With the two leading smartphone manufacturers having a combined market share of over 60% and a profit share of more than 95%, the question arises how long this leadership can last. There is no industry where a monopoly can continually exist. But can there be a mobile-industry with a duopoly lasting beyond 2015?Looking at the above mentioned market shares and profit shares it seems virtually impossible to take on these two giants. So who could take it on? Who has what it takes? And first and foremost, what is it you need to take it on with the big guns?

There are three components in this game, ecosystem, regional footprint and brand. It is obvious that it would take a very long time to effectively compete with two such large ecosystems as Apple and Android, which is Samsung’s main playground. Just this week Apple announced that it had more than 20 billion application downloads in 2012 and more than 500 million active users for the Appstore. So who would be able to create an operating system software that is easy to use, incentivize developers to develop applications (for free!) and at the same time locks in its consumers once they start using it? There is nothing today that comes even close to being relevant. Even Samsung has tried to create a proprietary operating software/ecosystem through various attempts (called Bada), but nothing bears any fruits today.

The only company who could therefore quickly attack is a well-known player: Nokia. It is the only company that could take it on with Apple and Samsung. It has a big enough product-planning team and manufacturing footprint. It has well established sales-relationships with distributors and operators. It has a brand that is still well-respected in many markets, especially in the not yet penetrated emerging markets, where expensive smartphones are only evolving now. If Nokia today decided to launch an Android-based phone, it could quickly re-establish itself as a relevant player and participate in the smartphone profit pool. A medium- to low-tier smartphone could sell basically everywhere outside North America and Northeast Asia, meaning outside Apple’s and Samsung’s home turf. Such a phone would sell very well in Europe, Latin America, Southeast Asia and also China. Chinese still love Nokia!

Other candidates could be LG Electronics or HTC, because both companies have initial relationships and experiences with Android. You might have forgotten, but back when it all started these were the two companies that had the Android offered by Google first before anyone else. If any of these companies would expand their Android capabilities there might be a chance to participate in the profit pool as early as 2014. However, they both had their chance and at this point rather doubtful to assume they would quickly act on their strategic options.

What deserves some more consideration, though, are the options of the existing players. How could they move forward? Apple could simply create a new and cheaper iPhone to respond on this threat. Samsung is already doing this with its various models, but Apple has so far not shown any movements to expand its product-line. We all know how Apple decides expanding its product-line, but this time it might make a lot of sense to skip old behaviour. With a cheaper phone Apple could gain new momentum to grow itself to a new level of smartphone provider. Similar to what we described about Nokia’s options are in fact even easier options for Apple. Brand, operator distribution channels and manufacturing-footprint are all things that Apple could easily leverage. The margins might be lower for such a lower-priced phone, but looking at other industries and straight-forward economics you cannot simply rely on one product if you are a company that size. And first and foremost a new product would help Apple to defend its current market-position, because any attacker apart from Samsung would need a huge organizational, a huge investment and a lot of time to catch up with Apple.