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Mobiles - Winners and Losers

  • Apple, Samsung and Microsoft sitting pretty
  • Sony on the brink
  • Hope for BlackBerry? No, probably not
Written by Adam Wajnberg

August is here, and in Australia that means a peek of Spring. But in the mobile technology universe - China, Japan, Europe, the US and Korea - we're heading into the frantic Thanksgiving-Christmas-4th Quarter period. The colder weather brings a flurry of intense competition, to see manufacturers and software makers through to the next year.

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apple vs android

And after 5 years of status quo, in which Apple became the only company in the world that seemed capable of doing anything right, while the competition saw their market share diminish, we might start to see some major shifts. Some of those hangers on might finally die off; some might start to claw their way back. Others are poised to break through and offer stiff competition. And Apple, for all their wealth and depth, might start to look human.



                   iphone 5 leaked pic attr: ilab factory

Yeah, their brand is diminishing in the face of withering patent wars with Samsung, and their last big update for mobile was 2 years ago. But c'maaaan. Their last earnings call was disappointing only because they didn't make ALL THE MONEY IN THE WORLD.

September 12 has been leaked as the date for the iPhone 5 launch, and it's about the only date that matters in the world of mobile technology. Apple will be answering the challenge of Samsung, who may very well have copied Apple's design aesthetic - but who cares, when they've managed to offer something significantly different? Samsung handsets are bigger, easier to access (with removable batteries and storage) and are far more diverse. Samsung have done enough to prove their worth as innovators.

But so has Apple, several times over. So it's going to be fun to see what's what on Sept 12. The current rumours suggest an underwhelming iPhone 4 chassis, slightly stretched (long, not wide), and with a new dock connector. Cue. Crickets. Hope springs that the insides will be sufficiently wow-inducing, or that the current leaked pics are a smokescreen for something boldly different.

On the topic of patent wars- these might be coming to an end. A price tag on Samsung's supposed sins has been put out there, and it's a doozy - $2.5bn - but at least there's a chance this could all be wrapped up soon. The two companies can then process an amicable divorce - Apple has already moved away from Samsung on display technology (Apple has gone to Japan Display and Sharp) and there is speculation that Samsung will lose Apple's business in storage and processor tech as well (less likely). Fine. With Apple gone as a customer and with the case settled, Samsung could unleash even fiercer tech that challenges Apple. That's good news for everyone. Rage on!


                    samsung galaxy s3

As above, but let's not overlook Samsung's genuine efforts in delivering the goods, even without the Apple drama. Their Samsung Galaxy S3 is a bonafide smash, with 10 million + sales in just 2 months. The Samsung Galaxy Note was a big hit, with the promise of a sequel before the end of the year. Their TV business is booming, and their Smart TV line looks to expand and deliver on the idea of integrated TV and Mobile integration- a paradigm that everyone thought Apple would deliver on, but to which they've only made vague overtures.

Samsung is now the world's top smartphone seller, with 50 million units to Apple's 26 million in the last quarter. Pound for pound, Samsung makes a smaller profit on their mobile enterprise than Apple does. But with their bigger numbers, the actual revenue numbers are coming into parity - and Samsung are locking in twice as many customers with products that are just as fun and awesome as the iPhone. The groundwork is there for Samsung to stand toe to toe with the Apple mobile juggernaut within 2 years, and in the process wipe out all their Android-toting competition.


microsoft surface

Long seen as laggards in mobile, the software behemoth have been improving of late, even if they're prone to taking two steps back for every three steps forward - releasing a great update with an exciting new hardware partner in March, and then rendering the entire product line obsolete just six months later is no way to make friends (see: Nokia).

But on October 26, Microsoft will be releasing their future, and their future looks pretty good. Windows 8, Windows Phone 8, and the Microsoft Surface tablet PC will be launching just in time for Christmas, and this fully integrated ecosystem will also represent a hardware challenge to Apple for the first time- the Surface tablet looks great, and Microsoft's 'Metro' design aesthetic is even simpler and nicer than Apple's iOS. Bugs still need to be ironed out, but Microsoft have reminder everyone that Apple and Google don't have a monopoly on talent.

In the process, Microsoft may be leaving several old friends out in the cold. HTC were not consulted on making a tablet, nor were Dell or HP. In Mobile, Nokia was welcomed into a loving embrace, only to be left at the altar- though it's anticipated that Nokia will still be the preferred handset partner for Windows Phone 8, there's a possibility that Microsoft with either a) bring it in house and bolster their hardware profile; b) throw the doors open and invite every other tom, dick and Samsung to join in; c) just buy Nokia and be done with it. That last one would be the best thing for the flailing Finns.


                         android 4.0 jelly bean

Android is now the dominant smartphone operating system worldwide, with over 50% of the market compared to Apple's 35% share. That doesn't tell the whole story, but it tells enough. Google still makes money on Google Play purchases, and it's enough to drive the mobile business.

The next Android update, 4.1 Jelly Bean, will probably suffer from the same problem as 4.0 Ice Cream Sandwich - too many people on Android can't get it, or have no idea to upgrade. That's a problem - if people are stuck on old software, there's more chance they'll get frustrated and jump ship. The next step for Google is to work on this issue of fragmentation.




Yeah, since the One X came out, they seem a little stunned at it's overall lack of success. That's a shame. Samsung have decisively won Android, and Nokia have maybe won exclusive rights to Windows Phone. What then, for HTC?

The reason that's a shame is because the One line demonstrated that HTC can still make a better handset than Samsung. The One X is superior to any handset from the Korean giant, but it seems a bit too little and a bit too late. HTC burned many with their hodge-podge range of handsets that all did 90% of what people wanted. The One X has fixed that, but most people had already moved on.

With so little to differentiate each Android handset maker, having a utilitarian name and brand like HTC doesn’t help either. HTC doesn’t have other divisions to burnish their reputation the way Samsung does, and amongst their native Chinese markets, Huawei has better cache. HTC may be the first to disappear in the next year or so, or get folded into another firm in a buy out. Microsoft could benefit from their assets, but other strugglers may be a better fit.


                                                   lifes good

LG, overall, is just fine. They’re second to Samsung in Korea, but second is still big in the world of Korean chaebol conglomerates. Their generic flatscreen TV, appliances and whitegoods divisions are doing ok. But Mobile is completely directionless, despite enthusiastic rumblings from their electronics VP, Bon Joon Koo. They certainly recognize that mobile is integral- it’s an extremely fast moving market, it puts the brand right in the hand, and it can generate big profits. And even though LG mobiles capture modest profits, and only within Korea, it can act as a loss leader.

But the problem is that LG have too few handsets with too little to differentiate them from Samsung. They’re not necessarily going to evaporate – they still make some cash – but they don’t look poised for any breakthroughs.



Like HTC, Nokia isn’t suffering because anything they do is bad. They’re suffering because there seems to be no place for them. What’s sadder about Nokia is at they’ve thrown in with Microsoft, and that’s backfired on them already. There’s a chance they’ll get back on their feet, but they don’t have much time – they’re running out of cash rapidly, spending about $2bn a year with no profits to show for it, and cash reserves under $5bn. Unless they release a hit Windows Phone 8 handset, it’s hard to see what, if anything could save them.




Sony just announced a $300 million loss for the quarter. The entire Sony monolith is in trouble, so it almost seems churlish to mention that their phone division is all but irrelevant. But unlike LG, mobile is where Sony made its bones – not with mobile phones per se, but with mobile technology. So the fact that their mobile division is so lacklustre is telling that Sony has lost its Mojo. If the originators of elegantly engineered, tiny powerhouse handheld electronics can't flourish in the only market left that combines those features, then what is Sony now, exactly? Basically, they're a Japanese insurance company with a (losing) side business in gizmos.

Sony is too big to sell off bits and pieces to competitors (well maybe…Motorola sold their mobile division to Google), so it seems more likely that Sony’s mobile division could just disappear, and soon.

Or, with Sony as a whole losing money in a big way in movies, music, gaming and displays, Mobile might just quietly plod along under the radar, until they come out with a big breakthrough. I just wouldn’t bet on it, is all.


                                   motorola split

Motorola revealed the RAZR V on Optus today, a sturdy enough Android phone with mid range specs and a budget price. The lack of enthusiasm is deafening.

Motorola’s best hope is that parent company Google finds something useful to do with it. The RAZR V is hopefully the last bit of work to wrap up from before the Google acquisition, and that now the venerable old phone maker can move forward. Or die. No-one seems to care.


                  blackberry bold team


Research in Motion, makers of the BlackBerry, are their own special category of Loser. Before smartphones became the norm, they were the smartphone emperors. When Apple, Google (Android) and Samsung came in, they were left with no clothes.

But unlike Nokia, who have been frantically trying to catch up, RIM insists that they’re fully clothed and not freezing. They are still just barely profitable, but they’re badly leveraged – a huge portion of their business is in fleet rollouts for companies, and more and more IT departments are switching to a Bring Your Own Device (BYOD) regime. And very few individuals are bringing BlackBerries.

To make matters worse, RIM announced a big breakthrough on BBOS 10, their hail-mary attempt to become relevant again. And previews of BBOS 10 looked very good- nothing groundbreaking, but certainly a worthwhile alternative to iOS, Android and Windows Phone. The question was, why would anyone bother with a 4th option, if already locked in with one of the other three very adequate ecosystems?

But now the question is less a question, and more a big, frustrated middle finger. BBOS 10 has been delayed to mid 2013, if it ever sees a release at all. This week. CEO Thorsten Heins hinted that BBOS 10 may be released to other manufacturers, the first clear suggestion that the BlackBerry would lose its hardware-software exclusivity.

That’s only exciting in one context – it might also mean that BlackBerry Messenger, the last working cog in the RIM machine, could also be individually incorporated into other operating systems. And at this point, iMessage, GChat and MSN Messenger are all viable alternatives.

What should I buy?

If you’re on Android, the Samsung Galaxy S3  or HTC One X are still good buys, especially the One X if you want a bargain. To be fair, the Sony XPERIA S is also a great handset, and is even cheaper. Call Optus on 1300 768 194

If you’re looking for an iPhone, sit tight. Even if the iPhone 5 is too expensive or not good enough, its availability might drive down the price of the iPhone 4S and iPhone 4.

If you’re looking for Windows Phone, sit tight. None of the current crop will be compatible with Windows Phone 8. But if you just like Windows Phone as it is, go for the Nokia Lumia 900.

If you use a BlackBerry, consider that every handset is a year old, and new handsets might be a year away. With RIM in very real danger of dying, now might be a good time to try a decent Android handset on a 12 month contract. The absolute champ here is the Samsung Galaxy Nexus through Vodafone, which is just $12 a month on a $49 cap plan.




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