Lets do Bloodbath update, Samsung Bada, Samsung Galaxy, Samsung Beam.. oh and some iPhone, Google, Nokia too

Doing some updates to the Smartphone Bloodbath of 2010. This edition is 'a lot to do about Samsung'

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.

APPLE

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

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.

MOTO

Motorola releases Charm, a youth oriented QWERTY smartphone running Android. Did they finally read my blog haha?

GOOGLE

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.

MICROSOFT

Steve Ballmer admitted that Microsoft goofed with smartphones and lost a whole generation, but promises Phone 7 will bring Microsoft back into the game.

ZTE

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. 

Comments

[Murat]

"and Symbians rule the world."

Come on now, unless you mean the developing world

[Tomi T Ahonen]

Murat, come on...

Outside of the USA, Nokia has over 50% of all smartphones sold. And then there are even more Symbian phones from Samsung, SonyEricsson, almost all the Japanese makers etc..

So Europe? Symbian is as big as iPhone and RIM and Microsoft combined.

Advanced Asia excluding Japan? Symbian is as big as iPhone and RIM and Microsoft combined.

Japan - Symbian is as big as iPhone and RIM and Microsoft combined.

Your point was what, exactly?

The only market where Nokia and Symbian are not dominating, is North America, and that is where the carriers exclude most of Nokia's models and won't subsidise them. Yeah, your point being?

Just because people 'desire' Ferraris does not mean that Toyota isn't selling mountains more than Ferrari..

Tomi Ahonen :-)

[Murat]

My point is you don't need to have marketshare to rule the world, I just think the current situation proves that. This whole thing is far more deep reaching than marketshare.

The Trouble is doesn't Apple iPhone(Ferrari) make loads more money than Nokia (Toyota)?

[Manu]

@Tomi : - If you can make two quick predictions:

- Do you anticipate Samsung achieving their monstrous smartphone targets for this year ?

- Do you see same %growth of Android till end of current financial year ? Or do you want to be more specific predicting it quarter wise ?

[Tomi T Ahonen]

Hi Murat and Manu

Murat - good point, but you know what the 'smartphone bloodbath' is all about - it is ONLY about market share. The profit does not matter, for the market share. Market share matters for developers and the eco-system. Apple's market share has peaked. The profit of Apple matters to its investors and you've been here plenty of times before to know this is not an investor site, we don't care who makes the MOST profits, we want any major player to make SOME profits to stay in business (ie not like say Motorola or Palm who were unable to make profits). Beyond just making profits, who makes most does not matter to the 'bloodbath' analysis. You know that, why keep bringing it up every quarter?

Manu - good questions. My quick gut feeling. First the easier one is Android. This iPhone 4 could have stalled the Android invasion if the phone was more radical to the rest of the world (remember, it impressed Americans far more than the rest of the world, who were quite underwhelmed by 'second camera' haha and 5 megapixels with LED flash etc). And now the death grip hits Apple's best quarter ie Q3 when it should really be selling monster amounts to put a dent into that lead that Androids built in Q2 in the world market (selling almost twice the amount of Android phones as Apple sells iPhones).

So the Android forecast is reasonably easy, yes I think it will keep growing - most of all because many Android makers have only now in Q2 released their main phones or are doing it in Q3. Phones like say the Galaxy series by Samsung. And we stil have several major players whose main Android offering has not been seen, like Dell. And LG has only very recently gotten their Android family onto the markets. So just by the expansion of the 'army' to its 'full strength' - we have not seen the full might of Android yet (which should REALLY give other rivals pause, from Apple to RIM to Nokia, the Android army is still not fully deployed haha).

Thus, expect yes significant market share growth through end of 2010. They are currently running about 22-23%, I think they'll hit easily 25% by end of year, could be nearing 30%. There is no way RIM or Apple can catch Android (this year). The only two things that can slow down Android - likely more in 2011 than 2010, is Samsung's shift to Bada and perhaps a strong showing by Microsoft in Phone 7, trying to lure SonyEricsson, LG, Motorola etc back from Android to Microsoft..

Samsung is more difficult. I am totally convinced they'll be growing very strong this year, but more by Android than Bada (as they have also signalled). They are coming from a tiny base. We heard finally the numbers that Samsung did sell 2.6 million smartphones in Q1, giving them 5th place ahead of Moto but behind HTC. That needs to grow very strongly to hit their targets for 2010.

But Samsung has a huge installed base of pretty loyal Samsung users on dumbphones, they are the second most profitable dumbphone maker behind Nokia, so they have pretty deep pockets, and can afford to 'subsidise' the shift of their customers from mid-range featurephones to smartphones, if they see that their targets are slipping towards the end of the year. But we have to monitor them, so far the reported numbers are not as strong as they should be. Bada reached 1 million sales so far, that is a good start for a new platform, but they need to do something very similar to Apple's first year iPhone sales in the next 12 months to achieve the Bada targets by end of year. And in some ways, Bada success will eat into Samsung Android success, inevitably there is some internal cannibalization (one way or another).

I do think its a safe bet to say Samsung will pass HTC soon, in Q3 very likely. Will they catch Apple in Q4 (for quarterly sales, not for the full calendar year) is a tall order, but they will at least move closer to Apple by then. Then we get the Spring impacts to Apple which Samsung can capitalize on - flat sales for Q1 and declining sales in Q2 - whereas Samsung gets the same 'Chinese New Year effect' being the second most popular dumbphone of China, so their latest Chinese editions of the Galaxy etc should have a very good Q1 in 2011 as they sell on all 3 Chinese networks. I think it will be probably Q1 of 2011, maybe Q2 when Samsung passes Apple. But the iPhone 4 death grip will hurt Apple more abroad than in the USA, and Samsung are nothing if not competitive. I am sure that in no small way, that under the belt comment by Steve Jobs about the Koreans at Friday's press conference, has only stirred Samsung (and LG) management to redouble their efforts to pass Apple soon.. It will be an interesting time, but yes, Samsung's goals are far more challenging and less certain to happen. We have to see how they report smartphone unit sales for Q2 to get good guidance.

Thank you both for writing

Tomi Ahonen :-)

[Murat]

Ok so If marketshare mattered for developers like you say, wouldn't the trend be to use Symbian developing for Nokia Ovi?

If Symbian 'rules the world' but doesn't have the most developers, apps, downloads, profits, positive consumer sentiment/desire what does marketshare really mean here, how do you see Symbian becoming dominant? I'm just trying to understand your analysis and statements.

Also:

"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"

The Wave is across multiple operators right now, the original iPhone 2G was pretty much exclusive not sure if that is a correct comparison. Agree?

[em]

@Murat

The current "mindshare" is on Apple, but if someone is seriously thinking applications for smartphones,
I suppose the trend is turning towards Symbian and Android. Developers are slowly finding out that Symbian has a huge installed base of devices out there and Android is growing fast.

And with Symbian it is possible to use any App Store out there, I guess there are hundreds of them already. If Nokia Ovi terms are not good for you, go and set up your own appstore or use some other store available, like Getjar.

Samsung has a huge distribution chain and lot of operator contacts. Of course, Samsung will use its advantages. Apple had no distribution chain for phones and it started slowly. That was Apple's own decision to start with only one operator, they could have started with many.

[Murat]

@em

I work with freelance developers and major global brands, financial institutions, agencies - none are interested in developing for Symbian, in fact it's not only below iPhone and Android in priority but Blackberry too. So I find it hard to believe the trend turning towards Symbian. Android is another story of course but that's not what I'm addressing here, it's about how Symbian is going to become a dominant platform and rule things, which it isn't today even though its marketshare is huge.

Sorry I missed your point with Samsung, how does that relate to the original statement comparing the Wave to iPhone 2G?

[eve isk]

chip made to stick.a whole new mind.why right brainers will rule the critical errors to avoid.the visual display of multimedia learnings.

[Polly]

Ce blog est certainement excellent. Excellent travail. Pour cette raison, je jouis de maintien de retour à la weblog.

[white iphone 4]

We love black iphone, and we also love the white Conversion kit iphone. Now you have a chanve to change your iphone 4 white.

[Henry Peise]

The white iphone 4 hardware design hasn't changed from the one we already knew about. It uses the same materials as the prototype: Black glass and stainless steel rim.

[iphone cases]

Il ya certainement beaucoup de détails comme celui de prendre en considération.

[wedding plan]

I think your tweets act as example that the limit is a problem - recent things you posted like "(link next)", "Next tweets are.." etc. It would just be so much easier for you and your followers to have them all there with no need to reference the next tweets..

[Block making machine]

It's good to see this information in your post, i was looking the same but there was not any proper resource, thanx now i have the link which i was looking for my research.

[Cheap Jordan shoes]

Ground for workers in small diligent in thinking smaller than the memory.

[personalized nfl jerseys]

Welcome to our website, maybe here are the item you want and expect to cooperate with you.

[Christian Louboutin Mary Janes]

The blog article very surprised to me! Your writing is good. In this I learned a lot! Thank you!

[Yves Saint Laurent]

Nice post.Thank you for taking the time to publish this information very useful!I’m still waiting for some interesting thoughts from your side in your next post thanks.

[moncler sale]

Incredible! This blog looks just like my old one! It's on a totally different topic but it has pretty much the same page layout and design. Excellent choice of colors!