Disruptive mobile announcements dominate September
September is a critical month for gadget makers. It's when they roll the dice on new products and make their big bets on what they think will be best sellers during the holiday shopping season, when they sell most of their devices for the year.
This September has been an enormously active one in the mobile market, with major announcements by Amazon, Apple and Nokia. The most disruptive announcements to the existing state of things, though, were made by Amazon and Apple, according to analysts at a webinar this week by the Boston-based Yankee Group.
"We believe that Amazon's Kindle—particularly the Fire—will be highly disruptive in the non-iPad tablet market," said Yankee Vice President Carl Howe.
Pricing will contribute mightily to the new Kindle lineup's unsettling effect on the non-iPad market, according to Yankee's London Senior Analyst Boris Metodiev. "All of them are much cheaper than any other competitor's device with similar specifications," he said.
Amazon can hit rock bottom selling points, because it's not concerned about making big profits on its hardware, Metodiev added. It wants to make money from selling services or goods to owners of the devices. "It's a strategy that a loaf of other competitors will have huge problems with," he said. "It is extremely difficult for any of the purely manufacturing companies to compete against Amazon."
What makes Apple's iPhone 5 announcement so disruptive is the sales velocity that follows it, according to Howe. He predicts that Apple will sell 10 million units worldwide by September 30. and rake in $614 billion. "It will be the largest consumer electronics launch in history," he said.
Apple will sell in a week what took Samsung months to achieve with its flagship phone, the Samsung Galaxy S III, Howe added. Samsung took two months to sell 10 million S3s.
An advantage Apple has over other manufacturers, Howe explained, is that it has "put all their wood behind one arrow." Limiting its smartphone to a single model gives Apple unprecedented advantages in scale for manufacturing and in controlling costs.
"Not only can they command premium prices because of their brand, they also get the lowest costs because when they order parts, they order them in the tens to hundreds of millions," Howe said. "That's a competitive advantage that all the other manufacturers will struggle to overcome."
Despite Research In Motion's sinking fortunes, the analysts aren't ready to write off the Blackberry smartphone just yet. In countries other than the United States, such as Indonesia, where the Blackberry is the premium brand, Howe noted. "We have a distorted view of how successful RIM has been," he said.
He called RIM's President and CEO Thorsten Heins "the Steve Jobs of RIM in terms of his willingness to make hard decisions, winnow down the line to the important things that are needed to be successful, and then execute on that vision."
While RIM has been chided by its critics for delays in getting its next new Blackberry smartphone to market, Howe praised the company for not rushing the new model out the door. "They're doing a clever thing by not preannouncing what they're doing," he said. "They're not trying to do what Microsoft and Nokia have done, which is announce product and you wait for months before it arrives."
"They're not going to announce it until it's ready, and I give them a lot of credit for that," he added.