The cell phone industry is a competitive market and will increase continuously. The profitability of individual companies is driven mainly by their ability to develop new products, providing better service and making their products affordable for consumers. Profitability of companies is achieved also by taking advantage of product marketing, access to capital, and by inquiring the expertise to improve the cell phones.
The profitability of the cell phone industry depends on the number of consumers they can attract. The profitability of the cell phone industry is dependent on the volume of consumers they can attract. The cell phone industry looks strong and competitive between the companies and service they provide.
The microenvironment includes the internal factors of the industry affected by the customers, staff, shareholders and competitors. The best model for evaluating the microenvironment of an industry is Porter’s 5 forces as it takes into consideration the competitors, customers, suppliers and new entrants.
Power of supplier
In this industry we can distinguish between hardware and software suppliers. The first one has a low power, as there are a huge number of large equipment makers, which can be chosen. So that, the cell phone company have the power to bargain for more money with them.
On the other hand the software suppliers has a high power because there are only a few of them, such as Microsoft or Macintosh, so cell phones companies must negotiate a price from a weaker position.
In conclusion, there is moderate threat from the power of suppliers because although the hardware suppliers have a very low power, software suppliers are very high.
The competition in this market is very high. The outsourcing of the hardware and software tasks has supported the entrance of new companies that come from other sectors such as Apple or Sony that see the potential