• The End of Disposable Mobiles

    by
    Ben
    Published on 5th February 2010 01:22 PM
    4 Comments Comments
    In the past, mobile phones have been rather disposable. Rapidly evolving form factors, hardware, and software have made an upgrade cycle of anywhere between 6 and 18 months the 'norm', particularly amongst younger owners.

    The move to touch-screen handsets has finally put an end to the form factor issue. Hardware is levelling out in terms of what is actually practical and useful to have on a mobile phone, and by that I'm referring to a half decent camera, GPS, compass, all rather consistent. New hardware these days tends to be about faster processors and more memory, finally emulating the x86 computer world, allowing the software running upon it to be faster and making way for more powerful applications.

    As a result of this, it is no longer necessary to have a new mobile phone in order to run the latest software, and therefore have the latest features. Nokia, the market leader, have thus far failed to capitalise on this, instead providing updates to its handsets as it has always done; fixing massive bugs, improving performance, and, rarely, adding new features, but only within the remit of the device as it was conceived. Apple and Google, however, have embraced the PC-world OS upgrade model. Which leaves us with this question: Why would any manufacturer want to allow 'old' hardware to run the latest and greatest software, for free, when surely this would cannibalise hardware sales?

    The answer is that neither Google nor Apple care about hardware sales. That's a lie, of course they do, but when you think about it they really don't. Their mobile platforms are revenue enablers. Apple's OS hooks into iTunes and their vast, and extremely polished, shopping nirvana, and Google's OS hooks into Google ad-land, a world of search and services filled with ads, not to mention a growing store-based concept of their own.

    This, in my mind, is brilliant. Less handset churn, less waste, better value for consumers. So long as they keep contributing to the mobile ecosystem by buying/searching/etc on the devices, it becomes economical to keep even the oldest devices, like the original iPhone, up to date. But it poses massive problems for companies like Nokia, who have no established post-sale revenue stream, and Android pushers like Samsung who may not have agreements in place whereby they can realise a share of search revenue - or they do have such agreements, but consider them to be a supplement to profitability or subsidy on handset selling price rather than an ongoing revenue stream to justify OS updates.

    I believe that consumers will gravitate towards devices that manufacturers keep up to date, and that this will, over the next few years, create very loyal and vocal user bases for certain mobile operating systems. Manufacturers who continue to churn out hardware that quickly becomes outdated will ultimately concede high end market share, also known as the most profitable section of the market; currently, and in agreement with my theory, owned in profit-terms by Apple - the company that still updates its oldest mobile phone in line with its latest model.
    This article was originally published in blog: The End of Disposable Mobiles started by Ben
    Categories:
    1. Services
    2. Terminals
    Comments 4 Comments
    1. The Mullet of G's Avatar
      Nokia has failed, how so? Its business model allows it to sell twice as many handsets as its nearest rival, how can that possibly be a bad thing? I don't know of anyone who relishes the prospect of being stuck with the same phone year after year, regardless of how often the software is updated, and its not just phones its pretty much everything we buy, as humans we get bored with things quite quickly.

      I get the pro iPhone and Android stance, but I don't understand this constant need to have a pop at the market leaders be it Nokia or Microsoft. It reminds me of reading Linux or Mac related posts on zdnet, the majority of the posts are having a pop at Microsoft, yet in Microsoft related posts no one even bothers to mention Linux or Mac apart from zealots from said camps. I get the whole minority thing, but seriously just enjoy your product and let others do the same.
      Reply
    1. The Mullet of G's Avatar
      My computer should have one of those mood ring things on it, and when I'm in a bad one it shouldn't let me post. Blame Virgin Media for that post ^^
      Reply
    1. Ben's Avatar
      Indeed, I can see someone swung out of their hammock on the wrong side today!

      I'm not saying "Nokia has failed". I'm saying that Nokia has failed to transition from its old software update strategy to the modern concept of a mobile phone that continues to evolve even after it has been superseded. Despite the Nokia Software Update program, the mindset has remained just as it was when only Nokia Service Centres could perform the updates; they're primarily used to fix problems. The core OS remains the same once you've bought the handset, and to get the latest and greatest you have to buy a new phone.

      What I'm suggesting is that this transition hasn't happened because Nokia has no incentive in keeping customers with old phones running the latest software. Their revenue comes from handset sales, not services, so they need us to keep buying new phones.

      They're trying to address this with Ovi, which in itself is a recognition that they're a little late to this party and that they can see the advantages of such a business model.

      Nokia will always be a handset company first and foremost, and that's great. But for their highest-end devices it really would be nice to see them adopt an approach whereby revenue is at least in part shifted to services and handsets are kept 'current' for longer.

      I hope you enjoyed my thoughts, though, aside from my compare-and-contrast with the Nokia business model!
      Reply
    1. The Mullet of G's Avatar
      My broadband was slow it was infuriating, having to watch stuff downloading at 1.5 MB/s instead of the usual 5 or 6 was simply unacceptable. I'll give them their due though, customer service was great, which was slightly more annoying as I really wanted to vent some e-rage.


      I totally understand what your saying, I was just being annoying earlier. In fairness though Nokia have been a bit more generous with firmware updates of late, where they have added new features and functionality. Kinetic scroll being added to 5800 recently is a good example along with the new homescreen, I realise these aren't exactly major changes, but it does show that Nokia isn't unwilling to filter newer features down to older phones. But their business model does ultimately rely on selling people new hardware to get new features. From a consumer point of view this has good and bad points, as a lot of people like having a new phone every year, but some would prefer to just update the software on the one they have. But from a purely business stand point its pretty smart if you can pull it off.

      Agreed Ovi does also demonstrate that Nokia are willing to make the shift towards that business model, but will likely maintain its current business model for the most part. I think Symbian^3 or ^4 and the shift to open source could see Nokia adopt an approach where updating the OS and offering services is a bigger part of the business model. Currently its difficult to offer unified updates to all Symbian handsets as the platform is so fragmented and hardware capabilities so varied. But I expect Symbian^3 and ^4 will be built on a more versatile hardware platform that will make updating the OS more viable, most current Symbian phones lack enough punch to do much more than they are currently doing.

      I did indeed enjoy your thoughts, and I can see both sides of the coin there are many arguments to made both for and against, ultimately only the future will tell and oh boy is it shaping up to be a good one.
      Reply