The past week saw quite a few important developments in the mobile sector. Apple’s (NASDAQ:AAPL) decision to stay away from the smaller tablet market so far seemed vindicated as Amazon’s (NASDAQ:AMZN) Kindle Fire shipments last quarter saw a sharp decline from about 4.8 million during the previous quarter to only 750,000 in the next. During the CTIA Wireless event this week, Nokia (NYSE:NOK) announced multiple exclusive partnerships to develop apps and content for its Lumia series of Windows Phones. Several reports also suggested that the Lumia is seeing good demand in the U.S. Further, Microsoft (NASDAQ:MSFT) has scheduled a Windows Phone developer summit in June 2012 to appease app developers and further drive ecosystem momentum.
- Apple’s Service Business Is Shining, But There Are Risks
- What’s The Upside For Apple’s Stock If iPhone 7 Surprises?
- Apple’s Chinese Woes Extend Beyond Regulatory And Macro Headwinds
- Apple’s Q3 Earnings Will Trend Lower On Sluggish iPhone And Mac Sales
- How Much Revenue Do Apple’s Smaller Product Lines Such As Beats and TV Bring In?
- Samsung Could Be A Beneficiary Of iPhone’s Delayed Design Refresh
Kindle Fire shipments slumped in the first quarter of 2012, after seeing record demand during the previous quarter’s holiday season. According to IDC, Amazon shipped only 750,000 Kindle Fire tablets during Q1, a sharp fall from the 4.8 million shipped during Q4 2011. Kindle Fire was however not the only tablet to be affected by the seasonal slowdown as overall Google’s (NASDAQ:GOOG) Android-based tablet shipments declined steeply, causing worldwide tablet shipments to come in lower than IDC’s projections for the quarter.
Even Apple was impacted by the seasonal slowdown, albeit to a lesser degree as the new iPad was launched and the prices of the older iPad versions were slashed. The comparatively strong showing of the iPad helped Apple grab a 68% market share with 11.8 million unit shipments, and shows that the impact of a cheaper and smaller tablet on Apple has been minimal at best. (learn more about why Apple Doesn’t Need To Enter The Low-Cost Smaller Tablet Market)
Nokia may not have started the year on a good note, losing the top spot in the mobile phone market to Samsung after 14 long years at the helm, but its turnaround plans are surely gaining traction in the U.S.
Earlier this week, Nokia said that it was trying hard to keep up with the demand for the Lumia in the U.S., particularly for the cyan version. This was confirmed later by Raymond James analyst Tavis McCourt, whose channel checks showed that the new Nokia Lumia 900 was in fact a hot seller at some AT&T stores, trailing behind only the Apple iPhone. If true, this is a good start for Nokia in a key smartphone market where it has failed to compete in before.
However, Nokia faces an uphill task trying to compete against the two well-entrenched ecosystems of Apple and Android and creating a niche for itself and Microsoft. More carrier partnerships to drive the sales of a well-acclaimed product like Lumia will be the key to its resurgent hopes. (see Nokia Faces Big Tests This Year In China And U.S.)
Nokia will also need to create an app ecosystem vibrant enough to counter Apple’s and Google’s growing presence. The iTunes store and Google Play boast of more than 600k and 400k apps respectively, while there are only 80k available in the Windows Phone Marketplace. Nokia is trying to bridge that gap by incentivizing app developers as well as partnering with some of the most popular ones to create exclusive content for the Lumia. 
Nokia can also look to Microsoft for help in this uphill task of creating a third mobile ecosystem in Windows Phone. Microsoft (NASDAQ:MSFT) has scheduled a Windows Phone developer summit in June 2012 to appease app developers and push them to develop apps for Windows Phone. Reports suggest that Microsoft may not only launch new developer programs to attract leading iOS and Android app developers to its platform, but also unveil more details about Windows Phone Tango and Windows Phone Apollo, the next version of Windows Phone.
If Microsoft is able to bridge the app gap between Windows Phone and other platforms, coupled with its initiative to invade the budget smartphone segment, it could help it become one of the top players in the smartphone market in the coming years. (see Windows Phone Needs To Impress Developers At June Summit)Notes:
- Nokia Lumia drives further ecosystem momentum with new app partnerships announced at CTIA, Reuters, May 8th, 2012 [↩]