My thesis for the smartphone industry is that the industry will be increasingly driven by the conversion of price-sensitive buyers in developed and emerging markets from lesser phones or no phones to smartphones. The market for high-priced mobile devices in developed economies is saturated. Almost everyone who is willing to purchase an expensive smartphone has done so. Therefore, the market for expensive smartphones is now dependent on the consumer upgrade cycle like the PC market before it. This will put inexorable downward pressure on handset average selling price.
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But, there are a lot of consumers out there that will get a smartphone if the price is right. My own mother is a perfect example. She upgraded from a feature phone to a smartphone this year largely because she was enticed to do so via the subsidized $0 Android handset being hawked by her cell phone provider in exchange for another two-year contract commitment (and an additional expensive data plan she doesn’t need). In the US, people like my mother will be a driving force of handset sales volume – and this market is very price sensitive. Hence the subsidized enticement. This is a major reason that Apple has begun to sell previous models of the iPhone at discounted rates – in order to capture these customers even if the margins are lower and even though it risks cannibalizing higher-ticket smartphone sales.
The most important markets may be outside the developed world now, places like China, India and Africa. There are billions of consumers in these markets and the mobile market there is much less mature than it is in the developed economies. Moreover, mobile handsets offer the added benefit of helping customers to leapfrog over the poor fixed line infrastructure that emerging markets have and move straight from no phone to smartphone.
Tech Crunch has an article describing how this is occurring in Africa.
What phone does Wikipedia founder Jimmy Wales have in his pocket? An unlocked Android-powered 3G smartphone, made by Chinese mobile maker Huawei – which was selling for $85 on the streets of Kenya last year and now goes for $50.
While the majority of Africa’s mobile phones are more basic talk-plus-text feature phones — recent figures from analyst ABI Research suggest 3G connectivity accounts for 11 percent of the continent’s overall mobile subscriptions vs. 2G’s 62.7 percent – 300,000 of these $50 Android smartphones have been sold in Kenya, according to Wales and African carrier Safaricom’s CEO Bob Collymore. The pair were speaking at Vodafone’s Mobile for Good summit taking place in London today.
“What I always thought about mobile in Africa…is this [smartphone adoption] is coming in the future — in the future someday,” said Wales. “Well the someday’s happening faster than I ever realised.”
This favours Android, although rumour is that Apple is gearing up for this market too.
One other trend that also favours Android is the product release cycle. Apple is just one company that has one major release cycle per device each year (Mac, MacBook, iPod, iPad, iPhone). We just saw the big Apple release cycle in September and October. So it will be quite a while before Apple comes back to market with more new product. In the interim the slew of handset manufacturers making Android product will be releasing a huge volume of new product with bigger and better screens and powerful hardware. This will drive sales for Android up to the point where Apple’s momentum from the holiday season will be completely dissipated. Rumours are that Apple may move to a multi-upgrade annual model whereby they release two iterations of the iphone per year. We’ll see if this rumour pans out. If it doesn’t, I fully expect to see Android take share in Q2 and Q3 2013.
See some of the related mobile stories below. I have a slew of Android mobile reviews here to give you a sense of how much product is out there. Each major Android manufacturer has at least two flagship phones and a tablet to sell.
Also see the stories on Facebook’s SMS onslaught. The company was rumoured to be looking to acquire SMS competitor What’s App. But that hasn’t panned out. What is clear, however, is that many different services are coming that will circumvent SMS, which had been a money maker for mobile operators in the past. That revenue stream will dwindle to a trickle in the next few years. These products will be supported by advertising revenue.
“Having described the Revenue, Operating Margin and cost structure for Samsung Electronics it’s time to review their investment strategy.”
“The Mountain View, Calif., company had set a deadline of Friday for the last round of bids, according to three people involved in the process. The company also signaled that the deadline might be extended, one of the people said.”
Reviews
“When I first started playing with DNA, I was totally ready to dig into my bag of Star Wars cliches and tell you that this is indeed the Droid you’re looking for. Now, after using the thing non-stop for an entire week, I’m not quite as sure. Don’t get me wrong — for the most part, the Droid DNA is a truly excellent phone and I’m still downright smitten with the thing. It’s handsome, has more than enough horsepower to keep up with all but the most demanding users, and its screen is one of the best I’ve ever come across.
For those of you who embrace the bleeding edge and all its resulting foibles, buy this phone. The choice isn’t as clear-cut for everyone else, mostly because a handful of questionable decisions and curious oversights on HTC’s part mean that the DNA just isn’t as great as it could’ve been. A dearth of storage space and a wimpy battery are among the Droid DNA’s most notable misses, but if you’re looking for a shiny new smartphone as we descend into holiday madness, the DNA is definitely worth at least mulling over.”
“Android phones! There are some that I love. The HTC One X was one of those, thanks to a very attractive external package alongside an Android skin (Sense) that had a fairly light touch and didn’t mess with most of Android’s good features, but brought some nice additional touches to the mix. The HTC One X+ is like the One X, but made better in nearly every important respect. Not surprisingly, that improves my impression of it, too.”
“The Galaxy Note II for U.S. Cellular ($299.99 direct) is many things, but above all, it’s the most phone there is. It gives you more screen, more processor, and more OS than just about any other phone out there. It’s also a significant improvement over the first Galaxy Note , thanks to a faster quad-core processor and the Android 4.1 “Jelly Bean” OS, not to mention a host of Samsung-developed note-taking software improvements. If you think other phones are too small, and prefer something big enough to double as a miniature tablet that (barely) fits in your pocket, the Galaxy Note II reigns supreme. It’s the first recipient of our new Editors’ Choice award for phablets (phones with screen sizes ranging from 5.0 to 6.9 inches), and it’s also the most powerful phone U.S. Cellular has ever offered.”
“Samsung’s products continue to meet and exceed their own sales expectations, with the newest being their ginormous Galaxy Note II. In two months alone, five million units were sold globally, which as you may recall is still quite limited in terms of market availability. Now that the U.S. is able to get their overly-sized hands on the device, you can expect even more units to ship and their numbers to bulge.”
“I think Google has accomplished what they set out to do – create a 10″ tablet for those that want it and expect it to be an absolute dream device at the same time. Sure, the back is a fingerprint magnet, but that is really the only negative I can come up with. The display is gorgeous, the device is extremely fast and responsive, and it will receive updates for a long time to come. As an Android fan, that is literally all we can ask for.”
“Working this time with Samsung, the Nexus 10 is a good alternative to the iPad. I’ve been using it for the past week, and I love the gorgeous display and design. The latest Android software also brings some nice extras, such as enhanced voice search and support for multiple users. Plus, it’s $100 less than the latest iPad, at $399 for the 16 gigabyte Wi-Fi model and $499 for the 32GB Wi-Fi version.
It’s not without faults, though. Battery life could be better. But the major issue that prevents it from overtaking the iPad is app selection. For now, Android doesn’t offer as many apps designed specifically for tablet use, compared to iTunes. Still, for those who prefer the Android operating system and want the larger screen, or are on a budget, the Nexus 10 is a great pick.”
“According to sources at parts manufacturers, sales figures for the Nexus 7 have officially shocked Google. Originally, El Goog thought 2.5 million units would be sufficient to get them through 2012, but to meet demand for the popular 7″ tablet, Google has placed an additional order of 2.5 million to keep the masses happy. Just weeks ago, we still didn’t have any word that the Nexus 7 was even selling well at all, but ASUS put our minds at ease when they slipped and said they are shipping nearly 1 million a month.”
“For the Android purist, only an unlocked Nexus phone will do—since carrier-subsidized Android phones are somewhat compromised, thanks to their skins, carrier modifications, and infrequent OS updates. Enter the Google Nexus 4 ($299 direct), a totally streamlined smartphone running the new Android 4.2 Jelly Bean OS in its stock form. The phone is made by LG now, rather than Samsung, which made last year’s Galaxy Nexus , and the price is also very low for an subsidized phone—even $50 less than the Galaxy Nexus. It’s a great deal for what amounts to the cleanest—and in our opinion, best—Android experience you can get, despite a few significant flaws. That, along with affordability, nets it our Editors’ Choice award for unlocked smartphones.”
“So there’s definitely a lot to love when it comes to the Nexus 4 — there’s also a lot of areas where the Google phone manages to fall short. Make no mistake, the Nexus 4 isn’t the “end-all, be-all” of smartphones. That part we know. The bottom line is the Nexus 4 is a great device, made even sweeter by its more than reasonable price tag. As far as whether or not this device is for you, I feel like this phone caters to a specific group of people:”
“Google is relatively new at this whole online store for physical goods thing. Sure, they’ve been selling physical goods like the occasional developer phone or Google mug for a couple years now, but the recent launch of the Nexus 4, Nexus 7 3G, and Nexus 10 is unlike anything Google has dealt with before. I understand that, and I know that means there could be hiccups throughout the process. That doesn’t make my ongoing struggle in trying to purchase a Nexus 4 any better.”
“Using this hybrid device has certainly been a learning experience and it may make me think twice before I go out and buy another point-and-shoot like I have in the past.
The Samsung Galaxy Camera deserves praise in terms of being a good camera, especially when it comes running Jelly Bean, something a lot of Android phones can’t even say yet.”
“For years now, camera makers have slapped “Wi-Fi compatible” labels on digital cameras to try to convince consumers that they can easily access the Web and share photos from these devices. Technically, this is true. But they’re often much more clunky or complicated than advertised, especially compared to the photo-sharing experience you can get with a smartphone.
So Nikon has introduced a digital camera that’s meant to grab the attention of photo-happy smartphone owners and offer the best of both worlds: High-quality photos with easy sharing.”
Rumoured Launches
“Piecing together details from a handful of sites reveals that the HTC M7 will be equipped with a 5-inch HD display, Qualcomm APQ8064 quad-core processor and a 13 megapixel camera — all wrapped up in an aluminum unibody frame. As we mentioned earlier today, HTC plans to bring the HTC M7 to market in Q1. But, things may be moving a bit quicker than we originally expected. Sources claim that HTC wants the HTC M7 to launch in mid-Q1, which would allow the phone to be on the market for 1-2 months without direct competition from Samsung’s Galaxy S IV (expected to launch in Q2 of 2013).”
“Samsung’s flexible OLED technology has been in the works for sometime now, but it could finally debut as part of the upcoming Galaxy S4′s hardware complement. But before you start conjuring up visions of a bendable, foldable handset, it is sounding like the technology will be deployed more for its resistance to breakage than for its pliability.”
“Codenamed “Project J” after mobile division chief JK Shin, development of the new Galaxy S IV could be aimed for release by as early as April, according to analysts and tech blogs.
And, as smartphones increasingly look alike – the converging form factor – an unbreakable screen could be a big selling point for the Galaxy, which is battling Apple Inc’s iPhone to lead the $200 billion plus smartphone market.
The Galaxy S IV is also expected to have bigger and better display, powerful quad-core processing power and a 13-megapixel camera, with picture density improving to 441 pixels per inch (ppi), a big improvement from the Galaxy S III’s 306 ppi and better than the iPhone 5’s 326 ppi.”
“With the most significant growth in the smartphone market coming from low-end handsets that are popular in emerging markets, one prominent financial firm has said it continues to believe Apple will expand the iPhone lineup with a new entry-level model.”
“In his very first television interview aired Thursday night, Apple CEO Tim Cook was typically cryptic about how his company is looking at the television market. He would only reveal that they have “intense interest” in it.”
Patents
“A decision published by the U.S. Patent and Trademark Office on Monday saw an Apple patent, co-invented by late Apple cofounder Steve Jobs, covering multi-touch functionality have all 20 of its claims invalidated after the property was reexamined.”
“Whoa, this bombshell of news is sure to wake a few of you night-shifters up. The infamous “Steve Jobs patent,” aka the one where Apple has the right to call multi-touch technology theirs, looks like it could be invalidated by the United States Patent and Trademark Office, Florian Mueller of FoSS Patents reports today.”
“In an interview with The Wall Street Journal on Tuesday, former Google CEO and current Executive Chairman Eric Schmidt talked briefly about how his company is slowly drifting away from Apple, and commented that existing litigation is likely to continue “for a while.” “
““In the early days we gave employees iPhones primarily,” a Facebook spokesperson tells me. That decision and the rise of Android has left Facebook scrambling to get employees dogfooding its apps for Google’s OS. Now the company’s headquarters is plastered with these eye-popping posters asking Facebookers to “switch today”, and fix Android flaws with its secret bug reporting tool “Rage Shake”.”
“Congratulations, text messages! It was 20 years ago Monday that the first SMS was sent. You’ve come a long way.
Pity that all the tech giants want you to die.
Facebook fired the latest shot in the war on SMS on Tuesday morning, as the company made its Messenger app available to Android users across five countries — regardless of whether or not they have a Facebook account.”
“Facebook announced its first-ever product open to people without a Facebook account. Starting now, the Messenger for Android app, and later its iOS counterpart, will allow signups from non-Facebook users with just a name and phone number. Facebook seems to have realized the limited reach of Messenger as is and wants to let you message your contacts whether or not they’ve joined Facebook.
The rollout of Messenger for non-Facebook users begins today with the Android app in a limited set of countries, including India, Australia, Indonesia, Venezuela, and South Africa but will reach the rest of the world shortly. Messenger for iOS will also take signups with just a phone number and name eventually, but Facebook doesn’t have a timetable for when.”
Elsewhere
“To say that, if it was up to Motorola they’d be shipping all Nexus devices, but Verizon pushes them into customizing Android, may be over simplifying the situation. But that’s the gist of it. Manufacturers like Samsung and HTC genuinely believe their changes to Android are for the better. It’s what sets them apart from the crowd. Motorola is heading in the opposite direction, but like a dog on a chain, can only run so far.”
“Lookout, the mobile security company with ambitions to become the Symantec of the wireless world, is picking up a new backer, and and a major distribution partner in its bid to become a household name. France Telecom, owner of the mobile carrier Orange, is making a strategic investment in the startup, and it has also signed a deal in which Lookout will be preloaded on devices that it sells. Orange has 169 million subscribers and it will start first with Lookout service bundles covering antivirus protection and device tracking for Android devices, installing it as standard on devices in France, Slovakia, Spain, and the UK (through its EE JV with T-Mobile) starting in early 2013.”
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