Mobile News takes a look at the world of rugged asking the heavyweights in the segment about its vertical
While the smartphone market has been slowing down in recent times as innovation has stagnated, there is one sector of the mobile industry that is showing growth and becoming more popular.
That market is in rugged phones, which is proving popular for the B2B sector in particular with phones designed for more testing environments.
According to figures published by CCS Insights in its ‘2017 Market Forecast: Rugged Mobile Phones Worldwide’ report, there were 25 million rugged shipments in 2016. This number is expected to more than double to 59 million by 2021.
It is a market that will see significant growth and, according to those working within the industry, it is anticipated to shake up the mass consumer market as well.
In short, rugged phones are designed with the purpose of lasting long and offering users durability as well as a tough phone that isn’t likely to smash or break.
Where smartphones are becoming increasingly fragile with more glass and edge-to-edge designs, rugged phones on the other hand are expected to withstand hard knocks and survive difficult conditions.
Typically those working outdoors on construction sites, or in agriculture and even in warehouses are familiar with rugged phones or are certainly becoming more aware.
So why do people use rugged handhelds and what benefits do they provide users with?
Toughphone sales director Stephen Westley believes rugged devices present users with value for money.
“Rugged devices offer consumers a return on investment, which gives them good value for money. Handsets also last longer and there is the cost element involved with fixing screens and the costs for businesses when workers don’t have phones in use. There is less of that with rugged phones.
Our Perspective director Jason Kemp agrees: “To businesses it’s more cost effective and improves productivity. For example, rugged phones tend to break less than standard smartphone. So there is less down time where these rugged handsets are out of work.
“They’re tough phones designed to last longer and are attractive propositions as they can save consumers money. It really depends on the device itself and the brand, too, which can play a part in attracting users.”
Bullitt Group director for applications and market intelligence Tim Shepherd believes consumers simply want tougher phones.
Speaking to Mobile News, Shepherd said: “There are lots of sectors where people are working in environments which are tough on mobile devices. People want phones that are fit for purpose for the working conditions they work in.”
TUFF Phone business development manager James Booker believes rugged handsets bring better reliability, improved connectivity and reduced costs in terms of mobile repair to consumers as well as being more sophisticated than people think.
“As our TUFF range proves, the latest handsets look as good as their mainstream counterparts. Rugged mobile phones no longer have to look chunky or unsophisticated, they can now stand side-by-side with some of the best.”
One particular element that has significance in the rugged industry is the influence the brand has for those in the industry.
Bullitt manufactures rugged phones for the Caterpillar – Cat – brand and also for Land Rover which are both recognisable brands worldwide. The Cat brand is seen as synonymous with those who work outdoors, with Land Rover as a brand that is often perceived as pushing itself in difficult outdoor conditions.
Shepherd (below) says these big names bring with them a higher level of expectation from consumers.
“Cat and Land Rover are huge global brands which carry with them a level of expectation of what is going to be delivered. We have to be careful with these brands and that gives customers assurance when buying these products.”
While there is a high level of expectancy and a “big responsibility” for Bullitt, Shepherd also says the brand is hugely important.
“Having a brand that is recognisable is a huge help in getting customers to be aware of what the proposition is. It is a huge assistance for Bullitt.
“We get a lot of customers who do DIY and home improvement so are interested in our Cat phones and also those who enjoy outdoor activities who like the Land Rover Explore.”
Another key brand present within the rugged mobile industry is Energizer, which is managed in the UK by Our Perspective.
Kemp believes that while brand does play an important role in influencing consumers, it’s only important if the phones have the performance to back it up.
Kemp said: “Having a recognised brand does play a part but that is not the only important thing, it is important to have the substance to back it up.
“In our case we have a brand in Energizer that is synonymous with batteries and durability, so this means a build-up in expectancy from our customers.”
Booker agrees: “Brand perception is as important within the ruggedised mobile space as it is within the mainstream mobile industry.
“However, customers realise that not all brands are equal in such a unique space. When you buy an iPhone you know what you are getting and you probably understand that while it will look great and be brilliant for streaming music, it might not serve you so well in a mud-filled farmyard or when you’re doing outdoor activities.”
Toughphone also has its own brand in the form of Defender and has released it’s own Beast range, which Westley says it is looking to develop further.
With a market that is predicted to explode and grow further in the next few years this has also driven competition within the industry.
According to IDC statistics for the UK in 2017, the Cat brand claimed more than three-quarters of market share with 76.8 per cent, followed by Energizer on 5.4 per cent and RugGear with 3.2 per cent.
While Cat dominated the market share in 2017, Shepherd believes there is still room for more growth for Bullitt and others in future.
“It’s a growing market and is growing at a faster rate than the mass market. The smartphone market has slowed down after a lot of growth in the past, whereas the rugged industry is under-penetrated and there is still plenty of scope for growth.
Again brand influence has played a part in how Bullitt has been able to gain such a dominant footprint in this sector.
“Our approach has been to leverage the power of well-known relevant brands that are trusted in the space, such as Cat and Land Rover.”
Westley acknowledges that those with the big brands are some of the bigger players but does see potential for further new entrants to join the race.
“There are a couple of key players such as Bullitt with Cat and also Energizer with its phones too, plus some smaller sub-brands. However there is definitely potential for more brands to come and join this market. While it is not yet a massive market, it is growing.”
Kemp also agrees that it is not yet a “mature” market but that innovation is required to really drive the future growth to make it bigger.
Booker says without competition the space wouldn’t be as successful as it has become. “It’s competition that has helped to drive the space forward through constant innovation. At TUFF Phones we know that to stay competitive we must provide a range of handsets at various price-points and to constantly develop our product line to match and even exceed consumer demands and needs.”
Key to the success of any industry is the level of innovation that is on display and again that is no different in the rugged sector.
Many of the rugged phones that consumers will buy will often be very different in terms of features to the standard smartphone from a high-street operator.
A great example of this is the Cat S61 smartphone manufactured by Bullitt. One of the USPs for this device is the integration of thermal imaging, laser assisted distance measure and also an indoor air quality sensor.
It’s these unique features that make rugged phones such an attractive option for those working in conditions where they need to check heat sources or for blockages and this innovation from Cat has given the brand a differentiation to its rivals according to Shepherd.
“It is absolutely huge to have innovation, if we don’t innovate then our proposition stays still. The real differentiation comes from adding relevant features from the devices, an example of this being the thermal imaging that is present in the S61.”
Booker agrees that innovating is important and acknowledges that while some of the leading smartphone manufacturers offer waterproof and dustproof options to the mass market, it doesn’t mean that these phones are as durable as customers would hope.
“We are currently developing our third generation of devices to include a further step-up in specification and design with products that represent the best in the category of phones that look like normal smartphones.”
Despite the growth in the quantity of rugged phones there are still a number of challenges that the main players face in this space.
Booker feels one of the main obstacles is customer perception about what a rugged phone is and how they work.
“The main challenges are found in changing customer perception of rugged handsets and the psychology of buying a tough phone.
“Brand perception is extremely important, as is educating consumers on the benefits of getting the most from a rugged handset, not only as part of their working-life but in their day-to-day life too.”
Kemp also agrees that there is an element of misunderstanding from consumers around what rugged handsets are and the lack of awareness around this.
Kemp said: “There is a lack of understanding from buyers in the market about what a rugged device is and what they do.
“There is also the challenge regarding a lot of consumers just choosing to buy phone cases thinking this will be sufficient to prevent damage to their phones. Awareness is still low and this is an obstacle the rugged industry faces.”
Shepherd also agrees and thinks it is dependent a lot on the marketing of these phones, while Westley looks further down the line and thinks that 5G could provide a challenge.
“The new technology and 5G could provide a challenge and will push us and those in the industry to make sure they are 5G ready and can keep up with the customer demand.
“It is now a fast moving market where the rugged market used to be behind in terms of technology but now rugged manufacturers are becoming the innovators.”
While it is not yet commonplace to walk into a high-street operator and see a display full of rugged smartphones, there has been some movement in this recently.
In July, Bullitt, through its Land Rover Explore smartphone, was picked up by both Vodafone and EE, which was the first time Bullitt had seen simultaneous operators range any of its mobile range.
This was a landmark for the manufacturer and Shepherd described this as a ‘process’ and something that took time to build towards.
“It is a process. At Bullitt we’ve had to take our time and build up those relationships with these operator partners and show credibility for this. It’s all about all building up a rapport, it’s been tough but it is exciting.”
Westley anticipates an increase in pick-up of rugged phones from the operators in the future as he believes there is a demand from consumers for this.
“I expect retailers to start picking up some of the brands in the near future. Visibility in the rugged market is growing and the demand for longer lasting handsets is too, customers are looking for handsets that are better value for money.”
However Kemp is slightly more sceptical and thinks it will take a “leap of faith” from the operators to take on some rugged brands where there is a low amount of awareness.
“With our Energizer brand we want to push into operators and retailers and I think it takes a leap of faith from the operators to trust in the rugged manufacturers to push these devices.
“In particular, across Europe you will often see rugged devices in most operators but in the UK it is not as prominent. It feels like networks and retailers are looking more at the past rather than the future. There is a huge market out there to showcase.”
So what does the future hold for the rugged industry? With further growth anticipated and more of a presence on the high street through operators and retailers expected, it is anticipated that opportunities will continue to be vast.
With an array of smartphones following similar design trends, Shepherd feels the different option that rugged phones present will give consumers a sense of standing out from the crowd.
“There are a number of phones in the mass market that look similar now, especially around the iPhone’s design.
“There will be consumers that want to
be different and stand out from the crowd and that is where rugged phones can come in.”
Booker also believes the trends will continue and that growth is going to tempt more bigger players from even the mass market to join the battle but doesn’t expect Apple to compete.
“This particular area of the mobile space has been growing in leaps and bounds and with more consumers opting to purchase TUFF devices than ever before we believe that this trend is likely to continue.
“Brands such as Samsung have already made a handful of rugged devices available to consumers through its Xcover and Active ranges, although we feel it unlikely that premium brands such as Apple will want to take a bite out of this part of the market.”