Rooting For Motorola

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It seems the suddenly sedentary Apple will finally present its long-rumored iPhone 5S on September 10. If form follows, the phone will actually appear in stores a few weeks soon thereafter. Has it been a whole year since the iPhone 5 was unleashed?

If reports are to be believed, iPhone 5S’s biggest innovation – other than the skeuomorphism-free iOS 7 – will be a fingerprint sensor home button, which will supplement or replace the PIN users have to punch in to unlock their phones.

But it’s what else Apple has planned for this fall that is likely to have a wider ripple effect on the worldwide smartphone business.

Cheap intentions

In the past, when Apple announces a new iPhone, previous models get price drops and entry-level pricing. But along with the iPhone 5S will supposedly come Apple’s new entry-level iPhone: the iPhone 5C, a full 5S technologically, but housed in plastic rather than the iPhone 5S’ aluminum case, and available in a number of designer colors a la iPod and the company’s iPad Smart Covers.

Apple’s most obvious intent with its first “cheap phone” is to narrow the widening Android v. iOS market share gap and especially the widening Samsung-Apple smartphone sales gap.

While iPhone 5 has widely outsold Samsung Galaxy S4 (although Samsung did sell more of its high-end smartphone in May than Apple did), Samsung smartphones outsell Apple’s overall; according to DTC, Samsung’s smartphones outsell Apple’s by more than 2 to 1.

Samsung’s smartphone sale superiority stems from the wide variety of lower-end smartphones it sells. The iPhone 5C could help narrow that gap.

More important for Apple is the enormous Chinese smartphone market, where the expensive iPhone is getting smacked sales-wise by cheaper models. The iPhone 5C will help Apple capture a wider share China’s bargain-hunting constituency, along with market share in the vast developing and BRIC markets.

Big bullies

DTC estimates that about half of 2013’s smartphone shipments will be attributed to Apple and Samsung. With their lower-priced super smartphones, Apple and Samsung are poised to widen their combined smartphone domination.

Which is all well and good for Apple and Samsung, but bad for competition in the rest of the smartphone market.

Sales of non-Samsung/Apple smartphones are flagging. While Nokia’s Lumia phones have been steady sellers, the company still reported a loss for its last quarter (albeit smaller than the loss from its previous quarter). Late last month, HTC reported its first-ever quarterly loss and will concentrate more on “mid-tier” rather than premium handsets such as its critically acclaimed HTC One.

And poor BlackBerry is now reportedly looking to sell itself after the failure of its BlackBerry Z10 comeback phone.

Only LG has shown any smartphone sales vitality outside of Samsung and Apple after reporting a record 12.1 million smartphone sales in its just-ended third quarter – but still a drop in the bucket compared to Samsung and Apple.

And it’s not as if these non-Samsung/non-Apple handset makers haven’t been innovating.

For instance, the well-reviewed Nokia 1020 boasts an industry-high 41 MP camera – but has reportedly sold poorly. HTC’s One is losing the sales war to Samsung’s Galaxy S4. LG hopes to get a market boost from its new G2, which moves the on/off, volume and camera controls to the rear of the handset.

Rooting for Motorola

There there’s the strange and sad case of Motorola, for whom I have a soft spot.

Most people don’t remember or realize that Motorola invented the cellphone back in 1973. It also was the first and, for a while, only cellphone vendor in the late 1980s, remaining dominant for nearly a decade.

But it all started going sideways for Motorola in the late 1990s, a combination of resting on its laurels and competition from aggressive vendors such as Nokia. Motorola got a temporary boost from its sleek RAZR line in the mid-2000s, before being once again relegated to industry artifact by the time iPhone hit stores in 2008. Two years ago, Motorola sadly sold its cellphone business to Google in 2011.

Last month, Motorola unveiled its latest attempt to innovate – the all-American made Moto X, which beats Apple to the multi-color phone market, complete with online customization. Whether or not Motorola’s voice-activated, design-your-own-phone concept catches on with consumers remains to be seen.

The problem is, it’s hard for innovations from Nokia, HTC, LG, BlackBerry and Motorola to get market traction with Samsung and Apple monopolizing mindshare.

Sure, it’s up to these smartphone vendors to create products compelling enough for consumers to care. But with increased Samsung/Apple dominance, it will become more and more difficult for other vendors to remain viable. And lack of competition inevitably leads to lack of innovation, which isn’t good for anyone.

So I’m rooting for Motorola – and Nokia and HTC and LG and even BlackBerry – to succeed and keep the smartphone market innovatingly competitive.

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