CommsMEA 2013 review: Smartphones round-up [CommsMEA (United Arab Emirates)]
(CommsMEA (United Arab Emirates) Via Acquire Media NewsEdge) Smartphones are increasingly the norm. In the Middle East alone, 40% of handsets are smartphones. The fact that the market gave a collective shrug over Apple's swanky new operating system and fingerprint-unlocking feature for the iPhone 5S, stands as testament to the attitude of mobility consumers. "Impress us," is the implied message and vendors are struggling to do so.
Apple's first-generation iPhones were eye-catching because they were something the electronics-buying public had not seen before. Vendors that were slow to react to new hardware trends suffered for it. Just ask BlackBerry.
Once capacitive touch, location suites, multimedia apps and imaging technology became standard the mobility battleground shrunk. Everything had been done. Coming up with models that would get attention now revolved around content. This is the hurdle Microsoft has had trouble with; criticism for its weak app ecosystem has come from analysts and vendor partners alike.
As 2014 approaches, the smartphone category is a two-horse race. Samsung looks unlikely to lose its comfortable lead on Apple and Microsoft's purchase of Nokia's devices business is an uncertain gambit, as the Redmond software giant's mobility gaps are not instantly plugged by the new property.
Chief among competitors' concerns next year will be emerging markets. Already several vendors can be seen tailoring their models to the budget pocket. Wearable tech has also emerged this year, but will need to do more and appeal to the budget-conscious consumer. The only innovations that seem likely are in this area, as it is a fledgling arena that is still discovering its limits.
In smartphones, the next step will be in flexible screens. Curved, rigid displays have already made an appearance but have proved little more than an aesthetic novelty. To stand out, vendors must now go further and figure out ways to make flexible handsets useful. If all that emerges is ornamental gadgetry, the market will shrug once more and it will be back to the drawing board for vendors.
Continues on next page
Cupertino was quiet for the half of the year, likely keeping its head down after the dismal launch of the iPhone 5. Cook & Co really needed a win as the company that was formerly the world's most valuable, continued to shed market capitalisation.
GALLERY: Apple's iPhone 5
As the industry began to speculate on what Apple designers could pull out of the bag in its next product cycle, clarion calls for budget models echoed through investment quarters. China was the world's largest smartphone market. Why had the great innovator not built a competing product for it?
In the run-up to the September launch of its next iPhone, Apple appeared to cater to investors' demands. It would be releasing the expected iPhone 5S, but on the same day it would also unveil the iPhone 5C and it would do so in the US and (a mere eight hours later) in China. This led onlookers to assume Apple had struck a subsidisation deal with the world's largest mobile operator by subscribers, China Mobile, and would have access to its 755m-strong customer base.
However, on launch day the deal had yet to close and it took a further three months before China Mobile was finally selling the new handsets. Even now, analysts' predictions as to how many phones will actually sell through China Mobile ranges from less than 10m to almost 40m.
Continues on next page
Also at the time of launch, analysts decried the inflated price tag on the 5C. Supposedly a budget model designed to appeal to the Chinese market, it had an unsubsidised cost of over $700, which was greater than the average urban monthly income in China.
Perceiving a lack of new ground in the handsets, investors punished Apple in the market. Stock fell once more and insult was heaped upon injury when, a matter of days after the public launch of the 5S, a German hacking group claimed it had cracked the finger-print security in the new handset.
More woes were to follow in October as analysts banded together to repeat that the iPhone 5C was inconsequential for emerging markets. And in November, battery problems were reported in the 5S.
Now Apple needs to lick its wounds quickly as the battle heats up for wearable tech, emerging markets and content ecosystems. In November, Bloomberg reported that the company was developing a curved screen and later the same month it acquired 3D-sensor specialist PrimeSense, known for its work on Microsoft's Xbox Kinect system. In December Apple announced acquisition of a company that has access to the entirety of Twitter's tweet archive. Just what Cupertino might use this archive for remains a matter for speculation, but the former innovator could still surprise consumers in 2014.
Continues on next page
It was business as usual for the South Korean juggernaut as it increased its lead in smartphones yet again.
GALLERY: Samsung Galaxy S4 Mini
Fearless market flooding remained its core strategy for dominance as Samsung released its anticipated flagship, the Galaxy S4, in March, the S4 mini and the S4 Zoom in May, then hit holiday adventurers with the rugged S4 Active in August. In September it appealed to the dashing business elite with a double-whammy: its latest phablet, the Galaxy Note 3 and Galaxy Series companion gimmick, the Galaxy Gear smartwatch. Not content to take the rest of the year off, in October it launched a curved smartphone, the Galaxy Round.
Samsung may announce the Galaxy S5 as soon as January and according to fan site SamMobile, next-generation Samsung handsets will carry 16MP cameras.
The smartphone market leader's success comes from constant market activity: an array of models that lean towards consumers of varying tastes and budgets. When the S4 launched in March, shares dipped slightly on all-too-familiar market grumblings about lack of innovation. Samsung insiders immediately leaked news of the development of a Tizen-based smartphone rival to Apple's rumoured iWatch. The stories were unofficial, but the Galaxy Gear debuted six months later and Apple's iWatch remains a rumour.
With curved handsets and smartwatches Samsung has set out its stall for the new year. The Gear and the Round may not have added exceptional value to a market that has shown an industry-wide slow down in breakthroughs, but both products have served to get the word out that Samsung is serious about wearable tech and curved screens. Both areas promise strides in 2014.
Continues on next page
Nokia used to rule the mobile phone market in terms of shipment units and OS install base. But that was before smartphones. Samsung toppled Nokia from its industry perch last year and ever since, the Finnish vendor has looked increasingly troubled.
In May the company launched the updated version of its flagship Lumia 920, the Lumia 925. The latest version tuned up the camera-sensor technology once again, but any doubt that cameras and imaging were Nokia's key focus was wiped away in July with the unveiling of the Lumia 1020.
With its 4.5-inch display, the 1020 was still nowhere near a phablet, which has been this year's fastest-growing sub-category. Instead it came to market with a 41-megapixel sensor with ZEISS optics (six physical lenses, plus optical image stabilisation). While this was followed in the same month by the 4.7-inch Nokia Lumia 625 (another budget model), a phablet was still lacking from the company's extensive devices portfolio and it also failed to make significant gains in the market.
GALLERY: Nokia's Dubai skydiving stunt
At the end of July, Nokia's app development VP, Bryan Biniak publicly suggested that Nokia's problems lay in its Windows Phone platform.
Continues on next page
When CEO Stephen Elop arrived at Nokia from Microsoft in 2010 he decided that failure to make a significant smartphone had a lot to do with the company's Symbian operating system and sent a memo to that effect. Its subsequent leaking to the press was a major embarrassment for the company.
But that did not stop Elop sidelining Symbian. What happened next was seen by some as a huge misstep by Nokia's first non-Finnish chief executive. Rather than adopt an established open OS such as Google's Android, already considered stable (Gingerbread was newly released), he opted for Microsoft's fledgling Windows Phone. Ever since, revenues and profits have plunged at a company that was once the pride of the nation.
In August Nokia completed its acquisition of Siemens' 50% stake in Nokia Siemens Networks, and renamed the company Nokia Solutions and Networks (NSN). The significance of the transaction became apparent the following month, when the company announced it would jettison its devices business unit, selling it to Microsoft for $7.1bn. Under the deal Nokia would license relevant patents and mapping services to the Redmond-based software company. After the acquisition is complete, Nokia will rely on NSN for 90% of its annual income.
As the deal progressed, Finnish press and commentators referred to Elop as a "Trojan horse". His supporters suggested the damage had been done prior to his arrival in 2010, but as analysts continue to cite content as the prime factor in consumers' smartphone choices, Elop's choice of his former employer's untested platform over Microsoft rival Google's relatively robust OS, is arguably a key factor in the demise of Nokia's devices unit.
That same decision has now led to a different smartphone market for 2014 - one in which Nokia's name no longer has a place.
Continues on next page
BlackBerry was once the undisputed king of smartphones. Arguably, the Waterloo, Ontario-based company invented the category, recognising the need for a roaming office and delivering email and rudimentary messaging on mobile phones at a time when many corporate IT departments were bemoaning the limitations of Palm Pilots.
The Canadian vendor went on to rule the roost in enterprise mobility offerings, introducing secure messaging platforms and a series of apps and tools that found a home in the shirt-and-tie realm. In 2008 the company's market capitalisation peaked at above $80bn. In mid-August, 2013, when it confirmed it was looking for a buyer, that figure was closer to $5.5bn and the only bid, by the firm's largest shareholder, Fairfax Financial Holdings, was a demeaning $4.7bn.
In early November, after a two-month scramble to find an alternative suitor, BlackBerry abandoned the sale plan, arranged for chief executive Thorsten Heins to step down and appointed ex-Sybase boss John Chen as CEO. Chen was credited with turning Sybase around in the late 1990s and the enterprise software company was eventually acquired by SAP in 2010. BlackBerry's board hoped Chen could perform the same magic on its groaning bottom line.
But the market was not impressed and BlackBerry stock took another 16% hit, leaving the company worth less than $3.4bn.
So what went wrong? Well, the story starts with another fruit-inspired brand that had previously branched out from computer-making into trying to make electronics cool again. Its iPods made people coo with delight and sometime before 2007 it decided that the time was right to bring that consumer chic to mobile phones.
It is hard to envisage what BlackBerry might have done to stymie or trump Apple's uncanny grasp of the consumer electronics market. The Canada-based firm had done the heavy lifting and Cupertino's Apple merely had the vision and design savoir-faire to say "Let's do this too... only cooler."
When iPhones hit the market, the same marketing strategy that had rescued Mac sales propelled the glossy fondle-inspiring bodies into the pockets of millions of consumers. As other vendors cloned the innovation, the consumer's choice of handset was driving corporate technology strategies to be rewritten. Companies today are still coming to terms with this "consumerisation of IT" and its BYOD fallout, while BlackBerry nurses the wounds from its tumble.
In January, about five years too late, BlackBerry came out swinging. The launch of its new BlackBerry 10 ecosystem was accompanied by its first touchscreen phone, the Z10, and a separate handset, the Q10, with a tactile QWERTY keyboard. In the product range, it appeared that BlackBerry, like a film studio contemplating a sequel to a classic blockbuster, could not figure out what its public wanted. A touchscreen might not fit its brand, after the company had built its success on the roller-ball/QWERTY interface. On the other hand, everyone else was doing it. So it decided to do both.
The Z10 was poorly received by the market, sales petering out after the first few months. In response, BlackBerry announced it was going to monetise its platform as never before, releasing its popular Messenger service for other operating systems. The release was not smooth. The initial launch had to be aborted because of undisclosed technical issues. However, when the launch finally occurred in late October, BlackBerry registered 10m downloads in the first 24 hours.
But even as buyers were sought this year, in the midst of staff downsizing and the pursuit of Waterloo property sales, no company appeared to be interested in BlackBerry as a whole. Once Fairfax tabled its bid, several others were approached to counter the offer, but most were thought to be mainly interested in networking technology and patents, particularly those for the keyboard and network encryption.
Chen has announced his intentions to keep the devices unit running as the former industry heavyweight limps on, its future in doubt. The new CEO will have some new funds to draw on as BlackBerry has opted for raising $1bn by selling convertible debt notes. Fairfax bought up $250m worth and another $200m reportedly came from Qatar's sovereign wealth fund Qatar Holding.
(c) 2013 ITP Business Publishing Ltd. All Rights Reserved. Provided by Syndigate.info, an Albawaba.com company
[ Back To TMCnet.com's Homepage ]