Analyst Speak: Mobile sector has seen a complete changeover of its leading players

29 October 2009

With many quarterly reports just published, the mobile industry has seen what might be a landmark moment. Nokia, the untouchable behemoth of the handset world, posted its first operating loss, £426m (£384.6m), since it started publishing quarterly results in 1996. It’s facing serious challenges to claim back the innovator spot it last held when the N95 drew gasps of wonder thanks to its GPS and camera. Meanwhile, former industry darlings Motorola and Sony Ericsson saw their shipment numbers melt, down 47% and 43% year on year in Q2.

The epicentre of mobile is no longer Scandinavia, it’s somewhere between Mountain View and Cupertino, respectively headquarters of Google and Apple. Both posted insolent results in the face of the current climate - $1.6bn (£962.5m) net income each - and are now the companies to measure up to. The global economic meltdown was barely a bump in their growth.

This is no small feat. Every major handset manufacturer that isn’t backing its own operating system will feature an Android handset in the next six months. Companies such as LG, HTC, Motorola, Samsung and Sony Ericsson are committed to an OS they should arguably have created in the first place. Google’s Android is ideally placed to become the default smartphone OS unless paying a premium for an alternative. Screen Digest estimates Android could be on 15m smartphones in 2010.

In its latest market monitor highlighting trends in mobile funding and mergers and acquisitions, Screen Digest witnesses the ongoing consolidation around mobile services, with most usual suspects picking smaller companies whose roadmaps align with the likes of Apple, AT&T, Google, Nokia, NTT DoCoMo, RIM or Yahoo.

Furthermore, Q3 sees a significant upturn in VC funding targeting mobile, a 180% quarterly growth to $530.8m (£319.3m). Although it’s too early to consider ourselves out of the woods, exciting developments include social network aggregation, augmented reality, mobile payments and femtocells, not to mention technologies deployed to fuel the smartphone-driven thirst for rich content.

Things might never be the same. The two hottest companies from both sides of the pond - Twitter and Spotify - rely on their service turning into a commodity and are on the brink of fixed or mobile becoming irrelevant. These two darlings of the moment share a lack of clear revenue model that has pundits talking and analysts modelling.

Have your say

Please do not complete the following form field for security reasons.

Name

E-mail

Comment

Post as

Anonymously

Display name

I have read and agree to the terms and conditions