Smartphone Wars 2012: Who will survive?

>> Wednesday, January 25, 2012

by THE GUARDIAN
LONDON - Smartphones are becoming pervasive: Ninety per cent of Singaporeans have phones that can browse the Internet and run apps, and nearly half of American mobile users do too.

Yet smartphone brands can rise and fall in the commercial blink of an eye. Five years ago, Apple had not sold a single smartphone, and Microsoft and BlackBerry-maker Research in Motion doubted that the iPhone could work. Finland's Nokia dominated the (tiny) market with its Symbian platform. Barely anyone outside Google had ever heard of "Android", a company started by ex-Apple employee Andy Rubin and bought in 2005 by Google co-founders Larry Page and Sergey Brin, who made the deal without telling then-chief executive Eric Schmidt.

All that has changed. The iPhone, launched in 2007, has redefined smartphone design and interaction; Microsoft and Nokia have pensioned off the mobile software they then used (Windows Mobile and Symbian) to form an alliance of Nokia's hardware and Microsoft's software as they struggle for market share. RIM has seen profits peak and decline - leading it this week to boot out its two hapless co-chief executives and founders, Mike Lazaridis and Jim Balsillie.

Android, meanwhile, drives all before it, operating more than 50 per cent of smartphones sold today.

Mr Horace Dediu, an ex-Nokia analyst who follows the smartphone market, has a theory that any smartphone company that falls into loss, even once, can never recover. As evidence he cites a long list: Alcatel, Siemens, BenQ, Ericsson, Sony, Motorola, Casio, NEC, Hitachi, Fujitsu, Toshiba, Palm and Handspring, none of which has recovered its former position (and some of which do not exist any more).

"Profitability is the canary in the coalmine," he warns. "A loss-maker is seen as a maker of damaged goods."

Since he wrote that last June, Nokia has joined the list - and questions linger over whether glory days lie ahead or behind.

So how can one handicap the runners and riders? Here's your guide to the phone in your pocket, and what may happen to it.

APPLE

BEST BRAINWAVE: Making the iPhone a completely touchscreen-based device, with a really good Web browser, that could also run apps. Despite being relatively expensive, the iPhone has attracted a growing market in the US and China. European buyers tend to prefer less expensive Android phones.

WORST DECISION: According to financial analyst Richard Windsor of Nomura Securities, Apple should have released two phones last year: A new high-end one, and a new mid-range one. With that, he thinks, it would have cleaned up. Instead Android took over.

BIGGEST STRENGTH: Internally, its focus on design and quality, allied to a huge cash pile for hiring factories and marketing; externally, continually loyal buyers.

BIGGEST WEAKNESS: All the eggs are in the iPhone basket, where there's only a single new model per year (so far). That hasn't served it badly - it makes more profit than any other smartphone maker - but if a new design misses, it could be left hanging

WHAT DOES THE FUTURE HOLD? Either huge success in China, or a gradual erosion of its world share as people defect to Android (and perhaps Windows Phone) devices.

RISING OR FALLING? Finely poised. Stunning Q4 sales, but now has to keep that momentum going into global economic headwinds, while Android phones keep getting cheaper.



GOOGLE

BEST BRAINWAVE: Making Android free for mobile handset makers, and tying Google services into it - a far simpler model than Microsoft's "pay per handset" version.

WORST DECISION: Putting Android into the market without getting adequate patent cover. Google is buying Motorola for US$12.5 billion (S$15.8 billion) solely for its mobile patents, just to ward rivals off.

BIGGEST STRENGTH: The number of handset companies using Android, which point back to Google search and YouTube, from which it makes its money.

BIGGEST WEAKNESS: Lack of patent cover; unclear path to actually make money from Android. So far it's mostly been expense.

WHAT DOES THE FUTURE HOLD? Further growth, especially in China - though handset makers there aren't using "official" Android, so Google doesn't benefit.

RISING OR FALLING? Still rising.



MICROSOFT

BEST BRAINWAVE: Tearing up Windows Mobile in favour of Windows Phone in 2008. Windows Mobile was a 20th-century product.

WORST DECISION: Thinking that touchscreen interaction would not be the important way of interacting with smartphones.

BIGGEST STRENGTH: The skills of its engineers, and its huge cash pile for marketing.

BIGGEST WEAKNESS: Tarnished brand in smartphones due to Windows Mobile, and some people's dislike of using Windows on PCs.

WHAT DOES THE FUTURE HOLD? Nokia is a strong partner, and Microsoft is a very determined company: Expect more business sales in the coming couple of years, and more consumer promotions such as free Xboxes with handsets

RISING OR FALLING? Rising - because it can't fall any lower than it has.



SAMSUNG

BEST BRAINWAVE: Deciding to focus on Android rather than its own Bada mobile OS.

WORST DECISION: Getting too close to Apple's designs for its phones and tablets. It has a huge design department that produces innovative designs in other fields; in phones, it seems content to mimic Apple's.

BIGGEST STRENGTH: Vertical integration - it's the world's largest semiconductor maker, and makes the screens used in mobile phones, so it can get every part first, and cheaply.

BIGGEST WEAKNESS: Brand name isn't as strong in the West as it is in Korea, so it can't rely on buyers in the way that Apple can.

WHAT DOES THE FUTURE HOLD? Samsung now sells about half of all "official" Android phones. In theory, it should be telling Google how to run it, and even dictating terms. But it's probably content with the profits.

RISING OR FALLING? Rising.



RIM

BEST BRAINWAVE: Devising both encrypted email and free device-to-device communications (BlackBerry Messenger) in the past decade.

WORST DECISION: Aping Apple's iPad with the PlayBook and ordering two million of them. After a year, has shipped about half of them, had to write off US$485 million in the unsold ones, and spent US$1 billion promoting them.

BIGGEST STRENGTH: Commercial customers who rely on BBM and encrypted email; teenagers who love the free BBM service.

BIGGEST WEAKNESS: Cracks have shown up in the system that keeps BBM and email running: Last October there was a days-long outage which hurt business.

WHAT DOES THE FUTURE HOLD? Unless new CEO Thorsten Heins creates a radical shakeup, a decline into invisibility or purchase by someone looking for a new corporate customer base - Microsoft maybe?

RISING OR FALLING? Falling, and with no bottom in sight.



NOKIA

BEST BRAINWAVE: Sacking CEO Olli-Pekka Kallasvuo in September 2010 and replacing him with Mr Stephen Elop.

WORST DECISION: Ignoring the iPhone and its touchscreen capabilities: Executives were convinced Symbian could do it better.

BIGGEST STRENGTH: Enormous flexibility and agility in manufacturing: First Windows Phones were developed in less than a year. Most handset makers would struggle with twice that time. "Survival is in our DNA," one of its press officers once said.

BIGGEST WEAKNESS: Perception that it is "yesterday's brand", having defined the mobile phone business in the 20th century and dominated it from 2000 to 2009.

WHAT DOES THE FUTURE HOLD? Has tied itself to Microsoft for the smartphone business, so will fly or flop together. As it's Nokia, a flop is unlikely. But there's a lot of competition from Chinese low-cost handset companies making cheap Android phones.

RISING OR FALLING? Rising, after bumping along for a couple of quarters. But its finances may still be rocky for a while to come.

Source:  www.todayonline.com/TechandDigital/Digital/EDC120126-0000012/Smartphone-Wars-2012--Who-will-survive?

0 comments:

Post a Comment

  © Blogger template Webnolia by Ourblogtemplates.com 2009

Back to TOP