Friday, July 26, 2013

The right side of 40. Smartphone vendors, get ready for "Megapixel Arms Race 2.0." Nokia's new 41Mpix Lumia has ended the d├ętente. Soon Sony, Samsung...

Smartphone vendors might need to start playing the megapixel numbers game again.

Nokia recently reignited and re-excited the market for high-end camera phones with the impressive Lumia 1020. With a 41-megapixel camera and top-notch imaging features, Nokia introduced a product with some clear consumer WOW. 41 is a big number to beat, but other vendors are probably already working with imaging component vendors to pump up their flagship devices with more megapixels.

Take for example the rumor of Sony's upcoming Cyber-shot like Xperia i1 Honami camera-centric phone. It's key-selling point is expected to be a 20Mpix camera with 2/3" Exmor RS sensor, Xenon flash, and advanced on-board image processing.

Smartphone vendors have known for years that there is still significant opportunities to make the adjacent move into the market for good point-and-shoot cameras, and possibly beyond. Back in 2010, former Nokia executive Anssi Vanjoki predicted that cameras in smartphones would eventually get so good, they could even replace SLR cameras.

It will be interesting to see how the competition develops now. Nokia led the way this round, but competitors expected the device after the introduction of the Symbian-based 41Mpix "808 PureView." This market is filled with fast followers, so Nokia's window of opportunity could be gone in a flash.

Tuesday, July 23, 2013

Authentic opportunity? Enabling the audience to avoid counterfeit products could mean real big business.


KEY MOBILE TRENDS: NFC, counterfeiting, RFID, internet of things, logistics, big data.

Currency, clothes, Converse, cosmetics, and car parts. Airplane brakes, batteries, baby formula, and watches. DVDs, pocketbooks, toothpaste, pharmaceuticals, cigarettes, and toys. If it gets bought, it gets faked, and even some of the world's most reputable retailers have found counterfeit goods in their inventory, and are often victims of fake returns and low-life distributors.

So, could all this fakery be a genuine opportunity for smartphone vendors, components makers, security firms, and developers? Yes.

According to some stats, the counterfeit economy is worth hundreds of billions of dollars. Add in the monetary value of reputation-killing headlines like exploding phone batteries and electrocuting chargers and it's clear that brands around the world have every incentive to fight the fakes. But perhaps now it's time to enable the consumer to protect themselves.

In the wireless world, we've been talking about the real opportunities in checking authenticity for years. But now the technology enablers are really falling into place: well-connected devices, NFC, RFID, low-cost components. And the incentives are huge.

Here's one interesting use case for the implementation of connected anti-counterfeiting technologies: fine wines. Expensive wines, as well as other high-end spirits, are sometimes consumed years after purchase, and far removed from the original point-of-sale. Selinko, a firm specializing in end-to-end authentication solutions, is working with distillers to digitally certify bottles using RFID tags which allow retailers and consumers to authenticate the items via NFC-enabled smartphones (apparently only Android-based devices at the moment). As the secure RFID tags provide a unique identity to each bottle, this goes beyond barcode scanning.

Systems such as this also provide consumers, retailers, distributors, and manufacturers with more detailed information about the products and their flow via the logistics chain. Educating the audience about the wide problems of counterfeits could drive the creation of a new service industry and a smartphone upgrade cycle or two.

So, for smartphone vendors looking for opportunities to complement shrinking margins, this could be the real thing.

Wednesday, July 17, 2013

NEC's Minolta Moment. NEC Casio to leave the smartphone business. No surprises here.


I've been predicting for a while that many current second-tier handset vendors will pick up and leave the business over the coming years. Last week I wrote about the coming "Minolta Moments" in the smartphone industry: big names leaving the business just like Konica Minolta left the camera business due to shrinking market share and profitability.

And here we go: today NEC announced its departure from the smartphone business, and likely the handset business in general.

With minuscule market share and partnership prospects gone, it was time for NEC to throw in the towel. A solid brand name, great technical pedigree, but only a tiny sliver of global market share.

NEC was once an industry leader. It had one of the first clamshells on the market, was among the first to make camera phones, and always had some of the most interesting device form factors in the pipeline. Back at their peak, in the mid-'90s, NEC mobile was a top-five global player, and a top-three vendor in the United States and APAC, and the dominant vendor in Japan with 30% market share.

Expect more Minolta Moments during the coming quarters in the smartphone business. Device ASPs are coming down along with margins, the importance of innovation is fading, and there will be few winners in this game of follow the leader.

Good bye NEC Casio Mobile Communications. You will be remembered as the leader you once were. Now who's next?

NEC Casio Mobile Communications to fold. Too bad.

Get ready for BlackBerry's "Segafication." Prediction: BlackBerry will soon announce their hardware departure.

There's gold, there's silver, there's bronze, and then there's a patronizing pat on the back. Nobody remembers the fourth-place finisher.

In January of 2001, Sega announced they were leaving the game console business to focus on software. Although the company's Dreamcast console was considered by some to be the best gaming device ever made, the "rule of three" was a force too strong to fight: there was Sony, there was Microsoft, and there was Nintendo.

Sega's board of directors certainly had a difficult decision to make at the time. Sega's hardware was loved by devout followers, but Sega suddenly found itself competing not just against its compatriots Nintendo and Sony, but by newcomer Microsoft, a company that was known to have the patience of Job when it came to RoI.

Sega was in the fortunate position of having strong, established sub-brands, mainly Sonic the Hedgehog. Such well-known characters could port well to other platforms.

Within the coming quarters, some big-name smartphone vendors will begin to acknowledge the rule of three. This is conjecture on my part, but I believe the first will be BlackBerry, which will, like Sega, announce that they will leave the hardware business to become a third-party software publisher, providing secure enterprise messaging software and services via its now eponymous platform. There will be boos and jeers from the audience, but this isn't the breakup of the Beatles. This isn't a boxer getting out of the ring while at top: BlackBerry is fading fast with new product and platform iterations being greeting with indifference at best.

So for screaming BlackBerry fans, get mentally prepared for the Segafication of your love. BB will be IBMified, and there's not much that can be done about it at this point. The game is over for the iconic BlackBerry QWERTY device. Time for the next level.

Will BlackBerry soon be Segafied?

Sunday, July 14, 2013

Chrome begins to shine. Google's Chromebook is the one star in a shrinking PC market. And it highlights major shifts ahead.

Chromebook Sales Growth Bucks PC Market's Downward Trend >>

MAJOR TRENDS: Cloud, HTML5, low-cost, commoditization, business-model changes

Back in February, I wrote about the next potential screen of death for Microsoft: Google's Chromebook. ("Is MS about to be Wanged?" Feb 25, 2013). At a price of $249, the Samsung-made Chromebook is an extremely capable, super sleek, cloud-centric laptop. It's solid and secure, low-maintenance and high-value. Set it and forget it. But now it's getting tough to ignore.

According to research firm NPD, Chromebooks dominated the low-cost segment of the U.S. laptop market during the half of 2013 with as much as 25% share. And according to Gartner, Chromebooks accounted for almost 5% of all U.S. laptop sales, up from around 1% — 2% in 2012. Considering that Samsung's low-cost Chromebook has been's top-selling laptop since December 2012, none of this is surprising. Americans are really learning that remote is the new local, and that thick-n-chunky, virus-friendly operating systems are a hindrance rather than a requirement to get things done.

But now as the Chromebook is going global, significant changes can begin to alter the entire market for PCs and really provide a boost to cloud-based ecosystems. Starting back in April of this year, Google began selling Chromebooks in 10 other countries. Chrome OS might soon reach escape velocity and become a platform worthy of a lot more respect from developers who'll accelerate the shift of their focus to web-based technologies such as HTML5.

Big changes are coming to the PC industry and Microsoft executives have certainly received the wake-up call: last week Steve Ballmer announced a corporate restructuring around "Software & Services." What's amazing about this new & improved Microsoft is the amazing parallels to the new & improved Nokia in 2006 when company executives promulgated its new organization focusing the future of the company on a P&L center called "Software & Services" to effectively compete against the GYM players (Google, Microsoft, Yahoo!).

During the coming years we will certainly see many more major company adjustments, some of them late and desperate last-minute attempts to acclimate to the on-going cross-industry shifts which are underway. Some platforms will be abandoned, some new ones will be adopted, smart players will make successful business-model transitions, and some big names will fade fast. Chrome OS is one of the lights at the end of the tunnel.

Thursday, July 11, 2013

Vision of the future smartphone? Another projector-based form factor.

I've been seeing similar projector-based form factors for a number of years from other university research labs and company visionary slides. These are playful concepts which might complement devices at some point. But I'm just not seeing the light myself with these visions.

From Reuters: "Researchers at the University of Tokyo are developing indoor projection technology that incorporates a sense of touch for interactive devices of the future. The system emits ultrasonic waves to generate pressure a user can feel and could one day render keyboards, smartphones, and even pens obsolete. Ben Gruber has more."

Tuesday, July 09, 2013

Garmin HUD Navigation

Nice idea. It would be great to see this as a common accessory for smartphone drivers:


Monday, July 08, 2013

Will the smartphone industry soon have its own "Minolta Moment." Expect some major smartphone vendors to leave the business over the coming years as profits fade. This won't be a pretty picture.

January 19, 2006: "Konica Minolta quits photo market. Konica Minolta said the market had become too competitive, and added it would sell its digital camera business to Japanese electronics giant Sony..." Source: BBC

Back at the beginning of 2006, despite a fantastically photogenic pedigree, Konica Minolta picked up and walked away from the camera business. Even with two strong brand names, both synonymous with photography, the company sank in an evolving industry until their market share was less than 3%. As competition increased and profit margins faded, the board of Konica Minolta made what must have been a very emotional decision: it's time to leave for greener pastures. Today Konica Minolta competes in the market for office copiers and printers. Photography is only part of the company's history now.

Industry shakeouts are nothing unprecedented in consumer electronics. Radios, televisions, telephones, computers. As average selling prices decline over time, the creamy profitable layer of the industry disappears, and the market self-corrects.

So now it's time to wonder which major smartphone vendor will be the first to surprise the industry with a "Minolta move" to an adjacent industry. Will it be Nokia, BlackBerry, Motorola, HTC, LG? This is conjecture, yes. But when market shares slip to the very low single digits, and only the absolute top-tier vendors are making a profit, we can be sure that some major market adjustments are afoot. It should be noted that many segments of the consumer electronics industry have historically followed a first-in-first-out pattern, with the early industry innovators vacating, leaving more room for the fast followers. (When's the last time you saw a Motorola car stereo?)

Several top-ten handset vendors from the '90s have left the business including Ericsson, Siemens, and a number of significant Japanese manufacturers. In the coming few years, there will be a similar pattern among smartphone vendors. Some brand names which are essentially synonymous with street talk will pick up and walk away. The enablers for extreme smartphone commoditization have quickly fallen into place: the hardware, the software, the distribution. The shakeout is going to happen. This will be an interesting development.

Minolta management, Jan 19th, 2006: "In such a changing world, profits for camera and photo businesses worsened in recent years, and it became necessary to drastically reform business structure for the further growth of Konica Minolta. Ever since we decided and announced restructuring guidelines of our businesses on November 4, 2005, we have been considering practical and detailed plan, and we would like to announce our decision made today as follows: we have decided to withdraw from camera business, such as film cameras and digital cameras..."