Summary: Is Skype killing Nokia Lumia sales? Does a drop in device shipments mean anything? Verizon is selling millions of iPhones, does it wish that weren’t the case?
The mobile space never stands still, I guess that’s why it’s mobile. This week had RIM in Orlando trying to ignite the passion of yesteryear for the BlackBerry. Time will tell if they were successful or not.
Bouncing around the mobile web this week uncovered some interesting perspectives on Skype, and the problem it creates for Nokia; tracking shipments and how that differs from tracking device sales; Verizon wishes customers would pass on the iPhone and why; was the much-anticipated Galaxy S III designed by Samsung lawyers?
Carriers shunning Windows Phone due to Skype?
Skype has been trying to crack into mobile for years. In the early days of that endeavor mobile operators fought it tooth and nail, out of fear that cheap Skype calls would start replacing cell calls. The fear seemed to fade of late, until this week when Nokia’s Stephen Elop made an interesting and telling comment.
Elop admitted at the Nokia shareholder meeting that Microsoft and Nokia were having to force carriers to accept Windows Phone against their will. This is being done through marketing/pricing/sales gimmicks of phones. Elop’s statement, a result of a question about carrier reluctance to accept Skype, implies that carriers are balking at Windows Phone due to the Microsoft Skype connection (Microsoft owns Skype).
As long-time industry watcher Tomi Ahonen states quite firmly:
“Nonetheless, Elop clearly admits that there is a reseller problem relating explicitly to Skype. He furthermore admits, the Skype issue has resulted in some carriers actually refusing to carry Lumia. I was on this blog immediately when news broke that Microsoft had bought Skype, that this would kill all Microsoft ambitions in mobile.”This indicates the old carrier fear of Skype is alive and kicking, and perhaps even worse now that Microsoft owns it. The fact the Nokia CEO mentioned the situation shows how serious it is, and how Nokia is thinking about it given the lackluster sales of the Lumia Windows Phone line.
Shipments do not equal sales
There is no shortage of analysts following every aspect of the hot mobile space, and this week IDC released some statistics that were thrown all around the web. The numbers covered tablet shipments last quarter, and most analysts jumped on the fact that shipments of Amazon’s Kindle Fire had dropped significantly from the previous quarter.
These reports caused a VP of the analyst firm NPD Group to jump in and set the record straight. In a blog post titled Shipments are not Sales, Stephen Baker points out that tracking device/platform/company shipments is not the same as tracking actual sales.
While tracking shipments is common due to the availability of those numbers as opposed to sales numbers (Amazon doesn’t divulge sales numbers), you have to understand the difference before jumping off the analyst cliff of supposition.
“In the Kindle Fire’s first quarter of availability IDC’s reported shipments of 4.8m most certainly included the normal inventory build-up a new item requires. The Fire was distributed in something around 10 thousand stores in the U.S. at launch and certainly Amazon’s warehouses needed some inventory too. Let’s not forget it was the fourth quarter when sales tend to rise dramatically. So Amazon, rightly, built a lot of Kindle Fires and shipped them out to its warehouses and its retail partners to take advantage of fourth quarter volume. Logically there will be inventory remaining and shipment volumes will decline in the following quarter as the inventory to support Q1 sales is partially satisfied by the remaining inventory from Q4.”This makes perfect sense, as companies launching a new product like the Kindle Fire have to flood the inventory pipeline to cover anticipated sales, especially for the holiday season. Companies like Amazon won’t just ship what they can immediately sell, they will ship enough to carry them through expected demand for a while. As Baker points out, it’s common for shipments to decline, and why tracking them must be done with understanding the difference between tracking shipments and sales.
Kindle Fire sales are still happening at a brisk pace according to NPD, and they expect that to continue given the cheap $199 price. Baker sums up the Amazon situation nicely:
“No matter how we frame it, or how others may spin it, the Kindle Fire had a pretty good second quarter of sales results. And as important as shipment tracking is, it is an incomplete number without the power of actual sales behind it.”Verizon selling mostly iPhones, but wish you’d buy something else
The iPhone is the hottest selling smartphone at the three largest carriers in the U. S., AT&T, Verizon, Sprint, based on sales numbers from the three. While it would seem they would be quite happy selling millions of any phone, PC Magazine’s Sascha Segan tells us that may not be the case with Verizon.
Only 9.1 percent of Verizon’s 93 million customers are on the LTE network according to Verizon’s own statement, so that brand new network is relatively unused compared to the crowded 3G pipe. That will only get worse as long as Verizon is selling more iPhones than everything else combined.
“From Verizon’s position, the solution looks simple: move heavy data users in crowded urban areas from 3G to 4G as fast as possible. That would help everyone. The new 4G users get much faster connections, and the 3G users would see better speeds and network quality, too, as that network becomes less crowded.”Segan’s point is a good one, that Verizon has spent billions rolling out its LTE 4G network, and it needs to cover that massive investment. That can’t be done with the 3G-only iPhone, so those millions of customers are stuck on the crowded Verizon 3G network. Those millions cannot be moved up to 4G in the future, either, and that hits Verizon where it hurts.
The next iPhone is thought to have LTE onboard, although Apple of course won’t admit that. Verizon will no doubt love it if that is the case, but it won’t help them with the millions of iPhone 4/4S it is selling now. The 3G network is going to keep getting taxed, while customers of the LTE network enjoy the relatively untapped fast pipe.
The Samsung Galaxy S III super phone — designed by lawyers?
Samsung released the Galaxy S III, the latest in its top-selling Android smartphone line. The S III has outstanding components, a new “smart” version of Samsung’s TouchWiz UI, and bizarrely is “designed for humans”.
Weird advertising slogan aside, the S III looks a little, well, simple for the lack of a better term. The thin phone is nice enough, but it looks rather pedestrian.
Simple might be a kind description of the way the S III looks, as Ron Amadeo of the enthusiast site Android Police is a little more direct in a recent article. He bluntly states the new phone from Samsung is “ugly”, and then goes on to explain why he believes it isn’t more attractive:
How did something like this ever make it out of Samsung’s design studio? I’ll tell you how, it was never in the design studio. This phone design was born down the hall, in a room where the door sign reads “Samsung Legal.”Amadeo then proceeds to explain why the design suit from Apple charging Samsung with copying is the basis for the entire design of the Galaxy S III. He makes a good point, several actually, as he notes that feature after feature of the S III design seems to be a direct response to Apple’s accusations against earlier handsets.
He backs up his observations with photos that address each claim Apple made against Samsung for earlier phones. Taken one after another his case is a compelling one, as the S III does indeed seem to be designed specifically to avoid riling Apple’s lawyers. Amadeo sums it up succinctly:
So Samsung, was it worth it? Your product won’t sell as well, but you won’t piss off one of your biggest component customers either. I understand the motivation, but I still feel like you’ve sold your soul.Image credit: Android Police
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