Wireless Smartphone Strategies

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

August 19, 2011 18:52 David Kerr

The announcement that HP has pulled the plug on webOS hardware but is keeping options open for the OS licensing is a sad day for those of us who remember fondly the great Palm hardware and software back in the day. HP was the worst possible buyer for Palm as it didn't tick any boxes that Palm lacked: scale, channels, brand power, marketing muscle etc.

We don't think webOS is dead though, there will be many options including licensing broadly or selling the OS right to one of several eager and desperate handset vendors. Owning or at least gaining early access to OS innovation is one of many success factors for smartphone vendors. Nokia has realized that albeit belatedly, Motorola had already bet the farm on Android long before Google's surprise acquisition this week

 

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Apple iOS while still powerful has been overtaken by an increasingly fragmented Android and mobile operators reportedly are making nice with Microkia and committing to ranging WP7 devices at least in the US with strong anticipation for the latest Mango release. A strong third ecosystems to counter the twin evils of Google and Apple remains a priority with both Microsoft and Nokia likely to benefit from this week of mega mobile announcements.

So who might step in to acquire or license webOS. One of the large Chinese vendors with ambitions to be a top 3 vendor worldwide would be a good candidate as volume and profits require a differentiated experience which a solid OS like webOS would bring. Verticalization is the order of the day and someone like Huawei with aspirations to be a $100B company has the  scale and ambition to take on the challenge whether or not they can understand developer mentality is another questions entirely.

Software, OS control and innovation of the user experience are critical to the chasing pack of Android developers and to vendors who seek to be able to control their own destiny, so who would benefit in terms of OEMs, Huawei is top of my list while I would not rule out LG. Licensing to multiple vendors for multiple purposes would be possible but HP and webOS is too late to the game in most markets and I just don't see the utility of putting it on printers and peripherals or refrigerators for that matter.


September 23, 2010 22:09 David Kerr

September 23, 2010

While there has understandably been a lot of attention given to consumer apps post iPhone and the plethora of application stores that have emerged, business mobility and enterprise mobility offer huge potential from horizontal to vertical applications and from smartphones to iPads and tablets to superphones.

In both NA and W. Europe, business customers account for under 30% of users but are the dominant streams of both revenue and profits for operators. On the device side, premium priced models from RIM, Nokia, and Microsoft Mobile licensees as well as the iPhone have long been key drivers of profits in a market where low single digit margins are the norm.  The explosion of smartphone choices has led to the battle ground moving beyond the corner office, to other executive and now increasingly the midlevel manager.

With a new range of devices competing for space in the corporate market, the issue of corporate versus individual liable has become an increasing priority for IT decision makers. Add on the complexity of managing an expanding list of OS (Android, iPhone, Windows Mobile, Symbian, Palm, MeeGo, Bada from Samsung) and the growing importance of mobile portable devices with access behind the firewall and one can already feel a corporate migraine forming…. And that’s before we even discuss device management, mobility policy, device retirement etc. etc.

I am looking forward to CTIA Fall (San Francisco October 5-7) and in particular to the Enterprise Mobility Boot Camp moderated by Philippe Winthrop of the Enterprise Mobility Foundation. The boot camp spread over two days will address many of the issue listed above with our own Andy Brown featured in an analyst roundtable on October 6th.  I look forward to meeting you there. Don’t hesitate to contact Philippe for passes to this the deep dive enterprise mobility event.

David Kerr

David Kerr
Snr. VP - Global Wireless Practice
Tel: +1 617 614 0720
Mob: +1 262 271 8974


August 4, 2010 23:08 nmawston


Blackberry has finally introduced its much-awaited OS 6 upgrade with the launch of the Torch 3G smartphone. It will initially be sold exclusively at AT&T in the USA in August 2010, giving the operator an alternative to the iPhone. OS 6 employs a Webkit engine, HTML5 support and universal search. The Torch is a QWERTY slider with a 3-inch HVGA+ touchscreen optimized for messaging and media prosumers. Can the Torch outshine Apple? Is it an Android killer?




Well, the external design is a little unexciting. It looks not dissimilar to the Palm Pre. The hardware-list ticks the right boxes for a premium handset -- with 802.11n, 5MP camera, and so on -- but the 624MHz Marvell processor might be perceived as sluggish compared with the emerging tide of 1GHz superphones. The software-list looks good, with Flash, HTML5 support and Webkit for developers. The Webkit-rendered browser will compress data traffic, benefitting AT&T's stressed network. RIM has opened up the platform a little for a better developer environment. Data services are prosumer-friendly and consumer-friendly and primed for email, Internet-browsing, social networking, instant messaging, maps, WiFi geolocation, universal search, RSS feeds, media playback, Blackberry World and PC tethering. No head-to-head videophony, though.

Navigation of the UI is delivered through 3 main interfaces; touchscreen, trackpad and hard-QWERTY keyboard. Our brief trial of the handset in New York recently found the user-experience to be generally satisfying with a responsive touchscreen and good discoverability for apps and services. Retail pricing will be set initially at US$199 postpaid with a two-year contract. This is just in the sweetspot zone for high-end users, and it indicates AT&T will be subsidizing the Torch to the tune of roughly US$200 per unit.

So... are OS 6, Blackberry World and the Torch an Android killer? No. The overall package of hardware, software and services lacks a true wow factor. The Torch helps RIM to close the gap on Android models and iPhone, but it does not overtake them. Is the Torch a Blackberry savior? Maybe. Torch 1 is a solid step in the right direction to stemming churn by upgrading its touchphone portfolio. Torch 2 and Torch 3 will need to be even better, though, with improvements like a 2GHz processor, because the consumer-enterprise handset market in the US has become hyper-competitive and the Torch will not be a leading light for long.


March 22, 2010 21:03 Neil Shah
With Q3 FY 2010 financial report released this week and the outlook is still gloomy for Palm, it is being titled as a candidate for a “potential” buyout. But the future is in its own hands, and for the company like Palm it still has enough potential to weather out of this state and see some sunlight. There are some key areas where Palm has to rework its strategy. Palm has a good product line with likes of Palm Pre Plus & Palm Pixi Plus, and powered by a striking Linux core webOS platform enabling an intuitive UI covering all the basic traits to suit the targeted North American market. But still it’s unable to leverage on this appealing product line. The major issue for this lacklustre performance is due to its competition against the smartphone giants- Apple with a richer user experience and sea of applications, Samsung & LG growth with their manufacturing strategy customizing to satisfy mobile operator’s market segments, Blackberry with strong enterprise growth as well as remarkable entry into consumer segment, and the growing entrant Google with its open Android Platform. It is clear that Android, Mac OS X, Blackberry will dominate the North American market and Palm will be a secondary priority for the operators in spite of an innovative webOS platform. Based on the latest results, roughly half of the Palm’s shipments are in carrier channels struggling to sell through and the pressure is likely to increase further as Apple iPhone and Android begins the next innings with major software and hardware revisions in the following quarters. Perhaps Palm need to embrace growing platforms like Android, where operator and consumer interest is on the rise. By developing cross platform interfaces and services such as the Synergy, Palm can still provide a unique user experience on top of Android without betting the farm on webOS. Also, with positive outlook on HTML’s growth and adoption in mobile phones, from the applications development point of view Palm is at an advantage in leveraging its HTML/CSS written webOS in an opportunity to create new revenue vistas through mobile web browser based applications easily which may attract the operators participating in the recently announced “Wholesale Applications Community” at GSMA World Congress in Barcelona. Palm should also keep an eye on in incorporating the evolving wireless technologies (ex: TD-SCDMA, HSPA+, LTE) to expand and diversify its future offerings. So, Palm should for now go with the flow instead going against it and incorporate newer platforms like Android in its portfolio by 2011 instead of pushing the sole struggling webOS devices and thus come up with unique selling propositions satisfying the consumers & operator’s needs. Palm should also focus on striking strong long-term operator relationships especially GSM operators with a well thought and executed go-to-market strategy,and clawback out of this deteriorating situation. Thus, there will not be any need for “Palm” reading, as it will control its own future. - Neil Shah

February 11, 2010 15:02 Alex Spektor
…Continued from part 1 PC vendors should be worried. It will be impossible to recreate the iPhone’s success. Furthermore the engineering-centric technology and design resources they currently rely on for their legacy products put them at a distinct disadvantage in today’s smartphone market, which is largely driven by engaging user experiences and a complementary set of compelling applications and services. Still, the operator smartphone craze means there is still plenty of room for good devices. Specialists like Dell and Acer can succeed if they prioritize the following issues.image · User Experience – The importance of a top-notch user experience cannot be overemphasized. Be it stock Android with top-shelf hardware, highly customized Android with decent hardware, or something in-between, handsets that provide an engaging experience will eventually make their way into consumers’ hands. · Content and Services – Technology and design will get you noticed, but content and services will get you used by consumers. This is where PC vendors are weakest. They should be proactively forging relationships with content/service providers. Working directly with carriers on on-portal offerings should not be ruled out. In fact, as operators look to drive on-portal usage, PC maker’s willingness to play is a potential differentiator from traditional handset vendors. · Platform Selection – Small vendors should focus on winning platforms. Samsung, with a huge distribution network, strong R&D resources, deep pockets, and dozens of SKUs can afford to support multiple open platforms and develop their own. Inexperienced vendors do not have this luxury. Indeed, platform selection is at the core of the PC-smartphone vendor’s issues, as it dictates the user experience and services capability. The experiences of HP, Asus, Palm and Motorola have shown that Windows Mobile has not been driving vendor success in the consumer smartphone market. Like its European rival Symbian, WinMo failed to evolve to address consumer demands for touchscreen-driven, Web-oriented user experiences. WinMo 7 and Symbian^4 will address these issues, though handsets based on these platforms won’t hit en masse until 2011. If PC vendors want to see meaningful smartphone sales, they need to expand beyond their familiar relationship with Microsoft and consider Android as their primary alternative. Dell has recently re-focused on Android to have a better shot at being consumer-relevant in the broad global market. This focus is necessary to allow PC vendors to concentrate on building the resources and relationships for content and services that are so critical in the mobile world. -Alex Spektor

January 19, 2010 03:01 tkang
At the end of last year Samsung suddenly announced ‘Bada’, their own smartphone platform. Although there are claims that its just vaporware, sorry to say its not making much hype like most vaporware should do. After two months we are still waiting for the real thing. Now we all know what a smartphone O/S is, but what’s a smartphone platform? In the official Bada site, it actually says that the kernel layer can be either Linux or real-time OS (feature phone OS) depending on the configuration. This shows that there will be a shared experience between feature phones and smartphones. So it may not be  inventing a new experience with a new O/S. Confusing nonetheless, I’d say. Why all the mystique and vagueness? In my view the vagueness and uncertainty reflect Samsung’s agony with smartphones. Let me summarize the situation Samsung is in right now. The Situation: - Samsung’s handset ASP had always been 10~30% higher than the industry average but since 2008 they’ve been 10% lower. - Samsung’s operating margin’s are jumping between the 5% and 10% line and it used to be the 10% and 20% line before. - As the No.2 manufacturer of handsets worldwide with 20% market share, Samsung only grasps 3% of the smartphone market. So it all began with the smartphone hype in recent years. Smartphones have been haunting Samsung over the last 2~3 years and even further back when they were experimenting with Palm, Linux and Blackberry (yes, even Blackberry). Samsung’s Bada is a reactive response rather than a proactive or creative move. So it will end up constantly changing as time goes by. I’d say the current facts all point to a direction which is clear though. Samsung’s Bada will be forced to become an upgrade to its legacy feature phones. Whether Samsung intends Bada to become such an upgraded feature phone experience or not, I’m not sure but that’s the only niche that is available in this market right now. As you can see in the chart below there still is a gap between the so-called smartphones and feature phones and with the beginning of the Jet, Samsung has been attempting to bridge that gap. Whether the Bada will be good enough to enter the ranks of smartphones or it will just blur the lines between smartphones and feature phones we’ll have to see the actual product. image Many other feature phone centric vendors will realize that they don’t have much options for the future and this type of feature phone upgrading will be seen again. I think we’ll have to come up with a new definition called the ‘Smart Feature Phone’ or the ‘Simple-minded Smartphone’ soon this year. - Tom Kang

January 19, 2010 03:01 tkang
At the end of last year Samsung suddenly announced ‘Bada’, their own smartphone platform. Although there are claims that its just vaporware, sorry to say its not making much hype like most vaporware should do. After two months we are still waiting for the real thing. Now we all know what a smartphone O/S is, but what’s a smartphone platform? In the official Bada site, it actually says that the kernel layer can be either Linux or real-time OS (feature phone OS) depending on the configuration. This shows that there will be a shared experience between feature phones and smartphones. So it may not be  inventing a new experience with a new O/S. Confusing nonetheless, I’d say. Why all the mystique and vagueness? In my view the vagueness and uncertainty reflect Samsung’s agony with smartphones. Let me summarize the situation Samsung is in right now. The Situation: - Samsung’s handset ASP had always been 10~30% higher than the industry average but since 2008 they’ve been 10% lower. - Samsung’s operating margin’s are jumping between the 5% and 10% line and it used to be the 10% and 20% line before. - As the No.2 manufacturer of handsets worldwide with 20% market share, Samsung only grasps 3% of the smartphone market. So it all began with the smartphone hype in recent years. Smartphones have been haunting Samsung over the last 2~3 years and even further back when they were experimenting with Palm, Linux and Blackberry (yes, even Blackberry). Samsung’s Bada is a reactive response rather than a proactive or creative move. So it will end up constantly changing as time goes by. I’d say the current facts all point to a direction which is clear though. Samsung’s Bada will be forced to become an upgrade to its legacy feature phones. Whether Samsung intends Bada to become such an upgraded feature phone experience or not, I’m not sure but that’s the only niche that is available in this market right now. As you can see in the chart below there still is a gap between the so-called smartphones and feature phones and with the beginning of the Jet, Samsung has been attempting to bridge that gap. Whether the Bada will be good enough to enter the ranks of smartphones or it will just blur the lines between smartphones and feature phones we’ll have to see the actual product. image Many other feature phone centric vendors will realize that they don’t have much options for the future and this type of feature phone upgrading will be seen again. I think we’ll have to come up with a new definition called the ‘Smart Feature Phone’ or the ‘Simple-minded Smartphone’ soon this year. - Tom Kang

January 13, 2010 16:01 Alex Spektor

As usual, this year was a fairly quiet one for mobile phones at CES. Hot consumer electronics products, like ultra-thin 3D TVs, e-books, tablets, and netbooks, all overshadowed phone announcements from the likes of Palm, LG, and Motorola.

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But one bit of important news came from an event that was held in parallel with CES. At the AT&T Developer Summit last week, the big news centered on the impending rollout of Qualcomm’s Brew Mobile Platform across the carrier’s messaging phone portfolio – complete with an app store (AT&T App Center) and “standard” 70-30 revenue sharing. AT&T’s target is 90% Brew MP penetration on mid-range featurephones by end-of-2011.

So, who benefits from the AT&T announcement?

Clear winners

  • US Carriers: Presumably, the most compelling apps would be data-enabled, so the development would drive data plan take-up. Verizon Wireless is already requiring a data plan on a number of its messaging phone models, and is rumored to expand the policy to more non-smart devices.
  • Developers: Improved revenue sharing, a unified platform, and a well-supported SDK make developing apps for multiple devices easier and potentially more profitable.
  • Qualcomm: Prior to this announcement, we were predicting the slow demise of Brew. Although it avoided the fragmentation issues of Sun’s Java ME, the relatively closed nature of Brew caused it to have narrow penetration. Breaking in at AT&T is an important win, though convincing Western European operators will remain a challenge.

Mixed impact

  • Consumers: Apps on phones mean a more powerful device, but if a consumer is ready to buy apps and pay for data, why not get a smartphone, which (after subsidy) is unlikely to cost much more? And what about consumers who might not want a (potentially required) dataplan?
  • Device vendors: A new platform can help vendors with smartphone-weak portfolios compete better, but also means more R&D work, further compliance testing, and potentially longer development cycles.

Strategy Analytics forecasts that 45% of the world’s mobile phones will have application store capability by 2014. While smartphones will account for a large chunk of app store-enabled devices, the fast-growing categories of touchscreen and QWERTY handsets are becoming the leading featurephone categories to embrace the app store business model.

Brew MP on AT&T’s messaging devices and other similar developments all point to the blurring of lines between smartphones and their less-capable featurephone cousins. While benefits of this activity extend to all involved parties, they do so to varying degrees. It remains to be seen how AT&T’s relationship with vendors, consumers, and developers evolves as a result.

-Alex Spektor