Interesting article, and hugely worrying for HTC. But it’s one of the comments by JohnDoey and KarlWa that caught my attention about the end of the cell phone market. JohnDoey succinctly states what we seem to be seeing:

The cell phone market is coming to an end. Almost all phone makers are not profitable. HTC is one of only 2 traditional cell phone makers who still turns a profit (Samsung is the other.) Both are still alive because they managed to make their phones look like little computers, but they still have only basic Java applets like cell phones, and lack of OS updates like cell phones, and poor build quality like cell phones.

It’s all computers from now on. It’s not going to be enough to have just a cell phone. Users need to have full-fledged native C/C++ apps to edit video, create presentations, and access all their computing from pocket or briefcase or wherever. Computing is the new calls.

And the developing world is no place to hide. People who have zero computers in their lives need to trade their phone for a computer even more than people who own Macs or PC’s. It will come a little slower there, but when it hits, it will be App Store that will drive sales, because it has real PC-class apps, which you can use to run a whole business, create and edit video for broadcast, create and edit multichannel music and audio, create and edit world class office documents.

The thing that is responsible for iPhone being such a game changer is that it is a small, cheap Mac, not an expensive phone. The game is changed. The only company that has started competing is Microsoft by porting NT to ARM, but it has not even shipped yet. Everything else is an obsolete cell phone or PDA system. There just isn’t enough Java code out there for a Java phone to go the distance against a pocket Mac running native C/C++ from Mac, Windows, DOS, Unix, game consoles, arcade systems.

And KarlWa goes on to say:

That’s why the iPhone simulator is so fast – you’re actually running against the native OSX versions of frameworks like CoreAnimation or CoreImage. People say the iPad is a big iPhone; hah! The iPhone is just a re-skinned Mac. Some things (like the aforementioned CoreImage) were kept private until the hardware could cope better, but now it’s pretty much all there. That’s how you manage a platform transition.

Whether or not you believe Apple planned it this way, that does seem to me what’s happened. It isn’t so much that Apple built a better Smartphone with the iPhone, but they effectively managed to put a small Mac in a Smartphone shell. The fact that there is such commonality between iOS and MacOS even though you’d never know it from using the OS’s seems to me the smart way to do what Microsoft is doing with Windows 8, and is the reason that Nokia and RIM (and Windows Mobile) could never hope to compete against iOS. Google moved quickly to respond and are reaping the benefits now with Android’s dominant market share.

HTC sales drop 48% YoY, 12% in a month. Profits down by 78% . Can 8X and 8S Windows Phones save them? » Unwired View

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