Mobile Handset Makers & Profits

... or lack thereof, if your company's name is not "Apple" or "Samsung". 

Apple and Samsung continue to soak up all the industry's profits, McCourt says. Apple claimed 87.4% of phone earnings before interest and taxes in the fourth quarter, he said. Samsung took in 32.2% of industry profits. Because their combined earnings were higher than the industry's total earnings as a result of many vendors losing money in Q4, Apple and Samsung mathematically accounted for more than 100% of the industry's earnings.

A year ago, Apple accounted for 77.8% of mobile phone industry profits, followed by Samsung with 26.1%, McCourt said.

Mobile phone market hits 'the great moderation' - Investors.com

Given that they tally to roughly 120% of the mobile handset profits, and they make rather a lot of profit, a 20% loss across HTC, Nokia, Motorola, Sony, etc. is huge. Not only is no one else making money, but no one else is even close to being a viable competitor.

I suspect the biggest reason Samsung is so competitive among the Android handset makers is that it's able to control its own supply thanks to its semiconductor, memory & screen fabrication business.

Pebble Steel

I've been checking out some of the new stuff coming out of CES this year, and the Pebble Steel is probably the first smartwatch that offers reasonable functionality while still maintaining marginally decent looks and great battery life. Certainly, it's the first that I'd consider wearing (unless you count the Fitbit Flex, which I do wear).

 The Pebble Steel in matte black.

 The Verge has a brief write-up, but check out the video on the Pebble Steel site as well.

BlackBerry's (Last) Hope

BlackBerry's CEO, John Chen, talked about the future of the company in an open letter to their (remaining) customers today.

"We're going back to our heritage and roots - delivering enterprise-grade, end-to-end mobile solutions. As we refocus back to our roots, BlackBerry will target four areas: handsets, EMM solutions, cross-platform messaging, and embedded systems."

- John Chen, open letter to customers, 12/2/13

Good for them. I think there honestly could be a market for a leaner BlackBerry, one more focused on enterprise, and one that chooses either Windows or Android as an OS for their handsets. At this point, it should be completely clear to the company that they can no longer deliver on the idea of BBX as their mobile OS. It simply isn't viable without a development community behind it.

As I see it, there are two options for the company to go at this point: 

Android

Focus on the shift to mobile for enterprise, and deliver a mobile solution on Android that bests Samsung's Knox offerings. Essentially, deliver a device that integrates well with Google's services, with a secure, IT-friendly integration with BlackBerry's messaging and enterprise solutions. Android's share of the mobile market is second to none, but how much of that share is in the high-end market that generates most of mobile profit share, falls into a gray area. The drawback here is that Samsung has swallowed such a large portion of the Android pie that it may be difficult to make inroads without an extremely large capital outlay on advertisement. BlackBerry has done this in the past, but that was with a much larger war chest of funds.

Windows Mobile

Deliver core integration based on Windows, and try and do it better than Microsoft has done thus far. There is significant room for improvement, and because Microsoft has been focused so heavily on the consumer market, there is a lot of room for BlackBerry to develop. Windows already owns the marketshare for enterprise in the workplace, and integration with traditional business solutions like Office, Outlook and Exchange will be crucial to enterprise expansion. Additionally, it's entirely possible that Microsoft would shoulder some of the advertising muscle as they continue to try and grow their own mobile OS marketshare. The biggest con to this solution is simply that Windows mobile OS doesn't have the critical mass to catapult BlackBerry devices onto the main stage, though this may not be an issue if BlackBerry chooses to focus solely on the high-end device and enterprise solutions market that they claim in the letter.

It'll be interesting to see how it all plays out. I haven't had a lot of confidence in BlackBerry for a long time, particularly since they've spent so much time with their head in the sand while iOS and Android blew them out of the water, but I do see that there exists a possibility for them to eke out a profitable position by abandoning their mobile OS in favor of another, and focusing on delivering tailored enterprise solutions.