Cyanogen’s CEO believes top smartphone brands are about to be destroyed by the competition


kirt mcmaster

Cyanogen’s top figurehead — Kirt McMaster — has been known to dish out bold and provocative statements before, so when we heard his latest one we didn’t bat an eye. Speaking with Business Insider, McMaster suggested “tier-one” manufacturers like Samsung and HTC were about to get destroyed by the up and coming little guys.

The tier one OEMs like Samsung are going to be the next generation Nokias in the next five years. They’re going to be slaughtered. We think long term Apple itself will have problems because they’re just not good at competing at the low end.

If you’re in need of some context, he’s referring to the ability for small, grassroots-like manufacturers in developing markets to create value-effective smartphones that actually do well to capture the interests of local consumers. His belief is that we’re set for another “disruption” in the mobile market.

The first few disruptions were in areas of application market places, form factors and the ultimate transition from dumbphones to smartphones. The next major step is to be able to put all of that into the hands of everyone who cares to partake.

We’ve already seen movement on that front with the likes of Motorola introducing the Moto G and Moto E lineup, as well as Android One devices bringing the latest and best experience Android has to offer for very affordable price points. We’ll even soon be able to build our own smartphones out of LEGO-like pieces and pay exactly how much we want for the exact features we want.

New Moto E 4G LTE 2015 DSC08306

Cyanogen’s role in all this is their keen ability to get the most out of whatever chipset they’re targeting and optimize performance for even the weakest chipsets. They say there’ll come a time where a sub-$100 smartphone can perform just as well as a top-end device like an iPhone.

With a close partnership with one of the world’s premier chipset makers — Qualcomm — they’re even more poised to make sure of that than they already were. We’re not totally sold on the notion that companies who put all their muscle into these affordable smartphones will make Samsung, HTC and LG as irrelevant as Nokia was unfortunate enough to become, but there’s no doubt they’ll do enough to change the landscape in a very significant way.

Quentyn Kennemer
The "Google Phone" sounded too awesome to pass up, so I bought a G1. The rest is history. And yes, I know my name isn't Wilson.

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  1. The smaller guys will definitely make an impact but they aren’t taking down the likes of Samsung or Apple anytime soon. They don’t have the budget, nor the massive marketing that backs those companies. Apple and Samsung don’t just make smart phones after all. They are full fledged electronics manufacturing companies.

    1. it won’t happen overnight but if the likes of samsung and htc continue to release products that don’t sell, it will only help speed up the market share increase from other players like xiaomi, lg etc.

      1. Xiaomi is not a small player, and LG is an electronics and technology with much greater reach. Here in the States a small player would be Blu.

  2. Actually, I tend to agree.

    The big brands, like Sammy lag and under deliver – for what is possible – and charge WAY too much for their products.. oppo, Huwaei, Xaomi – they are all killing it and moving faster, cheaper, using newest tech and designs. Why? They are smaller and lighter and faster. The other guys are big and fat and stuck.

    1. do you think its just a matter of time before Huwaei and Xaomi start to charge more one they gain foothold in the marketplace globally?? I think its just a matter of time personally….

      1. Yeah, to some degree surely. But at the same time, it still proves these devices CAN be done for far less than is being charged. I think it makes more sense to sell more SKUs at lower price overall to get them in peoples hands than to sell fewer skus at higher price in fewer hands – profit money may still balance out, but now 5x the people have the item. And I think, in China, that is working. Same should work here.

        1. cheap labor is for sure thankful for the cheaper costs. Its a shame, people there cant even make a living while the companies are hauling billions. i think if they moved here to the US (for sake of conversation), the unions would protest for higher wages and you would see another Motorola type incident on closing factories. sad how it all works to be honest.

        2. It’s not that easy for a brand that a lot of people don’t know to attract a lot of customers. Huawei phones are available for about 2 years on contract or without but I know only 1 person that owned one.

      2. It’s already happening. The first Huawei phones where cheap but the price is going up. Some time ago I was reading a article abou Huawei that the wanted to increase the prices and get rid of the fact that people think the only make cheap bad quality phones.

        1. Like what Kia/Hyundai did with cars

          1. Kind of.. except they still do make shitty cars.. all of them are shitty.

          2. Kia – maybe. Hyundai – not really. I prefer Japanese or European cars over the gas-guzzling, oversized trucks that are marketed at every schmoe who thinks it’s cool to have a truck. Meanwhile you only really need a truck when you actually move something really large. Otherwise it’s a complete waste and ridiculous.

        2. Considering the Mate 7, Huawei can charge too much in a phone (with non removable battery, non expandable memory) even using in house processor that is good but not u$ 800 good.

          1. Seriously $800? You can buy one for 436€ in the Netherlands or for 399€ if you order one at Amazon Germany

          2. Which converts to a fair amount more than $436/$399 dollars. Just saying.

    2. Outside of people who really love tech (like people here), I don’t think most people really care about phone performance or features. Sure, some features matter, like bigger screens and battery life, but for most people, I think brand recognition is a significant factor in their purchase choice. So, the big phone companies (Samsung, LG, Motorola, etc) may fight for their slice of the pie, I don’t see regular people venturing into the lesser known brands like Huwaei or Xaomi. The only exception is, if these phone companies released economical phones (like free with contract) that is co-branded with the carrier, that may be the traction they need to gain some brand recognition.

    3. The difference is that smaller OEMs like Oppo and Xiaomi are just parts integrators. They don’t produce any technology so they never actually have the newest tech.

  3. Yes, competition will increase for everyone, but that should be more frightening for a small start-up that has about .00001% market share than the company that has half of the Android market.

    1. agree 100% with this

    2. Well sure, but mostly because they are diversified and have their hands in 500 different market types. Cyanogen does phone OS, Samsung does toasters, and ovens, and tv and phone and bread makers and tooth brushes and…..

        1. They actually make ships? Well then…

          1. Fingers in many pies, friend.

      1. Exactly. LG and Samsung have been around long before there were smartphones and will be around long after they are ancient technology. It has just been gravy for the past few years to boost their bottom line. They’ll be fine selling low margin handsets if they have to.

        1. It also hasn’t hurt their value:

  4. heres my take on this. If the price of phones continue a downward trend and specs remain top notch, the profit margin will shrink and the companies that will still be successful are the ones who can generate revenue thru other avenues rather than just phone sales. whether its accessories, apps, or whatever they can generate profits from that will determine who is successful. so the advantage goes to the larger companies with more resources and money to invest in cell phone related markets. samsungs makes so many components for phones i dont see how any small company can make them irrelevant. smaller companies have caught up especially on design of some of these phones but which small company has come out with new features? thats usually done by the big guys with money for research and development. the big guys will be here for quite some time as long as they evolve. this is what had many thinking apple would crash, because they were unwilling to change but when they did they broke records!

  5. Nail polish…

  6. “They say there’ll come a time where a sub-$100 smartphone can perform just as well as a top-end device like an iPhone.” The Moto E can already do more for me than an iPhone. I think he meant REAL top end devices, not top marketing devices.

    1. My $40 Lumia 520 can play music and videos and it makes phone calls, too, just like an iPhone.

    2. I really want to know what the Moto E can do that the iPhone can’t do because I want to know what an Android fan can use to actually prove that the iPhone is not all it’s cracked up to be when compared to the Moto E.

      1. It can do more for ME than an iPhone. I can’t stand the iOS UI which is so cluttered and confusing, and the sharing capabilities between apps/services of Android still put iOS to shame. There are location aware apps, widgets, gestures, etc. that I can no longer be without and that Apple will probably never/5 years from now release. Add in access to your actual storage vs a mickey mouse interface on an iPhone and I’m in heaven.

        It’s the same reason you’re here on an Android fan site, because you take preference of one over the other. If not for the major things, it’s the small things that we care about.

  7. All of the current big android smartphone makers made dumb phones long before and they managed to adapt. Nokia just made a lot of terrible choices mostly with software not hardware. Yes I expect cell phone prices to come down and margins to shrink, but that’ll hurt smaller players who don’t have the economies of scale they’ll need. Moore’s law has been helping a lot in keeping the margins workable. Laptop’s and desktops hit their peaks a few years ago, and except for design differences which are minimal in cellphones, are basically commoditized

    1. Nokia’s decision was smart; they got to keep the company (the 250th biggest company in the world) and Microsoft gave them 7 billion dollars.

  8. Samsung’s not in trouble, too many other products, and they have a history, that goes back decades. I still use a microwave, that is over two decades old, so no. Apple could be, they just make computers, and mobile devices, and some entertainment things. Something comes along, that people want more, they’re gonna hurt. Heck, even googles portfolio, is more diverse, cars, robots, internet, and access to it, a lot of irons in the fire. If something fails, they can move on to something else, apple can’t

    1. Samsung mobile is in trouble and you’re delusional to suggest that the largest company by market capitalization on earth (Apple) is somehow in trouble

      1. Lol what? Samsung can afford to make cheap devices and stay in the market. Apple can’t, and won’t. I think it will be a lot longer before Apple gets into any kind of trouble though since they are a premium, although over priced, brand. There are enough stupid people in the world to continue wasting money on Apple products for awhile.

        1. Never understood why people who buy a powerful, simple and reliable phone are stupid, while people who buy the latest and greatest halfbaked bugfest are the “smart ones”. Ever consider some people’s priorities dont involve dicking with the the ui on their phone? My philosophy is if I buy it new and have to fix it, I never should of bought it. Have fun with Sucker 5.0 its all yours.

          1. iOS 8 has had more issues than Android 5.0, just saying.

          2. “Latest and greatest halfbaked bugfest.”

            Come back with that kind of crap when you’re phone stops going banana in your pants and you actually have the ability to use a 3rd party keyboard and share things effortlessly between apps without pulling teeth.

          3. 2011 called, it want’s it’s rhetoric back.

            At the very least update your hate man.

          4. Sorry you had a bad experience but so far 5.0.2 has worked great for me. I haven’t had to fix anything. I waited for 5.0.2 before updating my Nexus 7. And by the way, in case you missed it, the latest versions of iOS have been a bug filled mess.

  9. Chinese phones don’t have premium components and quality is questionable so they’re not going to affect Samsung but very possibly Apple.

    1. The major OEMs aren’t just producing phones, they are also producing the premium technology that makes cell phones possible. Samsung, Sony, and LG are supplying the industry with screens, batteries, modems, RAM chips, NAND modules, cameras, and so on. It’s not cheap to produce these, so the latest and greatest are only found in the more expensive devices.

  10. When there’s huge profits companies will continue to enter until the profits normalize. Business 101.

  11. Is anyone else liking Cyanogen less and less? That humble mod run by a humble man is slowly turning into an arrogant company.

    Anyway, I disagree with the idea.This is not to say that Samsung wont slowly loose it’s edge in the mobile market like HTC did or that Apple is indestructible but 5 years is a but of an overstatement. Samsung is, by far, the leader in smartphone shipments. Even given the fact that these numbers have gotten smaller since the S4, it hasn’t been a huge drop-off and they are still massive and it’s been three years of a very very slow fall. Five years from now Samsung will probably still be on top. Even if the S6 bombs, if anything succeeds (from anyone), Samsung is in a great position to simply pick out the parts that work and go from there. People loved the uni-body design of the iPhone 6, look at the S6. People wanted metals, look at the S6. Touch instead of swipe fingerprint scanner: S6. This proves that Samsung is willing and able to adjust so saying that they’re going to get smoked in 5 years is pretty arrogant, IMO.

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