The Apple WWDC kicked off today and the opening keynote was as expected slightly underwhelming but still depicted Apple’s broader and deeper ecosystem.

With respect to the announcements, following are some of our thoughts:

·    Typography, translucencies & lots of colors adds a fresher look and feel to the aging iOS6 UI but I believe it’s not enough to hold the iPhone users from switching to competing platforms as overall interaction, features remains weak.

·    iTunes Radio, multitasking, browser animations, Airplay and Airdrop are good and required catch-up additions but I believe many users are in many ways increasingly committed to cross-platform apps such as Pandora, Spotify, Dropbox, Gmail, Chrome which gives them a foot outside the door of iOS Ecosystem. While the current iOS users will welcome these additions, these features are not enough for competing platform users to switch to iOS.

·    In terms of maps, Apple is starting to get deeper location/mapping integration across devices and native iOS apps such as calendar, browser, enabling a tighter coupling and syncing across devices leveraging iCloud.

·    Apart from Airdrop, per app VPN, iCloud Keychain in OSX, we didn't seen many features or services announced which would boost the iCloud in enterprise.

·    Updates to OSX and notebooks were good in addition to the sneak peak of Mac Pro was truly impressive and depicts Apple still has enough design arsenal up their sleeves which they are not using it at this moment. Apple continues to bank on its strategy to leverage its strong brand equity, ecosystem advantage to think that these incremental updates will satisfy the current and prospective iOS users without giving away the farm and still will be able to maintain healthy bottom line.

Overall, Apple iOS7 has nothing revolutionary to help it beat Android or regain the "cool quotient".  However, the iOS ecosystem is still very strong and tightly controlled as it now boasts 575 million registered iTunes accounts, 300 million iCloud accounts, 240 million Game Center users, more than 90% of devices on iOS 6 (no fragmentation like Android) and 407 retail stores across 14 countries with approximately 350 million in annual footfall. Huge but still not an Android killer in long term!

It could sound surprising but the new BlackBerry Q10 is my first physical QWERTY smartphone, coming from four years of full-touch smartphone usage, to type using those soft physical keys on Q10 has been a unique experience. I have been using both the BlackBerry Z10 (last 4 months) and Q10 (last 6 weeks), both almost contrasting in formfactors as well as interaction experience.

Software: 

The touch-friendly BB10 User Interface and Interaction is simply fresh and extraordinary but some feature phone upgraders and even traditional BlackBerry users might find it a bit overwhelming at start. The smartphone comes loaded with host of useful and differentiated applications and services such as BlackBerry Hub (Very Useful Notification center), BlackBerry Remember (All Note Taking in one place), BlackBerry Messenger (BBM) Video with Screen Sharing and BlackBerry Balance (Two profiles: work and personal a key solution to attract enterprise users and attack BYOD trend). However, the BlackBerry Balance still requires the user to have BlackBerry Enterprise Server (BES) support to enable “work” profile and won’t work for users with enterprises which have not deployed BES. This is something BlackBerry needs to work on to attract more BYOD users.

Keyboard: 

While the new BlackBerry 10 physical QWERTY keyboard has left out the famous BlackBerry navigation "trackpad" but it is nicely replaced by the number of touchscreen gestures and smart typing features on the device. The universal type-to-search or action (e.g. open app, contact, etc.) using physical keyboard is a unique differentiator for BlackBerry Q10. However, I did miss the intuitive "word prediction & flick typing" feature implemented in Z10 virtual keyboard. Nevertheless, Z10's word prediction engine is still integrated in Q10 as well, very useful and saves tons of keystrokes which makes typing a breeze and simply outstanding.

Hardware: 

Q10 definitely comes in a "cute" form-factor with a high pixel density (330 ppi) but a tiny 3.1 inch 720p touch screen Super AMOLED display coupled with the world's best smartphone physical QWERTY keyboard. From our analysis, QWERTY SKUs have been dropping left and right in BlackBerry competitors’ smartphone portfolio and Q10 should help BlackBerry differentiate with the “best QWERTY smartphone experience” in smartphone space and in a form-factor which is super light, thin and also with a full-snappy touchscreen BB10 experience integrated. The BlackBerry loyalists and keyboard lovers will look forward to this device to provide an unparalleled "touch & type" experience. The device is powered by Qualcomm’s 1.5GHz dual-core Snapdragon S4 Plus processor with 2GB of RAM and Adreno 225 GPU, NFC, 8MP rear and 2MP front cameras, Bluetooth v 4.0, microSD and is 4G LTE ready like Z10.

Multiple Form-factors introduces App Store Fragmentation in BB10 Platform:

The Q10 QWERTY form-factor helps Blackberry differentiate and maintain the QWERTY keyboard leadership but at the same time introduces fragmentation in BlackBerry 10 platform in terms of applications development and availability of apps across different form-factors. For example, developers have to specially tweak the BB10 apps designed for Z10 to fit the 720x720 3.1 inch formfactor of Q10. A simple app store search revealed the gap in terms of apps which are available for Z10 but not yet for Q10. Also, Skype app was first announced for Q10 and then for Z10 separately which is not encouraging signs for the BlackBerry developers. BlackBerry will have to find ways to resolve this issue and make sure that the development process is painless, uniform and QWERTY BB10 devices are not deprived of apps which are available on full-touchscreen BB10 devices or vice-versa.

App Fragmentation Example: Q10 vs. Z10

Pricing: Very Expensive

 Secondly, on the pricing side the unlocked retail price (~US$600+) is on the higher side than expected and BlackBerry needs to launch multiple sub US$300 retail price-point models to target the emerging markets and younger segments and lock them in BB10 experience in coming quarters. This will drive broader adoption of BB10 this year as developed market consumers are still higher on the scale to choose iOS and Android platforms ahead of other platforms in near- to mid-term.

Conclusion

To summarize, Q10 is a solid differentiated “touch & type” offering by BlackBerry which will help BlackBerry maintain it legacy, style and attract millions of BlackBerry purists and loyalists as well as consumers with iOS or Android fatigue which in past have been BlackBerry users. However, the different form-factor also brings in an unwarranted app store fragmentation and the very higher retail pricing (unsubsidized and subsidized) will certainly raise some eyebrows and barriers to achieve tens of millions in volumes per quarter run-rate as Q10 is essentially competing in a very premium-tier against the behemoths such as Samsung Galaxy S4 or Apple iPhone 5 the world’s best-selling smartphone models.

According to our Wireless Smartphone Strategies (WSS) service, global smartphone revenues will grow +37% over the next 5 years. Increasing smartphone volumes will be partly offset by decreasing price points, 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 detailed report forecasts global smartphone sales volume, revenues and wholesale ASPs by six major regions and five price-tiers from 2003 to 2017. Extensive analysis of the premium, high, mid, entry and ultra-low price-bands is included. The published report can be downloaded by clients here.

According to our Wireless Device Strategies (WDS) service, global mobile phone industry revenues grew +11% annually in Q1 2013. Profits increased annually due to a greater proportion of 3G and 4G models in the mix. Samsung and Apple dominate the industry and they are tightening their grip on value share, squeezing out almost all other rivals. Our new report provides quarterly global mobile phone ASPs, revenues and profit metrics for multiple major mobile phone OEMs from 2007 through 1Q 2013. Revenue share and profit share are also supplied. The published report can be downloaded by clients here.

Tizen OS is being heavily supported by Samsung and others as an alternative smartphone platform to Android. Is Tizen a credible Android challenger? Or will it be a "Bada 2.0" flop? Extensive analysis and Tizen smartphone forecasts for 88 countries can be downloaded by clients in this published report, from our Wireless Smartphone Strategies (WSS) service.

Ubuntu OS is being hyped as an emerging smartphone platform that could be a long-term alternative to Android. What opportunities and threats does the Ubuntu OS face? Will it be low-cost enough and have a decent services ecosystem? Extensive analysis and forecasts for 88 countries can be downloaded by clients in this published report, from our Wireless Smartphone Strategies (WSS) service.

Apple iOS has reached a fork in the strategic road. Should Apple continue along its current path and do nothing? Or should Apple downscale and upscale into smaller and bigger screens? Extensive analysis and forecasts of Apple iOS sales for 88 countries can be downloaded by clients in this published report, from our Wireless Smartphone Strategies (WSS) service.

According to the latest research from our Wireless Smartphone Strategies, global smartphone shipments grew 36 percent annually to reach 210 million units in the first quarter of 2013. Samsung captured one-third of all smartphone volumes worldwide, while LG became the world’s third largest smartphone vendor for the first time ever.

Global smartphone shipments grew 36 percent annually from 153.8 million units in Q1 2012 to 209.5 million in Q1 2013. Growth was driven by surging demand for 4G LTE models in developed regions like North America and 3G models in emerging markets such as China

Samsung grew 56 percent annually and shipped a record 69.4 million smartphones worldwide, capturing an all-time-high 33 percent marketshare in Q1 2013. Samsung shipped almost two times more smartphones and grew nine times faster than Apple during the quarter. With the flagship Galaxy S4 model likely to be in high demand, provided there are no major component shortages, Samsung should continue to deliver strong smartphone volumes worldwide in the second quarter of the year. Apple shipped a lackluster 37.4 million iPhones worldwide in Q1 2013, up from 35.1 million a year earlier. Apple grew just 7 percent annually during Q1 2013, which was the iPhone’s lowest growth rate ever in its history. Apple’s premium-only strategy for the iPhone is approaching a natural ceiling and it will need to expand deeper into large markets like China or launch a lower-priced iPhone model for mass-market users.

LG was a star performer as its global shipments doubled year-over-year to 10.3 million units and it became the world’s third largest smartphone vendor for the first time ever in Q1 2013. An improved Optimus portfolio and expanded distribution have been the main causes of LG’s success. However, LG is still facing strong headwinds in the huge US and China markets and these remain key challenges for the Korean vendor this year.

Other findings from the research include:

Huawei delivered 5 percent share of the global smartphone market in Q1 2013, up from 3 percent a year earlier. Most of Huawei’s smartphone volumes are currently centered around China and Huawei will need to expand internationally if it wants to become an established global player in the future;
 

ZTE captured a record 4 percent share of the global smartphone market in Q1 2013. Like Huawei, ZTE’s growth has been coming largely from the China market and ZTE has a relatively modest presence abroad.

Exhibit 1: Global Smartphone Vendor Shipments and Market Share in Q1 2013  [1]

According to our Wireless Smartphone Strategies (WSS) service, shipments of smartphones through operator-controled channels, like China Telecom, will rise sharply in 2013. The landscape for smartphone distribution is changing rapidly in China, the world's largest smartphone market by volume. Clients can view more analysis and forecasts in this published report.

According to our Wireless Smartphone Strategies (WSS) service, smartphone sales volumes will surge +56% in Africa Middle East this year. The rate of growth in Africa is almost two times higher than the global average. Growth will be driven by first-time buyers and 2G handset upgraders in major countries such as Nigeria, Egypt and Saudi Arabia. More details can be viewed by clients in this published report, which forecasts worldwide smartphone sales for 88 countries globally, including Brazil, Spain, Russia and others.