At the end of the day – the verbal pause du jour – a gathering of thousands of industry people bursting with innovative products, some of them handsets, will undoubtedly kick up a little dust in Las Vegas next week.
Whether handset vendors are merely keeping their cards close to their vests for competitive reasons and timing their announcements apart from the din created at the largest American wireless show or other reasons, the embargoed news and preannouncements have been noticeably lower in number and less hyped than in the past, several analysts said.
Meanwhile, macro-economic conditions in the United States and, possibly, abroad, have fueled headlines as any hint emerges that 2008 might not attain the barely double-digit growth in handset volume shipments forecast by vendors and many analysts. Nokia Corp., with 40% global market share, has stood by its forecast of 10% growth over last year’s 1.14 billion units – with possible upside to its own share.
But many analysts read Sony Ericsson Mobile Communications’ reduced forecast last week – of 21 million units for the first quarter, vs. the 26 million sought by Wall Street – as a sign of possible weakness in the European upgrade market. Others, in contrast, said it was merely share shifts between competitors amidst brutal competition, with Samsung Electronics Co. Ltd. and LG Electronics Co. making inroads in a market long dominated by Nokia, Sony Ericsson and Motorola Inc. But a number of warnings from chip makers as large as Texas Instruments Inc. have many on edge.
The good news: A recent poll of Americans shows that they would rather leave home without their wallet than leave their mobile handset behind. The overriding question, however, is will new handset offerings this year tempt them to upgrade? Thus the avid interest in gauging whether economic conditions will delay or dampen upgrade sales, crucial to global volumes this year, as the rate of new subscriber growth in emerging markets slows.
Thus, interest in new handset offerings remains high – as high as the stakes.
Sure, there’s been a steady stream of speculative reports that hint at future releases. HTC Corp. will get its “Dream” handset based on the Android/Linux operating system to market later this year, according to PC World.com. Dell Inc. may be girding to re-enter the smartphone market, according to The Street.com. A mobile banking-oriented handset branded by Citi, made by Mobicom, has been spotted on the FCC’s Web site, according to PhoneScoop.com.
But what about real, actual, we’ll-playwith- it-on-April-Fool’s-Day handsets?
Quiet on the Vegas front
An informal survey of more than a half-dozen analysts found some consensus on the near-silence.
● “I haven’t seen a lot of announcements,” said Rob Enderle at Enderle Group.
● “I haven’t heard a thing, it’s been dead,” said Iain Gillott at iGR.
● “I’ve heard close to nothing,” said John Jackson at Yankee Group.
● “I don’t know what to expect from CTIA,” said Bill Hughes at In-Stat. “Why? I don’t have any pithy quotes.”
The theories
Pithy quotes aside, these and other analysts offered a few theories for the dearth of pre-announcement hype this year. The leading contenders, oft-cited by the group:
● Timing: With the International Consumer Electronics Show in January and the Mobile World Congress in February, handset vendors may be holding off bold announcements until summer, in anticipation of the fall-winter retail frenzy.
● Competitive concerns: Increasingly, vendors are worried that pre-announcing a product that misses its launch window brings negative press, and more importantly, tips off competitors to one’s direction.
● Differentiation: Many vendors, Apple Inc. and Nokia, for example, tend to march to their own schedule and other vendors may well find it difficult and expensive to stand out apart from the din at a large trade show.
“Vendors now are aiming to announce products closer to launch, due to competitive reasons,” said Enderle. “They may simply be keeping quiet. I foresee more technology products being introduced at the show – enhancements to software in the innards of the handset. But it’s also possible that vendors are looking to launch in the second half of the year as back-to-school purchasing leads into the holiday season.”
The trend is definitely to hold your cards closer to your vest, Jackson said.
“Too many vendors have been burned by announcing products in advance,” Jackson added. “CTIA’s spring show as a ‘big bang’ event is somewhat diluted by CES and MWC, so I sense a pullback in the use of this show to make a big splash. The Apple model of announcing on your own schedule is becoming more frequent. At the big shows, you don’t stand out as much and, therefore, your ROI is lower.”
It’s conceivable that the handset vendors are avoiding ‘buyer’s remorse,’ Gillott said. Vendors may not wish to launch compelling products so soon after the fourth-quarter consumer blow-out, when purchases have been made – and are, by April, a mere three months old.
“Also, we’re in a phase, with 3G networks in place and handsets out there, when everyone must make some money on their investment before we move on to the next ‘big thing,’ ” Gillott added. “Actually, I’m being bombarded with marketing for products that address network capacity issues.”
On the “buyer’s remorse” theory, analyst Avi Greengart at Current Analysis said, essentially, “phooey.”
“I agree there’s very little buzz going into this show,” Greengart said. “But if you have something cool to show, you won’t hold it back. You want to induce buyer’s remorse! The market is too competitive.”
To that end, Greengart noted, this September will mark 18 months since vendors saw the iPhone publicly debuted and 18 months is the gestation period for a complex handset – so the second half of the year indeed may see greater leaps in innovation from the incumbents.
“We’ll see a flurry of announcements this summer,” Greengart predicted.
What to look for…
On the other hand, ask these analysts what they would like to see from various vendors at CTIA 2008 and you can almost hear that analyst-mojo revving in the background.
Greengart said he looked forward to news that Sony Ericsson Mobile Communications would bring its new Xperia line of smartphones with touchscreen, QWERTY keypad and Microsoft Corp.’s Windows Mobile OS to the U.S. Copy that for Samsung Electronics Co. Ltd.’s Ultra Edition, all the rave in Europe, with their emphasis on colors, materials and finishes. LG Electronics Co. has a smartphone gap in its U.S. portfolio, he noted.
Motorola and Kyocera Corp. really need to step up next week, or be counted out, Greengart added.
“Motorola needs to show well – the U.S. is their stronghold,” he said. “If they don’t, they’re in far greater trouble than we thought. For Kyocera, we’ve seen bold designs, but this could be a make-it-or-break-it year.”
For Ross Rubin at NPD Group, Nokia’s expected Internet tablet for Sprint Nextel Corp.’s WiMAX network should make that proposition a bit more tangible.
“The N810 we’ve heard about shows the promise of a broadband-focused device that is not a handset,” Rubin said.
Rubin echoed Greengart on avid interest in Motorola’s work.
“They’re always of interest, due to their dominant share in the U.S.,” Rubin said. “How will they reinvigorate their post-Razr product line?”
Another well-publicized initiative – Google’s Android/Linux OS – has produced expectations as well, Hughes pointed out. Analysts may have the opportunity to compare the prototype OS and features they saw in Barcelona, Spain, last month with the latest tweaks.
