Mobile Market Wrap-up, October 4

Last week was a big week for new device releases, which seems to be happening more frequently these days.  The two most interesting cellphone releases were the T-mobile (HTC) G2 and the Nokia N8, RIM announced a tablet, and a themed Star Wars cellphone went on sale at Verizon.

The G2 is T-mobile’s follow up to the first commercial Android device, the G1. In the two years since the release of the G1, cellphones have changes radically, and the differences between the G1 and G2 are a great example of the advancements. The G2 takes advantage of T-mobile’s HSPA+ network, which allows for download speeds in excess of 20Mbps (faster than most home internet connections), and has a “stock” version of Android. A “stock” version of Android allows the Android operating system to be upgraded faster, which I have found to be a major benefit of the Nexus One that I’ve been using. I consistently get Android operating system updates 2-3 months before anyone else. The bottom line, if you’re looking for a clean Android experience and can’t get your hand on a Nexus One, the G2 is the next best thing.

Nokia also began shipping its N8 smartphone last week. While still the leader in both overall and smartphone shipments, Nokia has become all but forgotten due to all the iPhone and Android hype. It’s quite an unfortunate situation as Nokia still makes great hardware, and the N8 is no exception. However, since Nokia does not have a strong relationship with any of the major US carriers, no one has launched a major marketing initiative around the device. Unless Nokia really steps up both their marketing effort and carrier relationship status in the US, I would suspect that Nokia will continue to fade away into a niche player in the US market, which is a shame based on the quality of their hardware. If you’re seriously interested in picking up the device, your best bet is going to be to shell out the cash and buy the N8 directly from Nokia.

While I am not a huge tablet fan, BlackBerry maker RIM announced their tablet called the PlayBook last week. My first reaction was that RIM is making a huge mistake, until RIM co-CEO Mike Lazardis spoke about it. RIM is positioning the PlayBook as a companion to their smartphones targeted directly at business users. I think BlackBerry may be onto something. Businesses may be hesitant to buy employees iPads due to the level of distraction from games and apps that are available. With the PlayBook, enterprises will be given more control and the majority of applications will be business oriented. I suspect that businesses will be more receptive to buying their employees PlayBooks, which could overflow into consumer sales, much like their BlackBerry smartphone platform. In essence, I like the strategy, now it is up to RIM to execute.

In other handset news, another interesting device released last week was the R2-D2 themed Droid 2 from Motorola. Themed cellphones is an untapped market in my opinion. People are always looking for a way to stand out from the crowd, and themed cellphones are a great way to achieve it. I’m very curious to see how well these R2-D2 themed units sell. If they sell as well as I think they should, I suspect that you will see a lot more themed cellphones making their way into the market.

Finally, if you are interested in what the future holds for mobile phones, then take a look at this Mozilla video for a concept phone called “Seabird – A Community-driven Concept Phone.” Mozilla does not have any intention to build the phone, but it is clearly a sign of what is possible and what could be coming to mobile phones in the near future. I particularly like the idea of the included Bluetooth headset/mouse as well as the projectors that allow you to turn any surface into an interactive screen. I suspect that you will see phones within the next 2 or3 years with this type of technology, and I can’t wait!

Mobile Market Wrap-up, September 20

In last week’s mobile market wrap-up, I referenced a rumor that Windows Phone 7 is launching next month. I’ll admit I was impressed at the speed with which Microsoft completed the development of Windows Phone 7 and that they hit their end of year release target, which I thought was an impossible goal they set for themselves earlier this year. Well, last week the caveats started to emerge. Apparently, in a trade-off for schedule, Windows Phone 7 will be available on GSM phones only, which eliminates the largest carrier in the US, Verizon, from launching the device until mid-2011 at the earliest. While the engineering side of my brain understands the trade-off, the marketing side sees one word – FAIL! After seeing how the iPhone’s lock to AT&T’s network has limited its market share in the US, I am surprised that Microsoft would take this shortcut. I guess if you had to cut one of the two technologies, CDMA would be the first to go since it is not as prevalent worldwide as GSM. However, for a project of such importance to Microsoft, I would have figured supporting both technologies would have been a top priority. I have a feeling that Microsoft will regret this trade-off as it will allow Android to become even more entrenched as the smartphone OS of choice on Verizon.

In other handset news, Nokia and BlackBerry maker RIM, two manufacturers that are falling out of favor with investors, made major announcements last week. At their self-hosted Nokia World Show, Nokia touted that they are still the industry leader with 260,000 smartphone activations a day (compared to Android’s 200,000 and iOS’ 80,000). Unfortunately, perception is reality, and while Nokia still has the lead, they are suffering from a perception problem that John Biggs at MobileCrunch so eloquently describes. Along those same lines, RIM announced earnings last week. While the results blew past analyst expectations and a bright future was painted by management, the reality remains that Android continues to rapidly close the gap on RIM’s dominance in North America according to the latest ComScore stats. Both RIM and Nokia had better not be content to rest on their laurels because as they say in the mutual fund world – “past performance is not an indication of future performance.” I’m not surprised that Nokia and RIM are doing well when you look at past and current stats. When you look at trends, though, both Nokia and RIM should be concerned, and I mean very concerned.

As usual, I wanted to wrap up this week on a fun note. Motorola is launching a Star Wars themed R2-D2 Droid handset later this year on Verizon. While the hardware and wallpapers for the device look cool, they are not nearly as cool as this prototype Star Trek Communicator themed Nokia device. It’s quite a shame that only 14 were made back in 2008. I’m not even a Star Trek fan, and I found this concept prototype just too cool. Definitely worth spending the 9 minutes to watch the video.

The Verizon iPhone Winner: Android

Rumors of a Verzion iPhone are never ending, and they are reaching an even higher crescendo this summer. The latest rumor is that the iPhone is going through field testing on the Verizon network and that they’re ironing out the business details. There have also been lots of other interesting signs this summer – AT&T cozying up with Microsoft’s Windows Phone 7, Apple ordering CDMA parts, and exclusivity-ending statements in AT&T filings with the SEC.

The prevailing opinion is that Verizon will help Apple sell a lot more iPhones. While I am sure that there would be an opening weekend feeding frenzy for the devices, I don’t see Apple as the big winner – Android will be.

Why?

1. The iPhone is a shiny object
Apple is exactly what Verizon wants to lure more people into its stores. Once there, they will see lots of great phones, Android phones: the Droid Incredible, the Droid X, the Fascinate, and the Droid 2. All of these devices can hold their own with the iPhone. Plus most of these phones will be cheaper than the iPhone. I’m willing to bet a lot of casual buyers will get drawn into a Verizon store because of the iPhone but leave with an Android device.

2. Verizon’s bait-and-switch strategy
Verizon will heavily market the iPhone to draw people into their stores, but once there, people will see signs pushing Android, and lots of them. Verizon has clearly aligned itself with Google. Verizon and Google’s joint net neutrality proposal and rumors of a Google Chrome tablet exclusive for Verizon should indicate who Verizon’s real partner is.

3. Just another face in the crowd
At an AT&T store, the best device was an iPhone, hands down. Not the case in the Verizon store. Instead of being the top dog, the iPhone will be just another smartphone. In fact, people will notice greater diversity with Android handsets with regards to form factor and screen size as well as features like a slide out keyboard. Android offers a lot more versatility over the one-size-fits-all iPhone approach.

4. There’s no reason to wait
If someone really wanted the iPhone, they should already have it from AT&T. Sure AT&T service on the iPhone is poor, but people who want the iPhone  have already moved past that and just sucked it up – they’ve had four years to switch carriers. The only place there could be some pent-up demand is on corporate Verizon accounts where it was cost prohibitive for people to switch.

5. New customers, but only for Verizon
The majority of people who want the iPhone on Verizon want to switch from AT&T. A recent study showed that 1 in 3 AT&T iPhone users want to switch. I believe this is the same group who are feeding the rumors as well. They must think that if they wish it hard enough, Verizon will pick up the iPhone and give them freedom from AT&T. In fact, if the Verizon iPhone winner is Android, the loser is AT&T.

The bottom line – it’s inevitable that the iPhone, or an Apple equivalent, will make it to Verizon. It would be silly for Apple not to let it happen. If I was Google, I wouldn’t be concerned. In fact, I’d relish it. It will only fuel Android’s rapid growth.

Mobile Market Wrap-Up, August 16

Yes, I’m a day late this week, but you know how it goes. It’s been one of those weeks – already!

Following up on last week’s statistics, two more interesting reports were released last week. The first I’d like to highlight is from Chetan Sharma, a consultant in the mobile industry. He reports on mobile statistics quarterly, and his latest report indicated that mobile phone penetration is the US is nearing 100%. The number needs to be taken with a grain of salt as a lot of people these days are carrying two phones (me included), so the real number is likely lower – probably around 75-80%. Still yet, even at 80%, it’s clear that the mobile market in the US is nearing saturation and that brands and companies who do not have a mobile marketing strategy are missing out on a great opportunity to connect with consumers.

The other interesting report was released by the Gartner Group. The first statistic to highlight from the report is that mobile device sales grew 13.8% last quarter, so the market is definitely healthy and growing. A more telling statistic was that Android surpassed the iPhone in units sold worldwide last quarter, and outsold RIM in the US. As I pointed out in last week’s wrap-up, Android just keeps on rolling. Units sold is a clear trend of future overall marketshare, so I would expect to see Android make more gains in overall handset marketshare in the coming quarters.

Speaking of Android, two new Android handsets of note were released last week – the Motorola Droid 2 on Verizon and the Dell Streak on AT&T. The Droid 2 is a refresh of the original Droid while the Streak is an interesting “hybrid” device. I say “hybrid” because it sports a 5″ screen which makes it much larger than what people consider a phone but smaller than the new tablet form factor established by the iPad. It seems like an awkward tweener size, so I’m expecting it to be a device people will use a companion to a simple flip phone rather than their primary device. Either way, the diversity of Android devices in terms of screen sizes, features and form factors is exactly why Android is dominating the market. As opposed to the one size fits all Apple approach and the flavor of the month QWERTY keyboard BlackBerry approach, Android devices are available in all sorts of shapes and sizes at all types of price ranges. It’s easy to find an Android device that has the features you want to fit your budget.

Finally for this week is a fun survey that was released by dating site OK Cupid. The survey talks about how to make yourself look more attractive in digital photos (seems like it would be important for online dating). So what does this have to do with mobile? Well, about halfway down the page is a claim that iPhone users have more sex than Android and BlackBerry owners. So here’s the question, are the results of the survey accurate, or do iPhone users just tend to stretch the truth more than their smartphone counterparts?

Mobile Market Wrap-up, July 26

It’s been a while since we’ve done a mobile market wrap-up, and it’s not been for lack of news in the mobile industry. Innovation in the handset market has continued at a break neck pace, and it doesn’t appear that it will slow anytime soon. A lot of high-end phones have hit the market this summer, with the key ones being the iPhone 4.0 (AT&T), Droid X (Verizon), HTC EVO 4G (Sprint) and Samsung Vibrant (T-mobile). There has been a trend toward larger phones with higher resolution screens. Later this summer, the Dell Streak smartphone will be released that has an even larger, 5-inch screen. Personally, I can’t see using a device that big as a phone – it needs to fit comfortable in my hand or in my pocket to be my everyday device. It’ll be interesting to see if the Dell Streak breaks new ground, or if proves to be too big for the average consumer to handle.

The releases of these new smartphones have not been without troubles. Even the iPhone 4.0 has had its share of issues, primarily with reception. The issue got so bad that it forced Apple to hold a press conference with Steve Jobs responding to the criticism. In Apple style, they did a great job of spinning the problem and declaring the iPhone reception as good (or as bad, depending on your viewpoint) as every other smartphone. I thought the point of paying the “Apple tax” was to be a cut above everyone else, not as good as the competition. Either way, the iPhone 4.0 is still the class of the field these days, and it certainly helped Apple post great earnings for last quarter. Whether you love Apple or hate them, one thing is certain – they are posting impressive results!

In addition to the iPhone 4.0, the Droid X from Motorola that launched on Verizon has also run into its share of issues. Screen problems are plaguing the device, although both Motorola and Verizon have been quick to step in and remedy the issue. The increasing problems with smartphone introductions leads me to believe that manufacturers are rushing devices out the door prematurely to save/gain marketshare at the expense of quality. Manufacturers need to start doing a better job of quality control in order to preserve consumers’ trust in purchasing new devices.

Finally, one large player that has been absent from all of the mobile discussion has been Microsoft. Once a leader in the smartphone market, they have become a laggard. They are trying to stem their losses with a new OS called Windows Phone 7 (WP7). Microsoft is working to push out the OS by the end of the year, and it appears on schedule as they released hardware last week to Microsoft employees and select press members for review. Initial reviews have been mixed, and I get the feeling that the first release of WP7 will be half-baked with rapid improvements planned, similar to Apple’s original iPhone release strategy in 2007. Unfortunately for Microsoft, the market has shifted dramatically since 2007. iOS and Android are mature enough that I’d be surprised if users are willing to adopt an immature smartphone platform. While Microsoft has lots of resources to place behind WP7, I predict that they will compete with HP/Palm for third place in the smartphone market behind leaders Apple (iOS) and Google (Android).

If you’ve picked up one these, or a different, handset this summer, leave a comment – I’d like to hear how your experience has been. I’d be particularly interested in hearing from anyone who picked up a Samsung Vibrant on T-mobile. It’s the most underrated phone on the market in my opinion, and variants of the device will be available on AT&T, Sprint and Verizon by this fall.