To Skype or not to Skype: Nokia vs Carriers

The most excellent German blog Mobile Zeitgeist alerted me (in German) to a little battle that illustrates the pitfalls of creating the seamless user experience: Nokia appears to being in a tussle with (at least) the German arms of Vodafone and T-Mobile over the pre-installation of Skype clients on some of its forthcoming handset models (including the long-awaited iPhone competitor, N97).

Vodafone and T-Mobile Germany (who have a combined subscriber base of close to 80m) have now publicly stated that they will not include any Nokia models into their catalogues, which will have Skype installed. Now, there's a market gone dead then... For other models, look to 3 in the UK (and my post on the Skypephone there...).

T-Mobile said that they "would not let their business be destroyed" by this. Their terms and conditions prohibited VoIP clients already but the carriers did anecdotally turn a blind eye towards this in the past. Nokia's push however now is apparently too much for the carriers who fear network issues. Interestingly, this surfaces on the same day where, in anther part of the world, some queried the sustainability of free data plans for the iPhone (namely the Wall Street Journal on AT&T's policies in respect of the iPhone). Predictably, Skype lambasted the move as "unfair practice".

The name of the game is - of course - the pipe (not new: see e.g. here and here): the WSJ quotes from an Alcatel-Lucent analysis of North American networks during the midday hour of one day, which apparently shows that web browsing consumed 32% of data-related airtime but 69% of bandwidth whereas e-mail used 30% of data airtime but only 4% of bandwidth. The reasoning goes that increased data traffic impacts the networks' capex whilst remaining - at best - ARPU-neutral (AT&T ponders to drop its data plan for the iPhone by $10), cutting down margins and hurting the carrier more than is healthy. Voice and SMS services are - on a bit for bit basis - very, very profitable as they use very little bandwidth.

To conclude though - as the WSJ does - that unlimited data plans should be abandoned "in the short term", pours the baby out with the bathwater: smartphones are paving the way into the wireless future (20% of US households are completely wirefree already!) and it is a space where the carriers have great gains to make; maybe not on the sumptuous margins they were used to but healthy and viable nonetheless. To do as the WSJ asks would be as if one would have asked ISPs to please stop flat-rate plans for Internet access; and look what has become of the Internet!

Accordingly, other voices argue that a) slowing voice ARPU is at least being part set-off by increasing data ARPU (which grew a healthy 32% year-on-year in Q1 and saw more than $10bn in wireless data plans being sold in the US for the first time), and b) that the carriers actually know this for a while now and, accordingly, upgrade their networks to better cope with higher bandwidth demands in order to make the move to data pipes; the fight is arguably now "only" about whether these would be dumb or smart: with app stores, VAS and business-to-business (and machine-to-machine) solutions opening up vast new segments that have been completely unexploited to date, one should think that there is room for the smart pipe operator. So fear not!

Top 5 US Smartphones in Q1 2009

After all the talk (and more talk) about Apple's iPhone, a new report provides some new numbers reminding everyone that there are more phones on this earth than the sleek one from Cupertino. It is not about the iPhone (or not only) but about Blackberry, the iPhone, Blackberry and Blackberry. Yes, this is the first four places in the top-selling smartphones in the US in Q1/2009 according to market research specialists NPD Group (it is only the press release, so pretty lean on information).

Also: completing the top 5 is a phone with an open-source OS, namely the T-Mobile G1 (the first Android handset). I will be interesting to see if there is more to come from this last group (see my post on the state of play of open-source operating systems here).

So the top 5 are:

1. RIM BlackBerry Curve (all 83XX models)
2. Apple iPhone 3G (all models)
3. RIM BlackBerry Storm
4. RIM BlackBerry Pearl (all models, except flip)
5. T-Mobile G1

So: even though they counted all of the 3G iPhones in, they still could not beat the Blackberry Curve. Well done, RIM!

Top 10 Mobile Phones - March 2009

The monthly numbers on best-selling phones from our accessory-maker friends over at Krusell are out. In March, it looked like this:

1. (1) Samsung SGH-i900/i910 Omnia

2. (7) Nokia 3109

3. (3) Nokia 6300

4. (2) HTC Touch HD

5. (8) Nokia E71

6. (4) Nokia E51

7. (10) Nokia 3120

8. (8) Nokia 5800

9. (5) Blackberry Storm

10. (-) Samsung M8800

() = Last month’s position.

Not too many changes as compared to last month. The trend to higher-end phones is maintained (or is it that owners of shiny touch-screen phones tend to spend a little more on that stylish holster?).

Be it as it may be (and my earlier comments on the holster-phone correlation probably stand true to an extent), the numbers are roughly in line with the previously noted growth of the smartphone sector, which continues to outperform the rest of the handset market.

Photo credit: http://www.crunchgear.com/wp-content/uploads/2008/12/cellphone-holster01.jpg

Off to Vegas: CTIA Wireless 2009

On Monday, I shall be boarding a plane to visit Las Vegas for the All-American wireless love fest that is CTIA Wireless.

I will have the great pleasure of discussing the next generation of mobile entertainment services under a 4G LTE environment with executives from Samsung, Walt Disney, Atlantic Records, Buzznet and others. Alcatel-Lucent, who recently won a tender providing the infrastructure to Verizon Wireless for roll-out in early 2010, are hosting the respective 4G Symposium.

And otherwise? These are exciting times across a wide range of industry segments: network infrastructure and ultra-high bandwidth, the coming of age of smartphones and their widespread take-up as well as the respective changes for the content industries which can now offer services people could only be dreaming of a few years ago. Stay tuned!

Get in touch if you want to meet up during the show. Best to drop me an e-mail at volker (dot) hirsch (at) gmail (dot) com.

Smartphone Market Shares & Growth

World market leader Nokia had a bruising 2008, at least in the smartphone field. According to a study, the Finns' market share in this segment dropped by 10% to a - well - still fairly respectable 40.8% in Q4/2008 (as compared to 50.9% a for the quarter in the previous year). Painful!

The big winners were RIM (growth of 84.9% year-on-year), Apple (111.6%) and Samsung (138%) although the latter grew from a fairly low share (1.8%). HTC was up 20% but its carrier-branded handsets (T-Mobile G1, etc) were not listed under its own tab but under "others", so there might actually have been more (probable when considering that the company's profits rose sharply in Q4/2008 on G1 sales).

Apple, interestingly, is said to have suffered a fall of sales during Q4/2008 with growth in that quarter driven by the Blackberry Storm, T-Mobile G1 and strong Samsung sales. On the OS side, Windows Mobile made headway, mainly via the successful HTC Touch line and the Samsung Omnia.

Overall smartphone sales in Q4/2008 were 38m and 140m for the whole year. This seems to tie in roughly with the numbers I discussed earlier this month.

The changes are of interest to the content industry, too. Smartphones make for a disproportionate amount of content consumption, and smartphones also lead the way for the new app stores that are breaking through everywhere after Apple showed its competitors just how much consumers are craving content. RIM is out of the blocks, as is Android. Nokia announced its Ovi Store and runs similar programmes with N-Gage, NCD and Comes with Music already and Windows Mobile has just announced the shop it will launch itself. Remains to be seen where Palm will go with its Pre and WebOS: it only had 0.9% of the market (some faithful Treo users!) and hence lots of catching up to do. And what about the newly coined JavaFX?

Here are the charts (courtesy of Gartner via Cellular News) for 1) Q4 2008 by vendor, 2) all of 2008 by vendor, 3) Q4/2008: by operating system and 4) all of 2008 by OS:

Worldwide: Smartphone Sales to End Users by Vendor

(Thousands of Units)

Company	4Q08 Sales	Market Share4Q08 (%)	4Q07 Sales	Market Share4Q07 (%)	4Q07-4Q08 Growth (%)
Nokia	15,561.7	40.8%	18,703.3	50.9%	-16.8%
RIM	7,442.6	19.5%	4,024.7	10.9%	84.9%
Apple	4,079.4	10.7%	1,928.3	5.2%	111.6%
HTC	1,631.7	4.3%	1,361.1	3.7%	19.9%
Samsung	1,598.2	4.2%	671.5	1.8%	138.0%
Others	7,829.7	20.5%	10,077.3	27.4%	-22.3%
Total	38,143.3	100%	36,766.1	100%	3.7%

Worldwide: Smartphone Sales to End Users by Vendor, 2008

Company	2008 Sales	Market Share 2008	2007 Sales	Market Share 2007	Growth 2007-2008
Nokia	60,920.5	43.7%	60,465.0	49.4%	0.8%
RIM	23,149.0	16.6%	11,767.7	9.6%	96.7%
Apple	11,417.5	8.2%	3,302.6	2.7%	245.7%
HTC	5,895.4	4.2%	3,718.5	3.0%	58.5%
Sharp	5,234.2	3.8%	6,885.3	5.6%	-24.0%
Others	32,671.4	23.5%	36,176.6	29.6%	-9.7%
Total	139,287.9	100%	122,315.6	100%	13.9%

Worldwide: Smartphone Sales to End Users by Operating System, 4Q08

Company	4Q08 Sales	Market Share 4Q08	4Q07 Sales	Market Share 4Q07	Growth 4Q07-4Q08
Symbian	17,949.1	47.1%	22,902.5	62.3%	-21.6%
RIM	7,442.6	19.5%	4,024.7	10.9%	84.9%
Windows Mobile	4,713.9	12.4%	4,374.4	11.9%	7.8%
Mac OS X	4,079.4	10.7%	1,928.3	5.2%	111.6%
Linux	3,194.9	8.4%	2,675.9	7.3%	19.4%
Palm OS	326.5	0.9%	449.1	1.2%	-27.3%
Other OSs	436.9	1.1%	411.3	1.1%	6.2%
Total	38,143.3	100%	36,766.1	100%	3.7%

Note: The "Other OSs" category includes sales of Sharp Sidekick devices based on the Danger platform.

Worldwide: Smartphone Sales to End Users by Operating System, 2008

Company	2008 Sales	Market Share 2008	2007 Sales	Market Share 2007	Growth 2007-2008
Symbian	72,933.5	52.4%	77,684.0	63.5%	-6.1%
RIM	23,149.0	16.6%	11,767.7	9.6%	96.7%
Windows Mobile	16,498.1	11.8%	14,698.0	12.0%	12.2%
Mac OS X	11,417.5	8.2%	3,302.6	2.7%	245.7%
Linux	11,262.9	8.1%	11,756.7	9.6%	-4.2%
Palm OS	2,507.2	1.8%	1,762.7	1.4%	42.2%
Other OSs	1,519.7	1.1%	1,344.0	1.1%	13.1%
Total	139,287.9	100%	122,315.6	100%	13.9%

Note: The "Other OSs" category includes sales of Sharp Sidekick devices based on the Danger platform.

Top 10 Mobile Phones in February 2009

Here's the list of the 10 best-selling phones (judged by accessory sales) as compiled by Krusell, our Swedish holster-maker friends. I will not comment further on the sense or nonsense of this information but reference what I said previously about it.

So without any further ado, here's the list (in brackets the ranking from the previous month):

1. (1) Samsung SGH-i900/i910 Omnia
2. (2) HTC Touch HD
3. (5) Nokia 6300
4. (3) Nokia E51
5. (4) Blackberry Storm
6. (8) Nokia E71
7. (6) Nokia 3109
8. (-) Nokia 5800
9. (7) Sony Ericsson X1 Xperia
10. (-) Nokia 3120

The most noteworthy new entry is the Nokia 5800 (XpressMusic), and the holster-maker's CEO reckons it would shake up the top 3 next month. After Nokia's most recent US launch disaster (see even more poignantly here) for the device, this will sadly but almost certainly not be driven by US sales though...

And as for the remainder: I remain skeptical about the measure (holsters). Other surveys (based on sales, like Sound-Scan used to do for CDs) show VERY different results.

iPhone Dominates the Mobile Web (as yet)

The iPhone has a meagre 1.2% share of the overall phone market. However, it has true worker bees as users. No, honestly, these guys are sooo much busier than everybody else: they produce a whopping 2/3 of the world's mobile web traffic, or so says a report. Yes, that's right. Number 2? Shared between open-source-newbie Symbian and - remarkably - Android with 6.15% each, which is, erm, less than 10% of what the iPhone accounts for (and in spite there being a gazillion more Symbian-powered phones out there than iPhones). Next one in the queue then is Blackberry with 2.24%.

Interestingly, the researchers find that the runners-up are quickly gaining market share, which begs the question (again) if the iPhone was only a big marketing coup: did people only need the Jobs magic in order to be shown what they could actually do with their phones (and, yes, did operators need Mr Jobs vision to realize that fair use might exceed, like, 137 kb per month)?

The answer? No! 4,000 downloads per minute are more than a marketing fluke! That web traffic is not a mirage! What the iPhone did do is trigger a stampede towards better usability, better discovery, a better environment, more ease. It is no surprise that the Google-dominated Android phone is catching up so fast (in spite being the youngest platform): Google itself has a knack for simplicity and ease of use. And from the platforms that have been around for a little longer, Blackberry (traditionally equipped with flat-rate data plans and affluent users to go with it) and Symbian (highest install-base on smartphones) are best suited from the pack to catch up quickest. The only question is the one for Windows Mobile (ooh, and Mr & Mrs Gates children are not allowed iPhones...).

The most encouraging bit of that report is therefore not another staggering stat on the iPhone but that the others are catching up. A race to the top then (even if some say that, content-wise, it currently is a race to the bottom; I'm sure that that will sort itself out fairly quickly but of this another time...).

"Recession? Where?" Asks the Smartphone...

I previously looked at recession-busting sectors and products, and here's more proof that not all is bad: two reports point out that smartphones continue to outperform the market rather significantly, recording growth figures of 25.9% year-on-year in Europe; the growth for all of 2007 vs 2008 was even more impressive: they grew by 36.1%. In the US, smartphones increased their share of the overall mobile phone market from 12% in Q4/2007 to 25% a year later. Good numbers!

Half of the (US) smartphones now come with touchscreens, with 70% "instead" (?) having a QWERTY keyboard (my best guess is that this includes phones with a slide-out keyboard, such as the T-Mobile G1 or the Sony Ericsson Xperia).

So how come? The iPhone but also other devices like Blackberries, Nokia's higher-end phones (e.g. the N95) have powerfully demonstrated that the use of a mobile for things other than using voice and SMS (and take the occasional snap with a so-so camera) is not the end of all things. The overall feature sets of smartphones but - possibly more importantly still - the overall user experience is generally significantly better on a fairly comprehensive scale, and this - in particular in times of recession - would suggest a much higher value for money ("if I pay £50, then I get 4x in value of what I would otherwise have."): they now all contain decent cameras, enough storage to work as a decent MP3 player (or in Apple's case even as an iPod...), they do e-mail, connect more effortlessly to the Internet, play more fulfilling games and generally provide a much richer content experience (did I just hear "widgets"?).

For the content industry, this is good news: more powerful devices are generally easier to address and provide a better route to transport brands and production values across to the small screen. The iPhone has shown (see e.g. here and here) that users DO use their phones for all sorts of things if one makes it easy for them. Therefore, the smarter the phone, the higher the consumption. Good, good!

RIM's 50m & Symbian's riposte

Blackberry maker RIM announced it had raced through the "epic" 50m device barrier. An honourable feat indeed! Symbian fired of a riposte (or was it Symbian-fan-boy-bloggers that did? I don't know) that it had sold just under 80m devices in 2007 alone (with a total install base of 250m), and the Blackberry story therefore was to be considered as "how very quaint".

Now: isn't this comparing apples and pairs? Every Blackberry is (and has been for, like, ever) the benchmark device for e-mail on the go. I still remember sitting in Moscow pulling down my e-mail on a Nokia 9300, and, in the time it took me to download the header of the e-mails when my dear US colleague had browsed through his e-mail and replied to 5. So: Symbian is not to be equated with Blackberry; it's an entirely different thing: Symbian was all about creating a more powerful OS that could do a lot of things, and it does them fairly well. But we shouldn't forget that most of them a N-Series devices without a QWERTY keyboard that do different things than a Blackberry does. It is probably possible (now, not 3 years ago) to create a similar experience on a Symbian-powered phone than it is on a Blackberry but I have still to find an e-mail client on a phone as pain-free, reliable and quick as the Blackberry's.

I do believe that it is less about the theoretical power of an operating system but about the end-to-end experience (iPhone anyone? I commented on this a long time ago). And - across the board - a Blackberry beats most of its rivals hands down on that; still. So this comparison limps heavily. It is probably also to blame on this odd way to define "what is a smartphone"? The mere fact that it has a "an identifiable operating system" surely is not that smart (although Admob classifies it as such). 

I applaud RIM to their feat of selling 50m devices (or "i-banker phone" as they were called in their early years) and remain a fan.

On a sideline, RIM also mentioned that there have been 7m downloads of the Facebook client for the Blackberry so far. This would mean that a fairly respectable 15% of all Blackberries that have EVER been sold have the client, and this means that this is probably a rather high number of the ones currently in use. Who would have thought that? I-banker phone goes social networking. Ts ts ts...

Finally: a new Palm

After bloody ages (and 425m Elevation dollars later) Palm came out with a bang yesterday at CES by unveiling the Pre and its new WebOS. Palm's shareholders will be chuffed as the stock surged in the hours afterwards. Now, what is it? And does it have legs? One of the first reports (even containing a minute-by-minute live-blog of the presentation) notes that

'its form factor is a blend of the HTC Touch and the iPhone. The software looks an awful, awful lot like that of the iPhone — multitouch, gestures and so on. Many of the apps also have a very strong likeness to the iPhone [...]."

That in itself is of course not a bad thing. And other reports confirm high hardware quality and nice UI. However... Aren't they a bit late? And where will the content come from? Palm used to have a faithful following on his Tungsten and Treo product lines but this is a while ago now and there have been some awesome devices in the interim, some of which - most notably the iPhone and the G1 as well as RIM's Blackberries and the higher-end Nokia devices - have amalgamated a great device with a great UI and commercial environment into a huge following. Apple AppStore, Android Market, N-Gage and Ovi, Blackberry Application Center, etc, are all there or there about. And Palm will be up against that. The fact that it has - at least initially - tied itself to Sprint only will not be much help there.

WebOS is said to be easy to develop for. Allegedly HTML, CSS and some other stuff known from the web would be enough to develop for it. But will anyone do it unless there is a device base large enough to make it a compelling commercial case (which even seems to hit platforms like Nokia's N-Gage; THQ has just apparently dropped its "Worms World Party" development for this).

It's nice to see they're back but I think that the jury is still out on the success of this.

RIM eats Chalk

Blackberry maker Research in Motion is acquiring mobile content deployment solutions provider (quite a mouthful!) Chalk Media for $18.7m in cash. Chalk to what they call "pushcasts", which - if I understand it correctly - is basically pushing podcasts to smartphones. The Vancouver-based company is listed on the Toronto Stock Exchange, so it still requires shareholder approval, and the deal is therefore not closed yet.

The move is a neat one: podcasts are increasingly used in the corporate environment for staff communications of all sorts, and the enterprise being the stronghold for RIM, it makes a lot of sense to strengthen its service offering by adding such a tool.

RIM has of course got under fire by Apple's iPhone and this will presumably continue being the case also by the higher-end Android-based phones who have been nibbling away (see here and here) on the Blackberry's pedestal as the businessman's (and woman's) favourite gadget. A lot to defend then, and the price would therefore not seem to be excessive at all... Stringent rationale, me thinks...

AT&T to go all Symbian

An article tells us that AT&T Wireless intends to run all their phones on one platform as soon as 2014, namely on Symbian. Is this odd? I mean: the iPhone isn't Symbian, is it? 

It is of course not odd. The carrier wants to avoid platform fragmentation (see also here and here) which has made it hard to develop mobile applications (and one might well now think that they indeed had a very powerful showcase paraded past them over the last 5 months: see here), and their Director of Next Generation Services, Data Product Realization (can't they have shorter job titles?), Roger Smith called Symbian "a very credible and likely candidate" to be "the One".

AT&T intends to

 provide an own-branded smartphones and they reckon - rightly! - that it would be a "support nightmare" would they run this on various platforms.

Mr Smith also came up with some damning verdicts about J2ME: it failed to deliver a simplification for application developers and, moreover, doesn't allow developers to get deeply enough into a phone's OS to deliver the kind of experiences consumers want (what are these, I ask? Not having to put up with clunky and unintuitive restrictions? Ah, now I get it).

Symbian, Android (see here) or another one: the path is, I reckon, the right one. And it is a milestone for Symbian (and one probably only possible because of the decision to go open source with it) as it would wrap up one of the largest carriers in the world under its wings.

Is the iPhone the new Black(berry)?

Here's an interesting one: we will soon all be Cupertino-loving black turle-neck fashionistas whilst going on about our cold-nosed business. This is at least what this article ponders (following Apple's announcement to add "business features"; could it really get push-e-mail?) .

The article has some interesting facts to offer: user satisfaction for Apple's iPhone is dramatically better than for anyone else (a distant first at 59% "very satisfied" users). And, somewhat noteworthy, the Blackberry had a drop of 8% in "very satisfied" users (47%) according to a recent survey -- the first decline in its history. Nokia follows with 40% with the others behind.

Apple has only 5% of the smartphone market but, given it is only out on one carrier per country and only launched some 9 months ago, that is rather honourable. And user satisfaction is absolute key to business phones though: price is, for corporate IT buyers, less an issue than for the consumer. And no IT manager thrives on the thought of a mad manager breathing down their necks over an IT or phone glitch. So user satisfaction might in fact be an important lever to push it higher in the business smartphone sector, which is a sweet one with very high ARPU. The article concludes that there is "anecdotal evidence that Apple's market share is growing. FTN Midwest analyst Bill Fearnley Jr. said that according to his checks, iPhone sales were helped in February by the introduction of a corporate iPhone plan that allows AT&T to bill employers directly."

So an interesting battle at hand. It is also interesting (and may send shivers down open-source spines) as the two leaders in user satisfaction both run on rather contained software ecosystems. But it does show that it helps when things indeed work (comparatively) seamlessly and painlessly on a device.

I am yearning to see Gordon Brown and Angela Merkel in black turtlenecks wielding an iPhone (Sarko and Obama [do I even need a link for him?] are a given of course). Oh brave new world...

Handmark gets its hands on Astraware

One is a leading content provider for the niche smartphone market, the other a leading games developer for the niche smartphone market (Palm, Windows Mobile, Blackberry, etc), now they will become the leading content publisher for the niche but quickly growing smartphone market. Enter the reported acquisition of Astraware by Handmark.

Handmark publishes smartphone versions of e.g. Tetris and Scrabble and also runs the Pocket Express mobile news service. Astraware does the same for Bejewelled, Zuma and Chuzzle but also has a sizable portfolio of generic games and applications. They also have their coding hands in iPod games. As a lot of high-end smartphone stuff is retailed through shops where Handmark has a decent footprint, the two should improve margins on Astraware titles immediately. Presumably their distribution footprints for the remainder (e.g. is Astraware a Microsoft Gold Partner and embeds lots on Windows Mobile devices) also provide for some synergies.

Unfortunately nothing was reported on deal terms but, on the merits, this makes sense. Good luck, guys!