As Nokia smartphones continue to struggle to sell at the volumes the company needs them to for it to be a sustainable business, increasing pressure has been applied on Nokia employees who are tasked with producing and retailing these handsets. Reports indicate that the Finnish mobile phones giant may cut 4000 production jobs across its factories in Finland, Hungary and Mexico.

Change in manufacturing operation

The company announced plans to change its manufacturing operations so as to be more efficient in how it produces smartphones, with the knock-on effect being many current employees would lose their jobs. The company says it will begin producing its handsets in Asia for strategic reasons.

‘Shifting device assembly to Asia is targeted at improving our time to market. By working more closely with our suppliers, we believe that we will be able to introduce innovations into the market more quickly and ultimately be more competitive,’ said Niklas Savander, who is Nokia executive vice president for Markets. He continued, saying: ‘We recognize the planned changes are difficult for our employees and we are committed to supporting our personnel and their local communities during the transition.’

How much transition?

The company estimates that Nokia smartphone production changes could result in as many as 4000 jobs being lost across its factories in Finland, Hungary and Mexico. Instead of producing handsets, the factories will be used as bases for customising Nokia’s handsets set for retail in Europe and North America. Unsurprisingly, the head count needed for customisation is far lower than that needed for production, hence the high number of jobs on the line.

Windows Phone 7 needs to step up

For the Finnish mobile phones giant, the solution to its problem remains simple in explanation but incredibly difficult in execution: sales of Nokia Windows Phone 7 smartphones needs to increase dramatically and soon. Nokia smartphone production changes addresses some cost issues, but that is not where a return to dominance will come from. That can only happen in increased sales.

Not too long ago, HTC was synonymous with Android. In fact the early parts of Android’s growth happened in-step with HTC’s growth – they were one in the same. Things have changed, since, with analysts saying that the Taiwanese smartphone manufacturer is under increasing pressure to prove its worth and innovation chops to investors.

Differentiation the key

The challenge for HTC is to differentiate itself from a veritable sea of top-notch Android handsets. Speaking to Reuters, IDC’s Melissa Chau said that HTC’s ‘problem remains the same: How are they going to differentiate?’ This is especially so with several mid tier Android OEMs like Sony Ericsson and Motorola releasing handsets that, in the very least, are comparable with HTC’s offering.

Samsung pressure mounting

At the top of the heap, however, is Samsung. After a late start in the smartphone market, the company ships the second most smartphones in the world each quarter, bested only by Apple. Most of this success comes from meteoric sales of its Galaxy line of phones.

Apple lead widening

Apple, who many thought HTC was best poised to challenge before Samsung came virtually out of nowhere, is stretching its legs, too. In a blowout earnings report, the company sold 37.04 million smartphones in Q3 2011, representing year-on-year growth of 128 percent, whereas HTC is expected to post a year-on-year decline in unit sales.

What next

For perspective on meteoric rise and rapid decline of HTC sales, consider this: the company saw sales grow four-fold in one year, and its share price increase three-fold in 14 months ending April 2011. Since then, though, it’s been one of the biggest losers in the smartphone industry in 2012, with its share price dropping some 40 percent through 2011.

Consensus points to handset innovation if HTC is to return to winning ways, but with pressure mounting from all directions from competitors vying for the same spoils, it’s certainly not going to be easy.

The highly anticipated Samsung Galaxy S III will be unveiled later than expected, after reports emerged that the Korean consumer electronics maker would not use Mobile World Congress 2012 to show off their device.

Reveal after MWC, release before ‘summer’

The news comes courtesy of The Verge, who cited indications from ‘people familiar with the matter’ that the unveiling of the latest release of the best-selling Android device in the world by some margin would only happen after MWC 2012 in February. The source did, however, explain that the originally planned summer release window (between June and August) remains in tact.

Why the delay?

While a reason for the delay has not been given, it’s believed that Samsung was unhappy with the long gap between the Samsung Galaxy S II’s unveiling at MWC, and its eventual release in North America. Given how massive North America is as a smartphone market and the fact that the Galaxy S II is the best selling Android handset in the region, whatever Samsung can do to accelerate sales of the S III will be prudent.

What we can expect

A report in TechRadar on Tuesday suggested that the Samsung Galaxy S III would launch in the UK as soon as April, with an impressive tech spec sheet to boot. The handset will reportedly have a 12-megapixel camera, and will run on Ice Cream Sandwich from day one (unlike many as-yet unreleased handsets that will get an ICS sandwich as an update after release).

The gravity of anticipation

Just as Samsung has managed to become the second biggest smartphone manufacturer in the world behind only Apple, the Samsung Galaxy S III and its predecessors have shaped up to become the second most anticipated smartphone releases each year. I’d like to think the S III is a big enough deal that it should get its own press conference, and that MWC 2012 may be too crowded as is.

Thoughts? We’ll see how Samsung plays it.

Early reports indicate that the Nokia Microsoft is paying dividends, with nearly half of all second-generation Windows Phone 7 handsets sold being by the Finnish handset manufacturer.

Unpacking the WP7 marketshare

The report comes courtesy of WMPoweruser, who used data gleaned from OccasionalGamer’s game collection. On Nokia, they write: ‘Even at this early stage the company already has 45 percent of the second generation handset market, with most of that being the Nokia Lumia 800 and some the more recently introduced Nokia Lumia 710.’ Next in line? HTC with 40 percent market share, but that is down quite drastically from the 55 percent market share the company had prior to Nokia’s arrival.’

How much is the base growing?

The fact that Nokia has managed to race to almost half of all sales of the second-generation handsets so quickly is notable, but there are a few important qualifiers to consider. If that growth is at the expense of other WP7 handset vendors, as opposed to growing the whole sales base of WP7 handsets, than this is not an ideal situation for the Nokia Microsoft partnership.

Why? Well, Microsoft wants to compete with Android and iOS, and for that to happen, the company’s mobile OS has to grow in volume. What each vendor has of a non- or slow-growing base of WP7 handsets is, for all intents, immaterial. Nokia, on the other hand, wants to compete with the likes of Apple, Samsung and HTC, and for that to happen, need consumer acceptance of Windows Phone 7 and overall sales of that mobile OS platform to explode.

What will follow?

Windows Phone 7 say that they ‘suspect if market acceptance for Windows Phone 7 increases it may be because it becomes strongly associated with Nokia, which may mean this percentage could easily increase to 60-70% or more,’ while some users comment that the market will grow because of Nokia, but other OEMs will become attracted to WP7 as a result. Whichever it is, the Nokia Microsoft partnership has very quickly become mission critical – as many suspected it would – if WP7 is to succeed in the long run.

During their surprisingly weak earnings call – falling short of the street’s expectations – Google revealed that Android’s unreal momentum is showing no signs of slowing any time soon. The company announced that the mobile OS platform has been activated on a quarter of a billion devices, with the number of applications downloaded soaring, too. Of those device activations, 3.7 million were activated on Christmas day alone.

On iOS’ heels

For perspective on how significant the Android device activation figure is – as if 250 million is not ridiculous in and of itself – in October 2011 Apple revealed they had activated 250 million iOS devices. This, of course, included iPhones, iPads, and iPods. Android was released some two-years after Apple and has closed the gap almost exclusively with smartphone sales, since Android tablet PC sales are still relatively insignificant.

Apps market exploding

During the earnings call, Google CEO Larry Page also announced that over 11 billions apps had been downloaded from the Android market. Bank of the napkin maths reveals an average of about 44 apps per Android smartphone across the platforms lifetime.

What’s more, that application download number only accounts for what is on Google’s official app store, and precludes download stats from the Amazon Appstore, GetJar, direct app sales by publishers like EA, and other third party application marketplaces. Basically, the official apps number is certainly higher than just 11 billion. Once again, for perspective, over 18 billion iOS apps had been downloaded by October last year.

Where the influence lies

2012 is a significant year for the mobile OS team at Google. Maintaining and growing Android device activation will be a priority, as will finally kicking on in the tablet PC market, where Apple is still king and Amazon with its Kindle Fire has managed to sneak in and wedge itself into second place behind pure Android tablets.

The long-rumoured – and frequently leaked – Sony Xperia S was finally revealed at CES 2012. In addition to finally being confirmed by Sony, the Android smartphone now has an official UK release date, as well as pricing guidance.

Release date

The Xperia S will be available from 5 March onwards, and is priced at £429.99 Sim-free, reports TechRadar. The handset will be available from O2, Three, T-Mobile and Orange, while Phones4U will also exclusively retail the white version of the otherwise black handset. Vodafone seems to have given the phone a pass for the time being.

Why you should care

The handset has a notable design, with the thick bottom bezel piece with XPERIA engraved across it, separated by a thin silver strip where the Android buttons rest. This gives the phone a unique, immediately recognisable look.
The Sony Xperia S is powered by a 1.5GHz dual-core processor so performance should not be an issue. The handset has an LCD HD display that spans 4.3-inches, which is fast becoming the ‘new’ smartphone display size standard. It has a high-resolution 12-megapixel camera that sports an Exmor R lens. It can also record 720p video, which can be played on a television directly from the phone through the built-in micro-HDMI port on the handset.

The handset has been built around Google’s Android Gingerbread mobile OS, with Sony committing to update it to Ice Cream Sandwich after release.

Is it enough?

I like the Sony Xperia S, especially its design, which is saying a lot considering the general homogeneity of most contemporary smartphones. With the impressive camera, mobile photography fans would do well to consider it for their next purchase, too, as would any other users looking to purchase an Android device. With Mobile World Congress at the end of February, Sony runs the risk of having some of its thunder stolen by what other manufacturers release there.

Pareto’s 80/20 principle holds in many environments. Sometimes the effect is greatly exaggerated, as evidenced by the distribution of mobile data usage. A recent study found that the ‘1 percent’ on mobile carriers used 50 percent of data, leaving 50 percent of data to the remaining 99 percent.

An ever-widening gap

Arieso, an English company based on Newbury was commissioned by a European mobile carrier to track data traffic stats over a 24-hour period during November last year.  The company, which advises carriers in the US, Africa and Europe, found that the gap between heavy users and the remaining population was extremely wide and widening further still. In 2009, the top 3 percent generated around 40 percent of a network’s traffic. In 2011 the top 3 percent generate a top-heavy 70 percent of all the traffic on a network.

Occupy the Downlink

Speaking on the findings, Michael Flanagan, who is Arieso’s chief technology officer, said that: ‘Some people may draw the parallel to Occupy Wall Street, and I’ve already heard comments about ‘Occupy the Downlink.’ He added that ‘But the situations are very different, and the mobile situation doesn’t break down along socioeconomic lines.’

Flanagan explained that his study did not produce a precise profile of who these extreme mobile data users were, but he said he expected that they were made up of a mix of users, including business users that used their devices for Internet usage during their travels, and non-discretionary users with unlimited data packages that were users their devices to consume video. Video, like on the web, is the biggest culprit for heavy data use.

Increasing pressure on data usage

Device distribution for these extreme users on mobile data networks saw 64 percent using laptop, 33 percent using smartphones, and an impressive 3 percent on iPads. With ever more data hungry features released on mobile devices, like the Siri feature on Apple’s iPhone 4S, carriers have to constantly investigate mobile data usage trends to figure out how to price so as to maximise profits.

Charlie Kindel, a former Windows Phone GM, wrote a post explaining the reasons he believed were behind Windows Phone 7’s continued struggles in sales even though – according to him – it was a superior platform to Google’s mobile OS. He says it all comes down to control – and that is what has limited WP7’s sales potential to date.

Kindel’s reasoning

Kindel explains that there are four primary sides of the mobile market – the users, the OS providers, the device manufacturers and the mobile carriers. He explains that they all own and control different parts of the market, while in conflict in other parts. He explains that where Google gives the device manufacturer and the carrier control – leading to more Android devices being made and carrier retail sales people punting Android phones – Microsoft restricts this control, meaning manufacturers and carriers support it less. In turn users do not have the devices marketed to them by the carriers, hence Microsoft’s week sales position.

What this means

Charlie Kindel explains that this means that Windows Phone 7 is able to provide a superior end user experience, though it comes with a price. ‘This is why, despite being a superior PRODUCT to Android, Windows Phone has not sold as well.  Spending marketing dollars on advertising Android devices is and easy decision for the carriers. Pushing RSPs to push Android is easy,’ he writes.

In the long run, he believes this model – putting users first – could trump over Google’s ‘do what you will approach’, which he says has resulted in the platform becoming extremely fragmented.

A comeback unlikely?

Tech writer turned venture capitalist MG Siegler says that, even if WP7 is marginally better than Android or iOS, it’s not enough, especially given how late to market it is. ‘Two to three years in the hole, the only way Windows Phone can win the market now is to make a product that is leaps and bounds better than what’s out there. They need something that’s an iPhone-in-2007 type product. The product they have, while good, isn’t that,’ Siegler writes.

The Windows Phone 7 sales problem has been on my mind for some time now. The mobile OS platform is, in my view, at least on par with Google’s Android, if not superior. What’s for certain is Android OS isn’t manifold better warranting the major sales gap between the two platforms. So what then is Microsoft to do to mitigate their current sales problem?

Kindel does a good job outlining how, in simple terms, the mobile devices market is structured. His argument for Windows Phone 7 sales issues is well articulated, but the proactive steps the WP7 team need to take to kick start sales outside of throwing money at the problem and waiting is not explained at all.

Deutsche Bank has lent its voice to the growing chorus of industry voices that have predicted how well the Nokia Lumia line of Windows Phone 7 handsets have performed. The firm predicts that the Finnish mobile phones giant will sell 2 million Nokia Windows Phone 7 handsets in Q4 2011, roundly beating analyst expectations in the process.

Differing opinions

Deutsche Bank’s estimates for Nokia’s sales trajectory are in stark contrasts with those of Pacific Crest analyst James Faucette, who just last week issued a note to investors, saying Nokia Lumia sales had gotten off to a slow a start. ‘We had expected that the company could ship as many as 2 million units into the six targeted markets for the holidays; however, we now believe that those shipments are likely to be less than 1 million for the quarter,’ he wrote at the time. In fact, he estimated that the company would only sell 500,000 phones – a mere 25 percent of the initial estimates.

If anything, contrasting Deutsche Bank’s expectation that Nokia Windows Phone 7 sales would meet estimates with Pacific Crest’s conservative outlook shows the pitfalls of being too reliant on analysts for sales outlooks.

So much hangs in the balance

The Nokia Windows Phone 7 handsets have huge bearings on Nokia’s future, Microsoft’s future, and the overall makeup of the smartphone industry. If the handset clicks with consumers, Nokia, who for over a decade led the mobile phones industry almost unchallenged, have a chance of returning some glory to the beleaguered firm. For Microsoft, whose WP7 mobile OS has had sputtering sales, the Nokia Lumia phones could be just the momentum the company needs to put its handsets in the hands of customers who currently ignore it in favour of iOS and Android.

The long-awaited Samsung Galaxy Nexus is finally available for purchase in some regions, and early reviews of the Android Ice Cream Sandwich smartphone have begun rolling in. Suffice it to say, the general sentiment across major tech publications is positive, with some calling the device their favourite Google Android handset released yet. Below are extracts from some reviews.

‘Favourite Android device’ in the world

BGR’s Jonathan S. Geller writes: ‘This is almost comical at this point, but the Samsung Galaxy Nexus is my favorite Android device in the world. Easily replacing the HTC Rezound, the Motorola DROID RAZR, and Samsung Galaxy S II.’ He explains that the latest Google mobile OS could be more intuitive, but it certainly is powerful, and that ‘Android 4.0 is coupled with the best smartphone Samsung has ever produced and easily leapfrogs any other competitor’s device.’

Best Android phone ever made

Joshua Topolsky over at The Verge is equally smitten with the Samsung Galaxy Nexus. He writes: ‘The Galaxy Nexus is the best Android phone ever made. It’s one of the best smartphones ever made, and with a couple of minor tweaks (particularly to the camera), it could be the best smartphone ever produced.’ He mentions its size – with a colossal 4.65-inch display – could be off-putting to some. Importantly, he says that Android Ice Cream Sandwich ‘is a fantastic OS.’

Good, but not great

The folks over at TechRadar are not as smitten as BGR or The Verge. They write: ‘We had real high hopes for the Galaxy Nexus and genuinely expected it to take the place of best smartphone on the market today. But it hasn’t.’

The review continues: ‘If you were to take away Ice Cream Sandwich, hardware-wise, you’d not have much to write home about compared to what else is out there.’

All in all, while impressed with the device, they don’t think the Samsung Galaxy Nexus as a piece of hardware is the home run it could have potentially been.

General trends

Having read through several Samsung Galaxy Nexus reviews, the general trend seems positive. There’s almost universal approval for Android Ice Cream Sandwich, and there’s belief that Samsung has, against all odds, topped what it achieved with the Samsung Galaxy S2. Once we’ve spent solid time with it, we’ll share our thoughts on the handset.