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Samsung Galaxy Note. First Look

Today, large companies, especially corporate giants like Samsung, do not surprise users with extraordinary products...

First look. Sony ST21i Tapioca Microsoft Windows Phone 7: Reasons for Failure First Look at Samsung Galaxy S3 as a 2012 Flagship
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Spillikins 142. Android 4.0 Great Expectations

The last week was so rich for events I had to limit my enthusiasm as well as the size of this issue of the Spillikins. As for now I leave a preview of Motorola DROID RAZR aside but I think this phone is worth having a look at. Initially this phone was supposed to be released in February 2011 and I think that its been postponed for too long and instead of making a bang it became just another phone. Anyway, lets get down to what really matters.


  1. Android 4.0 A Race Against Time and Manufacturers
  2. Phone Screen Size Searching For Middle Ground
  3. Mobile CPUs ARM and NVidia
  4. GLONASS in iPhone 4s. Don't Dream about It
  5. Nokia Releases Its 3rd Quarter Results

Android 4.0 A Race Against Time and Manufacturers

Android 4.0 has been greatly anticipated. Some people were just curious about what Google was going to come up with this time; some expected the new OS to change everything. I suppose the announcement of Android 4.0 was a disappointment for many people but mostly for manufacturers. That is because Googles strategy will soon make it pointless for manufacturers to support old phones instead they will have to release new phones for every new Android version. And all that despite the fact that Google promised to users that manufacturers would provide new firmware for Android phones for at least 18 months. Lets try to understand what Google is trying to do and why this strategy is going to make a lot of people frustrated because of not being able to update to the latest Android version.

Since the very first Google Nexus One it became apparent that the company wants to start their own phone production but the phones failure made them reconsider and they claimed that it was a phone designed to pioneer new Android versions.

Google Nexus One or another PR revolution

The first Nexus was produced by HTC. This company bet it all on Android and it was right but firmware updates for Nexus One were being released too slowly Google was losing interest in this project. Current Google Nexus S developers will only receive the latest OS several weeks if not a month after the release of Galaxy Nexus. Thats way too late and I am sure many manufacturers will purchase a batch of Galaxy Nexus handsets just to get familiar with the new OS in action. So Googles claims about the Nexus family being a test range for developers are just rubbish.

The Nexus family today is a Googles showcase for presenting the latest Android versions. And unlike Apple, Google always demonstrates the new OS on the latest hardware with more memory, faster CPUs etc. This has become a part of Googles PR strategy and I think its a good move because as users we dont just buy an OS we buy the aggregate of software and hardware in one package. In a way the Nexus family sets the fashion for the whole industry it demonstrates an average Android device for the latest Android OS version (or a recommended set of specs).

This is where we get to the detrimental effects of Googles strategy on the market of Android smartphones. Many people have been asking the question when can I get my phone updated to Android 4.0? Only manufacturers do not have an answer as they have no idea about the final release date. Sony Ericsson claimed that all Xperia phones of 2011 will receive the 4.0 update until the end of the year. HTC humbly admitted that they only consider the possibility of updates and voiced no dates. Samsung did pretty much the same they said that their Androids will be updated but did not say when.

I want to get this straight. An update this big requires a lot of time to prepare and none of the manufacturers can make it before the end of January. And then they will face a dilemma: update some of the old phone to Android 4.0 or simply present new phones designed for the 4.0 at Mobile World Congress in Barcelona and only then offer users the update for old phones to spur sales of the new ones. It will be a difficult decision to make for every manufacturer.

When it comes to Sony Ericsson considering their tumbling sales I think it is crucial for them to provide updates at any cost to regain some of the customer loyalty they have been losing so quickly recently. Adapting the latest OS to their phones is only a matter of time and I am sure the company will try hard to do it first to stand out among the other manufacturers.

Samsung, on the other hand, does not have an incentive to hurry with the update they already have Android 4.0 in their Galaxy Nexus so users interested in this OS can get it from Samsung right now. Updates for older phones like galaxy SII will probably be released only after the release of Galaxy S3 unless something big happens on the market. The situation is very different for HTC as the company can now only grow while keeping the prices at the current level. This is an impossibly difficult problem as a big growth is only possible through entering new price ranges and HTC cannot make their phones cheaper now. The HTC Explorer is the cheapest phone the company can offer it has a 600MHz CPU, a 3MPiz camera, a 3.2 HVGA screen, 512MB onboard and a microSD slot, all for about 200. The biggest advantage of this phone is not Android 2.3 per se but the Sense 3.5 overlay. And that is why the phone is so expensive as compared to its rivals (about 150 for same hardware). Up until September 2012 Explorer (or its variants) will remain the companys cheapest phone on the market.

We can already observe the company grow the number of similar phones like music variants (Sensation XE), or with a slightly different design (Sensation XL) with a better bundled package and a higher price tag. The company tries to prolong the life cycle of a phone to get maximum profit of a single phone (the life cycle of the original phone i.e. Sensation).

HTC will not have a lot of room for maneuvering when it will come to adapting the new Android as Google borrowed a lot of features from the Sense UI. HTC cannot push any legal issues against Google as its business depends on Android. There is only one way for HTC be even better, come up with new popular features. That is why Sense is so important for HTC, even more important than latest Android versions.

Earlier this year the web was outraged by the news about HTC Desire not receiving latest Android updates. HTC had to release a light version of the update (without all the features of Sense because the phone had too little system memory). There was quite a lot of hype about this despite the fact that there were not a lot of people who really needed that Android update.

So for HTC it will be a lot more profitable to release the new Android on new phones instead of wasting time the company does not have adapting Sense for old models.

So, all in all, we have the following. Googles current strategy pressures the companys partners who become heavily criticized by the users of their phones because Android development is not steadfast, instead Android takes leaps. Googles partners do not receive the OS in advance so that they had time to prepare updates for their devices. Its a vicious circle very hard to break. It is very different from Apples market strategy Apple users always get updates on time. Over the past three years all Apple iPhones have been receiving updates and thanks to that they all have similar functionality (Siri on iPhone 4S is an exception).

The worst thing about it is that I dont think this situation is going to change anytime soon. Android sales are soaring now it is already the most popular OS in the world. And as long as stays so Google will not be worrying about user loyalty or be trying to improve its relation with business partners. For them it will still be easier to make a new device instead of trying to update an old one. That is a serious downside to Androids popularity.

I dont think it is worth the time to put down my thoughts about Galaxy Nexus since they are basically the same Artyom had in his article:

Galaxy Nexus. A First Look

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Phone Screen Size Searching For Middle Ground

After the announcement of Galaxy Nexus there have been a lot of people on the web voicing their concerns about the enormous screens of modern phones. The display of Galaxy Nexus is 4.65 big because the manufacturer removed all soft keys from the front panel (which I personally think is stupid but its the modern trend of the market to get rid of all buttons both hard and soft keys). The bright side is that as screens get bigger their resolution also gets higher. Only some screens like Retina by Apple already have 330 pixels per inch and the human eye cannot see a difference between 300, 350 or 400 ppi. So today resolution is no longer a factor and the manufacturers now have to work on improving brightness, contrast, color range etc.

I believe the optimal size for a phone screen lies in the 3.5-4.8 range and the 4-4.6 screens will be the most popular. This size is still comfortable and allows you to work with the phone with one hand. This screen size race seems to be forgetting that our hands dont grow with released of new phones but I am sure the market will soon restore the order. Devices like Galaxy Note (5.3 screen) will still be interesting for certain groups of users who need something bigger than a phone but not as big as a tablet the middle ground.

Further Reading:

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Mobile CPUs ARM and NVidia

British ARM literally exploded the market by announcing the new generation of Cortex A7. As compared to Cortex A8 it is five times smaller, five times more power efficient and is supposed to be really cheap. ARM claims that Cortex A7 will allow producing smartphones for less than $100 in 2013-2014 with a performance comparable to current flagship smartphones. Moreover, Cortex A7 allows building multicore CPUs and the company believes that in 2013 dual core processors will be the most popular solution on the mass market.

I think this announcement is very important for a simple reason the market is inundated with ARM processors and all major manufacturers look up to them. It is also unlikely that this situation changes in the next few years. ARM has also proposed a high performance solution for smartphones and tablets a combination of A7 and A15 processors (the fastest CPU on the market today). A bit earlier NVidia proposed a similar solution called Companion CPU they will use with their quad core Kal-El processor.

Companion CPU and the Kal-El CPU

And, finally, I would like to discuss briefly mobile quad core CPUs. In 2011 there will be only one quad core solution Asus Transformer Prime (Tegra 3). This promises to be a very interesting device and the first one in the upcoming family. It will be released November 9 (the slight postponement of the release was caused by bug fixing). It has already been shown to the public and its got its own page on the Asus web site.

Taking into account how popular the first Transformer was I have no doubts that the new one will also be a hit. There will a lot of similar products (I mean Tegra 3 based) in January at CES but Asus hurries to skim the cream. There will be a lot of quad core CPUs in tablets in 2012 while they will get to phones a bit later probably by the end of 2012. That is what the manufacturers plan so far and I dont think there will be any reasons for them to rush the production.

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GLONASS in iPhone 4s. Don't Dream about It

Apple found itself in the middle of agitation in Russia. On the Apple website iPhone 4s was labelled as the one supporting GLONASS.

Many rumors surfaced. Reportedly Apple sees many prospects in GLONASS or prepares for customs fees to be introduced in Russia for all GPS devices. I have not come across so much lies and false information for a long time. Let's see why iPhone may feature GLONASS and what does it mean.

Several years ago the government of Russia and state owned companies managed to persuade Qualcomm into investing around 70 million dollars to support GLONASS in some of its chips. The company was lured by the promises that GLONASS market will be huge and the government will support further developments. The sales of chips had to return the investment and get considerable revenues. Qualcomm believed and spent money on this project. The market was a non-starter unless you take into account 955, where GLONASS navigation did not work well (out of 3000 items only 2000 were sold).

Review of MTS 955

Apple iPhone 4s features Qualcomm MDM6610, which supports both GPS and GLONASS. Russia can be proud that the chip supports our navigation system, but there is one issue. The phone itself has no software for GLONASS support and there is no antenna to get signal from GLONASS satellites. That is why we cannot claim that GLONASS navigation is supported in iPhone. On the other hand the market will see more and more solutions with new Qualcomm chips supporting GLONASS. It will not be implemented in real life though.

In the summer of 2011 Russian officials once again mentioned that in January 2012 new customs fees for GPS devices without GLONASS will be introduced. The amount is 25%. We have not heard from them since, but I doubt that someone decided to destroy the market of phones (25% will kill the market). Some people counted that iPhone 4s will be 25% cheaper due to GLONASS, but it is not true. The price will remain the same, whereas rival models will become 25% more expensive. I doubt it will ever happen.

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Nokia Releases Its 3rd Quarter Results

Victorious press-releases filled numerous websites. Analysts made a mistake, Nokia is doing fine and lost only 90 million Euros. Against this background share prices went up, but I think it is a temporary improvement, because 3rd quarter results are perplexing. Let's look at the table first.

Reported and Non-IFRS third quarter 2011 results1,2
EUR million Q3/2011 Q3/2010 YoY Change Q2/2011 QoQ Change
 Net sales 8 980 10 270 -13% 9 275 -3%
 Operating profit -71 403   -487  
 Operating profit (non-IFRS) 252 634 -60% 391 -36%
 EPS, EUR diluted -0.02 0.14   -0.10  
 EPS, EUR diluted (non-IFRS)3 0.03 0.14 -79% 0.06 -50%
 Net cash from operating activities 852 439 94% -176  
 Net cash and other liquid assets4 5 067 4 375 16% 3 891 30%
Devices & Services5          
 Net sales 5 392 7 173 -25% 5 467 -1%
 Smart Devices net sales 2 206 3 612 -39% 2 368 -7%
 Mobile Phones net sales 2 903 3 364 -14% 2 551 14%
 Mobile device volume (million units) 106.6 110.4 -3% 88.5 20%
 Smart Devices volume (million units) 16.8 27.1 -38% 16.7 1%
 Mobile Phones volume (million units) 89.8 83.3 8% 71.8 25%
 Mobile device ASP6 51 65 -22% 62 -18%
 Smart Devices ASP6 131 133 -2% 142 -8%
 Mobile Phones ASP6 32 40 -20% 36 -11%
 Operating profit 132 807 -84% -247  
 Operating profit (non-IFRS) 222 750 -70% 369 -40%
 Operating margin % 2.4% 11.3%   -4.5%  
 Operating margin % (non-IFRS) 4.1% 10.5%   6.7%  
 Net sales 241 252 -4% 245 -2%
 Operating profit -45 -48   -58  
 Operating profit (non-IFRS) 68 74 -8% 53 28%
 Operating margin % -18.7% -19.0%   -23.7%  
 Operating margin % (non-IFRS) 28.2% 29.4%   21.5%  
Nokia Siemens Networks7          
 Net sales 3 413 2 943 16% 3 642 -6%
 Operating profit -114 -282   -111  
 Operating profit (non-IFRS) 6 -116   40 -85%
 Operating margin % -3.3% -9.6%   -3.0%  
 Operating margin % (non-IFRS) 0.2% -3.9%   1.1%  

Good results were achieved courtesy of cost cutting measures. Employees were fired and expensive research in Symbian/MeeGo/Qt was axed. In the reporting period the company managed to supply almost as many phones as a year ago. The numbers went down by 3%. Smartphone sales decreased by 38%. Dumping is the only way out for Nokia and the average price of a Nokia smartphone reached 131 Euros for the 3rd quarter a fall of 8%. The average price of any Nokia device went down from 51 to 65 Euros (- 22%). Nokia is losing Symbian sales, which offered high margin, while in the segment of simple phones it is squeezed by Chinese manufacturers. It is a warning sign, because a 22% price drop is too dramatic an the market share could not grow. Nokia is definitely back to the wall now.

I think it is a lose-lose situation for the company. Despite the possible outcome of Windows Phone 7 from Nokia ordinary phones will be sold for less and the pressure from rivals will only increase. By the end of 2nd quarter of 2012 Nokia will not offer new solutions in low and mid segments, which is a big issue. It is a consequence of earlier decisions and there is no way out in sight. In the 4th quarter the first WP7 model will appear in stores, but we cannot expect much here, so let's wait for the 1st and 2nd quarter results from 2012. Optimism about the latest data is not based on long-term strategy. At the moment Nokia wastes the rest of cash to save its face and keep on selling ordinary models, but it cannot continue for long.

Extra reading:

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Related links

Spillikins 139. Meltemi from Nokia

Spillikins 140. How To Avoid Theft and Retrieve Your Phone

Spillikins 141. Siri If You Say So

Eldar Murtazin (eldar@mobile-review.com)
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Translated by Maxim Antonenko (maxantonenko@ukr.net), Robert Mugattarov (mugattarov@gmail.com)

Published — 26 October 2011

Have something to add?! Write us... eldar@mobile-review.com



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