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Engineering

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Overview The smartphone industry consists of all companies that manufacture and sell smartphones to consumers. This industry is a massive, fast paced environment where products are constantly updating and changing. It is characterized by quickly evolving technology and designs, short product life cycles, aggressive pricing, rapid imitation of product and technological advancements, and highly price-sensitive consumers (Aviram, 2010)between the ages of 18-49, who have at least some college education and make $50,000 or more annually [see Appendix A]. The Problems The nature of the smartphone industry carries with it the continuous problems of short product lifecycles, rapid technological advancements, a decreasing new user market base, a large presence of imitations and substitutions, and numerous barriers of entry – such as stiff competition and strong brand loyalty. These problems require companies to be constantly and consistently ahead of current trends and consumer demands in order to produce the “latest” products in a timely manner. The Objectives In order to combat the problem of rapid technological changes, companies need to focus their attention on innovation, research and development, and become so attuned to consumer characteristics and values that they can predict their wants and needs ahead of the consumer. When addressing the issue of the declining new user market base, companies can produce smartphones geared toward the demographics of those who aren’t in the current market (those who are 65+; those with a high school diploma or less; and those who make under $50,000 annually). In regards to a larger presence of imitations and substitutions, firms need to develop ways to make switching costs higher. Just as Apple has effectively done by creating an app store, operating system, and software programs that can only be used by Apple products. Thus, the

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