Saturday, January 26, 2008

The End of the Feature Phone. Market Shifting.

In the last few years, phones have typically been categorized as either "smartphones" or "feature phones." Smartphones are really just better phones. Conversely, the feature phone label is a particularly unfortunate euphemism for "crappy."

Thankfully, soon the category known as "feature phone" will begin to fade away. This is because most of the basic system features in a phone are the same. Most all phones are expected to have an address book, messaging, a camera, media playback, etc. The difference between phones is primarily the quality of the software that drives the features and ties them together. The difference is between smart and dumb.

Smartphones for everyone!

And yet, feature phones have dominated. Why? No one walks into an AT&T store and says, can I have one of those "dumb phones." However, the market *is* price sensitive and so, since smartphones sell at a shrinking, but still consequential premium, adoption has been more limited. However, within the next year or two, after one more turn of Moore's Law, there will be no need to sell phones that don't have basic smartphone usability. Within this timeframe, even the most basic hardware will support a real operating system.

In short, real soon now, all phones will be "smart," because anything else will be, well... stupid.

A battle is coming

As the market shifts, and software becomes the primary differentiator, this will trigger radical shifts in the marketplace.

For example, can Symbian compete, from a quality-of-experience or developer platform perspective, with a Google Android based system, let alone Apple OS X? I don't think so. Over time I don't even think their user experience can best the much maligned Window's Mobile, given Microsoft's Terminator-like indefatigability. And what about RIM? Will they be able to play effectively against the entering titans?

The next 18 months will be a phone OS battle royal. And how the market shakes out in this software battle will really determine who the handset winners and losers are.

Look out Nokia

And so, despite Nokia's newly attained 40% market share, their total dependence on Symbian suggests that trouble is likely ahead. Weak software has been a significant part of Motorola's downfall as industrial design ceased to justify a pricing premium. And though Nokia has better software than Motorola, it is still weak. Today Nokia announced it is acquiring Trolltech, a Linux mobile OS platform vendor. This is a tepid, but at least credible response to the obvious problem with their Symbian dependence. However, much more is needed for them to truly be responsive to the tectonic shifts in the market.

In short, no one's position is safe. Everything is up for grabs. Because I don't care how many phones you sold last year. As Motorola will surely tell you, suck is suck.

12 comments:

  1. Having just taken possession of a winmobile phone, I dont see it as the one to beat. From a human factors perspective, it is worst in class: a collection of features with no thought to consistency, usability or overall experience. Individual teams think they are doing the best thing (e.g the WLAN team add a popup to tell you when a new WLAN AP is found), but the overall effect is an inconsistent mess (you could be halfway through dialling a number when that popup kicks in). Their exchange sync story, which is meant to be a strong point, kind of sucks too, and the Windows Live integration -for the consumer- is half complete. Same for the media player; this is not a device for enjoying MP3s, even if it can play them. compare with the latest set of music-centric nokia phones.

    Microsoft may have deep pockets, but even they have to look at ROI sometimes.

    As for the HW vendors -they should look at iPhone, recognise they want something with that kind of experience, and if they arent called Apple, get on the Android team.

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  2. Steve,

    Thanks for the comment. I am not *at all* suggesting that Windows Mobile is the one to beat. I agree that apple is currently best in class, though I think RIM is very good, and as someone who has spent some time with android, it is an incredible developer platform. It will be interesting to see what apple comes up with in that regard.

    My only point about MS is that they do keep coming. They never quit. And they are a better software company than Nokia or Symbian.

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  3. My only point about MS is that they do keep coming. They never quit.

    They do. I think it is rare, but they do quit. WebTV is gone, not replaced with anything. Their TiVo-like product is gone, also not replaced with anything (it was merged with WebTV at one point, then they both vanished). I'm sure there are other things, but I can't recall any of them just now (except Xenix, but since that was the '80s...)

    They also have seem to have a lot of developer technologies that get crated, promoted, and then abandoned (before or after becoming widely available). However I could be mistaken on this once since I'm not a MS developer and don't track that world all that closely, it may just have a lot of renaming of things and something I think is abandoned has just been subsumed into something with a new name and an upwardly compatible API.

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  4. I wonder if you ever tried a Symbian phone. Nokias with symbian are de-facto standard in Europe. Having myself used Windows Mobile (both PockerPC and SmartPhone) and Symbian I must say that (1) PocketPC just sucks (2) SmartPhone is okay but frustratingly unstable (3) Symbian is the best technology of all three.

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  5. "1) PocketPC just sucks (2) SmartPhone is okay but frustratingly unstable"

    I agree.

    My point was that this is an exceedingly important area and Microsoft has a "Terminator-like indefatigability". In other words the will put enormous amounts of money behind getting better and being competitive. They will figure out a way to remain competitive. On the other hand, Under the hood symbian is a mess, and I dont think they can easily work their way out of this. I think the world will be a linux/OS X/Win Mobile world. And by the way, I am no Microsoft fan boy.

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  6. Actually, I like dumb phones -- but one that has a good user interface with less functionality than a smart phone. I already have a computer and I don't like the idea of having a full featured gadget in my hand. (already tried the Treo and a smart phone). The problem for me is that I haven't found one that is truly easy to use.

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  7. If Symbian is a big mess under the hood then please explain to me how come it is very stable and very useful?
    I am very interested in OSX and Android development but really what's so great about them??? the touch screen or the fact that they are new?

    people like new stuff in the market and I for one always welcome new operating systems for mobiles. I belief new ideas and thoughts help improve all operating systems and push them to think out side their comfort level.

    your blog or thoughts on Symbian seems a little to harsh and misinformed. I am sorry but as a smart phone user I can't see how Nokia have a tough challenge and trouble with Symbian. of all the operating systems out there I have never seen any shortness in innovation when it comes to Symbian. As a matter of fact there is plenty of softwares out there that makes me stay with Symbian for the long foreseeable future. I love the Iphone browser and I think its the best out there but thats it. nothing else is worth mentioning, but i will be waiting for the app store soon. the lack of multitasking just blows my mind in the iphone...I can't believe they would miss such a thing in a smart phone. Android !!!! if stable and offer multitasking and usability then we might have something ...but thats in the future and it is out of the question until it comes to real life. I have used Symbina,palm, windows mobile and, OSX and I a back to Symbian for few good reasons. mainly multitasking, ease of use, and finally innovative software. but I understand why north america think differently than the rest of the world

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  8. i live in the states, where nokia is a thing of the past. it is true, the market is drastically changing for the better, and a year from now the companies on top could be all the way on the bottom. its pure guesswork with what is to come

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  9. Haha. I must concur that Symbian is a mess and will soon either require major reworking, or no longer remain competitive with the huge upward mobility of both Apple and Google.

    Reality check: Android is NOW, not the future. It's a remarkably intuitive and stable platform that is getting exponentially better with each step (i.e. the HTC Sense frontend).

    *nix is the underlying foundation of Android and thus security and stability are it's building blocks. These are both becoming increasingly important as our digital and personal lives exist in totality on our phones.

    Apple still have the most usable hardware/software package out there, but you're having the experience they want you to. Android requires some work from you, but will be what you want it to be.

    Symbian was born from dumbphones, and has become like a city without a planner. It has all the right roads, but has developed organically. A well strategized hardware/software combo built in the now has no trouble surpassing that revisionist approach.

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  10. While it's obvious that most of the Feature phones are can't do a lot of the things smart phones can, a lot of times this is because the cell companies dumb them down.
    But, according to The NPD Group, even now (Q2, 2009), 72 percent of new handset sales are for Feature phones.

    Why is this, you ask?

    It is because of the ridiculously high priced data plans that are required for the smart phones. I'm currently paying monthly charges for 4 phones right now and my total monthly bill is under $120. I looked at upgrading to Smart phones, but that would have came with a nice $200 monthly price tag because they require you to buy the data plan weather you want it or not. That's almost $1000 a year more!

    There's nothing "Smart" about that in my opinion!

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  11. They're all junk and a waste of time. Yes, even the precious iphone is junk. Get a plain phone and leave the glorified Nintendo to the kids. I've owned a number of 'smart phones' over the years but one day I realized what a massive waste of time it is to try and work with a crappy slow computer with a crappy slow interface and crappy low res screen. Everyone has somehow bought into 'cool' and do not realize the massive inefficiency of these devices. It's a testament to the power of advertising... and oh yea, after you discover that it's crap, they have increased the early cancellation fee to over 300 so yea.. you'll be enjoying that device for awhile.. you cool dude.

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  12. Enjoyable insight. It's interesting that 2 years after this though that Symbian have gained a greater share in the smartphone market. Apple have continued to be the ones dominating the media spotlight. Microsoft have gotten too far behind now and as such Windows Phone 7 has to be something spectacular for them to even begin to catch up. HTC have done a lot for Windows Mobile's usability and credibility, but they shouldn't have to.
    The sad thing is I am unable to use any phone that doesnt have Windows Mobile!
    But the biggest question of all...can you play Age of Empires on your phone?

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