Summary
Nokia, Apple and Google, along with several other companies, will shape the next phase of the mobile revolution.
Analysis
With more than four billion users worldwide and penetration over 100% in many countries, mobile is an integral part of global communications and entertainment. The next phase in the mobile revolution involves mobilizing the Internet and delivering the right data, communications and entertainment at the right time, in the right place for the right price. Leaders in mobile handsets (Nokia), consumer electronics (Apple), and the Internet (Google) were identified as companies to keep an eye on, and with good reason. These are, however, not the only ones to watch.
Nokia has a legacy of attractive and easy-to-use devices, superior manufacturing capabilities, and a dominant brand, which have combined to yield a global market share between 35% and 40% for most of the past decade. Nokia has struggled, however, at the high end of its product portfolio, and has shifted its Symbian strategy, introduced Ovi and Maemo, and reorganized internally in hopes of spurring sales, especially in the smartphone and mobile Internet devices (MID) / netbook segments. Nokia is facing increased competition in low-end and mid-end devices but is more than capable of defending its leadership position. The jury is still out on Nokia’s efforts to stem its declining share in the growing smartphone market. Despite stiff competition, Nokia will continue to dominate worldwide handset sales and influence the mobile industry.
Apple is a relatively new entrant to the mobile market that made quite a splash with its 2007 iPhone release and subsequent two iPhone 3G releases each summer following. Finally a consumer electronics company entered the mobile market with a user-centric device that was more than a marginal improvement over past mobile handsets in its portfolio. With a simple to use, innovative and attractive phone (and over 30 million iPhones sold and counting), Apple has raised the bar on the mobile user experience. As big a contribution, however, may have been the application store and the over 100,000 applications available to iPhone (and iTouch) users. The application store model will require some refining but mobile applications and application development are now essential to industry growth as well as product and service attractiveness.
Google, with its purchase of Android, effectively entered the mobile market in 2005. The first Google handset, the HTC G1 was released in 2008 to moderate success. Since then several major handset manufacturers have launched Android-based devices (with the notable exception of Nokia), and Motorola has even linked its future to Android. Google has its sights on reshaping the mobile world from the inside (of the phone) out via its Android OS platform and offering ad-sponsored Google services, such as search and location-based services. This model is attractive to handset manufacturers and mobile operators, the traditional mobile gatekeepers, and leverages the Internet search giant’s online dominance.
While these three companies will undoubtedly influence the future of mobile device and services, others will have an impact as well, including Research in Motion (RIM) with its dominant enterprise offerings and consumer expansion, Microsoft with its ongoing Windows Mobile smartphone initiative and significant resources, HTC, a pioneer in Windows Mobile phones that is also leading the way with Google Android devices, and is now attempting to establish its own brand, Samsung and LG - the world’s #2 and #3 handset manufacturers, respectively, with a slew of appealing new devices that leverage Android and other OSs in the pipeline, as well as Motorola and Palm, companies that have struggled and were close to collapse but are on the comeback trail with new devices that incorporate innovative software and social networking for an improved mobile experience.
Tal Raeside consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
