With the planned acquisition of mobile software maker Symbian, Nokia has decided to grab its future and run with it.
Nokia's decision to acquire the remaining stake in Symbian that it doesn't already own is designed to accelerate the mobile phone giant's product development--and serve as an open-source operating system platform to other handset makers, wireless carriers, software developers, and chipmakers, analysts say.
As a result, Nokia and other industry players hope to create a stronger defense against Apple's popular iPhone, Google's pending Android phone, and Microsoft's mobile operating system, analysts say.
"Nokia realized that under the current structure (where they owned only a minority stake), they could only hope Symbian would unlock their operating system and open it up to developers, handset makers, chipmakers, and carriers," said Jim Kelleher, an analyst with Argus Research.
Nokia and other electronics makers have formed the Symbian Foundation, a nonprofit that aims to create an ecosystem. The foundation is backed by carriers AT&T, Vodafone, and NTT DoCoMo and hardware competitors LG Electronics, Motorola, Samsung Electronics, and Sony Ericsson. Also joining the foundation are STMicroelectronics and Texas Instruments.
"By being a 100 percent owner, Nokia can push the Symbian Foundation initiative forward without the potential of dissenting stakeholders," said James Faucette, an analyst with Pacific Crest Securities. "Nokia wants to attract more development input from other sources and develop a reasonably good alternative to other operating systems that are being developed."
Of course, Nokia is also looking to bolster its own performance with the Symbian acquisition.
"Nokia is trying to accelerate its product development by acquiring Symbian and bringing development in-house," said Mark Sue, an analyst with RBC Capital Markets.
Nokia has seen its worldwide market share steadily erode over the recent quarters from roughly 50 percent of the handset market to around 45 percent, Sue noted.
Three to four years ago, Nokia faced a steep challenge as its competitors launched spiffy, colorful slider cell phones, Kelleher said. Nokia had no such offerings in the works.
"Nokia was guilty of having hardware with no slick, no color. It was just a lump...Nokia was caught short," Kelleher said. "But Nokia has since come back fast and fierce, with new changes to their phones."
He added that the cell phone maker has come to the realization it needs more than just hardware to keep customers interested and up-to-date.
This year, for example, Nokia launched such products as its Xpress Music Phones, the Nokia Tube, in response to Apple's iPhone, and its Prism clamshell phone with triangular buttons.
Motorola is getting close to hiring someone to head up its soon-to-be-spun-off handset division, according to a story in The Wall Street Journal on Wednesday.
Hewlett-Packard executive Todd Bradley has emerged as one of two final candidates for the position, according to the article, which cited sources close to the situation. The newspaper reported that the other person under consideration for the position is a top telecom executive whose identity is still unknown.
Motorola, which said in March that it was spinning off the fledgling cell phone division, is supposedly considering two candidates. The Wall Street Journal contacted Bradley by phone Tuesday night, and the executive said he wasn't planning to leave HP.
"I'm happy where I am, and I'm not planning to make any changes," he said in the article.
Bradley, 49, has a long management career that includes senior positions at GE Capital, Dun & Bradstreet, Gateway, FedEx, and PalmOne. He has been with HP since 2005.
He has been known to help struggling divisions get through tough times. Specifically, helped revive HP's personal computer division by focusing on consumers with emphasis on retail sales and new, sleek laptop designs.
He also became chief executive of PalmOne when the company merged with Handspring and split into separate hardware and software companies. (PalmOne, which was the hardware company, later reverted back to its previous brand, Palm.) Bradley is credited with moving the hardware-focused PalmOne from personal organizers into smartphones, creating a new category of handheld devices.
His experience in turning around troubled divisions and companies could be put to good use as the CEO of the new independently run Motorola handset business. The company has been struggling for several quarters to regain market share and profitability.The company's products have lagged while its competitors introduce cooler more compelling handsets. The last hit Motorola had was the 2004 release of the ultra-thin Razr cell phone. Since then its new phones have essentially flopped.
Meanwhile, former competitors like Nokia gobble up worldwide market share and new entrants such as Apple strum up excitement for its iPhone.
Motorola's soon-to-be-spun-off cell phone business is in need of new blood with fresh ideas. The company has essentially been without any significant leadership since February of 2007 when Ron Garriques, who headed up that division, left. Garriques supposedly clashed over strategy with then-CEO Ed Zander, who was later forced to resign.
If you use a Motorola Razr cell phone, don't accept JPEGs from strangers.
A vulnerability has been discovered in the phones that could allow a hacker to send a corrupt JPEG image via Multimedia Messaging Service that could be leveraged to run malicious code on the phone. However, you would have to accept the image for download before that could happen.
The specific flaw exists in the JPEG thumbprint component of the EXIF parser, according to an advisory released by security firm TippingPoint's Zero Day Initiative on Tuesday.
"Although the possibility of this vulnerability occurring is very remote," Motorola has fixed the vulnerability in all new releases of the Razr and urges people with older devices to download the latest software from its Web site, the advisory said.
The vulnerability was reported to Motorola last June.
Sales of cell phones in the U.S. declined during the first quarter of 2008, as the maturing market was hit by a slowing U.S. economy.
Nearly 31 million handsets were sold in the U.S. during the first quarter of this year, down 22 percent from the same period a year ago, according to the NPD Group. Sales of mobile handsets generated $2.7 billion, down from $2.9 billion for the same period a year ago.
This is the first time since the NPD Group started tracking mobile handset sales in 2005 that it a saw a decline in the first quarter after the holidays. And the market research firm believes the decline could be tied to economic troubles.
"Cellular phone service has become a practical necessity in modern life," said Ross Rubin, director of industry analysis for NPD. "However, with looming economic concerns on the horizon, many consumers may be holding back on new handset purchases, especially those tied to new pre-paid plans."
The maturing market may also be playing a role in the slowdown. Roughly 84 percent of the U.S. population already subscribes to cell phone service, according to the trade group CTIA.
But feature-rich phones like smartphones still seem to be selling well. In fact, smartphones, which offer e-mail, Web surfing, music, and other Internet services, accounted for about 17 percent of all mobile phone sales during the first quarter, the NPD Group reported. This was an increase of 10 percent over the previous year. The study also found that 60 percent of phones purchased in the first quarter were music-enabled. This is compared with 41 percent of phones the prior year.
News of slowing sales is bad for Motorola, whose handset business is currently up for sale. Despite its mountain of woes, Motorola maintained its lead in the U.S. market during the first quarter. But its overall share of the market declined from 35 percent in the first quarter of 2007 to 27 percent this year. Samsung and LG reported strong market share with 18 percent and 17 percent respectively, according NPD.
Research in Motion, the maker of the BlackBerry, edged out Sanyo as the fifth largest mobile phone maker in the first quarter of 2008.
But Nokia, the worldwide leader in handset sales, is still struggling in the U.S. market. The company came in fourth place with 8 percent market share according to NPD. Nokia has struggled to get a foothold in the U.S. market where most devices are sold through carriers. One of the main problems is that the company's hottest phones aren't sold in the U.S. market or come to the market months after they've been offered in Europe or Asia.
But Nokia executives say they are committed to increasing market share in North America. On Monday, Nokia's Chief Financial Officer Rick Simonson told Reuters that it plans to have strong double-digit market growth in North America within a year. The company has opened a research and development facility in Southern California, which it hopes will help it develop products specifically for the U.S. market. Still, Nokia believes that its massive scale will help it in North America.
The latest executive to leave Motorola: Rich Nottenburg, chief strategy and technology officer.
The doors of the cell phone maker's executive offices seem to have been revolving nonstop since activist investor Carl Icahn, who took a leading role in the Microsoft-Yahoo merger fracas late this week, began his successful pursuit of Motorola board seats.
Nottenburg's departure, announced on Thursday to employees in an internal memo, according to Motorola spokeswoman Jennifer Erickson, follows the replacements of CEO Ed Zander in January, acting CFO Tom Meredith in February, and mobile-devices head Stu Reed and marketing head Casey Keller in March, along with treasurer Steve Strobel and EMEA mobile-devices head Mike Fenger.
"(Nottenburg) left to return to the New York area to be with his family and pursue other opportunities," Erickson told Reuters.
In April, Motorola posted a quarterly loss of $194 million. Weeks earlier, under pressure from investors such as Icahn, the struggling company announced that it would split into two publicly traded companies, one handling handsets and accessories, and the other taking on wireless broadband networks and enterprise-level communications services.
In the wake of Nottenburg's resignation, according to The Wall Street Journal, Motorola Labs will be directed by Dan Moloney, who leads the company's home and networks mobility business.
Who's next?
Motorola on Thursday reported a first-quarter loss of $194 million, or 9 cents per share, up from a year-ago a loss of $181 million, or 8 cents a share, in the year-ago quarter.
The report comes as the company is struggling to reorganize its mobile-phone business before it separates into two companies.
Net sales for the quarter were $7.45 billion, down from $9.43 billion a year ago.
Sales at the Mobile Devices division were $3.3 billion, down 39 percent compared to a year ago. That division reported an operating loss of $418 million, up from $233 million in the year-ago quarter. During the quarter, the company shipped 27.4 million handsets.
Motorola has reportedly reorganized its struggling mobile-phone business in anticipation of plans to spin it off into a separate publicly traded entity.
Rob Shaddock
(Credit: Motorola)Although Motorola, at press time, had not yet put out a statement on the changes, they appear aimed at developing products more quickly in response to consumer demands, according to reports by Chicago Tribune, The Wall Street Journal, and Reuters.
Motorola has reportedly combined two categories of phones, mid/high-tier feature phones and multimedia phones, into a single segment, according to the Tribune. And among a group of executives named, Rob Shaddock, a senior vice president of mobile devices, was named head of consumer products, according to the Journal and Reuters. The Journal added that John Cipolla was promoted to senior vice president for mid- to high-tier products; Steve Lalla will oversee teams focused on mass-market phones; and Todd DeYoung "was given responsibility for ensuring the company's cell phones match its overarching strategy and are being directed at the right market."
Motorola has seen its handset market share plummet, mostly due to a lack of compelling new products. In January, amid pressure from activist investor Carl Icahn, the company said it would consider separating its handset business from the rest of the company in an effort to increase shareholder value and revive the struggling business. Late last month it officially announced the plan and has since announced a round of layoffs.
This article was updated at 1:21 p.m. PDT to correct information on video quality.
Generation Y (and Z) are in for a big treat. As social-networking services like MySpace.com, Facebook, and Twitter have exploded as the definitive way to keep in touch, mobile content companies have begun to offer up some sophisticated ways to capture that energy and broadcast photos, videos, audio, and text from mass market phones.
I've been impressed with what I've seen from JuiceCaster, a mobile-media broadcasting app that's available as a WAP site from any Internet-enabled cell phone, and very soon, as a Java app offered through T-Mobile. Juice Wireless' CEO Nick Desai gave me access to JuiceCaster 6.0, the app's latest evolution, and chatted about the app's previously unannounced T-Mobile release.
(Credit:
Juice Wireless)
Brand new features
Though the JuiceCaster WAP site is accessible from any mobile phone via m.juicecaster.com, the downloadable client is unsurprisingly prettier, faster, and more robust.
Actionable items are varied with this rich multimedia app, but they boil down to three essentials--watching someone else's media, posting your own, and interacting with others through comments, invitations, and chat. Let me laud JuiceCaster here for its broad definition of "others," which takes in JuiceCaster users and non-users, and which, like Twitter, allows users to subscribe to other users' feeds.
The app's well-plotted interface makes it easy to create media on the spot or tag, title, and publish media that's already on the phone. The output can be posted as public, messaged privately, or set as your JuiceCaster profile picture.
New to JuiceCaster 6.0 is the choice to set media as your Facebook status. Clicking that option after taking a photo cues friends reading their Facebook activity feed to check out your profile and see the photo. Of course, any photo you upload will also show up in the regular activity feed, but assuming you've added JuiceCaster's Mobile Status application for Facebook, friends will now be doubly reminded.
JuiceCaster's integration with the social networks doesn't stop there. Mobile Video is another Facebook application to showcase your mobile video uploads to your Facebook profile. For MySpace, Blogger, Friendster, and others, there's an embed code for pasting a similar widget. Another new, nicely integrated feature auto-updates Twitter with links to your media. A follower that clicks a link will be taken to a stylish player on JuiceCaster.com. Unlike the Facebook status update, which users selectively activate, Twitter updating works in the background after setting up account permissions in the "Manage Connections" section on JuiceCaster.com.
Friends can see your photos and videos online.
(Credit: CNET Networks)The downloadable client also comes equipped with five equally attractive skin colors and a backup mechanism for e-mailing or texting media to contacts. The latter is much more primitive than the default auto-updating, but it's a safety net nonetheless.
JuiceCaster's T-Mobile launch
Over the next few weeks, JuiceCaster 6.0 will be rolling out on between 12 and 14 T-Mobile handsets, including Nokia, Sony Ericcson, and Motorola models (like the Razr). Subscribers who agree to the $3 per month charge can sign up from the T-Zones catalog.
Is JuiceCaster worth $36 a year plus data charges? It is if you have an unlimited data plan and a penchant for broadcasting your life online, and it's exponentially more worth it the more high-end your phone.
I spent a lot of time with JuiceCaster on a Motorola Razr and enjoyed flawless performance, though the Razr's image quality was admittedly rough in photos and video. I'm not sure I'd want to continually broadcast poor photos I have to reshoot multiple times to frame correctly, but the immediate video feature is a huge plus, and is available so long as the phone's native camera supports video. Besides, if I had that Nokia N95 I won, image quality would be a different story.
Fence-sitters can always try JuiceCaster from its WAP site before making a subscription decision. Not all social networking features will be available, but the core media-sharing actions will give users a chance to see if their activity level warrants $3 a month for a significant publishing convenience.
Motorola has named former AT&T Chief Executive David Dorman as its new chairman, the company said Wednesday.
Dorman will succeed outgoing Chairman Ed Zander on May 5, when Zander's current term expires and he retires. Dorman, 54, joined Motorola's board in 2006. He currently serves as a managing director and senior adviser at the private-equity firm Warburg Pincus.
Motorola will likely be getting some new board members at that meeting; private-equity executive William Hambrecht and Keith Meister, managing director of Icahn investment funds, will be nominated for Motorola's board at the shareholder meeting. That was part of a settlement with investor Carl Icahn, who had been involved in a squabble over the company's financial performance.
Motorola and activist investor Carl Icahn on Monday announced a settlement to their long-running conflict. The result: Two Icahn allies will be nominated to Motorola's board of directors.
Carl Icahn
As part of the deal, all outstanding lawsuits will be dropped, and Icahn has agreed not to launch a proxy battle at the company's upcoming shareholders meeting.
Private equity star William Hambrecht and Keith Meister, managing director of Icahn investment funds, will be nominated for Motorola's board at the shareholders meeting. Meister has also been appointed to the board, effective immediately.
The Icahn Group owns about 6.4 percent of Motorola's outstanding stock.
Icahn has been agitating for better financial performance but has met resistance from company management.
As part of the settlement, Motorola said that it will seek Icahn's input into the company's plan to sell off its mobile devices business and the search for a CEO of that spun-off company.
