2012: The year in review

2012: The year in review

January

There was a new man at the helm of Research In Motion. Former chief operating officer Thorsten Heins  stepped into a weakened company as the former co-CEOs and founders Mike Lazaridis and Jim Balsillie were unable to keep up with the rate of change in the smartphone market.

HTC was another company hopeful of a turnaround. After a shaky 2011, it announced plans to focus on a more streamlined range of hero products. However, the devices’ promise did not translate to sales and it slipped in the UK sales rankings at the expense of Sony. The latter showed off its first products since buying out Ericsson’s share of its former joint venture at the Consumer Electronics Show in Las Vegas. Its new Xperia devices became one of the year’s success stories, and Sony would overtake HTC as the UK’s number two Android maker by the end of 2012.

Carphone Warehouse said it would bounce back from the declining prepay market by focusing on the rollout of its Wireless World store formats. Carphone Warehouse Europe CEO Roger Taylor said tablet, accessory, app and content sales would replace ailing prepay revenues.

February

LG lost its second head of mobile in six months as Warren Lewis abruptly left the business. The manufacturer was advised to give Lewis’ replacement greater autonomy, revamp the brand and sort out its product portfolio.

Virgin Media flirted with taking part in the 4G auction, saying next-generation mobile services were ‘critical’ for its business. But later in 2012 it changed its mind and chose to concentrate on rolling out a network of small cells.

T-Mobile shook up the market with a new unlimited data tariff. The Full Monty, backed by a series of barmy adverts, saw the operator win share from rivals, and both O2 and Vodafone came to market with their own spin on unlimited propositions. Phones 4u also brought a new perspective to contracts, with the Jump offer allowing consumers to upgrade their handset every six months.

In what became one of the most-viewed stories of 2012 on Mobile’s website, MVNO Alpha Mobile left customers angry after it went under. Customers claimed the business had been trying to talk them into putting more money into their accounts in the days before it ceased trading.

Everything Everywhere, O2 and Vodafone kicked off after the Competition Appeals Tribunal slashed mobile termination rates. A key source of revenue for the big beasts of the UK industry, each of the operators’ CEOs blamed falling sales on the changes.

March

Quad-core was the buzzword at Mobile World Congress as the industry made its annual pilgrimage to Barcelona. Panasonic played the hokey-cokey with the European smartphone market – in March it was in with its Eluga smartphone but out by August.

HTC unveiled its new One series of Android handsets, which it backed with one of its biggest ever ad campaigns, while Nokia held its hands up about mistakes it made when marketing its Lumia smartphones. Vodafone Group CEO Vittorio Colao got into a spat with EC digital agenda commissioner Neelie Kroes after he attacked the commission’s ‘continuous intervention on prices’.

Elsewhere, Apple smashed its first record of 2012, shifting three million new iPads during the first four days of sale. But the tablet wasn’t new enough for Apple, with a fourth version and a mini iteration coming to market just a few months later.

Windows Phone showed its first signs of biting into the UK market, with sales outperforming those of Nokia’s former operating system Symbian for the first time.

Simmering resentment about the plans for the 4G auction burst into the public domain for the first time, after Vodafone CEO Guy Laurence accused regulator Ofcom of ‘taking leave of its senses’ for allowing rival Everything Everywhere to refarm its 1800Mhz spectrum for 4G. Not content with that, it then accused Ofcom of overengineering the auction.

Virgin Media won the role of providing commuters with Wi-Fi on the London Underground. It was free throughout 2012 and it also signed deals with EE and Vodafone to bring it to their customers in 2013.

April

Samsung’s stellar year was underlined with the Korean manufacturer overtaking Nokia as the world’s number one mobile phone manufacturer, thanks to a diverse product portfolio and aggressive marketing.

It was a bad month for Nokia, as its switch to Windows Phone in late 2011 did not stop it from issuing a profit warning. While retailers and operators backed the move to Microsoft, they said the company needed to move faster to break the Apple and Android duopoly.

Sony also warned of heavy losses, and pledged to put mobile at the heart of its turnaround strategy. The manufacturer said it was cutting 10,000 jobs as it bid to claw back heavy losses.

Three got busy with its retail stores after reporting its first ever full-year profit.

It trialled new-look branches in Middlesbrough, Birmingham and the Bluewater shopping centre in Kent. It was so happy with the results that later in 2012 it announced a two-year plan to revamp its stores.

Vodafone also hit the halfway point of its £50m store transformation. The operator admitted to taking a leaf out of Apple’s book in its modular design, which it hoped would allow consumers to get hands-on with new devices.

T-Mobile was the first operator of 2012 to announce a mid-contract price rise for customers. Rivals followed suit throughout the year, blaming the rising costs of doing business, but this failed to placate consumers. Later, in the autumn, Ofcom announced it was looking into the issue because of the anger it was causing among consumers.

May

The changing face of indirect retail was underlined as Three and Phones 4u ended their trading relationship. Both companies said sales were minimal and Three wished to focus more on its direct proposition.

O2 became the latest operator to launch a mobile wallet service. The O2 Wallet allowed users to shop at more than 100 online retailers or send texts to other users. It initially shunned an NFC feature, arguing the technology was a long way from catching on. But it revealed later in the year that it was looking to introduce it soon.

LG’s search for a new UK head of mobile was over, after Samsung’s global account director Andy Coughlin quit one Korean manufacturer for another. Meanwhile, at Samsung, its eagerly awaited Galaxy S III hit the market, breaking records along the way.

Manufacturers were very much on the minds of operators and retailers, who argued that cheaper smartphones were needed to reverse the decline in the pre-pay market. Both Carphone Warehouse Group CEO Roger Taylor and O2 CEO Ronan Dunne said manufacturers were focusing too much on high-end handsets.

June

A bad month for BlackBerry manufacturer RIM as it revealed it was delaying the Q4 launch of its eagerly-awaited BB10 operating system to 2013, as well as cutting 5,000 jobs.

Ofcom was ‘wrong on all counts’, according to O2, after it gave Everything Everywhere the go-ahead to launch 4G services in late 2012, months ahead of its rivals. Everything Everywhere was undeterred, launching 4G trials in Bristol and Cumbria.

O2 and Vodafone teamed up to pool their infrastructure resources. The Cornerstone project led to both operators increasing their sites by 40% but a spectrum share was off the cards.

A1 Comms burst back onto the high street, after tying up a deal to buy Shebang’s Purple Partnership franchise business and 100 Go Mobile stores.

Microsoft signalled a desire to take on Apple’s iPad, after revealing its Surface tablets. The devices, which came with an attachable keyboard, would not be launched until the autumn. However, the devices were hampered by a lack of distribution and mixed reviews.

Google finally completed its $12.5bn acquisition of Motorola Mobility. The takeover, seen as largely driven by the desire to snatch Motorola’s patent portfolio, saw CEO Sanjay Jha replaced by former Google ad sales chief Dennis Woodside.

July

A third of O2’s customers, some 7.6 million people, were left irate after its network went down for 24 hours. CEO Ronan Dunne (pictured) admitted he was embarrassed by the outage and knocked 10% off the bills of affected customers. But it would not be the last outage to hit O2 in 2012…

In one of the many court tussles between manufacturers this year, Samsung won a case against Apple after being accused of copying the iPad. It had the dubious pleasure of being told by a UK judge that its devices were not ‘cool’ enough to be confused with Apple’s tablets. HTC also had success against Apple in the courts, winning a UK case where it was accused of copying touch-screen technology, including Apple’s ‘slide to unlock’ feature.

Apple put the thumbscrews on operators and retailers, as anticipation built for its new iPhone. It was asking UK companies to stump up more cash for Apple’s marketing campaigns.

A new entrant to the mobile market was unveiled, with Mozilla planning to bring its Firefox OS to the UK by late 2013. The devices will run web-based apps, so will be cheaper to build and operate.

August

The London 2012 Olympics saw a record increase in data consumption, with Vodafone dubbing it ‘the first truly mobile Olympiad’. Its customers consumed 15% more data than usual. On 11 August, when Mo Farah, Ed McKeever and Luke Campbell each won gold for Team GB, the data consumed through its network was equivalent to that of one person streaming video continuously on a mobile for almost 40 years.

There was a new man at the top at RIM in the UK. Rob Orr stepped into the shoes of Stephen Bates, who was appointed regional managing director for Europe. The manufacturer started sending out test versions of its new BB10 handsets.

O2 CEO Ronan Dunne suggested that the way operators do business was ‘unsustainable’ given the huge levels of investment they make and that the subsidy model had to change. Rivals privately sympathised with Dunne’s opinion although were sceptical the market would kiss goodbye to subsidies completely.

Everything Everywhere sought fresh focus in the MVNO space, looking to partner with 30 companies by mid-2013. It signed a deal with Atmovia to allow it to bring greater scale to partner companies. Elsewhere in the MVNO sector, TalkTalk muscled into the market with a new handset proposition, with competitive tariffs starting from £5 per month.

September

After months of speculation that it was ditching its own name, or Orange or T-Mobile’s, Everything Everywhere came clean as it revealed it was launching 4G in the following month. The operator would become EE, rebranding more than 700 branches and signing deals with a glut of smartphone manufacturers for next-generation handsets.

The Government bashed heads together and forced operators to stop squabbling and work together to bring forward the launch of 4G services by six months in 2013. There was a palpable fear that legal action could derail the rollout of next-generation services completely.

A busy month saw the sudden exit of Carphone Warehouse UK MD Matt Stringer, as the retailer pledged to move back to basics.

Apple won an eye-watering $1.05bn in damages from Samsung after an American court found the Korean manufacturer in breach of copying its patents. The case is still rumbling on at the end of the year as Samsung looks to have the ruling overturned and Apple pushes to have Samsung products banned from the US.

Motorola Mobility said it was making bigger bets on fewer products as it unveiled its first smartphone since it was formally taken over by Google. The launch of the Razr i was overshadowed by the news it was cutting 20% of its global workforce.

And then there was the small matter of the announcement of Nokia’s new Windows Phone 8 handsets and some device from Apple called the iPhone 5.

October

In an ideal world, Apple would have been cheered for its launch of the iPad mini. But the smartphone pioneer had an uncharacteristically hapless month as it dealt with the fallout of its recent launch of Apple Maps. iOS chief Scott Forstall bore the brunt of the criticism for the widely mocked product, exiting along with head of retail John Browett, who had joined in April and barely had time to get his feet under the desk.

Carphone moved on from the exit of its MD with the announcement it was axing 200 head office jobs. The retailer said it was reorganising to focus on specific groups of customers, rather than shifting product.

Just months after its network fell over for 24 hours, O2 experienced another outage, this time affecting fewer customers (10%) but lasting for several days in some cases. The operator paid out £10m on sharpening its network in the wake of the second outage.

Retailer Phones 4u stepped up the rollout of its concessions in Currys and PC World, aiming to have 65 of them by the end of 2012. It said like-for-like sales at the shops had increased by 50%.

And finally the UK had 4G services: EE officially launched on 30 October.

November

The new Windows Phone 8 devices hit the market, armed with a £25m Microsoft war chest. The software company said it was targeting the mid-market with devices from the likes of Nokia, HTC and Samsung.

Vodafone hit back at EE’s 4G launch with a £4.5m ad campaign, highlighting a 4G early upgrade guarantee. EE threatened to complain formally about the adverts, saying its rival could not promise a 4G service when it did not have any spectrum.

O2 looked to raise money by making almost half of its businesses franchises. The move was driven by ‘tough economic conditions’ and it predicted it would make around £4m. Speaking of cash, grim financials for Nokia continued as it lost almost €1bn and warned it would have a lower than normal boost from the frantic Christmas shopping season. There was better news for Samsung, after new research claimed the Galaxy S III had overtaken the iPhone 4S to become the world’s bestselling smartphone.

Android marked its fifth birthday with its popularity at an all-time high, with three out of every four smartphones running the OS. As Android 4.1 Jelly Bean started rolling out, Google was warned that manufacturers would not have long-term faith in the OS if they continued to make losses.

December

The 4G auction formally kicked off with operators paying an initial deposit of £100,000 to take part. Rumours of a new entrant to shake up the market appeared to be unfounded but operators were sceptical the Government would make the £3.5bn it is expecting from the spectrum sale.

Texting celebrated its 20th birthday with the humble SMS overtaking talking as the UK’s most popular means of communication. But it was revealed the UK consumer was using more mobile data per month than any other country.

O2 bounced back from its two network outages to cement its position as the UK’s favourite operator for customer service. There was reason to be cheerful for Three as it leaped up the rankings after a focus on how it deals with customers.

LG was boosted by its Nexus 4, with demand far outstripping supply. Its L-Series of handsets also performed well, having shifted 10 million units during the course of the year.

EE stepped up its rollout of 4G-ready cities, with 35 targeted by the end of 2013. Vodafone said more needed to be done to help operators implement improvements to its network as the current planning system was too slow and bureaucratic.

There was a final warning for manufacturers jetting off on their Christmas holidays. While demand for smartphones was booming, new research found the entire handset market was growing at its slowest rate for three years.

Written by Mobile Today
Mobile Today

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