Smartphones at saturation point, profitability under threat

The high-end smartphone market is at a peak, with traditional vendors about to come under intense competitive pressure from new entrants, according to an analyst.

Growth and profitability is also going to be squeezed hard as this segment of the handset industry undergoes a radical shift. These worrying predictions came from Richard Windsor, a senior analyst with Nomura Securities, speaking at the Open Mobile Summit in London. "Based on the company's research, the high-end smartphone segment is fast becoming saturated, and the market for handsets costing around $500 is running out," Windsor said. "We could see Apple start to struggle." However, this could change radically if Apple launches a mid-range iPhone, which would then take them into the volume market. "They are the company to do it, and it would make sense. But, Apple has admitted that they 'don't do cheap well.'"