Samsung, the world’s number one mobile handset vendor by volume, has launched a new series of ‘smart feature phones’ called REX, which is a direct challenge to Nokia’s Asha range, focusing primarily on developing markets.

According to our Wireless Device Strategies (WDS) service, while Samsung currently dominates the smartphone market along with Apple, traditional market leader Nokia remains a force in the market for phones that have entry-level app and internet capabilities, but don’t run a branded mobile operating system, which are defined as ‘smart feature phones’. This is thanks to the launch of the Asha series, which we estimate topped 9 million units shipped in Q4 2012, a little over a year after its launch.

The new Samsung REX series is a similar proposition to Asha, with four touchscreen devices (the REX 60, 70, 80 and 90) running basic apps, sporting ‘always-on’ dual SIMs, and offering web access through Opera Mini. Retail prices should range from US$80-120, and India will be the primary target market, with other Asian and South American countries soon to follow.

This is a shrewd, albeit inevitable move, by Samsung, which was never likely to give Nokia a clear run at the huge smart feature phone market. With smartphone penetration in developed markets such as North America, Western Europe, Japan and South Korea entering a mature phase, emerging markets - especially the BRICs - will be the engine of handset growth in the coming years.

This move heightens competition for the first time mobile internet user and will spur further innovation and price competition. Others are sure to follow, especially those who have yet to hit the mark in smartphones.

A court case between the French mobile operators Free Mobile and SFR was recently concluded in SFR’s favor, with the Paris court concluding SFR’s handset subsidies do not hide the true cost of the handset, and do not mislead consumers, as had been alleged. But the existence of such a dispute in the first place illustrates the growing dispute and controversy over whether operators should cut or maintain their subsidies in Europe.

It would not be easy for European operators to consider axing the subsidy entirely as they would risk losing existing and new subscribers in the short term and their ability to influence the distribution strategies of OEMs such as Apple and Samsung.

The following report - Global Handset Subsidy Forecast by Region - which is available to download for clients of Strategy Analytics’ Wireless Device Strategies (WDS) service, provides a detailed overview of the global handset subsidy market.

Nokia has released today its preliminary Q4 2012 numbers and, while the Devices and Services division made a welcome return to profit, shipments of its Lumia smartphones grew at a slightly slower rate than we expected.

Key Devices and Services Q4 2012 data points included:

• 86.3 million total handsets shipped were an improvement on 82.9 million the previous quarter, but still a little short of our expectations;
• 4.4 million Lumia Windows Phone devices were an improvement on 2.9 million units the previous quarter, but also slightly short of our forecasts;
• Shipments of 9.3 million Asha devices were shipped, which was a healthy improvement on 6.5 million the previous quarter;
• Operating margin for the devices division of 0% to 2% was slightly above our own expectations and Nokia’s previous guidance of around -6%
• Operating margin outlook for the devices division in Q1 2013 is in a range around -6% to +2%.

In summary, Nokia is doing a good job to control costs and regrow profits, but there is still some way to go for its smartphone division to be nursed back to full health.

The Consumer Electronics Show (CES), in Las Vegas, USA, is arguably the biggest consumer electronics trade show of the year, but with the major mobile industry event -- Mobile World Congress (MWC) -- following less than two months after, many mobile companies may choose to keep their cards close to their chest regarding major announcements. Nonetheless our Wireless Device Strategies (WDS) team will be in Las Vegas this week and expect there still to be a fair bit of handset news, including:

1. The rise of the 5-inch phone. Every year it seems that the largest practical size of screen for a handset goes up, and this year will be no exception. It’s quite possible that the majority of flagship smartphones announced at CES 2013 will have screens of at least 5 inches in size.

2. Phablets snowball. The phablet (a hybrid of ‘phone’ and ‘tablet’) was one of the success stories of 2012, which means a lot more handset manufacturers are likely to jump on board. This is set to be the year of the phablet for many players.

3. The Samsung Galaxy S4. Samsung was comfortably the world’s number one handset vendor by shipments in 2012, thanks in large part to its very popular Galaxy S Android family. In order to hit the aggressive shipment targets Samsung has set for itself, it will need to launch the latest member of this family -- the Galaxy S4 -- as soon as possible. However we wouldn’t be surprised if Samsung held this launch back until MWC, choosing to focus on the recently-launched, 5-inch Galaxy Grand for this show.

4. The Sony Xperia Z. Sony also has some 2012 smartphone momentum to build on, and thanks to the company’s strong consumer electronics heritage it tends to prioritise shows like CES and IFA higher than many other mobile vendors. We expect to see the launch of a 5-inch Sony Xperia Z phablet, which will also continue Sony’s strategy of increased consumer electronics convergence for its mobile devices.

5. 4K compatibility. While ‘smart TVs’ will once more be a major theme at this year’s CES, one of the hottest trends for TVs will be 4K displays. The name references a horizontal resolution in the region of 4,000 pixels, and the technology offers four times as many total pixels as ‘full HD’. While it’s debatable how useful that many pixels would be on a 5-inch handset display, it will increasingly be found in larger TVs and projectors. This creates a new opportunity for handset vendors to differentiate themselves by offering 4K support on handsets for functions such as video streaming.

We estimate Bluetooth will be found in almost three quarters of all mobile handsets sold globally in 2012. Asia, North America and Western Europe will be the world's three largest regions for Bluetooth handset sales in 2013. Major countries for Bluetooth devices will include China, USA, UK and Germany. Key buyers and users of Bluetooth handsets include male smartphone prosumers and connected youth. For example, road warriors with smartphones use Bluetooth for handsfree voice calls while driving between jobs.

Global Bluetooth phone sales will reach well over 1 billion units in 2013. Bluetooth is one of the most popular wireless technologies found in smartphones and feature phones today. However, selecting an appropriate profile remains very complex for companies such as Audi, BMW, Citroen, Ford, GM, Honda, Hyundai, Mercedes Daimler, Nissan, VW, Delphi, Cisco, Nokia and Apple. This report forecasts global Bluetooth phone sales by 12 of the most important Bluetooth profiles from 2006 to 2017. Profiles covered include A2DP, DUN, PAN and PBAP. The report also includes forecasts for Bluetooth smartphone and Bluetooth feature phone sales. The report is a valuable tool for car manufacturers, component makers, software developers, operators and other stakeholders who want to track the development of specific Bluetooth profiles on a worldwide basis.

The full report: Global Bluetooth Phone Sales Forecast by 12 Bluetooth Profiles: 2006 to 2017 can by downloaded by clients here.

As in the rest of the world, Android has experienced massive growth in its share of the UK smartphone market in the past few years. However, after reaching a peak market share in 2012, this share is set to drift in subsequent years as Apple, Microsoft and nascent mobile platforms such as Tizen and Firefox OS grow in popularity. While Android sales will grow by 84% in 2012, they will increase by a mere 2% the following year. This forecast is taken from the Strategy Analytics report: Global Smartphone Sales Forecast by 12 Operating Systems for 88 Countries: 2007 to 2017, recently published by our Wireless Smartphone Strategies (WSS), and available to subscribers.

The dominance of black as the default color for mobile handsets is set to decline, according to a new forecast from Strategy Analytics: Western European Handset Sales Forecast by Color, available to download by clients of our Wireless Device Strategies (WDS) service. Trends in handset color are cyclical in nature and black has been the dominant choice since the launch of the first Apple iPhone, while darker colors tend to be more popular the more expensive a device becomes. However, as indicated by Samsung’s decision not to offer a black version of the Galaxy S3, Black has peaked as the default color for mobile handsets.

The global grey handset market will make up 6.6% of all handset shipments in the second quarter of 2012. This finding is just one of many revealed in the recently published report: Global Handset Shipments Forecast by Quarter: Q2 2012, available to subscribers of Strategy Analytics’ Wireless Device Strategies service. With mobile devices fast supplanting PCs as the world’s default technology platform, it’s inevitable that the grey, or illegitimate, market proves tempting to many. However, greater activity by governments to crack down on fake handset makers that pose security risks or underpay taxes, stricter IPR monitoring of 3G chipset suppliers or buyers, and some grey brands legitimizing as they reach a certain size and find it harder to avoid authorities, have prevented this market from proliferating.

LTE smartphones

As expected LTE smartphones have dominated the first day of the biggest US tech show.

AT&T seems to have launched the greatest number of devices, including the first Windows Phone LTE handsets:  the Nokia 900 -- which you can read about in greater depth in our dedicated blog post -- and the HTC Titan 2, which has a 4.7-inch display and a 16 megapixel camera.

On top of that there was the first Sony LTE phone -- the Xperia ion -- and the first Pantech LTE handset -- the value-oriented Burst. AT&T also announced the US launch of an LTE-compatible Samsung Galaxy Note, as well as the Samsung Galaxy S 2 Skyrocket HD and the eco-friendly Samsung Exhilarate.

Meanwhile Sprint announced a couple of Android phones to run on its future LTE network -- the Galaxy Nexus and the eco-friendly (possibly a bit of a trend emerging there) LG Viper 4G LTE. And Verizon unveiled the LTE-enabled DROID 4 by Motorola, which has a slide-out qwerty keyboard.

Smart TVs

It wouldn’t be CES if there wasn’t a new generation of smart TVs on display. Samsung has evolved its offering with new content, new UIs, and even the ability to upgrade the TV’s processor, while Sony hasn’t given up on Google TV, and has launched a couple of media players featuring motion-sensitive controller, based on Google TV 2.0.

The traditional consumer electronics giants may have more competition than ever in this market, however. Lenovo has launched a smart TV running the latest version of Android -- 4.0 -- as part of its broader connected device strategy, while Yahoo augmented its Connected TV offering and Nuance launched a voice interface technology called Dragon TV.

Kinect for Windows

Lastly, Microsoft is swimming against the current -- from the TV back to the PC -- by announcing the launch of its Kinect gesture interface for Windows, possibly inspired by the many ‘unofficial’ initiatives already undertaken by the independent technology community.

This year’s Consumer Electronics Show (CES) takes place in Las Vegas, USA, from Tuesday 10th to Friday 13th January, 2012. There will be dozens of major and minor announcements vying for your attention, but here are three trends we recommend to look out for at the show:

1. Windows Phone LTE handsets

While the main mobile event of the year -- MWC -- occurs a mere six weeks afterwards, CES tends to feature a number of major handset launches of its own -- especially those with a strong focus on the valuable US market. This year, the Windows Phone ecosystem plans to revitalize its assault on the US market with a raft of LTE handsets to counter Android 4.0, Apple iOS 5 and BB10.

A hotly tipped 4G model is the successor to the Nokia Lumia 800, Nokia’s first flagship Windows phone, which was not launched in the US. Instead, Americans could get the opportunity to see what may be Nokia’s first ever superphone, perhaps an enhanced Lumia 800 with a larger screen and LTE, which could be called the Lumia 900 or simply the Nokia Ace. It is important that Nokia gets its sub-branding right for the American market, so we will be watching this one closely.

Elsewhere, HTC should be ready to launch its own LTE Windows Phone devices, while rumors indicate Samsung’s contribution to that market may also be imminent. Sony Ericsson, despite being a launch partner for Windows Phone 7, has been conspicuous by its absence so far. That might be about to change, however, if the ‘tile’ theme for its official pre-show teaser (below) is anything to go by.

Source: Sony Ericsson

2. Intel Medfield devices

Despite initial hype, we’ve seen few LG Windows Phone launches in recent quarters. Two years ago LG was a lead OEM partner for Intel’s Moorestown mobile chip. Unperturbed by the absence of that chip in the broader marketplace, rumor has it that the successor to Moorestown -- the 32nm Medfield chip -- could soon make its public debut inside an LG handset.

After keeping a low mobile profile in 2011 (excluding the Infineon purchase), we expect Intel to make a bigger noise about Medfield at CES this year. While it remains to be seen whether the chip giant has managed to crack the handset market, we would be surprised if Intel didn’t significantly raise its profile in tablets, with the anticipated launch later this year of Microsoft’s Windows Phone 8 and Windows 8 possibly its best opportunity yet.

But the loudest Intel-related noise may well come from ultrabooks -- the ‘thin, light and fast bootup’ notebook platform designed to serve the market demand suggested by the popularity of the Apple MacBook Air and iPad. While not all of the ultrabooks will feature 3G chipsets, they are being positioned as ‘ultra-mobile’ devices, so that would eventually seem a natural feature for many to have.

3. More smartphone-to-smart-TV convergence?

2012 is the year that many major players will have a fresh crack at smart TVs. Google’s first effort last year ran out of steam pretty quickly, while Apple is publicly treating TV as nothing more than a hobby. However, we expect both companies to renew their focus on the living room in 2012, and where better to make a statement of intent than CES?

Given the expected overlap with their mobile platforms -- Android and iOS -- it stands to reason that Google and Apple will look for ways to more closely integrate your mobile device with your TV. Not only does this increase the functionality for end-users -- for example, by using the device as a remote control for media streaming -- but potentially leverages the existing commercial relationship into new product areas. Apple will not be formally present at CES, of course, but Android hardware partners we recommend investigating at the show include Samsung, LG, Sony and even Vizio.