IDC: Reflecting on the big events of 2010

Ramon LLamas IDCFive months ago, I submitted a review of the big events in the U.S. mobile phone market during the first half of 2010. Now that 2010 is drawing to a close, it only makes sense to take a moment and reflect back on what we've seen during the second half of this year. Once again, I'm focusing on stories that made an impact on the U.S. mobile phone market rather than the business-as-usual. In no particular order, here's what I came up with:

  • Windows Phone 7 Relaunch. I've been looking forward to this all year, given Microsoft's challenges in the past: A constantly outdated user experience that barely kept up with the market, and steadily declining market share. On Oct. 11, Microsoft CEO Steve Ballmer officially revealed the Windows Phone 7 initial lineup, with Dell, HTC, LG, and Samsung all represented. What followed were the teasers, promising to introduce a phone that saved us from our phones. Shortly after launch worldwide were reports of sellouts, perhaps brought about by limited available quantities as well as 2000 applications available. Recently, several blogs have reported that WP7 devices will be available at CDMA carriers prior to the end of 2010. Regardless, congratulations to Microsoft and its partners for making a strong comeback. Numbers won't be officially available until January, but for now WP7's fresh approach of hubs and tiles provide a user experience for other smartphone manufacturers to take notice.
  • iPhone Antennagate. No year-in-review list is complete without mentioning Apple. Instead of pointing out the frenzy following the release of the iPhone 4, how about Antennagate? It was a short-lived story, but gave another reason for iPhone/AT&T users to point out problems of connectivity. Steve Jobs addressed the situation, offering solutions with cases and refunds, but not before showing how other smartphones suffered the same problem. Still, this incident highlights that even basic connectivity is still high on smartphone users' lists despite the advances and developments around features and functionalities.
  • Changes in leadership. LG replaced Nam Young, the head of the company's mobile phone business, with Koo Boo-Joon. Similarly, Nokia replaced Olli-Pekka Kallasvuo with Stephen Elop, a Microsoft executive in September. In both instances, one of the primary reasons for replacement was that the companies had not capitalized enough on the growth in smartphones where as other companies have thrived. In addition, shortly after Elop's installment, the director of the company's MeeGo initiative, Ari Jaaksi, left to join HP/Palm. While these leadership changes have implications on a global scale, the United States will be a primary focus for both companies moving forward.
  • 4G is arrives, but what is it? Sprint was the first to bring 4G WiMAX connectivity to the masses with its HTC EVO 4G over the summer. Overall, it was a very good device, and even better if you were in a market where 4G was available. Shortly after, Sprint launched its second 4G device, the Samsung Epic 4G. Not to be overlooked was the launch of the first LTE feature phone, the Samsung Craft, at MetroPCS. Accompanying the launch of the EVO 4G was an advertising campaign showing a list of firsts in the market, ultimately asking the viewer, "what will you do first with EVO, the first 4G phone?" Recently, Verizon Wireless's "Rule the Air" campaign features a lightning/javelin-throwing customer after receiving a box in the mail from the carrier (I'm hoping it wasn't a bill). While these ads were clever in their own right, it left many users wondering what exactly 4G was, and how it was different from current mobile phone usage today. Perhaps we'll get a better glimpse once devices and services become more available next year.
  • HP adds management to Palm, introduces webOS 2.0. Prior to HP's acquisition of Palm last spring, HP lacked a compelling smartphone portfolio and Palm needed financial backing. Since then, HP added managers from Nokia, Samsung, and several within the company to the business unit, all with years of experience in the wireless and/or IT industry. By November, the renamed "HP webOS" was upgraded to 2.0 status, with multiple updates to the user interface, messaging, and contacts among others. While these developments show strong investment into the platform, what remains to be seen is how HP and Palm can educate customers on what differentiates its experience apart from everyone else's. Last year's ad campaigns did little to sway consumers, and enterprise users have comprised but a small portion of overall shipments. With refreshed devices coming to market next year as well as a possible tablet, HP Palm seems poised for a stronger fresh start.
  • What's next for feature phones? Looking at the launches of new phones and the volumes of mobile phones each quarter, it is clear that the market is moving more and more towards smartphones. But now we're at the tipping point where smartphones are coming closer to representing the majority of all mobile phones shipped in the United States. In the same manner, the new direction for smartphone vendors has moved towards entry-level smartphones, which target the same market as most high-end feature phones. What does this mean for feature phone heavy vendors? For starters, feature phones will not disappear overnight, as their appeal has not been lost on those seeking simple solutions and lower service costs. But for those OEMs with a portfolio heavily tilted towards feature phones, 2011 is shaping up to be a year of major transition.

Of course, I'm sure that there are other stories that could have been listed, like the emergence of tablets, the rise and rise of Android, the rumors of a CDMA iPhone, and the new smartphone superpower in Samsung. Those stories are still ongoing, and will be examined more closely to see if they can be sustained. If anything, they set the stage for yet another competitive year in 2011. Still, use the talkback section below to point out any stories you thought I missed during the second half of the year.

Ramon Llamas is a senior research analyst with IDC's Mobile Devices Technology and Trends team. In his role, Llamas tracks the quarterly results of the leading and emerging mobile device vendors, and uses the data to forecast the short-term and long-term direction of the mobile device market, and how it affects handset vendors, carriers and customers. He recently released his worldwide mobile phone and smartphone 2010 - 2014 forecasts, as well as a worldwide forecast of the mobile phone touchscreen market. In addition to being featured in FierceWireless, Llamas has been featured on Bloomberg Radio, National Public Radio, and quoted in Investor's Business Daily, the New York Times, and the Wall Street Journal. Llamas can be reached at [email protected].