Monday, May 19, 2008

Dont forget the Feature Phones!

Lost in the building fervor over the raft of new smartphone devices expected over the next six months (3G iPhone, Blackbery Bold, HTC Diamond, etc) has been the absolute onslaught of new high-end non-smartphones (or "feature phones")from LG and Samsung. This is a definite mistake as the unit volumes of these handsets are likely to be absolutely huge and have as much impact on marketshare for both the semi and handset players as the upcoming smartphones. The Samsung Soul has hit the market to rave reviews and the LG Secret is getting similar early press before its launch at the end of the month. Both these devices, as well as others such as the Samsung F480, pack in 5 megapixel cameras, touchscreens, user friendly interfaces and top of the line display technologies into some very hot form factors. It is these devices that are driving Samsung and LG's share gains as well as the continuing momemtum in Qualcomm's chipset business.

The question is when Nokia/SE/Motorola will manage to respond. The current announced products from those vendors for the 2nd half of the year simply dont measure up to what LG and Samsung are putting on the market right now. The combination of these feature phones and the newcomers to the smartphone segment present a serious challenge to the high-end shares of the current market leaders. Both TXN and Nokia are bouncing today on an upgrade from SSB, but I must say I'm not optimistic about their prospects in the 2nd half.


Anonymous said...

Rumors have it that EMP and not Qualcomm is actually the baseband supplier for the LG Secret - this could be the first in a line of LG HSDPA phones with EMP instead of Qualcomm inside...

Ravi Patel said...

Thanks for the heads up. I hunted around a bit and confirmed your rumor. I had been expecting LG to begin second sourcing with EMP again, but not on their flagship handset. Qualcomm has two holes in their chipset lineup. One is the lack of support for Symbian and the other is the fact that their applications processors dont support five megapixel cameras (witness the 3 megapixel cameras on the HTC Diamond and Xperia). It looks like EMP is exploiting that hole with the LG Secret.

This will be definitely something to watch as Qualcomm's near lockdown of LG and Samsung's volumes have been driving much of the upside in their earnings over the last year.