Showing posts with label HTC. Show all posts
Showing posts with label HTC. Show all posts

Wednesday, August 29, 2012

NOKIA: LEADERSHIP UNDER SIEGE

In a span of four years since Kallasvuo took over as CEO of Nokia, the company remains the overall mobile phone dominant market leader. But of late, the leading handset manufacturer finds its position growingly threatened by competitive trends. Clearly, a major transformation is in order, and the sooner the better. by Virat Bahri

Recession was a rude awakening for many. But the problems for Nokia actually began when the smartphone category caught the fancy of consumers in the high-end segment globally — a segment where Nokia has been unable to find its footing till date in front of competitors like Research In Motion and Apple. Smart phone sales grew at a brisk 48.7% to 54.3 million units for Q1 2010 (17.2% of total mobile terminal sales) according to Gartner. But interestingly, pure smart phone player RIM made a maiden entry into the top five. The company still dominates the low-end segment, but the margins there are very hard to get, as competitors are springing out from all nooks and corners (in India itself, Micromax has gained so much ground in no time, with other players like Karbonn, Lava, Spice, Onida, et al locked in internecine pricing battles). Morningstar analyst Joseph Beaulieu has increased the fair value uncertainty rating for Nokia to high from medium in June this year. “While its scale still gives Nokia considerable cost advantages, these have become less relevant as software expertise and the ability to create a viable developer ecosystem grow in importance,” Beaulieu says.

Alarmingly, Nokia’s operating system Symbian also continues to lose market share to rivals like Android and Iphone OS, with market share at 44.3% in Q1 2010, compared to 48.8% for Q1 2009. Nokia hopes that the Meego platform based on Linux (being developed with Intel) is expected to address their problems on the software front, but that will take some time. The Symbian^3 powered Nokia N8 will be the last N-Series device to use Symbian, though the OS will still feature in the mid-range. “Although Nokia’s mid-tier products sold well, Nokia lacks a high-volume driver in the high-end. MeeGo-based devices and other high-end products will not rejuvenate Nokia’s premium portfolio until the end of the third quarter of 2010 at the earliest, and Nokia will continue to feel pressure on its average selling price (ASP) from vendors such as HTC, RIM and Samsung,” says Carolina Milanesi, research vice-president, Gartner. Lower than expected ASP and competitive market has compelled Nokia to project a flat market share, but a slightly lower value share for 2010, compared to 2009.

In the current market situation, offense can only be the best defence. Even its worst critics would admit that Nokia’s cash situation remains quite healthy and it still has the market reach that competitors could kill for. The way forward is to be nimble, and for that the company management has recently divided operations into mobile solutions for high-end mobile computers and smartphones — mobile phones for feature rich mobile phones and markets — which will handle all go-to-market strategies. Moreover, Nokia is a leader under siege, and its best bet forward has to be leading the market trend rather than bucking it. Kallasvuo’s transformation strategy was on target, but it still has to clear the test of the market.


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Thursday, July 26, 2012

Florian Müller, Founder, FOSS Patents & Co-founder of Rival Networks

B&E: Will payouts in settling patent infringement cases show on Google’s net earnings from Android?
FM: Since Google itself is rarely sued, the impact on the net earnings of device makers will be greater than on Google’s earnings. The Oracle lawsuit could, however, require Google to pay something on the order of a billion dollars depending on the exact outcome. The extent to which Android is accused of infringement is unpredecented. 42 lawsuits in a little more than a year show that there are fundamental problems. There are definitely some Android-specific reasons, such as Google’s ‘loose management’ of intellectual property issues, that contribute greatly to this mess.

B&E: Some have even pointed to security issues related to the Android OS. Is that something which handset makers and buyers should be wary of?
FM: By emphasising that the software is “free”, Google positioned Android as the poor man’s iPhone. But the security issues come with it. The Android Market is not managed well by Google. It contains programs infected by malware. I use a Samsung Galaxy, a high-end Android phone, and I like it for the most part, but I don’t have confidence in Google’s app store and never buy anything there.

B&E: Android Market Place is not giving Google enough topline push. Are the earnings enough to sustain stable Android OS projects in future?
FM: App stores can but only be a small part of a revenue mix. In Google’s case, there’s not enough money to be made there to sustain development of an OS.

B&E: Finally, will the Andoird connection enable handset and tablet makers like HTC, Samsung, LG, Dell, Acer et al, to make money in times to come?
FM: There are about three dozen device makers who have adopted Android by now and it’s clear to me that when growth rates flatten, most of them won’t make money with Android-based devices anymore. For now the explosive growth of the smartphone market creates some short-term opportunities, but strategically those device makers are in a difficult position because Google controls the platform. Google bullies Android device makers and forces them to do what it wants. Right now the biggest problem for makers of Android-based tablet makers is a lack of demand. Android tablets are a failure so far. They also turn out to be too expensive.


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