While Apple Breaks Records, Other Smartphone Makers Limp Along

Monday, 30 January 2012 00:00

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By Mike Isaac/wired.com

It’s a good time to be a smartphone manufacturer. That is, if your name is Apple.

The company’s financial momentum is, in a word, insane. Apple far surpassed shareholder and Wall Street expectations during its quarterly earnings call on Tuesday, soaring past previous sales records and nearly doubling company profits from the same quarter last year. In one fiscal quarter, Apple managed to sell more than 37 million iPhones, the largest number of units moved in a single quarter in the history of the company.

Yet Apple’s competitors are flailing about, all in search of a viable smartphone strategy to challenge Apple’s momentum.

Once considered the premier competitor to Apple in the mobile market, Motorola Mobility posted an $80 million loss in the fourth quarter, selling only 5.3 million smartphones and another 200,000 tablets. On a hopeful note, Motorola said smartphone sales were buoyed by the relaunch of its iconic Razr brand last year. And to be fair, that 5.3 million figure was up from 4.9 million units a year ago. But Motorola only managed to sell 18.7 millions smartphones throughout all of 2011, only slightly more than half the number Apple sold last quarter alone.

On a similar note, Nokia is bleeding cash in the midst of efforts to reinvent its business with Windows Phones. The Finnish mobile giant posted losses of $1.2 billion last quarter, with smartphone sales of 19.6 million devices. That number sounds high, but it’s a sharp 31 percent drop from the year-ago quarter.

But there is hope yet for mobile hardware companies not named Apple. Samsung currently seems the strongest competitor in the Android world, announcing its best-ever smartphone sales in one quarter on a conference call with analysts on Thursday. The company doesn’t break down sales data into granular bits and pieces, but Samsung told Bloomberg that its Galaxy S series of Android handsets helped boostmobile sales of over 300 million phones in 2011.

It’s important to consider this number accounts for mobile phones both smart and “dumb.” Nonetheless, it still represents a massive number of units shipped. What’s more, Samsung posted a rising net income of 4 trillion won (or $3.6 billion U.S.), up from 3.4 trillion one year ago.

Motorola hopes to build on the success of its Razr brand, continuing to introduce new versions of its legacy device. The Razr Maxx is the most recently revamped Razr-branded device to launch, for example, boasting a bigger battery for a longer talk time. And like it did with the first Razr of the mid-2000s, Motorola will introduce different color variations as 2012 progresses (a white version has already debuted).

To some degree, Nokia’s losses can still be explained as collateral damage in a larger shift in overall strategy. The company is gradually moving away from its long-championed Symbian and Meego OSes, doubling down instead on Microsoft’s Windows Phone platform. And there’s also a ray of sunshine in Nokia’s quarterly report: The company sold more than 1 million Windows Phone-based Lumia smartphones over the quarter, beating analysts expectations and signaling a promising future for the company’s roadmap.

But for now, it’s Apple’s game to lose. The company is sitting so fat, it’s practically giving away devices to its own employees. All eyes are focused on newly minted CEO Tim Cook to see if Cupertino’s most famous company can combat its mobile rivals successfully — without Steve Jobs at the helm.

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