Updating My Smartphone Market Analysis: The Market Is At A Strategic Inflection Point

NOTE: My original post, originally published in January 2013, continues to be one of the most viewed on the site.  Android and Apple have enjoyed an estimated 98% market share between the two, and many of my earlier projections regarding this market appear to have been borne out. However, the smartphone market has now matured to the point that it is at a strategic inflection point which has major implications for the future of this market and the major competitors. 

The Rapid Maturation of the Smartphone Market Should Have Been Foreseen

The signs of a dangerous strategic inflection point in the global smartphone market have been evident for some time: the rapid rise of domestic Chinese competition combined with the predictable end of the Western consumer fascination with “the next smartphone.” Five years ago, Samsung Electronics, the South Korean technology giant sat atop the Chinese market, selling nearly one of every five devices there. Today, Samsung is an also-ran, controlling less than 1% of the world’s largest smartphone market. Samsung has trimmed local staff and last month closed one of its two Chinese smartphone factories.  Surely, Apple must have been aware of this and the growing number of much lower cost domestic Chinese competitors that were already hammering Samsung.  Apple’s release of a lower cost iPhone, the XR, in Asia in October 2018 appears to have been a case of too little too late. Sales of the device have been disappointing in both Japan and China, and Apple has been relegated to offering “trade-ins” to camouflage slashing the price of the XR.  Apple had ample warning over at least a five year period.

Meanwhile, I sensed a very different kind of maturation of the smartphone market in North America and Europe. In what I like to call the smartphone market “Star Wars” phenomenon, each new generation of smartphones was greeted with a hysteria that was only paralleled by the Star Wars craze. This simply could not continue indefinitely.  Beginning in 2017 it was apparent the smartphone market as a whole was already shrinking, and there was significant anecdotal information in the media that smartphone hysteria was waning, if not publicly available hard data. I began having discussions about this with Tim Bajarin, one of the top Apple analysts.  As Apple moved to launch the iPhone X and broke the $1000 price point barrier it encountered clear if perhaps not overwhelming evidence that the smartphone market was softening: more people chose not to upgrade their phones. I like to say that the last major feature consumers seemed to want/need was water resistance, as so many had already experienced the disastrous “toilet drop.”  I view the Bluetooth earbud phenomenon as a distraction and perhaps a hint of the coming change. Samsung flirted with water resistance as early as the Samsung Galaxy S5, perhaps because water resistance had become a standard feature in the Japanese market. By 2018, water resistance was standardized, and the market began experimenting with “the next big thing” for phones, folding screens. WTF? It was clear to me that the smartphone market had run out of gas, and was undergoing rapid maturation, as phones were no longer fascinating and novel, but just simply commodity devices.

To my mind, and IMHO, this has been a case study in a classic “strategic inflection point” that was missed by both Samsung and Apple. Samsung might be forgiven for being the first to cross into the inflection point, while the media was still promoting “the next smartphone” hysteria, and not yet recognizing the sense of the market. Apple has no such excuse. The rapid maturation of the smartphone market should have been foreseen by Apple. Apple’s most disturbing move was the decision to increase pricing rather than delivering greater value, at exactly the wrong time. The crucial rhetorical question is what are the larger implications for Apple’s future business?

READ MORE:  Apple Beware: Samsung’s Fall in China Was Swift 

READ MORE: Samsung Profit Outlook Surprisingly Weak

 

Vendor Data Overview

Smartphone vendors shipped a total of 355.6 million units worldwide during the third quarter of 2018 (Q3 2018), resulting in a 5.9% decline when compared to the 377.8 million units shipped in the third quarter of 2017. The drop marks the fourth consecutive quarter of year-over-year declines for the global smartphone market. 

Quarter	2017Q1	2017Q2	2017Q3	2017Q4	2018Q1	2018Q2	2018Q3
Samsung	23,2%	22,9%	22,1%	18,9%	23,5%	21,0%	20,3%
Huawei	10,0%	11,0%	10,4%	10,7%	11,8%	15,9%	14,6%
Apple	14,7%	11,8%	12,4%	19,6%	15,7%	12,1%	13,2%
Xiaomi	4,3%	6,2%	7,5%	7,1%	8,4%	9,5%	9,5%
OPPO	7,5%	8,0%	8,1%	6,9%	7,4%	8,6%	8,4%
Others	40,2%	40,1%	39,6%	36,8%	33,2%	32,9%	33,9%
TOTAL	100,0%	100,0%	100,0%	100,0%	100,0%	100,0%	100,0%

 

 

 

2009 to 2012

In one of the most interesting high tech scenarios in years, the “smart mobile” OS (operating system) market is shaping up to be a classic Battle of the Titans. Key strategic issues, theories, speculation, and money, lots of it, are making this a great real-time strategy and marketing case study for management students of all ages (smile).  So as Dell prepares to fade into the sunset, get yourself a drink of your choice, and some popcorn, sit back and watch it all unfold.

The best metaphor I can apply to this might be a “destruction derby” featuring at least two players,  or perhaps a bizarre multidimensional Super Bowl or Rugby World Cup match, with four teams on one playing field with four goal posts at each cardinal point of the compass..  At the moment all four teams are tackling, passing, and running at each other in a confused pile. There are scrums, rucks and mauls in multiple locations. Two competitors, Google and Apple appear to be winning. The other two, Microsoft and Research in Motion, are pretty banged up, but still playing.

The two currently dominant competitors, Google Android with its acquisition of Motorola Mobility, and Apple IOS are rapidly consolidating and expanding their global market positions, via partnerships, vertical integration, and application development ecosystems. Microsoft has publicly committed to spending massively to make Windows 8 the third OS option, but a recent IDC mobile OS market forecast projects Microsoft with only a miniscule share in 2015.  Something tells me that Steve Ballmer will go on a rampage if that happens, rather like the video of him screaming and dancing on stage in my post “Extrovert or Introvert, Authentic Presentations Take Practice,” November 30th. http://mayo615.com/2012/11/30/introvert-or-extrovert-authentic-presentations-take-practice/

The key question is whether Microsoft or RIM, will be able to establish a third mobile OS to a survivable market position.  It is not at all clear that either can do so at this point.  The market is also speculating that mobile hardware market leader Samsung, is possibly considering making its own play by creating its own mobile OS ecosystem.  While this may seem far fetched, this kind of vertical integration seems to be making a resurgence as a strategic move, after having been discredited.  Then there is the perennial Nokia, who has seemed to be on death’s door, but may be coming back. As a strategic partner for Microsoft, Nokia’s fate may have a huge bearing on Microsoft’s strategy to reinvent itself as the PC goes into atrial fibrillation. Will Amazon enter the fray with its own smart phone entrant, and if so, with whose OS?  Will Research in Motion and the Blackberry be able to achieve a survivable market share, or is RIM already a walking zombie?

Finally, in a kind of death dance patent dispute reminiscent of the film, Gladiator, Nokia and RIM are now locked in new lawsuits and counter-lawsuits, as if to say, “If neither of us are going to survive, we might as well kill each other for the entertainment value.”

Here’s a more concise overview of the race to be the third mobile platform:

• The argument in favor of a third platform is straightforward and compelling: A new, robust competitor will prevent the dominant platforms from growing complacent or stifling innovation. Apple and Google are pretty happy with the status quo. Consumers are probably not consciously pining for a third mobile platform. Developers would happily get behind a third platform if it widened their revenue streams.
• Microsoft has a head start: It launched Windows Phone in 2010, and tablet-friendly Windows 8 this year. It is experienced in building developer communities. However, Windows Phone has so far only managed a paltry 3 percent platform market share.
• Amazon has the most potential to upend the market: A smartphone would be a natural extension of Amazon’s distribution empire, and its Kindle Fire tablet play. Unfortunately, the most recent E-reader forecasts show them in sharp decline as growth in full-functional tablets squeeze them out.  Amazon has 106 million unique visitors accessing its sites, many of them with credit cards on file. 
• Samsung is a dark horse: Its dependency on Android may become a liability and push the South Korean manufacturer into the platform business. Samsung’s strength is its hardware sales prowess — Samsung shipped over 56 million smartphones in the third quarter of 2012. 

Read more: http://www.businessinsider.com/bii-report-the-race-to-be-the-third-mobile-platform-2013-1#ixzz2IepLaaka

For Management students, this real time case study offers the opportunity to apply and ponder:

1. The time tested 1976 Boston Consulting Group (Bruce Henderson) “rule of three and four.”  In a stable mature market there can be no more than three surviving competitors, the largest of which can have no more than four times the share of the smallest of the three.   Here, the question is whether a third competitor can successfully emerge at all?

2. Barriers to market entry. Former Intel Marketing VP, Bill Davidow‘s book, Marketing High Technology, An Insider’s View, still considered the standard on the topic, suggested his own metric for a barrier to a new market entrant, or even a competitor just struggling to survive the market shakeout. The market entry barrier rule of thumb in dollars is three-quarters the most recent annual revenue of the market leader. In this case, that is a very big B number…  Microsoft has the bucks, but is it just too late?

3. Vertical integration. Rumors of Samsung introducing its own mobile OS seem implausible, but hey Nvidia just announced its own gaming console to compete with Microsoft, Nintendo, and Sony.

4. Resources and capabilities. It is necessary to consider the respective resources and capabilities of each of the many direct players, and those playing in related markets that bear on the mobile OS market.

5. Related markets, new markets, peripherally involved competitors and products which all could play a role in the eventual outcome of this. The integrated Internet HDTV market is only one example. Featuring Apple, Microsoft, Google, and Samsung, and the HDTV manufacturers, it could influence things.  What if Amazon were to vertically integrate and introduce its own smart phone?

This is the hairball of this Century so far.  Are you all still with me, here?

WCW III: World Chip War III

 Intel: The Missing Piece In The Epic New Global Microchip Battle

In the beginning, in the early 1970’s there were the original semiconductor companies like Intel, AMD, Motorola, and not far behind, the Japanese giants NEC, Fujitsu, and Mitsubishi. The first great Chip War was in memory chips, primarily as replacements for magnetic core memory and for the emerging new minicomputer industry. The Japanese fought World Chip War One as a nation, using the power and influence of its entire government to compete against the American companies. At the behest of the U.S. government itself, IBM bought a minority share in Intel to potentially defend Intel against any hostile bid from the Japanese.  Not long afterward, the Great Microprocessor War, World Chip War Two exploded, primarily between Intel and Motorola. Intel was the victor of World Chip War Two, primarily due to the extraordinary marketing genius of Intel Marketing VP Bill Davidow’s “Crush” campaign, not superior Intel technology. It was a huge lesson of the importance of marketing over having the “coolest technology.”  Now after something of a long hiatus, we have World Chip War Three, which is being fought over “CODECS,” and related chips which power our smartphones. Today’s news about Broadcom’s bid for Qualcomm omits the other crucial player in this new War of Titans, Intel, which has risen from earlier ignominious failures to become the third player in WCW III.

Broadcom’s Bid For Qualcomm Marks Upheaval in Chip Industry

The California-based chip maker offered made an unsolicited $105 billion takeover bid for Qualcomm

Broadcom proposed to acquire rival chip maker Qualcomm for $70 per share. PHOTO: MIKE BLAKE/REUTERS

By

Ted Greenwald

Broadcom Ltd. AVGO 1.42% made an unsolicited $105 billion takeover bid for QualcommInc., QCOM 1.15% the chip industry’s boldest bet yet that size will equal strength at a time of technological upheaval.

The approach, which would mark the biggest technology takeover ever, shows how tech companies are positioning themselves for a world where a range of chip-driven devices—from phones to cars to factory robots—are transmitting, receiving and processing evermore information. Broadcom Chief Executive Hock Tan already has used acquisitions to build the company into the fourth-biggest chip maker by market value, part of a wave of industry consolidation as profits on some chips, such as those used in personal computers, are squeezed by sluggish sales and rising costs.

A combination with Qualcomm would create a behemoth whose chips manage communications among consumer devices and appliances, phone service providers, and data centers that are becoming the workhorses in artificial intelligence.

The deal is far from certain. San Diego-based Qualcomm, which said it would consider the proposal, is expected ultimately to rebuff it on the grounds that the price isn’t high enough, especially given the significant risk that regulators would block it, according to some analysts. Under typical circumstances, unfriendly bids like this are difficult to pull off; given the sheer size and complexity of Qualcomm, this one could be especially challenging, analysts said Monday.

Broadcom’s preference is to strike a friendly deal, but if it fails to do so, it would consider nominating Qualcomm directors who may be more amenable to a transaction, a person familiar with the matter said. The nomination deadline is Dec. 8 and the annual meeting at which the director vote would take place is likely be around March.

Broadcom offered $70 a share for Qualcomm, representing a 28% premium from its closing price on Thursday—before news reports on the expected approach.

Qualcomm shares ended trading Monday up 1.2% to $62.52, while Broadcom shares were 1.4% higher at $277.52.

Mr. Tan said he has been talking with Qualcomm for over a year about a possible tie-up. “Our strategy has been consistent,” Mr. Tan said in an interview. “When a business is No. 1 in technology and No. 1 in market position, we acquire it and put it on our Broadcom platform and grow through that strategy. Qualcomm has a very large sustainable franchise that meets those criteria.”

Should the deal be completed, Broadcom would take on Qualcomm’s leadership in developing the next wave of cellular technology, known as 5G, which is expected to roll out over the coming two years. That could give Broadcom a new growth engine, as 5G is expected to dramatically accelerate the speed and responsiveness of cellular communications necessary for applications like self-driving cars.

Broadcom was formed when Avago Technologies Ltd. bought the former Broadcom in 2015 for $39 billion and kept the name, and Mr. Tan has continued growing by acquisition. The company sells a diverse line of equipment for networking and communications. Its products include chips for Wi-Fi and Bluetooth technology that connect devices that are closer together—technologies that some analysts say are likely to grow less quickly than 5G.

“People will continue to use short-proximity wireless like Wi-Fi and Bluetooth, but the growth and money is clearly in 5G,” said analyst Patrick Moorhead of Moor Insights & Strategy.

Overall, Broadcom and Qualcomm have largely complementary product lines. But the possible Broadcom takeover is likely to face intense regulatory scrutiny, given the companies’ combined scale and the fact that they are both leaders in Wi-Fi and Bluetooth technology. The companies share customers including Apple Inc., whose iPhones and iPads include components from both Qualcomm and Broadcom.

Qualcomm already has been under pressure from antitrust agencies in several jurisdictions, including the U.S. The company has paid hefty regulatory fines in China, South Korea and Taiwan.

Qualcomm was riding high as recently as a year ago after unveiling the chip industry’s largest-ever acquisition: a $39 billion proposed deal for NXP Semiconductors NV. The deal hasn’t closed yet, and Broadcom said Monday that its proposal would stand regardless of whether Qualcomm’s proposed acquisition of NXP is consummated under the current terms.

Since then, a string of hits by regulators, competitors, and customers including Apple has left the industry titan in a vulnerable position. Qualcomm’s profit in the fiscal year that ended Sept. 24 plummeted 57%, and its share price declined 18% in the 12 months through Thursday’s close compared with a 58% rise in the PHLX Semiconductor Sector Index. That was before news of Broadcom’s interest sent Qualcomm shares up nearly 13% on Friday.

Funding for the deal would come in the form of loans from a gaggle of banks, with additional cash from Silver Lake Management LLC. The private-equity firm, which already owns a stake in Broadcom, provided a commitment letter for $5 billion in convertible debt. Silver Lake said a substantial portion of that capital would come in the form of an equity investment from its Silver Lake Partners fund, with the remainder from other sources.

The equity contribution would be the single largest in the history of the firm, exceeding the roughly $1 billion it invested in the merger of Dell Inc. and EMC Corp.

Broadcom’s bid came days after the Singapore-based company announced plans to relocate its headquarters to the U.S., a move that could make it easier to pursue acquisitions of U.S. targets.

Broadcom’s earlier $5.5 billion offer to buy Brocade Communication Systems, based in San Jose, Calif., has been delayed due to a review by the Committee on Foreign Investment in the United States, which reviews international deals that raise concerns about national security.

Any deal to acquire Qualcomm would also receive close scrutiny, experts say. “Anything that has the word semiconductor in it gets rapt attention from CFIUS,” said James Lewis of the Center for Strategic and International Studies, a policy think tank. “The move to the U.S. is an effort to tamp down CFIUS concerns.”

Partnerships, Collaboration and Co-opetition: More Important Than Ever

A Strategy For Survival in Tough Times

In the simplest terms, the concept here is how a company can potentially increase both revenue and market share by executing a strategy to work with its direct or indirect competitor(s) to the benefit of both, a win-win.  The old Arab saying, “My enemy’s enemy is my friend” also applies. It can also be as simple as joining an ad hoc collaboration among a group of companies or a standards group to create market order and simplicity from an overcrowded and confused market.  Customers invariably respond to products that provide the greatest value and paths to long-term increased value and cost reduction. Collaboration or “Co-opetition” is one of the most effective means to achieve that goal, particularly in an economic environment where “flat is the new up.”

Multibus: An Early Example of Collaboration Building A New Market

Soon after joining Intel, I learned about Intel’s concept of “Open Systems” and its “Multibus” system architecture.  Motorola was Intel’s primary competitor in microprocessors and so-called “single board computers” at that time.  Intel’s now legendary Marketing VP, Bill Davidow had developed a strategy to recruit other companies to support Multibus as an open system standard.  Davidow’s idea was to make Multibus more attractive to system designers by having a stable of compatible products from other companies supporting Multibus. It worked. Since that time the concept has evolved significantly and has played a major role in the development of many new markets. This post discusses some of the evolutionary changes, offers two high-tech case studies and some key requirements for successful collaboration.  It is more important now than ever as a survival strategy in a particularly challenging global economy.

The IBM Personal Computer Sets The Standard For The Future

Perhaps the best known high-tech example of an open system is the IBM Personal Computer, involving IBM, Intel, Microsoft, and thousands of other supporting companies. The result has been the creation of a huge new market, with over 400,000 applications for the PC, significant price competition, and interchangeable components from multiple vendors.  By contrast, Apple opted for a closed, proprietary system, which persists to this day, and continues to be a source of discontent from Apple customers: higher prices, as well as accessories and interfaces only available from Apple, etc. In sheer market share, the PC dominated at 85% of the total market, while Apple was forced to concentrate on niche markets like education and graphic design. I am not going to discuss the PC as it has been analyzed extensively over the years, though it does provide an excellent case study on the dynamics and market power of open systems versus closed proprietary systems.

 Important Current Co-opetition Successes: DSL And Android

I will discuss two other cases, one less well known and the other better known and more recent.  In the first case, I was personally involved so my experience enables me to speak in-depth on the topic.  Shortly after leaving Ascend Communications, I was called by a friend at Compaq/HP in Houston and asked to fly down to Houston for a private discussion with the VP of the Presario Division and his team.  The VP wanted to incorporate a high-speed digital subscriber line (DSL) connection in the Presario out of the box.  The idea was that a consumer would connect the PC to a standard RJ11 telephone wall jack, and be instantly connected to the Internet.  However, I had to explain that the challenges to this were enormous. First and foremost the telephone companies themselves could not agree on the standard for how DSL worked. Equally problematic, the DSL market was fragmented with dozens of competitors offering different proprietary solutions.

We decided to proceed regardless, recognizing that if HP/Compaq were to succeed with their ingenious idea, it would require a fundamental change in the current DSL market and the telcos.  This could only be attempted if Compaq joined forces with Intel and Microsoft, and even then the outcome would be uncertain.  I contacted Ali Sarabi in Intel’s Architecture Labs, who admitted that Intel had been thinking of the same idea, and talking with Microsoft as well. So within two weeks all three companies met at Microsoft in Bellevue and the idea gained steam. Soon after we held three days of secret meetings in Atlanta with DSL companies, without explaining our purpose, and came away completely dejected. Bringing the competitors together was hopeless. They all pointed in a different direction. It then dawned on us that if we could get the telecom companies to agree on a single DSL standard, they could unite and as “the customers,” and therefore dictate to the DSL competitors what they would buy. Nothing works better than the opportunity to make money.

Another round of secret meetings in Seattle with the telecoms, and follow-up meetings around the country led to a breakthrough: the formation of a global consortium of over 100 telecom companies and DSL companies that culminated in the International Telecommunications Union in Geneva Switzerland creating a single global DSL standard, which eventually made the original Compaq Presario vision a reality.

Special Interest Group Legal Framework Paves The Way

One of the keys to this success was a simple legal framework for the companies to collaborate, known now as a “Special Interest Group,” avoiding any hint of unfair competition and ensuring that the technical aspects of the standard would be in the public domain. The SIG legal document has since been used in a number of other developments, notably Bluetooth and USB.  Other standards bodies, like the IEEE and IETF, are also structured similarly, enabling the creation of crucial collaborative projects like WiFi. These efforts are now a key aspect of many high-tech markets. Many companies devote entire teams to managing their participation in these standards bodies and ad hoc industry collaboration activities. Even on a small scale, some agreed framework, a Memorandum of Understanding or a simple one-pager may be required to achieve the necessary trust to move forward.

Android Repeats The IBM PC Phenomenon

The second case of successful global industry-wide collaboration is the Google Android smartphone operating system versus Apple IOS.  Once again, Android is an open architecture while Apple IOS is a closed proprietary system. Android has been adopted by a wide range of smartphone manufacturers, most notably Samsung, HTC, and Huawei. Despite the well-publicised popularity of Apple’s iPhone, the fact remains that Android, as an open architecture dominates the global smartphone market at 82% market share in 2015, as reported by International Data Corporation (IDC), and Apple again stuck in the 15% range.

Global Smartphone Market Share 2015 (IDC)

Two Failures To Collaborate: Videoconferencing And The Internet of Things

The video conferencing market has been around for nearly thirty years. Originally, there were big bulky proprietary systems. Cisco Systems later became a major player with its own impressive HD technology. In all, there were nearly a dozen major competitors addressing an “enterprise market” for business use only. The equipment was very expensive. Then along came Skype, WebEx, Apple Facetime and others. The problem is that, after thirty years, none of these competitors applications can talk with any other application. Clearly, this is a problem. So “middleware” startups have sprung up, offering a simple translation of otherwise incompatible video transmission protocols. Bluejeans technology is one excellent example. I have used it personally in my UBC classes to link a guest lecture on Skype to UBC’s corporate video conferencing system because there is no other way to do it. Is this the best solution or cost-effective. Absolutely not. Why, after thirty years, has the video conferencing industry failed to standardize?

In another case, the emerging new market buzzword is “The Internet of Things.” This means that everything in your home can and will be connected to the Internet. Sounds simple enough, right?  Not exactly.  Today the IoT market remains a complex, confusing Tower of Babble, with multiple competing communications protocols. Some products support WiFi, but there is no one single agreed way to communicate. A recent ZDNet post explains that home automation currently requires that devices need to be able to connect with “multiple local- and wide-area connectivity options (ZigBee, Wi-Fi, Bluetooth, GSM/GPRS, RFID/NFC, GPS, Ethernet). Along with the ability to connect many different kinds of sensors, this allows devices to be configured for a range of vertical markets.” Huh?  This is the problem in a nutshell. You do not need to be a data communication engineer to get the point.   I have written here on this blog about this embarrassing failure to collaborate.

Summary

While the open architecture of the PC happened more or less organically, as so many companies were keen to get in on the action, the DSL problem was a hairball of enormous global complexity that had to be solved.  I am honored to have been part of that effort. Google’s decision to launch Android as an open architecture was more like Multibus, and the conscious strategic decision of Eric Schmidt and Larry Page to enter the market as an open system from the outset. Other examples in other industries abound and are documented in the now legendary book, Co-opetition.

The result in all three successful cases has been a dramatic market success. The key takeaway point is that in all three cases the open architecture created opportunity and expanded the market.  Industry collaborations like this are as relevant for smaller markets with only two or three competitors as for large complex markets.  Collaboration can be the key to company survival or failure.

13 Best Tech Companies For Internships, According to Their Interns

The 13 Best Tech Companies For Internships, According To Their

Interns

JULIE BORT

Reblogged from the Business Insider

Cisco : Cisco interns

No part of the tech job market is more insane than the fight for interns. A few of my UBC Faculty of Management students have recently been very fortunate to land internship jobs with excellent high tech firms based both in Silicon Valley and in the Lower Mainland. The more industrious and resourceful UBC students should use these network connections to compete for their dream internship or first job.

The list includes: AMD, Blackberry (believe it or not), Cisco Systems, Facebook, Google, IBM Canada, and Intel.  I would add three more with a major presence in the Lower Mainland: Hootsuite, PMC-Sierra and Samsung

Companies are looking to snap up brilliant young college grads before their competitors do. Interns are looking for the right combination of training and fun.That leads companies to shower their interns with money, perks and challenging projects.Some 4,700 U.S. companies are looking for interns today, but not all internships are created equally, according to job-hunting site Glassdoor. Glassdoor just published its annual list of the 25 best companies for interns and, not surprisingly, the list was dominated by tech companies.Glassdoor, which rates companies based on feedback from employees, looked at the feedback interns gave on 20,000 U.S. companies to come up with this list.

Read more: http://www.businessinsider.com/13-best-tech-companies-for-interns-2014-2?op=1#ixzz2tKGYk6Vn

The Incredible CardMunch for Android Mystery: Market Stolen by CamCard

UPDATE May 8, 2014: LinkedIn is Killing Cardmunch and wil partner with Evernote business card service

LinkedIn is making this announcement without much explanation. IMHO the amount of time LinkedIn frittered away on this left them no option but to kill the app.  While LinkedIn may argue that Evernote provides its users with a superior solution as justification for their decision, if LinkedIn had moved promptly when they had the opportunity, partnering with Evernote would have been unnecessary. There is also the matter of the money wasted on Linkedin’s original acquisition of Cardmunch, though the Cardmunch founders may feel they dodged a bullet, and probably now own LinkedIn stock.

Read more: LinkedIn Killing Cardmunch Bizcard Scanning

My original story from 2013:

I need to first explain that I have no particular special insight into this marketing mystery. I have no insider information whatsoever. I did post a question on Quora last week on this topic, but so far I have received no answers, to help me unravel this mystery.  All I have is the observation of an informed technology marketing professional: me.

Over a year ago now someone on the UBC campus, who was thinking of developing an app,  told me about this cool application for capturing cards into your contacts by photographing them on your smart phone. It was Cardmunch.  It turned out that the application was only available on the iPhone at that time, but as luck would have it the company had just been acquired by LinkedIn.  Voila!  It would obviously only be a few months at most before I could obtain it for my Samsung Android smart phone, right?  Wrong.  That was over a year ago.

Common sense and the acquisition of Cardmunch by a major social media player, would say that addressing the Android market opportunity is not only an obvious huge potential revenue stream, but an imperative if Cardmunch is to survive as a major competitor in the card capture space.  Not only that, being “agnostic” about OS platforms is the mantra of this market.  The Android market is now dominant worldwide, and growing.  Relinquishing the Android market to the competition, Cardmunch would lose literally millions of dollars. Surely Cardmunch and LinkedIn would not fail to act.

Over the year and a half since this issue first arose, questions have appeared on the Linkedin and Cardmunch support sites, and other websites as well. Where was Cardmunch for Android, and why is it taking so long? I did find one “mealy mouthed yada yada marketing speak” answer allegedly from one of the Cardmunch founders. The answer was boiler plate words about “serving our customers to the best of our ability,” wishing to “be responsive to our customers,” and most interestingly, something about needing to be able to provide sufficient servers to support the large increase in demand from Android users. Obviously, this all sounds like complete nonsense, considering the scale and big pockets of LinkedIn, and the amount of time that has been frittered away.

CamCard

Cardmunch internal politics and strategy no longer matter. Not surprisingly, after leaving open a window of competitive opportunity as big as an aircraft carrier for more than a year, the market has responded. A competitor, CamCard has appeared with a vengeance. A year ago there were no acceptable alternatives to Cardmunch. Today, if you go to Google Play, you will find perhaps a dozen Android card scan applications, in addition to CamCard. IMHO, and others, CamCard appears to be the best of the lot.

To me, a Silicon Valley veteran, this sounds like a story with much more to it than is being made public. Silicon Valley is legendary for feuds, fights and odd, eccentric personalities.  No one seems to be talking publicly, but if someone does know the full true story of this marketing debacle, I invite them to come forward.  I am only guessing, but this is one of those things that might make a good book.

The bizarre burning unanswered question is why did Cardmunch and LinkedIn allow this happen?

Time To Thin Out Ineffective Startup Accelerators

If properly managed and matched to local economic need, resources and capabilities,  local accelerators can be a significant local economic asset. However, the problem with so many of these “everywhere else” accelerators, is highly unrealistic expectations to be “the next Silicon Valley“, failure to connect with local economic needs, excessive focus on any and every new Web app, and most importantly, poor management.  It is also apparent to me that many of these more remote smaller communities are so distant from the mainstream economy, that many of the “great ideas” that come out of them, are embarrassingly late.

My guess is that of the estimated 7500 accelerators worldwide, perhaps less than a couple hundred are providing real benefit. The rest are enjoying the current overenthusiastic entrepreneurship bubble,  chewing up vast amounts of public funds and resources without much to show for it.

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RT @bcic: “The Problems with Incubators and How to Solve them” http://t.co/vkS0cnMsZD #bcacceleration

— sba_bc (@sba_bc) September 2, 2013
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Two examples of local accelerators doing things right, and winning awards for their efforts, would be Andy Hamilton’s Ice House in Auckland, New Zealand,

Read more: Ice House, Auckland, New Zealand

and the Walla Walla Valley (Washington) Wine Cluster Economic Development Project,

Read more: Walla Walla Valley Economic Development Cluster

The background story  involves the economic decline of Walla Walla, whose economy had been based on grain farming, and establishing a wine industry accelerator in the local community college.  The result has been an astonishing revival of the town.

The author of the article below, is making a much too sweeping argument in favor of local accelerators, essentially “all” local accelerators, without much critical investigation or thought as to the vast sums of money being wasted in small communities that can ill-afford it.

6 Reasons to Keep Accelerators Everywhere Else.

There’s an accelerator bubble.

Accelerators, except for Ycombinator/TechStars, are irrelevant.

We should get rid of the Demo Day.

If you’ve been in the startup space for more than a minute, you’ve probably heard someone say something like this. Founders and startup advocates have naturally critical minds; it’s why we can solve complex problems in innovative ways. But, that also means we spend a lot of time second guessing and rethinking every single thing we do.

I’ve had my own doubts about the accelerator model, and they mimic most of the concerns people bring up. There are so many (2000 around the world). What company can really be built in 3 months? It seems that the only real success comes from the big names, so why bother with smaller, local accelerators?

But, this week I was convinced that accelerators everywhere else can be just as beneficial to companies as the more publicized YCombinator and TechStars. Yesterday I attended the Investor Day for Jumpstart Foundry, in Nashville, TN and was duly impressed with what I saw. Of course, they had the bells and whistles–cool venue, great food, open bar. But more impressive were the companies that presented.

Every company had made significant strides in the 3 month program. Most could give detailed explanations of revenue. Quite a few already had traction and are well on the way to making real money already.

Vic Gatto, founder of Jumpstart Foundry and partner at Solidus Company, is well aware of the negative perception accelerators carry.

“We’re definitely a young industry going through definitional challenges,” he told me. He talked about meetings with other accelerators around the world. The leaders of these accelerators are talking about what defines success. Is it funding? Exits? Revenue? Level of mentor networks?

By most metrics, Jumpstart Foundry is finding success. 65% of its graduates are still in business, either bootstrapping or with funding. They have over 100 mentors, and that network grows each year. Gatto insists, though, that another real metric of success will be future exits, and most of the industry is still too young to really see that achieved yet.

One mentor told me that this year’s cohort may be the best she’s seen. “And they didn’t start off particularly special,” she said. “I think that really speaks to how the program itself is growing.”

And, as far as getting rid of Investor Day, Gatto won’t be doing that any time soon.

“That pressure is important,” he said. It’s the deciding factor sometimes when a new founder is tired and wants to call it a night. With Investor Day looming, it’s easier to focus and do the hard work of a young company.

Make sure to check out Jumpstart Foundry’s latest cohort because there are definitely some companies to watch. We’ll cover some of them here on Nibletz in the coming weeks.

In the meantime, here are a few reasons we shouldn’t give up on the accelerators everywhere else just yet:

1. In the life of a young company, it can be easy to let an idea go when it gets hard. Surrounding yourself with mentors and good advice in an accelerator can help you push through those first stage challenges.
2. The pressure of Investor Day can give you more traction than you thought possible in 3 months.
3. Accelerators everywhere else understand companies everywhere else.We’ve talked before about how companies outside of Silicon Valley are innovating in industries besides the Internet and apps. Local accelerators inherently “get” that more easily than accelerators that are used to churning out consumer-facing apps.
4. A good accelerator can be a rallying point for a whole ecosystem. Yesterday in Nashville, it was a packed house. Not just investors, but anyone interested in the startup scene showed up to support the cohort.
5. Even if your first company doesn’t succeed, the 3 month MBA you get by doing the hands on work of an accelerator will be invaluable to the next companies you build.
6. Accelerators may not be perfect, but what is?Anything that spurs innovation is good for the local community as well as for global issues that need creative problem solvers.

The Enemy of My Enemy is My Friend: Should Microsoft buy Blackberry?

Readers of this blog will recall last week’s post on the International Data Corporation‘s (IDC) report on the mobile phone market.  The problems for both Microsoft and Blackberry were exposed again for all to see.   Microsoft’s Windows Phone market share at 3.7%, would have been even smaller without Nokia. Blackberry’s situation was even more dire.  A few months back Microsoft and Blackberry opened another new patent war on each other, as if this would somehow help their situations.

This week Blackberry has announced the inevitable search for a potential buyer to take the company private, as has also happened recently with Dell Computer. The suggestion that Ballmer and Microsoft should consider purchasing Blackberry is actually a potentially very interesting idea.   A broader market consolidation, with much larger implications, may be on the horizon.

The enemy of my enemy is my friend: Should Microsoft buy BlackBerry?

BY NATHANIEL MOTT
REBLOGGED FROM PANDODAILY ON AUGUST 13, 2013

BlackBerry was the undisputed king of thesmartphone market for years. Now, after ceding themajority of its marketshare and valuation to Apple and Samsung, the company hasput itself up for sale. Speculation that it will be acquired by Microsoft, its primary competitor for the bottom of the market, runs rampant, partly because the two companies are said to have considered such an arrangement before.

So hypothetically, if that deal goes through, what would a world in which Microsoft acquires BlackBerry look like? In theory, the two would be able to combine their strengths — those being Microsoft’s growing media empire, and BlackBerry’s experience developing hardware — and finally pose a threat to Apple and Samsung. In practice, such a world is unlikely to exist, largely due to the capricious smartphone market.

Microsoft needs Nokia. The smartphone-maker’s products are said to represent 80 percent of globalWindows Phone handset sales. Nokia warned investors in March that a Microsoft-built phone could threaten its business; it’s unlikely to stand by if Microsoft acquires BlackBerry and puts the company’s decades of experience with hardware to use. (Never mind how delighted consumers and investors might be to see Nokia cut ties with Windows Phone.)

Nokia CEO Stephen Elop is already under pressure from shareholders to “choose another road” lest it find its way to hell — it isn’t hard to imagine that sentiment being expressed louder and louder if Microsoft were to acquire BlackBerry.

The idea that Microsoft and BlackBerry would simply combine their marketshare and begin posing a larger threat to Apple and Samsung is flawed. Microsoft would have to leave BlackBerry alone, allow it to build the same products it’s been building, and perpetuate a business that put the company in a position to be acquired in the first place for that to happen.

Assimilating BlackBerry into Microsoft and using it to create Windows Phone products might alienate users who still appreciate BlackBerry’s phones and operating system. Making Windows Phone resemble BlackBerry’s software might do the same to all the people who like Microsoft’s mobile operating system. A combined company might be able to find a middle ground that leads to future gains, but it’s unlikely that the new marketshare could be found by combining the current numbers.

And then there’s Microsoft’s newfound emphasis on devices and services. Microsoft CEO Steve Ballmer is reorganizing the entire company to make devices like the Xbox and Surface tablets central to its purpose — bringing BlackBerry into the fold might facilitate that process, but it could just as easily cause problems.

Or again, if the two companies are kept separate, why bother purchasing BlackBerry in the first place? (Insert “for the patents, stupid!” comment here.) It’s not like the company developed a tablet that proved to be more popular than Microsoft’s Surface tablets, and people aren’t exactly lining upto purchase its latest smartphones, either. As “a former high-level source intimately involved in Microsoft’s acquisition strategy” tells Fast Company:

What Google did with Motorola is insane. Everyone was like, ‘Oh it’s about the patents.’ It turns out that it wasn’t about the patents — they actually want to get in the business of building devices. That was an expensive way to do it. I think Microsoft thinks that if you want to build your own devices, you hire new designers, get new hardware guys, and do it.

It’s a better path than acquiring a huge company with a completely different business model.

Could Microsoft acquire BlackBerry and turn it into something useful? Probably. BlackBerry’s patents, its enterprise-facing products, and its broad reach could be appealing to any buyer willing to pay the proper price. But such a deal is unlikely to change BlackBerry’s slide to the bottom of the smartphone market — and, since Microsoft has made gains because of that slide, slow Microsoft’s already sluggish ascent.

Latest IDC Mobile Market Report Underscores Importance of Industry Analysis

Android OS Was on Nearly 80% of Devices Shipped in the Second Quarter, IDC Says

Students of Industry Analysis will note the importance of high technology industry analysis firms, like International Data Corporation (IDC), which this week issued its quarterly reports on the state of key technology markets.  The report has today been seized upon, sliced and diced by the Wall Street Journal, and a host of other media sources. The technology blogosphere is alive with comment, PandoDaily, Gigaom, TechCrunch, Gizmodo have all been furiously offering their own spins on the IDC Report.  It is amazing to see so much of the industry talking about nothing else but IDC today.  Similar firms like Forrester, Gartner and others offer similar industry analysis reports, but IDC is the big dog, and the mobile market is their dog food.

But There’s More…..

Some of the best industry trend information is not immediately obvious, buried in the depths of the report….My favorites

1.  Microsoft’s Windows Phone is going nowhere fast at 3.7% market share.  Microsoft shareholders are rumored to be agitating for change, and Steve Ballmer’s head may be on the block.  Without Nokia’s support, Windows Phone would have an even smaller share of the market.  Microsoft’s catastrophic blunder with Windows 8 has only added to their woes.  IDC had previously correctly predicted this in 2012, which shows the reason for the immense interest in the IDC report.

2. Blackberry, despite doing an admirable job of turning things around, is still in freefall. Simply too little too late. This week’s latest resignations of key executives serves to underscore IDC’s analysis

3. The tablet market is a very different market from smart phones. It appears to be driven by the emotional devotion of iPad users, The entire tablet market seems to move on Apple’s  moves, and the lack of any new iPad launches has depressed the entire market,  This could suggest, as Blackberry’s CEO has said, that the tablet is not really a viable market. It may be squeezed between smart phones and the residual laptop market, and eventually disappear.

Read on….

Google Inc.’s Android software continues to steamroll the competition in smartphones, posing bigger problems for companies like Apple Inc., Microsoft and BlackBerry Ltd.

New data Wednesday from research firm IDC found that Apple’s share of the globalmarket slid to 13.2% in the second quarter from 16.6% in the year-earlier period. Handsets running Android, meanwhile, jumped to 79.3% from 69.1%.

The signs are particularly ominous for one-time market leader BlackBerry, despite some high-profile product announcements recently. Devices running its software accounted for just 2.9% of global smartphone shipments in the three months ended in June, compared with 4.9% for the same period in 2012.

Android is given away free to handset makers by Google, whose strategy is to make money on advertising associated with mobile devices. It has long powered smartphones offered by industry giantSamsung Electronics Co.,005930.SE +0.08% but has lately also benefited by Chinese companies such as Lenovo Group Ltd., 0992.HK -0.68%Huawei Technologies Inc. and ZTE Corp. that are grabbing a bigger chunk of the smartphone market.

“You are seeing tremendous growth in the developing world,” said Steve Mollenkopf, president and operating chief of mobile chip giant Qualcomm Inc. QCOM -0.58% Companies selling there are “picking up Android and driving that.”

Market share, of course, isn’t the same thing as making money. Apple earns more profit from its iPhones because it can charge more than rivals can. Its average sales price, excluding any carrier subsidies, was $710 in 2012, compared with an industry average for smartphones that year of $407, IDC estimates.

Smartphone Smackdown

Samsung, which is No. 1 by unit shipments, and No. 2 Apple account for essentially all the industry’s profit, Canaccord Genuity estimates. The firm puts Apple’s second-quarter smartphone operating profit at $5.99 billion, with an operating margin of 33%; it estimates Samsung’s profit at $5.63 billion, or 19%, including both smartphones and other handsets. Many others are losing money in the business, it estimates.

But high prices aren’t helping Apple’s share in some markets, said IDC analyst Ryan Reith, especially in some developing markets where most smartphones get sold for $390 to $450, he said.

Apple, which is expected to announce new products this fall, has also suffered from the lack of new handsets to drive demand now, Mr. Reith said. Apple’s shipments did grow 20% in the second period, IDC said, though lost share because the smartphone market grew more quickly.  An Apple spokesman declined to comment.

BlackBerry, which launched its new operating system in January, was overtaken as the No. 3 supplier of smartphone software in the second quarter by Microsoft Corp., whose share in smartphone software grew to 3.7% from 3.1% last year.

The Canadian company accounted for roughly a fifth of smartphone sales in 2009. But the impact of its new line of phones has been slight so far.

BlackBerry is “in a really tough spot right now,” Mr. Reith said. “They’ve shown their cards and the industry really hasn’t reacted the way they had hoped.”

A BlackBerry spokesman declined to comment.

Read more: following are my previous posts on the evolving Mobile Market Mega War:

Mobile OS Market Share: War of Titans Worth Following

Multidimensional Mobile Market War: Silicon Rust Belt

Mobile World Congress: Mega War Gets Even Weirder

Microsoft’s New End Game Strategy: Pray

Integrated Big Data, Cloud, Smart Mobile: Big Deal or Not?

Mobile World Congress: Smart Mobile Mega War Gets Even Weirder

Mobile World Congress This Week

New developments in the global smart mobile and tablet war at this week’s Mobile World Congress in Barcelona Spain, continue to add to the intrigue, infighting and mega dollars being bet on this market…with little impact so far on the probable outcome. I have spoken with two colleagues who are in Barcelona this week watching it all unfold.

Blackberry (the former Research in Motion), Hewlett-Packard, Nokia, and Microsoft, are all struggling and at risk, and making bold survival moves, with mega dollars.  Meanwhile, Google and Android continue to consolidate their market dominance globally, but not without major worries about Samsung “wearing the pants” in the Android market.

First, Hewlett-Packard, which in my opinion damaged its brand irreparably two years ago, with moves out of, then back into, both the tablet and PC markets, has left consumers and industry analysts befuddled. Years ago there was the bizarre acquisition of the Palm handheld OS for $2 Billion, which is now a boat anchor.  Recently, HP again blundered in its acquisition of British software firm, Autonomy for $11.1 Billion.  Previously, AOL‘s acquisition of Time Warner in 2000 has been considered the worst corporate deal of all time, but HP has stolen this title from AOL with the Autonomy deal.  The HP brand also still retains the old “plastic pocket protector” engineer geek image, which simply does not play well against Apple or Google. However the move to Android on HP tablets makes good sense, and is a major slap in the face to Microsoft.  IMHO, HP’s situation is analogous to Blackberry.  Despite recycling CEO’s and moving to the dominant tablet OS, Android, the market window has closed for HP.  The industry trade and business press has been asking editorially if all of the bad news and blunders are more than just coincidence, as if a jinx has descended on HP. with the ghosts of both Hewlett and Packard rising out of their graves in despair.

Blackberry has done everything right. It is difficult to find any fault with the efforts of the new CEO and team to turn the company around. Nevertheless, finding a realistic and reasonable scenario where Blackberry survives is increasingly difficult.  Corporate and U.S. government customers are leaving the Blackberry fold.  Some argue that Blackberry’s secure networking is the corporate jewel. However, at the Mobile World Congress in Barcelona this week, Samsung and General Dynamics announced a partnership to provide end-to-end mobile device security down to the application layer, providing a direct competitive threat to Blackberry.

Read more: http://www.hawaiinewsnow.com/story/21325388/general-dynamics-to-deliver-enhanced-security-for-samsung-mobile-devices

Microsoft must be reeling from HP”s decision to switch to Android, and frankly the image around Microsoft’s investment in the Dell privatization, looks more like paying for a destitute friend’s funeral.  Some have speculated that Microsoft’s investment is also viewed very unfavorably by other PC makers, making matters worse. Nokia, Microsoft’s anchor device partner for Windows Mobile, would be negligent if they were not scanning the market projections for Windows 8, and pondering HP’s decision to jump to Android.  Nokia’s best option for survival at this stage may also be to switch to Android.  All of this is surely making Microsoft executives nervous.

I have real doubts seeing any these competitors achieving survivable market share positions in the market.  I am not prescient, but my gut, after years of working in this space says no.

Samsung Share of Global Android Device Market

WRT Google, Android and Samsung, the Wall Street Journal yesterday published an an article aptly titled, “Samsung Sparks Anxiety At Google.”  As I suggested in my last post on this topic, Samsung has become so dominant in the Android OS market, controlling over 40% market share, that Google correctly sees significant risk in any renegotiation with Samsung.  Google is hopeful that new Android devices from HTC and HP will apply competitive pressure to Samsung, and diminish its negotiating leverage with Google.  Earlier rumors had Samsung considering launching its own OS to compete with Android. This seems far fetched in the larger scheme of this market, but stranger things have happened.

Read more: http://online.wsj.com/article_email/SB10001424127887323699704578324220017879796-lMyQjAxMTAzMDIwNTEyNDUyWj.html

More on the Mobile World Conference and The Smart Mobile Mega War next week.

Mobile Market Share: A Multidimensional War of Titans Worth Following

NOTE: This post, originally published in January 2013, continues to be one of the most viewed on the site.  As Google and Apple now are estimated to enjoy 98% market share between the two, many of my projections regarding this market appear to have been borne out.

In one of the most interesting high tech scenarios in years, the “smart mobile” OS (operating system) market is shaping up to be a classic Battle of the Titans. Key strategic issues, theories, speculation, and money, lots of it, are making this a great real-time strategy and marketing case study for management students of all ages (smile).  So as Dell prepares to fade into the sunset, get yourself a drink of your choice, and some popcorn, sit back and watch it all unfold.

The best metaphor I can apply to this might be a “destruction derby” featuring at least two players,  or perhaps a bizarre multidimensional Super Bowl or Rugby World Cup match, with four teams on one playing field with four goal posts at each cardinal point of the compass..  At the moment all four teams are tackling, passing, and running at each other in a confused pile. There are scrums, rucks and mauls in multiple locations. Two competitors, Google and Apple appear to be winning. The other two, Microsoft and Research in Motion, are pretty banged up, but still playing.

The two currently dominant competitors, Google Android with its acquisition of Motorola Mobility, and Apple IOS are rapidly consolidating and expanding their global market positions, via partnerships, vertical integration, and application development ecosystems. Microsoft has publicly committed to spending massively to make Windows 8 the third OS option, but a recent IDC mobile OS market forecast projects Microsoft with only a miniscule share in 2015.  Something tells me that Steve Ballmer will go on a rampage if that happens, rather like the video of him screaming and dancing on stage in my post “Extrovert or Introvert, Authentic Presentations Take Practice,” November 30th. http://mayo615.com/2012/11/30/introvert-or-extrovert-authentic-presentations-take-practice/

The key question is whether Microsoft or RIM, will be able to establish a third mobile OS to a survivable market position.  It is not at all clear that either can do so at this point.  The market is also speculating that mobile hardware market leader Samsung, is possibly considering making its own play by creating its own mobile OS ecosystem.  While this may seem far fetched, this kind of vertical integration seems to be making a resurgence as a strategic move, after having been discredited.  Then there is the perennial Nokia, who has seemed to be on death’s door, but may be coming back. As a strategic partner for Microsoft, Nokia’s fate may have a huge bearing on Microsoft’s strategy to reinvent itself as the PC goes into atrial fibrillation. Will Amazon enter the fray with its own smart phone entrant, and if so, with whose OS?  Will Research in Motion and the Blackberry be able to achieve a survivable market share, or is RIM already a walking zombie?

Finally, in a kind of death dance patent dispute reminiscent of the film, Gladiator, Nokia and RIM are now locked in new lawsuits and counter-lawsuits, as if to say, “If neither of us are going to survive, we might as well kill each other for the entertainment value.”

Here’s a more concise overview of the race to be the third mobile platform:

• The argument in favor of a third platform is straightforward and compelling: A new, robust competitor will prevent the dominant platforms from growing complacent or stifling innovation. Apple and Google are pretty happy with the status quo. Consumers are probably not consciously pining for a third mobile platform. Developers would happily get behind a third platform if it widened their revenue streams.
• Microsoft has a head start: It launched Windows Phone in 2010, and tablet-friendly Windows 8 this year. It is experienced in building developer communities. However, Windows Phone has so far only managed a paltry 3 percent platform market share.
• Amazon has the most potential to upend the market: A smartphone would be a natural extension of Amazon’s distribution empire, and its Kindle Fire tablet play. Unfortunately, the most recent E-reader forecasts show them in sharp decline as growth in full-functional tablets squeeze them out.  Amazon has 106 million unique visitors accessing its sites, many of them with credit cards on file. 
• Samsung is a dark horse: Its dependency on Android may become a liability and push the South Korean manufacturer into the platform business. Samsung’s strength is its hardware sales prowess — Samsung shipped over 56 million smartphones in the third quarter of 2012. 

Read more: http://www.businessinsider.com/bii-report-the-race-to-be-the-third-mobile-platform-2013-1#ixzz2IepLaaka

For Management students, this real time case study offers the opportunity to apply and ponder:

1. The time tested 1976 Boston Consulting Group (Bruce Henderson) “rule of three and four.”  In a stable mature market there can be no more than three surviving competitors, the largest of which can have no more than four times the share of the smallest of the three.   Here, the question is whether a third competitor can successfully emerge at all?

2. Barriers to market entry. Former Intel Marketing VP, Bill Davidow‘s book, Marketing High Technology, An Insider’s View, still considered the standard on the topic, suggested his own metric for a barrier to a new market entrant, or even a competitor just struggling to survive the market shakeout. The market entry barrier rule of thumb in dollars is three-quarters the most recent annual revenue of the market leader. In this case, that is a very big B number…  Microsoft has the bucks, but is it just too late?

3. Vertical integration. Rumors of Samsung introducing its own mobile OS seem implausible, but hey Nvidia just announced its own gaming console to compete with Microsoft, Nintendo, and Sony.

4. Resources and capabilities. It is necessary to consider the respective resources and capabilities of each of the many direct players, and those playing in related markets that bear on the mobile OS market.

5. Related markets, new markets, peripherally involved competitors and products which all could play a role in the eventual outcome of this. The integrated Internet HDTV market is only one example. Featuring Apple, Microsoft, Google, and Samsung, and the HDTV manufacturers, it could influence things.  What if Amazon were to vertically integrate and introduce its own smart phone?

This is the hairball of this Century so far.  Are you all still with me, here?