Don’t count Nokia out of the smartphone playground

Nokia has done a very good job lately.

First Nokia is now the dominant player of the Windows Phone segment with a market share of 59% of the Windows Phone segment after just 9 months. HTC and Samsung are left far behind with a market share of 21% and 13% respectively.

> FierceMobile article

The Nokia Windows Phone portfolio is wide starting at a 200€ retail price without subsidy for a Lumia 610. This mid range product, or entry level for a smartphone, is a very good one. Ive tested it for almost one month as my primary device and the user experience is really good. To achieve this price point Nokia has compromised on the Application Processor, a ‘small’ 800MHz.

But the experience is still smooth and great. You just get some disappointment when you cannot use some games or apps like Skype as they cannot run on the device. You get a message in the MarketPlace that this application doesn’t run on your device. This small disappointment is however far better than an application freezing your device. And after all, you know this device isn’t the most costly and powerful.  The device comes with a free sat nav software that you can use off line, Nokia apps on public transports, image processing, etc.

On the other hand, Windows Phone is lagging after the other OS with 2.7% market share of the smartphone market but dynamics are there:

  • Nokia Lumia product range is very good
  • Windows Phone is a very good OS
  • Nokia has achieved in less than a year to be the dominant player in the Windows Phone segment
  • Windows Phone has grown 300%+ in 8 months when Android growth is stalling.

If no other manufacturer competes with Nokia, Nokia will be synonymous of Windows Phone. In that case, Microsoft might have the temptation to buy out Nokia and become an integrated player like its XBOX console business.

Let’s wait for the new Lumia range (featuring WP 8) announcement at the beginning of September. It will give some hints at the future of Nokia and Windows Phone.

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So little space to differentiate

HTC has announced that it is shutting down HTCSense.com, the device firm’s portal that enables users to sync their contacts, messages, footprints and call history.

HTC has been caught between Microsoft and Google. There is no room for customized UI with Windows Phone and it is the same with Android and its non-fragmentation agreement. Furthermore, the services provided by HTCSense have been commoditized by the OS vendors: Microsoft Live and Google Mail are backing up all the device data in the background so you can access these data from your PC, tablet or a new device.

HTC Sense UI

The real question for device makers is ‘beyond hardware how can they differentiate from one another?’. Except for the ones with a fully integrated approach like Apple, the solution is to come from the outside.

Customers are lost in the zillions of applications available from the Application markets. I think they would appreciate some help from their preferred device manufacturer to pick up the best ones.

Which games? Which weather application? etc.

Device makers need to do something quite unusual for them: open to third parties, discuss partnerships and not try to do everything by themselves. The same service has much more value if provided by the top Internet brand than by the manufacturers. In these times of hardship, device makers need to focus on their hardware core business again and again.

Google buys Motorola. WindowsPhone7 remains the only independent platform

Google’s acquisition of Motorola Mobility (the handset maker branch) raises a few questions on the future openeness of the Android ecosystem in the future.

The acquisition is mostly presented as an acquisition of a patent portfolio but is that all?

In a previous post, I was mentioning that Android 3.0 has been reserved to a few selected manufacturers mainly Motorola. Motorola enjoyed around 4 months to sale its Android powered tablet before another competitor could enter the stage.

It certainly won’t improve with Motorola being a Google subsidiary.

“The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem,” Google said in a statement.

So we’ll have a 2 kind of Android devices. The Motorola devices with the latest features and innovation and the rest of the market providing the same devices but with months of delay or niche products that Google/Motorola don’t want to produce.

Most of the OEMs don’t care as long the OS license fee remains free, but what will be the reaction of the main ODM like Samsung, HTC, LG, Sony-Ericsson? Even if Google is 100% honest and Motorola managed separately there will be still suspicion in the air.

This is creating a fantastic opportunity for Microsoft is they play smartly. After all HTC is paying Microsoft around 5$ per Android device for Intellectual Property. If the cost of a Windows Phone 7 license is around 10$ the benefits of using Android are meager: 5$ per device for an outdated OS version. With the end of the Symbian foundation, Microsoft remains the only Open OS provider not manufacturing devices.

Operators’ walled garden temptation

Operators are tempted to use with Open OS the same old tactics they were using with feature OS: to put the device software in a nice walled garden where the end user is encouraged to eat the operator’s services only. This is what happened with the last update of HTC Desire / Vodafone variant. End users were expecting to get the latest version of Android (2.2 dubbed Froyo) but got mainly applications, bookmarks from Vodafone they couldn’t uninstall… > Full story here

Vodafone back paddled as they got loads of complains.

This is just a new example of the operator walled garden temptation. Operators think that they own end user device because they have subsidized it. But what is a subisidy? A financial service, in which you pay monthly a device instead of paying it one off? or a blank contract where you allow the operator to take control of your hardware and decide which software you are to use ?

Maybe this point should be clarified by regulators. Apparently, end users aren’t ready to comply with their operator diktat even though they have signed a 24 month contract.