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Spillikins ¹151. Fanaticism as the reflection of personality
The year is coming to an end and this issue of Spillikins should theoretically analyze the past 12 months, but we will stick to the rules of our genre and discuss events of the week. I would like to wish you a Happy New Year if you fail to read our special New Year Address or listen to the appropriate podcast. Stay healthy, reasonable and lucky. All three elements will be handy, while you can reach everything else anyway. Make our world brighter for near and dear ones.
After this festive introduction I will proceed to this issue of Spillikins as the past seven days were lively and had plenty of action. Our Russian readers can now follow us on Twitter. You will find there not only previews of articles, but a lot of related info.
Fanaticism is always bad, whether you are crazy about a soccer team or become a stubborn collector of objects. This negative trend affects us all. In 1990s when mobile phones and communication cost much more excessive brand loyalty translated into fanaticism. The novelty of the gadget was a possible excuse, but in 2011 such a passionate attitude to simple hardware should be considered as misplaced. Nevertheless, the disease of fanaticism turned chronic if to judge by web forums and conversations in cafes or restaurants. Dedicated followers of a particular brand spare no effort to defend their choice as if it affects their lifestyle and becomes its symbol.
At a recent business meeting with five fair ladies I saw them all using Apple iPhone 4/4s (I could not be sure about the presence of 4s as it required going to the settings menu or using Siri). My Galaxy S2 was alone in this not very diverse group of phones. Five Apple handset boasted different cases and accessories.
If in 2007 I paid attention to iPhone owners in upscale coffee shops due to their rarity this year it is easier to spot those who do not have an iPhone to boast. Does their choice reflect the lifestyle they lead and self image they form? The answer should be definitely positive, even though they are free to think and choose. These people are fashionable and buy the best from products on offer. Over the weekend I had a call from a friend who was in a store and could not choose between iPhone 4, iPhone 4s and Galaxy S2 as a substitute for its old and battered Nokia. Having mentioned advantages and disadvantages of all phones in questions I left him to make his own choice. I don't know what he bought after all, but the list of contenders was symptomatic.
This is why we enjoy discussing car or phone brands and boast our knowledge of related details. Online battles resemble virtual religious wars – Android against iOS, AMD versus Intel and so on. Participants argue not about characteristics, which become secondary, but try to figure out which philosophy is better and whose lifestyle is more stylish. I firmly believe that such arguments are absolutely useless. If you like iPhone it doesn't mean that Android is horrible or vice versa. People often want to prove that any choice different from theirs is a mistake, but it is not really so. All of us should have an opportunity to pay for the products we like without being judged or looked down upon.
When I see people enraged while discussing the virtues of a phone (or any other consumer product for that matter) it becomes clear they defend their choice and support their own decision (the more people argue the less confident they are in their decision). Quite often online battles become pretty abusive as arguments turn ugly, which is not acceptable. No phone is important enough to attack the dignity of a person. The phone is closely associated with the lifestyle behind it though.
I hope that next time you run into a hardware fanatic you will restrain your anger as it is not worth it. Any choice is always good for you. You can often get more for the money, but it is another issue anyway.
When Apple iPad hit the market there were no readymade scenarios of use. Many owners of their first tablet had to think hard and invent new ways to fit their needs. Initial potential and mobility allowed for hundreds types of use, which are not surprising these days – video, web surfing, databases, games and so on. I recently came across one more use, which seems quite original. When Electronic Arts offered any game for 99 cents I purchased 5 games for iPad and found the desktop mode in new versions of Monopoly and Scrabble. In fact it can be used as a game table to be used in a group. I think similar games started appearing during the last year and the number is growing. For example, Set for tablets has good graphics and can be played in fours. I play it with my children and the screen size is more than enough.
What can I say? Until recently games allowed connecting to another tablet similarly to game consoles, but new versions for multiple users offer different approach. These games are for groups of people to enjoy together. Computer versions of traditional games are as attractive as ever and cost much less. Next year we will see many traditional board games for several players and it will change our opinion about tablet computers once again. If until 2012 you could not often see people gathered around a tablet (they would watch video at best) soon we will see people gaming together. This new scenario was not expected at first, but it is perfect for family time.
Five years ago Nokia started tracking developments in Mediatek, which manufactured MTK platform popular among Chinese manufacturers. Inexpensive and morally outdated platforms were extremely cheap, which eroded Nokia's market share. Within five years Nokia went from 70% of the market in India to slightly more than 30%. Local companies with phones on Mediatek chipsets reaped the rewards. The quality of solutions, materials and build have been improving for years, but only the proprietary chipset and software from Mediatek gave them a true growth opportunity. They are not perfect, but the price means a lot.
2012 will belong to touch screen phones for under $100. These models are already on the market and their share is growing. Especially for such models Mediatek is launching MTK6236 platform to produce phones in $50-$120 price range (depending on manufacturer and features: camera resolution, amount of memory, etc.)
I tested the platform on Symphony FT38, which is a standard Chinese phone with a 3.5″ screen (capacitive technology with the resolution of 320õ400), 2 MP camera and standard apps. Its retail price is on the right side of $100.
MTK6236 can go together with cameras of up to 5 MP, does not support 3G, but deals with 2-4 SIM cards, offers an interface for integration with FM radio, WiFi, GPS, and aTV. Java is available too. On default we get Cosmos UI, which looks like a redesigned Sense from HTC with many borrowings from other manufacturers. Bear in mind that we are dealing with a Sense analogue for models costing between $50 and $120.
Interestingly, the frequency of ARM9 processor is less than impressive 312 MHz overshadowed by GHz and several cores in advanced solutions. At the same time the interface is rather fast and responsive, which is crucial for budget solutions. Watch the video to see how the interface works (Symphony has a redesigned interface). Always remember the price and do not compare it with more expensive smartphones.
I think we will come up with a short review of this model to understand where Chinese manufacturers are heading and what technological level is available for them. The main point is the price of such solutions. Cheap models are the main threat for bigger players as Mediatek gets the most from the old hardware to achieve the balance between the rock-bottom prices and acceptable performance. Market leaders cannot do the same so far.
In the previous Spillikins I mentioned that the company's stock broke another anti record by plummeting to the 1998 price. It turns out this was only half of the story and the Lumia 800 sales failure concerns not just Russia but all the markets. GfK Research has released a market report covering November and December in Britain and Nokia 800 never made it in the top 10 during these two months. An avid reader might ask what the tens of thousands (it is not an overstatement) of laudatory articles stating that Nokia 800 was a bomb for the market and is in unprecedented demand. Well, it is all lies. Despite the unprecedented size of the ad campaign, free XBOX 360 with the phone in Orange stores in Britain the actual sales are unbelievably low and now we have figures to prove it. I have already commented on Nokia's groundless triumphant hysteria about Nokia 800 sales here but now I think it's time we saw the sales figure at last.
The GfK Research Britain report was a real bombshell and it made a dramatic contrast with what the head of Portfolio, Product Marketing & Sales in Nokia Entertainment Global was telling us: that users find Android confusing and are tired of iPhone. Nokia 800's sales are just a bit higher than the sales of the company's budget Touch&Type phones. And it is far behind all Apple iPhones and Samsung Galaxy SII. Even Blackberry Curve is more popular on the market despite having more than moderate sales. I think this time Nokia's PR will not be able to turn the picture in their favor as the statistics says it all. More interesting figures: Nokia spent ?20 million on Nokia 800 ads in Britain alone.
It was no surprise that after the report was released Nokia stock plummeted again to the new record $4.46 per share – this is 1997 price.
Nokia's reaction to the report was a formal hysteria – the company cannot allow such bad news. It is curious how the company is trying to use rumors and ‘leaks' to counter balance the bad news, Nokia has issued three press releases in December which means that the company that is still the leader in terms of the number of handsets produced cannot act. The Nokia 710 Lumia release in the US was complemented by a generous dose of rumors before official statements. Amazingly, those rumors made the Nokia stock go up a bit. Nokia is using rumors as a tool to fight the negative trends – it is merely a tactical trick but when you are helpless all means are good.
As soon as the stock hit the new bottom Nokia launched a rumor about something spectacular they will be revealing on January 9 at CES in Las Vegas. This is another promise the company will never keep but many will still believe it. Nokia will surely try to make a bang at CES – the sheer area they will be occupying is impressive but a company which is almost unknown on the US market cannot be that extravagant. After all, the company's budget is getting thinner and thinner. It was a political decision of the PR department – they want to show how important the US market for them (and it is) to make the stock go up again for a short period of time. This is the only purpose of this escapade.
Unfortunately, Nokia no longer works with numbers because they have anything promising to tell us. In all the PR hype around the company people forget to listen to what market analysts have to say about it. Last week an IDC analysts (the company assesses sales to carriers and distributors) Francisco Jeronimo in a phone interview to Bloomberg said ‘When people talk about estimates of a million units for Nokia, I wouldn't expect them to sell that kind of volume'.
And there are valid grounds for such statements. In Q3 2011 Microsoft provided 138 000 Windows Phone 7 copies for manufacturers in Western Europe. Back then there was no Lumia phones by Nokia or the new HTC and Samsung phones on the market. The IDC forecasts 500 000 WP7 handsets in Q4: 210 000 for Britain, 84 000 for France and 80 000 for Germany. Nothing like millions we keep hearing about. The WP7 market share is really low and it cannot grow instantaneously even supported by humongous ad campaigns (the market share in the US is still not growing).
It is a weird situation: analysts are unanimously skeptical about Lumia sales figures while Nokia's PR keeps insisting on incredible achievements. I wonder when the mass market will finally realize that the king is naked.
But step by step the situation around the company becomes clear to more people. The MobilesPlease service reported figures on online sales of phones in Britain (handsets purchased on this website only). In November the service sold 5377 handsets and made a popularity rating. Funny, but Lumia is not in top 10 again – its share is 0.17%.
We should be careful when considering data from this source as it does not represent the whole market but only the market niche this service occupies. But their data is interesting anyway.
Once again about Mr. Stephen Elop – last week he ended his silence and commented on the rumors that Nokia might be moving its HQ to the US, to what he said 'As long as I'm CEO, the headquarters will be in Espoo'.
I like it when top managers who know a lot more than us make promises so easily. In 2012 Stephen Elop will resign as Nokia's CEO – a decision made a long time ago. And unless a miracle happens he will leave having accomplished his objective and that is to ruin Nokia in everything except for Windows Phone. Everything Elop has been doing as Nokia CEO say he is still a Microsoft employee not an independent manager acting on behalf of Nokia.
In the related news Microsoft's Windows Phone Division former head Andy Lee resigned to become the head of some kind key department with direct subordination to Steve Balmer in 2012. Steve Balmer announced this appointment in a letter also mentioning that Lee's new job will concern the new OS, phones and tablets. He did not provide any more details.
I suppose that the tumors about Microsoft's plans to purchase Nokia's smartphone divisions acquire more and more grounds. Andy Lee's new job is another piece in this puzzle – he will be responsible for both development and production of smartphones and tablets. He seems to be the most appropriate person in Microsoft for this job. The rumors about HQ moving to the US are partially true - when the company is sold part by part the mobile division will move to America. This why Stephen Elop has been so quiet lately – Nokia is getting ready for big times and a pompous funeral.
The last piece of news concerning Nokia is the post in the official blog on December 21 telling us about the demise of Symbian. The company decided to ditch the Symbian brand and henceforth Symbian Belle will be known as Nokia Belle. The reason for this is the image of an obsolete system that Symbian now has. Symbian sales have been going down rapidly recently.
Andy Rubin has released new figure on the number of daily Android activations – 700 000 smartphones and tablets every single day. The last time this figure was announced by Eric Schmidt on July 14 and amounted to 550 000 units per day. I think nothing can stop Android market growth. There are more and more Android devices every day, they become cheaper and penetrate all market niches. The next psychological barrier is a million devices a day and this level can be reached already in Q3 2012. All attempts to hamper the popularity growth of Android (like Apple's patent claims) have been failing so far and did not affect Android sales at all. This OS is quickly becoming the dominant force on the market and the statistics proves it.
P.S. I wish you a happy New Year and happiness in 2012. Let all your dreams come true. Good luck! Meanwhile we will work even harder on our articles.
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Published 31 December 2011
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