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Handset manufacturers ramp up launches for second half

Samsung ATIV S

Samsung's Windows Phone 8 phone

The second half is typically when major mobile launches occur but, this year the activity seems particularly strong as manufacturers look to make a splash before the important holiday-giving period and, hopefully, take attention away from the growing competition.

Amazon, Nokia and Apple are all expected to make major product announcements in the coming weeks, following Samsung’s recent revelations about a new Windows Phone 8 line. Manufacturers are ramping up for a strong second half following a first half that saw some of the slowest growth rates experienced by the smartphone market.

“[The number of major announcements] is not typical, but we did expect a large number of competitive announcements around the time of the launch of the sixth generation iPhone,” said Carl Howe, vice president of research and data sciences at Yankee Group, Boston.

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“When Apple has a new product on the market, it has a tendency to suck out all the air from older products in the market, so the key for competitors is to get their products into the market ahead of Apple's.”

All eyes on iPhone
Apple has traditionally announced new iPhones in the fall and the expectation is that the company will do the same this, with rumors flying about what capabilities the new phone may have.

Some also believe Apple will unveil an iPad mini soon, a development that has the potential to shake-up the market for 7-inch tablets where Amazon has had significant success with its Kindle Fire.

While Apple’s mobile products are frequently met with significant consumer demand, the pressure is on the company to continue the momentum as competition heats from Samsung.

“The iPhone 5 had better have the biggest impact of the season – it needs to,” said Michael Morgan, analyst at ABI Research, New York . “If it doesn’t, then you can start scaling back growth projections for the iPhone.

“It will be important to see if they can still make meaningful additions to the platform to continue to drive the growth rate,” he said. “They are running out of new places for them to go – the iPhone is already in quite a few countries.

“The sales bump is going to have to come from the large install base being willing to renew and upgrade to the new device.”

Samsung steals Nokia’s thunder
Nokia, which has seen its once leading role in mobile phones be whittled away by the competition recently, will make an announcement tomorrow that is expected to include Windows Phone 8 devices. The company has a lot riding on Windows Phone 8 as its feature phone business is shrinking and it needs a stronger presence in smartphones in order to continue to drive sales.

However, Samsung may have stolen some of Nokia’s thunder when it announced last week the new ATIV S smartphone running on the Windows Phone 8 operating system.

The new phone is expected to be available in October.

“Nokia’s Windows Phone 8 devices may be too little, too late,” Mr. Morgan said. “Samsung already announced its Windows Phone 8 device and it is the way that a Windows Phone 8 device should be.

“Focusing on making the device as good as you can and bringing down the cost later is a good move,” he said. “Samsung will create an ecosystem around Windows Phone, something Nokia can’t do.

“This might the last hurrah for Nokia with Windows Phone 8 unless it is incredibly successful.”

Windows Phone is the dark horse in the mobile market. It has not taken off yet but reviews for the OS have been strong and companies such as Nokia and Samsung – as well as Microsoft - are putting lot behind developing devices that can compete with iOS and Android.

Amazon stokes Kindle’s fire
Later this week, Amazon is expected to announce its newest Kindle Fire. The company made a big splash last year with the introduction of its Android tablet so the industry will be watching closely to see if it can repeat that success this year.

Last week, Amazon said it had sold out of the original Kindle Fire. For the new device, reports suggest that Amazon is partnering with Nokia to provide mapping and GPS navigation.

“Amazon did pretty good with its last tablet and hopefully this one will be the proper iterative step,” Mr. Morgan said.

“We will see if they can continue to add pressure on pricing in the tablet market,” he said. “We are already seeing prices come down.”

Microsoft will introduce its own Surface tablet in October and Apple is expected to introduce a smaller iPad this fall as well.

The Android ecosystem will be pressing forward with the Google Nexus 7 tablets and other Jelly Bean devices in phones and tablets.

“The big challenge there will be the fallout from the Apple/Samsung lawsuit -- that appears to already be having a chilling effect on Android demand,” Yankee Group’s Mr. Howe said.

Some of the other expected second half developments that have the potential to shake up the market include Samsung’s introduction of Tizen-based HTML 5 device and the enabling of technologies such as NFC, cloud services, DLNA, WiFi Direct in newer devices, which will provide new experiences and could prompt users to upgrade their devices.

“The mobile devices industry has been hot than ever with rising smartphone and tablet demand propelled by a growing ecosystem of mobile platforms,” said Neil Shah, senior analyst for the global wireless practice at Strategy Analytics, Newton, MA.

“The industry is not limited to battle between OEMs such as Nokia, Samsung but expanded to platform, social and e-commerce vendors such as Microsoft, Google, Facebook & Amazon,” he said. “To add, flagship product launches for almost all these players now follow annual refresh cycles and are clustered towards the pre-holiday season period.

“And, the ongoing market share, profit share and patent wars between these players have intensified the competition and thus the new product launch activities compared to previous years.”

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Manufacturers, iPhone, iPad mini, Apple, Amazon, Kindle Fire, Nokia, Samsung, ATIV S, Windows Phone 8, Yankee Group, Carl Howe, Strategy Analytics, Neil Shah, ABI Research, Michael Morgan, mobile marketing, mobile

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