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March 10, 2011



I think the iPhone "nano" will be the iPhone 4 in a 3GS type of case which will eliminate all the antenna issues but display, internals will remain exactly the same for a cheaper price, my guess around $350.

The iPhone 5 will be a 4" display, dual-core, 8mp cam mamouth but still keeping the same dimensions as the current iPhone.


I think android will go lower end faster than bada.


Nokia is isn't or didn't "give anything away" or "commit suicide" because of it's Microsoft relationship.

Nokia's upcoming fall in 2011 would have happened REGARDLESS because of the mistakes that it made in from 2007 till now.

MeeGo was a substandard OS that if Nokia had released would have left them in the EXACT SAME situation because any dev who looked at it knew that it was way behind the times.

All the Android vendors are in a commodity race- to - the bottom situation as with Windows on the desktop. At the high end of the smartphone market, few are going to buy HTC or Samsung at a price if similar to iPhone. Android manufacturers will sell in markets and at pricepoints where iPhone is not. For example, In a head to head comparison on the same carrier, iPhones will outsell Galaxy S by 8 to 1 or more. Most people, outside of techies, will not buy Android if they can get iPhone at the same price.

Now with the iPad selling, all those high end Nokia phone users (who were going to switch anyway as Symbian was so terrible and as MeeGo was going to be sub-standard) will all switch to iPhone and use the same ecosystem that iPad uses and be very happy about it.


If Microsoft can get it's act together, Nokia will do fine after they get killed in 2011 because WP7 is a very attractive OS and the fact that Nokia is the only company that can make hardware as nice as Apple's.

Of course, if it wasn't for Nokia's incompetence in developing MeeGo, they would not have had to go to MSFT.



There is NO way Samsung focuses much on Bada after 2011. Almost all phones will be smartphones and Bada is another substandard OS. The fact that Samsung sold a lot of them in what was essentially the feature phone market doesn't mean anything. Motorola sold a lot of Razr's but that was not because of the OS.

The fact of the matter is that Bada as an OS is much worse than Android with no comparable ecosystem. Bada was built by Samsung before they had a chance to prove out the gift of a free Android from Google. Bada was the equivalent of Nokia's MeeGo or Symbian^3. They are selling low cost Bada phones to people who don't know or care about smartphones and are essentially happy with feature phones.


give me some of what you smoke please :), there were 67 million android devices sold last year, and android devices sold more than IPhone in western europe, where IPhones and android are in head to head competition on all carriers.

Sony Ericsson and Motorola actually came back from the dead because of android and HTC became a well known brand in Europe because of android, nobody was really buying windows mobile HTC phones. Android device activations will jump to 200 million this year.


Bob - I'm talking about equivalent price points. If available on the same carrier at near or equal prices, iPhones will by multiples outsell any Android device maker.

iPhones are only on 175 carriers. Blackberries are on over 550 as an example.

I agree that iPhones won't out sell cheap Android devices or 2 for 1 BOGO specials as is happening with many Android phones.

At equivalent prices, when on the same carrier, customers will buy Apple over Samsung or any Android vendor because Apple is a much better brand that is aspirational. No one aspires to own Samsung.

 Tomi T Ahonen

Hi AT33, Evan, Vikram and Bob

Thank you all for the comments. I will respond to each individually as is our custom on this blog

AT33 - what you describe is somewhat the past strategy, and I don't count that as a proper Nano iPhone. It is only redressing last year's model with a lower price (reflecting Moore's Law). With it, there is still only one new model per year, and that strategy has carried Apple as far as it can (to about 16% market share where Apple has been stalled for two years now, since late 2009 when they were at that level). What Apple needs now is to spread its product portfolio. What I mean with a Nano, is truly a visibly smaller iPhone. While the competition is pushing bigger screens to 4 inches and beyond, Apple will soon have to enlarge the screen of its 'main' iPhone, the full price or 'big' iPhone (what we can call iPhone 5, for June 2011). That means that there is a clear opportunity to do a slightly smaller phone, with about a 3.2 inch screen, as the Nano model. Then do the rest of the specs roughly as the previous top model (iPhone 4) with something more that it didn't have (to be a 2011 model) and voila, we have the Nano. Smaller, cheaper, but too 'simple' to appeal to the established users who want the new big 'proper' iPhone. But use the Nano as the entry-level iPhone especially for those countries where phones are not subsidised (most of the world)

Evan - the problem is Android's power-hungry OS, it doesn't run well on very low spec processors and low amounts of memory. It was not designed for cheap phones - differing from Symbian and bada, the only two OS's that work well on low spec phones. So while I agree with you that Android makers will release cheaper phones yes, but I disagree that they will be cheaper than bada phones..

Vikram - your first comment sounds like you are only talking of what you believe, with no factual evidence whatsoever to support it. All evidence is to the contrary. Please study market data of handset sales, such analyst houses as Gartner, IDC etc, and the facts go all against your strongly held convictions. Sorry.

Vikram second comment - we will see, but the loss of Nokia's market share from 2009 to 2010 was from 29% to 33% (full year). That type of decline is what most analysts would have projected for Nokia for 2011, ie aiming for perhaps 27% for full year 2011, before the sudden Microsoft announcement. Now the optimists like me see Nokia crashing to 12% for Q4 when I see the bottom and slow climb (others see decline down to 8%). So Nokia is abandoning most of its market this year. So while you are correct that Nokia would have seen a decline, they have now strongly ACCELERATED their decline. The truly dumb part is to tell the world you shift from one platform to another - BEFORE you have the devices to do so. Even Sony was not that stupid when they abandoned Betamax and went to VHS. This has been a massively messed-up transition (so far) but maybe there is a grand plan, maybe Stephen Elop has some clever tricks to play. Or maybe it is the plan that they want Microsoft to buy up Nokia at a discount price. The value of Nokia has crashed 26% since Elop's announcement and again today Nokia is down on the stock market.. The owners are not happy with this (and neither with Microsoft, they too are agian down today)

Virkam third comment - did you not notice that Samsung announced they will sell 10M bada phones in the first half of 2011? With 15M sold in the first 12 months that is massively more than any other new smartphone OS ever. MASSIVELY better.

Bob - thanks, we agree :-)

Please keep the comments coming,

Tomi Ahonen :-)


Tomi, great read as usual! I very much agree with your analysis of the Microsoft-Nokia alliance. Nokia chose to marry Microsoft's bureaucratic software development instead of fixing its own. Now they are going to suffer inter-company inefficiencies on top of bureaucratic development process...

I think it is worth to mention the rumors of RIM adding Android compatibility to its new QNX-based OS. If that materializes (as most likely it will) it will be a major improvement in RIM's platform prospects. They are going to capitalize on the power of Android's ecosystem and they are going to pay a minimal price for it. They'll still have their own differentiating UX. They'll have their own App Market that will be just as well stocked as Android's, but will be completely under RIM's control. I think they will set a precedent that will eventually be followed by HP and other vendors with MeeGo.

I am curious why do you think that Samsung will shift focus to Bada? Since the beginning of 2011 they have announced quite a few mid-range Android phones - Pro, Ace, Fit, Gio, Mini - and just one Bada device. They even announced a few smartphone wannabes - Corby II, Ch@t, Champ Duos - all of those could have been Bada devices. I think Samsung will have a major problem convincing developers to go for Bada and judging by their product announcements it seems that they realize that. The smartphone wannabes are capable devices, with decent amount of RAM and capable of running J2ME applications. J2ME despite being very old now is still friendlier (IMO) and more future proof (thanks to Android) than Bada.

I think there is a gross misconception, especially among Apple fans, that the Android ecosystem is a "race to the bottom", similarly to what happened with Windows PCs. There is yet a lot of hardware and software innovation to happen and this will keep the prices of flagship devices high. During this time Android will only save money to the device manufacturers without commoditizing them. Then much unlike Windows, it does not prevent any company to extend it with differentiating features, just like SonyEricsson is doing now with its PlayStation Suite and Motorola with the 3LM enterprise extensions.

What I am trying to say is that what we'll likely see this year is the Androidification of many of the mobile OSs - RIM's, MeeGo, and probably WebOS. I wonder if Samsung will choose to add an Android compatibility layer in Bada or just discontinue it, but I don't see them shifting to Bada.

The fact that Bada is more efficient is not going to be a strong argument, because hardware will advance (as well as Android's efficiency) faster than software will migrate from Android to Bada.

That logic is further confirmed by the fact that WebOS is braving out with a JavaScript-based dev. framework, which is less efficient than Android's Java-based. They did that only to capitalize on the Web developers community.

Another example is WP7, which runs applications inside a VM, just like Android. Here it's worth to mention that applications that run inside of a VM are less of a security threat, because they run in a sandbox.

Bob Shaw

Tomi - As always good analysis. One thing I would like to point out is that we do not know whether the innovation in smart phones especially the OS in 2011 has overshot the ability or need of most consumers to absorb those innovations. If it has overshot than the basis for competition in smart phone would shift away from innovation and towards price in 2011. If this turns out to be the case than Nokia's market share would not be that significantly impacted in 2011 by its decision to discontinue its current OS i.e. Symbian down the line. All in all, a lot depends upon what is the basis of competition in smart phones in 2011 whether it is innovation based or price based.


you say android is not suitable for low-end, I don't think so, I think google optimized froyo for low-end devices in particular. Here is an example of low-end android device San Francisco(less than 100 pounds) which has a capacitive touch input as well


Bob Shaw,
but android has introduced the concept of chaos into the regular mobile world. Huawei and ZTE will compete on price solely, but HTC,Motorola, Samsung, Sony and LG will look to compete on high-end features. And all these competitors have low priced android devices too. It is going to become difficult to analyze mobile field when you have a chaos-inducing agent like android. All bets are off.


Evan, the low end Androids I have tested were very disappointing in their performance. I have not tested San Francisco, but for what I have seen I would not recommend a low end Android to nobody


I think doing a "nano" iPhone with a smaller screen would not make sense. Because the 3.5" screen is already small enough. Maybe they can shrink the case a little but still keep that 3.5" screen for the cheap iPhone. It would also be wise for them in terms of fragmentation. Introducing yet another screen size, in this case a 3.2", would be terrible for developers and probably all the 300k apps in the app store would not be compatible.

They are already adding a new screen size of 4" to the new iPhone 5 and hopefully they will find a way for all those apps to still be compatible to the new screen size while eventually all apps will need real adjustment to this 4" screen.

I think the development community would support the new screen size with joy because apps will look better in a larger screen, I'm not so certain they will embrace a smaller screen which would break the compatibility of most apps because of its smaller screen.

See Nokia would have no problem with such a move and that's why they lost out in the smart phone game because they never really cared about compatibility of apps within their devices. They would release a simple internet radio app which on some Nokia phones would work and on some it would. Customers don't appreciate that.


It's very much the question how much smaller the screen on another iphone model could be. After all, Apple so far has tested and optimized for exactly this screen size. Being the perfectionist he is, I think Steve Jobs will only OK another screen size if he's absolutely convinced this does not mean any change in the user experience.
Regarding the price point - Moore's law applies to the electronic innards, not the screen, battery, casing, manufacturing costs, distribution. Some of these costs will also decrease over time, but saying that Apple could sell last years model at half the price is an oversimplification.


From what I heard Jobs cared about the DPI not resolution, so to keep constant DPI they could release a 320x480 phone on wigh dimentions equal or smaller that 3.2'. The devs still support plenty of 3gs in circulation and this woudln't be additional hurdle.

I think basically nano could be the repackaged 3GS with maybe more ram to extend support form upcomming IOS updates longer than 3GS could handle.


As for android on budget phones the deterent to their (IMO) poor outcome will not be performance (600 and 800 mhz arm will be cheap preety soon) but poor touch experience induced but negatively reinforcing: low precision resistive screens, low resolution and small dimentions. Low resolution does offset performace issues caused by slower CPU and lack of GPU to some extent.
On the other hand it hampers the bigges selling point of consumer smartphone: the web.
I think they will sell well in the beggining just to produce huge wave of dissatisfied consumers.
As for Bada I propose to look here:
While the browser is minimally usefull as opposed to the one on samsung touch feature phones it's falls short of opera mini experience so basically we have a smartphone beaten by a lower class feature phone in it's key value proposition.

Anyway I think Samsung will probably replace feature phone lines with lower end smartphones whether consumers want it or not in less than a year.


As for value of software ecosystems as a leverage to convert consumers from feature phones to smartphones (which are and invariably more expensive, complex and have poor battery live) I think it's largery overstated by bias induced by US/Western consumer perspective.

US and Asian casual consumers (as well as the youth in much more parts of the world ) tend to naturally get software/web. But assuming that knowledge is easily transferable to 100% of cell phones consumers (who's also tend to be minimally computer literate) it a reality distortion.


2011 is the year of commoditization of mobile devices. Commodization is accelerating faster than excepted, things are moving too quickly. This year we may see smartphone sales in excess of 500 million devices

Acekard 2i

Acekard 2i

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