Nokia Outdesigns Apple

Tommi Pelkonen tipped us through Facebook on this one.

There was a time, not so very long ago, when Microsoft was a top seller of smartphone software. And Nokia, the Finnish electronics company, was the top seller of mobile devices. Then both of them got blindsided by Apple’s introduction of the iPhone in 2007. At first they just laughed. Who would buy that crazy overpriced phone from Apple that doesn’t even have a keyboard? Lots of people, it turns out. Which is why Nokia has seen the market share of its Symbian smartphone platform collapse to 19 percent today from 63 percent in 2007, according to IDC, a market researcher. Microsoft once had 13 percent share but now has only 2 percent, IDC says, making its presence almost negligible.

But now, working together, these companies are trying to plot a comeback, and based on the phone they introduced at the Consumer Electronics Show on Monday, they might actually stand a chance.

The sleek new Nokia Lumia 900 (PDF) has a 4.3-inch screen, an 8-megapixel camera, and runs on AT&T’s speedy new 4G LTE network. The phone “represents a new dawn for Nokia in the U.S.,” said Chris Weber, president of Nokia Americas, in a press release.

Nokia also released a YouTube video showing off the new phone.

The Lumia 900 runs the latest version of Microsoft’s mobile phone software, which is called Windows Phone 7.5 (code-name: Mango). This is a stunning piece of software that is radically different from what you get on an Apple iPhone or any of the Android phones. Instead of a bunch of same-sized icons, Microsoft uses big, bright-colored tiles. They can be moved around and customized. Some are “dynamic,” meaning they display information that is constantly updated when, for example, one of your friends posts something on Facebook.

Microsoft and Nokia struck a major partnership deal last February, with Nokia committing to make Windows Phone its primary mobile operating software. Previously Nokia had developed its own operating software. The deal was helped along by the fact that Nokia’s CEO, Stephen Elop, is a former Microsoft executive.

I recently I spent some time with the Lumia 900’s little brother, the Lumia 800, which has been a hot seller in Europe but hasn’t come to the U.S. yet. That phone also runs the Mango operating system and it’s a gorgeous device, with an elegant shell beautifully crafted from a single piece of polycarbonate plastic. The operating software is smooth and fast. In many ways the Lumia 800 was the nicest phone I’ve ever used. It makes the iPhone seem old and outdated, and makes Android phones seem big and clunky.

I usually have a bunch of different cell phones at any given time. I set them up so they all ring whenever someone calls my mobile number. Then I try not to think about it and just see which phone I tend to pick up when they all ring, and which phone I grab to toss in my pocket when I go out. Over and over again, the Lumia 800 was the one I picked up.

The Lumia 900 picks up from there. It’s bigger than the Lumia 800, which has a 3.7-inch screen. But it has the same sleek European modernist design feel.

Indeed, when it comes to design the new Nokia flagship devices have arguably leapfrogged past Apple, the company known for its cutting-edge design. It’s hard to predict whether the new Noka Windows phones will catch on in America. Apple and Android are so well entrenched that some pundits think whatever Microsoft and Nokia are doing will be too little too late. Not surprisingly, the folks at Nokia beg to differ. “I still believe that great products that are perceived as modern can change things very quickly,” says Marko Ahtisaari, the head of design at Nokia. “This is a long race that we are starting.”

As he puts it, the mobile phone market today is about where the automotive industry was in the 1890s, when standards had not emerged and people hadn’t even decided that a steering wheel was the best way to control a car.

Ahtisaari says the user interface of the iPhone “is becoming more dated as we speak. People think the iOS interface is the new generic and nothing will ever be better, but I disagree with that.”

Since joining Nokia in 2009, Ahtisaari has been trying to craft a new design language. “We share this focus on refining, taking away complexity, removing anything unnecessary, doing fewer things but better,” he says.

While pundits and customers in the U.S. focus on high-end devices, Ahtisaari says the bigger and more interesting opportunity lies at the other end of the market. “The big story is in Asia and Africa, it’s the next billion people and how we bring them online,” he says. “The line between smartphones and feature phones is becoming completely blurred. I’m as excited about making a breakthrough in a 10-euro phone as I am about a 1,000-euro phone. The next billion people coming online, that’s the real story.”

Indeed, the mobile market is so big that there may be room for everyone. I recently had lunch with a guy who works in the mobile space, and I asked him which platform he thought would win—Apple, Android or Windows. “All of them,” he said. The folks at Nokia and Microsoft are surely hoping that’s the case. With the new Lumia phones, they’ve made about as strong an effort as could be imagined.

Microsoft spends millions on training as HTC shows Windows Phones

• Author: Charles Arthur
• guardian.co.uk, Friday 2 September 2011

FA show gives glimpse of new HTC Titan and Radar phones running Windows Phone Mango to arrive in October as marketing head says 20% market share forecasts are conservative

The new HTC Radar, which will run the Windows Phone Mango OS

Microsoft is investing millions of dollars in training “hundreds” of sales staff for phone companies worldwide to encourage them to sell devices running its Windows Phone operating system, as the company tries to catch up in the smartphone market.

The news came as Taiwan’s HTC unveiled two new smartphones on Thursday – called Titan and Radar – which are based on Mango, the next update to Windows Phone, and said that they will be available from October. They will almost certainly be the first using the Windows Phone 7.5 software to be available in Europe.

The Titan model will be priced somewhat above Apple‘s iPhone but carries a wider 4.7in display. The HTC Radar phone will be priced at similar levels to other smartphones.

Achim Berg, Microsoft’s head of Windows Phone marketing, told Bloomberg that forecasts by market analysts that the operating system will have a 20% share by 2015 are conservative – even though it is languishing with a 1.6% world market share in the second quarter of the year according to the analysts Gartner.

“This is a completely new platform, it takes time,” Berg told Bloomberg. “It took time with Android, it took time with Apple. We have to show that we’re very capable and that we have the fastest and easiest phone.” Part of that effort will involve tutoring shop staff selling the handsets in how to show off the phones to best effect.

Other analysts say that Windows Phone has a mountain to climb in order to reach the aim expressed by Stephen Elop, chief executive of Nokia – which will use Windows Phone in forthcoming smartphones – of becoming the “third ecosystem” in the field alongside Google’s Android and Apple’s iOS.

Horace Dediu, a former Nokia executive who now runs the independent consultancy Asymco, noted that in the US Android and iOS phones cumulatively outnumber Windows Phone devices – which there have a 4.5% share – by 12 to one: “To become the largest mobile platform in the US, as some analysts are predicting, Microsoft has a 12:1 disadvantage that looks to continue to grow. Those are some pretty tough odds.”

But Microsoft is undaunted. “I am confident on Q3. We see a strong Q4,” Florian Seiche, head of HTC’s business in Europe, Middle East and Africa, told Reuters at the IFA consumer electronics show in Berlin. He said good demand for its latest models was continuing, despite macroeconomic worries and longer replacement cycles in some countries.

On 29 July, HTC gave a better than expected forecast for the third quarter, estimating sales of all its phones – which includes both Android and Windows Phone smarpthones – would double from a year ago to 13.5m, while its gross margin would be around 28%, down from 29-30% in previous quarters.

HTC’s shares have fallen as much as 40% from their peak in April because of the slowing growth, courtroom fights with Apple over patents and stiff competition. Microsoft has also won a per-handset payment – believed to be around $5 (£3) – for each Android handset HTC ships after claiming that HTC’s Android phones infringe its patents.

Analysts say HTC needs new markets to sustain growth and will have to call again on the speed and innovation that turned the once obscure Taiwanese company into a global brand in five years and propelled its market value beyond that of Nokia this year.

“HTC will be hoping the heightened awareness of Windows Phone as a result of Nokia cosying up to Microsoft will help kick-start interest in these new phones after the dismal reception of Windows Phone this time last year,” said Ben Wood, head of research at CCS Insight.

Nokia, still the world’s largest cellphone vendor by volume, has decided to dump its own Symbian software in favour of Windows Phone. The first devices, running Mango, are expected later this autumn, but analysts think that it will not be before late spring next year that the Finnish company will have a range of handsets with which to target the market. Meanwhile, the company fell into loss in the last quarter, and that is not expected to improve this year.

Microsoft first announced Windows Phone in February 2010, ditching its longstanding Windows Mobile operating system in the face of competition from Apple’s iPhone and Google’s Android. Windows Phone was launched in October 2010, but the company has given few details about how many handset licences have been sold as market figures have suggested a slow start.

HTC Pays Microsoft $5 Per Android Phone, Says Citi

Microsoft gets $5 for every HTC phone running Android, according to Citi analyst Walter Pritchard, who released a big report on Microsoft this morning.

Microsoft is getting that money thanks to a patent settlement with HTC over intellectual property infringement.

Microsoft is suing other Android phone makers, and it’s looking for $7.50 to $12.50 per device, says Pritchard.

We knew hardware companies were paying Microsoft, we just didn’t know how much. (In October Steve Ballmer said, “Android has a patent fee. It’s not like Android’s free.”)

Pritchard says we can expect more legal activity to pick up around Android in the coming months because “Google appears to have very little IP to defend itself with.”

This is good for Microsoft which is about to enter the tablet market and is trying to make a dent in the smartphone market.

Another Citi analyst, Kevin Chiang, believes Android phone makers have 10%-15% operating margins, and Android tablet makers have operating margins of just 2%-3%.

As Microsoft, Oracle (which is suing over Google’s use of Java), Apple, and others sue companies using Android, their margins take a whack for every settlement they make.

As the margins are crushed, it makes using a Microsoft-based operating system for tablets and phones much more attractive, argues Pritchard. (Unaddressed by Pritchard is how much Microsoft gets per device and if it’s less than or equal to what Android-based devices end up costing.)

Of course, Microsoft has to prove it has a compelling software package to put on tablets.

Here’s a chart from Pritchard looking at the lawsuits around Android:

via HTC Pays Microsoft $5 Per Android Phone, Says Citi.

Pyramid Points – Why Windows Phone Will Beat Android

After we have published our global findings from our Q1 smartphone forecasts, a number of tech bloggers, journalists, amateur telecom fans, people passionate about their own phones and others picked up on the very last sentence of our précis: “By 2015, Windows Phone will establish itself as the leader in the smartphone OS space.”

Some people have misinterpreted our statement, thinking that Windows Phone (WP) will establish its leadership in 2015. As you can see from Exhibit 1, we actually believe that this will happen much earlier – as early as 2013. Some of you loved this projection and agreed with it, othersargued thatthe potential margin of error was too large, and still others disregarded it. While I respect all the opinions, this blog is mostly aimed at readers who want to understand better how we came to the projection.

via Pyramid Points – Why Windows Phone Will Beat Android.