Since I downloaded speedtest.net app for my iPhone, I turned into a “speed test” junky! This afternoon, while I was in a Starbucks, I did two measurements; one through my Wi-Fi connection (which was already switched to thanks to ATT) and one through my cellular connection. While with my cellular connection I got constantly +4 Mbps in downlink and +2.5 Mbps in uplink direction, my Wi-Fi measurements constantly show 1.3 Mbps in both directions. I guess they use a T1 to connect their store to the Internet. While for customers with limited data plans switching to Wi-Fi will reduce their bill, the myth that “switching to Wi-Fi will provide higher bitrates” is not valid anymore. Years ago, with GPRS/EDGE and bad data coverage areas, this argument was right, but not anymore. The idea that let the iPhone decides to switch between Wi-Fi and cellular just because it can save some money or release the valuable cellular resources for operator is true, but it does not mean the subscribers will have a better experience. Switching to public Wi-Fi hot spots will limit your performance; there should be an end-to-end QoS measurement mechanism to make this decision. Either it is a part of SON or Release 12 of 3GPP, I don’t know. But it is a must and should be out soon.
For me, the most interesting part of Cook’s presentation was the announcement that iPhone has 5% of mobile market share worldwide. What I like about it is the sense of rebellion Apple brings to legacy market assumptions as usual. When Apple launched iPhone in 2007, there were lots of top investors who called this move stupid. They called Steve Jobs a “bigoted selfish individual” (if he was a female probably they would called her Ayn Rand resurrections) who is going against all business common sense and tries to enter a very mature market, with well established players and low margins. Steve Jobs proved that even if you are “the last” to enter a market, you can win if you produce “the best” with “highest margins” and still beats everyone. Even a lazy giant like Nokia!
iPad and iPhone do 60% of US mobile browsing and 8.2% of US web browsing is from mobile devices. These are pretty high percentages compare to five years ago. Then I looked at my mobile phone bills and statistics and I found out why. I was a Blackberry user since 2000; virtually hooks to it. This January I decided to switch to iPhone and rest is history! This is from my ATT monthly bill. I am glad I have an unlimited data plan; I am not sure about ATT though 🙂
This month Fortune cover shows an iPhone and referring to launch of Verizon iPhone as “get ready for the dream phone”. People familiar with the case speculate Verizon will launch iPhone in early 2011. Lots of US mobile phone users were praying for this news for years. As the largest US mobile operator; by number of subscriber, Verizon was always preferred choice for consumers as the ‘more reliable” service provider. Its CDMA based 2G network, better coverage and call quality in general in the first part of this decade made it preferred choice for voice users.
For the past couple of years, smartphones start to challenge data network capacity. While early 2000 was the hype of wireless data networks deployment, there was no real data traffic until couple of years ago. Operator’s huge investment on mobile data upgrade was sitting idle for years before iPhone shows the art of smartphone development to other vendors and flooding the market with its clones. ATT launch of iPhone in 2007 was smooth until the huge amount of data traffic starts to cripple its network in dense markets, including New York and San Francisco. ATT executives claims the dream of a better iPhone experience on Verizon network will shattered as soon as operator stats to sell and distribute iPhone across its networks. Although Driod and other Andriod based phones were very popular, their popularity and traffic load would not be even close to after iPhone launch. This points to another question; if Verizon starts to sell iPhone, does Andriod based phones continue to growth (at least in the US)? Lots of Verizon geeky data users were forced to buy Android phones because they didn’t have other choices. By introducing iPhone, Verizon introduces a real competitor for its Andriod phones.
Olli-Pekka Kallasvuo took over the world’s largest mobile phone manufacturer in the summer of 2006. Six months later Steve Jobs unveiled the iPhone, and it has been downhill ever since. Nokia’s shares have tumbled by nearly two-thirds. Its profit margins have withered from 15% to 7%. And the firm has all but imploded in America, despite Mr Kallasvuo’s pledge to conquer the region. Since 2005, experts in mobile industry started to predict a very gloomy future for the dying giant. While they stick to their legacy phones and are happy with major penetration in the developing countries; read it as high volume low margin domains, other competitors started to target higher margin products including smatphones. Developing countries will be all using smartphones within the next five years anyway.
Although people think Nokia’s most obvious problem is being squeezed out of the smartphone market, its biggest mistake was lack of vision for much higher margin products that come with them; applications! Smartphones are not only lucrative in themselves; they are the gateway to the even juicier market for services and “apps”. Apple’s iPhone and Google’s Android range compete on “cool”. BlackBerry is synonymous with business. But what does Nokia stand for? As usual Nokia still chases the pack. Mr Kallasvuo argues that the forthcoming N8—an all-singing-and-dancing handset that is due to hit the stores in October after several delays—will “mark the beginning of our renewal”; I guess this the fifth or sixth time they are waiting for such a product in the past five years. But previews suggest that the phone is more about catching up than setting the pace. Nokia’s ads tout its “revolutionary” touch-screen technology, built-in camera and GPS. Yet such baubles are already commonplace. It is time for Nokia board to wake up and consider a new direction. GM was once dominating car industry, but lack of innovation forced them to bankruptcy. Nokia should learn its lessons; things are changed!
It is sad to see Nokia is closing its flagship store on London’s Regent street after suffering slow sales and poor footfall; just after 2 years! While the fortunes of the Apple Store opposite are buoyant, with the Mac-maker frequently touting it as the most profitable store in its arsenal, Nokia’s Regent Street shop failed to generate enough interest. During same time and at same location, it is the product and user experience which dictate success of a company. Nokia should understand it was not Apple store which attract people; products in the store were the main reason customers were going to Apple store.
Couple of months ago I wrote about why Nokia is loosing the battle in smartphone war! The latest news that iPhone share of smartphone market is up to 17 percent is another affirmative sign of gradual decline for Nokia. While global mobile phone handsets were almost the same as for the same quarter in 2008, smartphone sales were up by 13 per cent to 41 million for the three months ending September 30. This means you can not count on out of date, old fashion voice centric phones forever to generate revenue. Also, you can not wait for Apple or other companies to come out with a concept (iPhone, iTune, etc) and just copy that! You should have some innovation yourself to be successful!