Doing some updates to the Smartphone Bloodbath of 2010. This edition is 'a lot to do about Samsung'
Lets start with Samsung Galaxy. There was a nice picture of the iPhone 4 and the Samsung Galaxy side-by-side in a phone store, as taken by Mrbangbang - please take a look (Picture of Galaxy and iPhone 4). Now here is my point. For the normal consumer - not like you and me at this blog, the normal person - look at that picture and consider your mother or cousin or uncle in a phone store somewhere, pondering the choice of the next phone. The two look almost identical. But the Galaxy has a bigger screen. Even with the iPhone 4 Retina Display, the Galaxy has a Super Amoled screen, so both seem far sharper and brighter and better than most other screens in the store - but the Galaxy is significantly bigger. Suddenly the Samsung is a very compelling player. Then as they are priced (without contract) about the same, it comes to the distribution. Samsung has roughly three times the networks than Apple has, for example all 4 big carriers in the USA carry the Galaxy. I don't mean it will sell as well as the Apple, it doesn't have to. Because Samsung has several cheaper phones that it can then sell to those customers who don't want to pay the price of a top line smartphone.
While we are on Samsung, the first Bada phone, the Wave has passed 1 million unit sales. Thats pretty solid for approximately one quarter worldwide. Its nowhere near Apple's iPhone 4 selling 1.7 million units in a couple of days, but remember, thats not the right comparison. The comparison is to the original launch, first phone on a new operating system. So the right comparison is to the original iPhone 2G launch of 2007. And 1 million Waves compare rather well in that context - far better than for example Google's highly visible 'superphone' launch of the Nexus One. Thus Bada is already selling better for Samsung than its Symbian and MS Windows Mobile based phones, and looks to be well on target to be about a third of all Samsung smartphones sold in 2010, behind only Android devices.
So the iPhone Death Grip is now verified by Consumer Reports. That is bad news for Apple who tried to pass the problem off as a software glitz.. Then it was reported by Bloomberg that Steve Jobs was told by Apple engineers of the antenna problems a year ago, so Apple has been launching a product they knew was faulty, and since then have tried to hide the fact. Now Apple stock has taken big hits as over 3,000 press stories have covered the problem and late night comedians ridicule Apple about it. Apple has scheduled a totally unusual press conference for Friday, very unusual especially considering their Quarterly results come out next week. There are those who say Apple needs to issue a recall. That would be the end of the iPhone market chances, so I don't see that happening. A rebate coupon or free rubber band shield sounds like the solution to me, that would be in Apple's best interest.
But while the Death Grip consumes the tech news, there is good news too for the iPhone. US consumer survey by Changing Wave and UK consumer survey by You Gov both put the iPhone on top as the most desirable smartphone - by a wide margin. It is very clear that worldwide, the iPhone is currently the world's most desired phone. Absolutely and without any doubt. Because of its high price, that cannot turn into global market share domination obviously, but it is the main ingredient in why Apple is so incredibly profitable in its phone business, while so many others are struggling.
Here is my quick squabble with Apple. You have the world's most desirable phone. You also know, its not hte outwardly design which is relatively easy to copy (see Galaxy above), the real secret sauce to Apple loyalty is your User Interface. Your phones are by far the most user-friendly. Why limit yourself to the few high end customers? Because all who have used an iPhone fall in love with it, you should flood the market with reasonably priced mid-price Nano iPhones and sell them with minimal profit margin. But flood the market. Why? Because the replacement cycle for phones is 18 months, and anyone using an iPhone will want another iPhone next time. So the Nano owner of 2010 will buy the iPhone 6 in 2012, at full price, and no magic by Samsung or Nokia or RIM or Motorola or HTC will be able to change their minds. NOW is the time to release a cheap iPhone Nano. Strip a few of the premium aspects of the iPhone 4 - obviously the retina display for example - give it visibly a 'nano look' ie smaller so a 3 inch screen for example. Then mostly do the specs of the iPhone 3GS ie 3 megapixel camera for example. Give it one or two 'improvements' beyond the 3GS that the 4 has, like now the flash for the camera. Just a few tidbits, so the consumer can see this is a 2010 phone, not a repackaging of a 2009 phone.
But then price it at half that of the iPhone 4 (in non-subsidised markets, that means 300 dollars vs 600 dollars) and in subsidised markets like the USA, do the deal with the carriers to get this phone in at near zero cost. Make it 25 dollars or 50 dollars on AT&T? Suddenly the world is tuned upside-down. The iPhone family explodes. You still make all the profits on the iPhone 4, because all old iPhone 2 or 3 owners will not 'downgrade' to the Nano, they will want the 5 megapixel camera and retina display etc. But those who never had an iPhone and can't justify the cost - this Nano will easily tripple your market share. Then like any good drug dealer, you lure them in with the cheap stuff, then you turn them onto the hard stuff. Come on, Apple, we know you have to release a Nano model sooner or later. NOW is the time, not in 2012 when Androids, Badas and Symbians rule the world... Yes, this would be a tiny margin product in 2010, but the iPhone 4 is raking in profits hand over fist. And these Nano owners will be iPhone users for life. You can milk them for profits their whole lifespan..
Ok, back to the Bloodbath update.
Nokia is going to announce quarterly results next week so nothing much in the news officially from Nokia, but the You Gov study did give some ok news and some devastating news. The ok news is that Nokia continues to be the second most desirable smartphone brand in the UK, although its preference is declining. Nokia is far above its traditional handset rivals, ie Samsung, LG, Motorola, SonyEricsson. But the bad news is that UK based Nokia smartphone owners are very reluctant to recommend Nokia. So it seems to be becoming a phone owners are ashamed to own. Not good news, but this is why Anssi Vanjoki was brought in to fix. That customer survey is symptomatic of how badly Nokia's preference has been hurt recently.
Motorola releases Charm, a youth oriented QWERTY smartphone running Android. Did they finally read my blog haha?
Google reported today. No new amazing unit sales numbers, so we are still at the 160,000 Android devices activated per day level (Android being the world's second most popular smartphone OS, ahead of Apple and RIM, behind only Symbian which activates 260,000 smartphones per day). But there was news about the Android App Store. It has now 70,000 apps, so it is ramping up quite rapidly (Apple still leads with about 250,000 but the gap is closing fast). And while Google didn't give a number, the AndroLib download counter passed the 1 billion Android app download milestone. This is about in a year. Apple is doing about 4 billion per year. The Ovi store was doing half a billion early this year and GetJar is the second biggest although now Android is closing up on that.
Steve Ballmer admitted that Microsoft goofed with smartphones and lost a whole generation, but promises Phone 7 will bring Microsoft back into the game.
The Chinese mobile phone maker who is the world's 4th biggest phone maker, is now selling a basic cheap touch screen smartphone in Europe. In the UK it is priced at one sixth the price of the top line phones like iPhone, Galaxy etc and is available for prepaid customers. It runs Android, is modest in specs, but is poised ot be a big market success due to its modest price.
SAMSUNG AND THE FUTURE OF SMARTPHONES
But I want to end back with Samsung. I have been saying the Asians make the most advanced phones. And once again we have evidence of it. In Singapore now Samsung is launching its flagship phone, the Samsung Galaxy Beam, an Android based superphone, the world's first that incorporates a pico projector. Ultracool. I want one of those haha...
Thats the quick update from the Bloodbath wars of 2010. I will report on what Apple said in its Press Conference also about the Death Grip.