Nokia, the world’s largest mobile phone manufacturer, looks to be streaking ahead of its main competitors with Motorola saying it expects to lose money on its core mobile phone division this year after losing market share over the past few months.
Nokia, the Finnish group that transformed itself from a forestry company and a producer of rubber boots into the world’s largest handset maker, is thought to have taken substantial market share from its US rival over the past three months, with Sony Ericsson and Samsung also expected to gain ground. Amid the hype around Apple’s entry into the mobile phone market with its top-end iPhone, Nokia has been forging ahead with a number of high-end handsets and a strong position in emerging markets.
Motorola looks in danger of losing its position as the world’s second-largest mobile phone maker after reporting a collapse in sales during the second quarter of the year. With the Korean manufacturer Samsung gaining ground on the American technology company, pressure is building on Motorola to develop a new hit phone to replicate the success of its wildly popular Razr handset. The company’s decision to pull out of the race to sell low-end handsets in emerging markets has boosted its average selling price but hit its volumes.
Motorola sold up to 35 million handsets in the second quarter of the year, 21 per cent lower than the 45 million it sold in the previous three months and 31 per cent lower than a year ago. After missing its sales and profit targets over the period, the company said it no longer expects to make a profit from its mobile phones sales this year.
The profit warning further increases pressure on Ed Zander, its chairman and chief executive, who has fought attempts by the billionaire activist investor Carl Icahn to oust him. Mr Zander joined Motorola in 2004 after a successful period at the helm of Sun Microsystems, and has overseen the demerger of the company’s semiconductor division Freescale and refocused the company on larger customers as well as consumers.
Richard Windsor, an analyst with Nomura Securities, said that Motorola’s problems look to be of its own making as data from its rivals such as Sony Ericsson suggests that underlying market growth remains robust. “Motorola is rapidly becoming a regional player with a strong position in North and South America and very little else. Motorola’s direction seems to be towards becoming a niche player in certain markets and segments. While this strategy could work, helping average selling prices and margins, it will come at the expense of long-term growth as all the action remains in emerging markets,” he said.
Sony Ericsson, the world’s fourth largest mobile phone maker, sold nearly 25 million handsets over the same period as it continued to benefit from the popularity of its Walkman music-oriented handsets and its Cybershot camera-focused models. But the company missed aggressive growth targets despite recording a 55 per cent jump in profit in the second quarter. The company’s average selling price fell to €125 (£85) as it targeted growth at the lower end of the market.
Wireless Mobile Telecom Wireless News
The arrival of the Apple iPhone has been an occasion for both praise of its breakthrough design and skepticism regarding its usefulness for busines. Gartner Group warned corporations that the use of iPhones for e-mail could create serious security problems.
Beyond its enormous coolness factor, the iPhone is in many ways a significant advance over all the other smartphones on the market. Apple designed it without catering to the extremely conservative tastes of wireless carriers. The result, while far from perfect, is an object of desire that many corporate executives will want to carry instead of their stodgy Research in Motion BlackBerrys or Palm Treos.
The iPhone’s exterior is responsible for its immediate emotional appeal. It looks beautiful and it feels wonderful in your hand. As has been extensively noted, the iPhone suffers from the choice of AT&T’s relatively slow EDGE network. The browser and other Web-based applications, such as Google Maps and YouTube perform extremely well when connected to a Wi-Fi network, but are painful on EDGE. About the only other thing I can criticize about the external design is that, unlike most handsets, it provides no obvious clue how to hold it, making it easy to grip in a way that interferes with the antenna’s reception.
Wireless Mobile Telecom Wireless News
Suppose that, instead of selling 10 million iPhones over the next 18 months as planned, Steve Jobs is only able to sell, say, 8 million.
* Could the iPhone be a flop?
Many analysts have portrayed the launch of the new device as an all-or-nothing proposition: Either Apple takes over the mobile space or gets crushed by the competition.
But that mentality ignores the fact that not every tech product needs to achieve iPod-like domination in order to be a success.
*Just look at Apple itself.
The company’s computers only have about a 5 percent market share but are profitable and continue to set the pace when it comes to defining the cutting-edge in operating systems.
Likewise, even if the iPhone never graduates from high-end niche product, that won’t necessarily make the phone a failure.
What’s more, the initial iPhone is really only about establishing a beachhead for future Apple phones to land on.
Telecommunications analyst Jeff Kagan said the iPhone doesn’t have to sell 10 million to be a success.
“If they sell 5 million or 15 million, it’s not going to matter,” he said. “They’re going to be very happy with it, and AT&T is going to be very happy with it.”
Mr. Kagan said Apple has already enticed enough fans to its brand that it’s a virtual certainty that second- and third-generation iPhones will be along soon.
“It’s a beginning, a first page of a new chapter,” he said. “Because Apple is going to come out with newer phones every six months, nine months, whatever, and prices on this phone will come down.
“The next version is going to keep on expanding the marketplace.”
But others argue that Apple has more riding on this product than on previous products that fizzled in the last few years.
Among those underwhelming technologies: the Cube computer, whose striking design was handicapped by persistent reports of cracks in the casing, and the more recent Apple TV, which was designed to simplify the transfer of video from a PC to a TV but has so far left barely a ripple in the gadget pool.
John Barrett, director of research for Dallas-based market research firm Parks Associates, said lackluster sales of the iPhone would be much more embarrassing for Apple than the poor performances of those previous gadgets, since the phone has been hyped so heavily.
“I think the biggest impact is Apple is going to lose this aura of invincibility that they kind of have,” he said. “People look at Apple and they look at the iPod, and they think, ‘Wow, this company does consumer electronics stuff really great.’ ”
* Too high a goal?
In fact, Mr. Barrett expects that the iPhone will struggle to reach the sales goals that Apple has set for the device.
A recent survey by Parks Associates of American households found that only about 2 million people are willing to spend as much as $500 on a product like the iPhone, Mr. Barrett said.
“The price tag is just too high for most consumers,” he said. “A lot of consumers don’t even want a lot of fancy features to begin with. It’s going to be just another phone.”
Even if the iPhone does sell as well as Apple hopes, it will clearly be a long time before the device owns more than a tiny sliver of the cellphone market.
British research firm The Mobile World estimated this week that there will be 3.25 billion cellphones in use around the world by the end of 2007.
What’s more, 65 percent of the handsets made this year are expected to be inexpensive models sold to developing countries.
While the iPhone is clearly a premium device, it is expected that Apple will release before long a slew of less expensive models, mimicking the pattern it adopted for the iPod.
But Mr. Barrett said there’s a limit to how low Apple can go with the iPhone.
“I suspect that they’ll offer some less expensive models, the $400 and $300 and $250, stuff like that,” he said. But “if you roll out iPhone shuffle, where it’s a phone but only holds 25 tracks, then it’s really no different from all the other phones out there.”
* Give it time
That said, it will be nearly impossible to gauge the success or failure of the iPhone for at least six months or so after the launch.
Mr. Barrett said it will take time for official sales numbers to be released, for AT&T to get a sense of whether the phone is profitable for them as well as Apple, and for consumers to get over the initial euphoria surrounding the iPhone.
“There’s a lot of stuff to be sorted out,” he said. “And it’s going to take some time to see really what’s going on. But at the end of the day, you’re not going to have any kind of revolution in the mobile phone industry.”
Mr. Kagan agreed, saying that, regardless of how successful the iPhone is for Apple, AT&T and the rest of the cellphone industry, only a small fraction of cellphone users will ever care.
“It’s not going to make that much different to the marketplace,” he said. “But it does raise the bar for this type of phone.”
Wireless Mobile Telecom Wireless News
AT&T and Apple announced three simple, affordable service plans for Apple iPhone which start at just $59.99 per month. All three plans include unlimited data, Visual Voicemail, 200 SMS text messages, roll-over minutes and unlimited mobile-to-mobile calling. With everything else already included, iPhone customers can easily choose the plan that’s right for them based on the amount of voice minutes they plan to use each month. In addition, Apple iPhone customers can choose from any of AT&T’s standard service plans. “AT&T has the largest voice and data network in America, the largest mobile-to-mobile calling community and the fewest dropped calls,” said Randall Stephenson, chairman and CEO, AT&T.
Wireless Mobile Telecom Wireless News
Visto, a provider of mobile email solutions for business users has announced the support of corporate email functionality for the Apple iPhone on the day of its launch.
Through Visto, iPhone users will be able to experience secure mobile access to current as well as legacy versions of both Microsoft Exchange and IBM Lotus Domino corporate messaging platforms.
What’s more; users will be able to access their messaging platforms easily to use as well as to administer them, alleviating IT concerns regarding security and reliability.
According to Brian Bogosian, president, chairman and CEO of Visto, “The iPhone and other devices to follow will continue to accelerate demand for secure mobile access to corporate data including email, contacts, calendar and other important information sources.”
Visto Mobile will directly offer secure and user-friendly mobile access to corporate and personal email for the iPhone in the US.
Visto Mobile will be available for the iPhone in late Q3 2007. What’s more; iPhone users will get access to a free 60-day trial of the Visto Mobile service.
Wireless Mobile Telecom Wireless News
Well, the revolution has begun. The Apple iPhone has been on sale for a few hours. We waited in line for about an hour today and managed to get one of the 4GB models - all of the 8GB models had sold out by the time we got to the front of the queue. Our AT&T store in the local mall received, I estimate, 36 8GB and 12 4GB iPhones. The manager wouldn’t/couldn’t comment on how many units they received, but did tell us when the supplies were running low, allowing me to do a bit of quick math to come up with a reasonable guess.
There was some confusion during the purchase process for many. Kids under 18 needed to have a parent with them, and one poor kid, who’s father was late, had to let others pass him in line as he waited. Another young man was turned down completely when he got to the counter because he wanted to pay with cash and was not an existing AT&T customer. New AT&T customers had to pay with credit cards, the manager told us. We also ran into a problem of our own: there was no credit authorization number on our receipt, as there was to be. But, considering how little time everybody had to prepare, I suppose problems like this are to be expected.
Some people were less lucky than we were. We called a number of AT&T stores before we set out today and found out that some stores did not have any iPhones at all, though they did have a line of people standing outside. Imagine how mad those people were when they found out they had waited in line for the privilege of ordering the phone instead of walking home with one.
But we had a phone, thankfully. We actually activated the iPhone from the parking lot of the mall, thanks to a laptop and a Verizon EV-DO data card. The process was pretty straight forward and took about 6 or 7 minutes from start to end. The only problem we had was that iTunes did not sync my Outlook calendar and contacts, like it claimed it was doing. The bookmarks from my copy of Internet Explorer did copy over, though. I’ll have to sort through this issue later, but by then we were simply anxious to start playing with the phone.
Wireless Mobile Telecom Wireless News
Okay, this could be second- or even fifth- or sixth-hand, so take it with a big grain of salt. Over at NoHeat, which bills itself as “Tech news that’s just too cool,” an anonymous poster says Nintendo (NTDOY), maker of the “Wii” and “Gameboy” gaming machines, has agreed to license a number of its video games to Apple (AAPL) for sale on the company’s iPhone cell phone, which hits stores in the U.S. a week from today.
The report, quoting no one in particular, says the games are to be released on Apple’s iTunes at $29 a pop “a few months after” the phone goes on sale. The posting notes the lack of buttons on the face of the iPhone (it has only a “home” button to get to the main menu”) as a tricky obstacle in adapting the games. The posting suggests the move is a way to hedge against the threat posed to Nintendo’s traditional game market of mobile games on phones. “Asked anonymously whether or not these games would cut into Nintendo DS sales, we heard a resounding no,” says the author, without saying who, exactly, was asked. “The logic is that because the licensed games will be exclusive and cater to an older audience they should not intrude into Nintendo’s existing markets.”
Meantime, Apple has posted on its Web site a long movie you can watch that walks you through the features of the iPhone.
Apple shares today closed down three-quarters of a percent at $122.98, while Nintendo’s American Depository Shares closed up half a percent at $45.05.
Wireless Mobile Telecom Wireless News
Randall Stephenson officially assumed the CEO reins at AT&T, taking over Sunday from outgoing chief executive Ed Whitacre, who announced his retirement in late April. Stephenson takes the helm just weeks prior to the operator’s much-anticipated exclusive launch of Apple’s iPhone multimedia handset. “Whatever your expectations are from this device, they are probably too low,” he said in an Associated Press interview. “It changes how we think about the PDA, the iPod and the cell phone interacting.” According to Stephenson, more than a million consumers have signed up to receive notification when the iPhone goes on sale: “I’ll be really disappointed if there’s not a shortage,” he added.
In related news, Apple officially announced the iPhone will arrive at retail June 29, confirming the launch date in a series of television spots that aired Sunday evening–one before CBS’ “60 Minutes” and another before The CW’s “7th Heaven,” oddly enough shows that any consumer interested in spending $500 on a handset will never, ever watch.
Wireless Mobile Telecom Wireless News
After an acquisition binge that transformed the smallest Baby Bell into a telecommunications heavyweight, AT&T is undergoing another change: a new chief executive.
Randall Stephenson, 47, rose through the ranks of AT&T and previously served as its CFO and COO. He is credited with helping position the company so it could afford the buying spree that turned it into the nation’s largest provider of traditional phone, wireless and broadband services.
Stephenson takes over for Edward Whitacre Jr. in time for what might be the most hyped telecommunications device launch in a generation, Apple’s iPhone.
AT&T, whose wireless division was formerly known as Cingular, will be the exclusive carrier for the combination mobile phone, portable music player and web device when it launches in the US later this month.
“Whatever your expectations are from this device, they are probably too low,” Stephenson said in a recent interview. “It changes how we think about the PDA, the iPod and the cell phone interacting.”
More than one million people have signed up through AT&T’s web site for a call when the iPhone becomes available, Stephenson said. It will be available in two models, priced at $499 or $599.
It’s not clear how many of the devices will be available at launch, but Stephenson said, “I’ll be really disappointed if there’s not a shortage.”
AT&T plans to grow through wireless, using that business segment to drive sales of its traditional phone, high-speed Internet and other services.
Wireless Mobile Telecom Wireless News
New chip to enable phone manufacturers to do away with external memory slots.
External flash memory slots in mobile phones may become a thing of the past if Samsung’s latest invention grabs the attention of phone manufacturers. The semiconductor manufacturer has developed a 4GB multi-chip package or MCP designed specifically for mobile phones and provides all the memory needed for the phone as well as doing away with the need for external flash memory slots, simplifying phone design, the company said.
Samsung has dubbed the new package “moviMCP” and features 4GB of embedded memory for general use, a 1Gbit mobile memory chip for use by the phone’s microprocessor plus a 2Gbit flash memory chip for general phone operation.
The moviMCP has an embedded memory control inside based on the eMMC standard from the MultiMediaCard Association, making it much simpler to design mobile phones with large amounts of storage. Previously, phone manufacturers would need to develop software that controls how the memory is accessed. Samsung’s moviMCP removes the need for that.
Market research firm iSuppli is being reported by Samsung as forecasting the third-generation mobile phone market will reach 392million units sold this year and grow at the rate of 40% per year through until 2010.
By removing the need for an external flash memory slot, phone manufacturers will be able to make 4GB multimedia phones at reduced cost. However, such phones are likely to appeal to the entry-level market rather than the enthusiast market as a result of the fixed storage.
The new memory chips are said to be trialling with phone manufacturers at the moment. Samsung did not say whether or not the new chips would be used in Apple’s upcoming iPhone, which Apple has announced will be available in a fixed 4GB capacity model.
Wireless Mobile Telecom Wireless News
Nokia surges clear of rivals as Motorola falters
