Tomi Ahonen Smartphone Prediction Graphs

There was a request in Communities Dominate Brands blog to see the Tomi's predictions in a different format. Here they are.

Please read the blog first. Tomi says these are simplified and hypothetical predictions for the near future. For example, Samsung will be Bada and Android, but it has been simplified to have only Bada in these predictions.

All numbers and predictions by Tomi Ahonen. His work is just turned into a pie here for your convenience.

Why Apple invented iTunes Store

At first

iPod and iTunes came at the same time. At the time, music player had no network connections, but it had to be connected to a Personal Computer. The iPod needed its content, and instead of just implementing a storage media approach via file manager or similar application, a separate software was melted in.

The content

Before moving your audio files into an iPod, you had to have those files. It is possible to convert Compact Discs (CDs) to files. That was the one way. The other way was, and is, to download the audio files you want from peer to peer (P2P) networks. Music industry does not like the latter, because it is not generating revenue to them. iPod has a hard drive for audio and the capacity at that time was enormous. You just could put your entire CD collection into the device and it is not filled up. The next step is to go to the net and start downloading via P2P.

Music industry did not like it, and Apple had to innovate. They started iTunes store. The store is popular, but revenue and profit from it is tiny when compared to devices Apple sells. There is no really any business reason to maintain it. My claim is that it was the pressure from music industry, rather than the business strategy to support the iPod, that created the iTunes Store., Or, do you know a good reason why Nokia has Ovi Music Store?

What happens to books after iPad?

It seems that the same thing may happen to books after iPad. eBooks are already available, but book pricing in P2P networks is more tempting, right?

Smartphone Market Share Diagrams Q1/2010

Here are smartphone market share per vendor for Q1/2010. Different analysts have a slight difference in their numbers.

Canalyst

IDC

Strategy Analytics

Price of the iPhone

Doing some simple math for finance reveals the true price of the phone ownership. The case is for Apple iPhone 3GS 32GB.

ATT USA

iPhone $199, required unlimited data plan $30/month for 24 months.
Math: $199 + $30 x 24 = $919

Vodafone UK

iPhone Free, requires £75 plan which includes 3000 min voice, unlimited SMS, 1GB of data.
Math: £75 x 24 = £1800

Telecom Italiana Mobile Italy

iPhone €719.

Phone is just now killing PC

Mobile wireless smartphones are just starting to kill Personal Computers, PCs. The box-shaped form-factor with separate display, keyboard and mouse has already been transformed into laptops, nettops, netbooks, iPads etc. Now disappearing of that transformed box called PC is closer than ever.

The alternate reality lies in your pocket, the mobile smartphone. You carry it everywhere, it wakes you up at morning and it is with you all the day. It has been used for the small and short tasks, like a replacement of a wristwatch, alarm clock, and of course as a messaging device.

PC is used for the "real work", like planning, writing, drawing, email etc. PCs are used for tasks that last longer, often hours per session. For those sessions, everyone wants a big screen, a proper keyboard, a comfortable mouse, a trackball, a drawing tablet, headphones and other accessory. It is just impossible to work longer without those things. How can a phone with tiny keyboard and small display replace these?

Well, it can't. But right now the connectivity and processing power of the mobile smartphones is gaining rapidly. Bluetooth has been there for ages for audio and keyboards. TV-OUT and HDMI connectors for displays are newcomers, but are there right now. Processor speeds are now at 1 GHz and GPUs are becoming a standard feature. And almost all the accessories that are used with PCs are available in wireless format. Keyboards, mice, headphones etc. If those accessories are not yet compatible with Bluetooth and phones, they will be very soon.

Most of us will soon have a smartphone carried with us, and at home we will have big screen, keyboard and mouse that will be connected to the phone. Our future PC, the mobile computer. The transformation will take years, no doubt. But knowing the replacement rates of mobile phones and PCs, it won't take too long.

This transformation is starting right now. This year, 2010, is the beginning of the end of the PC as we have known it. Watch out and move accordingly.

Hewlett Palmcard: a Negative Approach

Hewlett Packard acquires Palm, a troubled mobile phone maker for $1.2 Billion. Does this mean something for the fast-growing mobile industry? Not really.

Both companies have been strong in the era of PDAs. You remember, those smartphones without a phone. The market of PDAs peaked in 2005 and after that it has been vanished. Those companies have something in common in the past.

Hewlett Packard has been in the mobile handset business before, but not for too long. HP failed to note the move from PDAs to phones and put a calling capability into its devices only 2007. Since then it has been selling HP iPaq phones without remarkable success. Actually, the sales has been falling fairly fast during recent quarters. Why HP has not been using it strengths to gain sales of its own Windows-powered iPaq phones?

But HP is a huge company. It has vast resources and market presence everywhere, and PALM has a nice new operating system. Sales organizations are in shape, technical support has already been helping customers for ages. There is a huge opportunity to utilize the PALM technology and knowledge on mobile through these strengths. True.

But HP is a huge company. Annual sales is well above $100 Billion. PALM sales are below $1 Billion and falling. How much time HP management has to spent with their new acquisition? Just looking at those sales numbers, the answer is "Not too much really". HP may just use PALM as a source of technology. Pick the tech to its products and forget the PALM phones and brand.

Historically two thirds of the mergers and acquisitions fail. Hope you all the best and lots of luck HP and PALM, because odds are not on your side. Work hard, work really hard to understand where you are heading and what is the direction of the mobile businesses.

Sources:

H.P. and Palm – P.D.A. Powerhouses Unite

Mergers and Acquisitions: Why They Can Fail