Espoo, Finland
Struggling mobile phone makers Nokia, HTC and Research in Motion are plotting an entry into smartphone market to compete with Samsung and Apple, according to The Economist.
Nokia, a Finnish handset-maker, will name its product PHI, the 21st letter of the Greek Alphabet to represent the “golden ratio” admired by artists and architects for its pleasing proportionality.
Two other high-flying mobile-phone manufacturers HTC, a Taiwanese firm and Research in Motion (RIM) the Canadian maker of BlackBerry devices are also ailing. This is because their market share has been adversely affected by sharp falls in market prices, as well as competition from Samsung and Apple.
The fast-paced mobile telephony market has been unforgiving with consumers’ loyalty dwindling whenever the handsets they purchase disappoint. Besides, the network operators have also turned their backs on the dissatisfying handset manufacturers when they notice that the businesses are not mutually beneficial.
That is what happened to HTC, which rose from obscurity to dominance in the late 2000s. The smartphone business nowadays is an ‘ecosystems’ market, a combination of hardware, operating system and applications. This is believed to be the root cause of Nokia and RIM phase out with their ecosystems being overshadowed by Apple’s iPhone and by Android, an operating system orchestrated by Google.
A memo from HTC’s head, Peter Chou, read: “HTC used to be a company where we did things quick and reacted quickly. However, the fast growth from the last two years has slowed us down.” HTC is expected shortly to release three devices, code-named Rio, Accord and Zenith, that will use not Android, as its existing models do, but Microsoft’s new Windows Phone 8.
Nokia is also betting on Microsoft’s new software. The two firms have been collaborating closely to strengthen Windows Phone 8’s credentials as a third viable ecosystem, ahead of Apple’s launch of the iPhone 5, probably later this month.
Samsung, despite the huge success it has had selling devices that run on Android, this week also launched some new models that run on Microsoft Windows 8. Samsung, like HTC, appears to be hedging its bets in case Android runs into patent problems following Apple’s court victory in California. Nokia’s premium-priced Phi, is believed to be accompanied by a cheaper phone named the Arrow.
These and other Windows Phone 8 handsets will form part of an interoperable suite of products running on Microsoft’s software, from Xboxes to PCs and the forthcoming Surface, a tablet to challenge the iPad. Developers are already familiar with Microsoft’s design language, so vast numbers of apps will be available to PHI and Arrow owners—a clear advantage. RIM, in contrast, is attempting to stick with its own, fourth platform.
The BlackBerry 10 will run on an entirely new operating system, BB10. This may prove a disadvantage: developers will need to get used to it before creating apps, so users may at first find they have limited choices. In July the release of the handset itself was delayed until early next year. This may be just as well, in the view of Ben Wood of CCS Insight, a market-research firm.
RIM would not be able to compete with the lavish marketing budgets of Apple, Nokia and Microsoft over the coming months. It is unclear if there will ultimately be room for three mobile-device ecosystems, let alone four. Underestimating Microsoft, with all its cash and clout, would be a mistake. But Carolina Milanesi at Gartner, a research firm, fears that RIM’s attempt to persevere with its own ecosystem will prove “futile”.
It may get tougher still for the Canadians if the market becomes even more crowded. On September 6th Amazon will stage an event that may launch a revamped Kindle or may, some whisper, see the unveiling of an Amazon phone.
As the smartphone strugglers fight for their long-term survival, they can draw comfort from the fact that sometimes there are second acts in the lives of tech firms. Apple itself rose again to become the most valuable company on record. Also Apple’s focus for new markets is one of the reasons for its survival.(The Economist)
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