Handset makers face urgent need to innovate

Caroline Gabriel/Wireless Watch
15 Oct 2012

The ensuing pattern will be predictable. HTC followed up with quarterly figures in sad contrast to those of its Korean rival, reflecting how Samsung and Apple are increasingly dominating the smartphone market between them, and squeezing the air supply of other contenders.

The next few weeks will no doubt see a solid quarter from Apple, and the promise of a massive Q4 ahead boosted by the iPhone 5; minor share gains, if any, at Motorola Mobility and Sony Mobile; progress in the mass market from Huawei and ZTE; more dark days at Nokia.

Meanwhile, RIM remains in suspended animation until it can get the BlackBerry 10 OS and devices out of the door, and though it cheered investors somewhat by losing less than anticipated in its fiscal Q3, the relief was shortlived – its shares dropped again last week as an analyst warned BB10 might not appear until March.

There are common threads running through the stories of the smartphone also-rans, particularly that the players have, in times of success, grown complacent and failed to innovate or change their formula in time. HTC‘s early headstart in Android, Motorola‘s renaissance on the back of RAZR, Nokia's and RIM's former glories – in all cases, the vendors have stood still for too long and seen others come up behind them, with better marketing, new product features and enhanced supply chains.

The onus is now on the big two to avoid a similar fate, and there is already frustration in some quarters with Apple‘s hesitancy at launching grand new devices (see separate item). Apple can certainly live on its massive brand and user experience appeal, coupled with marginal functional updates, for a while longer, but if it ever rests on its laurels, it should remember just how dominant Nokia used to be, and how unthinkable it was that the mighty Finn should fall so rapidly from its pedestal.

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