Mobile Update for May 6, 2012

Here are some of the interesting things that happened this week in the mobile industry with my usual insightful commentary.

Samsung Galaxy S III Introduced

Samsung finally introduced their new flagship smartphone, the Galaxy S III (AKA the GS3). The rumor mill for the GS3 was almost as out of control as that for any iPhone release but now we know the actual details.

The hardware is a modest bump from last year’s GS2 featuring:

  • 4.8″ 720p Super AMOLED display
  • Quad core CPU
  • 8MP rear camera, with 1.9MP front camera
  • Inductive charging
  • Bluetooth 4

In addition to the new hardware were many new software features. These are additions to Android 4 and are exclusive to the GS3:

  • S-Voice (Siri like voice assistant)
  • All Share Play (system to push audio or video to a TV)
  • “Natural interactions”

The HSPA+ version GS3 will go on sale in Europe at the end of May. It will be available in the US with LTE in June.

My Take: The GS3 is an important phone for several reasons.

It is clear that Samsung is going after Apple with the GS3. It is adding features that directly mirror iPhone features (Siri and Airplay) as well as adding new features to the mix. I was surprised they did not include their S-Pen technology available in the Galaxy Note. It would seem to me that would be a strong differentiating feature.

S-Voice and All Share Play are just clones of Apple features, but “natural interactions” seemed genuinely innovative to me. The phone will watch and listen to you to try to interpret your actions to anticipate what you want it to do. For example, if you are reading it will use the front facing camera to notice that your eyes are on the screen and not dim or turn off the display at the usual timeout period. This is the type of thing you don’t notice when it is working well.

Samsung has invested a good deal in their name and brand with great success. Galaxy is a well known smartphone brand and Samsung is wise to press this. Their up coming “Pop up”stores are also a good idea to enforce their brand, if executed well.

I am not happy with the trend of bigger and bigger displays as I think anything larger than 4″ is just too big. The 4.8” display is larger than the 4.6″display in the Galaxy Nexus which many complained is too big. I expect to hear Samsung will launch a line of clothing with larger pockets to hold these giant phones (just kidding!)

Overall the hardware is nice but not amazing. Many bloggers are complaining that it doesn’t look particularly nice, but that should be its worst problem. Some pundits are disappointed with the GS3 but if sales are anything like the “disappointing” iPhone 4S Samsung should be in pretty good shape.

Despite the nit picking, the GS3 looks like a world class phone and Samsung will sell many millions of them.

BlackBerry 10 Teased by RIM

At BlackBerry world this week RIM teased their new OS, BlackBerry 10, to the press and developers. They showed off some of the features, such as the new virtual keyboard and camera, but did not give a tour of the entire OS and user experience.

At the “BlackBerry Jam” developers event, each developer received an ‘alpha’ device for building apps. The device was described as a small Playbook running the Playbook OS. This was to get developers working on apps, but without BB10 I’m not sure how far they could get. As an interesting incentive to developers, RIM is guaranteeing that certified developers will make $10K from their app the first year. If they do not, RIM will make up the difference.

Also as expected, there is no upgrade path to BlackBerry 10 for existing BlackBerry 7 users. Seeing how BB10 requires much more powerful hardware this shouldn’t be a surprise. BlackBerry 7 will continue to live on after BB10 ships but it will be marketed as an entry level platform.

My Take: It looks like RIM is actually doing some good things from a usability point of view, but if they do not have at least an alpha release of their OS to give to developers at this point, I don’t know how they will be able to sell finished phones by the end of the year. By that time they will be competing with iOS 6, Android 5, and Windows Phone 8.

I’m glad that RIM is doing some interesting things but I think it will be too little too late. Microsoft is experiencing how hard it is to catch up to Android and iOS and they are two years ahead of RIM.

Target to cease selling Amazon Kindle hardware

Target will stop selling Amazon’s Kindle devices this spring. They claim “a conflict of interests” as the reason but do not get any more specific than that. This, of course, leads to all kinds of speculation.

Theory 1: Target is coming out with its own ereader. Unlikely as they are continuing to sell the Barnes & Noble Nook and Apple tablets.

Theory 2: Pressure from Apple as it will be opening “mini-stores” in 25 Target stores. Unlikely as iPads and Kindles are sold together in other large chains such as Best Buy.

Theory 3: Target views Amazon as a competitor and does not wish to help sell its products. This seems the most likely. Target, as well as other retailers, are concerned that Amazon is treating their stores as showrooms for products that people will then buy online at Amazon. Amazon actively encouraged this behavior this past fall by giving $15 to consumers who checked prices in stores and then purchased the product online.

Sources: TechCrunch, NY Times

My Take: This can be a real problem for Amazon. One of Apple’s strengths in selling iPad has been the Apple stores where people can try the device in person. This experience leads to sales. Losing Target will mean a lot of people won’t be able to try a Kindle before making a buying decision.

Is the Kindle Fire dropping in popularity?

Just last week comScore reported that the Kindle Fire represents 54% of all Android tablets and this week IDC is reporting that shipments of the Fire have plummeted from 4.8MM units in Q4 to 750K units in Q1 putting it behind Samsung for market share. Many media outlets have reported that the Fire has lost popularity and may have been a ‘flash in the pan.’

The NPD Group’s Stephen Baker points out in his company’s blog that ‘shipments are not sales’ and we cannot conclude that the reduction in shipments means sales rates have plummeted. The fact that Amazon shipped 4.8MM units in Q4 does not mean they sold all of them in Q4 and the 750K shipped may be to maintain the same sales rate.

Sources: IDC, NPD

My Take: Whenever you read an analysts numbers about market share you have to be careful to read exactly what data they are reporting. It is very easy to jump to the wrong conclusion. Not all companies report actual sales numbers (Amazon does not) so analysts look to different methods to estimate market share.

MG Siegler pointed this out when comScore’s Q2 2012 US smartphone market share report showed Android growing faster than iPhone even when AT&T and Verizon said they sold (sold, not shipped) more iPhones than Android phones. comScore’s numbers are based on a survey of users, not actual sales data, so it is important to understand that.

I have found that survey based reports are good for showing trends, not actual numbers. You can see if a platform is growing or declining but hard numbers are hard to come by.

Smartphone Profits

Asymco’s Horace Dediu tweets:

Apple captured 73% of phone industry profits and Samsung captured 26%. HTC took 1%. Everybody else lost money.

My Take. For all the billions being invested in mobile, it looks like only Apple, Samsung, and HTC are making money, and Apple is raking in the vast majority of it! Samsung may have sold more phones than Apple, but Apple is making almost three times as much money.

I wonder at what point the other phone makers (e.g. Motorola, LG, Sony, etc.) decide it isn’t worth it any more and bow out of the market.

This also points out something that Brian S. Hall brought up before. It may be wrong to think of the smartphone war as Apple vs. Google, but rather Apple vs. Samsung.

And that’s the news! Good night and have a pleasant tomorrow.

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About Lee J.

Mobile Guy!
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