The Smartphone Wars: NoWin deal &#8220;more takeover than deal&#8221;?
<p>In this week&#8217;s installment of &#8220;As the Smartphone World Turns&#8221;, we hear dire rumors from Nokia and see (more) evidence that RIM is circling the drain. We finish with a fascinating dispatch from the Android front.</p>
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<p>First up, <a href="http://www.techeye.net/business/nokia-will-lay-off-up-to-6000-next-week">Nokia will lay off up to 6,000 next week</a>?  (Hat tip to Richard Herrell.)  OK, this is a thinly-sourced story in the category of &#8220;rumor&#8221;, but dismissals that size are hard to hide in a country as small as Finland.  If the layoffs happen on schedule, that will be at least partial evidence for the rest.</p>
<p>A &#8220;senior figure&#8221; at Nokia has reported as saying &#8220;This isn&#8217;t a deal between Nokia and Microsoft, this is a Microsoft take over.&#8221;  Which would certainly be consistent with Microsoft&#8217;s past history. It is also rumored that Symbian is being handed to Microsoft for development.</p>
<p>Symbian, handed to the managers and developers who have made WP7 so wildly successful that Microsoft now has <em>less</em> smartphone share than it did a year so. Oh, <em>there&#8217;s</em> a prospect to gladden a Nokia shareholder&#8217;s heart.  Not.  </p>
<p>I&#8217;ll take &#8220;Formerly respected companies circling the drain&#8221; again for $400, Alex.  Answer: RIM.  Bing!  &#8220;What company just had the product it was betting on to reverse its catastrophic market share decline <a href="http://money.cnn.com/2011/04/14/technology/rim_stock_falls/?section=money_latest">roundly panned</a>?&#8221;</p>
<p>Yes, the RIM Playbook is out and nobody is impressed. Turns out the most interesting functions require it to be &#8211; wait for it! &#8211; <em>tethered to another Blackberry</em>.  (Best-snark award to David Pogue at the New York Times: &#8220;RIM has just shipped a BlackBerry product that cannot do e-mail. It must be skating season in hell.&#8221;)  </p>
<p>Business-saving advice to RIM: hunt down the genius who planned this and shoot him through the head.  That is, if you can still afford the bullets by the time you find him.</p>
<p>Really, with competition like this, what&#8217;s going to stop Android from blowing past 55% in Q3 &#8211; a giant-meteor strike?  Aside from Apple, its smartphone competitors seem to be contending mainly for the epic-incompetence award &#8211; and Apple hasn&#8217;t been doing so hot itself since the iPhone 4 antenna fiasco.</p>
<p>Meanwhile, 7-inch Android tablets now ship for <a href="http://www.pickegg.com/wholesale-search/android-apad-tablet-pc/1-0-0-60-2-1.html?welcome=5000&#038;gclid=CObhhcS3nKgCFUXe4AodsDl2Gg">less than $90</a> quantity 1.</p>
<p>Mind you, this is <em>before</em> the Android SoCs are shipping in volume.  This tells us three things:  first, my previous price projections were way, way too conservative &#8211; $85 tablets now implies $50 tablets by year end.</p>
<p>Second, the price of low-end smartphones is about to crash <em>hard</em>.  Yield problems with the displays (and thus their cost) scale as the square of the size; when 7-inch displays are cheap enough to fit in an $85 retail price, it&#8217;s likely HTC could already build a $50 smartphone around the 4-inch displays that are midrange now.</p>
<p>Third: By year end, the price pressure on anything non-Android in the smartphone and tablet markets is going to be <em>brutal</em>.  Unsurvivable for RIM; stick a fork in them, because their growth prospects are toast.  Even for Apple, maintaining share will be tough uphill fight.</p>
