Now that I have given you an overview of the past year it is only fitting that I share some of my cellular industry predictions for the coming year and beyond. I’m not an industry insider (I WISH!) and these are my own conjecture based upon my own views and info I have gleaned from the cellular phone blogs. This article will focus on the US but make some observations on worldwide issues as well.
SMART PHONES:
I’ll state this as simply as I can: The future belongs to Android and BlackBerry.
Period.
The two of them are clearly staging to “own” the competition (and yes I mean iPhone too . . . .)
ANDROID:
Android will eventually reign supreme in the consumer realm. Why do I say this? Android is an open source phone operating system created by Google. The fact that it is open source means that it is infinitely customizable and since it does not use a proprietary programming language developers will have an easy time writing apps for it.
Since it is not the closed system that iPhone is, the quality and quantity of apps will grow exponentially. It is only a year old and has already show tremendous growth (10,000 apps and growing!). As of this writing there are at least 7 different handsets on three different carriers running it and several more are slated for the first part of 2010. Each handset is unique in both hardware and software UI. The means more diversification and it will reach and appeal to the most people, much more so than apple who is still limited to one carrier in the US. While each manufacturer has created their own User Interface (UI) the underlying OS it more or less the same. The iPhone on the other hand is basically the same phone for everyone with slight hardware and software differences from year to year, but you basically have two choices when it comes to iPhone: Black or White; 16 GB or 32 GB.
The fact that it is backed by Google means that it is backed by a company that thrives on innovation. Some will argue that so is the iPhone, but the way that Apple runs their App Store clearly shows otherwise. Their restrictive approach to applications in the name of device stability/user friendliness is fundamentally flawed. If a submitted app does not meet their standards of approval or replaces a “core function” of the phone and does its function better than the core app does then they reject it. These judgments are based upon their own closed minded viewpoint: that they know what is best for users. This staggers innovation.
Apples claim to fame is the ease of use (easily duplicated on android with the multiple ui’s it allows) and the apps and they are rapidly gaining ground there too. Android will probably make an iPhone centric model next year, and when it does I see users defecting in droves.
BlackBerry
BlackBerry is an amazing platform with a bright future in both the business and consumer arenas, and a lot of people are going to scream at me for saying this but while BlackBerry will also increase their market share in the consumer realm its bread and butter is the business world and always will be.
BlackBerry’s greatest strength is that it is a functional device and something that is instantly recognizable as a BlackBerry smartphone, and someone familiar with BlackBerries can instantly pick one up and start using it. This is done by gradual evolution rather than revolutionary change and is very friendly to businesses who do not have the money to retrain their staff every time they get a new smartphone. Someone can jump from the 8830 to the 9630 or even 9550 or 9700 with very little learning curve.
This is why the BB OS has remained more or less the same since 1999 with evolutionary changes rather than a revolutionary change. They like to make gradual changes – not as gradual as apple though 
This method of gradual change, along with top notch security, is it’s greatest benefit to business users, but is also it’s biggest handicap in the consumer realm where users get tired of the same old thing and want something new every few months. This is a big reason why themes sell so well, but themes can only appease users just so far.
May people argue that what RIM needs is a totally new touch specific OS for the Storm series, but this is unlikely though since any touch phone they do must be a BlackBerry smartphone first and foremost.
BlackBerry has dozens of device models on several dozen carriers worldwide and their portfolio is only growing. In the year 2010 I foresee them making some footholds in the prepaid market as well.
Nokia/Symbion:
Symbion is the number one smart phone operating system worldwide, and for good reason. But in the US it is a tiny niche market with only a few handsets on US carriers. Nokia/Symbion will remain popular overseas but will mostly continue to be a niche market in the coming years. As there is more and more serious competition their market share will continue to dwindle in the US and eventually worldwide. There is nothing WRONG with Symbion but If they don’t innovate and market more they are destined to fade into obscurity just as the old PalmOS has.
Windows Mobile:
The majority of people reading this are doing so from a Windows computer. We are all more than familiar with the issues that Microsoft Windows has and you would have to be living under a rock to not realize that Windows Mobile has the same issues. Even fans of Windows Mobile say that it takes getting used to (the crashes and lock ups I mean).
It completely blows the mind why anyone would want the same problems that their much more powerful PC’s have, on their smaller, less powerful mobile phones, but WinMo continues to give users just that and they continue to swallow it as the price of owning their phones. But it does not have to be!
Fans of Windows Mobile like it because it is easy for them to learn and because it is so customizable with hacks, but Android is also customizable and as it evolves most of the things you can hack into Windows Mobile you will be able to just do on Android.
Once upon a time WinMo became popular because it could sync email, contacts, and calendar with a Windows PC. Now pretty much every phone with PDA functionality can do that. The advantage is long since gone. They keep releasing new versions (6.5 was released in October 2009 on new devices, but the roll out for existing devices has been very slow) with few new features and no significant stability increases. The most recent info says that Windows Mobile 7 will not be released until the end of 2011, and if that is the case, no matter what Microsoft does with it, it will be too little too late.
Windows mobile will be all but dead in maybe 3 years. If Microsoft were smart they would ditch Windows Mobile completely and focus on the newer ZUNE platform. They claim that a Zune phone is not being developed but I think we all know that isn’t true, and even if it was they could easily port the OS that the new Zune HD units are running to a cel phone platform for other people’s hardware.
Apple iPhone:
iPhone is not a smart phone. The hallmark of a smartphone is not only PDA functionality bit the ability to multitask, and this is something that Apple has locked down hard. Rumors have promised multitasking in the next release for the last two years and for the last two years users have been disapointed. Apple claims that multitasking is not necessary with push notifications (come on!) and that it would just slow the phone down and decrease the user experience… well at least they were being honest there and it makes me wonder if they are running a much slower processor than they want us to believe. Most recent rumors are that iPhone 4.0 will allow you to run 3 apps at a time. Even if true, this is too little too late!
I’ve already explained this above, but Apple is killing iPhone with their restrictions and they have too large of egos to see and admit it. The next two generations of iPhone will be more of the same incremental upgrades and the 5th iPhone will be the last one that actually sells well.
WebOS
The Palm Pre debuted this summer with a lot of promise that unfortunately has not yet been realized.
Yes it is innovative, new, and fast. However, the software is fundamentally flawed in that it depends on the network connection to run the apps which are all “web apps”, similar to the first generation iPhone. It depends completely on Palm’s cloud services to run. T-Mobile Sidekick users saw what could happen when that happens and something goes wrong this past summer. I’m not up on the specifics of WebOS yet but I sure hope you can at least back up your contacts to an SD or SIM card.
It’s biggest claim to fame is it’s ability to natively sync with iTunes, but since this is done with a hack (basically it fools iTunes into thinking it is an iPod) and Apple keeps breaking it (every time iTunes upgrades you need to wait for Palm to upgrade their software to fix the hack again which takes longer and longer each time) this woefully unreliable. This isn’t very consumer friendly; nor is it innovative!
I’m not saying they need to write their own software to manage their music, they could easily contract with someone else to do it as BlackBerry and Motorola have for their smartphone offerings, or use the same method of sync as BlackBerry has, using an application that reads the iTunes XML files and uses that to import the files and play-lists.
In addition, it is only available on the junk Palm hardware (go to a Sprint store and try a Pre if you don’t believe me, shoddiest smart phone I have ever seen). And one dead end carrier. True the Pre and a second unit called Pixie are expected to debut on Verizon within the first quarter of next year, but it will get lost in the jumble of new smart phones launched in the last quarter of this year. I’m sure it will help some but not enough.
WebOS may survive and flourish, but only if palm let’s them put it on other hardware. Palm is dead. So is Sprint (but I will get to that later). They just don’t know it yet.
Conclusion:
I know I’ve kind of shocked some of you with my comments so far (“How dare he criticize Apple and iPhone!”) but let me use an analogy to put this into terms that some of you may understand better. You’d have to live under a rock not to notice that there are three major video game consoles in the US: Sony PlayStation 3, Nintendo Wii, and Microsoft XBOX 360.
Back in the late 80’s and early 90’s Nintendo was the undisputed king of the gaming market. There were other consoles and hand held units out there, but Nintendo had (arguably) the best games and definitely the largest catalog. Nintendo wanted to keep their quality high so they adopted the policy of only licensing a specific number of games from each manufacturer each year. Games also required their seal of approval (literally). The idea was that they only wanted the best games on their system, and because game makers wanted a piece of the Nintendo pie, they went along with it. They also wanted to focus on family friendly and kid games. They felt that this would get the broadest appear for them.
Then along came Sony PayStation. Sony had no such restrictions and their catalog grew by leaps and bounds. Game sales (or lack thereof) motivated game developers to design better games. If a game was written well many people bought it and they were able to keep the price up for a while before the next greatest game took its slot in the sames lineup and the older game got discounted. Poor games did not sell and were discounted sooner. Game developers were less willing to invest R&D in poorly written games because they were not as profitable.
Then when Sony PlayStation 2 came out they maintained backward compatibility with PS1 (something Nintendo never did, since each console used different physical media) when the new system came out, in addition to the catalog of launch titles it had a built in catalog of PS1 titles that worked on the new system and looked even better than they had on the PS1.
Microsoft joined the competition with a the X-Box, with a new online service and hard drive, and Nintendo released the Super Nintendo and N64, each of which used their own proprietary media.
Nintendo had staggered innovation while Sony had encouraged it, and it paid off BIG.
Jump forward a few years new contender Microsoft released their second generation X-Box, Sony released the third generation PlayStation, and Nintendo released the revolutionary new device the Nintendo Wii.
Sony added a built in hard drive, motion sensitive wireless controller, and blue ray drive, banking the future on hardware upgrades, but basically released an overpriced upgraded PS2 that was nothing revolutionary, and to top if off they broke compatibility with older PS1 (and many PS2) games (and later redesigns of the system broke it pretty much completely).
Microsoft was the first next gen system to release by nearly a year and paid the price for it by releasing a system that had many hardware issues that took them two years to resolve. The new system was available in 3 varieties to meet every market and budget. The upgraded game consoles had some significant hardware improvements and broke backward compatibility, but their focus on online games which they linked the online service to their already successful Windows Live service which included mail, instant messenger, etc and concentrated on adding features to that such as down-loadable music, games, movies, etc. and making all games online capable, was their saving grace.
This paid off for them because they are now the number 2 console in sales rather than a distant third.
Nintendo, on the other hand, came up with something completely different. A game console that sold at a lower price but was completely motion sensitive and open to many different kinds of games.It was inexpensive to produce and sell, and had a broad range of appeal for everyone from little kids to senior citizens!
They also removed the limits on game quantities and shed the kid game persona that they had carried for a decade, morphing into more of a family centric persona which worked well with the system that was designed for all ages from kids to senior citizens, men, women, boys, girls. It didn’t matter. Wii had something for everyone. They also maintained backward compatibility to Game Cube games (the only other Nintendo console to use optical disc media) and created the “Wii Shop Chanel” where people could download (for a nominal fee) select titles from earlier Nintendo and other game consoles. In many ways the Nintendo Wii is inferior to the PS3 and XBOX360 but it outsells both consoles by more than 10:1
Within a year Nintendo had regained their former position of prominence in the industry and with Microsoft chugging away at their platform, Sony slipped from the number 1 to number 3 position.
Nintendo and Microsoft embraced innovation and are thriving. Sony stifled and is floundering.
Android is embracing innovation and diversity while Apple releases the same phone year after year with only minor upgrades and has a closed system where they control what apps you can have.
The Apple fanboys like to say that BlackBerries are all the same but RIM has 5 form factors now with lots of variation. Apple releases the same device every year (only cosmetic change was going from a silver back to a black or white one) with more memory and a couple ticks higher processor. Oh and 3gs finally added a video camera lol.
U.S. CARRIERS:
The next year or two will see AT&T loose iPhone exclusivity and once that happens customers will desert them like rats fleeing a sinking ship. The fanboys insist they will not make a cdma iPhone but they already have the one in China uses cdma200 the same technology as Verizon. I do think it will be dual mode CDMA/LTE hybrid though. This dramatic loss of customers, because they have literally bet the network on the iPhone will cause them to drop to the #3 spot in the usa.
Verizon is the only other network which can handle the iPhone in any quantity and Apple is not stupid. Even if they don’t give VZW an exclusive on a CDMA /LTE model the bulk of those leaving AT&T will go to Verizon. Verizon will use the influx of cash to push the LTE roll out up and to buy Sprint and divest the nextel/iden part of it.
Then T-Mobile USA, an under recognized, but quality carrier will quietly continue to grow and when the time is right they will take advantage of their weakness and will buy AT&T People say that will never happen but they said the same thing about Altel, and look what happened there? Remember, AT&T didn’t buy Cingular, it was the other way around and the latter just changed their name.
A lot of people will have a hard time believing that this will happen but let’s take a look at a little history shall we? Once upon a time there were at least a dozen cel phone companies in the US. Mostly regional. Over time the larger ones bought out the smaller ones and now we are faced with two really big ones AT&T and Verizon, both of which consist of at least a half a dozen small carriers.
This is where the similarity ends, however, as how each has accomplished this varies dramatically. AT&T knit all of the smaller carriers into a patchwork quilt of cellular coverage across the nation. Parts of their network are GSM, TDMA, GRPS, HSPA, etc. Verizon on the other hand concentrated on upgrading legacy equipment so that it was all the same. AT&T upgraded selective areas of their network to faster technologies while Verizon upgraded their entire network to EVDO Rev-A.
We’ve all seen the “there’s a map for that” commercials and they are accurate. AT&T may have a faster 3G network than Verizon, but only a small percentage of their towers are 3G, so even in areas where they have 3G coverage they don’t have the capacity and users are forced to drop down to lower technologies. Verizon on the other hand has an entire nationwide network that is all 3G. Every tower they own (well for the most part) is 3G and to top it all off they own some GSM towers from their various acquisitions which they lease to AT&T and other carriers.
CONCLUSIONS:
I know that some of you will have issues with some of my conclusions and predictions, but that is the nature of the blog-sphere. We will all have to just sit back and see what te new year holds. .. .
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