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Spillikins #73. iPhone 4 Hits the Shelves and Android Conquers the World
The main event of the week is the market launch of iPhone 4. The advertising campaign was prepared in Apple style. The show reached its climax with people queuing to buy the phone in numerous locations around the world and many spent nights outside the shops with live broadcasts from these battlefields. When Russian president visited San Francisco Steve Jobs showed him around Apple head office and presented with iPhone 4 one day before the sales started, which was part of PR campaign extensively covered by Russian and international media.
I hope you remember that during the first day of Apple iPhone 4 preordering the websites of Apple and AT&T were crashed by the sheer scale of demand. 600,000 models were ordered within one day and there was no let off afterwards. The device will undoubtedly become the most successful product in the history of Apple. According to the estimates around 1.5 million handsets were sold during the first couple of days.
The market launch also brought the first disappointment taken up by Apple haters and competitors. It happened that iPhone 4 has a substandard antenna, which leads to the signal drop if you take the phone in your left hand (the hand shields its metal frame antenna). There are no problems if you hold it in the right hand. I mentioned the cause of the issue in my blog and will quote my explanation here:
Reason No 1. The models were tested in cases to ensure the confidentiality. We know about it from the stories of the lost prototype. It was found in the case simulating the case of an ordinary iPhone. Was it possible to detect the issue if all models were tested in such conditions? Surely, the answer is negative.
Reason No 2. Apple does not have enough engineering experience in the manufacturing of mobile phones (antennas and other components). It was always the company's weak point and nothing has changed. As a result there is no insulator here (sometimes it is enough to cover the metal with the special paint). They should have thought about it during the design stage.
How the issue can be handled by the new owners? Put it in the case or use bumpers (which cost $29 per item, imagine just for a second).
In reply to the letters Steve Jobs suggested to solve the signal issue by using the right hand only, which was greeted by public with irony. Then he said it was not connected with the antenna and asked to stay tuned.
Unofficially Apple claimed this not to be a hardware problem, but it is difficult to believe. With the help of the software Apple may do the trick and get rid of the weak signal indication not to irritate the customers, but it will not solve the issue of missed calls, unavailability of data transfer, etc. This problem should not be handled in such a way.
There are only two available solutions. To sell the handsets as they are and not to recall them (bumpers can be provided free of charge, which will go down well with the customers). The recall can hit Apple hard and they will not follow this route. The hardware nature of the problem will be denied until the end. Steve Jobs letter to the customers will not be so harmless in 2 or 3 days if the problem somehow does not disappear and goes from bad to worse. But I have some reservations, if you take into account the popularity of Apple in the USA. This device is perceived well even with this defect. Has anybody decided not to buy iPhone 4 when they heard about the issue? I sincerely doubt it (Apple brand is so strong that people are ready to buy products with minor defects).
Meanwhile, the right way to solve the issue is to add an insulating layer (most probably paint) and such models may go on sale in around one month and a half. The manufacturing cycle does not allow selling the adjusted models faster. I am sure that in service centers the models could be fixed free of charge. How it should be offered still remains an open question.
There still may be a software approach I was told about in my blog Ц to track the fluctuations of antenna characteristics when touched and increase the power capacity of the phone. It will solve the signal drop issue, but will require more power. Probably, Apple decided to go this way to address the issue promptly as many sources quote that this week will see the release of iOS 4.01 upgrade to deal with this problem only. It is a variant to handle the issue right now and the company will still change the manufacturing process as the software patch is not the best solution. It may influence the battery operation time, signal reception, etc.
This problem is quite serious, but the dedication of Apple customers will save their blushes. It is another matter that other manufacturers will be ironic and always mention the product with sarcasm, but the sales will remain unaffected. Other companies would have already suffered losses.
In Russia the price of iPhone 4 is quite acceptable for the current period, but many people still wait for the official market launch here. There is no feverish demand for Apple iPhone anymore, but I cannot explain this phenomenon.
It must be noted that all shipped items will be sold away. The number of people who want to be the first owners of Apple iPhone (regardless of the price) has diminished. They might be still playing with iPad or waiting for the white model to start selling in the second part of July. Apple officially reported that the manufacturing of the model turned out to be more complicated and the release date was postponed. The company could have identified some defects as the production has already started before the launch and it was effectively called off days before first deliveries. Are there any troubles with the body materials or the antenna does not work at all in the white model?
My colleague Staska from Unwiredview decided to crunch the numbers regularly reported by Andy Rubin from Google. You can read the original from Unwiredview here здесь.
I would like to quote the figures as nobody paid attention to them, because analytical reports rarely get the spotlight they deserve. Mentioned outside the context they often impress but are more often neglected. Who will believe that Android will conquer the world if it appeared less than two years ago?
Look at the activation figures provided by Andy Rubin.
The final figure is really impressive - 160,000 phone activations within one day by June 23, 2010. A month ago it was 100,000 activations and 60,000 at the start of this year. What has influenced the market in such a dramatic fashion?
The answer is obvious Ц manufacturers began to offer different Android phones in various price ranges, which affected the sales. U.S. mobile carriers promote Android as the top priority OS as well. For example, Verizon, which has high hopes for DROID, allowed Motorola to enjoy huge sales. The company just has no time to produce enough of phones.
Android market is still dominated by big companies Ц HTC and Motorola, followed by Samsung and Sony Ericsson. Only these manufacturers allow such rate of activations (activations are less numerous than volume sales, but equal the retail sales, which is a precise way of measurement). 2010 will see revolutionary changes, which will boost the sales of Android devices even further, when the Chinese manufacturers enter the market. To be fair they are already here, but do not play a major role. Their products are cheap and do not look attractive against the background of the big brands. Initially, Android was launched as the top segment platform and the mass market treated it with caution. The sales today show Android as the emerging frontrunner among all smartphone platforms. Even if the sales growth levels off (and there is no basis for a dramatic turnaround, because the growth will continue, including the price range of $200 and higher), we have 58 million phones per year. Read it again, 58 million phones
Look at the worldwide sales of smartphones in 2009 according to Gartner.
What will happen this year based on the current level of sales? If everything goes its way Android will become OS No 2. Even the effective launch of iPhone 4 and its huge sales represent only one model, while Android has dozens of them and each is capable to be successful in a particular price range. There is obviously an open highway for Android, but major changes will happen in the middle of October 2010, when Android 3.0 is to be unveiled.
Main changes are connected with the platform performance, several new social networks features, which will boost the functionality, but the key here is the new and thoroughly reworked user interface. The move is quite unexpected and original as it undermines the investment of Motorola in MOTOBLUR, HTC in Sense and Sony Ericsson in "brilliant" (according to the manufacturer) Timescape and Mediascape. These shells will lose out to the original interface. One of my acquaintances managed to get an insight into Android 3.0 prototype and said: "It is similar to Apple and the best interfaces of other companies, for example, HTC Sense. It produces quite an impression by the performance speed and the maturity of solutions. It is the undeniable market leader". I trust the person, because he has been rarely mistaken and this time should be right as ever.
Android 3.0 launch in October is also significant in other ways Ц it will upset Nokia plans, because the new generation of MeeGo smartphones should allow the company to regain its leadership in the smartphone market. MeeGo has serious hardware requirements and uses only the best components. It could have been a winning formula at the start of 2010 for the company to be in the driving seat again. Half a year is a lengthy period and one month after September 15, 2010, when MeeGo model is announced, we will see a range of Android phones with top features. Their hardware requirements will suit a PC rather than a mobile phone Ц1 GHz (many will have 2 GHz) processor, 512 MB of RAM (up to 1 GB for several companies), graphics accelerator, capacitive screen and so on. These are the flagship models with top characteristics and they will be presented in the retail price range of $500 and higher. Does it mean that Android will not feature in the lower price ranges?
On the contrary, Android will make a great leap forward, predominantly with the models built on versions 2.1 and 2.2 or even older ones. The market will remain split until the second half of 2011, when the subsequent Android versions become cheaper and move down market.
If anybody asks me if Android captures the market and dislodge the current pacesetters in the smartphone race within 2 years I will answer positively. There are all the necessary conditions and Google is moving in the right direction, which is confirmed by the sales.
DROID X from Motorola was launched in the USA to good effect and taken by many as the answer to iPhone 4, but it is not the case. It is one of niche models similar to HTC HD2. A whopping 4.3? touchscreen turns it into a special model, which is not for everybody's liking, but it is a nice handset we plan to review in the near future when we get the sample from the carrier. But now let's look at the rest of the week's news.
I have to admit that going away on vacation leads to negative consequences. In your absence many inexplicable and strange things may happen. In the detailed review of Nokia N8 I mentioned a number of models to be based on this handset. And then Cnet Australia published their impressions from Nokia N8 and mentioned, citing a Nokia representative, that Nokia N8 is the last model in Nseries based on Symbian. It is odd, especially for the flagship, which is about to be unveiled. It led to an information avalanche, which was summed up by Reuters. They quoted a pundit from Nokia, who confirmed these rumors. In total two sources from Nokia claimed that Symbian will not be used in Nseries. It means only two models for 2010 Ц Nokia N8 and Nokia N9. All copy cats of N8 will feature in X and C series, which is not quite logical. It will be interesting to see how these models will be differentiated from N8 on the market. So far I consider these changes as a circus where Nokia cannot decide how to name the models and what to do with them. MeeGo is good to start anew, but it cannot offer many models from the very beginning. Information noise around N8 as the last Symbian based model in Nseries backfired against the company. Many ordinary customers are reluctant to buy the last handset in the series. I cannot answer the question, but I have heard about such sentiment more than once.
During the week we saw an image of Nokia N8-1 on the web (will it be labeled as Nokia C7-1 or moved into Eseries as it is a copy of E7 in different colors), which is a QWERTY version of Nokia N8 with an 8 MP camera and similar price. It will go on sale a bit later around the final quarter of 2010. Interestingly, the picture with firmware version shows N00 model (the firmware similar to N8), there is a photo of Symbian home screen, but the handset is named as N9. It must be a mistake because N9 is bigger and looks differently. Negri Electronics promises to provide a review and video this week. I can hardly believe that Nokia will allow it. Anyway it can be interesting, se we will wait for the news.
A follow up to the issue of Nokia ditching Symbian in favor of MeeGo. The following link highlights the current vacancies in Nokia: 43 positions for maps, 18 for OVI, Symbian needs 46 people, and MeeGo (Maemo) 28. Obviously, this information is indirect as we do not take into account the size of different departments in Nokia, but it gives some food for thought. Click here.
Partially, the number of vacancies in Symbian can be explained by many veterans leaving the department, which embodies the spirit of Nokia. One of the biggest resignations was that of Charles Davies, the Head of R&D in strategy and architecture and former CTO of Symbian. Davies worked in Nokia since 2008, when it took over Symbian. Before he was responsible for Psion development and was one of the originators of Symbian. He moved to the rival navigation systems manufacturer TomTom, which employs many former colleagues of Davies at Psion (Ken McAlpine was in charge of Psion hardware and Mark Gretton occupied the position of the CTO). It looks as if everybody knowledgeable about Symbian leaves Nokia, while it puts emphasis on MeeGo. In the short term it means that Symbian is far from being dead and is going to develop, albeit at a much slower pace than before.
I was not going to mention it, but the opportunity suggests itself. MeeGo for tablets looks interesting, but we have to wait and see what kind of end product we will finally have.
And the final portion of Nokia news in the form of OVI statistics. Published by a Nokia Forum employee it shows factual downloads broken down by countries and models. It is quite interesting and you can access the original material here.
Top 15 is represented (alphabetically) by - China, Egypt, France, Germany, India, Indonesia, Italy, Russia, Saudi Arabia, Spain, Thailand, Turkey, UK, USA and Vietnam.
May be, I did not study geography well enough and do not remember the population of the abovementioned countries and their place in the market of mobile applications, but I have some reservations about the presence of Vietnam, Turkey and Egypt in the list. I do not want to insult their citizens, but they do not have enough of mobile phones penetration to compete with Germany and France in content downloads. There are many questions here. I have already described the sales of OVI Store in Russia, they are almost non-existent and several shops in Moscow have better software sales than OVI Store. In the Spillikins we have mentioned the feedback of developers regarding the miserable sales as well. This list proves only that OVI Store does not work well.
Breakdown by models in Russia also offers an interesting reading - 2700 Classic, 3600 Slide, 5130 XpressMusic, 5530 XpressMusic, 5800 XpressMusic, 6303 Classic, 6500 Classic, 6500 Slide, 6700 Classic and N97. The smartphones are heavily underrepresented, which was never the case in the past (Russia was one of the leading users of Nokia smartphones and this was always emphasized by the company itself). Have Nokia smartphones become less popular in Russia? Of course, not. The smartphones owners just do not use the OVI Store. The statistics is interesting, but has nothing to do with real life, which only proves that OVI Store does not work at all and it is an open secret for customers and developers alike.
It was also interesting to follow Nokia share prices fluctuations last week as they reached a new low of $8.25. The only explanation is the announcement that all Nseries devices will be based on MeeGo. You can observe the share prices fluctuations here.
To avoid repetition we advise you to read about the questions and their prehistory here.
This week's question:
Question No 4.
You had no time to answer the previous questions (which forms a new tradition), but I hope this letter will be luckier and you will provide the comments to our readers.
During the Nokia event for the Russian distributors the company's representatives said that Nokia does not care about its market share and even if it goes down to 30% it will be acceptable for Nokia. Is it true and what can be the related timeframe for such changes?
Thank you in advance.
Eldar Murtazin, Editor in Chief, Mobile-Review.com
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Published 29 June 2010
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