Wireless Smartphone Strategies

The industry’s most comprehensive set of critical market statistics and qualitative analysis, tracking and reporting on smartphones.

October 20, 2014 15:20 nmawston

According to a new report from our Wireless Smartphone Strategies (WSS) service, Blackberry captured 1% smartphone share worldwide in Q3 2014. The company’s hardware division is finally on the cusp of returning to profits for the first time in three years. Cost cuts (e.g. outsourcing) and improved BB10 designs -- like the Z3 and Passport models -- are driving the vendor’s enhanced performance. Additional analysis can be viewed by clients here.

June 19, 2014 23:11 swaltzer

After years of speculation, Amazon finally introduced its first Fire Phone with AT&T in the US on Wednesday, 18th June, 2014. Amazon is planning to take a slice of the global smartphone hardware industry and expand the mobile shopping market. However, the Fire is neither optimized for smartphone buyers nor mobile shoppers, and it risks getting caught in no-man’s land. This first-generation Fire may struggle to gain traction. Further insight and analysis on this topic can be found for subscribers in our published report here: Amazon Fire Puts a Shopping Cart in Your Pocket.

May 6, 2014 15:03 sbicheno

As smartphone vendors, bar Apple and Samsung, continue to find it difficult to extract profit from hardware sales, they’re increasingly looking for novel methods of generating a bit of much-needed margin. Similarly the software license model that served Microsoft and others so well in PCs is not being replicated in mobile, so nearly everyone is under pressure to find another way to profit from the age of the smartphone.

Strategy Analytics’ Wireless Smartphone Strategies (WSS) service believes one likely new mobile business model was highlighted by the recent announcement from the CEO of the UK’s biggest supermarket chain - Tesco - that his company will launch its own smartphone by the end of this year. Tesco has already managed to claim a respectable chunk of UK tablet market share through the own-branded Hudl, launched in Q4 2013, and it clearly thinks it can replicate that performance with a smartphone.

The strategy behind a retailer becoming a mobile device vendor is to gain a captive mobile audience, which it hope to then sell other products to. This is why Tesco was able to launch the Hudle at a very low price and we expect it to do the same with its smartphone. If a significant proportion of the population uses a Tesco mobile device, that should increase not only the amount of m-commerce they do through the retailer, but hopefully customer loyalty too.

This was also the thinking behind Amazon’s launch of the Kindle Fire. While the Kindle Fire hasn’t reached the level of global tablet market share Amazon might have liked, Amazon’s extensively reported plans to launch a smartphone of its own this year indicate the business model has proved itself sufficiently to justify the considerable risk involved in trying to become a smartphone player.

Both the Tesco and Amazon smartphone initiatives are representative of a new mobile business model that is likely to gather momentum as companies look to take of the profit from mobile devices that is currently being dominated by Apple, Samsung, Google and Facebook. Microsoft is increasingly indicating it is chasing captive installed base rather than software revenue and innovative smartphone players such as Xiaomi are also experiencing significant success selling cut-price devices in order to grow installed base. The success or failure of these products could provide a good barometer of the likely future direction of the mobile industry.

April 16, 2014 14:44 nmawston

According to a new report from our Wireless Smartphone Strategies (WSS) service, global smartphone wholesale (trade) revenues will grow +21% over the next 7 years. Increasing smartphone volumes will be partly offset by decreasing average selling prices (ASP), as vendors and operators penetrate deeper into the price-sensitive prepaid market. Falling component prices will enable sales expansion in lower price-tiers, particularly for emerging markets like Asia and Latin America. Meanwhile, Apple and others will continue to target the subsidy-led premium category.

Our extensive published report, available to clients, forecasts global smartphone sales volume, revenues and wholesale average selling prices (ASP) by 6 major regions and 8 price-tiers from 2003 to 2020. Extensive analysis of the premium, high, mid, entry and ultra-low price-bands is included. The report is a valuable tool for device vendors, operators, component manufacturers, software developers, financial analysts, car makers, and other stakeholders who want to measure the smartphone market by value and benchmark their pricing strategies.

January 3, 2012 10:55 sbicheno
A brief recap of what was a massive year for the smartphone industry.
As ever the technology year commenced with the big US tech show of the year: CES. The most positive publicity among the device-makers went to Motorola, which was the OEM lead partner for the tablet-specific new version of Android: 3.0 / Honeycomb. Moto combined Honeycomb with NVIDIA’s Tegra 2 dual-core SoC in the Xoom tablet; considered by many to be the device of the show. Moto doubled-down on Tegra 2 to also launch the Atrix smartphone in Vegas, which showcased an innovative laptop dock peripheral.
The biggest story of MWC 2011 in Barcelona broke just before the show, when Nokia announced its decision to use Microsoft’s Windows Phone as its main smartphone platform. The first NokiaSoft handset was still nine months away, but MWC 2011 did see the launch of the Samsung Galaxy S 2, which would go on to be one of the best-selling handsets of the year.
Another major theme from MWC 2011 was NFC, and in the following month there was widespread anticipation that Apple, RIM and Microsoft would follow Google’s lead in putting NFC at the core of their platforms. As the year progressed it became clear that NFC adoption was going to be a slow, gradual, process as a number of contactless payment initiatives struggled to gain traction.
April saw another round of major smartphone launches, including HTC’s media-centric flagship Sensation and Sony Ericsson’s phone / handheld gamer hybrid, the Xperia Play. These launches characterised a key trend established in 2011 – the need for Android OEMs to find ways of differentiating themselves from each other with additional features and services. The long-awaited white Apple iPhone 4 also finally made an appearance this month.
Mobile platform innovation was the focus for May. RIM announced the latest version of its platform – BlackBerry 7 – which included NFC support, while Microsoft unveiled the first major update to Windows Phone since its launch – codenamed Mango – which claimed over 500 new features, including deeper social networking integration.
Not to be out-done by its rivals, Apple previewed the latest version of its mobile platform – iOS 5 – this month. While there were many new features, including Newsstand and iMessage, but the headline launch was iCloud – Apple’s answer to cloud storage and music locker offerings from Google and Amazon. In June LG formally launched its main Android differentiation in the form of the Optimus 3D, with its auto-stereoscopic 3D display.
By the halfway stage it was becoming clear that two vendors were dominating smartphone sales in 2011: Apple and Samsung. In the second quarter both of them overtook Nokia in smartphone sales, with Apple number one for the first time. Meanwhile Samsung revealed that the Galaxy S 2 was its fastest-selling handset yet. There were also ominous signs for Nokia in the Chinese smartphone market, which had grown to be the world’s second-biggest behind the US.

August is traditionally one of the quietest months of the year for tech news, but that was far from the case in 2011. The big story of the month was Google’s bid to acquire Motorola. While this was positioned as a move to shore up the Android ecosystem with Moto’s patents and by giving Google more hardware expertise, it unsettled the other Android OEMs, which compete directly with Motorola. A possible consolation prize soon became available, however, when HP announced it was planning to sell webOS, while RIM announced its long-awaited BlackBerry 7 family of handsets too.
The big news in September concerned a tablet, but sent shockwaves across the whole mobile device industry. Amazon launched the Kindle Fire Android tablet at an ultra-aggressive price point of $199. This was immediately hailed as the first true competitor to Apple’s iPad, following the relative failure of tablet launches earlier in the year.
This was arguably the biggest handset launch month of the year. First we had the Apple iPhone 4S, launched later than new iPhones have traditionally been, and featuring the Siri voice recognition system. Then NokiaSoft revealed itself in the form of the Lumia family of handsets, which were launched alongside the biggest marketing effort yet for a Windows Phone handset. And lest we forget, October 2011 also marked the passing of Apple’s Steve Jobs.
Strategy Analytics revealed two key smartphone milestones to the world. At the start of the month we reported that Samsung had overtaken Apple to become the world’s number one smartphone vendor in Q3. A few weeks later we announced that China had overtaken the US to become the world’s largest smartphone market in that quarter too.
The early signs were that the 2011 holiday season produced record sales for many device makers, despite the spectre of another global recession in 2012. Amazon and Samsung both made announcements celebrating strong sales, while the Apple iPhone 4S was on a record trajectory as soon as it launched. It seems that, regardless of what’s happening elsewhere in the economy, the mobile device revolution is maintaining its momentum.


March 17, 2010 23:03 bjoy
High-end mobile handsets have more in common with the consumer electronics industry than they used to. Music, camera and GPS segments are some of the early examples that have lost increasing ground to the mobile industry. As the industry converges further, more use-cases and functions will be bundled on high-end handsets and crimp the growth of other consumer-electronic segments such as portable gaming. Retailers are closely watching the evolution of cellular devices and treading the waters carefully. Connectivity will of course be common across multiple device categories, whether it is your 65-inch Plasma TV or internet-enabled table clock – and for the most part, this is a new learning experience for major main-street retailers. Connectivity adds another dimension and requires additional training for their customer representatives – initial set up, configuration, billing, activation, rebates and contract obligations are areas where retailers need to climb up the experience ladder. Some interesting trends from the buoyant US market: Best Buy is betting its future growth on high-end smartphones and emerging connected devices such as 3G laptops. Smartphones are just the launch pad for Best Buy’s broader strategy in taking an early position in the evolving connected terminals space. Wal-Mart is embracing a different route that is aligned with their low-cost mass-market philosophy. The no-frills service plan StraightTalk, developed in conjunction with TracFone, was a big success during the last holiday season. The business is changing in the online channels as well; Amazon launched is beta program last year and connected devices are often sold at significant discounts than through carrier-direct channels. On one hand, third-party specialist retail channels will expand operators' addressable markets to new segments. Operators do not have all the necessary assets to tap the long tail of emerging 3G device segments or new service plans that are aligned more with the consumer electronics industry. In this scenario, retailers are the operators' friend. On the other hand, dilution of operators' direct channels will be a threat for operators' control, and without proper checks in place, the thousands of existing operator stores in the US will soon become much less important. In this scenario, retailers will gain more distribution power and become the operators' foe. - Bonny Joy

February 2, 2010 19:02 cambrosio
In a recent meeting I attended, Henry Ford’s quote was used to remind us that consumers are rarely the source of innovation. I would suggest that this maxim also applies to the philosophy of mobile technology professionals developing new, emerging devices. The wireless industry is still driven by the engineering-driven belief that giving users “faster horses” (read mobile broadband) will be the fundamental driver of future non-traditional devices.   To be fair, we should note that early efforts are progressing - the Amazon Kindle ignited e-book developments; rabid press coverage of the Apple iPad continues; recently, even AT&T reported that it had added 1 million new “emerging” devices in Q4 2009.  Hold your horses, though – the future appears bright for e-books, but the iPad is largely unproven and pricey. At AT&T, the majority of these are sensors adding little incremental revenue, a sign that AT&T and Jasper are making progress and less a sign of consumer device innovation. During 2010 we will continue to hear many companies heralding their new emerging devices as “innovative” offerings that will drive consumer wireless penetration into the stratosphere.So how can device OEMs define emerging device innovation? The worrisome truth is that they will have to go far beyond their staple expertise in industrial design. While this will continue to be important, I would offer a framework including five important elements of innovative emerging devices (which we'll dissect in more detail in coming weeks): 1)      Branding – Innovative device brands will partner with compelling service, content, or application brands to dominate headlines and also realized profits; 2)      Use Case - Emerging devices designed or optimized for one or a select few applications as the “primary” use will be easily understood by consumers, and more easily valued for service delivery by operators; 3)      The user experience – The UX will continue to be the most important factor driving innovative emerging devices. This will be the most formidable hurdle for traditional OEMs; 4)      The wireless business model - A transparent business model where the wireless costs are embedded in the device price will ultimately be the most consumer friendly option; 5)     Distribution - Big brands will innovate by leverage existing resources and strong consumer awareness, directly and via partnerships with content and service players, to drive sell-through in traditional and online consumer channels. Chris Ambrosio

January 6, 2010 14:01 nmawston

The Google HTC Nexus One smartphone with Android 2.1 was unveiled in the US on Tuesday 5 January, 2010. It will initially ship in the US, UK, Germany, Hong Kong and Singapore. The HSUPA handset ticks most of the right technology boxes, including a 4-inch touchscreen, multi-tasking and a powerful 1GHz Qualcomm Snapdragon processor. The phone has a handy voice-recognition feature, which can be used for controlling text fields, and it will be a key differentiator. A user can quickly write SMS and email messages simply by speaking to the handset. Only time will tell just how accurate and reliable the voice-control solution actually is. Why has Google gotten into the handset business? Google wants to champion a flagship user-experience and limit fragmentation for Android, while simultaneously driving up its global user-base for future mobile advertising revenues.

Exhibit 1: Google Nexus One


Some downsides: first, the Nexus One lacks a hard QWERTY and multi-touch, which may be an issue for some segments. Second, the handset's style and design are a little ho-hum and me-too. Third, the retail pricing, at US$179 postpaid and US$529 prepaid unlocked, is not as competitive as some might have expected from a company that is often associated with super-low-cost business models. And fourth, the Nexus One is initially being launched with T Mobile, which may lack the marketing clout of its bigger US rivals such as AT&T.

An interesting development is the opening of a Google-hosted online store, at www.google.com/phone, which will offer an online retail channel through which consumers in the US can buy a prepaid or postpaid Nexus One. A customer must register on the site (useful for Google to control the end-user), choose a phone model, pick a data-plan from T Mobile, then Google will deliver the phone directly to their home. In effect, Google has become a handset distributor and retailer. This is unchartered territory, and it remains to be seen whether Google can compete effectively with the likes of Apple and Amazon. The announcement is certainly good news for the online handset distribution industry. Online handset distribution, via firms such as Amazon, currently accounts for 1 in 12 of all shipments worldwide. With Google's huge marketing clout and its heavily visited PC search engine, online handset distribution is going to see a major uplift in activity this year. Google just made online distribution a hotter topic for 2010.