Seven years ago most people used either a Blackberry or Nokia as their mobile device. They were the two hottest telecoms companies of the day. Blackberry had a market capitalisation of over $50bn, whilst Nokia as a whole was valued at $150bn. Move forward to today. Blackberry is almost in freefall with poor takeup of recent product lauches, whilst Nokia was snapped up by Microsoft for $7bn and soon its name will disappear from the mobile marketplace.
The death knell was sounded when the iPhone arrived and Blackberry was too slow to react. Mike Lazaridis, who was then co-CEO of Research in Motion, was asked in 2007 about the threat from Apple’s phone. “How much presence does Apple have in business? It’s vanishingly small,” was his reaction, and he was dismissive of the idea that anyone would want a phone without a keyboard. The response from Nokia’s executives was similar. Only in recent times have they given up on the Symbian software and moved to windows based devices.
So, is anyone ready to predict that in six years Apple and Samsung will have fallen from grace in a similar style? Of the two who has the most to fear? Well Samsung have become the market leader and Apple’s recent releases have not perhaps had the wow factor of a few years ago. This is highlighted by the fact that for the first time Apple are offering trade-ins to encourage people to upgrade. But Samsung latest release resulted in dismissal of their leading designer.
Since Steve Jobs died there have also been software issues, notably the maps fiasco and reports of blue screening with the IPhone 5S. The IPhone 6 launch brought forth stories of devices bending in pockets, heavy memory usage and even pulling women’s hair out. Can the price premium be sustained? And, if they are forced to cut prices, will that reduce the resources needed for the vast amount of marketing they undertake to create the brand people desire? It certainly creates for an interesting 2015.
The fastest growth of 2014 was in sales of Windows phones. Microsoft is focusing on the telecoms market with its acquisitions not just Nokia but also Skype. With sales of Lync also expanding – they can make a challenge in both the fixed and mobile space. Samsung also play in that space but it is an area where Apple is weak. As devices become more integrated could that be a chink in the armour.