LG buys Palm, Firefox spreads, Tizen phones in July, and other observations in Smartphone Bloodbath Year Four, Smartphones Galore

So we have lots of news coming from Barcelona MWC (and to be clear, I am not there in person, I am monitoring via new sources). So its the Smartphone Bloodbath year Four: Smartphones Galore, and perhaps that should be 'Ecosystems Galore' haha.. The space in the OS wars keeps spreading. So lets cover a few big news items. 

LG BUYS PALM FROM HP

So in ecosystem news, this is the biggest today. LG bought the Palm WebOS unit from HP. If you ever wanted to see whats next for Palm, if you thought WebOS didn't deserve to die, now it has a chance to come back. LG is not really big enough to go it alone, they need now partners to provide handsets, but where LG bought its own OS, is a clear sign LG wants to be seen as a top-tier smartphone maker with its own OS, like Samsung, Apple, Blackberry, Google/Motorola (and until recently also Nokia). And thus separate itself from the second tier makers like Huawei, ZTE, Sony and Lenovo (and now also Nokia) who are totally dependent on others for their smarpthone destiny.

Two interesting developments - how long until first LG 'Palm' device is announced & released. They might be able to do it in 15 months, with Korean efficiency and 'balli-balli' philosophy or hurrying-hurrying... So first LG phones with WebOS out perhaps in summer 2014, and the hype to start around end of year 2013. What LG would dearly love, is to find a few hardware manufacturers to commit to WebOS. Remember, this was once rated as good as the then-current iPhone and iOS platform (3 years ago). So LG does gain a potentially competitive platform, but they must find partners to make the ecosystem play work. LG is no Samsung (or what Nokia was) in scale to be able to support an OS just by its own sales - like Sammy did with bada in the past few years.

FIREFOX SPREADS

And Mozilla's Firefox OS is now blasting the industry with an ever more impressive lineup of carriers (they had plenty of those already) and now, many handset manufacturers. At MWC we've already heard that Huawei, ZTE, LG and Alcatel will provide Firefox handsets - this year. Huawei is the world's third largest smarpthone maker, ZTE and LG are Top 10 makers, so Firefox now has a nice portfolio of handset makers in its stable. The little fly in the ointment is that LG just bought Palm, so don't expect LG to fully ever embrace Firefox, but early on, even one LG phone is good enough for Firefox to claim 3 of the 10 largest handset makers supporting their OS.

The main points with Firefox lie in 'how mobile' is the OS. Mozilla is an internet company, we've seen what mistakes for example Microsoft had made, time and again, taking USA West Coast lessons and attempting to force those into its mobile strategy (a strategy Microsoft Chairman Bill Gates has just admitted last week that it has been a mistake). A first-edition OS is rarely solid and complete. Firefox will be compared to Tizen, which builds on the hugely admired and beloved MeeGo OS by Nokia and Intel, the only OS that ever was consistently rated better than the iPhone. If you take that, MeeGo, already better than the iPhone, and now evolve it further, combining Samsung's bada competence and knowhow into the MeeGo project, with Intel's Moblin background, expect Tizen to be the most complete and 'mobile' of any new OS this year - and the one rated by all analysts as 'by far' the best. And Samsung is trying to find the same handset maker ecosystem to Tizen with Huawei there already plus Panasonic and others. So for a Huawei, who already does Android, if the Tizen OS is proven to be far more robust, advanced and complete, than Firefox, we might see Huawei preferring Tizen over Firefox. But we don't know, and the operators/carriers will have a lot to say on which OS and which manufacturers they decide to support... Still, Firefox is moving into a strong challenger position now with the impressive supplier lineup.

TIZEN PHONES OUT IN JULY

Samsung is promising first Tizen phones as early as July or August and saying there will be several this year. Much of what I think was in the above paragraph, Tizen will be a success simply on Samsung's own push alone, and will be bigger than say Windows or Blackberry in two years, simply because Samsung will promote it as one of its OS platforms (and migrating/converging bada into Tizen). What Samsung and Intel need with Tizen is then many handset makers and carriers/operators embracing the OS, which is likely to be easier than Firefox, where carriers/operators like NTT DoCoMo for example are on the Tizen Board, and the legacy of the OS, being an upgrowth of something very well mature, developed, and highly competitive if not supreme to other OS platforms. Expect a lot of the tech buzz this year being between Tizen and Firefox

WINDOWS NO TRACTION

And yes, we heard last week Bill Gates admit that Microsoft had seen the smartphone revolution, was in it early, but the strategy they adopted had prevented Microsoft from gaining scale. Windows Phone has failed and Bill Gates used the words it is a mistake. Now we heard last week (before the Palm purchase) that LG for example said, they will not bother to make more Windows based smartphones until there is some demand by carriers/operators. Obviously the carriers/operators do want a third ecosystem, but after two years of Steve Ballmer and Stephen Elop hard-selling Windows ("with Skype included, of course") at the operator/carrier community, with the biggest marketing budgets ever, the overwhelming response by the carrier community is rejection. Yes, they'll take the money, then not sell the phones. The Windows strategy is dead. But its no surprise to my readers, I told you so. And now, once again, we hear from yet another Windows partner - LG says there is no traction from carriers. 

NOKIA CLAIMS ITS NOT ME-TOO

Elop continues to play the Bush-Cheney strategy. Look at blatantly obvious facts and steadfastly simply deny deny deny. In January 2011, just before Elop announced his mad Microsoftian strategy, Nokia had the most differentiated smartphone strategy on the planet. It had smartphones with the best camera on the planet (N8) - far better than what Apple offered on the iPhone. It had smartphones with full QWERTY keyboards similar to Blackberries - something Apple refuses to offer. It had touch-screen and QWERTY slider hybrid phones like the highly praised E7, the latest 'communicator' a model of smartphones far more expensive than the iPhone, with astonishing tech that the iPhone didn't match, and yes, a QWERTY slider in addition to the touch screen. Nokia offered the most open ecosystem, something Apple didn't, and had the most connectivity from FM radio broadcasting to NFC to microSD slots to unrestricted Bluetooth - things again that Apple's iPhone didn't offer. In January 2011, Nokia was THE most 'not me-too' smartphone maker on the planet, selling smartphones far more expensive than the iPhone to smartphones far far FAR cheaper than the iPhone. 

Now we have seen 11 smartphones launched in the Lumia series. Not one of them has a camera that even matches the N8, or is anywhere near the best in the world today (Nokia's Symbian-based 808 Pureview, launched last year). Nokia is now in the same 8mp class as.. the iPhone. Nokia abandoned its QWERTY advantage, even as more than 1 in 4 smartphones sold by Nokia (and many more dumbphones) had QWERTY and Nokia would have a huge loyal customer base eager to buy one, yet of the 11 Lumia phones so far, not one has a QWERTY or hybrid with QWERTY slider/folder. Nokia had the most open ecosystem and was far beyond Apple, today it uses Windows, the only ecosystem on smartphones more restrictive than the iOS !! And what of connectivity? Yes, some Lumia series have been adding some connectivity options but many in the series are as unconnectable as the iPhone, and none are as broadly connectable as say the Nokia N9 (running MeeGo) or the Nokia 808 Pureview (running Symbian). So in reality, every Lumia is ever increasingly like an iPhone, often a more cheezy plasticky version, but all are same form-factor, thin slab touch-screen only large screen smartphones - similar to iPhones. Nokia abandoned all its differentiation opportunities and is purely now a 'me-too' provider. If you wanted an iPhone with some more colors, there is Lumia. Or if the iPhone is a bit too expensive, but you'd like a new phone that is very much like an iPhone from two years ago, Lumia has some cheap versions in some cheesy colors to let you have that. i-Phon-a-clones is what I call them. Elop clearly has made Nokia into only a me-too provider, abandoning markets worth millions of sales per quarter, and regions where other form factors are highly praised, in his search to try to make his Lumia company look exactly like Apple iPhone (minus the loyalty, minus the revenues and minus the profits, obviously).

But it should tell you something about how deluded Elop is, that he gives an interview promising Nokia is not a 'me-too' smartphone provider. He is delusional, that means madman. That means, he looks at reality, refuses to see facts, and substitutes his own imaginary world in the place of reality. That is delusion. That is what Nokia CEO proves to us, when he claims Nokia is not a me-too company, when Elop's own actions abolished all major differentiation abilities. Don't expect Nokia to recover from this madman (and why is Elop allowed to continue to ruin this company. The only reason the handset unit 'generated a profit' in Q4 was because Elop sold the HQ building and then attributed all its revenues to the handset unit, rather than accross all Nokia divisions evenly. Now he's sold the Nokia Oulu technology campus in Finland, is that so he can create another fictional profit for his handset unit for Q1?)

By the way, did I tell you its all about the retail distribution/carrier relations? Here is Stephen Elop yesterday in YLE interview (Finland's biggest broadcaster) and its short English version news item - what does Elop complain bitterly about - once again - its the lack of sales support to his beloved and so utterly doomed Lumia phones. The market says loudly 'we do not want it' and refuses to sell it, but Elop keeps spending money to do new 'me-too' variants of Lumia, rather than abandoning Windows like the channel wants, and get sales growing again for Nokia. When Elop took over, Nokia sold 34 million smarpthones per quarter. In its latest results, Nokia sold 6.6 million smartphones in the quarter. That, my dear readers, is market failure. Its not because the phones are miserable with exploding batteries and antennagates and lack of apps, its because the retail channel says - no way. We will not support this platform. Elop heard this in 2011, he admitted it to the Nokia shareholders in May of 2012 and now its February 2013, and Elop cries the same song once again 'my retail sales guys are not selling my phones....' - get over it Elop. Windows Phone is dead. The sooner you quit the dead platform the sooner Nokia can start to recover.

JOLLA COMING

We are expecting news from Jolla and sailfish, it might be the coolest must-have phone of the year when it launches. But so far, nothing yet. Hopefully we'll learn soon

SONY NEEDS MOBILE

Sony CEO Kazuo Hirai said in an interview for the BBC that mobile is 'front and center' for Sony's consumer electronics business. Also that Sony had strong assets it could and would use to be one of the biggest players in mobile. Sony is currently a Top 10 sized smartphone maker and currently offers only Android based smartphones (left the Windows ecosystem after the carrier boycott relating to Skype). Now I would expect the delegations from Tizen, Firefox, LG/Palm, Ubuntu and Sailfish are making regular pilgrimages to Tokyo to try to bring Sony to their camp.

BB10 MIXED NEWS

Blackberry (ie the company previously known as RIM) is receiving mixed news in the first quarter of sales for the BB10. In some news the phone is highly desired and selling very well, in some other news the response has been lackluster. It will be interesting to see what kind of results we get when Blackberry reports this quarter sales in March.

Plenty more to come, as we get in the news from MWC in Barcelona.

For anyone needing more info on the mobile industry, if you are interested in the opinions of the most accurate forecaster of this industry, remember buying the Almanac 2012 will get you the Almanac 2013 also for the same one price, now before the Almanac 2013 is released. And those who need info specifically on the handset industry, my TomiAhonen Phone Book 2012 is your resource with all the facts, stats and numbers.

Comments

[Tester]

Yeah, whatever.

The problem with all this is that the most sought after users are not idiots. They don't fall for these marketing schemes and buy the product they want to have, not the one the companies try pushing most.

I think the current state of 'success' of Windows Phone is a good indicator.

If they want apps and Samsung says 'no, thank you' to Android, the customers will say 'no, thank you' to Samsung. There's enough other Android manufacturers they can turn to.

What happens in the low end market segment is another story - but it is one of very little interest to third party suppliers. These people don't spend money to begin with, why invest work into them?

So, maybe, the low end smartphone segment will eventually fragment into a myriad of different OSs. The downside of this will be that these OSs won't get a stable supply of apps - which will keep them in the low end.

The current market position of Android is already too powerful to make it go away by this type of stupid antics.

[cycnus]

@Sander van der Wal

I remember Tomi say that user don't know about the OS that nokia use, they just know nokia. -- This is the OLD theory before the GREEN ROBOTO come in.

If that's OLD theory still true.... Nokia wouldn't LOST THEIR SYMBIAN USER TO ANDROID. Symbian user will be using WP now. If this theory were true, samsung will be able to sell MORE WP PHONE.

Second,
It has been discussed here many time that Carrier don't really want more OS. What they want is MORE phone vendor. They want to use Huawei AFFORDABLE device to get a better deal from samsung, They will use Lenovo AFFORDABLE device to get better deal from LG. and so on.... The argument of third ecosystem is just a way FOR MICROSOFT TO BRAINWASH CARRIER EXECUTIVE & USER. and it's FAILING!!!!

[RottenApple]

@cycnus:

I guess we'll see this year who is correct.

If phone OS does indeed not matter we'll see some success of all those new OSs coming into the market. We'll also see Nokia having more success again.

If not, however, we'll see Android marketshare growing and all those new entries having a hard time getting a foot into the market. And we'll see Windows Phone continue to hover below the 5% mark.

From my experience, those who are willing to invest some money into a smartphone normally know very well what they are going to buy. Why Samsung? Well, actually for 2 reasons:
1) They use Android
2) They make great phones

I think it's obvious if one of these reasons is taken away, people won't buy Samsung anymore. By now Sony is also making great phones. HTC less so. Somehow their reputation is not the best among the people I know. So if OS matters more than manufacturer we should see Sony growing strongly this year.

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