Is 3rd Place the Best any Smart Phone Provider Now Can Hope For?

Whether aiming for third place in any competition is a good thing, or a bad thing, depends on perspective. For the acknowledged "best" competitor in any endeavor, third place is a defeat. For an up and coming new competitor that never has won at that level, third is a big win.

In the smart phone business, it appears that "third" place in sales volume or market share is about the best any contestant other than Apple or Samsung now can aspire to. That is not to say that state of affairs is permanent. 

But it might now be fair to say many observers seriously doubt any of the "other" contenders have a realistic shot at anything other than third place. That might not be such a "bad" thing for lots of entrepreneurs, though. 

With a different cost structure, niche markets, specialized products or method of delivery, plus retail price, lots of competitors "too small to matter" can make a living in many businesses. That  has been true in the communications business for a few decades, at least. 

In other words, if you want to be a whale, only a few can succeed. If being something else works, lots of space exists in most communication markets. The scale will be different. So will the gross revenue and profit margin. But those niches always exist.

Specialists serving small business segments, premises-based products such as business phone systems, repair, refurbishing, language populations, migrants, prepaid and other niches provide examples. 

That is not to say the niches are permanently defensible. If the biggest providers decide they need to be in the businesses specialists occupy, and if the "whales" can figure out a way to sell at a profit (one reason whales do not pursue some lines of business or customer segments is that they cannot do so profitably), then other contestants can find themselves squeezed out of the business. 

Each business is different, but the "rule of three" process is likely at work in most parts of the communications business. By that rule of thumb, one should expect to see only three leading contestants in any market. 

Some might also suggest that in most markets, market share is unevenly shared by those three competitors. It would not be unusual to expect the share of the lead contestant to be twice that of the number two provider, and for the share held by the number two provider to be twice that of the number three provider, as a general rule. 

For contestants in the tier one part of the access provider business, and the smart phone business, the rule of three will be an uncomfortable reality for many. but that isn't the game most entities in the communications business are playing, in any case.