Grocery store to launch high-end smartphone

You might think smartphones are becoming commodities, since British grocery and general-merchandise retailer Tesco plans to launch a high-end Android smartphone by the end of the year. The new device will complement Tesco's Hudl tablet, released last year.

The low-cost Hudl, however, was aimed at people who might not otherwise buy a tablet. One reviewer noted that with only 1 GB of RAM, the Hudl, while offering adequate performance within an app, offered slow transitions between apps, and audio and video would occasionally move out of sync.

In contrast, Tesco's new smartphone is designed to compete with high-end smartphones such as the Samsung Galaxy S5, Sony Xperia Z2, and HTC One M8, according to Tesco chief executive Philip Clarke, as reported in the Guardian. Tesco also plans to release a follow-up to the Hudl.

Warwick Business School Assistant Professor of Information Systems Dr Markos Zachariadis, who has researched the smartphone sector, had this to say in an email message this morning: “Tesco’s low-budget tablet might have been a good idea, but a high-end smartphone is a bold and quite unpredictable move to make for a nontraditional tech firm with no technology manufacturing experience.”

He noted that low-end device makers have been able to capitalize on access to open mobile platforms like Android, offering the benefits of advanced software to low-budget customers.

“The high-end market that Tesco is aiming at is somewhat different, though,” he continued. “Mobile producers like Samsung, HTC, Apple, and Sony have spent years developing high-tech devices that include a long list of features to accommodate even the most demanding tech users out there. Breaking into that category directly and gaining the slightest market share is going to be very difficult for new starters like Tesco.”

Then there is the question of how resilient the high-end smartphone market will be. In March, Ina Fried of re/code posed the question, “With cellphones having gotten pretty darn powerful and as big as a hand can possibly hold, will consumers hang onto their devices for longer and be less willing to pay for high-end devices?”

She quoted Rutberg analyst Ratjeev Chand, speaking March 26 at his company’s global summit in Atlanta, as saying, “I think the answer to both those questions is yes and yes.” Fried noted that ARM has also forecast slower growth for high-end smartphones.

In contrast, Fried reported, “Qualcomm executive chairman Paul Jacobs rejected the idea that the premium smartphone market’s best days are behind it. He pointed to the coming arrival of LTE broadcast, wireless charging, and dramatically cheaper data access as ensuring continued innovation.”