Mobile phone industry analysis is a comprehensive study of the mobile phone market with a view to assessing the state of the industry. A mobile phone industry analysis may be carried out for various purposes, depending on who is carrying out the analysis. Prospective entrants into the mobile phone market must necessarily carry out an analysis as a part of their strategic market analysis. Even established mobile phone companies have to carry out periodic studies of the mobile phone market in order to remain informed about changes in trends as well as other microeconomic factors that might affect the company.
One of the subjects of a mobile phone industry analysis is the business environment, which would include the competition. An analysis of the competition is either restricted or expanded by the size of the market under consideration. Assuming the company is merely contemplating the size of the competition within a country, the study of the competition will be narrower than that of a company considering the size of international competition in the mobile market. Competition plays a huge role in the establishment and profitability of a business, because the aggregate profits tend to drop in relation to the number of similar companies.
Another related subject is the ease with which any new company can penetrate the identified market. For instance, if the analysis of the mobile industry is focused on the reality in the local environment, prospective entrants will have to study the structure already in place and its effect on their bid to enter the market. The company will have to find out if there is a monopoly or if a few established companies have cornered the market for that region. This would make it hard for any new company to have any kind of meaningful impact on the mobile phone industry in that area. A study of the competition is also necessary, because it will reveal the level of efforts existing companies expend on issues related to rivalry and how much the new company will have to expend in order to effectively compete in the market.
When conducting a mobile phone industry analysis, the threat of substitution must also be analyzed. This means that the company must study the other cell phones on the market with a view of finding out the ones that may likely be used to replace theirs due to factors that may make them more appealing to consumers. For instance, the competition may include free applications or little extras that might give them a competitive edge.