Another week in bloodbath, another casualty: now Google's Nexus Two. Plus HTC, Samsung, Nokia

Its a bloodbath out there indeed. So last week in less than six weeks from its launch, Microsoft killed its two first phone models and the whole handset project known as Kin. And before we have had time to even digest and understand all the undertones of that bizarre end to a 'strategy' we now see another death in the smartphones space.

GOOGLE NEXUS ONE IS NEXUS LAST

The CEO of Google, Eric Schmidt announced earlier this week that there won't be another Nexus. No Nexus Two. So their first attempt at making a 'superphone' (that was a silly term for it) ended a superdud. And rather than try to learn and make it better (something Apple managed tremendously well where its original iPhone 2 was not being accepted internationally), Google decides to end its line of superphones. This is no doubt welcome news to all the 30 or so manufacturers who are committed to the Android platform, to see that Google is not going to compete with them. That initial launch of Nexus One with its 'proprietary' gains to the OS, seemed very unfair at the time. But as we ponder how poorly Google managed its smartphones on the Android platform, consider HTC here next.

HTC SALES JUMP AND PROFITS TOO

HTC announces a monster Q2 quarter. Remember that RIM grew its sales by 6% from Q1, a very healthy growth rate (and in the previous quarter from Q4 to Q1, Nokia grew 3% and Apple was flat) - HTC is now so hot, it grew 36% from Q1 to Q2. They sold 4.5 million smartphones. I make it that about 30% of all Android phones sold globally today are made by HTC. And they did not achieve that enormous jump in their growth, by slashing prices. Their revenues are up and bucking the trend in the bloodbath - HTC profits are up by 33%! (which does really make me wonder, just how badly was Google's Nexus Last doing, if HTC, its manufacturer, manages 36% unit sales growth and 33% profit growth - and if you remember, in Q1 Motorola had its only bright spot in the Android smartphone growth..  and look at Samsung here next)

SAMSUNG GALAXY HIT AT HOME

So yes then another Android powerhouse.. Samsung has promised us earlier this Spring to sell about 12 million Android phones this year - ie half of their total smartphone production. That would be huge growth from the 2.6 million smartphones they sold in Q1 of 2010. But the Samsung Galaxy is certainly giving them plenty to smile about. Just in South Korea, Samsung's new top smartphone sold 200,000 units at its launch in South Korea. Its not nearly as big as Apple's iPhone 4, obviously, but South Korea has only a population of 50 million, so if we adjust it for the same size population as the USA (multiply by 6) - it is equivalent to 1.2 million Galaxys sold at launch - that is certainly a number very much in line with Apple's dramatic launch performance in the USA. And do bear in mind, South Korea is the world's most advanced digitally converged market, where they count internet penetration as how many internet connections you have per capita, where all internet connections are broadband, with the world's fastest broadband speeds and lowest broadband costs. And yes, the widest WiMax cloud, widest WiFi cloud and two different nationwide 3.5G network standards deployed by the 3 carriers offering 3G. South Korea will shortly become the second country in teh world where 100% of mobile phones are 3G enabled (Japan was first). So in South Korea the Galaxy is being offered to very discerning and knowledgable, and value-oriented customers - who don't get subsidies with their phones so they pay full price for the handsets.

Then consider that the Galaxy is now being launched in the USA - but it is on all 4 big networks there. There is a combo input edition with both QWERTY and touch screen input to the Galaxy. And Samsung is the bestselling dumbphone in the USA. It would seem like a very good chance to make massive inroads into the Android world of US smartphones, bringing the fight to Apple (and with QWERTY to RIM) and perhaps snipping bits off Motorola there in Motorola's backyard. And meanwhile IDC's latest Western European numebers tell us that Samsung dumbphones are nearing Nokia for bestselling status in Europe, again a great platform to use to now offer Galaxy smartphones.

NOKIA LOSES SUPERFAN, GAINS SUPERBOSS

So then the big news in the Symbian, Nokia and Ovi camp has been the sad announcement of Ricky Cadden the Blogger Previously Known as Prince, no sorry, previously known as Symbian Guru. Ricky and his co-blogger Rita El Khoury decided to kill the Symbian Guru blog. They were very open about it, that they did it because they felt Nokia and Symbian were not deserving of their support, there had been so many problems more or less from the time of the N97 and today it seems that things are only getting worse. The Symbian Guru blog had been a very facts-based voice or reason in the smartphones space, with a clear Symbian and Nokia slant but always insightful with tons of excellent commentary on the industry on the whole. Their blog will be sorely missed by all in our industry - but the fact that Ricky said he is switching to Android - saying that in public truly brought a lot of pain to the execs in Espoo. And if this is a public outcry about the recent failures of Nokia and Symbian and Ovi, then how many thousands more are there like Ricky and Rita, who had once been passionately loyal about Nokia but no more. A real wake-up call (as if one was needed in this year of the Bloodbath)

But in another unusual blog statement, Anssi Vanjoki made a very public call to arms to his troops, promising the fightback starts now. As many remember, Anssi was the strange Nokia executive voice that admitted that the N97 was a failure. Very refreshing honesty and now Anssi is tasked by Nokia to make the smartphones business a success. Does he have the credentials? He was in charge of the first Nokia consumer smartphones push, when Nokia launched the Multimedia Unit better known as the home of the Nseries consumer oriented smartphones. Anssi's last Nseries phone launched on his watch was the iconic N95, which many Nokia watchers consider the last great Nokia phone. So he does bring in the instant credibility, that if anyone can turn Nokias stumbling Nseries and Symbian and Ovi strategy back into one that has passionate fans cheering its newest phones, Anssi can. We wish him the very best in this endevour. Its a bloodbath out there, and Nokia has already warned its profits are down this quarter, so this is no easy task. And rumors suggest that the N8 is near to launch, except that Anssi is not 'satisfied' with it - makes you think of the problems with N97 - and then it kind of reminds you of Steve Jobs - he would not release devices he personally was not satisfied with. That may be exactly what Nokia needs right now, a bit of discipline. They do know how to make a great phone, but with their flagship phones, they cannot afford to stumble. Not now.

APPLE BEST SELLING SECOND HAND PHONE IN UK

The iPhone is accomplishing another feat of proof of its brand appeal. A new survey of the most popular second hand phones in the UK has the iPhone 3G on top (you can get about 170 UK pounds or about 260 US dollars for an iPhone 3G if you sell it). The loyalty of the Apple fans is enormous. This is all great news combined with the early launch success sales, were it not for the runaway train they call Android and how this whole industry is exploding now in 2010.

Thats the quick look at the past few days in smartphones. More to come in the fast-changing world of the bloodbath. For those who were counting, we reached a peak of 24 global Fortune 500 corporations who had been smartphone makers a couple of weeks ago when Yahoo threw its hat in the ring, but now with Microsoft and Google pulling out, we're already seeing the death count bring our global giant competitors down to 22. And don't think the bloodbath is over. It will get bloodier still. Expect twists and turns in the continuing saga.

Comments

[Michael]

Tomi: I don't the Nexus One a line of phones, rather a sales channel experiment by Google. The Nexus One was basically the HTC phone of the moment

It might have worked if Google had sold multiple phones (HTC, Moto, Samsung, etc.) and required that they were more universal. If they had supported all the AT&T and T-Mobile frequencies, so that they were truly unlocked.

[Tomi T Ahonen]

Hi Michael

yeah, that makes sense. I do think the initial announcement by Google was a serious attempt to enter the phone busienss. Since then they had push-back from operators/carriers - which meant they had to go to the online sales - and I am sure behind the scenes they had grumblings from the Android makers who didn't like how Google did the OS update to favor Nexus One. They learned, and did the math and saw in this year of the Bloodbath, they'd be crazy to try to become major phone maker. Wise move to close it down (for now)..

Tomi Ahonen :-)

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