14
Nov

Any meaningful feature gap between high end and low end smartphones has been obliterated

Consumer markets for smartphones no longer present any gap, whatsoever, between high end and low end entrants as regard high value features. With this gap obliterated, industry players will do well to implement product marketing strategies with a proven effectiveness in pure commodity markets or else risk extinction. This means product marketers should emphasize methods of lowering the cost of manufacture, and secondary markets to prop up revenue expectations while closely scrutinizing new model planning.

Here’s a case in point. We just purchased, outright, an LG Optimus L90 Smartphone from our wireless data provider, T-Mobile. Our total cost to acquire this device amounted to a one-time charge of $99.99. We should also note we maintain 2 Nokia Lumia 925s, which we purchased from T-Mobile at a cost of approximately $600.00, each. We are still paying, monthly, for each of the Lumias and will likely continue to do so for at least another few months.

But with an Android KitKat O/S, and a very extensive set of app options, we can’t find anything we’ve given away by opting to purchase the LG-D415 instead of a new Lumia, or even an iPhone 6. Sure the Lumia and the iPhone 6 offer many more powerful features than our LG Optimus L90, but we have no need for them. In this writer’s opinion, when features reach a usefulness plateau as they have in the smartphone market, consumers have zero incentive to migrate up the ladder to more expensive versions of the same commodity.

Leading manufacturers of smartphones are already exhibiting a set of strategic moves befitting general agreement about the nature of the market as, in late 2014, entirely commodity driven. Accordingly, Apple is talking about producing a gold version of its iPhone 6, which is already available for custom monogramming. This move makes sense for a manufacturer with a leading product whose principal attractiveness is its position as a status symbol for a highly concentrated set of consumers habituated on only buying the leading product in the category.

At the low end manufacturers like Samsung are feeling the pain as competitors with a substantially lower cost of manufacturing, for example, Xiaomi, seize market share. For this segment of the market, app stores look to be an oasis in a profit desert. No wonder Microsoft is racing to win a place on the radar of app developers as its best hope to capitalize on the smartphone market.

Look for further consolidation in this market as manufacturers either drop out, or consumer rivals.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

27
Mar

The White House is Evaluating Samsung and LG Phones, But is this really a blow to Blackberry?

On March 20, 2014, Will Connors published an article on the Wall Street Journal Online titled BlackBerry Suffers Blow as White House Tests Samsung, LG Phones. As the title plainly states, Connors considers this review of competitive smart phones to be a negative for Blackberry. But is this a really accurate read of this news?

I found neither any mention in Connor’s article of any apparent interest, on the part of the White House in any alternative to Blackberry® Enterprise Services (BES), nor in Blackberry Secure Work Space (BSWS) for iOS® and Android. Unless and until there is mention of the White House seriously considering a move off of these software platforms, I don’t see news about the White House evaluating new smart phones as a blow to Blackberry.

On March 26, 2014, Blackberry announced its achievement of ” . . . Federal Information Processing Standard (FIPS) 140-2″ for both of the above mentioned secure messaging platforms. Readers can review the entire press release, titled BlackBerry Advances Security of its Multi-Platform Mobility Portfolio with New Cryptography Certification. BES and BSWS operate entirely correctly on any Android devices, including the Samsung and LG smart phones currently under review by the White House. With specific regard to the LG smart phone line, on December 18, 2013, Blackberry published a press release, titled BBM To Come Preinstalled On LG SmartPhones. So the LG G Pro Lite runs the Blackberry Messaging Platform, native, right out of the box. The White House statement, however, does not specifically mention this LG smart phone as under specific consideration.

Readers should also carefully consider a December 20, 2013 announcement: Blackberry and Foxconn Agree a Five-Year Deal. Is Blackberry really deeply committed to the smart phone handset manufacturing business? Or is this interest on the part of the White House merely an indicator of Blackberry successfully transitioning over to the enterprise software revenue model John Chen, CEO has made clear is its near term future?

BES and BSWS win any way the White House decides to proceed — Android smart phones from Samsung, or LG, or new Blackberry handsets manufactured by Foxconn.

Disclaimer: I’m long Blackberry

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

26
Feb

Can Mozilla Successfully Challenge Android for Significant Share of Emerging Market Consumer Appetite for Mobile Devices?

To date, Google’s Android business unit has claimed to be the sole significant representative of open source O/S options for mobile devices. Leaving aside, for the moment, whether Android’s O/S architecture really complies with OpenSource standards, or not (I don’t think so and some other analysts hold my position), on February 23, 2014, the Mozilla organization made an announcement to enter the fray in a big way: Firefox OS Expands to Higher-Performance Devices and Pushes the Boundaries of Entry-Level Smartphones.

The press release also mentions Panasonic has chosen the Firefox OS for a new smart TV, and a tablet to be built on the Firefox OS by Foxconn. What’s most important for emerging markets about all this activity by the Mozilla Organization, is the low cost of entry it purports to opens up for retail consumers. On February 25, 2014, Sven Grundberg and Tom Gryta wrote in an article titled Smart Phone Makers Aim at Emerging Markets With Low-End Devices: “China’s ZTE Corp. introduced a phone running on Mozilla’s Firefox operating system that will cost $80. Mozilla says it will introduce a phone made in conjunction with a Chinese chip maker this year that will cost just $25.” (quoted from Grundberg and Gryta’s article, a link to which has been provided in this paragraph).

Of course, the close ties Firefox OS has evidently established with Chinese mobile phone OEMs, together with the very low cost to consumers for this technology in Internet ready smart phones, should give Android executives something to think about, at the least. How long will it take before Samsung, and/or Lenovo comes to market with similar products? Only time will tell.

As to how big an impact a serious challenge from the Mozilla Organization may have on Google’s Android bottom line will take sometime to determine. I think there are a lot of reasons, at present, for mobile phone OEMs with a commitment to Android to start taking a serious look at the Firefox OS option.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved