Tag: LG (Page 1 of 3)

Top 5 Handset OEMs 2001-2010 / Infographic

Nice infographic from the good folks over at Visionmobile on the largest handset OEM of the last 10 years (by volume of handsets – not market cap, margins or anything else, OK?).

And if the numbers are right, RIM and Apple became “mainstream” in 2010 for the first time, Nokia hangs on to its #1 spot with some 150m  (!) units ahead of #2 (but on what handsets and for how much longer?), Samsung keeps charging, and, oh, does anyone remember Siemens? No, thought so…

Top 5 handset OEM

 

Handset Rankings: Apple moving up

Both Gartner and IDC have recently published their handset rankings for Q3/2010, and both have Apple moving into the #4 spot globally. That is impressive, as this is not measuring smartphones but all phones, and it is not measuring North America and Western Europe but the world.

In Smartphone-only terms, Apple has leapfrogged RIM into the #2 slot.

On a platform-basis, Apple’s iOS is now #3 behind Symbian and Android but ahead of RIM’s proprietary Blackberry OS.

Interestingly, IDC has the rankings identically but the market shares of the leading players lower, which would suggest a higher share of the “others” (which is probably unduly diminutive for such companies like Motorola, HTC or Sony Ericsson).

IDC’s smartphone numbers are here.

The Mobile Landscape: It will all change. Or will it?

Recently, previously civilized and subtle top executives of the world’s big mobile handset makers took the gloves off and became, well, a little more outspoken. What sticks from this is, of course, always only the most figurative snippets. Because all of these esteemed people have the most vested of all vested interests, their statements tend to distort reality a little. And because of that, we have increasingly lively debates at hand. But, alas, these debates may not necessarily lead to enlightenment.

So I thought I undertake a little mapping exercise and see where we end up…

The War of Words

I don’t know who started this. But we have had a couple of outbursts recently. Nokia’s soon to be former smartphone maestro Anssi Vanjoki (of nGage and other fame) likened switching to Android to boys who pee in their pants for warmth in winter. What he wanted to say is that it gets worse after brief relief. Apple supremo Steve Jobs sees no one (and in particular not RIM) getting anywhere near his beautiful iPhones anytime soon (he probably has not forgotten Mike Lazaridis riposte to the iPhone 4’s Antennagate). Others are convinced that Apple cannot beat Android. Period. Everyone wonders what Nokia will come up with (and, no, we do not think the N8 is it). Etc, etc, etc.

A Lot of Little Worlds

When one looks at the world map and then listens to the good folks cited above (and others), it appears that there is not one but many little worlds out there. Nokia is sitting high and dry in overall handset rankings with over 35% market share across all handsets. It is estimated to ship more than 500m handsets in 2011, too (so hold back with your obituary just yet). However, it is nowhere to be seen in the US (and even less in US smartphones where it is fighting a close fight with Palm around the 4-5% mark). Samsung (one of the few big boys not to participate in the above bickering) is building out its #2 spot with around 20% market share. Apple is well behind (although recording fairly impressive numbers given that it is basically a single handset company).

Does this matter in the discussion who is “winning”? No, it does not. An iPhone is useless if you are in an emerging (or developing) country with no 3G coverage and no abundance of power outlets from where to re-charge your fancy beauty every 8-12 hours or so. On the other end of the spectrum, a Nokia 1100 is useless if you would like to navigate on your handset through the urban jungle of Manhattan whilst shooting photos for the ones at home. But it runs forever, doesn’t mind a bit of sand or water and will never ever break. Ever.

The point is that there is more than one market here. The market is not mobile phones. The market is not even smartphones. There are many. And in some of them, Apple is looking really weak. And in others, Nokia is looking really weak.

Single Segment vs. Multi-Segment

Nokia’s strength (and, to an extent, curse) is that it wants to be everything to everyone. The N8 is a great handset from a hardware perspective but, after having played around with it for a week or so, I think it has a distinct 3-years-ago feel to it. It makes great phone calls though (which, well, the iPhone does not always). However, will Apple be able to challenge Nokia (and Samsung) in the broad lower-end mass market? Not for a long time, I would say.

The situation is a little more serious for other single-segment OEM. RIM used to live off the fat of the land in the enterprise sector. And it continues to thrive there. In recent years, it has seen a huge upswing amongst kids – because of the now almost legendary BBM (Blackberry Messenger for the uninformed). However, can you successfully build or expand on a single feature? And then on one that could really also be mimicked, worked around or substituted by something similar? Tricky.

Tricky in a different way is the situation for the likes of Motorola, HTC or Sony Ericsson: they have all committed their life to the Android platform. With Google’s muscle in the Open Handset Alliance, this means that they depend more and more on hardware design only. It feels a little like the movie business: hit-driven. And that is a tricky situation to be in. HTC looks good at this: this is home turf for it. On top of this, it has quickly started to try some gentle steps to distinguish itself (HTC Sense; Google Nexus One, etc) from other Android makers. Motorola’s Blur was less successful initially. And Sony Ericsson has yet to show its hand.

Vertically Integrated vs. Multi-OEM

All this does of course not bother Android (and perhaps also Microsoft’s Windows Phone 7) as they have the advantage of being able to bringing many weapons to the battlefield. Android’s huge advantage is one of price due to its open-source nature: For Windows Phone 7, you need to pay a software license. Android is – basically – free. Both have multiple OEM that fight their corner though. Which is, or at least can be, good. Google will not really care if the next killer phone is produced by HTC or Motorola or Sony Ericsson (or Foxconn directly for that matter).

Apple will likely struggle to match the sheer number of iterations being thrown at it. And therefore it is likely that Android will be winning, or rather continue to win.

Does this matter much to Apple? Possibly not. The margin discussion will, in all likelihood, be one that Apple execs will happily take. They will look better at it. However, will it manage to break the old Mac vs. PC pattern? Probably not. However, Apple’s position looks much brighter than it did in the decades of 5% OS-share mediocrity. The company has perfected the hardware-software-service-sex-appeal equation, which looks likely to cement a much more comfortable niche for it (just have a look at its market cap).

Vertically Integrated Multi-Segment

Nokia and Samsung try (or seem to try) a different way. Nokia is betting on MeeGo (its Symbian support sounds more and more hollow by the day). Samsung, which traditionally bet on almost every horse, made a big push for its proprietary bada OS.

This approach could be a winner: with their strong grip on emerging markets and the ability to roll out a proprietary OS across multiple segments, it presents an opportunity to nurture users in emerging markets (where the real growth will be in the next 5 years) into the use of their respective ecosystems. It did pay off for Nokia the first time around!

The Real Battlefield

In the more saturated markets in the Northern hemisphere though the battlefield is likely to be one involving OEM and network operators. This is where Apple really shook up the markets. A lot of the revenue streams from the iPhone simply bypass carriers. The Android OS opens similar avenues. The reason why Apple managed to pull this off is likely to be seen in the branding side of things: it enjoys such pulling power that carriers were bending over backwards to get their hands onto it (and then of course started moaning about the strain on their networks). Android is now being positioned as the alternative. At least, carriers can put competing offers onto Android devices.

Now, in markets where handset purchases are also driven by the overall package (cf. my recent post on this), this is likely to be important.

Nokia, Motorola, RIM, Samsung, etc all enjoy good distribution relationships with carriers. Apple is in a special position because of a) its brand but also b) its price; not much flexibility here, I suspect.

Nokia for instance struggled however to assert itself with some further-reaching ideas it had: some carriers pushed it back over e.g. plans to put Skype onto its handsets. It apparently has less brand power than Apple. Or the carriers were more used to having a say over what gets onto its handsets and what doesn’t.

Conclusion: We don’t Know What We don’t Know

We are, hence, in essence still in a fairly foggy situation: other than Apple’s brand power, we really don’t know as yet what, who, how will prevail. And that is in itself good news. Because it means we will have some time left with competing concepts, competing OEM and competing approaches. And with more CEO banter of course…

The Power of Open: Why Android is Big

A couple of weeks ago, I gave a keynote at Droidcon, the (so far) largest Android conference, in Berlin. I spoke about why brands should look at it (I posted it here). Brands care for volume. They’re not necessarily interested in small segments of the market.

The iPhone is not an exception, it is rather a powerful reinforcement of that idea: in spite of its niche, it provides ROI (and warm, fluffy PR as well as content execs) when you compare the cost of the activity (creating an app) with its effects. The conclusion is however not that the iPhone is such a big driver in itself but that EVEN the iPhone (with its very limited scale) generates positive ROI.

The mobile phone market (and its associated content offerings) is extremely fragmented. A plethora of platforms (J2ME, BREW, Symbian, Blackberry, Windows Mobile, iPhone, Android, a couple of proprietary ones, some with middleware, now Bada and Maemo; wonderful…) and distribution channels (traditionally carriers, and lots of them, plus D2C distributors like Thumbplay, Jamba, Zed, Buongiorno, etc and now, increasingly, app stores: everything from the App Store to Android Market, Ovi, Blackberry App World and countless others). Tough for brands: they do not really care for a subset of users consisting of owners of J2ME devices on, say, Orange UK (no offence, Orange).

The ecosystem is tough to address as every mobile game developer will tell you. Which is why the iPhone was such a huge game changer: one device on one platform with one distribution channel globally. And all presented well, easy to use, great UI and users get to content with very few clicks and without unnecessary warnings). It is also always connected (rather than only connected in theory) and hence opens the doors to a new way of consuming, promoting and using content, specifically interactive one such as games and apps. Everyone else scrambles to follow but they struggle because it is such a different way to look at the world (well, different when you are a network operator or handset OEM). And because of this, competition on this platform is now fierce, very fierce.

But now then, why would one support Android? I mean, Gameloft just said it sucks (well, commercially at least). Why do I think it will be (is?) big? And why do I think one should look at it now rather than, well, later?

For starters: it took Gameloft a full 3 days or so to realize the mess it made with its announcement to cut back Android; and swiftly issuing a statement that said pretty much the contrary… But, heck, we’re not running everywhere where Gameloft runs, do we?

Android’s potential is enormous! Not because Eric Schmitt, Google’s CEO said so. But because it is O.P.E.N. This gives it a potential that is beyond all others: it enjoys wide support from vendors (HTC, Dell, LG, Samsung, Sony Ericsson, Huawei, Motorola, Acer, Creative and countless more), carriers (it’s a little like the who’s who: China Mobile, China Unicom, NTT DoCoMo, Sprint, KDDI, Softbank, T-Mobile, TIM, Telefonica, Vodafone) and has a very powerful sponsor indeed in Google. The result is a huge number of devices (cf. Wikipedia page here), and they will grow. They will grow faster than Apple can because of the law of big numbers. Even if Apple may retain an edge on running the overall sexiest package but it will not withstand the overall numbers. Incidentally, the afore distinguishes Android – for the time being – from Symbian (which is now also open source): it lacks a convinced sponsor at the moment (Nokia seems to be wavering in its support) and also seems a little clunky (no open can be so strong so as to support a weak or rather outdated proposition). However, with its massive install base of 280m+ devices it could rebound if they fix this.

Android stretches further though: it is not limited to mobile devices, it goes across to eBook readers, set-top boxes, netbooks, you name it. Users increasingly swap between screens. As a content and/or service provider, you want to be with them, be of service to them, wherever they are. They should not have to worry, you should! Android makes this relatively easy for you.

The Power of Open is tremendous. It provides for (theoretically) infinite growth. And you want to be there. And you want to be there now: They say, a tidal wave of apps is coming. You won’t catch the train once you can see it… 😉

Do not forget: people (and brands) want to reach people. Full stop. They do not necessarily want to reach people who happen to have an XYZ device running the ABC OS on the carrier X in country Y! Apple is wonderful (I am an avid iPhone user and do not plan to change – well, yet) but it is a niche. And if you have business to do, you may want to look beyond that niche.

Android 2.0 a Motorola Exclusive???

There have been reports (referred to by this here) pondering if Motorola grabbed an “exclusive” deal with the Google-led Open Handset Alliance for Android 2.0 on its Droid (or, in Europe et al, Milestone) handset. There does not appear to being any formal confirmation of this but it was mentioned that, anecdotally, other vendors (and fellow members of the Open Handset Alliance) like HTC, LG, Kyocera and Samsung were still deploying version 1.5.

They quoted industry analyst Ross Rubin as to why Android 2.0 debuted on a Motorola device:

[…] There could be several reasons. Verizon’s subscriber strength and more direct competition with AT&T and the iPhone may have led it to push for Android 2.0 to be more competitive. Or it could be simple product development timetables. Moving forward, HTC will want to put its Sense user experience on top of Android 2.0, which requires development time. Google wants a healthy Android ecosystem and a competitive Motorola contributes to that.

The article went on to refer to the respective releases for 1.0 and 1.5 (both to HTC). However, one might argue that, for the first two releases, there was not much harm done in working more closely with HTC as they were the front-runners on deploying an Android phone, so that the concerted marketing buzz etc might have been justified. However, now that there is a large number of vendors deploying, one might query the compliance of the term “open source” with such exclusivity arrangements.

It also highlights the dominance Google has in the Open Handset Alliance which might, longer-term, lead to assertions that Google is in fact using the open source road as a cover to push what is effectively an OS largely driven by them. I am not implying that it is and a healthy ecosystem with multiple strong is important in particular for the launch of a new OS in a space so full of powerful multi-nationals but there is a fine line to walk in order to get it right.

EA Mobile, Namco Bandai and the State of Carrier Decks

After many rumours and ominous statements that it was “reviewing its activities” Namco Bandai confirmed today that EA Mobile will thenceforth act as its distributor for mobile games outside the US and outside any app store.

After Taito and Eidos, EA Mobile just gobbled up another major distribution deal and the exodus from J2ME games distributed via carriers continues. It also means that EA’s dominance over the operator decks has just increased a little more yet again. It had estimated (back in June) that its 2009 mobile revenues would reach $185m (although this arguably includes Apple’s and other people’s app stores as well as embeds).

What is worrying is that this cements the oligopoly of games distribution in all major markets. EA Mobile, Gameloft occupy the top 2 slots very comfortably with Glu an equally comfortable but distant third. I-Play, Digital Chocolate, Real and Connect 2 Media are fighting for place and Xendex, Handy Games and a few others seek (and sometimes find) niches to prosper. THQ Wireless, Vivendi Games Mobile have departed. Player X found a new home under the mighty wings of Zed. And then? If the above companies all manage to maintain a healthy business, this might be enough; there are silverback gorillas in every market segment. If not though, this might become a doomed sub-sector; the limelight would then be on the (failed) ecosystem operators tried to build: overly fragmented with everyone of them wanting it just so and just their way rather than agreeing on a largely unified structure and processes pressed margins from a system that has been tough from the outset (handset fragmentation and international spread mean fairly high cost per capita anyway).

The accumulation of external properties arguably also mean that EA will need to run a business that is almost a combination of a publisher and an aggregator (with its very own challenges). The issue of shelf position (will they give Tetris and the Sims undue preference over Space Invaders, Pac-Man and Cooking Mama?), the commercials of their own deals (they anecdotally paid Hasbro a handsome sum), and the generally dominant position will all come into play and it is inconceivable (well, is it really?) that their partners will continue to play ball.

It might of course only be a brief interregnum on the way to an app store world. Smartphones are very much on the rise and, in that world, such stores seem to rule. Apple has taken the lead, Android followed suit and new stores are springing up almost by the day, which also includes operator-led ones: Orange already has one, Verizon Wireless has announced one (mobile web-based) and so has Vodafone (which might actually be bigger than Apples) as well as many others. The OEM all do the same (even though some carriers want to disallow them): Nokia Ovi, Blackberry App World, Sony Ericsson, LG, Samsung, you name them, they have it. The question of course is if that might mean the same thing all over again: will they again want it all just so? Will they again have it just their way so that a user would have the unique flavour of operator X on handset Y in this unique way, meaning that – again – thousands of SKUs would be required to service them? Groundhog Day? I hope not!

Image credit: http://www.antitrustreview.com/files/2007/07/files51lsaydhrsl.-ss500-.jpg

Mobile Innovation; in Response to Scoble

Egoblogger extraordinaire Robert Scoble has never been known to be shy, and so he declared with his usual great fanfare that Europe did not matter any more in terms of mobile innovation. Why did he say that, you ask? Well, Nokia apparently took him to visit their research lab in Cambridge (no, not in Espoo) as part of a (Nokia-)sponsored geek tour. And Scoble was not impressed. Because (1) everyone appears to have been texting when he was on the tube (how quaint), (2) the N97 isn’t cooler than the iPhone and (3) Symbian is much clunkier than the iPhone’s OS or Palm’s WebOS, Scoble deduces that Europe has had it.

He reduces this loss of leadership in mobile innovation to handsets or, more specifically, to the coolness factor of handsets (“London’s cool kids are [not] hot and bothered” about the N97). And, with that somewhat tight limitation, he might actually be right. Nokia has been losing ground on the coolness and usability front for quite a while. However, when it comes to technical ability, their devices are still quite hot. Scoble basically uses the iPhone plus the first Android-based (Taiwanese [sic!]) phones to declare that the king is dead.

Hardware is a Commodity

Now, let’s try to differentiate a little. Would you say the US have the lead in computer manufacturing? Well, probably not. IBM’s ThinkPads are Chinese, then there is Sony, Samsung, Toshiba, and there is HP and Dell. There is of course also Apple (“designed in California”). Does it matter at all where the hardware is from? No, not at all, and no one really cares anymore. And why not? Because hardware is basically a commodity, that is in a world where one does not actually see that much of the hardware because the interfaces are software-driven. And these are from Microsoft, etc.

In mobile, this has not been true in the past because their were such vast differences in the available hardware that the usability was severely impaired should you have been using, say, a low-end Motorola device as opposed to a high-end Nokia. This is where the myth of European mobile superiority comes from. And, with Apple, RIM and maybe Palm again, this is firmly in North American hands. There are of course Samsung and LG, the Korean powerhouses who drive their market share up and up. Android devices G1, G2 and Magic are from Taiwanese HTC. However, given how far mobile software and indeed services have come: does it really matter either way today? I say it does not.

Here’s the Innovation: Services

If one wants to see where mobile innovation is happening, one would need to go to South Korea, Japan, Finland (not the Nokia research labs but, say, the public transport system where you can pay via SMS for the past couple of years already), Austria (mass deployment of mobile RFID-payments), South Africa (mobile wallets and very evolved mobile marketing services), Malaysia, the Philippines and even Kenya (mobile money transfers). Certainly not the US though, I’m afraid. They are still the country where “can you hear me now?” campaigns rule.

The iPhone has changed a lot of things of course. However, American Idol arguably did a lot more. It brought, shock, horror, texting to the Americans. SMS being, of course, a service. And why, Mr Scoble, should that be bad? Carriers (other than in the US) have made 25% of their revenues and 50% of their profits over the last 10 years with this unassuming little thing. That’s not too shabby, is it? The iPhone (and Palm’s WebOS) have introduced a new level of ease of use, and one that was long overdue. One that woke Nokia, which had comfortably dominated the space with less and less innovation on the software side, up (and Nokia might be a little slow to open their eyes properly). And one that will improve service levels all over the world.

Where the Big Market is

However, let us also not forget that the best-selling phone of all times is the Nokia 1100. No, it doesn’t do Java. It has a battery life of close to 20 years though and comes with a flashlight installed. Both very handy things to have in rural parts of developing or emerging countries. Nokia is having a fairly comfortable market share in these countries. I am not sure if that is a good thing to rest on though: as these markets, they demand more sophisticated devices. And because the computer penetration is much lower than in Europe, Japan, South Korea and North America, the significance of evolved mobile devices will be even more important. Nokia thought this would carry it through. However, we are seeing now that that might not be so: its smartphone market shares are rapidly decreasing.

Europe is not Europe

One last word on Europe: distinct to what Mr Scoble appears to have in mind, Europe is not a country, and this is not meant to be sarcastic. Europe is a pile of little countries and in each of them a couple of carriers rule like little kings. It makes for an extremely complex (and, consequently, low-margin) playground to deploy services. The US (as well as some of the huge Asian countries) have the incredible opportunity to deploy applications and services in one language through less than a handful of carriers to hundreds of millions. No such thing in Europe.

And this is why the US should lead in every aspect really: it is an evolved, competitive economy and it enjoys the tremendous upside of being (almost) completely aligned as to the framework: language, currency, carriers, billing systems, legal system, etc. This is the reason why the US has indeed leapfrogged Europe, the continent, when it comes to basic mobile applications: economies of scale are much easier to achieve there.

Software, Services, Interfaces

When one looks at Nokia in its current state as the sole indicator of where European mobile innovation is, one might be disappointed (as I pointed out numerous times, e.g. here). However, when one looks at how concert tickets are being sold via mobile, public transport, parking fees and vending machines all using mobile as a wallet solution, or indeed Obama making his latest speech available via SMS (there are more than 10x as many mobile phones in Africa than PCs according to Tomi Ahonen), then one can and should still be awed. And, no, in spite of its President the US is not (yet) close in this respect.

I hope, however, the US will catch up on this front sooner rather than later, too. Because of the size of the market and the aforementioned advantages, it would unleash incredible opportunities that would bring all of us fantastic new services and applications. And, Mr Scoble, it does not matter if these are 160 characters or polished web pages; it depends on what you want to do with it (as you, being one of the most prolific Twitterati, surely know).

I did not text anymore because I hated the UI and could not stand the clunky interfaces (in spite of T9; I’m too old, I guess). I started again with the iPhone. Why? Because – distinct what some people say – it’s a great interface: it displays the conversation, it looks neat and I have a full keyboard (the touch screen works much better than I feared; and I used a Blackberry for years and years). But that is not a question of the device or the technology, it is solely a question of the software. I would be much happier if I could also use my iPhone (or any other phone) to buy my newspaper (which I can with an RFID-equipped credit card in this country and which I could do in, say, Austria, a country with 2/3 the population of Illinois and a footprint smaller than Maine).

What Scoble misses (or omits in his post) is that the next leap in innovation will be a service-driven one (just as we saw on the Internet: first hardware, then basic apps, now sophisticated services).

Mobile has had the hardware phase, it is going through a “basic” app phase, and some European, African and Asian countries have entered the value-added services phase already, some years and years ago in fact! Compared to the US, they’re leading, by a lot! They’re perhaps just too small for the Robert Scoble to realize they’re there… But, as I said above: this is not about Europe leading the US (apart from the fact that it would appear to being Asia that is truly leading and has been for a while): it is about the evolution of an incredibly powerful communication device that is being unlocked for more and more applications and services; and this is independent from country and nationality!

Along those lines: why, Mr Scoble, should it be a bad thing that Europeans now “must” visit Cupertino and Mountain View. California is nice, isn’t it? Not a bad thing to go visit every now and then at all! We’re living in a large world, Mr Scoble, not only on a single continent, and mobile is a facilitator spurning new ecosystems, not only a device.

Image credit drawing: http://www.aartkom.cz

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