ZTE's CEO: Windows smartphones set for comeback next year

Executives from Samsung, LG, Sony Ericsson, and ZTE all assert that Google's pending purchase of Motorola Mobility won't hurt the Android ecosystem.
Written by Rachel King, Contributor

SAN FRANCISCO -- Lower-end smartphones -- especially from Android, are expected to proliferate in the next couple of years, but not all mobile OEMs are counting out featurephones just yet.

Lixin Cheng, CEO of ZTE's U.S. division, argued during a panel discussion at Open Mobile World on Thursday that while 30 to 40 percent of all new mobile phone shipments are smartphones, that means that 60 to 70 percent are staying on the featurephone side of the spectrum.

LG Electronics senior vice president Alex Jin Sung Choi noted that there is a potential market opportunity for featurephones because of an obvious reason: the cost. Featurephones typically cost between $20 and $50.

Furthermore, Choi pointed out all of the added costs when buying a smartphone. Sure, the contracts and taxes provide the way to a heavily-subsized and advanced device, but those costs add up significantly over time.

Cheng also remarked that many mobile carriers still want to keep that segment going and are doing so with attractive calling plans.

Yet, Kevin Packingham, a senior vice president at Samsung, posited that most customers are willing to step up to price points if they see the value in them.

"For a lot of people, that's the social networking experience," said Packingham, reiterating that now the technology matches up with what the consumer sees value in.

Nevertheless, Packingham said that the featurephone still meets needs in emering markets.

"In the future, there could be low-feature (smartphone) devices that work on five to six apps very well," Packingham predicted, "But it will be some time before people know what those apps are."

The major differentiators at this point, Cheng posited, are the hardware and the cost.

"When we go back to 2G days, we also talked about smartphones," Cheng said. "The smartphone today could be the featurephone tomorrow."

Sony Ericsson chief technology officer Dr. Jan Uddenfeldt rebuffed these ideas, arguing that "in [developing] countries, people are running their business out of their phone. The more they can do with their phones, they more propserous their business will actually be."

"We left the featurephones behind us," said Uddenfeldt, explaining that 90 percent of Sony Ericsson shipments are now smartphones. "We're an all Android company now."

Speaking of Android, all of the panelists were quick to agree that Google's pending acquistion of Motorola Mobility is not going to harm the Android ecosystem but rather benefit it.

Uddenfelt said that it doesn't change Sony Ericsson's stance, while Choi said that it didn't pose a threat.

Packingham went so far as to say that the proposed merger "really benefits all of us" because developers will have better access to the "metal of these devices."

It's not that Samsung will have access, Packingham clarified, but developers are enabled to have new ways to leverage the hardware.

Although there was accord on the fact that Android and iOS are the two leading mobile operating systems of the moment, Microsoft's Windows Phone 7 and 8 definitely got a round of support as well.

"I do believe the industry needs another operating system to keep competition healthy," Cheng said.

But while he affirmed that ZTE is committed to both Windows and Android, Cheng predicted, "I think next year you will see Windows will come back strongly."


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