I really hate bad reporting by any major publication. And now the Guardian - usually excellent in reporting about mobile - has totally goofed it up with their article "How the Smartphone made Europe look Stupid" by Richard Wray. This is gonna be one of my 'rants'...
Richard Wray the Communications Editor for the Guardian, has a long history of studying mobile. He used to be with the publication The451 all those years ago and had several posts with media reporting on technology. Now he seems to have been drinking that West Coast cool-aid and gotten all drunk on the hype. He starts his article writing "The European giants that pioneered the mobile telecoms industry are now stumbling in the wake of American and Asian rivals."
Richard then goes on to add "For two decades, Europe's mobile telecoms sector has considered itself a world leader. It had the biggest names, the technological knowhow, the most customers. Over the past year, however, the hegemony has been smashed." Richard adds that Europe is now a flyover region not worth stopping at, because of how much it has fallen behind. He then points to where the innovation is happening: "All the service innovation is being done on the West Coast of the US, and all the manufacturing and technical innovation is being done in the Far East."
He then mentions that "access to Google, Facebook, and Twitter" on phones, is the services customers want; and the devices they "covet" are the iPhone and the Blackberry. Richard then adds HTC at the top end and Huawei and ZTE at the low end of smartphones as the global leaders. Richard points out that Microsoft is its "latest attempt to break into the market".
In the Guardian article he then mentions that Greece is one of the PIGS nations (Portugal, Italy, Greece and Spain), suggesting that because Greece's economy is in trouble with the Eurozone economic rules, that means apparently also that Greece (and the other PIGS) are struggling with mobile telecoms?
Richard takes a historical comparison point from the 1980s mentioning Motorola, Nokia and Ericsson. He also brings networks clearly as 'valid game' in his argument, as he points out that US carrier/operator giant Verizon is going to be switching its technology from the CDMA evolution path to the 'European' GSM evolution path later this year. He says the future is the internet on mobile, and claims 'The (European) industry did not see it coming". Richard accuses (European) operators of limiting customers to 'walled gardens'.
Richard then mentions "the runaway success of the iPhone" as if it had somehow become bigger a rival to Google's interests in smartphones than Nokia is. Richard argues that the 3G version of the iPhone in the summer of 2008 "proved that consumers will do much more than use their phones to make calls and send texts."
Richard points out that Nokia is still the largest handset maker in the world but says Nokia has been "sideswiped by by the success of Apple and the encroachment of Google's Android platform." He then claims that this has forced Nokia to Symbian free to developers, and to make the "desperate decision" to give satnav services to Nokia smartphone users. Richard claims that Nokia is in crisis (?) and pushed into bed with Intel because of it (??). Richard suggests that this crisis-collaboration is to have new devices to counter HTC.
Then Richard takes aim at Ericsson. He says Ericsson's market share had been cut in half in three years form 10% to 5% today and that it is because of Apple and Blackberry.
Richard does point out that European mobile operators (carriers) ie where he lists Vodafone, Orange and O2 (which is owned by Telefonica), have apparently the ability to get back in to the game. Ah-ha. Richard mentions networking of Huawei out of China. Richard mentions as the Google Nexus One as a new way to sell phones directly to consumers and clearly thinks this was both a success and an innovation. Richard does mention that AT&T had customer service issues related to that launch.
He then claims that "In the race to increase revenues, mobile phone operators have the chance to claw back money from the likes of Apple and Google" and refers to their apps stores. Clearly Richard Wray feels that the initiative is with Apple and Google and the European operators have to try to re-take that initiative. Richard ends with the claim that European mobile operators/carriers have to become "great at customer service" to get a fight-back.
WHAT A BUNCH OF BALONEY
That is utterly absolutely comprehensively faulty reporting, Richard Wray of the Guardian. You have taken some facts and twisted them beyond any reasonable interpretation, ignored far more relevant facts and made many false claims. You wrote a story that was not the truth, nor the whole truth, and everything but the truth. Shame on you Richard Wray! Lets take these claims one by one.
FIRST THE FACTS
First, lets be clear. There are some themes and some points which Richard refers to which have merit. Lets be very clear about this. First Asia. It is true, that the global leadership in innovation in customer service in mobile telecoms for the mobile operators/carriers is indeed very strong in Asia, starting with Japan, South Korea and Singapore. As to handsets, the South Koreans have been innovative in handset design recently for handsets designed for global markets (Japan's innovation has only been for the domestic market on usually non-standard technologies like 1Seg and SuiCa/FeliCa etc). Taiwan and China are not particularly innovative, more being powerful at copying quickly and offering lower price alternatives when it comees to handsets. With major network infrastructure providers, there is no significant innovation coming from Asia. And with applications and services, these are not typically Asian strengths with the exception of gaming in South Korea and Japan.
So yes, I agree with that part of the premise that the Guardian article has, that there is global leadership in Asia, especially with mobile operator/carrier business and also with handsets. That, however, is not much even mentioned in the Guardian article, which focuses on USA-West Coast based supposed 'leadership". Mr Wray never mentions the biggest Asian mobile industry innovators NTT DoCoMo or SK Telecom or KDDI or Softbank or Singtel etc. He also never mentions Samsung or LG in the article, but does mention HTC twice, as if HTC was the biggest handset innovator of Asia (it is far from it).
Then lets turn to America. It is true, that the North America based mobile telecoms industry has been revived, thanks in part to the iPhone, Blackberry and Google Android. These three companies however, represent only smartphones, a tiny fraction of all phones sold on the planet, where all phones form only part of the hardware side of mobile telecoms, and the services side of mobile telecoms is far greater than all hardware. Mr Wray makes the mistake of looking at an ant and thinking it is as big as an elephant. But yes, it is undeniably true that the US and Canadian mobile telecoms related industries are better off today, and more competitive today, than in the recent past. That is true. But does that mean that they have overtaken Europe? No.
And I also want to make it clear, that Europe is by no means perfect, and Nokis is not perfect and its smartphones or its operating systems or its apps stores ie Ovi etc are not perfect. There is room to improve of course.
So lets be clear. I am not arguing against some Asian players being big and powerful in mobile telecoms - but those big and powerful players like NTT DoCoMo, SK Telecom, KDDI, Softbank, Singtel, Samsung and LG are never mentioned in the article. None of the Asian companies Mr Wray mentions (Huawei, ZTE, HTC) are in any way considered innovators except perhaps for offering ultra-cheap technology. If price leadership is your definition if 'innovation' then that is all that these three companies can represent currently to mobile out of Asia. The true Asian mobile industry innovators are all missing in the article
I am also not against admitting that the US has recently woken up to the mobile industry and its opportunities. It has however, so much ground to try to catch up, that it will take years for it to reach parity with Europe, far less to 'overtake' Europe and somehow make Europe "look stupid". So, lets go over each silly statement and compare it to the facts.
"The European giants that pioneered the mobile telecoms industry are now stumbling in the wake of American and Asian rivals."
Ok, Richard Wray only mentions HTC, ZTE and Huawei among handset makers, and Huawei among equipment makers out of Asia. HTC and Huawei do not even register among 10 largest handset makers of the world. ZTE ranks as the 6th largest handset maker. These three companies together make about 6% of all mobile phones. He ignores the big Asian handset makers of Samsung, LG, Kyocera and Sharp, which combined make 37% of all mobile phones. If you want to claim that European makers - like Nokia - are 'threatened' by Asian handset makers, then if you count these four giants together, its still less than the 38% that Nokia alone sells.
In the article Richard Wray focuses on the North American players. He mentions Apple, RIM, Google (as already apparently successful) and also Microsoft (as coming back) and Motorola as a past giant among American handset makers. Yes. If we add together all phones made in 2009 by Apple, RIM, Google and Motorola (the actual handset makers of the five, Microsoft only makes mobile operating systems) we arrive at 105 million total handsets. Yes, and Nokia alone sold four times as many as these four 'powerful' American manufactures all put together. Nokia sold 432 million handsets. This is Europe 'stumbling' in the wake of American and Asian rivals. I have not even added other European handset makers. Just Nokia alone is four times as big. Oh, and how about the only one of the North American handset makers who is big enough to be a "big Five" handset maker - Motorola? It is perennially making losses. Motorola had 22% market share a couple of years ago and today has 5%. It has shrunk sales to a quarter of what they were, and in that process went from being profitable to making losses. Economists suggest that should not be possible. If anyone is stumbling in the industry, its a US based former giant handset maker, not the giant from Europe. Meanwhile Nokia is the only handset maker to post a profit in every single quarter of the decade. Every single quarter of the decade (in its handset division). Even currently profitable Asian giants Samsung and LG were not able to post every quarter of profits in the past decade. And Richard says Europe is "stumbling"?
Maybe he means smartphone operating systems? The world's biggest smartphone operating system is Symbian. Out of all smartphones sold last year, Apple iPhone, RIM Blackberry, Google Android devices and Microsoft Windows smartphones - sold less than Symbian alone. Europe is stumbling... where? Microsoft - which by last count was still a West Coast based company - is the one stumbling. Microsoft had almost 30% of the market for smartphones a couple of years ago and now has a quarter of that.
Now lets be very very clear. Handsets are only part of the hardware side of the mobile telecoms industry. Mobile network infrastructure forms another major part of hardware and then we have the telecoms traffic. But you can't make a blanket statement of 'European Giants' and only talk about a tiny corner of the industry like smartphones. The world's largest telecoms networking infrastructure vendor was earlier in the last decade a company called Lucent. Based out of North America yes. Today that company is owned by Alcatel, out of France. Europe 1, North America 0. Then who is now the biggest mobile networking infrastructure vendor? It is LM Ericsson out of Sweden. Europe 2, North America 0. And where is that former Canadian infra maker giant, Nortel? Bankrupt thats where. Europe 2, North America -1. Yes Chinese Huawei has recently gained market share but whether they are second or third largest NokiaSiemens Networks is far larger than the last remaining North America based network infrastructure provider of mobile networking gear, Motorola's networks division. Europe 3, North America -1. European giants are 'stumbling' where, Richard Wray, where?
HEGEMONY SMASHED, HAHA
"For two decades, Europe's mobile telecoms sector has considered itself a world leader. It had the biggest names, the technological knowhow, the most customers. Over the past year, however, the hegemony has been smashed."
But Mr Richard Wray, the facts to do not support your claims. Two decades ago, four of the world's ten largest mobile operators/carriers (ie the ones who have the 'customers') were USA based. They owned vast empires in Latin America, in Asia and even parts of Europe. What happened and whose hegemony was 'smashed?". Have you counted any customers recently Mr Wray? The biggest USA based carrier group by cellphone subscribers is AT&T, which barely fits in the global top 20, not in the top 10 anymore. Yes there is a "North American" carrier group that is in the Top 10 but that is America Movil, out of Mexico. You never once mentioned Mexico in your article. And what of those Europeans who so suffer in their hegemony being smashed? The top 10 has no US or Canadian carrier groups anymore, but has now Vodafone of the UK, Telefonica of Spain, Telenor of Norway, T-Mobile of Germany, TeliaSonera of Sweden and Orange of France. Yes, six of the top 10 biggest mobile operator groups are from Europe, Mr Wray. And of those Europeans? Vodafone owns 40% of US carrier Verizon Wireless and T-Mobile owns all of US T-Mobile. The tables have totally been turned, Mr Wray. European hegemony has not been 'smashed' - the exact opposite has happened. US based carriers have withdrawn from almost all of their international holdings, it is clearly that US hegemony has been smashed.
And where the industry is growing the fastest, in Asian markets such as India, Bangladesh, Thailand etc, we find Vodafone, Telenor, Orange etc growing strongly, while in Latin America we find Telefonica and Italy-based TIM (also a Top 20 sized player). If anything, European players are growing and expanding their holdings and US based players are withdrawing. This is exactly opposite to what you claimed.
Richard says that Europe is now a flyover region not worth stopping at, because of how much it has fallen behind. He then points to where the innovation is happening:
"All the service innovation is being done on the West Coast of the US," He then mentions that "access to Google, Facebook, and Twitter" on phones, is the services customers want.
Yes, Mr Richard Wray, Communications Editor of the Guardian, how do the facts stack with these claims? Access to Google is what customers want, eh? Well, I had a Vodafone account in your native Britain, on a Nokia phone way back when in 2004 and used Google search happily on my service (yes, using WAP). Was this Google access invented by Apple or Blackberry (or Google) now in 2008/ No. So, why is Google search access today by some American company an innovation, but when European operators and handset makers offered it as a first years ago, that is not "service innovation"? Who leads and who follows? We have far more advanced mobile search solutions now such as AQA there in the UK, an idea being copied in.. America..
Facebook and Twitter are so new, that they have been launched in very close proximity by operators/carriers and handset makers globally so its hard to prove one way or another who was 'first' but years before Facebook or Twitter even existed, the Three operators in Italy, Austria and UK introduced a social networking service for 3G mobile video called SeeMeTV (which is making them tons of money). UK based Flirtomatic the award-winning social networking service that is among the most popular mobile internet services in the UK and launched in Germany, Australia and the USA, was on mobile phones before there was any Google Android or Apple iPhone of any kind - and they are profitable on mobile, whereas Facebook and Twitter still are not. Where is the 'innovation' Richard Wray? Who is copying who and who was the true inventor and innovator. And did you forget Skype? Another European invention that was also deployed on mobile first - in Europe. What of Habbo Hotel that invented the monetization of internet content and social networking, via the mobile phone? Not invented in America, invented in Europe.
But if you mean 'real internet' (non WAP non i-Mode) access that allows us to access any internet content like Facebook, MySpace, Flickr, YouTube, Bebo etc - that was not invented by Apple iPhone in 2007. The real unrestricted access to the real internet (not WAP) using cellular telecoms mobile phones was invented by Nokia with its 9000 Communicator - a DECADE before the iPhone in 1997. Why is 'all service innovation being done on West Coast' if Apple is copying Nokia from ten years before? If you mean the all-you-can-eat pricing, that is not an AT&T iPhone-related invention from 2007, it was first done by KDDI in Japan at the start of the past decade and the first European carrier/operator to offer all-you-can-eat mobile data services was DNA of Finland four years before AT&T launched the iPhone. Europe is behind the West Coast, as in where?
You Richard Wray are saying 'all service innovation is being done on the West Coast'. Ah yes, what of Layar the Augmented Reality Browser, out of the Netherlands? What of Mood Music, a new (money-making) mobile music format invented by Dada of Italy? GiffGaff the Scotland based service provider that lets users do its marketing? Scotland is somewhat to the West Coast yes, but West Coast of Great Britain, not West Coast of the USA. How about the mobile stamps of E-Mobile in Germany etc.
Or lets turn it the other way. Recent big news in America has been that now over half of Americans send SMS text messages. That threshold was passed in 2008 in the United States. Europe reached that point in 2001. Who leads whom in services? President Obama is the first US president to use SMS? Wow, Tony Blair was using SMS in government in 2004, the Slovenian Prime Minister in 2001. Who is leading whom? SMS alone is worth over 100 Billion dollars, Mr Richard Wray, Communications Editor of the Guardian. You know this. And you know fully well that its a recent 'discovery' of American telecoms to join the family of SMS text messaging. They are a decade behind.
So its now the 'amazing' solutions around SMS that they are 'discovering' like paying for parking - whoop-te-doo - invented in Norway ...in 1999. In Estonia today all parking payments are paid for by SMS. Americans are 'experimenting' with mobile parking. Or mobile phone check-in, invented by Finnair in 2001. Today over half of passengers on Finnair's frequent routest use mobile check-in. American airports are gradually joining in this, even Canadian airlines got to it before the USA did. Those SMS contributions to Haiti that made all the news? You know this Richard Wray of the Guardian, the UK has had SMS charity contributions for years.
MMS? About half of British users, over 80% of Norwegians use MMS based services, either in sending person-to-person picture messages or consuming ads and media content on their phones. Essentially all European-made phones and networks have supported MMS from 2005. The Apple iPhone was not even supporting MMS in its first two years but finally do so today. This is the world's second-most-used data application with 1.7 billion active users, MMS is. Its bigger than email. Yet Apple didn't add MMS to its 'innovative' device until 2009. Who is the service innovator and who is the follower?
No, Richard Wray, the West Coast 'innovators' are not making European mobile industry giants 'look stupid'; this article makes you look stupid, Richard Wray.
WANT iPHONES AND BLACKBERRIES?
Then Richard Wray says that the consumers 'covet' the iPhone and the Blackberry. Now it is true, that the consumers do covet the Blackberry. But where is the evidence they covet the iPhone anymore? Don't you do the simplest of research, Richard Wray? For the Christmas season, iPhone sales were flat, Blackberry sales grew market share and faster even than that, consumers snapped up more Nokia smartphones. So Nokia branded smarttphones are being coveted, iPhones not. The evidence does not support your position, Mr Wray. You should know this, it is widely reported in statistics by IDC, by Gartner and by Strategy Analytics. All showed exactly the same trends. What is this nonsense you say of consumers 'coveting' iPhones and Blackberries - ahead of Nokias? In fact for your home market, the UK, the Mobile Youth survey out at the end of last year said the most desirable phone brand was now Nokia, followed by SonyEricsson, then Blackberry. No, Mr Wray, European smartphones are not falling behind the iPhone and Blackberry. You are patently wrong.
PIGS VS WEST COAST
In the Guardian article Richard Wray mentions that Greece is one of the PIGS nations (Portugal, Italy, Greece and Spain), suggesting that because Greece's economy is in trouble with the Eurozone economic rules, that means apparently also that Greece (and the other PIGS) are struggling with mobile telecoms?
Now, do you Richard mean to suggest, that the US and Canada are 'ahead of' the PIGS ? That while yes, Greece had trouble with its economy (I recall that a year ago the USA economy was so badly in trouble it needed the biggest bail-out in economic history.. but I digress). Lets stick to mobile telecoms shall we? So PIGS vs USA and Canada? Hmm. Yes, lets examine. The mobile phone penetration rate per capita - one of the most-used measures of a country's leadership in mobile, of the United States is 96%. For Canada it is 79%. This is the most widely used metric to indicated a nation's leadership or lack thereof, in mobile technology. The national penetration rate per capita.
Yes, now lets see how poorly the PIGS do with this most-used measure of mobile industry leadership, shall we. Spain has a national per-capita penetration rate of 121% (yes, that is better than the USA and better than Canada). Well, maybe its a lucky member of the PIGS? What of Portugal? 139%. Italy is at 146% and that maligned Greece - is at 148% mobile phone penetration rate per capita. Yes nearly twice the penetration rate of Canada and almost exactly 50% better than the USA. By the most used metric, all PIGS countries totally trash North America in mobile telecoms leadership. Every PIGS country does so.
Or if you don't like the penetation rate as a measure, lets take 3G adoption rate per capita. Taking of course the real definition of 3G ie that approved by the ITU (whereas CDMA2000 EV-DO is 3G, the lesser CDMA2000 1X RTT standard is not 3G). The USA has a 3G subsription for 31% of its total population at the end of 2009. That ranks it only 22nd among all countries (Japan and South Korea are world leaders). Yes, Greece is a bit behind the USA at 27%, but the rest of the PIGS are far ahead of the USA - Portugal has an active 3G subscription for 47%, Spain for 48% and Italy for 52% of its population. (Canada is so low its ranked with Third World countries in 3G adoption). Yes, what was it about the PIGS countries somehow struggling with mobile telecoms? Spain's Telefonica is the world's third largest mobile operator/carrier group, bigger than the two largest US based carrier groups combined. Italian Buongiorno is the world's largest mobile application developer. These PIGS were struggling in mobile exactly how Mr Wray?
GSM VS CDMA
Richard contradicts himself several times in the article. For example he points out that US based Verizon is abandoning the US based technology evolution path of CDMA2000 to the 'European' (actually 'international') standard of GSM. If the US is the leader and Europe the follower, this evidence goes diametrically against his argument. Richard also says the future is the internet on mobile, and claims 'The (European) industry did not see it coming" but then contradicts himself in the next sentence pointing out that the European players tried many times to create that mobile internet, including WAP and iMode. And as I pointed out earlier in this rebuttal (and Richard well knows this), it was Nokia who deployed the world's first phone to do the real (non-WAP) internet a decade before the iPhone.
Richard accuses (European) operators of limiting customers to 'walled gardens' as if this was not how North American and many Asian operators also do today. But again, the European operator/carriers are far more customer-friendly than US based carriers/operators. Europeans generally as a rule tend not to lock their phones to one network - this is illegal actually in many European markets. European customers usually have the chance to use their SIM card and switch networks easily. And European carriers/operators do not force handset makers to 'cripple' phones and eliminate features such as WiFi and Bluetooth as American carriers tend to do. Who is the leader and who is the follower. Who is better at customer service and who is pushing openness in mobile Mr Richard Wray? Europeans or Americans? And obviously Europeans had unlimited mobile data plans years before AT&T brought it to the iPhone in 2007.
RUNAWAY SUCCESS OF WHAT?
Richard then mentions "the runaway success of the iPhone" as if it had somehow become bigger a rival to Google's interests in smartphones than Nokia. Now, I am not going to argue that the iPhone has not been a tremendous success as a smartphone, but its not a runaway success and its actually severely suffering right now. Richard knows this. The Apple iPhone grew market share into the Christmas quarter of sales in 2007 and again in 2008 but for the first time last year, the Apple iPhone sales stalled in the Christmas quarter - obviously the best-selling quarter of the year. Meanwhile that 'maligned' Nokia picked up several market share points for the Christmas quarter. No, Apple is a success yes, but its definitely not a runaway success and all analysts tend to agree that for the first quarter of 2010 Apple will automatically lose market share gains due to its model being obsolescent, until the next iPhone is released in June of 2010. Apple may well have peaked. And no evidence suggests 'runaway' success. The only handset maker with a runaway success in smartphones currently is the Blackberry, not the iPhone.
Richard argues that the 3G version of the iPhone in the summer of 2008 "proved that consumers will do much more than use their phones to make calls and send texts." Now, the one thing and only one thing, that the iPhone proved in the summer of 2008 that consumers would do, which they tended not to do before, was to download apps to smartphones.
First, Apple did not invent the Apps Store, that was NTT DoCoMo of Japan nearly a decade earlier. Secondly, Apple did not launch an App Store before Europeans. Nokia's first App Store was with N-Gage games four years earlier. And still today, the majority of paid apps on the iPhone are games, so Nokia's N-Gage store was more of the original (gaming app store) and Apple's App Store (gaming app store) is more of the copy. I don't argue that Apple did it 'better' but Nokia was there well before Apple. But app stores were not the point, Richard Gray said Apple proved "consumer do more than make alls and send texts." How much is that App Store busines worth? Morgan Stanley told us that its worth 780 million dollars - under one billion, globally. Lets see what else those consumers do that is not voice calls or texts, shall we.
MMS is worth 27 billion dollars in 2009 said Juniper. 27 times bigger than app stores. If all Apple iPhone users downloaded apps, thats 35 million people. The active user base of MMS is 1.7 billion. Thats 51 times more than all possible App Store users. Now, in the summer of 2008, with the 3G iPhone, did Apple teach us that we could use MMS multimedia messaging to consume video clips, sounds, pictures and long texts, ads, coupons and share pictures? No, because Apple's iPhone 3G did not support MMS (they do today). But every Western European network and essentially every cameraphone handset made by Nokia, SonyEricsson, Alcatel, Sendo, etc of European handset brands did support MMS. So who taught us that consumers would do more than voice or texts? Not "Apple in 2008".
What of Ringing Tones? Ringing Tones were worth 5 billion dollars said Juniper in 2009. This, the first basic form of music on mobile phones was not invented by Apple in 2008 - at that time Apple still did not support ringing tones (they do today). But it was Nokia which first enabled the downloaded content to phones, in the form of ringing tones, back in 1998. So who taught the consumers they can do more than voice or texts?
What of the YouTube Videos? The first phone to show videos was not the iPhone. It was the 9210 Communicator by Nokia in 2001. Videos on mobile are a multi-billion dollar global industry. And it was brough to us by Apple in 2008? No, not Apple, but by Nokia seven years earlier. Who is the one who showed consumers they can do more than voice or texts on a phone?
And videogaming? The biggest part of the paid apps on the Apple iPhone App Store is games. Who was the first phone maker to offer a gaming phone? Not Apple in the summer of 2008. Nokia released its N-gage five years before that and taught consumers to load game apps to a gaming phone. Or to go back further, the first videogame preloaded on any phone was the Nokia Snake a decade before that. The global videogaming industry for mobile phones was worth 4.5 billion dollars in 2008 according to Gartner. Who was it who showed consumers they can do more than voice or texts on a phone?
Richard Wray, you have made patently silly statements. In the summer of 2008, with the 3G model of the iPhone, Apple was playing catch-up with Nokia and its N95 model of a year earlier, on most of the announced 'improvements' in the 3G iPhone when compared to the original 2G iPhone, such as the 3G network speed, the GPS location positioning etc. The App Store was not invented by Apple, that was invented in Japan by NTT DoCoMo. And for the really popular mobile services used on the planet - MMS and ringing tones expressly, Apple did not even support those in the summer of 2008 when essentially all other European and major Asian handset makers already did so. And even today, the latest model iPhone 3GS still does not support multi-tasking, is not an open-source OS, does not have a flash for the camera, a memory card slot, etc. The 2009 (and 2010) model of the Apple iPhone is a still playing catch-up with a Nokia model... from 2007. Who is the leader and who is the follower?
Richard points out that Nokia is still the largest handset maker in the world but says Nokia has been "sideswiped by by the success of Apple and the encroachment of Google's Android platform."
What proof does there exist for this? Sideswiped? If he means the touch screen - Nokia had released its first touch-screen phone almost two years before the original iPhone. If he means the applications, Nokia's first app developer community was set up a decade ago and had 400,000 application developers signed up by 2001. And Apple's original iPhone 2G did not even support user-installed apps! Nokia's smartphones have all supported user-installed apps for a decade already. If he means that Apple sold 25 million smartphones last year but RIM sold 35 million Blackberries - then yes, Nokia did pay attention - much more so - to the rapid growth of Blackberry. Very differently from Apple, RIM did grow market share into the Christmas quarter. That is where the real rival is coming from in Smartphones to Nokia. Not from Apple and certainly not from Google Android phones. RIM sold more smartphones than Apple and Google Androids put together!
How badly has Nokia been "sideswiped"? They are the biggest handset maker on the planet, as big as numbers 2, 3 and 4 counted together. But in smartphones they have a BETTER market share than in all types of phones, and are as big as numbers 2, 3, 4 and almost 5, counted together. That is really being 'sideswiped' indeed. And remember, Nokia is profitable whereas in both overall phones and in smartphones, there are rivals among its biggest 5 competitors who are not profitable. Sideswiped, I can tell you what you can swipe, I'll get you some toilet-paper Mr Richard Wray, Communications Editor of the Guardian and you can go and have a wipe.
Mr Wray then claims that this 'being sideswiped' by Apple and Google has forced Nokia to make Symbian free to developers. Oh? And what was the 'free model' that Apple OS/X used on the iPhone? No, its not available to anyone other than Apple, is it? But Nokia was right from the start of the Symbian partnership - partnership mind you Mr Wray, partnership - willing to let its rival handset makers join in co-ownership of the Symbian operating system. There with then-biggest handset makers like Motorola and Ericsson, co-owning the Symbian OS. Thats Nokia mind-set, cooperation, not the 'only my way' style of Apple. And Nokia has been preaching open systems for this whole decade from network APIs to open standards in service platforms. The Symbian partnership was headed to an open system well before there was any - haha - sideswiping by Apple, or gosh - Google Android ! Android only took to steam this last quarter, long after the Symbian foundation was announced. What is wrong with you Mr Richard Wray?
As to a "desperate decision" to give satnav services to Nokia smartphone users? Richard claims that Nokia is in crisis (?) and pushed into bed with Intel because of it (??). Richard suggests that this crisis-collaboration is to have new devices to counter... HTC.
This is so baloney I don't know where to start. Whats wrong with giving navigation services for free? Google does it? Nokia was earlier already giving the maps for free? I think this is perfectly logical in their evolution of their services and apps platform. They have a strength and are playing that card. "Pushed to bed with Intel"? Now this is simply silly. Intel powers many devices in the Nokia portfolio from the original fixed telecoms switching equipment and Intel and Nokia have had a long and fruitful partnership. But to counter HTC ? You gotta be kidding ! Nokia sold 50 times more phones than HTC, Nokia sold 8 times more smartphones than HTC. If Nokia bothers about someone, it is RIM who is nearly half of Nokia's size in smartphones, not HTC. And the company Nokia needs to be aware of is Samsung who sell a little over half of the number of total phones as does Nokia. Samsung is a bigger rival to Nokia than Apple, RIM, HTC, Motorola, ZTE, Huawei, Microsoft and Google branded phones all added together. "HTC causes concern that Nokia needs to counter" - what utter rubbish Mr Wray. How incompetent are you?
NEXUS SALES MODEL IS NEW?
Its not just Nokia vs Apple in his article of Europe's doom. So Richard Wray finds that the way Google sells its Nexus One, bypassing the carriers in the USA, via the web, is an innovation? Now I wonder where they got that idea? The Nokia N97 a year earlier was sold on the exact same concept. But that is not where Nokia debuted the idea - no, its not a 'North American' innovation, Nokia - and most handset brands - have been selling directly to consumers in Europe for most of this decade. Why in Europe, because of the freedom of the SIM card of course.
Then Richard takes aim at Ericsson. He says Ericsson's market share had been cut in half in three years form 10% to 5% today and that it is because of Apple and Blackberry. That looks pretty on first glance, as the two market shares of RIM and Apple conveniently add up to about 5%. But first, RIM was selling Blackberries already three years ago before the iPhone launched, so actually the math does not add up. And then, what of Motorola? Motorola went from 22% market share to 4.9% market share in the same time. And recently SonyEricsson has been climbing a little while Motorola continued its crash-dive. No, if the article is that US based giants are strong and Europeans weak, then clearly SonyEricsson is far stronger than Motorola, and again the evidence does not support Mr Wray's bewildering conclusions.
Lastly Richard Wray says that European operators/carriers have to 'claw back money' from Apple and Google (???) to re-take the initiative.
First. The valid Europeans vs Americans comparison in the case of operators (carriers) is Vodafone, Telefonica, Orange etc vs Verizon, AT&T, Sprint etc, not vs handset makers or operating systems. Its as dumb as saying British Airways competes with Boeing or American Airlines competes with Airbus. Wrong industry comparison. The handset makers like Apple iPhone and Blackberry (and Motorola, Palm etc phones from North America) are correctly compared to other handset makers like Nokia (Sony)Ericsson, Sendo, etc. And the operating systems like Windows Mobile, Google Android, RIM/Blackberry OS and iPhones OS/X, are correctly compared to European operating systems like Symbian and Maemo. You can't pit mobile operators (carriers) against handset makers or operating systems.
So right from the start, for Richard Wray to suggest that somehow Vodafone, Telefonica (ie O2) and Orange are losing ground to Apple and Google is plain silly. If you want scale, the total global apps store opportunity was worth 780 million dollars, the only part that could be considered to have some overlap with the operator business. But how is that operator business? The European operators/carriers earned in Europe alone (excluding their Asian, American etc subsidiary income) 265 BILLION dollars in 2009. Just the mobile data portion of that is 80 Billion dollars. The mobile data services generated PROFITS of more than 60 BILLION dollars last year. So what? That global income of under one billion by Apple and Google is somehow now crippling this European juggernaut that is called the mobile operator community, and European operators have to somehow 'claw back' the 'money' out of what? FREE apps delivered on the App Store? Where most app developers are losing money? You gotta be kidding.
And one more point about those operators. Richard Wray mentions that AT&T was having service troubles and dissatisfied customers in America. Yes, how bad is it? Sprint again lost customers in America. It was recently voted not just the worst telecoms company in customer care, the worst company in all of the United States. That is the 'standard' that Richard Wray wants European operators to 'emulate' for regaining their leadership? Ridiculous. Any professionals who have had work-related phones within the past 5 years in both Europe and North America will say in unison that European operators have better customer service than the American carriers. American carriers still today charge for incoming calls, incoming text messages etc.
What a stupid silly moronic article. What cool-aid have you been drinking Richard Wray? That is utterly incompetent reporting!
He says that Asia has taken some leadership from Europe. That is true, but he does not list any of the companies doing so, and only lists briefly four companies that are NOT doing the leadership.
He says that the USA and Canada (and specifically West Coast) has taken a leadership position over Europe. That Is patently not true. The Mobile industry is worth 1.07 Trillion dollars. 80% of that is service revenues. Where in the 1980s US based mobile operator groups were the 'hegemony' and controlled much of the mobile operators/carriers and dealt directly with the customers, today not one US or Canada based operator/carrier is even in the Top 10. But today 6 out of the top 10 are Europe-based operator groups. The vast majority of this industry and its revenues, are controlled by Europeans, not Americans. Europeans also own major parts of the carriers/operators in America, but none of the American carriers/operators own major shares of European major operators. In the big picture, Mr Richard Wray is totally off.
The handsets and network infrastricture form the remaining about 20% of the Trillion dollars in mobile telecoms. What happened to Lucent, Nortel? Motorola's networking division is a shadow of its past greatness. But three of the world's four largest mobile telecoms network infrastructure vendors today are Europeans, Swedish LM Ericsson, Finnish NokiaSiemens Networks and French Alcatel-Lucent.
Of handsets 85% of all handsets are not smartphones. In that market the biggest player is Nokia with 38% marklet share, bigger than all North America-based handset makers including all smartphone makers rolled together. Nokia's rival is not North America based basket-case 'giant' handset maker Motorola nor the tiny RIM, Apple, Palm or Google etc. Nokia's true rival is South Korean Samsung and if you want a second, 'dark horse' rival for the next few years if all goes really really REALLY badly for Nokia, that would be LG, also out of South Korea. America-based tiny smartphone makers will not bother Nokia just like an ant won't bother an elephant. That is the scale we are looking at folks. Nokia sells more handsets every three days than Palm sells in a year.. Please understand the scale.
In smartphones the rival to Nokia is not Apple, Apple was unable even to grow market share in its latest quarter and will definitely lose market share now in the January-March quarter. And Google's phones or HTC's phones are irrelevant to Nokia's market share. The only rival to Nokia's dominance in smartphones is RIM and its Blackberry, given minimal mention in the article by Mr Wray. Still, Nokia's smartphone market share is bigger than what it has in normal phones, and as big as numbers 2, 3, 4 and almost all of number 5, put together. No, Nokia has not been "side-swiped".
In smartphone operating systems the battle is even more lopsided. You can take all smartphones manufactured on the planet that have any of the North America based smartphone operating systems, RIM Blackberry, Apple iPhone OS/X, Windows Mobile, Palm, Google Android; and European Symbian outsells them all. That article is so full of baloney its not funny.
But what of apps stores. Yes what of them? They are worth less than a billion dollars in total revenues. They were invented in Japan not by Apple, and Nokia had its own developers and its own dedicated app store long before anyone had seen Steve Jobs showcase the first 2G iPhone. App store income at less than a billion is 0.4% - one fourth of one percent - the size of the global mobile data services income and yes, a little bit more than one tenth of one percent of all service revenues in mobile telecoms. Totally meaningless for anyone except some windbag journalists who want to make hype stories based on press releases.
App stores may become relevant later in this decade, they are not so now. But that change in consumer behavior that Mr Wray talked about, it was not caused by the Apple iPhone 3G in the summer of 2008. No, the changes to consumers, using a phone for more than voice and SMS, can be traced more than to any other company, to Nokia. Ringing tones ie mobile music, video gaming, TV related video clips etc. Nokia Nokia Nokia.
And of Europe? The world's largest handset manufacturer is not North American, it is Nokia of Finland. The world's largest mobile equipment maker is not North American, it is LM Ericsson of Sweden. The world's largest mobile operator group is not North American, it is Vodafone of the UK. The world's largest mobile smartphone operating system is not North American, it is Symbian of the UK. The world's largest mobile application developer is not North American, it is Buongiorno of Italy. The world's largest SIM card maker is not North American it is Gemplus of France.
Europe? The customers are there. The 'giants' of the mobile industry are there. The revenues of the industry are generated there. The profits are generated there. The innovations are generated there. In Europe. (Did I mention Motorola is making losses, Sprint is making losses, Palm is making losses, Nortel went bankrupt etc).
What annoys me, Mr Richard Wray, Communciations Editor of the Guardian, is that I was compelled to waste all this time writing this reply to your idiotic article. You KNOW better than what you wrote. Shame on you Richard Wray! Correct your article now!