Cellphone vendors could exit business if economy remains bleak
Mobile phone makers are sounding alarms to their investors cautioning that mobile sales are down and likely to only get worse in 2009. However, Apple's iPhone is uniquely positioned within the safer smartphone market, a segment that is expected to continue to grow next year.
Nokia issued its second warning in three weeks that sales of mobile phones are slowing faster than expected due to slack demand from consumers. The company said its fourth quarter earnings will be hurt because it has been unable to cut costs quickly enough to account for the "rapid deterioration of the handset market in the last few weeks."
Fifth place phone maker LG and sixth place RIM also issued warnings on sales and profit growth. The bad news for big phone makers comes on top of the troubles experienced by Motorola and Sony Ericsson, which have both been struggling in the phone market even as the market was blooming.
With hard times ahead, the weaker companies might not even survive as phone makers. Michael Schroder, the head of research at FIM in Helsinki, was cited by Reuters as saying, "If the weakness continues past summer, it is probable that some would get out of the business."
Nokia hopes to win back market share in the smartphone market, the one bright spot in the mobile arena and one where Nokia has lost ground to BlackBerry devices from RIM and Apple's iPhone. However, that outlook also bodes well for Apple, which doesn't have any mobile products outside of its iconic smartphone.
Unlike the other phone makers, Apple sells one highly visible iPhone 3G model rather than the 'hundreds of devices' that chief executive Steve Jobs alluded to as the failed strategy of Apple's competitors in the company's recent earnings conference call.
Apple's simpler strategy of selling one full featured smartphone model has positioned the company as the number three phone maker in terms of revenue and created a strong platform for third party development, recently passing the 300 million downloads milestone with 10,000 apps available.
The iPhone has also soaked up market share in units sold and in terms of operating system use at the expense of rival hardware makers and software vendors, growing 327% over the last year according to figures recently released by Gartner. Despite general concerns about the economy, there is currently no evidence to suggest that Mac or iPhone sales are actually slowing.
Nokia issued its second warning in three weeks that sales of mobile phones are slowing faster than expected due to slack demand from consumers. The company said its fourth quarter earnings will be hurt because it has been unable to cut costs quickly enough to account for the "rapid deterioration of the handset market in the last few weeks."
Fifth place phone maker LG and sixth place RIM also issued warnings on sales and profit growth. The bad news for big phone makers comes on top of the troubles experienced by Motorola and Sony Ericsson, which have both been struggling in the phone market even as the market was blooming.
With hard times ahead, the weaker companies might not even survive as phone makers. Michael Schroder, the head of research at FIM in Helsinki, was cited by Reuters as saying, "If the weakness continues past summer, it is probable that some would get out of the business."
Nokia hopes to win back market share in the smartphone market, the one bright spot in the mobile arena and one where Nokia has lost ground to BlackBerry devices from RIM and Apple's iPhone. However, that outlook also bodes well for Apple, which doesn't have any mobile products outside of its iconic smartphone.
Unlike the other phone makers, Apple sells one highly visible iPhone 3G model rather than the 'hundreds of devices' that chief executive Steve Jobs alluded to as the failed strategy of Apple's competitors in the company's recent earnings conference call.
Apple's simpler strategy of selling one full featured smartphone model has positioned the company as the number three phone maker in terms of revenue and created a strong platform for third party development, recently passing the 300 million downloads milestone with 10,000 apps available.
The iPhone has also soaked up market share in units sold and in terms of operating system use at the expense of rival hardware makers and software vendors, growing 327% over the last year according to figures recently released by Gartner. Despite general concerns about the economy, there is currently no evidence to suggest that Mac or iPhone sales are actually slowing.
Comments
Apple's simpler strategy of selling one full featured smartphone model has positioned the company as the number three phone maker in terms of revenue and created a strong platform for third party development, recently passing the 300 million downloads milestone with 10,000 apps available.
full featured? What about the missing features?
What I would be interested in is what is the motivating factor people have for buying a phone, whether or not it is a smart phone.
Nokia hopes to win back market share in the smartphone market, the one bright spot in the mobile arena and one where Nokia has lost ground to BlackBerry devices from RIM and Apple's iPhone. However, that outlook also bodes well for Apple, which doesn't have any mobile products outside of its iconic smartphone.
In addition, there's an even more specific segment that seems to be really popular: touchscreen smartphones. And with the G1 not being much to talk about while the BlackBerry Storm continues to take on a lot of bad press, Apple is in a terribly good position.
full featured? What about the missing features?
Um, 'full featured' as in all or most of the features needed by the vast majority of users, with the ability to add just about anything else as demand requires?
Otherwise what you're envisioning is an 'everything to everyone' piece of crap.
But of course Jobs is obviously an idiot who should be slavishly implementing feature demands from every basement blogger on the planet.
Unless of course you look at the fact that he's got the only successful strategy going at the moment.
Um, 'full featured' as in all or most of the features needed by the vast majority of users, with the ability to add just about anything else as demand requires?
As demand requires? Don't you mean as Apple grants you?
Plus, why would you add a feature if it is already full featured?
If even smartphones and luxury phones are being sold for a couple of hundred bucks, anything less is rapidly becoming worthless.
Next year, smartphones start to merge with netbooks creating a whole new category (although they might still be called "phones"). The phone that is just a phone is already a thing of the past, although it will take a few years for the full transition and all the old models to be ditched.
People are finally starting to realise that the "smartphone market" or the smartphone segment of the cell market is poised to become the entire market.
No they aren't
If even smartphones and luxury phones are being sold for a couple of hundred bucks, anything less is rapidly becoming worthless.
They are not being sold for a couple of hundred bucks, they are being subsidised by the network provider to lock you into a contract. A large number of connections in the world are pre-paid, and using a low cost phone (when purchased a full price)
As demand requires? Don't you mean as Apple grants you?
Plus, why would you add a feature if it is already full featured?
Ok, then name another phone that meets your definition of full feature.
Make sure you include ones that include ALL features of the iPhone...
Full featured is always a relative term.
People are finally starting to realise that the "smartphone market" or the smartphone segment of the cell market is poised to become the entire market.
If even smartphones and luxury phones are being sold for a couple of hundred bucks, anything less is rapidly becoming worthless.
One thing I've noticed that's definitely a result of increased smartphone demand is that almost every non-smartphone commercial now prominently advertises the phone's "full qwerty keyboard."
Next year, smartphones start to merge with netbooks creating a whole new category (although they might still be called "phones"). The phone that is just a phone is already a thing of the past, although it will take a few years for the full transition and all the old models to be ditched.
Hmm, I don't see people wanting to talk on a bulkier, more expensive toy laptop.
Ok, then name another phone that meets your definition of full feature.
Make sure you include ones that include ALL features of the iPhone...
Full featured is always a relative term.
Why? I wasn't the one that brought up the original claim. Is it know that the iPhone doesn't have features that other phones have, so to claim it has full features is an outright lie.
Full featured isn't a relative term, the measure of what features make that list up is the relative part.
People are finally starting to realise that the "smartphone market" or the smartphone segment of the cell market is poised to become the entire market.
.
Not sure I can agree with that one.
I own a touch and a POC 'dumb' phone that lets me spend the least I can to the carriers.
Frankly, I HATE cell phones and consider them a curse, and am just fine with wifi on my touch.
But that's just me. Do wish the touch had a camera tho'.
Guess I have to get a Zune because the touch isn't 'full featured'.
Why? I wasn't the one that brought up the original claim. Is it know that the iPhone doesn't have features that other phones have, so to claim it has full features is an outright lie.
Full featured isn't a relative term, the measure of what features make that list up is the relative part.
No, you asked "Full featured? What about the missing features."
You suggested that full feature means that the phone must incorporate every feature known to man to deserve that label, and I simply noted that its a relative term, and its open ended nature allowed for expansion, which you seem to find dictatorial.
Plus, why would you add a feature if it is already full featured?
Because "full featured" is not the same as "having every feature imaginable, whether you wanted them all or not."
People are finally starting to realise that the "smartphone market" or the smartphone segment of the cell market is poised to become the entire market.
If even smartphones and luxury phones are being sold for a couple of hundred bucks, anything less is rapidly becoming worthless.
Next year, smartphones start to merge with netbooks creating a whole new category (although they might still be called "phones"). The phone that is just a phone is already a thing of the past, although it will take a few years for the full transition and all the old models to be ditched.
Phones that are just phones have been quite obscure at best for a couple years already. There aren't a whole lot that can't use the internet, take pictures, play music or video, even the free ones (free but with subscription agreement) do that now. The lines have been blurring for some time. About the only thing that separates them in classification is input and form factor, screen size and maybe OS sophistication. Still, that is blurry. I knew a guy that had a flip phone about the size of a RAZR but it ran Windows Mobile.
I'm not sure how you'd make calls with a netbook, would you resurrect the Nokia Taco Ngage Sidetalking? http://www.sidetalkin.com/
Personally, I don't see a whole lot of companies leaving this market. If I had to place a bet, maybe Motorola would, though I haven't been carefully watching the financials of any of the makers.
They are not being sold for a couple of hundred bucks, they are being subsidised by the network provider to lock you into a contract. A large number of connections in the world are pre-paid, and using a low cost phone (when purchased a full price)
Oh, and non-smartphones aren't being subsidized? You seem to ignore that there was already a ton of demand for the iPhone before it was offered to the rest of the world. Apple imposed limits on the number of iPhones sold per person and required credit cards with the original iPhone after a few months because of foreigners buying them in bulk and then selling them in the gray market in their home countries; the iPhone 3G requires in-store activation because of this.
Is it know that the iPhone doesn't have features that other phones have, so to claim it has full features is an outright lie.
Yeah...and likewise, many dumb phones lack features the iPhone has: MultiTouch screens with gesture support, large internal storage, accelerometers, desktop-class web browsers, the list goes on. Obviously the author never meant to imply that the iPhone had every feature you could ever think up, he made mention that Apple's business model of offering an essentially unified platform and form factor, rather than splintering that with simple non-smartphones, smartphones with big keyboards, and full touchscreen smartphones as others have, is working very well for Apple.
"People are finally starting to realise that the "smartphone market" or the smartphone segment of the cell market is poised to become the entire market."
No they aren't
Are too!
Quote: Originally Posted by Virgil-TB2
"If even smartphones and luxury phones are being sold for a couple of hundred bucks, anything less is rapidly becoming worthless."
They are not being sold for a couple of hundred bucks, they are being subsidised by the network provider to lock you into a contract. A large number of connections in the world are pre-paid, and using a low cost phone (when purchased a full price)
Well thanks for stating the obvious, but what I was talking about was the cost to the consumer, duh.
To all the more well thought out replies ...
What I was (perhaps ham-handedly) referring to is that there is a new portable platform emerging that basically subsumes the "phone" within it. Pretty much what Microsoft *thought* would happen in 1992. Next years hot netbooks are going to be running Android. Think about that for a sec, then think about Apple's netbook entry (also next year) which will be running the same OS as the iPhone (which Android is very similar to of course). This is a whole new platform, between computers and phones with a whole new type of OS. Convergence is (finally!) actually happening.
A "Phone" stands in the same relation to this "new category" today, as a "calculator" stood in respect to the new category of "computers" in the 1980's.
In the 1980's there were companies that made and sold nothing but calculators, but it became unprofitable. Today there are companies that make and sell nothing but "dumb phones." The whole point of this article is that these guys (the dumb phone manufacturers), are saying that they might not be able to do this profitably anymore. They are in the same spot more or less as the calculator manufacturers.
The typical counter-argument is that the average person, or third-world people, or some other category of people, don't *need* the smartphone features (all they need is to make a call), but this exact same argument was made for calculators and calculator companies in the 1980's.
Just Sayin.
One person's feature is another person's garbage.
full featured? What about the missing features?
Full featured doesn't mean having EVERY feature in the world, as I'm sure you know. It simply means that it does have all the basic categories taken care of.
As demand requires? Don't you mean as Apple grants you?
Don't you mean "as every other maker also grants you, minus everything the cell companies don't allow them to"?
Plus, why would you add a feature if it is already full featured?
Again, a lack of understanding of what "full featured" actually means.