t as all the other products and services within the ecosystem provide the smartphone with additional use cases. In some instances, as with Apple, Samsung, and Google, those other use cases are unique to that ecosystem and go a long way toward drawing in new users and retaining existing ones. Apple’s Find My and Samsung’s SmartThings Find services enable users to locate their respective Apple or Samsung Galaxy devices on any other Apple or Samsung Galaxy device. Samsung’s Quick Share and Apple’s AirDrop permits users to share photos, videos, and files across their Galaxy and Apple devices, respectively.
A lack of a large ecosystem of products and services in which to challenge the major players is, therefore, a critical weakness in Nothing’s ambitions to entrench itself in the US smartphone market. Of course, there are other issues plaguing Nothing, such as having none to barely any brand loyalty and limited carrier relationships.
Any hope for Nothing?
If there is any semblance of hope for Nothing, it is in the company founder Carl Pei’s knowledge of the US market that was gained during his time at OnePlus, which he co-founded. This knowledge should serve as a good starting point on Nothing’s quest for US smartphone market share as the company should have some understanding of the dynamics involving carriers and consumers. Nothing also sells its Earbuds in the US, giving the company some insights into the country’s accessories market, not to mention the beginnings of an ecosystem. It will be interesting to see what Pei decides to do after June 30, 2023, the date the Beta Membership program is set to close. It is in Nothing’s interest to continue pursuing access into the US smartphone market. If Nothing continues to force its way in it should eventually see some success, even if at a fraction compared to the competition.
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By GlobalData
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