There might just be a 128GB memory option when it comes to upgrading to the Galaxy S4 next year or the S5 the year after, thanks to Samsung now mass producing 128GB memory chips for use in mobile devices. More »
Rumors have been circulating about the imminent arrival of a Mozilla phone for some time. Now the Wall Street Journal and Reuters are reporting that ZTE is planning to launch a Mozilla-powered phone in the first quarter of 2013. More »
Calling it their “biggest launch since the original RAZR” (no sniggering in the back row, please), Motorola’s RAZRi is the first phone with a 2GHz Intel processor; however good that may be. Sounds impressive though, non? More »
HTC has posted its Q2 numbers and they’re not pretty. While numbers were up on Q1, the Taiwanese Android/Windows Phone smartphone maker saw declines in nearly every line of earnings compared to the same quarter a year ago. Revenues were 91.04 billion Taiwan dollars ($3 billion), down nearly 27% on Q2 2011 (and missing consensus analyst expectations); gross profit was down by more than 30% to NT24.59 billion ($819 million); operating profit down by over 57% to NT8.2 billion ($273 million). Earnings per share were also down by nearly 57% to NT8.9 ($0.30) per share.
HTC also provided a sober look at the quarter ahead. It expects that in Q3 revenues will drop even further to NT$70-80 billion ($2.3-2.7 billion), with the gross margin also dropping down to 25%, and the operating margin also coming down to 7%.
The results show that despite gains in some key markets like China (and a slight one in the U.S.), HTC continues to see huge competitive pressure in the smartphone segment in which it competes. This year, in an effort to better focus the company, HTC launched a line of handsets under the brand “HTC One”, which followed a similar convention to Apple with its streamlined iPhone line-up.
In its short earnings statement (which will likely see more elaboration during the conference call later today at 8AM Eastern time) HTC also emphasized its success in China, noting it was “well positioned to become a key growth driver.” Just as Canalys noted yesterday, the company highlighted operator partnerships as a key part of the equation, along with brand awareness and increasing retail presence.
Overall HTC said Asia was meeting expectations for the launch of the One line. But noticeably the key North American and European markets did not get mentioned in that context. Instead, these have been seeing “increasing marketing and sales efforts in North America & EMEA.”
Based on comments from April (via Slashgear), when HTC’s CEO Peter Chou was frank about how hard it would be for the company to claw back lost market share in the U.S. (where it currently accounts for only 6.4% of all smartphone users, says comScore), HTC may have already given up the ghost on this one.
But if it is still holding out for a recovery, HTC will have to spend even more (read: more margin/profit pressures) to try to make better headway in these two markets, where it once commanded a respectable presence but has more recently been hit hard by competition, partly from Apple, but also from other Android players, primarily from Samsung.
HTC, like Samsung, makes smartphones based mainly on Google’s Android operating system, with a secondary line based on Microsoft’s Windows Phone OS. But despite being a very early mover in smartphones — it was Microsoft’s first handset partner for its smartphone forays, and Google’s first Android handset maker — HTC has not managed to hold on to its lead.
Unlike Samsung, HTC focuses only on smartphones (and, increasingly, a streamlined lineup of models). That means that HTC offers a less diversified range to the market, and that makes it more susceptible to feeling a pinch when its main/only line of business is not performing that well. While feature phones are getting gradually replaced by smartphones in the overall market, there is still a strong business to be had in the lower end models, as both Samsung and Nokia have shown. And it also provides a customer base loyal to a brand that can be tapped for upgrades. (Apple has been the one standout in the market that seems to have bucked this trend.)
More to come. Refresh for updates.
Today Nokia announced that its deal to buy imaging company Scalado has been finalized — a sign of another piece of the puzzle falling into place for Nokia as it continues to restructure to reverse huge declines in handset sales. But that dark, Finnish cloud has a silver lining that we’ve been noticing: the emergence of a bunch of startups being formed by many among the 40,000 people that have been laid off. The other day we wrote about how some of the smaller players have been picking up funding from Nokia courtesy of its Bridge program. And now we’ve come across what might possibly be one of the more ambitious spin-offs yet.
Oulutalent is a team of no less than 500 former-Nokia employees based in the town of Oulu. The skills on offer, and the ready-made team, is a testament to what Nokia has had to drop by the wayside, but also what is on the market for the many tech companies out there fighting the war for talent.
Averaging more than 10 years of experience, the group claims to have “created over 50 devices including major blockbusters. In addition to devices, we have done novel cloud services and UI platforms from scratch. We are on the leading edge with touch and LTE phones, Linux and WiMax tablets and we have world-class technical competence on all.”
The group is being led by Pekka Väyrynen, an engineer who developed patented wireless technology for Nokia (that is, the patents that are reported worth up to $6 billion and may well start getting sold off to help Nokia’s cash position).
Effectively, what we have in Oulutalent is a handset-making operation that could in theory be bolted on to a company with mobile ambitions (Amazon? A new Asian entrant? Nokia’s MeeGo spinoff Jolla?); or one that is growing already and needs to expand. It plays on the big area of outsourced operations — something that may have been too expensive for Nokia to maintain may well be hard for another as well; this lets that cost stay off the balance sheet.
Oulutalent notes that it can provide a range of consulting and technical services, from identifying market opportunities and planning product portfolios; to “concepting” (covering hardware and user experience, simulation and prototyping); turning those concepts into products; and then helping with the aftersales.
One twist is that the team is not in full effect yet, with some employees still working out their terms with Nokia, according to a spokesperson for the company.
And another is whether Oulutalent will be able to prove to the market that it’s worth the investment: its success is partly dependent on whether others believe Nokia’s downfall was mainly due to some bad decisions from management; or whether it was also down to those executing on decisions.
Oulutalent is offering itself as a group for “turn-key product creation,” but there may be possibilities to engage smaller teams, too. That is the approach being taken by a similar project called Kyvyt (Finnish for “talent”). Despite its Finnish name, Kyvyt is based in the German town of Ulm, where Nokia also had a large team of people who apparently were working on its low-end Linux based platform Meltemi (another project Nokia left on the cutting-room floor). Kyvyt is offering out its pool of talent as and where it is needed, and it is also running events like job fairs, as well as posting job adverts on its site.
The Oulutalent spokesperson says that it will cooperate with Kyvyt, although declined to specify what that will mean. More detailed information, she says, will be coming out in coming weeks.
Ironically, as Nokia has been cutting staff, it’s taken a few on, too, to focus on areas where it hopes to stand out against handset competitors. The Scalado purchase will see some 50 people join Nokia’s smartphone operations in Lund, Sweden, where Nokia will be incorporating Scalado’s technologies and IP into its imaging business:
“We believe that this acquisition will strengthen Nokia’s leading position in mobile imaging and provide us with a great opportunity to create even better imaging products and applications,” Jo Harlow, executive vice president, Smart Devices at Nokia, said in a statement.
In the bigger picture, Nokia has insisted that it is safe and secure as far as cash reserves are concerned, but at the same time it’s running out of goodwill with the investment community: Nokia’s debt rating yesterday was cut once again by Moody’s, as the agency noted that losses in the current quarter will be even greater than previously thought. The three major credit agencies, Standard & Poor’s; Fitch and Moody’s have all now graded Nokia’s debt down to “junk” status.
Nokia, as before, has said that the “impact on the company is limited” with the company taking action to turn things around. The company says at the end of June it had a cash balance of €9.4 billion and a net cash balance of €4.2 billion, both higher than a year ago.
It’s not clear who is providing the capital to finance Oulutalent, although the Bridge program we wrote about before is basically restricted to startups of four people or less, so it’s unlikely to play a role here. We’re asking questions and will update as we learn more.
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