Microsoft-Nokia Pact: Logical, But Not Necessarily Appetizing

[qi:083] Updated: The deal expected to be announced between Nokia (s NOK)  and Microsoft (s MSFT) today, which would see Microsoft adapt its Office products for Nokia smartphones, would be is a desperate play. But not nearly desperate enough. The pact, by which Microsoft hopes to boost the fortunes of its Office software (threatened by Google, Linux and smaller companies like Zoho), and Nokia hopes to crank up sales of its smartphones (under siege from Research in Motion’s BlackBerry (s rimm) and the iPhone (s aapl)), is akin to taking two leftovers from your fridge, popping them on a plate and hoping people find the combination appetizing. Perhaps when the two companies hold their conference call today at 11 a.m. ET they’ll at least announce a special sauce to bring this whole mess together.
When it comes to the smartphone market, which is not only growing during the economic downturn, but is allowing Apple and RIM to walk away with 31 percent and 35 percent of the margins in the handset industry, respectively, Nokia needs to do something to protect its margins, if not its market share. Nokia sells a lot of phones, but most of them are cheap and carry low margins. So this deal with Microsoft, designed to appeal to the corporate customer, is clearly Nokia’s attempt to sell more high-end phones to enterprises. Read More about Microsoft-Nokia Pact: Logical, But Not Necessarily Appetizing

Handset Market Goes From Bad to Better

[qi:gigaom_icon_mobile] The global market for handsets in 2009 will shrink 7.5 percent from the prior year, according to a blog post written today by ABI Research. That compares with a prior contraction forecast of 8.1 percent. The firm revised its global handset sales outlook following a better-than-anticipated first half of the year.

And while ABI analyst Kevin Burden expects industry consolidation driven by vendors’ need to support more hardware platforms, operating systems and applications, as well as an overall pressure on profits, he doesn’t see that consolidation taking place until 2010 and beyond. From the post: Read More about Handset Market Goes From Bad to Better

Location Data Adds Spice to a Variety of Apps

Location information is becoming a lot like salt — some folks think adding it makes every app better. Data released today from Skyhook, a company that uses Wi-Fi signals to provide location information, notes that location data is popping up in ever more mobile applications, from the expected, like travel and navigation apps, to the bizarre, like medical and music apps. The report notes that paid apps using location-based services outnumber the free ones in the well-established Apple (s aapl) App Store and are likely to gradually outnumber the free apps in other popular app stores as they mature. Read More about Location Data Adds Spice to a Variety of Apps

Europe Gets Handset Makers to Agree to Universal Charger

666px-Micro_USB_and_USBNokia (s NOK), Motorola (s MOT), Research in Motion (s RIM), Apple (s aapl) (yes, even Apple) and six other cell phone makers have agreed to a European Commission request to develop a universal charger. The agreement was announced today by the the EC. The new handsets will use Micro-USB connectors, and will be available in Europe beginning next year. The GSM Association had been working on a similar effort to deliver a universal charger by 2012.

Importantly, only data-enabled phones will be able to accept the universal charger, since those are the phones that currently contain Micro-USB ports. While the Micro-USB standard may be replaced by a different one someday, for now having a universal charger will make it easier to replenish phones while on the road. As for reducing waste, I’m less certain that will happen unless cell phone providers stop including a charger with each phone. The EC hopes that the universal charger will spread beyond its borders, which is likely to happen given that the powerful GSM Association is also in favor of such a standard, but perhaps not by 2010.

Our friends at jkOnTheRun are wondering if this standard will make its way to the US? I certainly hope so. 

Micro-USB and USB image courtesy of George Shuklin

Analyst: Nokia to Offer an Android Netbook in 2010

[qi:gigaom_icon_netbook] Nokia (s NOK) plans to launch an ARM-based netbook that relies on the Google-pioneered Android (s goog) mobile operating system in 2010, writes Lazard Capital Markets analyst Daniel Amir in a research note issued this morning. In the same note, he predicts that the total number of netbooks sold worldwide will reach 25 million in 2009 vs. 10 million in 2008, with the majority of them being Intel-based (s intc) machines running Windows (s msft).

Amir said he expects the Nokia notebook to be sold through carriers, which fits with Nokia’s distribution system for mobile phones. From the note:

“In our conversations with ODMs, we have confirmed that Nokia is planning to enter the netbook market with a Google Android, ARM-based netbook that would be sold at carriers. Considering this market is dominated by the PC players, we believe Nokia could face an uphill battle to succeed in this market.”

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Intel-Nokia Deal Could Mean Nokia Netbook Is Near

Updated: imagesIntel (s intc) is expected to announce today that will sell its chips to Nokia (s NOK) for use in the Swedish Finnish handset maker’s mobile devices, according to a report from Bloomberg. The deal may be a coup for Intel’s low-power Atom chips, which it hopes to provide in small computers, embedded devices and eventually, smartphones. Intel’s Anand Chandrasekher, senior VP and general manager of the firm’s Ultra Mobility Group, is scheduled to host a conference call today at 8:30 PT.

If the Bloomberg report is correct, my bet is it means Nokia is building out some type of netbook, not that Intel is making huge inroads into the smartphone market. Intel’s Moorestown chip, which integrates a cellular radio and the low-power Atom processor, is expected in 2010 and may be the star of the press conference. A deal with Nokia, even if it is for a netbook, would validate Intel’s strategy of moving into lower-cost mobile chips for computing and keep Intel’s x86 architecture relevant in a mobile world. I wonder if the proposed netbook will run Nokia’s Symbian operating system or Intel’s Mobilin. Update: The two unveiled “a long-term relationship to develop a new class of Intel Architecture-based mobile computing device and chipset architectures which will combine the performance of powerful computers with high-bandwidth mobile broadband communications and ubiquitous Internet connectivity.” Neither was to discuss any actual products that might come out of the agreement, however.

Global Cell Phone Growth Slowed During Q1

Global revenue growth from mobile phone subscriptions has slowed, according to data released today by research firm Telegeography. The firm notes that the top 20 global service providers generated $251 billion during the first three months of 2009, which was only up 3 percent from the same period last year. Part of the slowed growth was related to market saturation, but Telegeography said it was also tied to the lousy economy, which depressed demand.

India and China, which together accounted for 48 percent of the global growth, were bright spots on the world stage. The U.S. and Canada saw only 2 percent growth, however the U.S. did add 1 million broadband subscribers, demonstrating how wireless data can offer some growth for a carrier in saturated markets. Worldwide broadband subscriber additions during the quarter came in at 14 million. Read More about Global Cell Phone Growth Slowed During Q1

Vodafone Wants to Take a Bite Out of Apple’s App Store

vodafone-logoVodafone (s VOD) today has followed in the footsteps of other carriers concerned about becoming a dumb pipe by unveiling plans for an application store. But the details provided by Reuters have me questioning the success of the venture. First, Vodafone is taking a 30 percent cut of the revenue for all apps, which is what Apple charges, and is pretty close to the 33 percent or 40 percent that phone companies charged app makers in the pre-Apple (s aapl) days. That seems like a lot for a me-too product that developers will be skeptical of.

There’s also the question of the user experience and app discovery. The App Store nailed the user experience — and that’s why it is so successful. Technically savvy consumers want to buy the iPhone; they want to download the apps (and lots of them), and developers don’t mind giving up a cut of their sales to build for the platform. It’s hard to imagine that Vodafone, even with the promise of attracting millions of potential users, can make its app store as sexy. Read More about Vodafone Wants to Take a Bite Out of Apple’s App Store

Google Knows the Mobile Web Isn’t Only About Phones

vintThe mobile Internet will be responsible for getting more of the world online, according to Internet co-founder Vint Cerf, who now works for Google (s GOOG), speaking at a conference in Madrid today. In an earlier post, Om made a similar point, saying that instead of a one-laptop-per-child initiative, we should be thinking along the lines of one smartphone per child. But Google knows access to the web will be about more than mobile phones.
Google, which employs Cerf as vice president and “chief Internet evangelist,” has a stake in mobile web access becoming ubiquitous, not only because more web access equals more people searching on Google and clicking on ads, but because Google has more flexibility in the ways it can control and monetize the mobile web experience as compared to the wired broadband experience. To that end, it has especially high hopes for its Android mobile operating system, which is being used on smartphones, netbooks and eventually on other devices. Read More about Google Knows the Mobile Web Isn’t Only About Phones

Nokia: Profits Down 90%, But At Least We’ve Hit Bottom

Nokia (s NOK) reported financial results for the first quarter today and, despite posting a 90 percent drop in profits, gave investors something to celebrate. The world’s largest cell phone maker said the handset market hit bottom in the first quarter and sales for the rest of the year would be off by about 10 percent from the year prior. Nokia sold 93 million devices from January through March, down 19 percent from 115 million in the year-ago quarter. It also maintained the 37 percent cell phone market share it reported in fourth quarter, down 2 percent from the same period a year ago. Nokia reported profit of €122 million ($161 million) on sales of €9.3 billion ($12.2 billion) for the quarter.
Like Intel’s (s INTC) report on Tuesday, when the chipmaker told the world that the decline in PC sales had bottomed, this news is encouraging — but it’s no reason to get out the party hats. One can coast along at the bottom for a while before seeing things trend up. What these companies are telling us is that many of their buyers have run through the inventory they had on hand when the economy went off the rails last fall, and they’ll now need to start buying replacements.
But the news wasn’t all good. Nokia said the market for network equipment would be down by 10 percent, not 5 percent, as it had projected during its fourth quarter results in January. That’s bad news for the telecommunications equipment makers, who have so far been hard hit by the credit crunch. AT&T (s T) has said it would rein in capital spending in 2009 as have other operators.