Smartphone Market Growing Rapidly
Year-to-year growth in the Smartphone market in 2006 will exceed 70%, and will continue to grow robustly for the next several years, according to a new report from In-Stat. The growth is seen as strong despite major challenges in user adoption. More...
There is a risk, however, that these devices will be seen by consumers as just very expensive feature phones, the high-tech market research firm says. A major problem is that many users do not download applications that make the devices more useful after they leave the store.
“The market’s growth will involve major shifts in share among the OS platforms,” says Bill Hughes, In-Stat analyst. “The winners will be Microsoft and Linux. Their growth will be at the expense of Research In Motion (RIM) and PalmSource, although these organizations will continue to see their numbers grow.”
A recent report by In-Stat found the following:
- The median number of applications that Smartphone users have downloaded is only one, and the ownership of PDAs, the devices that Smartphones are meant to displace, is twice that for Smartphone users as non-users.
- Consumers, as well as the industry, still lack a clear definition of “Smartphone.”
- Many wireless organizations are wary of Microsoft’s intentions with Windows Mobile. Microsoft is working to overcome the reluctance by the wireless industry by integrating the delivery of content to Windows Mobile-based Smartphones with its server software.
The report, The Smartphone OS Wars (#IN0502112WH), covers the global market for Smartphones. It includes worldwide unit shipment forecasts by OS through 2009. It also contains results of a user survey of Smartphone users in North America with data on user preferences for features and OS. The report explores market barriers and drivers along with trends that will influence future development of the market. The report price is $2,995 U.S. Dollars.
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Wouldn't *that* be nice...
Tim Carroll
Your friendly customer service robot
(and big Treo fan)
Doom for PSRC - WM division makes first profit!!!
Its long been the cry in POS circles that the only reason WM is still in the market (and succeeding) was that it has been heavily subsidized by Micro$oft, and that it will therefore never make a profit. Well, like the battery life and WIFI and stability myths, its time to put that old saw horse to sleep. The Microsoft Mobile and Embedded Division has just make their first quarterly and half-year profit. They made a $20 million profit on revenue of $101 million, up 40% Q/Q, and a $17 million profit on revenue of $175 million half-year/half-year,up 44%. This reflects how close to profitability they were in the previous quarter ( Q1 Financial year 2006, July-September 2005). With the introduction of more than 20-30 devices this year by >10 active OEM's (including Palm Inc) there can be no doubt that they will also be profitable for the full year.
http://www.microsoft.com/msft/earnings/FY06/earn_rel_q2_06.mspx
They are also the fastest growing segment, up 40% Q/Q. Compare:
Segments
............................................ q2..........q1.....% growth
Client......................................3459......3193...8.3
Server and Tools.......................2907.....2542...14.4
Information Worker...................2979....2825.....5.5
Microsoft Business Solutions.........242......207.....16.9
MSN........................................593.......606...-2.1
Mobile and Embedded Devices.......101.......72....40.3
Home and Entertainment ............1556......1373..13.3
There are still fantasists (especially at 1src.com, but D.O. comes to mind also), who are waiting for MS to abandon WM. I hope this silences them once and for all.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: Doom for PSRC - WM division makes first profit!!!
Go MSFT!!!
"****ing Eric Schmidt is a ****ing *****! I'm going to ****ing bury that guy, I have done it before and I will do it again! I'm going to ****ing kill Google!" - Steve Ballmer (punctuated by the tossing of a chair)
RE: Doom for PSRC - WM division makes first profit!!!
It remains to be seen whether Windows Mobile can start catching up with Linux-based systems on smart devices. And of course it remains to be seen how much of that Linux momentum the rebranded Palm OS for Linux will be able to capture. But as I've said before, the important numbers for both Microsoft and PalmSource are the overall market numbers and the fact that the wireless operators are looking for differentiation more than consolidation when it comes to device platforms. It's not going to be a winner take all market, and if ACCESS/PalmSource execute well on their new OS I expect them to do very well right along with Microsoft and Symbian.
David Beers
Pikesoft Mobile Computing
Software Everywhere blog
www.pikesoft.com/blog
RE: Doom for PSRC - WM division makes first profit!!!
The quarter should see the release of no less than two new Treos which would permit Palm to GORGE themselves on the FUD/panic of people abandoning BlackBerries. If nothing else, a number of people are buying Treos "just in case".
It's hard to increase marketshare when you have one ANCIENT model with feeble specs and one new model that's exclusive to ONE domestic carrier.
Pilot 1000-->Pilot 5000-->PalmPilot Pro-->IIIe-->Vx-->m505-->T|T-->T|T2-->T|C-->T|T3-->T|T5-->TX
RE: Doom for PSRC - WM division makes first profit!!!
There was also the Dreamcast (that runned a previous version of Windows CE), but it was gone years ago and never sold well.
But set-top boxes, automotive solutions, thin clients and other stuff are still kind of "sci-fi" devices here. :-P
PPCs aren't. We can see their presence growing and growing at specialized stores shelves and e-commerce business.
RE: Doom for PSRC - WM division makes first profit!!!
I'm not saying Windows Mobile isn't making headway, just that there's no way to gauge that from looking at profits for the whole division, especially when the non-WM products are doing so well these days.
Actually there is some information available about the WM vs WinXP Embedded split, at least for Q3 2005 and Q3 2004. Its from this statement from the Financial year 1Q2006 10Q filling.
In the three months ended September 30, 2005, revenue for Windows Embedded operating systems increased $12 million or 57% and revenue for Windows Mobile software increased $11 million or 41%.
Using elementary school algebra, its simple to work out that in Q3 2004 WM made $26.8 M and WXPE made $21.05 M. In Q3 2005 WM made $37.8 M, while WXPE made $33.05 M (the workings is left as an exercise to the reader ;) )
So the split is pretty even, and they seem to be growing step-in-step.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: Doom for PSRC - WM division makes first profit!!!
So the split is pretty even, and they seem to be growing step-in-step.
That's the revenue split. WM's problem to date hasn't been revenue but profit. How much of the divisions cost is attributable to Windows Mobile?
Not to rain on your parade or anything, but I notice that Office Depot has completely pulled their PocketPCs and is nothing but Palm now. So it's not all good news out there for Windows Mobile.
David Beers
Pikesoft Mobile Computing
Software Everywhere blog
www.pikesoft.com/blog
RE: Doom for PSRC - WM division makes first profit!!!
How much of the divisions cost is attributable to Windows Mobile?
The nice thing about software, the cost of doing business is not directly related to the amount of product you distribute (which is why you can give it away for free). With shipments increasing profit should increase in step with revenue, while cost of revenue should be pretty constant.
David said
Office Depot has completely pulled their PocketPCs and is nothing but Palm now. So it's not all good news out there for Windows Mobile.
HTC would beg to differ.
HTC Q4 sales, income rocket
By Tony Smith
27th January 2006 10:18 GMTTaiwan's HTC saw sales leapt 66.2 per cent sequentially during the fourth quarter of FY2005, according to the PDA-phone maker's provisional, unaudited financial results.
For the three months to 31 December 2005, the company realised revenues of TWD27.53bn ($862.32m), well up on the previous quarter's TWD16.56bn ($518.71m). Then, HTC reported a net income of TWD2.78bn ($87.08m) before tax - for Q4, the figure had risen 84.5 per cent to TWD5.13bn ($160.69m).
For the full fiscal year, HTC reported unaudited revenues of TWD72.78bn ($2.28bn), up 99.9 per cent on FY2004's total, TWD36.40bn ($1.14bn). Income before tax rose even more sharply year on year: by 205.3 per cent from TWD3.96bn ($124.04m) to TWD12.09bn ($378.69m).
During the year, HTC launched a series of critically acclaimed Windows Mobile-based PDA phones and smart phones, including the 3G-based Universal, sold as the i-mate Jasjar, the O2 XDA Pro, the T-Mobile MDA IV and the Orange SPV M5000 among others. HTC's numbers show it has built a solid business making devices mobile phone networks can offer under their own brands.
The coming year is expected to see the introduction of a large number of new models, including handsets that will support the High Speed Data Packet Access (HSDPA) speed boost technology for 3G networks. It is also known to be preparing a GPS-equipped PDA, along with a number of 3G smart and music phones.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: Doom for PSRC - WM division makes first profit!!!
How much of the divisions cost is attributable to Windows Mobile?
Surer wrote:
The nice thing about software, the cost of doing business is not directly related to the amount of product you distribute (which is why you can give it away for free). With shipments increasing profit should increase in step with revenue, while cost of revenue should be pretty constant.
That's extremely naive. The cost of doing business as a software company has as much to do with the support services, marketing (technical and otherwise), licensee services, etc. as it does the salaries you pay to developers. All those costs increase as you ship more software and it's always a very real question whether a software company (with less resources to burn than Microsoft) has a business model that will enable it to survive its own success. Microsoft is still subsidizing Windows Mobile heavily and this too is a real cost that has to be factored in if you want to know whether the product is profitable. Having said that, my point is not that Windows Mobile is still losing money--I don't know that, and I'd be surprised if their balance sheet wasn't looking up in the current market. My point was that none of what you have presented proves otherwise.
I wrote:
Office Depot has completely pulled their PocketPCs and is nothing but Palm now. So it's not all good news out there for Windows Mobile.
Surer wrote:
HTC would beg to differ.
Perhaps, but you're sidestepping the issue, aren't you? If HTC (which makes the Treo 650, too) is doing well while HP's retail channels implode what's the net for Windows Mobile? And I thought we were talking about software not hardware. Wasn't your point that Microsoft was making money from Windows Mobile not the licensees it's been subsidizing?
David Beers
Pikesoft Mobile Computing
Software Everywhere blog
www.pikesoft.com/blog
RE: Doom for PSRC - WM division makes first profit!!!
That's probably because you are familiar with the consumer devices that are available. I'm aware of large deployments of Win CE devices in the wholesale flower and cattle industries in South America. I'm sure there are plenty of folks in Brazil's government and military that are using them on the job, too. Just as consumer software (like the shareware you buy from Handango) is only the tip of the mobile software iceburg, consumer PDAs and smartphones are just the tip of the mobile device iceburg.
David Beers
Pikesoft Mobile Computing
Software Everywhere blog
www.pikesoft.com/blog
RE: Doom for PSRC - WM division makes first profit!!!
Now you are just arguing for the sake of arguing. Its obvious that support costs would increase much slower than revenue, especially for a relatively mature product such as windows mobile. Also MS only supports its OEM's, not end users. Again support costs will increase much slower than revenue.
Lastly, again it should be obvious that if distribution of devices increase, so will the sale of licenses. Did you know that one WM license is $16 (probably less for HTC, but it gives you a ball park figure). One WXP embedded license is about $90, and for a Point of Sale device about $100. I'm sure the support for each individual shop using their product is much more trouble than the 40 odd WM OEM's.
Canalys numbers for Q4 2005 will be out soon. I hope they are able to provide more useful numbers this time than 3 months ago, but I have no doubt that WM sales have increased significantly, possibly even to 3 million/quarter.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: Doom for PSRC - WM division makes first profit!!!
Nah, just keeping you honest, Surer my boy!
Its obvious that support costs would increase much slower than revenue, especially for a relatively mature product such as windows mobile.
Microsoft has operating expenses on the order of $4.5 billion, mostly from selling "mature" products. Sorry, but until someone shows me a breakdown of the income statement that shows what they make from licensing Windows Mobile versus what they spend producing and selling it I'm not going to be particularly impressed by these numbers. The burden of proof is still on you, amigo. Lay off the fan boy shtick and go get us some real numbers!
David Beers
Pikesoft Mobile Computing
Software Everywhere blog
www.pikesoft.com/blog
RE: Doom for PSRC - WM division makes first profit!!!
Sorry, but until someone shows me a breakdown of the income statement that shows what they make from licensing Windows Mobile versus what they spend producing and selling it I'm not going to be particularly impressed by these numbers.
Way to go with asking for the impossible. I'll get right back to you when MS e-mails me their detailed financials ;)
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: Doom for PSRC - WM division makes first profit!!!
I just wanted to point out that XP Embedded devices would be far more expensive, per license, that WM. The revenue split might give some people the impression that there are almost as many XPE devices being sold as WM, whereas the fact is that you could probably get 20 WM licenses for the price of one XPE.
RE: Doom for PSRC - WM division makes first profit!!!
Dear Palm Apologists - Don't fool yourselves thinking that WINMOB will lose money forever. Even if they do, it DOESN'T MATTER. How much money does MSFT make directly on Internet Explorer??????? Think about it.
p.s. that Steve Ballmer quote is real.
RE: Doom for PSRC - WM division makes first profit!!!
Agreed. Windows Mobile is a loss leader that helps drive corporate sales of Exchange Server and SQL Server. At the end of the day, that's all Microsoft needs it to be. That business model is what makes it sensible for them to subsidize WM for now. It's also the focus that made WM smartphones prior to the 700w so vulnerable to the Treo and Blackberry, since those sell to a large market of customers who care more about a certain user experience than about interop with Exchange Server or SQL Server. That tiny companies like Palm and RIM survive and grow in the shadow of a Leviathan that outspends them many times over is testament to, among other things, the fact that people want lots of different things from their mobile devices. Anyone who thinks we're going to move to one dominant mobile platform that wipes out all the rest in the next decade is making a big mistake, IMO.
David Beers
Pikesoft Mobile Computing
Software Everywhere blog
www.pikesoft.com/blog
RE: Doom for PSRC - WM division makes first profit!!!
Even if they do, it DOESN'T MATTER.Agreed. Windows Mobile is a loss leader that helps drive corporate sales of Exchange Server and SQL Server. At the end of the day, that's all Microsoft needs it to be.
I think thats a bit unfair. You are taking the fact that I cant prove that they are making a profit to mean that they are definitely not. With growing shipments and expenses being stable, they would have to be criminally stupid not to make a profit. Also with MS being under a lot of scrutiny from investors sceptical about growth potential, they would again be stupid not to take advantage of the one booming market (cellphones) which still excites consumers.
And its not all about Exchange. That narrow focus is actually Blackberry's weakness. What has windows media, PlayForSure and directX have to do with Exchange? Its about providing a full end to end solution for all your mobile tech needs. If MS does not take the territory, some-one else will. And if they are making it profit there, so can MS.
Finally, it would be a good thing if the whole market moved to a single platform. Its only then that innovative and useful solutions will follow, due to the decreased cost to third parties of serving the mobile market, and the bigger returns possible due to this. I think its becoming inevitable actually.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: Doom for PSRC - WM division makes first profit!!!
Surer wrote:
And its not all about Exchange. That narrow focus is actually Blackberry's weakness.
If its corporate email focus is BlackBerry's weakness then you really have some explaining to do about the BlackBerry phenomenon! :-)
What has windows media, PlayForSure and directX have to do with Exchange? Its about providing a full end to end solution for all your mobile tech needs.
Yes, but again, you're dodging the question--which you brought up, not me: do any of these things add anything significant to Microsoft's bottom line when all is said and done.
In my opinion, these are great features for a tiny number of enthusiasts like you and the others who hang out on forums like PalmInfocenter, but they very well may not create enough sales revenue for Microsoft to justify their cost. That's because the vast majority of consumers who want to do music or multimedia would prefer to do it on an inflexible, do-one-thing-only device like the iPod over an infinitely flexible do-anything mobile computer. (This is starting to merge with the Michael Mace LifeDrive thread, now.)
Getting back to the report that started this whole discussion, isn't it interesting that people who own smart phones own twice as many other mobile devices like PDAs and music players than people who use "dumb" phones. Apparently, people who buy smartphones do so not because they are totally multipurpose devices that obviate the need for other mobile computers or devices. They probably want them because they handle all their communication needs well. For handling all their mobile documents and data or delivering entertainment they seem to prefer dedicated devices.
This fact is antithetical to Microsoft's mobile vision which is that Windows will let you do everything with one device. It's a nice vision for a geek like Bill Gates to talk about (or you or me) but for the MSFT accountants the thing that adds up is that Windows Mobile devices make Exchange and SQL Server more valuable to their corporate customers and sell licenses to those high-dollar products. It doesn't matter to them that the vision is something that only has a nice sound during a keynote address.
David Beers
Pikesoft Mobile Computing
Software Everywhere blog
www.pikesoft.com/blog
RE: Doom for PSRC - WM division makes first profit!!!
David, I think your US focus (or my european one) is stopping us from seeing eye to eye. Over there WM phones are quite rare, and ipod's very popular. Over here you can get a WM PDA phone or smartphone free on contract(http://tinyurl.com/8k5fb http://tinyurl.com/a57gl ) and available in baby pink! There is a natural pressure on mobile devices to intergrate. Mobile phones have become the Attractor, and they are swallowing up all the other gadgets. Just look at the impact camera phones are having on the sale on digital cameras, and the effect smartphones are having stand alone PDA's. Do you seriously think the Ipod is immune to this? Is Sony Erricson wasting their time with the Walkman phone? Will the HTC Muse (http://us.gizmodo.com/gadgets/cellphones/htc-muse-is-coming-134776.php) be a complete flop?
MS, with its full featured mobile OS, is positioning itself welll to take advantage of this trend. Blackberry, being a one trick pony, will be decimated when some-one else offers a comparable service cheaper. If they dont want to die they better diversify, and fast.
That's because the vast majority of consumers who want to do music or multimedia would prefer to do it on an inflexible, do-one-thing-only device like the iPod over an infinitely flexible do-anything mobile computer.
The only real advantage stand-alone users have is less complexity and ease of use. These are far from insurmountable problems. Or maybe in USA they are. Other countries seem to feel the complexity is worth it.
According to Berg Insight Analyst Sabine Ehlers, the most significant trend in the Japanese mobile phone market is the emergence of the phone as a ubiquitous tool for "most personal electronic needs." Phones travel everywhere with users, Ehlers says, and service providers have created services that enable phones to be used to pay, check in, enter, and travel, just by waving the phone in front of sensors.For example, in Japan, 30 million handsets with contactless chips have been used to pay for items in seven million shops, Ehlers notes. Meanwhile, a music download service launched in November of last year has already racked up five million song downloads.
According to the Berg Insight report, phones are available in Japan with FM receivers and transmitters, TV capabilities, GPS systems, and safety features such as child location trackers and one-button alarms. Additionally, phones there can remotely control and view images from cameras, robots (such as the Sony "ROB-1" pictured at right), and other electronics devices.
http://linuxdevices.com/news/NS9956382512.html
David, its not me seeing what I want to see. The trend to more complex, more intergrated devices is very clear. The 'cult of Ipod' is just a current exception. I suggest some more travel to more advanced markets.
"The future is here. It's just not widely distributed yet." -William Gibson
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
Get a clue, Beersy
Get a clue, Beersy. Last time I checked, smartphones were expensive, cutting edge devices that are too pricy to sell to the average consumer. And as far as I remember, early adopters - the kind of people that buy cutting edge devices - tend to buy a LOT more equipment (especially high end single purpose equipment) in general than Joe Sixpack or Betty Budweiser types. So much for your "smartphones aren't so smart" theory. Try to remember that we're still VERY early in this whole smartphone development. The ideal form factors and feature mixes are still being worked out and currently ideal specs are too expensive. Once we start seeing small, inexpensive clamshells smartphones with large OLED screens, huge memory, hi speed wireless, Wi-Fi, VoIP, 6 megapixel cameras, USB host ability etc we'll see them quickly "obviate the need for other mobile computers or devices".
What's happened to you, Beersy? You continue to disappoint.
TVoR
------------------------
Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.
------------------------
The Palm eCONomy = Communism™
The Great Palm Swindle: http://www.palminfocenter.com/comment_view.asp?ID=7864#108038
NetFrontLinux - the next major cellphone OS?: http://www.palminfocenter.com/comment_view.asp?ID=8060#111823
RE: Doom for PSRC - WM division makes first profit!!!
HA! sr4, get with the times. The DOOM occurred the day Yankowski donned the gold pinstripes. :-? ie, Palm gave away the golden goose.
Pat Horne; www.churchoflivingfaith.com
Gates thinks phones are a better way to spread computing
Hard cell by Gates? Computer phone
Paper reports the Microsoft founder thinks mobile phones are a better way to spread computing.
January 30, 2006: 7:27 AM EST
NEW YORK (CNNMoney.com) - Microsoft founder and Chairman Bill Gates believes cell phones are a better way than laptops to bring computing to the masses in developing nations, according to a published report.
The New York Times reports that Craig Mundie, the No. 1 software provider's vice president and chief technology officer, told the paper that both he and Gates believe that turning a specially configured cell phone into a computer by connecting it to a TV and a keyboard is the best way to spread the power of computing.
http://money.cnn.com/2006/01/30/technology/microsoft_cellphones/index.htm
RE: Gates thinks phones are a better way to spread computing
mobileministrymagazine.com
antoinerjwright.com
RE: Gates thinks phones are a better way to spread computing
thanks, 'Toine. i guess that's why you're a multi-Billionaire and he's not.
Announcing the 11 best PalmOS smartphones of 2005:
Liar! PalmOS will live on FOREVER in out hearts - and in those "Magnificent 11" PalmOS smartphones that came out in 2005:
Palm Treo Vapora
Sony Sublimatrix
Garmin Gasea
Tapwave Evapide
Samsung Myst
Symbol Steame
AlphaSmart Evanesce
Kyocera Volatizique
Fossil Fögge
HandEra Hazé
Oswin Flatulenca
There's no place like home... there's no place like home... there's no place like home... there's...
TVoR
------------------------
Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.
------------------------
The Palm eCONomy = Communism™
The Great Palm Swindle: http://www.palminfocenter.com/comment_view.asp?ID=7864#108038
NetFrontLinux - the next major cellphone OS?: http://www.palminfocenter.com/comment_view.asp?ID=8060#111823
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Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...