Tag Archives: Smartphones

Samsung’s road to smartphone dominance is a dead end

How many stories in the tech press have you read over the past year which posited a theory of Apple being in trouble? Tens – probably hundreds of articles have appeared which put forward the idea that Apple’s needed to move the iPhone downmarket and create a cheaper version to gain market share. Failure to do this means doom.

So let’s take a look at a company which has followed exactly this plan, competing at every level of the smartphone market from cheap devices for the masses through to expensive, high-end phones: Samsung.

Samsung’s earnings are out, and they’re not pretty:

“Earnings will remain stagnant this year as the explosive growth of the past two to three years seems to have ended,” said Lee Sun Tae, a Seoul-based analyst at NH Investment & Securities Co. “Although the lower-end smartphone market will continue to grow, the scale of profit from that segment doesn’t compare to the high-end market so the growth seems limited.”

Samsung’s problem is simple: at the low end it is being squeezed out of existence by low-name and no-name Chinese manufacturers, all happy to stick “good enough” Android on their phones with no costly extra software. Although the company has tried to differentiate its products by value-ended extras and services, for price-conscious consumers these are meaningless or, in some cases, a turn-off.

At the high end, it is being squeezed by Apple, which has proved it can compete in any market.

If you want to make a comparison to the PC market, Samsung is like IBM was: a “quality brand” producing products which aren’t sufficiently different from cheaper commodity players like Dell. In the smartphone market, for Dell read Lenovo or (long term) Xiaomi.

Why did Microsoft buy Nokia?

Why did Microsoft buy Nokia?1 Why did the company choose to spend €5.44 billion of its cash reserves to buy a company that was already a close partner for Windows Phone, and which it had committed to pay billions in “platform support” cash2 to use its operating system?

Here's the official reasoning:

Building on the partnership with Nokia announced in February 2011 and the increasing success of Nokia’s Lumia smartphones, Microsoft aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing. For Nokia, this transaction is expected to be significantly accretive to earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses.

The part about “faster innovation” is curious. Nokia never had a problem with innovation: it holds one of the largest patent portfolios in the tech industry, and collects billions of dollars per year to prove it. But what it always had was a problem with bringing that innovation to market. Nokia engineers were talking about single-button touchscreen smartphones years before the iPhone, but failed to bring their brilliant prototypes to market.

And failing to bring great concepts to market is something that Microsoft, too, has been guilty of. Potential innovations like the Courier floated around and then died. The company had prototype ereader hardware around years before the Kindle, and failed to bring it to market. In both cases, the reason for the failure to bring innovation to market was simple: protecting the Windows brand. If it doesn't run Windows (or isn't called Windows), Microsoft won't ship it – no matter how innovative it is.

What about the other reasons? Marketing, branding and advertising? What “synergies” (read: cost savings) can the two companies find there? Microsoft/Nokia might be able to drive better deals for ads and consolidate its work into a single agency, but there aren't billions of dollars of savings to be made there.

Marketing? If Microsoft wants to sell anything, it's going to have to ramp up the quality and quantity of marketing. Samsung outspends everyone else enormously when it comes to marketing, and even the cash reserves of Microsoft won't make up for a gap that big. Can Microsoft really compete with a company that spends more on marketing than Apple, HP, Dell, Microsoft and Coca Cola combined?

Maybe it could if the quality of its marketing was up to Apple's standards. But take a look at the advertising and marketing work for Surface and I you'll see why I have doubts it can deliver. When you create a tablet computer and choose to emphasis how great it works with an optional £100 keyboard, you're either trying to cover up the product's deficiencies as a tablet, or utterly missing the point.

Branding? Only if you ditch the Nokia brand. Otherwise, you have two brands, which is confusing and expensive. And given the license to “Nokia” that Microsoft has paid for, unlikely.

So if the “official” reasons make such little sense, why did Microsoft buy Nokia? Ben Thompson makes a good case that the Microsoft/Nokia deal was driven by an immanent switch to Android – or bankruptcy:

I theorize that Nokia was either going to switch to Android or was on the verge of going bankrupt. (I suspect the latter: part of the deal included €1.5 billion in financing available to Nokia immediately). And, had Nokia abandoned Windows Phone, then Windows Phone would be dead.

Which brings us back to that point about how Microsoft's failure to bring innovative products to market could be ascribed to its determination to protect Windows. Nokia was either going to go down the tubes, or admit defeat and move into the Android camp. This would have killed Windows, and condemned the Windows brand to the PC ghetto. And Windows is sacred: a few billion dollars of offshore cash (which Microsoft couldn't bring back into the US anyway without incurring lots of tax) is a small price to pay to “protect” the sacred cow of Windows.


  1. Yes, I know it's only bought the devices and services divisions and that the new/old Nokia will continue on. But to all intents and purposes, Microsoft has bought what most people think of as Nokia. 

  2. It may actually turn out that the billions in platform support would have ended up more than the amount Microsoft paid for Nokia. Looked at purely in this way, this is a good deal. 

Good luck with making money from Android apps

Android App Store Is 57% Free Compared to Apple’s 25% – app stores – Gizmodo:

App store analytics firm Distimo recently released a bunch of juicy info about the major mobile app stores, and the results are pretty interesting. For one, Android has a much higher proportion of free apps.

Or, to put it another way, you’ve got even less chance of making money on Android than you have on iPhone.

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Sync your Mac with an LG phone with FoneSync

Shocking as this might sound, not everyone wants an iPhone. And if you have a phone from LG, you might want to check out FoneSync, a new application from Novamedia which lets you sync contacts and calendar information from your Mac to a variety of LG phones.

At present, only three phones are compatible: The HB620T, KF750, and KU990. However, other LG phones might work, and Novamedia is offering a PhoneInspector application which you can download to check if your phone is supported.

FoneSync costs €19, and is available now.

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The iPad and me

There’s a million posts around about the iPad today, and there will be a  million more tomorrow. My reaction is simply that I’ll be buying one, because I’m a geek, and that’s what I do.

As for whether it’s good or bad, game-breaking or Apple-breaker, that I’ve yet to learn.

I learned with the iPhone never to judge Apple products until I’d  had them in my sweaty paws. As a dyed-in-the-wool BlackBerry user, there was not way I was going to get an iPhone. Not a chance.

However, as a general nerd, I felt duty-bound to experience the interface – so I bought an iPod touch. Within two weeks, I’d bought an iPhone. Having used the interface  on the touch, there was simply no way that I was going to not have that lovely interface on my phone. It made my perfectly-good BlackBerry feel like something from the 19th Century.

So, till I actually have one in my hands, I’ll refrain from too much comment. People who judge Apple products by looking at the spec sheets simply don’t get it.

(Image by MarketingFacts)

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There’s these great cut-down computers, right…

Daring Fireball: Maybe Instead of Two Cars, You Just Need a Car and a Bicycle:

“The idea of a computer that does a lot less — leaving out even things you consider essential, because you can still do those things on your other, primary computer — is liberating. That’s the opportunity, and that’s the idea behind Chrome OS and Litl and even Android and iPhone OS.”

The idea of it is liberating, as I’ve found out with my experiences with netbooks over the years. The problem is that while the idea of it is liberating, the actual reality of it is less so.

While my MacBook Pro takes up a larger bag, I’ve carried it around with me much more lately because it really doesn’t weigh that much more. And the rest of the time, I have my iPhone – a constantly-connected device which lets me take notes, write short documents.

Chrome OS is an interesting experiment, but in the long term the trend is still towards more power on the desktop – and in the lap.

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Come, gentle readers: Help me buy a new phone (Part 1)

Within the next month, my contract with o2 runs out – and that means it’s new phone time. However for the first time since the release of the iPhone, I face a serious choice: do I stick with iPhone, or not. Here are the runners and riders.

iPhone 3GS

Let’s be clear: I like the iPhone. Compared to everything that came before it, it’s a wonderous thing of amazement. There’s the responsiveness. You touch it, it responds, and you almost purr with pleasure. Yum. This thing was designed by someone who really, truly understands that the most important thing about a touch interface is how it responds to being touched. Sounds obvious – but try any one of the competitors, and you’ll quickly see how few companies have really got this fundamental point.

But… I’ve run into some walls with the iPhone. Things which actually have begun to drive me what can only be described as “batshit crazy”.

First, multitasking – or rather the lack thereof. I cannot begin to describe how painful the lack of multitasking is. I’ve used an OS with multitasking that I’ve forgotten what computing was like before it. Or rather, I had forgotten it – until the iPhone.

Using iPhone is like taking your lovely new MacBook Pro, ripping out Mac OS X, installing System 6, and disabling MultiFinder. But still letting you run the powerful lovely apps you’re used to. Just one at a time. It’s dark ages computing – and I’m bored of it. The novelty has worn off. I can multitask – why can’t my phone.

I don’t care that I might do terrible things – like making my phone run at less than optimal Jobs-dicatated performance. It’s my phone – treat me like a grown up and let me do it.

Multitasking is the big beef, by it’s by no means the only one. There are plenty of elements in the iPhone which are half thought out, or just plain half baked.

Take email. Like a lot of people, I have work and personal email accounts, and I check both a lot. And on the iPhone, the elegant, minimal iPhone, it takes four taps to get from one inbox to the other. By happy coincidence, that’s the same number of taps it takes to type “suck”, which is what the iPhone’s email client does.

This “make ‘em tap” approach is elsewhere, too. Tethering, for example, takes five taps from Home Screen to turning on, and the same five if you want to turn it off – which is, of course, what you should be doing. This should be on the home screen, but it’s not. It’s almost like the developers were so pleased with how well tapping and scrolling and touch generally worked, that they decided to make you, the user, do more of it so you’d appreciate just how responsive the interface is.

Worse yet, no developer other than Apple can create the simple app to do it, because that is a Part Of The OS Into Which Only Apple Is Allowed. Thou shalt not mess around with those bits, sayeth Steve.

And that’s a great example of the other great flaw of the iPhone: developers cannot fill in the bits which Apple doesn’t do right, if it means digging into some bits of the system. Leaving aside the fact that the App Store is broken, what developers can do is firmly in Apple’s control, and the company keeps tight reign on where they’re allowed to poke. Want the ability to link up an external keyboard to your Mac? Can’t have it – not because developers don’t want to make one, but because Apple won’t allow them to do it.

But… having said all that… the iPhone is still my front runner. Why? Put simply, because it’s the path of least resistance. I have lots of Apps, which I like, and I’d need to install and run some of them on my iPod touch if I didn’t have an iPhone. And that touch interface really is seductive. So for all my complaining… maybe iPhone is my best option.

In part two, I’ll look at the two other contenders: Android (of some kind) and the Palm Pre.

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The App Store and Macworld – Malice or stupidity?

There are two possible explanations for Apple’s rejection of Macworld’s app about the iPhone on the grounds that, erm, it mentions iPhone:

Reason 1: Malice

Apple rules the app store with a rod of iron. It has rejected the app because it really, truly wants to “protect its trademarks” and will punish those that fail to obey.

However, one of my general rules in life is that you should be reluctant to attribute to malice something which can be explained by out second option…

Reason 2: Stupidity

Apple is stupid. Something has gone so badly wrong with the management of the app store that it’s employees aren’t capable of making a simple decision like this and getting it right. Option 2 sounds the most likely one to me. But essentially the end result is the same: an app store which is increasingly a poor experience for developers, which is something that will ultimately show in the quality of the developers it attracts.

The App Store is broken. Now, Apple, you need to fix it.

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The One Million Application Store

The iPhone App Store is now over the 90,000 mark, and marching inexorably towards 100,000. Responding to my and Scoble’s posts on the App Store numbers, John highlights the fact that I think I alluded to in my post: That the position is very similar to the old world of Mac vs PC from the 1990′s (and still true today).

To John, and I suspect a lot of Mac users, quality of applications is more important than quantity. After all, Windows has many, many more applications than the Mac. If you’re talking about the world of the personal computer, there’s only one company that could use the phrase “there’s an app for that” – and it isn’t Apple.

However, I think that is missing the long-term picture of the App Store, and how it changes the game compared to the world of the PC. 100,000 applications, even of low quality, is already a big number. A very big number. Having searched around, I can’t find a number for the total number of Windows applications, but I’d hazard a guess that it’s not an order of magnitude larger than 100,000.

In other words, I think that the total number of iPhone apps is already within distance of the total number of Windows apps – and given that the iPhone is much, much younger platform that’s significant. Now relate this to this point of John’s:

“It’s a sign that the iPhone and the App Store are popular, and it’s a self-perpetuating form of popularity, in that developers go where the action is, and users go where the software is.”

More applications = more developers = more applications = more users = more developers… you get the idea.

Given the astonishing growth of the number of iPhone applications, the question should be this: What happens when (and it is when, not if) there aren’t 100,000 apps, but one million? How will that change the game? When “there’s an app for that” isn’t just true in a sorta, kinda, advertising-ish way but literally true, how does that change what people can do?

I don’t actually know the answer. I suspect, in fact, no one does – that the ability to know that whatever you want to do, there’s an application to do it, and importantly that you can find it all in one place – changes the relationship between software, platform and usage so dramatically that we’d be entering a different world.

This is related to a point that Dan Lyons made in one of his best recent Fake Steve posts. The worlds of applications and content are meeting and blurring, and what the outcome of that will be is really unknown at the moment. The next generation of content creators will think of everything as an application. It’s not a video, it’s not a book, it’s not even a web site. It will be a genuinely interactive expression of an idea. The iPhone is starting to give us a glimpse of that. The Apple tablet (if there is one) will give us another glimpse.

Think of it that way, and suddenly even a one million app store isn’t big enough. Ten million? Twenty? Who knows?

But it will be fun finding out.

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Next quarter may be good one for Apple in European smartphone market

While the iPhone has been the big smartphone hit in the US, in Europe/Middle East/Africa (EMEA) Nokia continues to lead the pack, with a market share figure of 71.2% according to the latest figures for Q2 2008 by Canalys.

BlackBerry-maker RIM and Windows Mobile specialist HTC are in second and third place, with 7.2% and 7% respectively. Motorola and Samsung follow these two with 3.4% and 3.2%, while “Others” – including Apple – combine together to reach 8%.

However, it could be good news for Apple next quarter:

“Both HTC and RIM have been making steady progress toward the one million shipments per quarter mark in EMEA and are now very close to each other in market share terms, but it is possible that they will be overtaken by Apple in Q3 following the launch of the iPhone 3G in many countries in the region.”

That, of course, implies that Apple will go from a market share of less than 3% to over 7%, which would be impressive growth. It would also be an indication that the iPhone has really arrived as a worldwide competitor.