I bring this up because today brought some very interesting numbers from the research firm, Strategy Analytics. According to them, Apple has surpassed Nokia as the most profitable phone maker in the world. I’ll throw some numbers at you in a second to show why this is really incredible, but the key takeaway is that this is why, at the end of the day, Apple wins.

While the press and rivals obsess over market share, Apple quietly comes in and makes an insane amount of money. It’s the same in the computer industry. Small market share, huge amount of money. The most important thing for all of these are companies is the bottom line. Apple wins that battle.

According to the report, Apple made $1.6 billion in operating profit off of the iPhone in Q3. Nokia, meanwhile, made $1.1 billion. Let’s put this in perspective. Recent numbers suggest Nokia controls roughly 35% of the worldwide handset market. Apple? About 2.5%.

Not 25%. Two point five percent.

Since the launch of the iPhone in 2007, just about everyone has been clamoring for more variety in Apple’s offering. People wanted iPhone minis, they wanted CDMA iPhones, etc. But Apple stuck to its guns and has basically sold one phone, which it could manufacture efficiently, when rivals like Nokia are busy peddling dozens. Sure, there are a few variations on the iPhone (included memory, and now the 3G/3GS), but basically, it’s one phone that is pulling in hundreds of millions of dollars of more profit than the market leader.

To people who follow Apple closely, this should be absolutely no surprise. It’s the same thing it does in the computer industry. Despite having a much smaller market share than its rivals, it makes more money than most of them. The key, of course, is that Apple maintains its high profit margins, while the competitors shuffle to battle each other for market share.

That’s not to say that Apple doesn’t care about market share for either its computers or the iPhone, it undoubtedly does. But it’s a secondary goal to running a successful business. A business which is now absolutely thriving in an awful worldwide economic environment.

If Apple wanted to boost its computer market share, it could do so in a heartbeat simply by slashing into its margins and chopping hundreds of dollars off its machines. That’s why those “I’m A PC” shopping commercials this summer were humorous. They’re attacking Apple for not competing in segments (low cost PCs) that it has absolutely no desire to compete in. Would those commercials be effective if Apple chose to sell a $500 MacBook? No, because Lauren probably would have bought it (remember, her first stop was the Apple store).

Most consumers obviously shouldn’t like the idea that a company is purposely charging more for its product to keep its margins high. But Apple has a winning proposition for that because it builds machines of such high quality that to many users it seems like they should cost more than they actually do. Or as Apple COO Tim Cook put it in a earnings call over the summer, “Our goal is not to build the most computers. It’s to build the best.” When you do that, apparently you can keep your margins high and in turn, make insane profits.

The iPhone is a bit different because Apple has a partner that it has convinced to pay it an insane amount of money for each device sold and then subsidize the cost of it for consumers. Remember that when the iPhone first came out it was $600. That’s the price Apple clearly felt comfortable setting for it to maintain what it thought was a good margin.

That price, of course, was ridiculous (though, admittedly, myself and plenty of others paid it). A few months later, Apple realized this too, and slashed a couple hundred dollars off the price, thus slashing it margins. But then they figured out a better way. Previously, they had been getting a cut of every monthly AT&T iPhone contract. But with the iPhone 3G, Apple decided to give all that money to AT&T in exchange for one upfront payment, and the promise that AT&T would subsidize the cost of the phone down to $199 (and $299). Jackpot.

So basically, Apple is now making a huge margin on every iPhone sold, while AT&T more or less picks up the tab. (Don’t feel too bad for them, they still make plenty on those monthly contracts.) Now you see why Apple doesn’t mind that exclusive agreement even while us consumers bitch to no end? There are 1.6 billion reasons why they like that deal (okay, probably some smaller percentage of that, but still).

And because Apple makes all of this money, they have money to pour into making that next great product. A product that will likely be high quality — and sell with a high margin. Hopefully some of that $34 billion in cash (with no debt) is being poured into finalizing the tablet as we speak.

This influx of profit also allows Apple to take the plunge into new markets, like it did with the iPhone. Earlier today, blogger John Gruber recalled what former Palm CEO Ed Colligan said when he heard that computers makers like Apple could enter the phone market:

“We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”

Not only did they walk in, they walked in, changed the landscape, and have what now appears to be the best business model industry-wide.

Just as with the computer industry, while all its rivals were busy jockeying for market share, Apple secured the high ground and figured out the best way to bathe in profits.

[images: Touchstone Pictures and flickr/jaci xiii]

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One of the biggest sources of new searches in the coming years for Google will come from mobile devices, which is why it is attacking mobile on multiple fronts—with Android phones, mobile apps, and mobile search across multiple devices. One of its more impressive efforts lately has been around voice search. Not every phone has a touchscreen or a full keyboard, and some languages simply aren’t keyboard-friendly, and that is where voice search comes in extra handy.

Google already has impressive voice search capabilities on the iPhone, Android, and other phones in English. But today, it is extending voice search to Mandarin Chinese and to Nokia S60 series phones. There are so many different accents and nuances to spoken Chinese, which is the most popular language in the world, that getting the speech-to-text good enough to return relevant searches is a huge challenge.

I don’t speak Chinese so I can’t evaluate how good a job Google does with Chinese voice search (perhaps some of our readers who know Mandarin can give it a whirl and tell us their impressions in comments). But I am starting to use Google’s English voice search, even though I have an iPhone. The speech recognition in English is surprisingly good.

For instance, just this weekend, driving around Bedford, NY, I remembered that Richard Gere has an inn and restaurant up there, but couldn’t remember the name. Typing in “Richard Gere restaurant” into the Google Maps app on the iPhone returned nothing, so I closed that and clicked on the Google Mobile Apps icon. When I selected search, it encouraged me to try Voice Search. Maybe it always did that, but it was the first time I had noticed it. Already frustrated at that point and not wanting to retype my query, I tried saying “richard gere restaurant.” Sure enough, it understood me and delivered The Bedford Post Inn and Restaurants as the first result.

If Google can get its Chinese language voice search to be that good, China could become its largest source of mobile search queries.

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(c) Oliver Widder

In making our decisions, we looked at these phones from the standpoint of the consumer. Thus, developer struggles, business security, and other such problems were not taken into account. Instead, functionality, price, and the overall usefulness of various smartphones made up the criteria which we adhered to during our reviews. These phones can be found on a multitude of carriers, operating systems, and continents.

Feel free to comment below on the merits of this list of the best smart phones currently available.

iPhone 3GS

You know you’re on top when phone manufacturers are constantly struggling to produce an “iPhone killer”. The iPhone 3GS boasts a massive App Store (with nearly 100,000 apps now), the largest developer base, and is simply put, the best phone on the market.

Status: Launched June 19th, 2009 on ATT
Screen: 3.5-inch 480 x 320-pixel resolution at 163 ppi widescreen Multi-Touch display
Dimensions: 115.5 x 62.1 x 12.3 mm; 135 grams
Camera: 3 megapixels w/ AutoFocus, No flash
Battery: 1150 mAh Li-Ion
Standby Time: 300 hours
Talk Time: Up to 12 hours on 2G; Up to 5 hours on 3G
Processor: Samsung S5PC100; 600 MHz
Internal/External Memory: 16GB or 32GB
Extras: 3.5mm Headset jack, accelerometer, Wi-Fi, Bluetooth and GPS enabled
Operating System: iPhone OS
Price: $199 for 16 GB; $299 for 32GB

Motorola Droid

If any phone is going to challenge the iPhone’s supremacy, it will be the Verizon Droid. The Droid is on a superior network than the iPhone, and will be running Android 2.0 which has a much improved user interface over previous versions of Android.

Status: Rumored to be announced October 28th; Verizon Wireless.
Screen: 3.7-inch/480×854 Full Touchscreen with Full QWERTY Slider
Dimensions: 60 x 115.8 x 13.7 mm; 169 grams
Camera: 5.0 Megapixels with AutoFocus
Battery: Li-ion 1400mAh
Standby Time: 450 Hours
Talk Time:7 Hours
Processor: Texas Instruments OMAP 3430 processor; 600MHz
Internal/External Memory: 512MB Flash, 256MB RAM/MicroSD (16GB capacity)
Extras: 3.5mm Headset jack, Wi-Fi, Bluetooth and GPS enabled
Operating System: Android 2.0
Price: Unknown

Palm Pre

The Palm Pre signaled the resurrection of Palm. It is well-designed, and has a very promising OS, which if tweaked and improved slightly, can challenge any OS on the market.

Status: Available June 6th on Sprint. Available October 13 in Germany and October 16 in UK and Ireland
Screen: 3.1-inch touch screen with 24-bit color 320×480 resolution HVGA display and full QWERTY keyboard
Dimensions: 100.5 x 59.5 x 16.95 mm; 135 grams
Camera: 3 megapixel camera with LED flash and AutoFocus
Battery: 1150 mAh
Standby Time: 250 Hours
Talk Time: 5 Hours
Processor: Texas Instruments OMAP 3430 processor; 600MHz
Internal/External Memory: 8 GB
Extras: 3.5mm Headset jack, accelerometer, Wi-Fi, Bluetooth and GPS enabled
Operating System: Palm webOS
Price: $149.99

HTC Hero/T-Mobile G2 Touch/Sprint HTC Hero

The inclusion of HTC Sense makes the Hero the best Android phone currently on the market. It is fast, stylish, and easy to use.

Status: HTC Hero Launched July 24th for Orange UK. T-Mobile G2 Touch Launched July 29th.
Screen: 3.2-inch/ 320×480 HVGA resolution; Full Touchscreen/TFT-LCD touch-sensitive screen
Dimensions: 112 x 56.2 x 14.35 mm ; 135 grams
Camera: 5 Megapixels with AutoFocus
Battery: 1350 mAh Lithium-ion battery
Standby Time: Up to 750 hours for WCDMA, Up to 440 hours for GSM
Talk Time:Up to 420 minutes for WCDMA, Up to 470 minutes for GSM
Processor: Qualcomm® MSM7200A™, 528 MHz
Internal/External Memory:288MB/MicroSD 2.0
Extras: 3.5mm Headset jack, Wi-Fi, accelerometer, Bluetooth and GPS enabled
Operating System: Android
Price: $179.99

BlackBerry Bold

The BlackBerry Bold is RIM’s crowning achievement thus far and the impending Bold 9700 should see widespread adoption.

Status: Available on AT&T; Bold 9700 available November 2nd, 2009
Screen: 2.6 inch Half VGA resolution Dispay Screen; 480 x 320 pixels; 65,000 colors
Dimensions: 114 x 66 x 15; 136 grams
Camera: 2.0 MP w/ AutoFocus
Battery: Li – Ion, 1500 mAh
Standby Time: 324 hours
Talk Time: 4.5 hours
Processor: 624 MHz
Internal/External Memory: 1 GB
Extras: 3.5mm Headset jack, Wi-Fi, Bluetooth and GPS capable with extended ephemeris
Operating System: BlackBerry OS
Price: $199.99

HTC Magic/T-Mobile MyTouch 3G

The MyTouch 3G is an easy to use, stylish Android phone. The absence of a standard 3.5mm headset jack is a bit of a disappointment, but otherwise this phone is quite powerful and useful. Furthermore, Mike quit the iPhone for the MyTouch, and that has to mean something.

Status: HTC Magic Launched May 1, 2009 and July 10th, 2009 in Japan; MyTouch 3G launched July 8, 2009. Available through T-Mobile, Vodafone, and Docomo
Screen:3.2″ /320 x 480 HVGA Touchscreen/TFT, TFD, LCD 262k
Dimensions: 113 x 55 x 13 mm; 118.5 grams
Camera: 3.2 Megapixels with AutoFocus (MyTouch has a 5MP camera)
Battery: 1340 mAh Lithium-ion battery
Standby Time: 420 hours
Talk Time: 7.5 Hours
Processor: Qualcomm® MSM7201a™, 528 MHz
Internal/External Memory:192/288 MB (Underclocked)/ MicroSD up to 32GB
Extras: HTC ExtUSB Headset Jack, Wi-Fi, Bluetooth and GPS enabled
Operating System: Android
Price: $99.99 (T-Mobile MyTouch $149.99)

BlackBerry Storm 2

The BlackBerry Storm 2, while an improvement over its predecessor, still lacks the “wow” factor necessary to push it higher up on this list.

Status: Available on Verizon Wireless October 28th, 2009
Screen: 3.25 inch 360 x 480 pixel touchscreen; 65k colors
Dimensions: 112.5 x 62.2 x 13.9 mm; 160 grams
Camera: 3.2 Megapixels w/ LED flash and AutoFocus
Battery: 1400 mAh Li-Ion
Standby Time: 270 hours
Talk Time: 5.5 hours
Processor: 528 MHz Qualcomm processor
Internal/External Memory: 2 GB/16 GB microSD
Extras: 3.5 mm headset, GPS, bluetooth, and wi-fi enabled
Operating System: BlackBerry OS
Price: $179.99

BlackBerry Tour

Our biggest qualm with the BlackBerry Tour is its lack of Wi-Fi. Other than that however, the Tour is a great phone if you’re a chronic email user or if you text message a lot.

Status: Available on July 12, 2009 through Verizon and Sprint.
Screen: 2.4 inch 480×360 pixel display screen; 65,000 colors
Dimensions: 112 x 62 x 14.2 mm; 130 grams
Camera: 3.2 Megapixels with AutoFocus
Battery: 1400 mAHr removable/rechargeable cryptographic lithium cell
Standby Time: 336 Hours
Talk Time: 5 Hours
Processor: 528 MHz Qualcomm processor
Internal/External Memory: 256 MB RAM
Extras: 3.5mm Headset jack, Bluetooth and GPS enabled. No Wi-Fi nor accelerometer
Operating System: BlackBerry OS
Price: $149.99

Nokia E71x

The Nokia E71x is a sleek and stylish phone, but like the Magic, lacks a 3.5mm headset jack. Nonetheless, this phone is just right for those on a budget, given its $99.99 price tag.

Status: Available on AT&T
Screen: 2.4″ LCD (Color TFT/TFD) display screen; 320 x 240 pixels (QVGA); 16.7 million (24-bit)
Dimensions:114 x 57 x 10 mm; 126g
Camera: 3.2MP w/ Autofocus and Flash
Battery: BP-4L 1500 mAh Li-Po standard battery
Standby Time: 480 hours
Talk Time: 4.5 hours
Processor: ARM 11, 369 MHz
Internal/External Memory: 110MB/ MicroSD
Extras: 2.5mm Headset jack, bluetooth, wi-fi, and GPS enabled
Operating System: Symbian OS
Price: $99.00

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Whoa. What? The deal was announced on September 24. It’s been less than a month. Not even eBay throws away acquisitions that quickly.

According to our source, all Nokia really wanted from the acquisition was the team, particularly CEO Marko Ahtisaari (formerly a star Nokia guy) and CTO Matt Biddulph. Suddenly, Mike Butcher’s article about the deal on TechCrunch Europe makes a lot of sense.

They may actually want to keep the mobile stuff, too, which will be useful for future Nokia products.

But the main Dopplr site is now up for grabs, from what we hear. So if you’re in the market for a really nice travel social network, give Nokia a call.

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And now the advertisers are jumping all over it. Trust me, this is just the beginning.

Nokia has a new site up to promote their Maemo operating system, Maemoproject.com, which has a similar camera setup to Paranormal Activity. Watch long enough and something happens (around 10 minutes).

Whatever this is, look for an official release this Thursday. My guess is Nokia wants Maemo to be known as the scariest product ever. That makes sense, right?

Update (Robin Wauters): there’s something interesting in the source code of that website. It involves finding a penguin and if you accomplish that you’re eligible to win a Nokia N900 or BH-95 headset. Here’s the PDF with the rules of the contest.

Happy hunting. (Here’s a tip: wait for the 9 minute mark on that video)

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The purchase price, we’ve heard, is between €10 million and €15 million ($15 million – $22 million based on current exchange rates). Dopplr cofounder and CEO Marko Ahtisaari was previously the Director of Design Strategy at Nokia.

We first covered Dopplr in 2007 when it closed on seed funding. The site has never grown to huge usage, but core users are passionate about the service, which lets them share travel plans with friends. And they’ve supposedly raised just €1.25 million or so in total funding.

Dopplr was about to close a new round of funding when Nokia swooped in for the buy.

Update: TechCrunch Europe has more analysis.

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The beta tool, which requires a Nokia N97 device, taps into Facebook to enable you to share status updates and photos with your Facebook friends and also lets you share your location through Ovi Maps (also in beta). Here’s an introduction video featuring two polished young men using the application to hook up with each other in some city:

Also new is an extension of Nokia Messaging called Social Messaging, which interestingly Nokia calls the groundwork for an impending proprietary multi-community social networking client. The company insists this is an early look, and currently only supports Facebook:

In other news, Nokia Beta Labs is discontinuing Nokia Friend View, which was an experimental research project from Nokia Research Center. We covered the app, which was basically a location-aware microblogging tool when it was introduced in November 2008.

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There are no shortage of whispers out there right now as to what Facebook’s plans for location are. With rival Twitter having recently announced its geolocation API, the pressure is on the larger network to deliver something. Tomorrow will bring a step in that direction, as Nokia will announce a new service at its Nokia World event that will utilize location within Facebook, we’ve learned.

Now, to be clear, this is not Facebook officially getting into the game itself yet, but it’s big enough that Henri Moissinac, Facebook’s director of mobile, will apparently be using his keynote address at Nokia World to unveil this, we’ve heard.

The app looks to be a direct result of the Nokia purchase of the location-based social network Plazes, in the summer of 2008. As you can see in the screenshot below, an Ovi Map (Nokia’s map property) will reside inside of Facebook and show where you are. It can also update your Facebook status with your location, and a link to it on one of these maps.

Other services such as Yahoo’s Fire Eagle and Whrrl have applications to set your location within Facebook, but those are still rather cumbersome to use, and haven’t taken off within Facebook. Presumably, this Nokia announcement would also be tied into its mobile devices, which could get it access to millions of users right off the bat.

It’s also interesting that this Nokia/Facebook concept appears to work around “checking-in” places, which is what services like Foursquare (and Plazes before it), use for location. That’s different from something like Google Latitude or Loopt, which simply track your location.

At some point, Facebook is going to have to get off the bench and throw its considerable weight into the location-based services arena itself. That’s definitely happening, we’ve heard from many sources, but the question is, when? For now, partnerships will have to do.

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As we wrote when news broke of Obopay’s $70 million funding round (of which Nokia was a major participant in), one of the biggest markets for this technology is in regions like India, where many people have phones with pre-paid SIM cards but don’t have bank accounts. And judging by Nokia’s press release, which emphasizes that there are “4 billion mobile phone users and only 1.6 billion bank accounts”, the company seems to agree. From the release:

“Rural consumers will particularly benefit from money transfers and, for urban consumers used to online services, we are enabling services such as payment of utility bills, purchase of train and movie tickets, top-ups, all through their mobile phones. Nokia Money is simple to use, secure and available across different operator networks and on virtually any mobile phone. This means millions of new consumers will soon be able to manage all their financial needs from their mobile phone”

Nokia will hardly be the only player in these emerging markets — other competitors include mChek and Paymate. We’ve also seen some alternative payment models like Aryty, which allows users in the US to remotely charge up the mobile accounts of family and friends in India and the Philippines.

Stateside, the technology will also likely see some success, though it will be competing with a variety of other payment methods, and US users haven’t been nearly as quick at adopting mobile payments as customers in other regions have been. Nokia’s release notes that while the technology will be based on Obopay, it will be making a number of improvements and will allow the payment service to interoperate with competing services.

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Know what’s popular nowadays? Netbooks! Nokia is officially jumping on the netbook bullet train with the “Booklet 3G” — an Intel/Microsoft-based netbook that promises 12-hour battery life, a weight of 2.75 pounds, and apparently built-in GPS. The “3G” portion of the name indicates a wireless data connection as well.

Actual specs and details will be announced by Nokia on September 2nd, but it’s believed that the Booklet 3G will run Windows 7. The 12-hour battery life is interesting, too, as that’s a full four hours longer than most netbooks currently on the market. It’ll be interesting to see which Atom CPU is used in the machine to obtain that kind of longevity. It may be a slower but less power-hungry Z-series CPU since the 10-inch Booklet will have a higher-resolution screen (likely 1280×800 or 1366×768).

Again, not a whole lot of details yet aside from some teaser photos. We’ll find out more next week.

UPDATE: Here’s a video, too. This thing’s looking pretty nice so far:

[via Reuters and CNET]

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Microsoft and Nokia announced a broad ranging alliance this morning which will bring Microsoft Office and other productivity software to a Nokia phones. The agreement marks “the first time Microsoft will make Office for non windows mobile phones,” says Microsoft Business Division President Stephen Elop. There are 200 million Nokia smart phones out there, and Microsoft wants its software on all of them eventually.

But initially, the alliance is targeting enterprise customers and will be integrated into Nokia’s E Series business phones. The Microsoft software and features that will be ported to Nokia phones include:

The ability to view, edit, create and share Office documents on more devices in more places with mobile-optimized versions of Microsoft Word, Microsoft PowerPoint, Microsoft Excel and Microsoft OneNote

Enterprise instant messaging and presence, and optimized conferencing and collaboration experience with Microsoft Office Communicator Mobile

Mobile access to intranet and extranet portals built on Microsoft SharePoint Server

Enterprise device management with Microsoft System Center

But the alliance aims to go “way beyond email and Office,” says Nokia’s Executive Vice President for Devices Kai Öistämö. Microsoft and Nokia are focusing on communication and productivity apps (Office, IM, Sharepoint, OneNote), but the alliance opens up those 200 million Nokia smart phones to future Mobile apps from Microsoft, perhaps including Mesh (which will sync all apps across all devices). Update: Unfortunately, the alliance is only for the Office business and does not include Mesh, according to Microsoft.

The alliance is an acknowledgment that Windows Mobile is not going to take over the world, and smartly extends the reach of Microsoft’s mobile apps to a huge new audience of mobile professionals. It also positions Microsoft and Nokia in an unholy alliance against the encroachments of the more modern iPhone and Android smart phones. It allows Microsoft to deeply integrate its mobile apps into Nokia phones in a way that might make them more appealing to corporate customers.

“This is not a browser discussion,” says Elop. These mobile applications will create “really rich experiences that bring that device to life.” The apps will start with email and productivity, but will be designed to drive collaboration through instant messaging, presence management, and call control. The alliance for now covers only Nokia phones with the Symbian operating system (not its newer Maemo phones), which lends to its dinosaur feel. It also suggests that Nokia has no intention of ditching Symbian any time soon.

But why do you need an “alliance” to create apps for a mobile computer/phone? Microsoft doesn’t need an alliance to create Office apps for Android or the iPhone because they are (relatively) open mobile platforms, although it hasn’t yet for strategic reasons. What this alliance highlights more than anything else is Symbian’s creaking age. And it’s too little, too late. Mobile Office can’t stave off Symbian’s inevitable decline.

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German mobile startup Cellity is getting acquired by Nokia. The sale price was not disclosed, but it is not likely to be more than $10 million to $20 million. The deal was all cash. About a year ago, Vodafone bought Cellity’s competitor Zyb for 31.5 million Euros.

Nokia didn’t actually buy the whole company, only “certain assets” and the team, which is usually code for a fire sale. The company began talking to Nokia six months ago, and in the end there was actually a little bit of a bidding war with Netherlands mobile carrier KPN and an international web portal. Cellity had a Series A round of funding in 2007, led by Mangrove Capital Partners.

Cellity’s service is a social addressbook for mobile phones which which syncs your contact list on your phone with your contacts on the Web, including Outlook, Twitter, AOL, Hotmail, Yahoomail, Gmail, Plaxo and LinkedIn. Nokia won’t be continuing Cellity’s Addressbook 2.0 service, but it stands to reason the team will build similar functionality from scratch for future Nokia phones. Or perhaps they will work on new projects. The team will become part of Nokia’s Services division in Berlin, which also houses other startup acquisitions Plazes and bit-side.

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The chances of me being genuinely amazed at something I see a Belgian tech company achieve are rather slim. But occasionally, it happens. Last week I went to local entrepreneur meetup BetaGroup and saw five startups pitch their stuff to the 200-person audience.

The last one to get its five minutes of fame was Cherry, a new mobile operator that promised to “revolutionize the telecom world”. Needless to say, I was as curious as I was skeptical.

Then the company’s CEO got up on stage, introduced himself, took out his Nokia smartphone, called some random guy in the audience and had him call him back on his phone afterwards. Projecting his mobile phone screen on a bigger screen for everyone to see, he demonstrated how he didn’t need to launch an application and just browsed his contact list to call the other person. Standard functionality, sure, but the cool part of it was the fact that the phone was lacking the presence of a SIM card, which is supposed to identify you as a subscriber of a telephony service.

I was intrigued. By now you’ll have guessed that the calling was done over Wi-Fi, which I suppose isn’t really unique even if it made me wonder how they did it without launching a third-party app like Skype. Looking to learn more, I went to their official coming-out event the evening after, when they presented the newly founded company to a host of local geeks in more detail, giving them the chance to beta-test the service for a couple of weeks to iron out bugs before launching publicly.

Here’s how it works: Cherry – which is essentially an MVNO – pre-installs software (so yes, in the demo there was actually an application running in the background) on smartphones which it will sell as a packaged product, starting with a Symbian version for Nokia E-Series phones and expanding to other platforms later. Once activated, Cherry lets you call your contacts either over Wi-Fi or the GSM network when you insert a SIM card. Take out the card, and you can only call over a wireless Internet connection.

The funky part? Cherry automatically switches you from one to the other. This process, called a handover, can seriously cut into your current calling and roaming costs when you’re a frequent traveler or on the road often, and it doesn’t even require you to change numbers. You could easily dial your office number from your home over Wi-Fi, leave the house and have the software automatically have Cherry switch you over to a carrier’s cellular network once you’re out of range. There’s no interruption of service during the handover, which means you won’t even notice – until you receive your bill, since it’s obviously cheaper to call over Wi-Fi than the GSM network. Please correct me if I’m wrong, but I think this automatic handover is a quite unique value proposition.

I did a short interview with Cherry CEO Bernard Noël De Burlin and Telco Service Manager aka mobile guru Davy Van De Moere after the event (apologies for the abrupt ending, my Flip’s batteries ran out of juice).

And just in case you don’t have a couple of minutes to watch the video, let me save you the trouble of asking: support for iPhone and Android are on the top of their list and a Windows Mobile-compatible version should be available soon.

(Full disclosure: the company gave me a Nokia E51 and free calling minutes so I could try out the service under normal circumstances on a daily basis. I need to return or pay for the phone end of August 2009.)

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There was some criticism about the lack of content on the Ovi Store at launch day, particularly because of the fact that a lot of big names were lacking, but I figured I should give it at least a month to see if and how many developers would flock to the platform. Now, I think it’s time to take a look at where they stand after that month, and I thought I’d start by comparing the content offering to that of Apple’s App Store, the central application marketplace for iPhone and iPod Touch devices.

This is evidently not really a fair comparison, since Apple’s App Store has been around for almost a year now, while Nokia is still getting started. Still, it’s worth noting that a lot of the big names on the Internet – whether we’re talking about social networks, search companies or game developers – are still missing on the Ovi Store.

A quick and dirty comparison (note that my top lists for the App Store may differ from yours depending on your location, mine being Belgium, Europe):

Social networks

Ten popular apps in the App Store (free and paid mixed together):

- Facebook
- Skype
- TweetDeck
- Nimbuzz
- fring
- LinkedIn
- Truphone
- AIM
- Tweetie
- BeejiveIM

Ten popular apps in the Ovi Store (free and paid mixed together):

- Gravity (a Twitter client)
- Insy
- Friendster
- ThumbDive
- Hi5
- GyPSii
- IM+ For Skype
- See-Fi
- Twittix (another Twitter client)
- Facebook for Nokia

News and information

Ten popular apps in the App Store (free and paid mixed together):

- BBC World News Live
- NY Times
- AP Mobile
- France24
- Thomson Reuters News Pro
- CNN
- Wall Street Journal
- L.A. Times
- The Telegraph
- USA Today

Ten popular apps in the Ovi Store (free and paid mixed together):

- Daily Star
- Daily Express UK
- France24
- AP News
- Reuters
- The Straits Times (daily newspaper, popular in Singapore)
- The Star (Malaysian newspaper)
- The Guardian
- CNBC
- Breaking News

Music

Ten popular apps in the App Store (free and paid mixed together):

- Sirius XM
- Pandora Radio
- Shazam
- Y! Music
- imeem Mobile
- PocketGuitar
- AOL Radio
- Last.fm
- KCRW Radio
- Ocarina

Ten popular apps in the Ovi Store (free and paid mixed together):

- Mundu Radio
- NME
- MusAic
- Midomi
- Nokia Internet Radio
- Tunerific
- Bandfan
- MixPack
- Mozart Killer
- MyRMX

I could go on with a number of other categories, but I think you’ll agree the trend is clear: Nokia so far hasn’t attracted many familiar names on the Internet to develop and/or submit applications to the Ovi Store.

If the company wants to catch up and make its mobile marketplace a success, that needs to change.

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• Intel and Nokia have formed a long-term strategic partnership to create an open standard for a new mobile computing platform built upon Linux-based operating systems.
• Intel will acquire a Nokia HSPA/3G modem IP license for use in future products -- will complement Intel's Wi-Fi and WiMax offerings.

That number include people who live in areas where wireless networks offer coverage, something that is not always the case because operators tend to shy away from underdeveloped markets because of limited chances of financial return on investments. Apparently, the key to be able to tap into this vast pool of potential customers in these so-called ‘emerging markets’ lies in drastically reducing the cost of handsets that can be used by low-income users.

Mobile handset juggernaut Nokia is a big believer in this, as we’ve talked about in the past when the company released a series of devices and services specifically targeting these emerging markets and the debut of its Mail on Ovi service on some 35 different Series 40 handsets.

According to Juniper’s report, of which you’ll find a summary in this free whitepaper, entry-level devices (Nokia’s definition for phones that sell for less than $60) accounted for 45% of total global shipments in 2008, which translates to 535 million units. However, Juniper also says ULC devices (ultra low-cost or devices selling for $5 on average) were only a fraction of those but growing in importance quickly. By 2014, Juniper forecasts low-cost devices to account for over 50% of all devices sold worldwide each year. Of the 700 million low-cost handsets expected to be sold in 2014, Juniper Research believes around 24% will be sold in Africa and the Middle East.

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With all of the collaboration going on between Qik and Nokia over the past few months, it seemed like it wouldn’t be too long before Nokia went ahead and put the live mobile video broadcasting service onto handsets right out of the box. Sure, enough: Beginning with this morning’s release of the North American N97, Qik will come preloaded onto all Nokia S60-based phones.

Read the rest of this post >>

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When you look at sales of the iPhone or Blackberry as a percentage of total cell phone sales, they are still a tiny smidgen of the one billion phones estimated to be sold this year. But when you look at what really matters—their share of revenues or operating profits—the picture looks a lot different. Deutsche Bank analyst Brian Modoff calculated the share of operating profits going to each major mobile handset manufacturer and came up with the eye-opening chart above. It shows Apple (pink) and RIM (turquoise) increasingly taking a disproportionate share of industry profits, mostly at the expense of Nokia’s diminishing handset operating profits (blue).

In a note, Modoff writes: “Increasingly, the smartphone vendors are claiming more of the industry’s profit dollars even as the pool of profitability stabilizes or shrinks.” Thanks to the success of the highly-profitable iPhone, Apple’s share of industry operating profits went from 3 percent in 2007 to 20 percent in 2008 and will grow again to an estimated 31 percent in 2009. RIM, maker of the Blackberry, is doing even better, increasing its estimated share of industry profits from 8 percent (2007) to 19 percent (2008) to 35 percent (2009). So adding those two together, Apple and RIM are expected to account for an incredible 66 percent of industry profits this year.

Meanwhile, once-dominant Nokia is seeing its estimated share of industry profits drop from 64 percent (2007) to 57 percent (2008) to 32 percent (2009). The only other major manufacturer to grow its profit share is Samsung, from 14 prcent last year to an estimated 19 percent this year. (A note on methodology: These numbers take into account operating losses at companies such as Motorola and Palm, and the total adds up to 100 only when you subtract their losses, which are expressed as negative percentages).

Such a massive shift in control of industry profits is unprecedented and speaks to the growing value of software in the cell phone industry. It also speaks to the missteps of the traditional handset manufacturers (only Samsung seems to have its act together) and the end of unbridled growth for the industry. Modoff expects total unit sales to decline slightly this year back down to one billion, while industry revenues will continue to come down from their 2007 peak. Nevertheless, Apple and RIM, will continue to take share in both units and revenues as the rest of the industry struggles (see charts below).

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Today sees the worldwide roll-out of Nokia’s Ovi Store, the company’s response to Apple’s App Store (and other centralized content stores for mobile phones and OS’es), and no doubt the company is watching the launch unfold on a global scale with watchful eyes. Here’s the thing: the launch is an utter disaster and I assume (hope) Nokia executives are outraged with the way things are going.

Update: the Ovi team posted a response to the recurring problems, see below.

Since I’ve seen the Nokia Ovi Store website come up a few hours ago, I’ve been trying to browse the selection of apps to select 10 that users should download to start off. I found that the store was down most of the time I was trying to snoop around, pages often didn’t load, and if they did they nearly always did extremely slowly. Despite the fact that I constantly needed to refresh and hope for pages to load, I figured that the service must be getting pounded from all the press it’s getting and was willing to forgive the slowness and regular downtime for the time being. But this has been going on for hours on end now, and there’s no sign of improvement.

It gets worse. Out of the ten applications I recommended earlier today, three suddenly disappeared from the Ovi Store for no obvious reason. Searching for them yields no results, but they do pop up in the ‘related items’ section when you’re browsing alternative applications. Nokia offers no explanation why the content suddenly became unavailable, or if and when they will be back. Meanwhile, some apps are showing up twice (e.g. Qik).

The user experience sucks too. Navigating the online store is downright complicated, and the categories being assigned to certain applications and content are way off at times. Entering basic search queries (e.g. ‘games’) often leads to zero results or a freezing page. Publisher profiles sometimes have nothing but a poorly embedded logo, an extremely short description and no link to their own website (e.g. inTouch).

To add insult to injury, we hear people with an Ovi account are unable to use their credentials for logging on to the new service, but that they are being told that there’s already a profile with their username when they attempt to register for a new account. That means Nokia is basically blocking registered users from using its new service at this point.

Update: All About Symbian lists more problems that need solving.

I’ve contacted Nokia’s press services to give them a chance to respond and detail how heavy the load on their servers has been this morning, but the only conclusion I can make at this point is that the Ovi Store launch is a complete fail on Nokia’s part with a service being rushed out the door before it was ready for prime time.

My advice to Nokia: tell us you’re open for business when you actually are.

Update from the Ovi team:

“Shortly after launching the Ovi Store at 2 am ET, we began experiencing extraordinarily high spikes of traffic that resulted in some performance issues for users accessing store.ovi.com and store.ovi.mobi. We immediately began to address this issue by adding servers, which resulted in intermittent performance improvements. We apologize for any inconvenience this may have caused Ovi Store users and encourage you to continue giving us feedback as we develop the service further.

The Ovi Store device client, however, has continued to perform very well and there were no reported issues from users logged on through that entry point.”

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Nokia claims more than 50 of its mobile devices are compatible with the service as of today, with more slated to roll out over time, and estimates that around 50 million people with Nokia devices will be able to license content and download applications from the Ovi Store right now. The news is now completely out there and people are testing the service like crazy, which means it can be a little slow or downright unresponsive at times.

Update: actually, the launch is a complete fail.

We’ve browsed the online store extensively and hand-picked 10 applications we think you should download and install first. Note that the available content you can download depends on which device you’re using, we’ve selected the option ‘any phone’ to increase the chances of these being available for you as well:

* Qik (Photo & video, free) – Ovi Store listing: a powerful way to share live video from your mobile phone with friends everywhere you go. MobileCrunch knew it was going to be one of the featured apps in the store back in March.

* FlyScreen (News & Info, free)- Ovi Store listing: an application that lets you add your favorite web services (in widget form) to your phone’s sleep screen, enabling zero-click access to the content you use most.

* Photobucket (Photo & video) – Ovi Store listing: lets you log in to your Photobucket account, upload photos from your phone to your album and search its public repository of photos.

* Flight Info (News & Info, free) – Ovi Store listing: key in any airline code and flight number and track terminal, departing and arrival information.

* Assassin’s Creed (Games) – Ovi Store listing: end the Third Crusade from your mobile phone. Update: seems to have disappeared from the store somehow. Alternative: Wolverine (€5).

* Twittix (Social Networks, €1) – Ovi Store listing: Yup, it’s a mobile client for Twitter.

* MobiSystems OfficeSuite 5 (Business, €20) – Ovi Store listing: OfficeSuite is a complete mobile office solution, allowing you to create, view and edit Word, Excel and PowerPoint files away from your office. Support MS Office 2007 files.

* RISK (Games, €5) – Ovi Store listing: Enjoy the classic board game playing against up to five cunning computer opponents, each with distinctive tactics and unique levels of aggression.

* AP News (News & Info, free) – Ovi Store listing: Yes, we know, it’s AP, but this app does give you a good overview of breaking news and photo galleries to boot.

* World Traveler (Utilities) – Ovi Store listing: allows travelers to plan and manage journey activities and provides instant access to relevant information and services. Update: seems to have disappeared from the store somehow. Alternative: WorldMate 2009 (free).

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