{"id":4042,"date":"2012-01-05T23:08:56","date_gmt":"2012-01-06T04:08:56","guid":{"rendered":"http:\/\/esr.ibiblio.org\/?p=4042"},"modified":"2014-03-11T19:22:28","modified_gmt":"2014-03-11T23:22:28","slug":"the-smartphone-wars-dinosaurs-mating","status":"publish","type":"post","link":"http:\/\/esr.ibiblio.org\/?p=4042","title":{"rendered":"The Smartphone Wars: Dinosaurs mating?"},"content":{"rendered":"<p>Just when you thought the smartphone industry couldn&#8217;t get any more soap-operatic, everybody&#8217;s favorite pair of aging drama queens &#8211; Microsoft and Nokia &#8211; may be at it again.  There&#8217;s a rumor, from a gossip with a good track record, that Microsoft intends to <a href=\"http:\/\/www.bizjournals.com\/sanjose\/news\/2012\/01\/05\/microsoft-to-buy-nokia-smartphone.html\">buy Nokia&#8217;s Smartphone division<\/a>.<\/p>\n<p><!--more--><\/p>\n<p>Inexplicably, there are even some people writing about the rumor who think this might even be a good idea.  I mean, a good idea for Microsoft.  It probably really would be a good idea for Nokia &#8211; they&#8217;d get shut of their idiotic alliance with Redmond and unload a crappy, chronically underperforming division for a pile of cash (the rumormonger says $19 billion).<\/p>\n<p>But for Microsoft?  Nokia&#8217;s brand strength was probably the only thing keeping Windows-phone share as high as 5.2%.  It hasn&#8217;t been Microsoft&#8217;s software doing it, that&#8217;s for sure. Botched upgrades and a pathetically weak app ecosystem have only been the most obvious problems.  <\/p>\n<p>If Microsoft bought Nokia&#8217;s smartphone division, they&#8217;d mismanage it into smoking rubble within two years.  &#8220;But wait, Eric&#8230;&#8221; I hear you cry, &#8220;they haven&#8217;t done too badly with the X-Box!&#8221;  Quite right they haven&#8217;t &#8211; but that&#8217;s because Microsoft runs that division as a cash generator, mostly hands off.<\/p>\n<p>Smartphones, on the other hand, are <em>strategic<\/em>. That means that if Microsoft buys itself a smartphone division, Steve Ballmer&#8217;s going to poke his prong into it. Repeatedly. To, um, what&#8217;s the B-school jargon? &#8220;Maximize the synergies&#8221;. They might even be treated to more <a href=\"http:\/\/www.youtube.com\/watch?v=wvsboPUjrGc\">demented-monkey ranting<\/a>.  Two years.  Smoking rubble.<\/p>\n<p>On a different subject, what are we to make of the latest <a href=\"http:\/\/www.catb.org\/esr\/comscore\/\">comScore  figures<\/a>? I have to say I don&#8217;t know. Android has fallen off the roughly 2%-per-month rate of share increase it had been sustaining for 18 months. Even at the lower rate, though, it&#8217;s still probably going to surpass 50% U.S. market share within a month or two &#8211; actually, some of the more excitable market-research outfits think it&#8217;s already there.<\/p>\n<p>Apple fans would like the reason for the slowdown to be Apple, but there hasn&#8217;t been any corresponding improvement in Apple&#8217;s relative position.  Both Android and Apple now seem to be tracking overall smartphone market growth pretty closely. Neither the iPhone 4S nor Android 4.0 shows any sign of being a game-changer.<\/p>\n<p>The most likely possibility is that the U.S. smartphone market has reached a sort of initial saturation point &#8211; that while there&#8217;s still growth in the offing, the first frantic rush to smartphones has finally spent itself.  <\/p>\n<p>I rate this only &#8220;likely&#8221; because the holiday sales figures could still shock everybody.  Apple had a flat month in September which might have been people deferring purchases until they could get a 4S; it&#8217;s just possible that the larger Android wobble was their considerably larger prospective-buyer pool holding out for Ice Cream Sandwich &#8211; currently only available on a Verizon phone. <\/p>\n<p>The saturation theory has a near-term consequence we can watch for: decreasing consumer willingness to pay premium prices for high-end smartphones. Watch for the more market-savvy vendors to start emphasizing value pricing and low-end to midline products more in 1Q2012.<\/p>\n<p>The purchase-deferral theory has a more obvious near-term consequence we can watch for, too; huge Christmas-morning sales for Verizon. Andy Rubin was on G+ <a href=\"https:\/\/plus.google.com\/u\/0\/112599748506977857728\/posts\/WmkvJx7UL9\">talking up Christmas activations<\/a> recently, which suggests that Google thinks it&#8217;s going to have a good story for its next quarterlies.<\/p>\n<p>Meanwhile, the non-sucky low-cost Android tablets that I was predicting six months ago are beginning to trickle in now, two months later than I was expecting but hey, prediction is hard.  There&#8217;s a fair amount of buzz about Velocity Micro&#8217;s <a href=\"http:\/\/reviews.cnet.com\/8301-32494_7-57351747\/velocity-micros-$150-android-4.0-tablet\/\">T507<\/a>, an Android 4.0 tablet with a 7-inch display for $150.  <\/p>\n<p>Significantly, this is less than an iPad.  The vendors may be getting a clue that to complete with Apple they have to offer something as good for <em>less money<\/em>. &#8220;Premium&#8221; pricing simply will not work in that market, not for anyone but Apple now and probably not even for Apple in the longer-term future.<\/p>\n<p>I don&#8217;t want a T507. But the specs on it hint that we&#8217;re only one product-development cycle &#8211; three or four months &#8211; from something I and a whole lot of other people will want.  If the iPad&#8217;s product manager isn&#8217;t starting to get nervous about this, he should be fired and replaced with somebody with enough sense to be worried.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Just when you thought the smartphone industry couldn&#8217;t get any more soap-operatic, everybody&#8217;s favorite pair of aging drama queens &#8211; Microsoft and Nokia &#8211; may be at it again. There&#8217;s a rumor, from a gossip with a good track record, that Microsoft intends to buy Nokia&#8217;s Smartphone division.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[34],"class_list":["post-4042","post","type-post","status-publish","format-standard","hentry","category-technology","tag-smartphone-wars","entry"],"_links":{"self":[{"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=\/wp\/v2\/posts\/4042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4042"}],"version-history":[{"count":3,"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=\/wp\/v2\/posts\/4042\/revisions"}],"predecessor-version":[{"id":5427,"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=\/wp\/v2\/posts\/4042\/revisions\/5427"}],"wp:attachment":[{"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4042"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/esr.ibiblio.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}