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Competitive Developments Driving PC/Mobile Convergence Finds Futuresource Consulting - Earlier in February, Nokia formed a broad strategic partnership with Microsoft to defend its number one position in the global cellphone market, a deal that forms part of a larger series of competitive events driving PC and mobile convergence
Competitive Developments Driving PC/Mobile Convergence Finds Futuresource Consulting


NewswireToday - /newswire/ - Dunstable, Bedfordshire, United Kingdom, 2011/02/22 - Earlier in February, Nokia formed a broad strategic partnership with Microsoft to defend its number one position in the global cellphone market, a deal that forms part of a larger series of competitive events driving PC and mobile convergence.

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John Bird, Principal Consultant at Futuresource Consulting puts recent market movements into context.

A Backdrop to the Nokia-Microsoft Alliance
Almost 20 years ago, Nokia was the pioneer of converged devices with its Communicator, a combined cellphone, Internet browser and organiser able to download apps, and the company went on to buy its competitors' shares in platform developer Symbian as the industry's commitment to smartphones began to slump. During this period, Nokia and Samsung displaced Motorola to become numbers one and two respectively in the cellphone market.

iPhone arrived in 2007, with the Apps Store strengthening Apple's competitive thrust from 2009. In addition, BlackBerry began pushing into the consumer market from its secure position within enterprise and secure email.

Nokia's traditional competitors - Samsung, LG, Motorola and Sony-Ericsson - looked to Android to create a counterbalance to Apple, with Android's shipment share overtaking iPhone in Q4 2010. However, surging sales of iPad and iPhone have maintained Apple's momentum.

Nokia's overall mobile share has fallen by five points in the last two years - though it is still over 30% - and fell even more in the high-end smartphone market. The company has been challenged, and new management has been called in (including an ex-Microsoft executive as CEO). A revitalised strategy was urgently required, with a clear choice between backing Android or Microsoft.

Looking to Microsoft, the company has been in the mobile market for many years, but Windows-powered products have never risen above 2% share of total handsets; the land grab by Apple, BlackBerry and Android has marginalised Windows still further.

Against this backdrop, Nokia partnered with Microsoft in an alliance to drive Windows into the mobile market, and reaction has been mixed both within and outside of the company.

Microsoft Extending Windows to ARM Chips
During CES 2011, paving the way for the Nokia announcement, Microsoft stated that the next generation of Windows will run on ARM architectures. ARM does not make chips, but its low power designs are used in the majority of the world's mobile devices and increasingly appear in a wide range of other products such as games, cameras and STBs.

Over the last 30 years, Microsoft has partnered with Intel in a 'Wintel' dominance of the computing market, but this new shift will enable Microsoft to offer Windows mobile to OEMs using ARM architectures, hence intensifying its push into the burgeoning market for PC/mobile converged devices, not least with Nokia.

Intel Steps Up Drive into Converged Devices and Mobile
Intel is pushing forward. As well as powering all PCs and Macs, Intel's chips reside in the majority of netbooks and many of the new non-Apple tablets currently being launched. Many of these products will run Android as well as Windows.

At Mobile World Congress last week, Intel announced Medfield, a low cost 32nM Atom chip designed to take on ARM in the mobile space.
During CES, Intel announced it is acquiring Infineon's Wireless Solutions Business, WLS, to provide a link between baseband processors and Intel CPUs and - more recently - Silicon Hive, to enable an integrated graphics solution. These moves allow Intel to offer a more competitive solution to mobile device OEMs running ARM chipsets.

Android Extends its Footprint into Computing
Google's Linux-based Android has become a major force in the mobile market through support by Samsung, the global number two in cellphones, and other major mobile brands such as LG, Motorola, Sony-Ericsson and HTC.

The combined share of Android devices overtook iPhone and BlackBerry sales in Q4 2010 globally, and with over 150,000 apps now available in Android Market, the platform has become a standard requirement for developers, alongside iOS.

Significantly, Android is running on an increasing range of devices and pushing into the computing space. Mobile PC market leader Acer's new netbooks are Dual OS, running Windows and Android, RIMs new Playbook will run Android apps and Motorola's new Atrix Android-powered phone docks with a keyboard and display to become a fully-fledged computer.

Android, with the resources of Google behind it, is emerging as a competitor to both Windows and Mac OS in the mainstream computing space, as well as lower level mobile apps.

Flash 10.1: A New Competitive Factor
Shipments of Apple's devices continue to skyrocket - iPhone reached 47m in 2010, and this year iPad will almost double its 2010 shipments volumes. Mac is also significantly outgrowing the PC market.

With such growth, Apple is unlikely to feel seriously threatened by Android or the Nokia-Microsoft alliance. However, Flash may be an issue, as it dominates video distribution on the web (over 90%) and is supported by all of Apple's competitors.

Flash will run on Apple Macs, but was barred from running native on iPhone in 2007, and, in 2010, a more forceful move stopped developers converting Flash script into native iOS applications. iPad users were greeted with a frustrating blank when they clicked on a Flash video link on a website. In September 2010, Apple reversed the decision, allowing developers to convert Flash into iOS apps, including Adobe's AIR run-time environment, although the Flash Player still cannot run native in the iOS browser.

In version 10.1, Adobe has optimised Flash Player for mobiles. The company expects it to be supported by at least 130m tablets and smartphones by the end of 2011.

Predictably, since Apple's ban on Flash, its competitors have increased support for the format. In addition to its Chrome browser, Google's Android platform supports Flash, including the new Honeycomb tablet version. RIM will support Flash in its new Playbook tablet, and HP in their webOS tablet born from the Palm acquisition: the HP TouchPad.

Apple has maintained that there are many alternatives to Flash, in particular HTML5, which can support the VP8 codec. However, progress towards finalisation of HTML5 is slow, and in the meantime Apple is facing many competitive converged mobile devices able to run native Flash Internet video. The company may have to reconsider this if growth in iPad and iPhone shows any sign of slowing.

This is just a small insight into Futuresource Consulting's studies into the convergence of mobile and PC. For more information or to subscribe to this service, get in touch with David Sidebottom at Futuresource Consulting on +44 (0) 1582 500 127.

Futuresource will be hosting the Futuresource Entertainment Summit in London again this year, taking place on 16 and 17 June. Topics will include the rise of digital content delivery, convergent devices vs. dedicated devices and the business opportunities presented by new home entertainment technologies, platforms and delivery systems. For more information visit

About Futuresource Consulting
Futuresource Consulting ( is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments.

Authorised use of information
All information provided by Futuresource in any form is proprietary information that belongs to Futuresource and is protected by UK and international copyright law. Except as outlined below, direct or indirect reproduction of information, in whole or in part and by any means, is prohibited without the express written consent of Futuresource.

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