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Spillikins #13. Musings about the megapixel race and Motorola’s canceled phone

Last week we published our take on the Samsung PIXON12’s camera, and to tell the truth over all these years of the megapixel race I’ve already gotten used to endless rants that increased megapixel counts don’t do any good, especially when it comes to color reproduction, and less sophisticated cameraphones perform infinitely better. But is that so? See for yourself – take our good old 2 MP flagship device of 2005, that collected all imaginable awards back in its time, and see how it fares against any of today’s top-of-the-range devices. Resolution aside, we now enjoy juicer colors, sharper and ever-so more detailed images. And don’t think that such a comparison is outrageous – a lot of things have changed over the last 5 years, so that these days we have every right to expect at least passable quality from a cameraphone. It’s quite another matter, though, that the megapixel rate is all but over now. Earlier this year (in March, if I remember correctly), Akira Watanabe of Olympus said that “12 megapixels will be enough for covering most applications most customers needs” and added in his interview to PMA, that in the mass-market segment most manufacturers will focus on ISO and image processing algorithms. Surprisingly, Olympus officially admitted that in today’s world the megapixel race lost all purpose, as the industry is facing other challenges. Same holds true for mobile phones.

Our review of the PIXON12 will become available in the coming days, but for those of you who can’t wait anymore, I shall notice that it doesn’t offer anything groundbreaking compared to the recently announced Samsung Jet – a couple of new features here and there, sorting function for the main menu but that’s about it.

For some reason many people have a very odd notion of how phone makers make their money. For example, they believe that the most expensive models constitute a decent share of their income. But nothing could be further from the truth – for most large phone makers the budget segment (up to 100 Euro) is of paramount importance. In Nokia’s books, for instance, they account for as much as half of their total sales. Samsung is not much different. One can love or hate this mass market, but the reality is that phone makers stay afloat primarily thanks to such products. The mid-tier devices have taken the hardest hit as a result of the financial meltdown (200-320 Euro segment) – their sales have slumped, as most buyers have moved to lower price brackets. At the same time the “320 Euro and higher” hasn’t been affected all that much – some price segments within this group have changed, as well as consumers’ preferences, but the volume of this market hasn’t shrunk. So as it turns out, phone makers simply have to churn out affordable models (which is what all consumers need, even in the enterprise segment), as well as support their sales in higher segments, but not overdo it, otherwise they’ll have more phones on their hands than they can sell. One of the most frequently exercised approach in this case implies creation of niche solutions in order to meet the demand and offer consumers a choice. That’s exactly what Samsung and Nokia are doing, saving their strengths and resources for the final showdown, when they’ll be the only major forces on the market, struggling against each other. It won’t happen tomorrow, but in several years’ time – for sure, since there are no other contenders on the horizon.

Sony Ericsson, for instance, reported another losing quarter – they ended Q2 2009 with 274 million Euro in the red, while their sales had decreased by 43 percent quarter-on-quarter. You know why there are going downhill? Not because of exorbitant prices – trust me, they could’ve sold all their models if only they were positioned for the segments, where the demand was still high. Instead Sony Ericsson opted to play first fiddle in the all-but-dead mid-range segment, that had already been saturated with solutions from other phone makers that offered more punch for less money. You know the rest of the story. Their attempt to migrate to the top price brackets, employing Nokia’s and Samsung’s time-proven strategy has ended up in vain, as they have learned that their band is not as craved as before. All they have left is a bunch of loyal consumers who still remember Sony Ericsson’s past accomplishments.

Any one of you can become an analyst for a second and take a look at what phones Sony Ericsson will present in Q3 2009 – out of this pile of models, only the W205 more or less fits in the segment that has been on the rise for the last couple of months, while the rest are clear misses. That’s why I don’t have a shade of doubt that the company will continue to lose money, the only question is “how much?”.

Nokia also posted their Q2 results, which weren’t all that bad considering the raging crisis – with the market share of 38 percent the company is making money and other than that there is not much else to discuss (the quarter-on-quarter profit drop was expected, given the state of the economy).

Speaking of niche devices, whose primary purpose is to attract more attention to a specific brand, let’s take a look at the LG Chocolate II (BL40), and Motorola’s canceled Ivory. The clip with the BL40’s specs popped up across the globe pretty much at the same time and for an instant it seemed like a carefully planned marketing campaign, since a day before that they had launched the phone’s teaser.

However, the next day LG were blazing through YouTube, deleting all clips about the phone from accounts, so that there would be no mention of the phone left in the Internet. Which, to tell the truth, was a silly and extremely short-sighted attempt, since nobody has ever succeeded in cleaning up the Internet, so the clip didn’t go anywhere and was readily available in spite of all LG’s efforts.

The Chocolate II offers nothing groundbreaking, representing the next generation after the LG Arena, and featuring some revamped UI functions and several new feats. All in all, it’s an interesting phone, showcasing what LG are capable of, but by no means a potential bestseller. Such phones are must-haves in any phone maker’s portfolio, and somehow LG have been able to maintain a perfect ratio between mass-market solutions and devices of this kind.

On the other hand, the Motorola E18 (Ivory) will never see daylight, for it was canceled. In fact, it sprung into my mind when I thought about the BL40’s stretched casing and decided to leak some of its images, so that it wouldn’t silently disappear in Motorola’s archives. This phone was developed alongside with the AURA and was supposed to become the company’s second fashion-conscious device for the top price bracket (its no-frills steel casing sky-rocketed its price tag to 2000 Euro), with three editions boasting different casing materials: steel, gold and platinum.

The phone’s specifications, however, could hardly blow you away – the Ivory had a 3 MP camera onboard, bog-standard hardware, similar to that found in the AURA and a decent loudspeaker. Also it sported the dual-slider mechanism: the user could slide it halfway open and access the functional keys or unveil the entire keypad. While none other phone maker had ever experimented which such design, it looked pretty good in the Ivory.

Basically, the phone was cancelled solely because of carriers, as none of them had agreed to purchase a sufficient number of units, so the whole project was shut down. On a side note, the Ivory followed suit of many other models that never got out of Motorola's development centers, even though some of them offered pretty attractive looks and hardware.

So, as you can see, the market is ruled not by out-of-the-ordinary models or phones with top-notch spec sheets. As strange as it sounds, mid-tier phones are running the show – exactly the type of phones that may seem dull or ugly to the ordinary consumer. We’ll have the review of the Samsung S5050 up later this week – another member in Samsung’s La’Fleur family that, unlike its predecessors, doesn’t have any features for women, offering crystal-laden camera module. Personally, I wouldn’t dare to buy this phone for any of my friends, however women seemed to be quite intrigued by the phone. The thing I don’t like about the S5050 are its touch-sensitive controls, but other than that its functionality is similar to other contemporary Samsung-branded solutions.