According to some Bloomberg sources, Lenovo is preparing to buy NEC’s mobile division. This comes a couple of weeks after other rumors said that Panasonic is also selling its mobile division and HTC or TSMC are going to buy it. These are signs that the mobile market is beginning to mature and consolidate into fewer players.
Usually, when a new industry and market is formed, there are a ton of new business trying to build the same type of product. Some really want to create the best products in that market, and are at the forefront of the industry. Others , whether big or small, just try to follow the leaders in the market and invest only as much as it’s “necessary”, and are usually playing it safe. And others try to clone the best products, and sell them off as cheap as possible. Usually these companies have big issues on the quality side, too.
After a while, when that industry starts to become more mature, the players who never took the market and the products they were making too seriously, and didn’t get a large customer base, start having financial troubles, and they begin selling off either their whole companies, or that division that was addressing that specific industry.
This is the process the mobile market is starting to go through right now, too. Players like NEC or Panasonic, never really tried to enter the modern mobile markets, and as a consequence of that, their mobile divisions weren’t profitable. Now they are starting to get rid of them, and selling them off to the bigger players.
This is just the beginning and we’re only going to see more of this in the next few years, until only a few large players are left. The mobile market is a large one, though, with over 2.2 billion units being sold per year being predicted by 2017, so it should sustain quite a few players in the end.[Via Reuters]