With Sony Ericsson's president Dick Komiyama set to retire from the company at the end of the year, to be replaced by Bert Nordberg, currently head of Ericsson Silicon Valley, who will assume the role of co-president on 15 October, a rejuvenated SEMC in the US and smartphone sectors could just spell more difficulty for Palm as it tries to make its mark.
Analysts were gloomy about the firm over the weekend, after Morgan Joseph downgraded the stock from 'hold' to 'sell', saying they believed sales of the Pre by its exclusive carrier, Sprint, had "slowed significantly".
Most observers do not now expect Palm to deliver the promised 'mini' version, the Pixie - which will be a lower end phone sporting the same webOS software platform - in time for the holiday buying season, despite its obvious potential as a gift option for younger users.
Pre sales fell from 200,000 units in June to 100,000 in July, with this month slated to be lower than July, Morgan Joseph analyst Ilya Grozovsky wrote in a research note quoted by internetnews.com. "We believe that our 400,000 units estimate for Pre was a low estimate relative to Street expectations and, as a result, believe that should the company even achieve these numbers, it would be viewed as a disappointment by investors," the note said.
Non-Pre shipments in the quarter were also lower than expected due to cannibalization by the Pre and Grozovsky is expecting price cuts to spur holiday sales, with the resulting impact on margins.
Palm was not the only phonemaker under fire from analysts. Goldman Sachs issued a depressed research note about Nokia, saying there was "little hope" of a revival in the market leader's fortunes in the next 12 months. The analysts pinpointed loss of share in the smartphone segment as the main problem for Nokia, and said this was "self-inflicted" rather than a result of recession.
It was unconvinced by the impact that Nokia's new smartphone launches, like the N97, would have, criticizing the menu structure and user interface of Symbian/Series 60, used on all Nokia's high end models (though it should soon announce a new Maemo Linux device, the Rover tablet/phone hybrid).
Goldman also predicted that the iPhone, once it went non-exclusive, would start to pressurize Nokia in its strongest area, emerging markets - an odd comment, given that the iPhone has been non-exclusive for over a year in many countries, and is nearly always multicarrier in emerging economies, where subsidies are less common. So far, the impact of the phone in markets like India has been tiny.
More credibly, Goldman also said that Nokia's 55% market share in the midrange smartphone segment looked "unsustainably high" given rising competition, as all the vendors move downmarket, some bringing powerful brands like Apple's to the midmarket. Goldman thinks Nokia's share of this segment will come into line with its overall share, around 40%, by 2011. It says the Finn's key challenge will be to execute its software/services strategy so that its high end models can compete more strongly with smartphone specialists.
Finally, Samsung's head of Mobile Communications, JK Shin, told BusinessWeek that the firm remains a step behind in high end smartphones and low end devices, despite its leap in global market share from 14.6% in Q208 to almost 20% in Q209.
Rivals might not find the Korean leader weak in either segment, but Shin has high standards, and is determined to improve on its measly 3.5% share in the high end smartphone niche. Shin said he will focus efforts for the 2010-2011 portfolio on this challenge - the recent, high profile Jet launch is a strong first step - and on chasing Nokia in emerging economies.
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