Nokia flips to Android. Samsung flips to Tizen. Netflix flips to pay Comcast for quality service. And the Ukraine flips from oligarchy to democracy. What a week!
There are three large mobile and wireless trade shows each year: 1) International CES in January in Las Vegas, 2) GSMA Mobile World Congress (MWC) in February in Barcelona and 3) the CTIA Wireless show in September in Las Vegas. I have attended a number of the MWC events in past years but not this year.
Even so, there have already been a number of significant announcements – many which seem to be companies doing something not done before which may signal sea changes going forward. Here is a quick summary of these major announcements and why many of them are ‘flipping’ their position from what they have been doing in the past.
Nokia Flips to Android with the X Series
It was not too many years ago when Nokia was the clear market leader in cell phones. Back in 2006, they had upwards of 40% of the worldwide market. Then, along came Apple’s introduction of the iPhone in 2007 followed by Google’s rollout of Android and the race to convert the world to smartphones began.
Nokia was late and made a dramatic decision to throw out Symbian and jump aboard Microsoft Windows Phone. While the market has been lukewarm adopting Windows Phone smartphones, Nokia made another bold decision on Sept. 3, 2013 to sell their handset business to Microsoft and, instead, focus on wireless network infrastructure, their strong navigation asset called HERE, and licensing intellectual property.
The future of Nokia handsets seemed ‘all set’ to migrate to be part of Microsoft. We would see a series of new Windows Phone devices rolled out with Microsoft’s backing. There is just one thing wrong with this picture: a number of analysts (including yours truly) had recommended that Nokia ‘try out’ a smartphone handset built around Android because it would enable them to address the broader, lower cost market (Android is free and phones can be built at lower cost than Windows Phone).
Therefore, a number of months ago – before the sale of the handset business to Microsoft – a team was put together to build a smartphone for the emerging markets. They were to focus on low price points. They quickly determined that needed to build something that was lower cost than their line of Windows Phone smartphones.
Then on Sept. 3, Microsoft announced it was acquiring the Nokia handset business. While the public did not know that Nokia was developing a line of Android phones, certainly executives at both Nokia and Microsoft knew of the plans and allowed them to go forward. The rationale is likely around: 1) this gives Nokia an ability to focus on building an affordable smartphone for the developing geographies (like Indonesia) and 2) they will put a number of Microsoft services on the phone (e.g. OneDrive cloud storage, Skype VoIP calling and messaging) instead of the equivalent Google’s services.
Now, on Monday at GSMA MWC, Nokia announced the Nokia X smartphone, likely the first of a product family. It has the Android OS but the Nokia HERE navigation with true offline maps and MixRadio steaming music service.
There are actually three products in the Nokia X series. The Nokia X has a 4" IPS capacitive display and 3MP camera. The Nokia X+ is has more memory and storage. Both the Nokia X and Nokia X+ will be available in a variety of colors. The Nokia XL has a 5" display with 2MP front facing and a 5MP rear facing, autofocus camera with flash.
The entire Nokia X family is powered by the Qualcomm Snapdragon dual core processor and supports Dual SIM, letting people switch SIM cards to get better tariffs as they travel. The price of the Nokia X is EUR 89 and rolling-out in Asia-Pacific, Europe, India, Latin America, the Middle East, and Africa. The Nokia X+ and Nokia XL are expected to roll out in these markets starting early second quarter and is priced at EUR 99 for the X+ and EUR 109 for the XL.
Here is the big issue: if the Nokia X series meets or exceeds expectations, then you can expect to see Nokia (soon to be owned by Microsoft) expand the offering both in products and in geographies. No one would have thought after the announcement of Microsoft acquiring the handset group from Nokia that they would continue and launch an Android smartphone. However, here it is, and it appears to make good sense.
I think this is a smart move by Nokia. They have always been successful in broad international markets in the past so they have the relationships with operators in many developing economies.
Samsung Update: Galaxy S5 but Gear Flips to Tizen
Samsung announced their new Galaxy S5 smartphone that is a nice upgrade to last year’s popular S4. This is clearly an evolutionary upgrade rather than a revolutionary product. It reminds me of the upgrades we often see in the PCs – upgrades to a new processor and memory that makes it a bit faster. The S5 display is a bit larger but the resolution is the same as the S4.
An important new feature in the S5 is the addition of a fingerprint reader that works quite differently from the iPhone 5s. The S5 has a fingerprint swipe vs. the iPhone 5s fingerprint press and hold. It operates more like the fingerprint verification units on many laptops. Samsung has collaborated with PayPal to use the fingerprint scanner to authenticate payments made through the popular service.
Another new feature in the S5 is the addition of a heart rate sensor. I suspect we will see a number of third party apps that will take advantage of it.
However, the biggest news in the Samsung announcement is that they are using the Linux-based Tizen OS for the Gear 2 smart watch (but not in the Gear Fit wearable). This is an important development because of the potential long-term implications for the Galaxy line of smartphones, tablets, and wearables such as the Gear smart watch.
Tizen is a project that is an outgrowth of a number of past attempts to develop a Linux-based open source operating system for the mobile market. It came about in September 2011 when Samsung contributed their Linux efforts (along with their Bada OS) and Intel contributed their Meego Linux-based OS that, itself, was an outgrowth of the Intel's Moblin and Nokia's Maemo Linux projects. There is now one large Linux-based effort all focused around Tizen.
I suspect that the product management teams at Samsung were eager to bring a smartphone product to market using Tizen to remove the over-dependence on Google’s Android. However, that is a huge risk to take all at once. Instead, they chose to limit risk and focus on a smaller project to use Tizen in the Gear 2 smart watch. This gives them the opportunity to put Tizen in a commercial product and get some experience with it before they take on the possibility of replacing Android in the Galaxy S series smartphones and TAB series tablets.
It will be a big chore to convert the entire programming libraries and Android apps to run on Tizen. However, there could also be huge rewards to Samsung to eventually develop their own operating environment that they can control. This would give them an ecosystem more like Apple – controlling the hardware, OS, built-in apps, and overall user experience. Using Tizen would be able Samsung to tie together many of the disparate built-in applications into a more cohesive user experience.
Netflix Flips to Pay Comcast
There was a standoff between Netflix and Comcast. Netflix wanted to make sure its streaming content is delivered to their subscribers. Comcast did not want the ‘bandwidth hound’ to consume too much of their available bandwidth to deliver movies and TV shows to their customers. After all, Comcast would prefer to sell customers a combination package including 500+ cable channels plus Internet access rather than just Internet access or cable TV alone (they often price them to be very similar whether you buy one or both).
But, Netflix has more to lose if their customers couldn’t receive their next episode of ‘House of Cards’ starring Kevin Spacey so they decided to pay Comcast an ‘insurance fee’ that their shows will get delivered without interruption or slowdown – whether on a TV, PC, tablet or smartphone. This is just the first volley in a big issue surrounding net neutrality between content providers who want to deliver valuable content through a cable company’s Internet access but to do so with a guarantee quality of service.
For most people, cutting the chord isn’t going to happen anytime soon, but it does point out that people are willing to subscribe to content that’s gets delivered over the Internet rather than through the cable network. For example, many Comcast customers want to watch “House of Cards” and Comcast has agreed to assure those customers that they will have a good streaming experience if they are using Comcast’s Internet access service. We will have to see if Netflix strikes a similar deal with AT&T for U-verse distribution.
Now, there is no reason that Netflix could not sign a separate agreement with Comcast to add ‘House of Cards’ to an HD cable channel. It has not happened yet, but it would not surprise me if it happened. It is just another, complementary way to distribute the popular show – only over cable TV much like the way HBO is produced and sold today. One way to make it a ‘win-win’ would be to add the show to the Comcast on-demand service or add it to a value-added channel like HBO or into a slot on an open HD channel.
One thing that still has to happen to drive success with the Internet delivery of TV is to create well-organized and easy to use electronic service guide (ESG) that will allow people to easily find, watch or record shows on their DVR.
Eventually, we may have gigabit Internet service that will deliver most of our content – TV, video games, Internet access, music and more – but we will need fiber optic connections to our homes in order to make that happen. Google’s Fiber Optic service is doing the build out in a number of test cities. Comcast could do this as well but feels their coax delivery mechanism will provide adequate service for both TV, Internet and telephone. This story is not over. It is going to be fun to see how cable vs. fiber optic advances over the coming years.
Written By:
J. Gerry Purdy, Ph.D.
Chief Mobility Strategist
Compass Intelligence
gerry.purdy@compassintelligence.com
404-855-9494