Samsung and Nokia in the spotlight at Mobile World Congress

Vendors hope to prove new products are worth upgrading to, as smartphone growth slows

The two most talked about smartphones ahead of this year's Mobile World Congress sit at opposites sides of the spectrum; the low-end Android-based Nokia X and Samsung Electronics' new flagship model, the Galaxy S5.

The smartphone market has seen phenomenal growth in the last couple of years. But even if worldwide shipments increase, growth rates won't be as impressive, resulting in even tougher competition.

The fourth quarter highlighted this burgeoning trend, as mobile phone sales in mature regions fell due to weaker demand. Lack of compelling hardware innovation in the high-end segment meant consumers didn't find enough reasons to buy the latest model, according to Anshul Gupta , principal research analyst at Gartner.

Also, after nine consecutive quarters of explosive growth, China experienced its first slowdown, according to IDC. Vendors there will also have to increase efforts to convince consumers to upgrade, instead of relying on first-time buyers.

It is against this backdrop that Mobile World Congress opens its doors Monday. For Nokia as a handset maker, this year's trip to Barcelona will be its swan song as its acquisition by Microsoft is scheduled to be approved before the end of March.

Reports have in the last couple of months said Nokia is planning on using the Android open source code and a user interface of its own to reignite the low end of its product portfolio, and it seems likely the company will launch its first product early Monday morning local time.

It's not difficult to understand why Nokia is moving away from the proprietary operating system used on its Asha phones. Forked Android or AOSP (Android Open Source Project) devices had a 25 percent market share with 71 million shipped smartphones during the fourth quarter -- mainly thanks to China, India and adjacent countries, according to ABI Research. That's more than Apple's iOS, Windows Phone and BlackBerry put together.

The Nokia X, also known as Normandy, is rumored to be powered by a dual-core 1GHz Snapdragon, have a 4-inch screen with a 854 by 480 pixel resolution, and a 5-megapixel camera. The device is also expected to have 512MB of RAM and 4GB of integrated storage that can be expanded using a microSD card slot. Nokia's most advanced Asha phone, the 503, also has a 5-megapixel camera, but with a low resolution 3-inch screen.

The X will enter a competitive section of the smartphone market. But it isn't just consumers who will decide its fate -- Microsoft will soon own Nokia's smartphones and will have to decide on strategies for the sub-$200 and $100 segments. Since analysts expect much of the growth is coming from that segment staying away is not an option.

When Nokia decided on Windows Phone, getting the cost down was a key part of its strategy. The Lumia 610 arrived in April 2012 with a $260 price tag without taxes and subsidies, followed by the 510 for about $200 in October the same year, and then the best-selling 520 for $185 in February last year. But after that, Nokia's quest to push down the cost of its Lumia devices stalled.

Close cooperation between chip makers such as Qualcomm and Mediatek and phone manufacturers laid the groundwork for Android's low-end success. If Microsoft wants to make Windows Phone relevant on inexpensive smartphones, the company needs broader support from the chip makers, including reference design programs that include everything manufacturers need to quickly and cheaply put out affordable products.

Samsung is one company that any chip maker would love to work with. While Samsung's smartphone share was up in 2013, it slightly fell by 1.6 percentage points in the fourth quarter of 2013, according to Gartner. This was mainly due to a saturated high-end smartphone market in developed regions, and it remains critical for Samsung to improve its portfolio at the high end, Gartner said.

The Galaxy S phones have made Samsung successful in that segment and the company has hinted that version 5 will be launched Monday evening local time.

Reports say the Galaxy S5 will have a 5.25-inch screen with a 2560 by 1440 pixel resolution and a 16-megapixel or 20-megapixel camera with optical imaging stabilization. Potential processors include a new in-house Exynos chip or Qualcomm's recently announced Snapdragon 805 processor, which has four cores running at up to 2.5GHz and is expected to be available in commercial devices in the first half of the year.

Samsung can put 4GB of RAM on the S5, thanks to a new chip developed in-house. But 3GB is starting to look like the new standard configuration for high-end smartphones with products like the Galaxy Note 3 and LG Electronics' G Pro 2 having that amount.

Design is another important part of Samsung's next flagship smartphone. The Galaxy S4's plastic shell wasn't well liked by reviewers because it made the device feel less premium than competing products such as the HTC One and Apple's iPhones. The faux leather used on the Galaxy Note 3 is a step in the right direction, but only aluminium can put it on par with the competition.

Samsung and Nokia aren't the only phone makers that will show new devices next week. On Tuesday, ZTE said it will launch the Grand Memo II LTE, which has a 6-inch screen and the Firefox OS-based ZTE Open C. Huawei Technologies has posted a video saying the company will introduce two tablets and a smartphone.

LG has already announced four new phones, which it will show at Mobile World Congress, including the G Pro II, which has a 5.9-inch screen and Full HD resolution. Sony and BlackBerry will also reportedly announce new products.

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Mikael Ricknäs

IDG News Service
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