Tero K. on Android and RIM in Q4, and on Nokia's CES Lumia Landing ...
Hi Syl,
My former SI and TMF virtual friend and now the real life friend of my wife and I (who I've not touched bases with for some time, unfortunately) penned this piece for Forbes a few days before he wrote the "How China Ate Android" piece that you linked.
>> Nielsen Numbers Bad Indeed for Android, RIM
Tero Kuittinen
Forbes
1/20/2012
forbes.com
Many observers have sort of shrugged off the latest Nielsen market share numbers as just more fluctuation in the handset space. But I think this set of figures is actually fairly shocking.
Blackberry market share in North America has been sinking for so long that the latest decline may seem like just more of the same. Yet the precise market share shift noted by Nielsen seems devastating for three reasons.
1. Blackberry smartphone share tumbled from 7.7% to 4.5% between October and December – and the decline actually accelerated into December. There is no stabilization evident here, even with the rather large enterprise customer base of RIM. The business users are not giving RIM a floor even at 5% of total smartphone sales. There may not be a floor – it looks like enterprise clients continue bailing.
2. The latest dive is happening with a brand new device portfolio. The new Bold, Curve and Torch models arrived at AT&T less than two months ago. RIMM is not being dragged down by a 2-year old device base as it was last winter. It’s being dragged down by a brand new device base. Which is a whole lot scarier.
3. The delay of the new mobile OS now looks possibly lethal. The current slate of Bold, Curve and Torch devices is bombing. New models are needed right now – not at some nebulous date close to next Christmas.
RIMM received a big boost on Monday due to take-over speculation. But the management has been too demanding during previous negotiations with various partners. Here is the problem: if RIMM market share drops below 2% in the US market, it may be impossible to sell at any price. The Latin American market share is diving – you cannot build a mobile OS success story on Malaysia and Indonesia. We may be only months away from RIM cracking the two in its core market.
Android is not in similar straits, but the 4Q11 seems gruesome enough for different reasons.
1. This was the first quarter when Apple engaged in wide-spread price competition – the $0 iPhone 3GS at AT&T and the $99 iPhone 4 at AT&T and Verizon. It wasn’t obvious how the two-year old iPhone 3GS would do against tough low-end Android competition. The 3GS is seriously underpowered by some metrics. The display is notably coarse, with a 320×480 pixel count. Many free Android phones feature 480×800 pixel count in a substantially larger and brighter screen. No matter – the positively ancient iPhone 3GS must have connected with US consumers in a big way. Otherwise, Apple’s market share wouldn’t have soared from 25% to 45% in two months. Conclusion – really old Apple hardware is competitive with brand new Android hardware at the low end of the smartphone market.
2. The variety of vendors and phones did not help Android. The market share tumble from 62% to 47% is jaw-dropping considering how Motorola, Samsung, HTC, LG and other brands blanketed the stores with different phones. This implies a really, really ugly glut of Androids in 1Q2012 in North America. We know Nielsen numbers reflect the same sort of massive Android market share loss in America that NPD demonstrated last week – so the trend looks real.
3. Next up – iPhone 5 with presumably a bigger leap in design and feature performance next summer. The iPhone 4S was actually a relative moment of weakness for Apple, because it only represents an incremental improvement on iPhone 4.
The Android camp is now facing some very tough decisions – particularly as Samsung is clearly pulling away from HTC, Motorola, LG, Sony and other brands. The current pricing of Android phones is not working against Apple in either the high-end or the low-end smartphone market. Loading cheap Android models with attractive features like advanced display tech and powerful processors is not helping them to compete with the seriously ancient iPhone 3GS.
What is going to work? In emerging markets, Android is still rampant. But it’s not clear that the vendors can neutralize the negative impact of US market share losses by sales growth in Brazil and China – Motorola’s and HTC’s recent numbers show as much. American market is highly profitable – for any handset division, it’s hard to break even on peddling $150 non-subsidized devices in Jakarta. ###
Another piece by Tero was written the prior week for Forbes:
>> Can Nokia Play The Volkswagen Game?
Tero Kuittinen
Forbes
1/11/2012
forbes.com
Samsung, HTC and other Android vendors are no longer innovating on the hardware look and feel of their phones. The conventional wisdom says consumers no longer care about that. Is it possible this has created an opening for a new design to carve a niche? The timing for the Lumia 900 debut in the US market just might be right. Handsets have never looked this boring, not since the pre-1994 era of whip antenna bricks before the Nokia 2100 changed the dynamics of phone design.
When Volkswagen debuted the New Beetle in 1998, there was skepticism about its success in the US market. The car was basically a reskinned VW Golf with little storage space and some fairly serious quality issues with transmission and windows. Its European vibe was considered possibly too weird for America. Of course, it became a hit – unusual, quirky design was a big selling point at the time when the US car industry was dominated by cautious clones. Later, the offbeat approach was copied with gusto by Chrysler and others.
Nokia announced its first major high-end device for the US market on Monday – and the Lumia 900 will basically have to duplicate the New Beetle trick in order to make an impact. This is a single-core phone competing against the new dual-core beasts of Samsung and HTC. It has a regular 4.3 inch display instead of the 4.6 to 5 inch jumbo screens debuted by the Asian Android vendors. It has two good cameras, but they do not hit the 16 MP level of the latest HTC.
The two advantages the Lumia 900 possesses are a new silhouette and an original user interface. Compared with the army of Android models AT&T announced, the Lumia hardware pops out. The cyan version features a glass block slightly elevated from a bright blue chassis, contrasting sharply with the Samsung-Motorola-HTC-LG-Pantech monoblock look. It’s no coincidence Nokia opted to use the blue Lumia in its Monday presentation. That’s the approach Volkswagen used in its New Beetle ads that often featured neon colors to underline the quirky design. ###
Cheers,
- Eric - |
