View from the Frontline in Bloodbath Update: The Smartphone Wars

Its been a big day or two around smartphones but there have been developments in many areas in the past week or two. Lets look at some of the significant matters in this, Month of September in Year 2 the Electric Boogaloo of the Smartphone Bloodbath.

APPLE TOLD US, THAT APPLE WILL TELL US - NEXT WEEK

The biggest news is that we finally know when we will know. Apple just announced that a week from now we'll hear the iPhone news. Will it be a brand new iPhone 5 with its rumored covered glass and 8 megapixel camera etc. Or will it perhaps be the rumored iPhone 4GS or 4S. Or perhaps both? There are rumors that we'll finally see that split in the iPhone product line, two new models for the year, one high-end totally new iPhone 5 and one update of the iPhone 4 but at lower cost components to sell at about half the price in unsubsidised form.

Its all rumors still. But on October 4 the new CEO Tim Cook will take to the stage and tell us what will happen with the next iPhone(s). And there are some confirmed new network operator/carrier customers - or very poorly kept secrets - such as KDDI in Japan and Sprint in the USA - as well as some carriers/operators who have said pretty definitively that they won't be offering an iPhone this year, like T-Mobile in the USA or NTT DoCoMo in Japan.

What else in the iNews? Some stunning customer loyalty stats came from with iPhone owners expecting their next phone to also be an iPhone, and at a far higher retention rate than any other handset. This bodes well for iPhone sales with the new model(s).

Meanwhile tidbits of iPhone success keep emerging. We've heard its the bestselling smartphone in countries like the USA, Japan, UK, France and Australia. But what of Nokia's backyard? Finland? Elisa one of the three Finnish carriers/operators said in its Q2 results that the bestselling phone - not bestselling smartphone - in Finland right now is the iPhone 4. But we'll return to the Elisa stats a bit later.

SAMSUNG HOW FARETH THOU, BADA?

So how is the new number two dog in smartphone handset brands, Samsung? Well, on the good news front, they said the Galaxy 2S had passed the 10 million unit sold mark. But Samsung has still not told us that they'd have passed 10 million bada phones. If they had been hitting their announced sales targets for bada, they should have passed 10 million cumulative shipments months ago. Yet not a peep. In my book that means trouble. They probably haven't reached that milestone yet. Not so good in an otherwise powerhouse performer. Sammy is also featured in the gossip about MeeGo and Limo, but about those in the OS section below.

And in the lawsuits side, the war between Apple and Samsung gets rougher and rougher. Samsung was really stung by Apple blocking it in European sales for the Galaxy Tab and since both sides have ramped up the war. There are statements from Samsung execs now that Sammy expects to sue Apple when the iPhone 5 launches, in courtrooms from Seoul to the one in Germany that first blocked the Galaxy Tab sales. Samsung claims that Apple infringes on several Samsung patents that are classified 'essential' which on the one hand make it very easy for the judges to rule in Sammy's favor, but also, these have established ranges of what 'reasonable' royalty payments are, as with essential patents, most if not all handset makers use those and have well-established regimes on how they are priced for royalties. So Apple can get past this obstacle 'easily' simply by paying - and Apple is easily rich enough to afford paying a coupla dollars per iPhone for the rights to use those patented ideas.. Still, someone counted that there are now over 20 separate lawsuits between Apple and Samsung. Stay tuned. This is one battlefield in the big war and the patents portfolios will become increasingly valuable in these fights.

NOKIA NOW IN SWEEPSTAKES FOR MOST EVIL

So in Nokianews. I have tried to keep my Nokiatirades in check recently and not write massive 'fire Elop now' blogposts after every little lunatic move he makes, but while we have this update, there are some bigger bits we do need to cover. In the news part, Nokia said they are now shipping the N9. Last days of September. What a lost opportunity. They could have had the whole month or more, before the iPhone 5, but no, all targets were pushed back, the famous countdown clock at Nokia Sweden site was taken down and only now the MeeGo powered superphone, the N9 ships. And what a footprint! Kazakhstan gets the N9, as does New Zealand and Norway and Singapore. But any of Nokia's traditional biggest markets in Europe like Germany, the UK, France, Italy and Spain - don't get the N9. The USA where Nokia desperately needs a comeback, the N9 was eagerly desired but will not be sold. It will be sold in China (due to China Mobile's commitment to MeeGo) but not in India. This madness by Stephen Elop to limit the N9 sales footprint to very marginal markets is to make sure its sales numbers cannot be huge. Apparently even here in Hong Kong with our 7 million population, that was too much for Elop, Hong Kong won't get the N9 even though the demand here for it was huge and the big branded Nokia stores are mostly void of customers.

While we talk of shops selling Nokia. I think I mentioned before that in China the Nokia branded franchise Nokia stores have seen such a total collapse of Nokia sales, that they have started to sell mobile phones by other brand phone makers! Imagine going to your MacDonald's and finding they now sell Burger King burgers and fries, in Burger King wrapping and all - right there at the McD underneath the Golden Arches. And here in Hong Kong for example I took an informal survey of some phone retail shops - my carrier here is SmartOne the local Vodafone affiliate and it used to be that the window display of SmartOne stores was half filled with various Nokia models. Last month when I counted, not one Nokia branded phone. Not any Nokia smartphones, not any Nokia featurephones even. Looked at windows of four stores near my home here. That is how bad its now getting for Nokia.

Or is it. Check out Finland. It was so strongly Nokia backyard that most quarters, all 10 of the Top 10 bestselling phones were Nokia branded. The market has been by far the most harmonious. In one of the most thorough market analysis of any country market Antero Kivi studied the Finnish mobile market for the Helsinki University of Technology in 2006 and of the total installed base of mobile phones in Finland, the first phone model that was not Nokia branded, was ranked the 30th most popular phone! 87% of all mobile phones in Finland were Nokias and the next 'biggest' market share was with Siemens, at 5%. Third biggest (Samsung) was at 1%. This is such a poisonous market for foreign brands that many giant global players have decided not to even bother to compete in Finland, as RIM did with its European Blackberry roll-out plans.

So its a safe market for Nokia, eh? Today two thirds of all mobile phones sold in Finland are smartphones. And Elisa the Finnish mobile operator/carrier (and my former employer haha) released the list of Top 5 bestselling smartphones in its Q2 quarterly results. We already heard the dastardly news that the iPhone 4 not only broke into that Top 5 list, but sits atop it!. Wow. A year ago nobody would have suggested with a straight face that any non-Nokia brand could ever sell better in Finland than Nokia. The smartphone was invented in Finland by Nokia, and Nokia's top smartphone designs originate from Finland, where one of Nokia's smartphone factories also proudly churns out top Nokia branded phones. So now we hear iPhone has taken Nokia's slot. What of the others of that Top 5? They must be Nokia branded, right? Well, kinda. There is one Nokia smartphone in the Top 5. Yes. One. And two Samsung Galaxy models. And one ZTE. Yes. Where Nokia 'owned' the Finnish market and in any other year Nokia had the top 5 bestselling smartphones all to itself in this market, today Nokia fits barely one out of the five bestselling smarpthones in Nokia's home market. I hate to say it, but this looks dangerously like Motorola (and its US market which it lost to Samsung and LG).

One more angle to the angst. Nokia chipmakers and subcontractors are all complaining, that even after the Q2 results, the current component shipments to Nokia are falling below even those dismal levels. Texas Instruments and STMicroelectronics. All this is of course due not because Nokia is an inherently bad company or its phones outdated or its smartphones obsolete. Nokia was growing sales, growing revenues - and massively increasing profits (and had its share price up 11% from when Elop took over) until the Elop Effect in February of this year. Since then its been crash-dive at Nokia, already having produced the world record for any market leading brand to demolish its market share - a world record Nokia is now only 'improving upon' in this current Quarter.

THE MICROSOFT MAFIA AT NOKIA

There were personnel changes. Tero Ojanpera left. Rich Green the CTO (who was already protesting against the MeeGo and QT broken promises by Stephen Elop) has left. Who is there left? Just about all the familiar faces of what did make Nokia the biggest phone maker and biggest smartphone maker and biggest smartphone OS maker - long-time Nokia veterans who KNEW how to succeed in the rough wars of mobile - the Nokia handset unit the only one in the industry that was profitable year in, year out, quarter in, quarter out (when comparing Nokia to other full portfolio mobile phone makers, obviously, not to those who only do smarpthones at the top end of the industry where there are much bigger profits).

Stephen Elop has not only created a Microsoft Mafia inside Nokia, his private little clique who don't understand mobile and think they can run the handset business like Microsoft did in the PC world (by bullying, we'll get to that in a moment) but he's also caused just about anyone of the veteran senior staff to depart, so Elop has no sanity checks to his insane ideas. Oh. And while am on that CTO, Henry Tirri - a Finn and past head of the Nokia Research Centre was made the new CTO. Have a guess where he is going to be based? 70% of the world's phones are made in China, most of those right here a few miles from my home, in Shenzhen where more than 2,000 phone manufacturers are registered. Chinese brands are storming up the global sales charts and already ZTE and Huawei are in the top 10 of handset makers. Asian brands, when we add South Korea, Taiwan and Japan, count for most of both the total handset brands and the total smartphone brands, replacing ever more of what remain of North American brands. So Henry Tirri is moving here to Asia? Based here in Hong Kong or in Shanghai or Seoul or perhaps yes, Shenzen. No. He is going to be based in California right next to Microsoft's office.

So, Nokia's CTO could be where the big competitors are to understand the real market, or go where their PARTNER exists to what, set up the new corporate offices for Nokia HQ when it becomes a division of Microsoft? I know Henry was in Silicon Valley before and its a nice place for a Finn to be placed on an Expat salary and housing allowances etc - but is this a CEO who is serious about winning, or just marking time before Elop shifts Nokia formally into the arms of Microsoft?

And yes don't write about apps. Elop has actively moved Nokia AWAY from the software side of the business! He is abdicating all software stuff to Microsoft. Yes, maybe the CTO of.. Microsoft.. should be in Silicon Valley but not Nokia. Especially not that new Nokia which foregoes the software side of the industry and focuses on moving boxes. And in that phone business, new CTO Henry Tirri can no doubt study the brilliant success of US mobile phone juggernauts like Palm, Danger, Motorola and HP. Toss in the Canadians with RIM. If you say 'but Apple' yes, Apple releases one iPhone now every 16 months, that is hardly reason to post your CTO to California. Just these Shenzen phone makers a bicycle-ride away from my home release about 7,000 new phone models in that same period of time..

ELOP IS THE NEW BLACK

But I am digressing. I meant to talk about the new definition of Evil. We just heard today that O2 the European mobile operator/carrier group that is part of Telefonica - is not going to be featuring any Nokia Windows Phone marketing when the first WP7 phone launches at the end of the year! Wot? Yes. Mobile News reports that O2 and Nokia did not agree on Nokia's 'strict criteria' for Windows Phone launch?

Since when has Nokia said 'you cannot sell my phones anymore'? Come on! Nokia's competitive advantage is its world-leading distributor network! And this is Nokia? They have the gall to do this? Nokia the company formerly known as biggest and strongest? Nokia which is bleeding cash, making a loss for the first time ever, this past Q2. And now they start to LIMIT which of their LONG-STANDING operator/carrier partners 'may sell' the new Windows Phone based Nokia smartphones?

This is sheer lunacy! Its not that O2 said they don't want to sell them. Its Nokia who says 'you are not allowed to have it'. What the Fffffff... (...rhymes with Duck).

THE DARTH VADER COMPLEX

So here is the scoop. Stephen Elop (whom I have already called a deranged psycopath and the evidence is increasingly supporting that conclusion) has a Darth Vader complex. Yes, that Darth Vader from the Star Wars movies, who wanted to be the most evil, of the Empire known as Evil. Where in the tech space, we used to have the standard for evil-ness, that was Microsoft. Now Elop at Nokia wants to prove to Ballmer, he can be trump that. That Elop can become known simply as Elop the Evil.

So he's come up with some nice bullying tactics, to force the carriers/operators to do heavy Windows Phone marketing for Nokia's launch. If you don't comply with Elop's demands, you don't get the Nokia phones. Its the Cheney-Rumsfeldian gambit - either you are with us, or you're against us. Maybe that worked for George W Bush after the world was shocked by the terrorist attacks of September 11, ten years ago. But nobody attacked Nokia (well, nobody except Elop himself with his Burning Platforms memo). So this strategem is incredibly ill-advised. You don't engender support and loyalty by bullying. You build resentment - and indeed hatered that way.

Who is going to win in this situation? Microsoft came across the carrier revolt very recently. Last year, they had many carriers lined up to sell the Kin phones. Most pulled out at the last moment, Kin was killed by Microsoft as untenable. Google met the same fate with the Nexus One, it was signed on many networks but when they pulled the phone Google tried to sell it via online, and found it was a dead prospect and ended the Nexus One. This is a game that the carriers will always win. Look at the strongest handset brand by far - Apple. When Apple tried its iPhone without SIM card (using a virtual SIM card) the carriers said 'no way' and now we have had Apple frantically redesigning its iPhone 5 to fit the micro SIM card and pushed for a 4 month delay in its launch. Imagine how much cash Apple left on the table due to this 'punishment' caused by the 4 month delay in iPhone 5 launch? They have permanently abandoned millions of iPhones of sales - that Apple wanted to have but were prevented from collecting on.

And yes, Nokia has experienced the wrath of the carriers before. When Nokia tried to launch the N-Gage, it had an app store that bypassed the carriers/operators who revolted and in less than two years, cut Nokia global sales by a third! Nokia learned that lesson well. But Elop has fired all the senior staff who knew that. He is now about to repeat one of the costliest mistakes possible in this industry. If you anger the carriers, the damage will be carried for years. Just look at how badly the US carriers have carried a grudge over the years, punishing Nokia until its market share is a tiny sliver of what it once was.

Now we know Elop is trying to bully the carriers/operators. How will this play out? First, the carrier CEO's will see that what was once the friendly, collaborative Nokia, is now a belligerent (lawsuit-prone) and bullying Nokia, channeling Microsoft at its worst. What was once the reliable 'we keep our words come what may' Nokia has become 'we break all of our promises, even to our strategic partners' Nokia. They can see they can trust Nokia no more and that moron Elop in charge is flipflopping every which way like the worst we've seen of Mitt Romney haha..

HE WHO LAUGHS LAST, LASTS

When they had the old Nokia, they feared it for being too big and powerful. Now even as Nokia's sales and market share have shrunk, when Nokia is married to Microsoft, the pair is far more dangerous to the carriers. And this is all before their universal hatered of Skype, all now focused as a new hatered of Microsoft.

The carriers can see that Nokia, when led by Elop, and allied with Microsoft is by far the most belligerent, arrogant, bullying, unreliable, lawsuit-prone, untrustworthy of ANY handset maker out there. So will they want to support Nokia and Microsoft. Of course not. When they see Elop trying to bully them - and one of the most cooperation-friendly veteran carrier/operator groups, O2 - they will gang up against Nokia. Just like they did against Apple about the virtual SIM card issue. But how will this revenge be served? Like the Klingons say (or like the Sicilians say) revenge is a dish best served cold. The carriers will now line up to promise to sell and promote the new Nokia Windows Phone smarpthones. They will take the marketing dollars from Microsoft and from Nokia. Then when the time comes, ooops, they have a campaign already in progress. The iPhone 5 was selling too well, the Galaxy S2 whatever was in super-demand. The HTC is simply selling better, etc. The Nokia phones will soon find themselves in the back shelves or out of stock.

And if I know my carriers friends, haha, some - maybe many - will 'suddenly' decide, this is too much, and say forget it, to Nokia and Microsoft dollars, and simply decide not to promote those phones at all. And if so, like the revenge served cold, they'll do it very close to the launch date, at the very last moment, to mess up Nokia and Microsoft as badly as possible.

Bullying NEVER works with the carriers. This is sheer lunacy by Elop. But I think this is a bigger story now, I need to write a separate blog about it, and the carrier/operator ethos and what is acceptable and what is not. Elop simply went to the wrong schools. He studied the Rumsfeldian school of collaboration, with the advanced studies of Cheney'an style of backstabbing and conniving (and utter denial in face of facts)

Lets leave Nokia for now (I am still expecting Nokia to post a loss this quarter, all signs suggest that will happen, and if so, if Nokia knows this, according to the rules of the stock markets, they should be giving a profit warning. But honestly, I am not in any way privvy to what the CFO of Nokia knows, maybe the new Nokia smartphones can now turn lead into gold or something and they can magically deliver profits or zero profit this quarter as Elop promised two months ago)

HP CHANGES BOSSES

In other misguided smartphone maker CEO news, Hewlett-Packard fired Leo Apotheker and hired former eBay boss and past Republican political candidate Meg Whitman. Whitman promtly signed onto Apotheker's strategy. Lets hope she does not mean every bit of it. And that finally at HP, some wiser heads prevail about their Palm and WebOS acquisition. This is only the strongest growing part of the IT industry, the most profitable part of the IT industry, the inevitable direction where HP's total current business is headed (traditional computers increasingly to mobile and smartphones). This is also the inevitable direction for the internet, for newsmedia, for broadcast media, for music, for gaming, for advertising. Its the inevitable direction.. for money for goodness sakes!

And obviously the world-beater smartphone is the iPhone and iOS. And when HP bought Palm, many analysts said Palm and its WebOS was the next-best thing to Apple's product and iOS, and I said here, that Palm was a winner waiting only for one thing - funding. HP has that in droves. If HP only would let the Palm project flourish and use its natural strengths (rather than attempting to convert Palm into a PC division for enterprise solutions) - the Palm unit could be to HP, exactly what the iPhone has been to Apple - with the exception that HP is far bigger than Apple, if done correctly, the gains to HP could come far faster than they did to Apple from the iPhone... But yeah, we know the story. Lets see if Meg is smart enough to give Palm its chance to drive HP's profit into the stratosphere.

MOTOROLA-GOOGLE

Google has been giving ever stronger confirmations that they do not intend to let Motorola compete strongly against other Android makers. Chairman Eric Shmidt said words to that effect just a few days ago. Expect Moto to become a second class citizen in the Android army, never stepping on the toes of the front line warriors, but obviously making only Android phones..

HTC ROLLS ON

No big news from HTC, except that they expect solid growth again for the current quarter, increasing sales. Good news. HTC should be a beneficiary where Samsung's interests may increasingly shift away from Android to other operating systems (bada, possibly MeeGo-Limo, and Windows Phone). Samsung seems to have been most visibly annoyed by Google's purchase of Motorola.

ANDROID IS EVEN BIGGERER

Nothing but big numbers on the Android story. Android operating system based smarphones outsell iPhones by 2 to 1 by some survey, Android has 54% of the market by another survey and so forth. They are clearly the 'first' ecosystem in terms of the dominant, biggest one. Similarly various app store etc stats are starting to fall in line. I think it was now the number of developers for Android which has passed that for the iPhone. In terms of total apps, Apple still leads but Android is now the strong second, and catching up fast. And on that front, the combined number of apps adding all iPhone apps and all Android apps has passed one million smarpthone apps just by these two biggest app markets.

WINDOWS PHONE MANGO LAUNCH

The 7.5 version of Windows Phone, called Mango has just launched. It has the first phones starting to ship from HTC and Samsung - itself a bit of a slap in the face of Nokia, as Nokia didn't release smartphones on the previous Windows Phone 7 version and this was to be the big Nokia coming-out party. Also with Microsoft supposedly committed to Nokia, now the big Mango party is with HTC and Samsung. Nokia's first Windows Phone (and thus first Mango) based smarpthone, code-named Sea Ray, is to launch just before Christmas, in a few selected markets with limited availability, then rolled out in selected countries in Q1. Mango adds many 'normal' abilities to Microsoft's new OS, starting with multitasking (a very necessary ability on a mobile phone) something that 'obsolete' Symbian has had for most of the decade haha.. Mango will be shortly available for older Windows Phone 7 users to upgrade to (but obviously not for older Windows Mobile users)

MEEGO MAY GO.. LIMO

Intel has been working very hard behind the scenes to bring MeeGo new viability after Nokia announced they won't be doing more MeeGo phones after the N9. There is a big Intel event about it tomorrow so we'll know more then, but a strong rumor says Intel will be announcing a new merger partnership of two Linux based platforms, MeeGo with LiMo. Most Japanese phone manufacturers are familiar with LiMo as it is the basis of many Japanese featurephones as their operating system. With this merger, MeeGo would gain for example Panasonic and NEC to the handset manufacturers and several operators/carriers too. A related rumor says Samsung may migrate/merge its bada OS project with MeeGo/Limo and join thus the MeeGo family. This would be an ironic twist to Elop's misadventures. Nokia abandons the winning platform, Samsung takes Nokia's place and shows how strong it is, while Nokia instead goes with the loser in Microsoft Windows Phone, that may well see most partners deserting it if my gut feelings about this Microsoft Nokia bullying of carriers turns out to be true.

Nonetheless, I have been saying, that any handset maker who has an interest in MeeGo should now try to capitalize on Nokia's N9 and Nokia's (Stephen Elop's) sheer pigheadedness to not sell the N9 broadly. Why not Samsung or ZTE or Huawei or Panasonic or whoever, do a quick clone of the N9 but with a few 'upgrades' to reflect the launch timing probably in Q1 - like say 12 megapixel camera - and fixing a few obvious Nokia faults like no microSD slot or no remvable battery - and then use MeeGo and show the world how great both the hardware and the software can be. Then watch all those who 'really' wanted the Nokia N9, buy your superphone instead. And yeah, if Nokia refuses to sell the N950 (essentially an N9 with slider QWERTY keyboard) then by all means, MeeGo partners, you sell it! Do your MeeGo slider QWERTY and make Nokia look supremely foolish. But yes. We'll know more after the Intel event. Oh, and one more tidbit, some analyst house, might be Strategy Analytics or Gartner Dataquest, said they expect half a million MeeGo tablets sold this year. So MeeGo is far from dead, much to Elop's and Ballmer's shagrin. I tweeted only half in jest, that if you want the third ecosystem, this MeeGo-Limo partnership is far healthier bet to be the third ecosystem than Microsoft's Windows Phone with or without Nokia haha..

That is all I had on my mind today from the trenches of the Bloodbath Year 2: Electric Boogaloo. Next up in the known unknowns, what Intel tells us about Meego and what Apple tells us about the iPhone(s). But more fascinating are the unknown unknowns (Sorry, that is a good phraseology by Rumsfeld) which will no doubt unveil themselves in the coming weeks. Then in October we'll get into the next Quarterly results from all the players.

Comments

[Boris]

OK, Tommi, Meg Whitman wasn't CEO of Yahoo! She was CEO of eBay. She bought your lovely Skype :-).

News from Germany:

Several large German online retailers have listed N9 16 GB. Preorder price is 619,00 €. My thoughts: demand is so high, that they don't want to miss huge profit, even Nokia want release N9 there. There is always a way to import something outside official distribution channel.

German court's ban of Samsung Galaxy Tab 10.1 is ignored in Germany by everybody. Almost all major online retailers of computers/laptops/phones are selling it, and not only them - Vodafone D2 GmbH is selling them, too, subsidized with mobile internet plan, and they even advertise it on the main page!

About WP7 boycott:
You are right, good luck finding WP7 phones at Verizon stores in NYC, and if you found them, they are not connected to Internet (which effectivelly cripple already crippled platform), and sales people will do everything to convice you to buy iPhone or green robot's phones.

[Jonay]

MeeGo has become Tizen, and Samsung is joining it, as well as LiMo. So maybe that could become huge, or maybe that turns out to be vaporware. Timing of the announcement also puzzles me, the very same day that the N9 begins shipping.

[Kirill Zelenski]

Tomi, Mango still haveno multitasking... so, it is still much worse than old good symbian.

[gzost]

Yout talk about the N9 as if it were running pure, fully open sourced MeeGo, and other manufacturers could just check out the source, compile and have it running on a new handset.
What the N9 actually runs is the Nokia Maemo core (open sourced, but not MeeGo), with some MeeGo compatibility layers - and a Nokia-made UI. That UI is not part of the MeeGO distribution. The current MeeGo built for handsets is from October 2010, and the promised 1.2 update will not bring the N9 UI.
So there's no simple picking up from the N9. Anybody wanting to release a MeeGo phone has to invest a lot, especially in the part that matters most to modern smartphones - the UI.
What does today's announcement of "Tizen" change here? LiMo doesn't bring the needed interface, neither NEC nor Panasonic are particularly strong players in the mobile space, Samsung hasn't managed to do all that much with Bada, and Intel has wasted years bringing Moblin/MeeGo to a point where basically nothing ships with it. So it's an alliance of players proven to be at best mediocre in software development.
Looking how much the Moblin/Maemo fusion hindered development there, it's hard not to be pessimistic. Intel claims that Nokia cost them 6 months of development time. Add to that another 6 months for the current fusion, and that's a full year lost - an age in the mobile space.
By the time the first competitive Tizen phones may be out, another few hundred million customers will have switched to smartphones and chosen Android, iOS or maybe Windows Phone 7. That's increasingly customers with real investments in applications and content that's tied to the platform of their choice. Customers for whom the platform will be an ever more important point in the choice of their next phone.
Nothing's settled in the phone market yet, and there may yet be space for an open source OS, with some major players backing it and providing the necessary parts of the ecosystem, like app stores, mapping and content. I'd personally welcome this very much, and would be willing to switch. As it is, things on the Linux front are too little and too late, and to keep merging failing projects will not change this for the better.

[vvaz]

@Boris

Price is high due to Nokia positioning of N9 designed to destroy any chances for commercial success.

Samsung Tab ban is ONLY for direct sales from Samsung Deutschland GmBH. Retailers can easily buy them eg from Samsung Polska or whatever other entity making this ban and Apple a laughing stock.

[dsmogor]

Tomi, I don't know where are you taking your information from but from the MeeGo page itself it looks like MeeGo is officially no more https://meego.com/.

Restriction of N9 sales and Intel commitment to Android was a final blow to the platform. Sad but true.

[hrxorh]

The N9 will arrive in Croatia in October – however, with a price of 680€ without carrier subsidies (higher than iPhone 4 (ca. 626€) and Samsung Galaxy SII (ca. 586€)) and an OS that is considered dead, I do not see it making an impact on the small Croatian smartphone market.

[darwinphish]

Next week Apple will announce the new iPhone 5 and an 8 GB version of the iPhone 4. The latter will cost $0 on a contract or around $450 with no contract. They will stop selling the 16&32 GB 4's. All new phones will ship with iOS 5 and existing 4's will be upgradeable, likely for free (or very little).

This is nothing new. Apple already sells 2 iPhone models (4 and 3GS) and seems quite happy to keep two versions on the market. That the 3GS still outsells most other smartphones suggest this is a good approach for them. Even with an iPhone 5 on the market, a lower priced iPhone 4 will probably continue to sell very, very well.

[Guest2]

Well that merger happened and Meego's dead again.

[vvaz]

@ LB

MeeGo had one real advantage on Android (the same advantage iOS and Symbian have). Native code. On Android everything runs on Dalvik layer which requires better hardware to get the same effects.

In other words: MeeGo and iOS can run with the same results as Android on cheaper hardware giving producers better margins.

[KDT]

Come on Tomi, you couldn't possibly believe that the 4 month delay of the next iPhone was due to Apple trying to do a virtual SIM....

1) Around the time of a new iPhone, there are always leaks of suppliers ramping up production. There was *no* indication of a ramp up of a new iPhone in April-June time frame.

2) Apple use to hold the annual iPod event around October to have their product line ramped up for X-Mas sales. The iPod is no longer the must-have Christmas gift and the yearly iPod introduction is nowhere near as exciting as it use to be. The only one anyone cares about is the Touch and everyone knows the hardware spec of the new Touch in October as soon as the new iPhone is launched in June. They wanted to change the annual event to October and include iPhones + iPods.

3) You were *dead wrong* about your 2nd quarter iPhone forecast. How many more iPhones could Apple possibly manufacturer and sell during the 2nd quarter than it did?.

4) *Every* carrier is bending over backwards to sell the iPhone. If carriers truly had the power over Apple that they have over most vendors, you would see the carrier branded crapware on iPhones like you see on all other phones. You definitely wouldn't see Apple with such a direct relationship with the customer.

[apollo_dev_team]

Elop will fire another 3500 people. Cluj will be closed down. Concentrate productions in major asian factories.

And Meego? Meego is dead... hehe

[apollo_dev_team]

@Baron95:
Meltemi? ssst, company confidential ;-P

[Szymon]

Well, i just read that WP will beat Android as soon as 2013. Really. See pyramidresearch.com/points/item/110509.htm

The other thing i just read is that nokia Q3 will be not so bad... (google: RBC raises Nokia outlook for Q3)

This may sound funny, but i see that so many people believe in MS omnipotence that in some (small imho) part this may be self-fulfilling prophecies.

[Tom brady jersey]

it's so good for that !!

[kevin]

Tomi,
I've given up contesting the reason why Apple moved iPhone 5 to fall, since you're fixated on the virtual SIM.

For everyone else, here are some of the technical and marketing reasons for Apple's change:
1. Additional time to make larger A5 chip workable in iPhone (and to have a lower unit production cost).
2. Additional time to finish iCloud, which required OS X Lion and iOS 5 to get in sync, and the prior launch of OS X Lion for testing by developers.
3. Additional time to finish the coming iOS 5, in particular, voice input and personal assistant software (which impacts all of iPhone's Apple apps).
4. iPhone 4 would receive a boost from CDMA version in Feb.
5. iPhone 4 would receive a boost from white model in May.
6. Nokia announced switch to Windows Phone 7, with first model due by end of year, so little competition.
7. Microsoft announced Mango arriving phones by fall, so little competition during summer, but major competition just prior to Christmas.
8. Google leaked Ice Cream Sandwich arriving by end of year, so little new competition during summer.
9. RIM announced delays in new BB 7 models until late summer; QNX-based phones not due until next year. No new competition.
10. iPod is no longer as big a Christmas sales draw. Positions iPhone to be the draw and to be more competitive during 4Q.

[eduardo]

Nokia laying off 3,500 more

http://techcrunch.com/2011/09/29/oh-nokia-another-3500-people-laid-off-manufacturing-operations-trimmed-down/

[Robert]

Prediction: Apple will introduce new battery design in 2012/13 that enables iPhones and iPads to last up to 50% longer on one charge, and will occupy less space. They will have sole access to this battery technology(for awhile), and take even more profit from revenues.

Prediction: Apple will introduce another killer device that will beat all other manufacturers to the market. Maybe a small portable printer for the iPhone/iPad using same advanced battery technology, printing color output straight from your phone or pad?

Prediction: Steve and Stephen will both be gone this time in 2012.

Prediction: Tomi will receive a Pulitzer for his analysis of the collapse of Nokia, and the failure of MS to compete in the mobile market.

All predictions free of charge, no refunds or exchanges allowed. If you profit from this, I expect you to chip me off 10%.

Thank you,
Robert

[Earendil Star]

The nice thing about the mobile space is that it's so dynamic and competitive, that anything may happen in very little time. That's exciting, but it makes doing any kind of prediction really tough. Because of this, thanks to Tomi for sharing his insight with us.

Meego is dead. As I had said previously and as correctly reminded by LeeBase, it was hideoulsy killed by its foster father TH Elop in February. However, it is also true what gzost says in his post, that the N9 is not featuring Meego, despite what is normally reported.
My take on this is that Nokia really had a potential killer product with Maemo, if it only had the guts of promoting it from the outset, with the N900. Yet they totally failed in vision and execution, lost precious time in doubts on whether supporting Maemo as future OS (probably they were afraid of harming Symbian), then -instead of sticking to Maemo- chose the frutiless Meego path just loosing more time, and this mismanagement hindered a potential killer product they had in their hands, represented by the current -late to market- Maemo N9.
A real new Nokia CEO should -among other things- have refocused and relaunched Maemo, curing Nokia's execution woes. But the MS parasite was quicker. It infected Nokia and it crippled it so badly that it now is under an imperius curse from Redmond. As already stated, good (but unfair and possibly illegal) move by MS (attempting to force feed its unattractive OS to customers, as typical for the company with its products), end of the story for Nokia.

Then about OSs, ecosystems and the like. Let's try to get rid of the FUD and misinformation.
Certainly iOS and the iPhone work well. But that's just a part of the story. The real strenght of the iPhone ecosystem is that IT IS COOL, it's what ALL PEOPLE WANT (TO SHOW OFF). I'm not saying this as a criticism, but as a praise. It's not an easy thing to achieve.
Before the iPhone, I remember Blackberry managing to reach that status. It first happened in the business world (everyone that counted HAD to have a BB), but then spread out to consumers (the BB Pearl was one of the first consumer fashionable items by RIM).
Unfortunately for BB, then came the iPhone, which dethroned it on the STATUS SYMBOL FACTOR and, eventually, that was it.

This means that all discussions about hardware or software features, what OS is better than the other specs-(hw or sw)-wise is moot. What counts in this space is what is COOL, what is perceived as the MUST HAVE product. That's where the real battle should be fought.
In this sense, the fact that Apple has "just" "the iPhone", i.e. ONE product, is no coincidence. Much easier for the consumer to identify the single, unique COOL and MUST HAVE product.

Of course features count, together with the related UX, but that is only the initial prerequisite. You must then build an IMAGE, a BRAND, that entices people to buy your products. Features may be superior, but if you lack recognition and this COOLNESS factor, all is in vain. History shows that many superior products were trumped by others just because of this.

And more: regarding features, some count more than others. The iPhone/PodThouch/Pad demonstrate that cool screen and snappy touch UI are crucial. If your phone is laggy, despite its other qualities, it will fail.

Nokia had lots of cool features. Voice recognition. Worldwide Ovi maps on the phone (no need to be on-line) with free lifelong updates. Yet it failed to capitalize and promote them enough to create that extra feeling in customers that it was really a MUST HAVE thing. Instead it continued to insist on specs that were no longer that important to customers (e.g. cameras), while slowly destroying the reputation of solid software AND HARDWARE that it had built over the years, by offering lagging touch response and unstable OSs on its latest models.

Finally WP. WP still is a laggard. So far, no sign that consumers are buying into the hype created by MS super strong PR machine. But, as Eric Schmidt will remind you, NEVER underestimate MS. They are rich in cash and profits from their Windows and Office monoply (which seemingly, nobody is caring about any longer). They are by their own nature sharks. They know that this is an important battle for them and they will try anything to be successful here.
From spreading FUD, pay favourable reports, promoting campaigns against competitors in the media, covertly acquiring companies without paying them (e.g. Nokia), blackmailing partners (now also carriers as Tomi is saying), force feeding their face-lifted only products leveraging on their monopoly, etc. etc.. MS never cared about the casualties it left on its path.

Proof is, that currently they are no-one in the mobile space (despite a decade long presence), yet still many consider their claim of becoming the "third ecosystem" -after Android and iPhone- plausible (by the way, this claim was made by Nokia!? CEO TH Elop, while Nokia STILL had the FIRST ecosystem with Symbian).
Did anyone notice that they have a 1% market share in mobile, but a 30%+ share in news market coverage in mobile systems? While their latest release is still lacking in features everyone else has? Power of MS's PR.
Yes, MS might in the end achieve this goal. Sad to think that, if this happens, part of the success will be thanks to Nokia's technologies being stolen, such as Maps, Swipe (already to be seen even on Windows 8!), and the like.
But this time, carriers will also play a role. Let's see if it is as decisive as Tomi says.

Meanwhile other contenders are being wiped out after conceding defeat. Look at HP/WebOS. Sadly, less contenders mean less competition and less innovation to all.

Just think:
MS IE9 is not too bad. But it came out thanks to Firefox and Chrome. Before that all MS cared to offer was the crappy IE7/8.
Windows 8, despite being just a flashy UI over Win 7 (albeit being marketed as a NEW OS), still carries some elements of novelty in Metro. Yet, would it have come out without the iPad or Android? Nope!
Unfortunately, market dynamics and supervisory inaction are ridding us of competition and thus of many of the real innovators. As long as this goes on, we will all stand to loose. Sorry, all you fanbois, but that's how things are.

Also a comment on Linux and open software. Linux has proven to be a disruptive element and a source of terrific innovation. Look at Android, Maemo, Meego, you name it. But in the current crazy patent system coupled with the US legal system style (where it's better to pay a little by settling agreements rather than facing the risks of a lengthy trial), a huge handicap is given to FOSS.
Again, we all stand to lose in the current state of affairs.

Meanwhile however, new disruption is coming, this time from Amazon... even if not on mobile phones yet.

The battle is heating up even more in the exciting mobile space!

[karlim]

@Earendil Star It's the first comment that I agree with probably 80% of...

I mean pre Elop Nokia was ffin up by the numbers without Elop, as you say too.

(Btw - what the heck TH Elop means (that TH thing)? You refer to him with that TH, sounds like some witty allusion, but have trouble figuring it out.

Then there comes your thing about "Elop killed Meego" and then contradicting yourself - that there was no Meego (so nothing to kill), it was always Maemo - and OPK and Vanjoki killed just by delaying by a year with Meego adventure. As Intel just proved by killing Meego themselves.

And then about that evil MS empire. It sounds from your comment that MS is killing WebOS because of "market dynamics and supervisory inaction"...

MS might have been Evil Empire in the 90s, but they've been a laughing stock of tech industry through the first. They haven't been able to kill anyone or anything with good enough product in the last 10 yrs.

You admit yourself that previous Nokia management with OPK and Vanjoki at the helm has been screwing by the numbers. But then go and start playing arm chair CEO with 20% of the info actual new CEO had,telling that he should have doubled downed on Maemo, etc;.

Not even ready to contemplate a possibility that it's not Elop alone who made the Feb.11th decision - Jorma Ollila was 100% behind it too as was at least most of NOkia board and senior management. No, somehow Microsoft fooled them all, and got them sacrifice they reputation, risk jail if sometime your theory is proved correct, and destroy Nokia for a bunch of money they do not actually need since they are already have enough....

Have you ever contemplated a possibility that they all made the best decision they could, given all the info they had, to save Nokia from the position OPK and Vanjoki put them in