The key pieces of the mobile internet ecosystem that have converged are:
A. From Device vendors and Internet players:
- powerful mobile devices and OS’s with fast processors, high res screens, rich GUI’s, GPS + compass, and very important software update mechanisms to keep the software on these devices at the latest version and to fix any bugs,
- rich mobile application development tools, over the air app distribution, and app charging/revenue share mechanisms including advertising insertion,
- sophisticated on-line cloud services that interact in real-time over the internet with the mobile device and applications downloaded onto it.
B. From mobile operators:
- fast mobile broadband networks (3G, 3G+ - HSPA) with wide geographic coverage,
- open internet access without any walled gardens,
- reasonably priced mobile data bundles meaning most users don’t have to worry about bill shock from ‘normal’ use of their device – I accept that international roaming is a major problem and that very heavy users blow out their bundles – there is still important work for the operators to do here.
With all these pieces coming together users are finding that a range of web activities (messaging, social networking, photo sharing, location services, games) actually make more sense on a mobile device than on a PC. Compared to the fixed internet mobile devices are generally less expensive, more portable and personal, and always ‘logged on’. Many more people will have access to the mobile internet for more of the time compared to the fixed internet.
The iPhone absolutely blew open mass market expectations for what a great mobile internet experience can be and all other vendors have been scrambling to meet that standard. Predictions from the U.S. are that fully half of all mobile users will have a Smartphone by Q3 next year (2011) – not just a ‘feature’ phone with a good camera or that can play music or that can sort of browse a few web pages – but a fully featured Smartphone.
Two vendor models have emerged for how these devices are taken to market:
1. One vendor makes the OS and the hardware – this model is currently dominant and is followed by Apple, BlackBerry and Palm.
2. The OS vendor licenses to multiple hardware OEM’s – this model is followed by Google, Microsoft, and Symbian. This is leading to a flurry of new Android devices and a wide range of WinMo in the past.
Given the staggering number of platform and device releases going on there are large shifts in market share taking place and it is important to understand how these changes are different in the U.S. vs. the rest of the world, certainly vs. NZ. The U.S. has become the leading Smartphone market as the recent focus on mobile from their computer and internet giants gains traction but they are having different success outside the U.S.
Below is a summary of recent announcements for each of the major Smartphone platforms and how they are performing in the U.S. vs. New Zealand. Note that the total Smartphone market is growing strongly so even if a vendor is static or losing total market share they could still be growing their customer base. U.S. statistics are well publicized but there is nothing formal for NZ so I have used my best estimates.
Platform – Apple iPhone
Recent major announcements:
- iPad details released
- iPad launched in U.S.
- iPhone OS 4.0 details announced.
U.S. position – Has rapidly grown to 25% of the total installed market but remained flat now for the last quarter, i.e. growing at same rate as total Smartphone market. Although note that Apple claim the iPhone OS (incl. iPod) accounts for 64% of all mobile browsing. Remember that the iPhone only works on one mobile operator in the U.S. - AT&T.
N.Z. position – Probably accounting for over half of all Smartphone sales and would be much higher if it wasn’t officially restricted to one of the two main mobile networks - Vodafone. Note that all iPhones sold in NZ are unlocked so can be used on either network and is in fact better suited to Telecom’s AT&T aligned 850MHz 3G network.
Upcoming activity – Current boost in US with iPad sales but unknown when iPad will be available in NZ. Expected new iPhone device (iPhone HD + video calling?) running OS 4.0 in July will also push up sales. Perennial questions over whether Telecom will begin offering the iPhone.
Platform – Google Android OS & OEM devices
Recent major announcements:
- Nexus One sold on-line by Google unsubsidized in U.S. although this sales distribution ‘experiment’ is not regarded as a success.
- Several new high-spec device launches across all carriers in U.S. from HTC and Samsung with 1GHz Snapdragon processors and very high resolution screens
- On-going improvement of cloud services such as translation and visual recognition to enhance mobile search
- Android 2.1 released – fairly minor update with some UI enhancements.
U.S. position – Huge amount of Android related activity means it is the real Smartphone growth story currently. Grew total market share from 4% to 9% over Dec’09 to Feb’10. Wide range of devices across all carriers and large marketing campaigns from non-iPhone carriers.
N.Z. position – Barely a ripple. Still only one Android device launced as of beginning of April, the HTC Magic on Vodafone in mid-2009. No market understanding of Android and its capabilities. Lacking the ‘killer app’ of spoken word turn-by-turn navigation as in the U.S.
Upcoming activity – Telecom have finally announced two devices for imminent launch in NZ - the low end LG GW620 ($699 - old version of Android) and the high end Sony Ericsson X10 ($1399). SE don’t have a great reputation with recent handsets on 3rd party OS’s and this one will have to be very good to justify the price tag. Telecom will have to work hard for these devices to get cut-through especially from late-June/July when the next iPhone is revealed. Really need to have the latest HTC and Samsung devices at sub-$1000 to generate any sort of buzz.
Platform – Microsoft Windows Mobile 6.x/Phone 7 and KIN + OEM devices
Recent major announcements:
- Windows Phone 7 announced at Mobile World Congress in Feb is a complete ground-up reworking of Windows Mobile. But no devices out until Oct/Nov/Dec 2010, and no ability for OEM’s to differentiate by ‘reskinning’. A brave and bold move that now must be executed on well.
- KIN One and Two just announced, teen/youth focused social networking and media uploading devices exclusive to Verizon in the U.S. (and Vodafone in rest of world - thx Mauricio), launching in May. Evolution of the T-mobile Sidekick from Danger, purchased by MS in 2008. Devices will continue to be built by Sharp and jointly branded. We will have to wait and see what reception the KIN gets upon release in the U.S. but this is a very interesting development with some commentators stating this shows the Smartphone market is maturing and fragmenting with specific products designed for specific market segments. A couple of important things seems to be missing - no IM (MSN Messenger is huge amongst NZ teens, not sure about U.S.), no app development so no games. The KIN move definitely raises questions as to how these devices will sit alongside Windows Phone 7, will services be interoperable, and Microsoft’s position in competition with its OEM’s. Also these devices will need to be cheap as 95%+ of the target market are PrePay users - if they aren't cheap then won't users just go for a fully fledged Smartphone. 2010 is make or break year for Microsoft's mobile strategy.
- HTC HD2 setting the benchmark of what could be achieved with WM 6.5. While selling robustly in markets it has been launched in it will struggle under expectations of WP 7 – and it is not upgradable.
U.S. position – Rapidly losing market share with all previous versions of Windows Mobile 6.x, dropping 19% to 15% of total base over Nov – Feb. KIN coming in May on Verizon is the only hope for most of 2010.
N.Z. position – Poor sales ever since Telecom stopped pushing the Okta range. Probably maintaining a few business sales on Telecom but very little else. Unsure if we will see the KIN or WP7 this year.
Upcoming activity – everything as above. Any new WM 6.5 devices will really struggle.
Platform – BlackBerry
Recent major announcements:
- Nothing significant.
U.S. position – Slightly gaining market share from 41% to 42% over Nov-Feb. Very entrenched in the business market but also seeing uptake amongst 20-25 age group due to the excellent BlackBerry Messenger (BBM) service on cheaper 2G Curve handsets. BBM is the best of IM combined with SMS to provide always-on group messaging, status etc. I have also heard that this service is gaining some traction in parts of Europe. It really requires the mobile operators to push BlackBerry into Consumer markets which is increasingly difficult with the outdated handset range on the aging OS.
N.Z. position – As most NZ business customers are in small businesses who use the BIS service (rather than Corporates who use BES) it is losing market share to iPhone. Vodafone declined to even launch the 'Storm 2'.
Upcoming activity – Nothing rumoured but expect some announcements out of the Wireless Enterprise Symposium (WES) at the end of April. Note that the ‘WES’ name is looking increasingly dated. Weaknesses with lack of cloud services and good touch-screen handsets as the ‘Storm’ failed to impress.
Platform – Symbian/Nokia & Sony Ericsson - MeeGo/Nokia & Intel
Recent major announcements:
- Nokia and Intel announced merger of both of their mobile linux initiatives into “MeeGo”. However strategy is unclear and will be difficult to get traction in an increasingly crowded market.
- Nokia N900 (on previous Maemo linux OS) released in some parts of the world but not given a major push.
U.S. position – Symbian devices are virtually non-existent. Nokia have slipped majorly in the U.S. over the last 5 years to the point where most analysts don’t even measure them against other vendors.
N.Z. position – Nokia has only a couple of business focused devices that come close to being called Smartphones in market, has really slipped since the N-95 revolutionised Consumer Smartphones. There are a couple of Sony Ericsson Symbian based devices focusing on high res cameras but are not true Smartphones.
Upcoming activity – unknown but desperately needed for Nokia and SE.
NB: Palm webOS is not available in NZ so is not reviewed.
Of course mobile is just one of the many battlefronts between the huge tech and industry players as they fight it out for ownership of our digital lives. From a vendor perspective it will be interesting to see if anyone outside of Apple, Google and Microsoft and their hugely rich and integrated services can stay in the mobile game over 2010. And how will those three differentiate themselves from each other?
Other related posts:
Brands producing apps only for iPhone
Steve Jobs: Rock Star!
The features Kiwis miss out on with Android 1.6
Comment by freitasm, on 17-Apr-2010 16:37
Also remember the KIN is a joint development with Verizon Wireless and Vodafone. It will be exclusive to a single operator in each country, and Vodafone has the rights to sell it wherever they operate. Vodafone has announced launch in Europe soon, nothing for AU/NZ yet.
Palm might well be rulled out. The company is gearing up for sale, it's WebOS Senior VP left the company yesterday and other high level officers were paid a bonus to stay. I wouldn't count Palm as a contender for anything these days.
Comment by Andy, on 17-Apr-2010 17:23
What about Palm? There is no mention of Palm OS or even Palm Smartfones on here
Comment by freitasm, on 17-Apr-2010 17:29
Andy, check the last line in the blog post.
Comment by Andy, on 17-Apr-2010 17:50
Didn't see that bit, thanks, what's a good step up from Palm not Apple though
Comment by BrentR, on 17-Apr-2010 18:51
Symbian and Meego/Maemo are two different platforms.
Comment by BrentR, on 18-Apr-2010 19:23
Not as confusing as some other manufacturers ;)
Maemo/Meego is only for the high end of the product range.
Symbian will probably be in the bulk of handsets.
S40 in lower end.
Comment by DS248, on 19-Apr-2010 14:09
Interesting - title of blog is "Smartphone landscape at beginning of Q2 2010"
Your summary appears to heavily downplay Symbian.
In what way are phones such as the n97mini & 5800 any less capable as smartphones than an iphone, and various Android and Windows Mobile phones?
While the share has been dropping, various sites still put Symbian at ~50% of the total smartphone market in 2009, with double the market share of the next highest competitor and 3x total iphone sales.
In NZ, the 5800 has been ranked around 1 or 2 for all mobiles on PriceSpy for the last few months (not certain what their rank is based on, but is presumably related to searches, popularity, sales, or similar?)
Comment by paulspain, on 19-Apr-2010 17:59
Windows Phone 7 - I realise nothing official has been announced about release in NZ or Australia however I would anticipate a global launch in order to attract maximum press coverage. It's still a few months out so I likely we'll hear more on that in Q3.
Regarding Palm - who led the way with their early Palm Pilot PDAs then Treo smartphones - I don't think they will ever increase their market share again.
Comment by Linuxluver, on 19-Apr-2010 21:54
Looks like sound, balanced analysis.
It's good to be reminded how most people behave so I understand that my own market behaviour is an exception.
I've looked at all the local phone offerings, including iPhone, and they all clearly communicate the message 9to me, anyway) that it's all about the vendor....not me, the customer. This is most strongly demonstrated by the Apple eco-system, which is why I declined the invitation posed by my iPod Touch.
Vodafone offering the HTC Magic in NZ broke down a lot of bariers for. I'm on an account - which I would normally never do. In fact, I have two accounts, one mainly for voice and one mainly for data. Both driven by the possibilities and capabilities of my HTC Magic.
But Vodafone has failed to follow up that model in a timely way and I have now moved over to the ranks of those who import their phones because the local telcos just don't offer anything I want.....I know I am now outside the mainstream....and for me it has meant freedom, greater choice and - ultimately - is saving me money.
So I read analyses like this knowing they are almost certainly true for the vast majority.....yet they do not ring true for me, peronsally. Not even close.
I sometimes wonder why that is. I'm the ideal consumer and market participant in many ways. I research what's on offer and I set about obtaining what I see as best and offers best value.
That process lead me to order a Nexus One from the US. It's in my hand. It's my phone / camera (still & video) / multi-media thing / Internet Everything / data store of essential files / e-book / content-creation device.....and there is no walled garden to hem me in.
I would have bought it from an NZ telco, but no one would sell it to me. Now I know I dn't have to care whatthey sell. I can have whatever i want from among all the great phones on Earth compatible with NZ networks.
I'm frankly surprised the market at large isn't similarly self-liberated. But they aren't. Frightened...or incurious perhaps.
But then I care about this stuff because I see it as ultimately liberating and empowering.
I'm not like most people, I guess...because Tim's analysis is probably spot on....yet at the same time fails completely to account for people like me. We may be numerous, but as a prtion of the whole market, we are trivial and irrelevant.
It's important to keep that in mind. :-)
Comment by Linuxluver, on 20-Apr-2010 16:36
@timmyh - The Sony Xperia 10 is a seriously nice phone from what I can see from the specs and the videos I have seen. Reviewing the specs, there is a lot of good stuff. For example, : 1GB of internal storage. This phone won't need 'Apps2sd' if that means space to store apps. I don't know if it does.
It has 384MB of RAM. Not bad. It's twice what the HTC Magic 32B has. It's 100MB more than HTC Hero and Magic 32A. But the Nexus One and several others now have 512MB of RAM....and that translates into a faster phone that doesn't have to swap or reload apps.
Android v1.6. A solid, reliable and very fast performer on a phone like this. But no multi-touch by default.
Based on the competing hardware out there now, the price - at this stage - would have to be comparable with the A- grade of phones now out there. The Nexus One can be had for about NZ$950-1050 today, including GST, delivered to your door, depending on x-rates. The HTC Desire is slightly cheaper, but is slightly better spec'd than the Nexus One.
So would I pay $1399 for an Xperia X10? Probably not. I might pay anywhere up to $1050 (incl GST).
Another factor is can it be modded? Great phones can be turned into OK phones by vendors who restrict function for marketing or other reasons. How hard is it to root the phone and make it all it can be and keep it up to date with the latest source code?
My Nexus One is now running Cyanogen Mod 5.0.6...and that includes new source from the Google source tree as of March 31st, 2010. Can any phone vendor offer that kind of speed in keeping up with fixes, mods and adding new features? Can I update my own phone if the vendor is tardy...or disinterested? All important questions from a customer who wants to keep his $1000 phone alive and improving....demonstrating the value of his/her investment in it.
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