Technological change and performance deterioration of mobile phone suppliers

Abstract

Currently Apple is seen as a solid performer in high tech sector, but its success formation has been rapid, and built through high end smart phones. However, earlier examples from mobile sector dominant actors do show that this comes together with considerable downside risk. Typically negative spiral is triggered by new technological generation inauguration, and the inability of leading supplier to fully see underlying potential of it. End result is suddenly lost of shareholder value (–50 to –70%) for dominant actor, which is followed by real operational performance deterioration with some years time (first decline in sales prices, followed with a time lag in shipment volume). Our three previous success cases (Benefon, Nokia and RIM) show that in the end valuation of companies is only small fraction of what it was in the peak.