Smartphone shake-out looms as hardware herd may thin
HTC's sales are plunging. Nokia is betting the company on Windows Phone devices. Research in Motion can't get out of its own way. Welcome to the upcoming shakeout in the smartphone market. Any vendor that's relying primarily on hardware may want to duck.
Simply put, the wireless industry is tapped out on the hardware front. Snazzy screens. Check. Speedy chips. Check. Better battery life. Getting there. Tablets? They all kind of look alike after a while.
In other words, it's becoming increasingly difficult---if not impossible---to differentiate a mobile device based on hardware. Even software is a two horse race with Apple and Google's Android. On the Android side of the smartphone industry, the commoditization race is going to kill a few device makers.
HTC is already in a bind. Sales fell 20 percent in November. The problem: HTC is competing with Samsung and Motorola Mobility for 4G devices in the U.S. and Apple's iPhone 4S too. Without hardware differentiation HTC doesn't have much because all the Android software looks the same.
Motorola Mobility would be in the same boat, but Google will shield the company a bit. Whatever happens to Motorola will be a rounding error on Google's balance sheet. RIM and Nokia also compete on hardware. Both companies aspire to have unique software and a vibrant app ecosystem, but it's a tough road for them against Android and Apple.
Toss in the fact that the smartphone industry may just be out of ideas and you really have to start thinking about a device death pool. In the end, Samsung and Apple appear to be the only sure smartphone bets at the moment.
Perhaps the Consumer Electronics Show changes my perception in January. But for now I see some colossal train wrecks ahead. All the tablets and smartphones are starting to look alike and software integration is everything. The shelf life for the latest greatest smartphone is about 5 minutes and getting shorter by the day---especially since most of these hardware vendors lack the ecosystem and services to compete.
2012 may be the year we see some hardware-focused mobile players stumble in a big way.
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