Corporations are people, right? Some politician somewhere said that once. And if corporations are people, they can be graded like students. We thought we’d play the teacher for our year-end retrospective on the mobile industry, handing out a report card to each of the major smartphone manufacturers.
We considered each company’s flagship phones for the year, how well they sold and how the company marketed them to the public. Only a few manufacturers received grades worth telling Mum about, while others will have to do some extra-credit work to get ahead next year.
Of course, some of these companies make a lot of different products (hello, Samsung). These grades reflect only their smartphone efforts.
It should come as no surprise that Apple’s had yet another successful year, though industry watchers had some doubts early on. The iPhone 5 dropped late last year to fantastic reviews. Estimates suggest that it will end up at 90 million units by the end of the year, but that’s not enough to keep Samsung from outselling Apple.
Then, in October, Apple staged a comeback with the iPhone 5s and iPhone 5c, both of which helped earn the company another opening weekend record. With the iPhone 5s, Apple refocused its efforts on hardware, with the inclusion of features such as a fingerprint scanner, a motion tracker, a dual-tone flash and a new 64-bit processing architecture.
Apple’s second-tier device, the iPhone 5c, reflects the company’s plans to get its devices into more hands around the world. In the new year, Apple will extend its reach by partnering with companies overseas, like China Mobile. If the iPhone catches on in those markets, Apple could surpass Samsung in worldwide popularity. It’ll need to move fast, though, since Samsung is beginning to make Apple look a little like the sleeping hare in this race.
Apple’s only real shake-up this year involved the release of iOS 7, which introduced a flat interface and a host of new features to modernise the antiquated design of versions past. There’s a lot to like in iOS 7, but consumers didn’t immediately respond positively to it, and many even complained that its new animations were causing them motion sickness.
By the criterion of global sales, Samsung reigns supreme – in fact, the company’s executives are likely rolling around in a pile of cash right now – but financial prosperity doesn’t automatically translate into a 4.0 for the company this year.
The Galaxy S4, Samsung’s flagship handset of the year, sold 40 million units in its first six months on the market and the manufacturer’s third-generation phablet, the Note 3, sold five million units in its first month. Though its market share flattened out during the third quarter of this year, the company’s overall smartphone sales were still up by 10 percent. And as Gartner’s marketshare comparison chart (below) indicates, Samsung remains in the lead by a huge margin.
Nevertheless, we can’t overlook Samsung’s missteps in 2013. Its primary strategy this year seemed to be to launch handsets in almost every conceivable size, as if to ensure that no one had an excuse not to buy one. One model, the Galaxy Mega, is so comically huge that Samsung’s arsenal of large-size devices was beginning to approach self-parody. The company also has a habit of repackaging some of its older phone models and distributing them in various markets under different aliases.
Let’s not forget the company’s various PR faux pas this year. The Samsung Unpacked 2013 event started off as a second-rate Broadway spectacle, and degenerated into a series of politically incorrect skits. The event’s jaw-dropping awfulness illustrated that Samsung, though quite accomplished at producing devices that people want, still hasn’t figured out how to establish a friendly identity for itself of the sort that Apple has exhibited over the years. Samsung also flubbed the numbers of its processor speeds to score higher on benchmark tests. We’ve already expressed our views on benchmarking, but the whole episode made Samsung look desperate.
Last, there’s the issue of the Galaxy Gear, which was supposed to mark the company’s entry into wearables, but ended up being a flop, even though it did sell more units than Pebble’s and Sony’s wristwear. The Galaxy Gear felt half-finished and was riddled with bugs and malfunctioning features – yet another example of Samsung’s willingness to go to market with (unready) new products, just for the sake of being first.
Samsung plans to continue offering a spectrum of low- and high-end devices, while likely attempting to extend its mobile business into its own ecosystem. You’d be hard pressed to find much similarity between Samsung’s version of Android and Google’s, and Samsung even held its first annual developers’ conference to try and attract app makers to develop for its own proprietary app marketplace.
Even though Samsung has enjoyed a year of profitability that practically any other company would like to have had, we can’t overlook its PR transgressions and the disappointment that was the Galaxy Gear. Samsung did its work, but the means to get there weren’t organic, so we’re sticking the company with an A-.
We began the year pondering Motorola’s future. 2012 wasn’t exactly fruitful for the company, but we knew that Google was going to do something with the company after shelling out US$13 billion for it in 2011. After months of rumours and speculation about the ‘X Phone’, Motorola eventually released the Moto X – which proved to be one of the best phones of the year.
From the beginning, we loved its always-on, always-listening technology and ultra-efficient processor. Rather than play the specs game, the handset focuses on making your life more convenient. And because it operates under Google now, Motorola doesn’t need to be profitable on its own. Even if it loses money, its products are promoting Google’s technology, which is a win for both parties. If it can continue to ride Google’s coattails and offer consumers a peek into the future direction of Android, Motorola may find itself in a top three list sometime soon.
HTC is like a genius student who aces the important tests, but doesn’t bother to do any homework the rest of the year. That student shouldn’t expect to get a high grade without doing the required work. In HTC’s case, though it launched a stellar product, it failed to market it properly.
The HTC One, the company’s flagship handset that was supposed to help it get back on track, has all the makings of a winning device: a speedy processor, a custom version of Android that looks better than the versions other companies offer and a camera that can capture low-light photos, all wrapped up in a stylish, aluminum body. But a shortage of components and a scattershot rollout made sales a bit slow. Plus by the time the One became widely available, consumers had a number of other new Android phones to choose from.
Arguably the company’s biggest bomb of the year was the HTC First. Promoted as the phone that would bring Facebook Home to the masses and help HTC penetrate emerging markets, the First appealed to no one. And yet the phone wasn’t all that bad – you could even delete Facebook Home if you didn’t want it, and just use an older version of stock Android.
In the area of executive departures, the company lost several key players as it posted a net loss of about US$102 million. Those numbers and the executive turnover didn’t make the company look too good on paper, or give the public much confidence in HTC’s future, though it did hire the recognisable Robert Downey Jr as its spokesman.
The company’s latest strategy, according to CEO Peter Chou, is to reincarnate the One repeatedly and pass it off as several different phones – which sounds a lot like Samsung’s strategy for selling a large number of devices to stay at the top. If you really want to show your HTC love, you can spend US$2500 on a gold-plated HTC One.
We’re not suggesting that HTC didn’t try hard this year, but in view of the company’s struggles – in particular the clumsy launch of the highly lauded One, and the negative press surrounding its numerous executive departures – HTC should consider itself lucky to get a C.
We liked LG’s handset line-up this year. The Optimus G Pro was a beautiful piece of hardware and, even though the G2 features unconventional button placement, it’s a powerful device with top-tier specifications. Google obviously likes LG, too, since it stayed with the company as the manufacturer of the two latest iterations of the Nexus handset. But on the innovation front, LG seems to be cribbing off the papers of the top students in the class, Apple and Samsung.
It’s not that LG doesn’t innovate. LG was one of the first companies to market this year with a 1080p-enabled phablet, and the G2 was the first to come equipped with a Qualcomm Snapdragon 800 processor – but its current marketing strategy doesn’t seem to resonate with US consumers.
At least it’s doing all right financially, managing a 24 percent profit increase in its mobile business, though it fell to fourth place in global market share. Next year, the company needs to try something different, especially as Apple begins to hit the Asian markets where LG makes most of its profits. Maybe the LG G Flex will turn some heads after all.
Nokia is a solid smartphone manufacturer, but nothing it produces rises above the plateau of being merely good. Beyond their exceptional photo-taking abilities, the members of Nokia’s Windows Phone family have little to distinguish themselves from the rest of the mobile industry.
This year saw the introduction of the Lumia 925, the Lumia 928, the Lumia 1020 and the Lumia 1520. That’s a lot of Lumias – and a confusing line-up for consumers. Nokia tried all sorts of tricks to gain new followers: promoting its camera abilities, bringing official versions of popular apps on other platforms to the Windows Phone and launching devices in two other product categories. All were worthwhile endeavours, but Nokia is still just carrying the torch for Windows Phone and playing catch-up against Android and iOS.
With the promising news of Windows Phone’s growth in Europe, the likelihood that manufacturers like Samsung and HTC will never again produce a Windows Phone smartphone, and the probable finalising of Nokia’s partial buyout by Microsoft in 2014, things are looking up for the Finnish company. For now, though, Nokia had better plan on spending the winter holiday doing some make-up studying.
There was some hope for BlackBerry at the beginning of the year, and we were impressed by the company’s new operating system. The BlackBerry 10 OS had some interesting new elements, including gestures, spot-on keyboard predictions and a unified notifications centre. But it wasn’t enough to entice customers back to the platform.
The BlackBerry Z10 was a huge sales failure. It didn’t help that the handset had an oddly staged rollout – BlackBerry even fibbed on the numbers in the beginning in hopes of concealing the phone’s worse-than-hoped-for sales figures. The company eventually followed up with two more handsets to try to reach a broader range of consumers, but in the sea of Samsung Galaxies and Apple iPhones, BlackBerry simply couldn’t compete.
We could be seeing the end of a company that once defined the mobile industry. BlackBerry has dethroned Thorstein Heins, the once optimistic CEO who preached BlackBerry’s resurrection, and will rely on a US$1 billion investment from Canada-based Fairfax Financial to try to stage a comeback. By targeting emerging markets – the same markets that Apple and Samsung are gunning for – with its BBM messaging platform, BlackBerry could reemerge as a cross-platform software company. Will it work? Well, we thought the company’s comeback would happen this year, and instead it’s still circling the drain.
What’s in store for next year?
Smartphone makers will likely continue to expand their business globally. Untapped markets in Latin America, Asia and Africa are rife with new users who rely on a smartphone as their only internet device – which is why manufacturers have made such a push for cheaper phones.
The high-end smartphone market, in contrast, has remained mostly stagnant this year. Sure, we saw incremental hardware updates and high-definition displays come to all handsets, but most devices failed to deliver anything game-changing. As smartphones become faster and more energy-efficient, consumers will worry less about what’s inside and more about the software experience.
Wearables – maybe smartwatches or maybe something else – could catch on with consumers, too. Apple may launch a related product next year, but the space is still so nascent that we can hardly tell if the trend is a gimmick or a movement.
by Florence Ion, TechHive