The 3rd week of June 2009 is momentous in terms of the ground breaking new launches that we would have redefining the smartphone space. Palm is alll set for a return with its highly touted Pre challenging the iPhone. There are guesses and second guesses on whether Pre would be the iPhone killer. iPhone gets the 3.0 makeover which essentially puts it in par on many other departments as far as smartphone capability is concerned. However, iPhone will all be about the Apps that they can bring to the table. Nokia N 97 on the other hand is Nokia’s flagship salvo to claim its own technology leadership space in the smartphone category. In as much as it will be against the iPhone, the battle between N 97 and iPhone will be one between Device and Markets. This article com compares the N 97 against the formidable iPhone on various departments.
N 97 versus iPhone
The fight between web-based and mobile-based players has officially started this week. On Monday, Apple announced its latest phone, the iPhone 3G S, which will go on sale next week. And on Saturday, Palm started selling the much-hyped Pre.
This comparison seems like one of hardware vs. applications. If this is a smartphone device market, the iPhone is four year late. If this is an app awareness market, Nokia is one year late. Analysts world over are watching these launches as a toss up between Device driven smartphone market or Apps driven smartphone market.
The Nokia N97 seems to have better hardware, where the iPhone 3G S and its App Store are second to none. The latest iPhone marketing campaign was smart enough to pinpoint the main competitive advantage into their next wave of customers: “there is an app for that.”
The average iPhone user seems to behave either as a teen or a teen at heart, and loves having fun with useless and exciting apps thrown away as rapidly as they are downloaded, like a Facebook app. More than 1 billion downloads later, less that 5 percent of those who downloaded an iPhone application are actively using it after 21 days and only 10% of apps retain the audience attention, according to a PinchMedia survey. Nokia’s target market demographics may be different, more for professionals and professional use.
The other differentiator for Apple is the “user experience”: Understanding it, being in control of it and finding joy in handling it. Something that Apple does perfectly, and Nokia’s Symbian-Interface does not do as well. Apple’s forte is their vast experience with user industry-leading GUIs.
Neither T-Mobile and AT&T, the two US operators that could have subsidized the Nokia N97, has picked it up (yet?). As a consequence, at more than $600 Amazon price, the N97 is unlikely to be a threat to the latest iPhone in the US
Each of these devices can be bought for far less than the Nokia N97. The 16GB iPhone 3G S will sell for $199. And the 32GB model, which has the same amount of built-in memory as the N97, will cost $299 when the phones go on sale next week. Apple has also cut the price of its 8GB iPhone 3G, introduced last year, to only $99. The Pre, which also has a slide-out QWERTY keypad and a touch screen like the N97, is $199 with a $100 mail-in rebate.But there is a catch; these low-priced smartphones come with strings. Consumers must sign a two-year contract to get the discounted prices. And in the case of the iPhone and the Palm these phones are exclusive to one carrier. Subscribers are also charged an early cancellation fee if they terminate their contract before it ends.Even with early termination fees, the iPhone and Pre are still less expensive than the N97. For example, a new AT&T subscriber buying the 32GB iPhone 3G S will pay $300 for the device. If this subscriber cancels his service before the two-year contract ends, he will pay at most $175. Adding the early termination fee to the cost of the phone, the iPhone subscriber will still only pay $475 for the device. This is about $225 less than what he’d pay for the Nokia N97.
Just look at Sony Ericsson’s Xperia X1, which went on sale last year in the U.S. with a price tag of $800. The phone has largely been a flop in the U.S.
Nokia must realize that it can’t really compete in the U.S. smartphone market without a carrier subsidy. And it’s difficult to understand why the company would not be able to strike deals with U.S. carriers. After all, it is the largest cell phone maker in the world.Perhaps Nokia doesn’t think the U.S. market is worth the trouble. Even though the U.S. offers the biggest growth opportunity in smartphones, which also happens to be fastest growing segment of the mobile market, analysts say that Nokia could still maintain a market share position in the 30 percent to 40 percent range by selling devices throughout the world. But the U.S. market represents an untapped opportunity that could prove very lucrative for Nokia. And the longer it takes Nokia to bring an affordable hit phone to the U.S., the harder it will be for the company to get its fair share of the pie.
On RIM and Blackberry steady rise in Smartphones in US and world markets. The reasons for its performance are its competitive pricing, availability across carriers, business expertise (security, service and reliability for enterprise users), aggressive pricing and portfolio. This article also reviews the weaknesses in the RIM portfolio where it would need to work hard and work quick so not to loose edge to the sharp competition.
Apple’s iPhone 3GS and Palm’s Pre has captured a lot of hype but don’t count out Research in Motion’s BlackBerry just yet, say experts.
While the iPhone enjoyed an initial pop in market share after the second generation version was released last July, that share has been nearly cut in half.
In the first quarter of this year, BlackBerrys had a 55.3% share, compared to 19.5% for iPhones, according to IDC data. Compare that with the third quarter of 2008, when BlackBerry devices controlled 40.4% of the U.S. smartphone market, compared with 30.1% for Apple.
Solid footing. Much of RIM’s anticipated success lies in its ability to grow market share even as competitors launch new flashy devices.
Analysts expect that market share to grow into next year, despite the mostly negative reviews for its first touchscreen device, the Storm, and new launches from Apple and Palm.
A recent Yankee Group survey showed 41% of Americans plan on buying a smartphone for their next phone purchase, and 50% of those people plan on buying a BlackBerry. Only 25% said they would buy an iPhone.
Experts cite competitive pricing, business expertise and new consumer products as reasons for RIM’s sustained growth.
Pricing. RIM may not offer the interactive operating system experience that the iPhone, Pre or Google’s G1 phone offer, but RIM offers BlackBerrys that beat them in end user cost.
That’s because every major U.S. wireless carrier offers at least one BlackBerry device, unlike competitors, which have exclusive contracts with AT&T, Sprint and T-Mobile. With the carriers fighting for customers, many offer discounted rates, including Verizon’s aggressive “buy one get one free” promotion for its BlackBerry line.
Analysts say wireless providers can afford to offer competitive pricing because BlackBerrys cost less for them to operate than iPhones and Pres.
“RIM’s design is much more bandwidth-efficient than its competitors, so carriers make the most money off the BlackBerry platform,” said Nick Agostino, RIM analyst with Research Capital Corp. “Once two carriers in the same market offer BlackBerrys, they start to compete against one another and RIM is the beneficiary.”
The campaign appears to be working. Exclusive iPhone carrier AT&T has as many BlackBerry users as iPhone users, according to Andy Castonguay, director of mobile device research at Yankee Group.
“The total value of a device goes far beyond the physical phone itself,” said Castonguay. “Service, reliability and functionality all play a part in the total valuation, and BlackBerry continues to distinguish itself in those terms.”
Enterprise. Most experts agree that RIM has solidified its standing at the business smartphone of choice, due to its focus on security and ease of configuration.
“RIM has been very aggressive in its enterprise server upgrades, making its software even more appealing to businesses,” said Castonguay. “RIM has made a name for itself in security, service and reliability, which are fundamental necessities for companies.”
Still, some think that RIM shouldn’t get too comfortable as the enterprise leader.
“RIM is facing bigger challenges now from a competitive standpoint than they’ve ever had before,” said Ken Dulaney, analyst at tech consultancy firm Gartner. “The user interface doesn’t match up to its competitors, and many of our clients are breaking with their previous policies just to use the iPhone. IT departments are beginning to support anything with basic security features.”
Furthermore, the company still has some ground to make up in worldwide smartphone sales. It controls just 20% of the global market, compared to 41.2% for Nokia.
The company is trying to broaden its appeal to global businesses, including world travelers with its new BlackBerry Tour, which can easily access foreign voice and data networks while abroad.
What’s in store. BlackBerry has increased its consumer base in the past three quarters, according to IDC, but some analysts think RIM needs to establish itself as more a consumer device.
The launch of the BlackBerry app store has helped draw consumers, experts say, and though it lags behind the iTunes app store, it has grown to become the No. 2 app store. The Pearl and Curve have also sold well, and the Storm held its own after heavy subsidies from Verizon.
But most analysts agree that RIM will need to launch a competitor that looks and functions more like the Pre to continue to drive consumer demand. Both Verizon and RIM have hinted at a release of a touch screen device with a keyboard in the third quarter of 2009.
“The Pre and iPhone pushed the envelope in what the operating system needs to be in terms of flexibility and ease of use,” said Castonguay. “BlackBerry will have to adapt its operating system to become much more consumer-friendly.”