Here are some of the interesting things that happened this week in the mobile industry with my usual witty commentary
Smartphones make up 50% of mobile phones in US
According to Nielsen as of February 2012 49.7% of mobile phones in use in the US are smartphones. If the current trends continue, by January 2013 smartphones will be over 60% of the mobile phone population.
The Nielsen data also shows platform total sales and for phone purchases in the last three months. The overall population is 48% Android, 32% iOS, 12% RIM, and 8% other. For the recent purchases, it is Android 48%, iOS 43%, RIM 5%, and other 4%. It seems that iOS has been surging recently, and RIM continues its freefall.
My Take: The population of smartphone users will continue to grow with Android and iPhone dominating the market. At current rates, by January 2014 smartphones will be 75%.
LTE Windows Phones coming to AT&T
Nokia’s flagship Windows Phone, the Lumia 900, is coming to AT&T on April 8 for a surprisingly low $99.99. It will be available in cyan, black, and (on April 22) white. That is a very aggressive price for a top tier phone as other high end smartphones sell for $199 or $299. The 900 features the unique industrial design of its sibling, the Lumia 800, with a bigger screen (4.3″), LTE, and a forward facing camera.
Expect an ad blitz as AT&T said it is going all out for the Lumia launch. AT&T is even claiming their marketing campaign will be bigger than that for the iPhone’s launch.
HTC’s Titan II is also coming to AT&T on April 8, but for $199. The Titan II shares the Titan’s huge 4.7″ screen and adds LTE and a 16MP camera.
My Take: With these phones in the market Microsoft can start aggressively marketing Windows Phone. It is really important for the platform to get some traction. Microsoft and Nokia are spending many millions to build some marketshare which is critical to get developer support. There are 70K apps in the Microsoft store but Windows Phone is clearly seen as second class platform among developers. Only 37% of devs are considering targeting Windows Phone where as 78% are looking at Android and 89% at iOS.
The Lumia’s low price shows that Nokia is very serious in its bid to re-establish itself in the US. Even the full price of the phone is $449 which is $100 less than other top tier phones so Nokia is pricing it low – not AT&T. I’m not sure if Nokia and/or Microsoft are taking a loss on the phone to establish marketshare but I wouldn’t be surprised. Long term it may be a good strategy.
Another wise strategic move by Nokia is to win the hearts and minds of AT&T store salespeople by offering to to replace their personal phones with a Lumia for free. This is costing Nokia about $25 million but is an important investment as, historically, apathy for Windows Phone among salespeople has been a huge problem for the platform. Not only were salespeople were not pushing Windows Phones, but actually actively steering people away from them toward Android or iPhones.
This is also a good move for AT&T which needs a source of phones other than Apple. Being a champion of Windows Phone can be a differentiating factor from Verizon which is solidly an Android seller.
A question I have is will Nokia push out other phone makers from Windows Phone? I’m not sure how HTC plans to move product by selling the Titan II at twice the price of the Lumia. (PocketNow asks the same question). The Titan is a well reviewed phone but $100 is $100. I would expect that price to drop quickly but with all of AT&T’s marketing might behind the Nokia product will HTC or any other OEM have any incentive to stay with the Microsoft platform?
One thing that worries me about the Windows Phone platform is rumors that the upcoming Windows Phone 8 might not run on these new phones. Nokia couldn’t comment on whether this was true or not and at this point I’m not sure if they even know. If true, that would be really bad for the platform. The delays in shipping Android 4 shows how Android owners are upset by not being able to update their phones. This will be just as bad if not worse because Microsoft and Nokia need momentum and screwing your early adopters is not a good way to get it. Word of mouth will be important for them. A buyer of a top tier phone should be able to expect at least one major system update. Even if some WP8 features didn’t work, it would be better than not updating them at all.
IDC Tablet Market Predictions
I’ve been seeing lots of predictions from IDC about the smartphone and tablet market going out four years. The latest is that 60% of the tablet market will be low cost tablets by 2016.
My Take: I have a hard time believing any prediction going out four years. In this industry, four years might as well be forty years. Things change way too quickly to look that far ahead. Any study or article looking that far out is just looking to attract attention, not be useful. If they want to be useful, tell me where things will be in six months or one year.
Samsung Galaxy Note sales pass 5 million
When the Samsung Galaxy Note, with its huge 5.3″ screen and pen interface arrived five months ago it was mocked by pundits for being too large to use as a phone and the pen input called just a gimmick. Well, it seems that buyers have not been reading those reviews. Samsung claims to have sold over 5 million units worldwide. That’s sold, not just shipped. Maybe that Super Bowl commercial worked after all?
My Take: The Note has two differentiating features from other phones; the large screen and the pen. The question is, which feature is luring buyers? Dell’s 5″ tablet flopped so it probably isn’t the large size that is the key feature. The S-Pen, as Samsung calls it, is not just a capacitive stylus like that you can use with an iPad. The device has a separate digitizer that works with the S-Pen to provide a much better and accurate writing experience. Steve Jobs famously said “if you see a stylus, they blew it” but I believe what he meant by that was if the pen was the primary interface. With the note you can use your finger(s) and the pen. For some applications the pen is mightier than the finger. See all of the attention the drawing app Paper just received on the iPad. Paper on a Galaxy Note with a real pen could be an even better experience making the platform more attractive to artists.
Samsung has brought its S-Pen to its 10″ tablet and I would expect to see it come to other phones too. I’m waiting to see if it will be part of the soon to be announced Galaxy S III.
The Galaxy Note is available in the US from AT&T for $299.99.
RIM’s new CEO Thorsen Hines had his first quarterly earnings call on March 29 and it was not good news for the Blackberry maker. Shipments are down, revenue is down and RIM lost money this quarter. Blackberry 7 sales are shrinking even in emerging markets which has been RIM’s stronghold.
Along with this, RIM is seeing senior departures (co-founder Jim Balsille, David Yach – CTO of Software, Jim Rowan – COO Global Operations.) In addition, CEO Thorsten Hines is cleaning house laying off many executives.
My Take: RIM’s situation has been steadily getting worse and for the first time they have lost money in a quarter. Competition at the low end, which is where they have been marketing, is fierce and the amount of money they make per device is shrinking.
RIM is betting heavily on the fall release of their new OS, BlackBerry 10, and new devices running it to save the company. That means they are going to have to limp along for at least six more months. And worse, even if BB10 is great, it will be competing against a new iPhone with iOS6, Android 4.0/5.0 devices, and Windows Phone 8 devices each with a large collection of apps.
I have a hard time believing they can get enough BB10 users to save the company. I’ve said before I think their best chance for survival is to get out of the smartphone business and sell their services (BBM, BES, etc.). Creating a device and OS costs a fortune and RIM doesn’t have the cash to play a long game like Microsoft does.
PSA: Don’t sell your old Android device
McAfee identity theft specialist Robert Siciliano claims that even if you follow the procedures to wipe an Android device, personal information may still be left on the device. A tech-savvy criminal could extract that information. Siciliano claims that it is better to just hold onto the device or destroy it. The money you may get for selling your used device is not enough for the hassles of identity theft. He also notes a similar problem with Windows XP systems. He found that BlackBerry, iOS, and Windows 7 devices properly delete data and are safe to sell after wiping them.
My Take: This is disturbing considering how much personal information we store on our phones (contacts, bank accounts, credit cards, etc.). A bigger problem here is that even if Google can fix this problem in Android, the patches may not ever get to devices because the OEMs and carriers have to approve and ship the patches. Android’s poor system update processes continue to be a big problem for the platform.
And that’s the news. Good night and have a pleasant tomorrow.