Mossberg Talks About The Rise of the Super-Smartphone

Mo'Bullet Snacks

• Mobile Industry cognoscenti continue to discuss the catastrophic launch of Nokia's Ovi Store
• Verizon Wireless announces it will start supporting Java for smartphones on its network
• KongZhong (KONG) hits 52 week high & announces new focus on mobile games
• Twistbox/Mandalay Media (MNDL) CFO Jay Wolfe steps down abruptly & is replaced by Russell Burke
• Multiple reports about depleted inventories of the current iPhone model fan rumors/speculation that Apple will announce a new model next week
• D7 demo of the Palm Pre, the announcement of iTunes support & concerns over June 6th launch-day inventory levels further enhance the hotness factor of this device
• Mobile Streams (MOS) continues to enhance it's porn portfolio with the launch of new UK D2C site Porncasa.mobi

Uh...Duh! Data Confirms Everyone IS Buying a Smartphone

Like a data drug dealer Gartner teased the results of it's $1,300 Q1 2009 WW Mobile Devices survey with some free databytes showing that overall handset sales fell 8.6% in Q1 2009, but that smartphone sales increased 12.7%. Nokia was the leader...though some would argue that many of their Symbian handsets that Gartner characterized as smartphones don't really fit the bill. I think RIM looked pretty impressive from a product portfolio standpoint with over 7mil units sold and, of course, as an individual device the iPhone continued to be the hotness du jour with 4mil units in Q1. Bottom line is that kids, my mom and everyone wants a mobile with a full QWERTY keyboard, that can browse the internet via 3G and/or wifi and handle email.

Diamond In The Tweetarrhea...iPhone v3 Leak Courtesy of TelecomNZ

Great post on MobileCrunch this morning. More fuel on the fire that Apple is indeed preparing to launch the 3rd version of their rockstar iPhone...this time courtesy of a reference in a "tweet" from Telecom New Zealand's official Twitter account (ooops!). Twitter's kinda like that guy in the office with verbal diarrhea...most of the time it's tedious, but occasionally there's a gem that makes abiding the drivel all worthwhile.

Many (including myself) anticipate that the new device will be announced during Apple's Worldwide Developers Conference in SF on June 8th.

RIM Jobs...BlackBerry Throws iPhone A Curve

The Register is reporting that an NPD survey of the US smartphone market in Q1 2009 has revealed that RIM's workhorse BlackBerry Curve outsold the exalted iPhone. Here's the Top 5 in order:

1. RIM BlackBerry Curve
2. Apple iPhone 3G
3. RIM BlackBerry Storm
4. RIM BlackBerry Pearl
5. T-Mobile G1

This specific result & the fact that RIM jumped to ~50% share of the US smartphone market can be attributed to: 1) Verizon Wireless's Buy One, Get One promotion on BlackBerry devices during the Feb & Mar 2009; 2) iPhone sales cooling to 1.6mil units (down from 2.4 in Q4 2008) as the faithful eagerly await the announcement of the next model; 3) RIM's diverse, quality and still aspirational product line.

btw -- Palm has totally dropped off the map...that Pre can't come soon enough.

Another interesting data point in this NPD survey highlights a trend I've been tracking for months now...the transition of US consumers from "dumb phones" to smartphones. According to NPD the US handset market for smartphones jumped from 17% in Q1 2008 to 23% in Q1 2009...which is great news for those companies that provide mobile entertainment experiences for consumers. This trend will continue...if not quicken over the next year. Frankly, I think within 5years it's possible that the 12key mobile handset goes the way of the dodo.

Dell: Stop Flirting With Smartphones & Turn to the Palm

Rollercoasters usually make me want to barf, but the undulating speculation associated with Dell's protracted flirtation with the smartphone space are having a curiously soporific effect on me...perhaps because Dell is a brand only corporate IT guys get excited about. Here's the chain of events:

• It all started in February 2007 with a theory in a Gizmodo post that Dell was going to jump into handsets after poaching Motorola device exec Ron Garriques.
• That April the rumor-mill started churning again with speculation in Engadget that Dell and Quanta Computer were working on a handset codenamed "Fly".
• Just before 3GSM 2008 bloggers were advancing a theory that Dell and Google were in cahoots on the project.
• But on a conference call in September 2008 Michael Dell dismissed rumors that the company was working on a smartphone, according to MacUser.
• Buzz was rekindled by an Engadget post this January reporting on industry chatter over a Dell Android or S60 handset.
• Then at 3GSM 2009 (aka MWC) gadget blog GearLog reported that during a panel discussion AT&T Mobility CEO Ralph De La Vega inadvertently blabbed that, "Dell announced they're entering the smart phone market." The rumorazzi went wild.
• Then last week Barron's reported on Kaufman Bros. analyst Shaw Wu's research note that claimed Dell had presented Windows Mobile & Android prototype devices to the US carriers and that they had been rejected for "lack of differentiation" (ouch!!)
• But, just yesterday Computerworld reported that in a Tokyo speech Michael Dell indicated that the company was still exploring a smartphone device.

OK, now wake up...there's more! In the note referenced in the Barron's story above Mr. Wu also mentioned that Dell is exploring acquisitions to help them with their differentiation problem. The author of the piece Eric Savitz ran with this idea, wondering aloud why Dell wasn't bidding for long-suffering Palm. Good idea! Palm knows the ropes with the carriers and that Pre is potential handset hotness.

More Americans Like The Mobile Web More Often

comScore released some numbers about mobile web usage in the US today. Unfortunately you don't get a good picture of overall mobile web usage from this survey, rather you get some understanding of behaviors within specific segments of the mobile internet. For instance it looks like 63.2mil Americans accessed news & info sites (like CNN) at least once in Jan 2009 via their mobile browsers...and 22.4mil did it daily (daily use increased over 100% from a year ago period). Social Networking mobile sites (Facebook, MySpace, etc.) saw a huge jump in daily usage (guilty!)...up 427% from Jan 2008, with 9.3mil daily users. I'm convinced this trend is being driven by the increased popularity of smartphones with full QWERTY keyboards, good browsers (that make it easy for users to browse beyond the carrier deck), big screens and unlimited data plans.

Nokia Noodling Notebooks?

Both Digital Daily and Reuters have picked up on a YLE interview with Nokia CEO Olli-Pekka Kallasvuo in which he suggests that Nokia (NOK) might make a move into the laptop space. Kallasuvo suggests that it would be a logical extension of their business as the capabilities of smartphones and laptops converge (mostly in the form of netbooks). More likely this is a competitive reaction to computer makers like Dell (DELL) and Acer (2353) pushing into the mobile phone business where Nokia is currently the market leader. There is little doubt that Nokia could pull it off...the big question raised in the Reuters story is whether it makes sense for Nokia to compete in a much more commoditized product category, with much lower margins.

Glu Mobile 2008 Earnings...Hoping For a Less Sticky 2009

I look forward to Glu Mobile's (GLUU) quarterly earnings calls like kids look forward to Christmas. Because they are one of the larger public mobile pure-play companies the calls are a great barometer of the overall state of the mobile games business and always feature lots of valuable mobile business data points. Moreover, I think all of us vested in the health of the market for mobile games based on entertainment IP desperately want to Glu Mobile to succeed. Here are the key take-aways:

2008

• Q4 2008 Rev = $21.6 mil Net Loss = 37.8 mil
• FY 2008 Rev = $89.8 mil Net Loss = 107 mil (ouch!)
• 34% increase in Revs over 2007
• Top 4 carriers = 42% of Revs, Verizon was a whopping 23%
• Non-carrier business (iPhone, Android, N-Gage) was insignificant in 2008
• 54% North America 27% EMEA 19% Rest of World (10% China)

2009

• Q1 2009 Estimate Rev = $18 mil to 18.5 mil Estimated Net Loss =$6.7 mil to $7.1 mil
• FY 2009 Estimated Rev = $76 mil (15% decrease!) Estimated Net Loss = $16.6 mil to $19.6 mil
• $19.2 mil in cash on hand at end of FY 2008
• Plan is to be Cash Flow Positive in 2009 (Profitability is clearly off the table)
• 75% - 80% of IP for 2009 games will be licensed...big movie titles for 2009 are Watchmen & Ice Age 3
• Glu Mobile will release fewer titles in 2009 than 2008 (more like 2007 volume)
• The Dark Knight: Batmobile (co-Published with WB) got as far as 8th place in the iTunes App Store giving Glu Mobile the ability to model Rev potential of a Top 10 title in that channel
• 30% to 40% of Glu Mobile's development capability is focused on iPhone, N-Gage and Android
• Headcount is currently 560

DATA NUGGETS (all this is from Glu Mobile's perspective)

• The global economic downturn is hurting mobile games business as consumers curtail new handset purchases (most games purchases happen in first 90days of ownership)
• Consumers are migrating to Smartphones (see Cabana's Trend Watch)
• 17 mil iPhones Worldwide (additionally iPod Touch is a factor in App Store games). iPhone has the highest tie ratio to games purchases of all handsets (2nd is BlackBerry Pearl)
• Richer merchandising environment in iTunes App Store means non-established brands can flourish
• iPhone App Store is allowing smaller publishers enter the business, but ultimately larger companies that stay focused on the platform will consolidate market share (as happened on carrier decks)
• Executives at the carriers are paying more attention games due to there success on iPhone, but this is not yet being reflected in marketing initiatives

THQ Wireless Almost Finnish?

THQ Wireless (a division of struggling THQ) is going to focus exclusively on games for smartphone platforms and will move all its production to its Universomo studio in Finland according to IGN. The move will result in 100 layoffs in the US, UK and Germany. Currently the division generates about $20mil in revenue and is not profitable. The frenzy to jump on the smartphone bandwagon is becoming worrisome...and it makes one wonder how many games publishers those platforms can sustain and whether some companies stand to benefit by continuing to support Java & BREW platforms.

2 More Reasons For iPhone To Dominate Industry & Consumer Mindshare

1) Information Week is reporting this morning that Apple is planning video conferencing applications for the iPhone. Cool...if this is true it'll be like Japan 4 years ago! Wonder what the monthly tariff from AT&T will be on that service?

2) Consumer adoption of the iPhone and other smartphones (one of my TREND WATCH items) is apparently behind a 17% increase in downloads of mobile games in 2008 according a ComScore release last Friday. The iPhone accounted for a whopping 14% of all mobile games downloads in November 2008 with 32.4% of iPhone users having claimed to have downloaded at least one mobile game in that month...which is pretty impressive since the average across all device users is still a paltry 3.8% in a month.

RIM Baking Delicious BlackBerry StoreFront Pie

In anticipation of RIM's (RIMM) planned March 2009 opening of it's StoreFront applications marketplace (think iTunes App Store or Android Market) the Canadian smartphone manufacturer began accepting submissions to their developer site on January 19th. Early word is that StoreFront will be managed more loosely than carrier decks or the iTunes App Store -- with restrictions primarily being related to bandwidth usage. Additionally, all apps must support OTA download and purchase via PayPal. The good news for developers is that the revenue split is a generous 80/20 in favor of the developer! Some reports have expressed concern about the inherent lack of "application memory" space in current BlackBerry devices...but I'm sure our friends to the north are on this as their devices become more consumer and media focused.

Totally Tubular...dude

According to an Engadget break Nokia (NOK)has now shipped a cool 1 million units of its 5800 XpressMusic "Tube" touchscreen smartphone following a strong December in select markets and a boffo UK product launch. The 3G S60 handset features a 3.2in 16:9 touchscreen, accelerometer, 3.2 megapixel Carl Zeiss camera, video camera that shoots 640x480 pixels at 30fps & front video camera for video calling, 8GB standard memory, Bluetooth 2.0, stereo speakers and TV out...and guitar pick stylus that actually kinda rocks. It's FCC approved...so US launch can't be far off, right?

I categorize it: Likey without touchy