A new wave of aggressively priced smartphones is causing feature phones to disappear, according to industry experts.
Momentum is growing in the sub €200 market, fuelled by Symbian and Android moving into prepay. Operators see this as a good revenue stream as the extra data gives them additional ARPU.
Android is growing as Asian and Chinese manufacturers target a new segment, says CCS Insight analyst Geoff Blaber. ZTE, Huawei and Alcatel are particularly targeting branded operator phones such as Orange, Vodafone, and T-Mobile, he adds.
And in contract, the feature phone is disappearing. Blaber (pictured) says: ‘We talk about the smartphone and feature phone but smartphones are dominating in that space. At certain price points – €200, £30 tariffs, feature phones are starting to look thin on the ground.’
Operators are now putting their propositions on five or six platforms instead of 20 or 30 as they were a few years ago. Blaber says: ‘In subsidized markets, it’s the manufacturers and the operators. The operators want an ARPU uplift from data usage and over and beyond that, there is a benefit in mass platforms.
‘If you think an operator is putting its proposition on five or six platforms instead of 20 or 30 as it was a few years ago,’ he adds.
The reality is, the networks want to drive data – and Android has a particular advantage on the number of price points it can do.
CCS Insight says Android will overtake Apple in the next two years at a European level because of the push behind it from Asian manufacturers and operators.
Blaber says: ‘The HTCs and Sony Ericssons need to maintain a level of flexibility. There is room for more than one but with more emerging players, Android is easy and more flexible and is a growing market.’
He adds: ‘We aren’t seeing a huge amount of consumer appetite for smartphones but consumers are buying phones for what they do rather than what it is – experience selling.’
The interesting question is where Nokia will go. Blaber says: ‘While we are seeing a lot of entry-level Android, Nokia has the opportunity to target with Symbian. It’s still a strong player. Nokia is being attacked from all angles – there isn’t a category where it doesn’t feel the pressure.’
MeeGo enters battle of the Platforms
MeeGo, the platform that combines Intel’s netbook focused Moblin platform with Nokia’s cross-platform application framework Qt, could upset vendor driven offerings from Apple, Google, and Microsoft.
The platform represents the first concerted effort to create a complete, robust, and scalable device and application platform that spans an array of device categories. It also offers operators and manufacturers total freedom to modify the platform and user experience as desired.
But analyst firm Ovum doubts MeeGo’s short-term ability to upset the ‘increasingly vertically integrated, vendor driven offerings from Apple, Google, and Microsoft’.
Tony Cripps, principal analyst at Ovum, said the volume and variety of devices on which MeeGo is deployed may prove meaningless unless the consistency in the underlying OS is not matched by its ability to provide a true multi-screen application platform for developers.
‘The reality is that Nokia and Intel need to sell more MeeGo devices if they want access to the potentially lucrative seam of tools, consulting, and systems integration surrounding cross-platform, multi-screen application development that Qt offers.
‘For the wholesale leveraging of Qt to become a reality, developers must ultimately be persuaded that it is a better cross-platform, cross-device application and UX platform than the alternatives.’
Orange targets Android with own-brand devices
Orange is targeting the mid-range market with own-brand Android smartphones at £100 price points.
The network will launch one device with Huawei in June and one device with ZTE in August, across the European footprint. More devices will follow later in 2010, with up to four launching in the UK.
Initially, the handsets will be Orange branded, but later this year they will feature ‘grade A’ manufacturers such as LG, Orange devices chief Patrick Remy told Mobile.
Orange is aiming for 50% of its mobile portfolio to be Smartphones by 2013, with ‘affordable’ smartphones driving that growth. Currently, smartphones make up 15% of the Orange portfolio.
Remy said: ‘We have seen a dramatic growth in smartphones. In 2009, 15% of all devices were smartphones and this will double in 2010 to one third of devices. We expect this figure to grow to 50% by 2013.’
The move is the latest development in Orange’s multimedia strategy, announced in Barcelona in 2009. Remy said: ‘We had noticed that only one in 10 customers were buying smartphones but we thought that sector had potential for the majority of our customers.
‘We worked on defining segments and matching the devices with the right services and tariffs in 2009 and we were happy with the results.’
Over a 12 month period, Orange’s smartphone customers grew from 10% to 25% and data traffic trebled, Remy added.
In the UK, the handsets will be available on contract ‘entry level’ tariffs of around £15. It will then be developed for prepay customers.