BlackBerry has finally been taken off the market, almost… Question is, does the consumer market care? What does it bode for BlackBerry to be taken private. Our analysis of social buzz surrounding recent events show that although the Fairfax offer is incredible important, the recent launch of BBM on iOS and Android products is still driving the most buzz for Blackberry faithful.
We believe this shows the market is hopeful for the deal and what it means for the BlackBerry faithful regarding the future of their favorite handset manufacturer. The rapid adoption of BBM across the mobile ecosystem also signals the extension of the BlackBerry experience by growing roots under the walled gardens of Apple and Google. In the wake of Dell’s recent privatization, these trend signals willingness by members of the private equity community to place bets on opportunities that the market refuses to see.
Our friends in Finland are moving to Redmond. What will be key is what baggage Nokia is bringing over in the shipping containers. Beyond the obvious war chest of intellectual property, patents, insanely good supply chain management, Nokia is also bringing the highest performing Windows handsets with them. Will it be enough to push Microsoft’s hardware game into the extra innings they need?
Nokia’s flagship phones are doing well in the battle for mindshare against Samsung, Apple and the like. For the consumers that are seeking an alternative to the Sam-pple hegemony, Nokia is second only to the HTC One. Our analysis at Argus Insights has shown of the falling fortunes of RIM, LG, and dynamic fluctuations of HTC, have opened opportunities for Nokia. As you can see from the chart above, the low end handsets have similar consumer responses as the low end handsets of LG, Samsung and the rest, while the high end, even the much maligned 42 megapixel Lumia 1020, have solid footholds in the hearts and minds of consumers.
What does this mean for Microsoft? How can they capitalize on Nokia’s strengths? With Googl-Rola finally marching out the Moto X (and despite the gadget community being excited, early consumers, not so much) and Apple’s continued dominance, Microsoft has to deploy a competitive hardware play. While the Surface Pro continues to see uptake by consumers, it has consigned Microsoft hardware to “serious” enterprise users that are trying to get work done. The acquisition of Nokia’s consumer hardware business has the chance to soften Microsoft’s corporate edge for consumers. And Nokia knows hardware. Their supply chain is almost without parallel. Their challenge since the launch of the iPhone has been to understand how to blend software and hardware experiences into a seamless whole. This is the biggest opportunity for the new entity, and if executed correctly, could build out a bright future for both Microsoft and consumers.
As Samsung reports their quarterly report with a mix of excitement and caution (Samsung Boosts Capital Spending as High-End Phone Demand Slows – Bloomberg), Argus Insights sees their caution warranted for Q3. July brought the first significant drop in consumer buzz for Samsung Smartphone in a long time. What made the drop even more poignant was that Apple saw a boost in demand. This drop in buzz was coupled with a drop in delight meaning that consumers expectations for what a Samsung Smartphone brings to their lives are not being met.
The weakness of the S4 coupled with the desire to phase out the S3, compounded by the confusing launch of four separate Galaxy Note 3 handsets this fall portends a challenging 2013 for Samsung. The market leader has to lead the market in more than just sales and invention of technology driven features, it has to lead with value and innovation to the end user.
We recently did some analysis for the Embedded Vision Alliance looking at consumer adoption vision technologies in consumer electronics. If you’re curious, you can see the slides here. The shocking result was how little of the Galaxy S4 customers even mention the eye-tracking features. The graph below shows the volume of eye-tracking mentions compared to the overall mentions. Previously we’ve commented on the S4’s poor launch into the market but this may shed some light as to why that’s was the case.
Samsung’s biggest push in the marketing was the ability of the Galaxy S4 to do cool things by tracking your eyes. It was featured in all their commercials and was the backbone of their “next big thing is already here” campaign refresh. Turns out it wasn’t that important to consumers. Less than 5% even mentioned what Samsung considered to be the most important feature of the Galaxy. Let’s put a fine point on that. Samsung spent millions of dollars telling the world about these vision based interface features and it only resonated enough with 5% of their customers to even mention it?
Here’s the kicker, of that 5%, over 60% did not like the feature. They found it “twitchy” or “erratic”. One particularly passionate consumer even called it “fake.” The other theme that arose from the naysayers was the impact these features had on battery life, causing their S4 to lose joules faster than Coca Cola’s share price evaporating.
To be fair, those that loved these features, really loved them and found Samsung’s brand promise of a “Life Companion” rings true. But that was for just 2% of all consumers that bothered to review the product.
This could be the reason the S4 was slow the launch. The features that Samsung pushed in an effort to drive demand literally no one wanted. When you strip the vision features from the S4, it looks a lot like the S3 (which is still doing brisk sales by the way). Like selling solar powered heaters in the Sahara, Samsung staked their flagship launch on what the market did not want. Pushing features over experience will do that to you. While the Galaxy S4 seems to be recovering now, its not that more consumers are discussing Smart Pause. Consumers cite the screen size, application responsiveness, anything but the vision based features, as reasons for purchase. LG just released a firmware update to enable the same feature set on the LG Optimus G Pro and so far no one has even mentioned it. The market is not yet ready, partly for performance issues, partly for not finding compelling needs that these features solve for. Maybe the S5…
For the company formerly known as RIM, Friday was a tough day because of revelations that fewer than half of the handsets sold were BB10 handsets according to BlackBerry pleads for patience after brutal quarter | Mobile – CNET News. While CNet puts blame on the launch of the Q10 after the Z10, our analysis finds that the issue isn’t the launch order of the new products but consumer concerns with the Q10 in specific.
As you can see in the comparisons to the Apple iPhone 5 and the Samsung Galaxy S4, BlackBerry’s new handsets are experiencing slack demand. The initial delight around the Z10 has stabilized above the iPhone 5, showing that the early adopters of BB10 are delighted by the innovations embedded in the interface. The Q10, by contrast, has had a rougher start with few consumers even bothering to share their views, a key indicator of poor demand though recently it has gained in both delight and buzz. Overall, our results tell the story that the market is viewing BlackBerry as two companies, the stalwart producer of email focused, QWERTY enabled handsets and an upstart entrant into the smartphone market that has to play by the same rules of any new brand entering a market. The issue is the upstart has not yet sparked the frenzy BlackBerry or Wall Street needs or expects.
We will be digging into the differences in user expectations for the Q10 and the Z10 in this week’s Smartphone Consumer Demand Report. You can sign up to receive the report here and get weekly updates on what is driving Smartphones while your competition is still waiting for their quarterly report to download…