The familiar scent of Blackberries.
Wall Street investors seem happy to take what Fairfax Financial Holdings is offering for Blackberry and let the dwindling mobile phone company waft away in the wind. Subtract out the cash that Blackberry is holding, and the net sale price is about $2 billion, a sad end to a psychedelic slide that began at $83 billion five years ago.
Like Microsoft’s purchase of Nokia, Fairfax’s offer seems to be based on the chemically impaired notion that Blackberry isn’t in the final stages of a terminal crash. Fairfax head Prem Watsa babbled about “execution of a long term strategy” in a press release but, according to the San Jose Mercury News, he’s a fan of Blackberry’s two biggest and most recent flops, its new CEO and operating system…
Watsa is likely to keep current CEO Thorsten Heins in the job. He said in April that he’s a big supporter of Heins and has called his promotion the right decision. He also said he’s excited about the company’s new BlackBerry 10 operating system.
Watsa has a reputation as a savvy investor, so he might just be blowing smoke to keep the headquarter troops in Waterloo, Ontario from coming down with the shakes. There are three ways to suck $2 billion in value out of the deal: 1. sell off Blackberry’s intellectual property, 2. milk its remaining 50 million customers for whatever they’re worth and 3. try to turn it into a much smaller mobile and IT services company, providing security and backend support to other platforms.
But as it stands, Blackberry isn’t even worth stems and seeds anymore. Without a thorough corporate detox, Watsa will be just licking the ashtray.
When you have to buy corporate affection.
Finally, there’s a plausible explanation for Microsoft’s purchase of Nokia last week: an Android phone was under development, on the only major mobile product line that supports its Windows operating system.
It couldn’t have been because Microsoft wanted to hire away the management team that took Nokia from world domination to being a life member of the sub-five percent market share club. I believe that Steve Ballmer thinks that he can scream loud enough to make Finnish engineers turn out hip, frictionless iPhone clones. But Microsoft’s board includes adults who know how to spell Blackberry and, in any case, would probably point out that even Apple isn’t doing that anymore.
Fear is a powerful motivator, though. Nokia makes about 80% of Windows-powered phones. If it defected to Android, Window’s market share – which, if only by default, has just edged past the Blackberry OS – would sink out of sight.
Any hope that the deal meant that Microsoft had found a secret pathway back to relevance is completely gone. Microsoft’s Office software package is still the big kahuna of productivity applications, but that’s the only bright spot.
Its Surface tablets are underwater, Linux is slowly but surely crowding Windows out of the booming cloud computing sector, and the personal computer side of the business is being squeezed between slowing sales and tentative moves by manufacturers towards alternative operating systems like, gee, Android.
Now it turns out that Microsoft grabbed Nokia to keep any of the other kids from playing with it. When the only way you can hang onto your friends is to buy them, your days on the playground are numbered.
It used to be bigger.
Combined, Samsung and Apple are selling about half the world’s smart phones, with 30% and 19% market share respectively in 2012 according to IDC. Much of Samsung’s growth from 19% in 2011 came out of HTC’s hide. Its share was cut in half over same period, dropping below 5% and putting it more or less in a tie with Nokia and Blackberry.
At least it was still in the top five then. Now, the most recent quarterly figures for 2013 have LG, Huawei and ZTE pulling ahead, with HTC (and Nokia and Blackberry) dropping further into commodity class. Judging by its latest competitive move, it’s destined to stay there.
This week, HTC previewed the HTC One Mini, a smaller version of its flagship phone. It’s a nice enough addition to the product range. Some consumers will like the size and feel of it. But its impact on HTC’s market position will be minimal. The HTC One Mini doesn’t offer anything new that might otherwise make it significant. Trading a smaller form factor for lower performance specs and price is pretty ordinary.
The mobile handset market is dividing into genuine consumer brands – Apple and Samsung in the lead – and generics. HTC’s problem is that it’s landing in the generic space. Older brands – Nokia and Blackberry – are still recognised, but not bought. HTC never climbed to that height, and its current marketing efforts are swamped by Samsung’s media saturation campaign and Apple’s reality distortion field.
A few tweaks to its product mix won’t build the brand identity it needs even to just get back into the top five.
Qualcomm CEO Paul Jacobs presented a vision of the future for the consumer electronics industry this morning, as he opened the first official day of the show with a thought provoking keynote.
The core of that future is mobile services and technology. “All consumer electronics business are either in the mobile business or soon will be”, said Jacobs.
This mobile transformation is most pronounced in the developing world, according to Jacobs. Emerging markets are increasingly mobile-centric. The developing word’s share of the smart phone market is growing, and will soon hit the 50% mark. Mobile technology will be the biggest driver of growth in the years ahead.
Mobile networks are frequently the only way that people in emerging countries can access the Internet. A Grameen Foundation initiative funded in part by Qualcomm, PT Ruma, began by financing simple cell phones for women in Indonesia, who in turn built a small business by selling phone calls on a per minute basis to others in their villages. But it quickly turned into a smart-phone based, data centric business model because of the growing demand for information services, even in the world’s poorest places.
“Our goal is to enable better phones for every market at the lowest price possible”, said Jacobs, setting a sub-$150 target for smartphones that can address this demand and announcing a Qualcomm initiative to develop reference designs for emerging markets.
Jacobs balanced his keynote time between talking about using technology to promote growth and better lives in the developing world and promoting Qualcomm’s newest products. He talked about the next generation Snapdragon S4 processor which is aimed at the television and ultra-compact laptop segments, as well as mobile phones. Jacobs also shared the stage with partners such as Nokia and Lennovo, keeping the product pitches low key and focused on consumer benefits.
It was a good example of how to use a keynote opportunity to say something meaningful about how the CE industry can make the world a better place, while at the same time positioning a company’s brand and delivering a couple of pointed, tactical marketing messages.
Last to first, real time tweets from Las Vegas…
- WirelessHD press conference. Certification ready. 60GHz standard to link devices inside the same room to HDMI standards.
- Clear thinker: Paul Liao, CTO Panasonic. Uses Maslow’s hierarchy to rate & rank tech features.
- Clear, though, that there’s still a battle to be fought over how to split up content and application revenue in the wireless world.
- Recognition that consumers will have lots of devices, but don’t want to pay lots of money to connect them all. There’s hope.
- Went to Wireless Meets CE panel. Nokia, Intel, Panasonic, Verizon represented. Vague consensus: 1 sub fee/device model will “evolve”.
- Heading to LVCC, bus line wasn’t long at all.
- Charlie Ergen: kids love IPTV & it will spread from there. Complicated now but just wait.
- DISH will sell 1080p downloads via Internet.
- ETC pres Mark Jackson keynotes DISH news conf, doesn’t say “satellite” once. It’s about TV!
- IPTV is now an integrated feature in mainstream TV products, services & platforms.
- SlingGuide puts personal content search & control online.
- SlingLoaded distributes video: TVs, PCs, iPhone, car, whatever.
- EchoStar intros STB with IPTV, new “SlingLoaded” navigation across all video sources.
- Waiting for EchoStar press conf to start.
- At Sands, show feels empty so far.
Real time Tweets from the Discover Oulu wireless technology conference in San Jose on 18 November 2008…
- At Oulu wireless conference in San Jose, per Purnima Kochikar, Nokia biz dev: Indian mobile users buying 10 rupee (25 cent) prepay cards. Devices are status symbols in developing world, services aren’t. People will buy smartphone but not service, just to put the phone on a table at a meeting. 11:20 AM Nov 18th.
- 1,000 radios per person in near term. Interesting prediction from expert panel. Means power & spectrum challenges. Opportunities too. 11:34 AM Nov 18th.
- Green is The Word. ICT accounts for 2% of global carbon, panel says will grow to 6%, more than air travel. What is ICT offsetting? 11:38 AM Nov 18th.
- Craig Barrett, Intel chair, speaking to Oulu conference. Saying nice things about Finland. 12:57 PM Nov 18th.
- Barret speaking without script or TelePrompTer, very engaging. Interesting speaker, so far focusing on historical perspective. 1:05 PM Nov 18th.
- Barrett thinks we have at least 15 years to go on Moore’s Law. Sees complementary trend in telecom with bandwidth doubling every 18 months. 1:09 PM Nov 18th.
- Barrett: bringing advanced telecom technology to developing world is key to future growth. 1:21 PM Nov 18th.
- Sriram Viswanathan, Intel Capital, doing live WiMAX demo. Don’t doubt Intel is betting big on WiMAX. 1:24 PM Nov 18th.
- Craig Barrett: “People over 40 sometimes stand in the way of technology because they’re overly worried about security, while people under 30 couldn’t care less.” 1:35 PM Nov 18th.
- Barrett echoing prediction about a thousand – maybe thousands- of radios per person. 1:37 PM Nov 18th.
- Barrett: telemedicine & advanced ICT key to delivering health care to developing world. Kiva.org can provide supporting financial tools. 1:45 PM Nov 18th.
- Barrett: disruptive technologies include WiMAX in telecom, 3D graphics for entertainment, OLPC type devices for global education. 1:58 PM Nov 18th.
- Barrett: been through 11 recessions, you can’t save your way out of a recession, you have to invest. 2:02 PM Nov 18th.