Carolina Milanesi

A member of the Gartner Blog Network

Carolina Milanesi
Research VP
10 years at Gartner
11 years IT industry

Carolina Milanesi is a Research VP in Gartner's Mobile Devices team and agenda manager for mobile devices. Ms. Milanesi leads the research for mobile devices worldwide and is responsible for the forecasting and market share effort in this area. Other areas of coverage are mobile…Read Full Bio

Windows Phone 7 promises to help doing things faster and better, but is that enough?

by Carolina Milanesi  |  October 11, 2010  |  Comments Off

Windows Phone 7 is finally here, after what seems like a very long wait and after witnessing the premature departure of its younger sibling KIN. There has certainly been a lot of attention in the press around today’s launch and with the big splash MS has made to cover the come back into the smartphone business with coordinated events all over the world I am sure we will continue to talk about this for a few days.

Gartner is planning a full evaluation of the offering as soon as we have more information on the Marketplace developments. For now, though, I wanted to share some initial thoughts with you.

Do I think that this is a marked improvement over previous versions of the OS? Absolutely. Do I think that it will have a positive impact on sales this year and next year? Yes, I do. Do I believe that Microsoft has done enough to establish itself as a key OS in 5 years time? I am not sure.  This is pretty much the sentiment that is behind our OS forecast (Forecast: Mobile Communications Devices by Open Operating System, Worldwide, 2007-2014) where we are showing a nice volume increase for 2011 but then share decreasing as volumes grow but not enough to keep up with the market. There are many factors that need to come together for our forecast to prove conservative:

-       Microsoft based products need to move from hitting consumers at a functional level to hitting consumers at a visceral and reflective level. It basically needs to get to the “I want it cause it’s cool” stage

-       The Windows Phone brand needs to be seen as a cool consumer brand rather than something that only a business user would find interesting

-       Microsoft needs to make sure that its Marketplace offering stand ups to the “number game” where “mine is bigger than yours” seems better. Saying that having the right apps is more important than having more apps although true might be seen as a statement coming from someone who knows they will not compete

-       Lastly a wider ASP offering that we are initially seeing. At launch starting out with high-end devices will guarantee a higher level of appeal and help drive on the visceral appeal. However, in order to grow share Microsoft will have to come down on ASP to be able to compete more directly with Android-based products.

So I suppose this can be summed up with: good effort Microsoft but we need to see more evidence that you will be able to deliver on the points listed above. On paper KIN had a lot of potential but ended up not going anywhere.

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Samsung says Bye-Bye Symbian

by Carolina Milanesi  |  October 1, 2010  |  1 Comment

A message on behalf of Samsung Mobile Innovator

Dear Symbian developers, 

 Samsung Mobile Innovator will discontinue its Symbian support service from December 31st 2010.

This message appeared on the Samsung Mobile Innovator site and makes Samsung’s position on Symbian official. To industry watchers this should not come as a surprise. The last volume driver that Samsung had on Symbian was the innov8 and you need to think quite hard to get to recall that as so much as happened since. Samsung’s opportunistic approach to OS might mean that we will see Symbian support again as and when key customers might require it. For now, it makes absolute sense for Samsung to work with Android, Bada and Windows Phone 7.

On the developer side, Samsung has its work cut out already with Bada where it needs to grow its developer community fast so that Bada based devices become open OS devices in the true sense rather than glorified feature phones.

For Symbian this is another blow after the statement from Sony Ericsson a week or so ago. Does it make sense for Symbian to continue as open source? Should Nokia bring it back in house? It could make sense because at the end of the day it is companies such as RIM and Apple who control their end to end offering that benefit today from higher margins.

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Slight N8 delay will not impact sales expectations

by Carolina Milanesi  |  September 21, 2010  |  4 Comments

Nokia announced today that the N8 will be shipping with a couple of weeks delay. I believe that such a delay allows Nokia to put a few  touches on the N8. Considering Nokia must have received a whole bunch of comments during Nokia World last week making small improvements that enhance the overall experience makes a lot of sense. For Nokia first impressions on the N8 are more critical than an extra week of sales.


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Nokia World opens tomorrow but have we heard all we need know already?

by Carolina Milanesi  |  September 13, 2010  |  3 Comments

After my vacation in Sardinia last week came abruptly to an end at 7.30 am on Friday morning when I received the first call from the press on Nokia’s new CEO. I am gearing up to go into London for Nokia World that starts tomorrow.

With OPK not on stage and Anssi Vanjoki resigning today I wonder how many in the audience will pay much attention to what will be said?  Although the first announcement was planned I doubt the second was. The result might still be a good one for Nokia. At the end of the day, any product announced tomorrow is likely going to follow in the footpath of the N8 – the best N series device Nokia has had since the N95 but still a long way away from an iPhone. We know this because we know Nokia needs Symbian ^4 to make radical improvements on the user interface. So I argue that any more promises made on stage tomorrow about what is to come would have not helped Nokia much with or without OPK and Vanjoki. Seeing the old guard leave will however help Nokia show they are serious about making changes.


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The tablet frenzy has officially started: Samsung launches the Galaxy Tab

by Carolina Milanesi  |  September 2, 2010  |  1 Comment

Since the launch if the Apple iPad we have been waiting to see what other manufacturers will do. The first responses that came from Computex in Taiwan a couple of months ago were devices based on Windows showing that PC manufacturers felt more comfortable playing on familiar territory. But the tablet market will not be about Windows at least not the PC version of the OS.

Looking at this market it is all a bit of a deja vu. Hardware design and features where the first things that vendors had to respond to iPhone but what makes the iPhone such as a success is the combination of hardware and ecosystem. With tablets we have the same situation. Our expectation for this market is quite bullish. Our official forecast will be out in the next few days. We expect the majority of media tablets to be based on Android with other OSs such as Meego and WebOS also playing a role in the space. Like with the iPhone’s competitors, media tablet vendors will target two types of users: the ones that will look more at hardware features and the ones that will be more interested in the strength of the ecosystem.

The Galaxy Tab builds on the success that the Galaxy S has been having since its launch in June. With a 7inch display front and back camera 16 and 32gb storage plus SD card and a price tag of around 600 euros before subsidy the Galaxy Tab offers a good solution for those users that have been thinking about getting a tablet but were waiting for something more price competitive. Samsung will have about 200 apps at launch that will be dedicated to the Galaxy Tab. All apps in its Markets application store will of course run as well. But if the iPad experience is anything to go by it will be dedicated apps that will make the difference. It will be also interesting to see what will be the consumers’ response to the subsidised model. The flexibility that you can have with iPad where in the UK I can buy a day pass for 3G or a week or a month has had a lot of success with consumers who do not feel they have signed up their life yet to another contract. All that said, the recent OFCOM report on the UK shows that the trend for the 24 months contract is growing. Subsidy on hardware is still what consumers see rather than total cost of ownership.

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Papermaster leaves Apple. Now what?

by Carolina Milanesi  |  August 9, 2010  |  Comments Off

When Apple’s senior VP of devices hardware engineering leaves so soon after “antennagate”, it’s natural to see a connection. True or not, it looks like Apple is taking a moment to regroup, by appointing Bob Mansfield to head up the devices division.

The press has speculated wildly about the reasons for Papermaster’s departure. Obviously many see him as responsible for “antennagate,” but others attribute it to his incompatibility with Steve Jobs’ hands-on management approach (he was actually hired when Jobs was on medical leave), or even to Papermaster’s un-Apple wardrobe (maybe he didn’t own enough t-shirts and jeans). Whatever the cause, it’s further evidence that Apple has little tolerance for mistakes.

While speculation about the departure of a key employee is interesting, what’s more important is what Apple in general, and its mobile division in particular, does next. Consumers have come to expect perfection from Apple and with iPhone 4 that expectation fell a little short for some. The risk Apple faces is that it won’t be able to keep its reputation polished as its popularity grows.

This is a real issue, because the kind of popularity that Apple’s now enjoying always turns companies into targets — and not just for critics and investigative journalists, but for hackers. I was talking to a security expert back in early 2010 who told me that Symbian faced more security risks than the iPhone, simply because Symbian reached massive scale first. Times have certainly changed: iOS has a new system-wide security exploit, announced by a German security firm last week, and the jailbreaking community gets faster at cracking Apple’s protections with each new version.

Apple is certainly not alone in having to fight an increase in security attacks. But this kind of scrutiny is a new thing for Apple. Its Mac OS platform, for example, has always enjoyed a reputation for being free of viruses and other security risks, partly due to its niche market share. But given the growing interest shown by enterprises in both iPhone and iPad Apple needs to make sure that businesses can buy its products confident that they have the best security available.

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Blackberry Torch aims to add the pleasure of touch for QWERTY lovers

by Carolina Milanesi  |  August 3, 2010  |  Comments Off

Today RIM announced the Blackberry Torch 9800 a vertical slider that combines the traditional Blackberry qwerty with a full touch screen running RIM new OS 6.

Touch-enabled devices have been growing in popularity since Apple launched the first iPhone in 2007. Yet, users who spend a lot of time sending text messages or emailing seem to have preferred devices with a physical QWERTY keyboard. RIM jumped on the touch bandwagon with the Storm and Storm 2 with somewhat mixed results as the OS that worked so well with a keypad did not easily adapt to a touch UI.

The Torch bridges these two use cases to offer a more traditional solution to RIM’s core users with the added bonus of a new OS that improves the touch experience. It will certainly offer a nice upgrade path for Bold users. From demos I have seen, it seems that the new OS is an improvement but not a feature that will set RIM apart from its competitors.

Overall I see the device as RIM’s chance to limit churn to other devices such as Apple iPhone and more so Android. I do not think we will see users moving in the other direction because of the Torch.  The vertical slider is also going to appeal more to business users than light messaging users who have shown a strong preference to side-sliders, especially in the North American market.  For AT&T certainly a good to have device as speculations around the end of the iPhone exclusivity are mounting.

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2Q10 Earnings season comes to an end. One main theme: margins pressure

by Carolina Milanesi  |  July 30, 2010  |  2 Comments

The 2Q10 earnings season is drawing to an end with Samsung, LG and Motorola all announcing in the past 24 hours. My preliminary estimates came in pretty close to the vendors’ volumes. I think however, that this is not going to be the main story going forward and that looking at ASP this quarter will show a very interesting but worrying trend for vendors.

Most vendors have cited strong competition as well as a stronger Dollar as the main causes of ASP decrease in the quarter. Unfortunately, they have also guided to increased price pressure in the second half of the year. Although this is bad for manufacturers it is of course great news for consumers, who will be able to get their hands on devices with improved specifications without having to invest much more money than they did when they last bought a phone. With increased consumer confidence in many emerging markets, consumers are potentially planning to spend more money but if things continue as they are they will not need to do so.

The phone market is turning more and more into the PC market where for the same money you get more features and where manufacturers will struggle to differentiate their offering. Some, including me, thought that apps and services would help vendors add value to hardware. It seems to me though, that the popularity of Android is not going to allow that to happen as so many vendors are using the same platform. Are open single-vendor platforms (RIM, Apple) the only way to keep your margins healthy? If so, should Nokia just forget about Symbian Foundation and bring it in-house? It is not like there are vendors queuing up to bring Symbian devices to market. And it might allow Nokia to move more swiftly going forward.

Our 2Q10 market share will be published on August 11 and a press release will go out the day after that.


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Making sense of Gartner’s new device definitions

by Carolina Milanesi  |  July 23, 2010  |  Comments Off

In the past week or so I had a few clients asking how they should read our new forecast as we moved away from calling a portion of the market smartphones. I mentioned in one of my blogs that this was coming and I tried to explain the rationale behind the decision of dropping the name smartphone, but I think that although people can understand the need for change they are more concerned with the implications that such a change brings to the numbers.

“You used to have smartphones, now you called them something else that’s fine but tell me where I can find a like for like number in your stats.”  This is pretty much what it boils down to.

So if what you need to do is to plug our numbers into your model and are a little lost as to what is what now here is some help:

  • Low-cost devices (<$75) = 100% basic phones.
  • Basic communication devices = 80% enhanced phones + 60% entry-level smartphones.
  • Premium communication devices: up to $300 = 17% enhanced phones + 40% entry-level smartphones + 7% feature smartphones.
  • Premium communication device: above $300 = 93% feature smartphones + 3% enhanced phones.

The Open OS volumes in the OS tab match our old smartphone category. If you add the device field into the pivot view you can see how much the individual categories contribute to the overall open OS segment.

I know change is disruptive when you rely on our numbers to model yours and we really try and limit the number of times we do this. Mainly cause the level of pain I feel is similar to the pain one feels when hitting his/her little toe against something. This multiplied for every day that it takes to get consensus internally J

I really believe that the new set of definition offers more granularity than before. By segmenting this way it is easier to understand where the different operating systems play. The smartphone market is growing not only in volume, but also in the range of ASPs it covers. In a few years we will see devices based on Symbian and possibly Android below the 75USD mark. I am sure by then, the high end of the market would have moved even closer to a PC experience and I bet the low end smartphones won’t look that smart after all.

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OPK has reasons to be optimistic after Nokia’s Q2 results. Is he the only one?

by Carolina Milanesi  |  July 22, 2010  |  8 Comments

Today’s results do nothing to increase optimism on Nokia’s immediate future.

Volume sales of 111 million units are in line with our low-end expectations (we had 111 to 113 million) and today’s results confirm the issues Nokia has:

- the low-end is selling OK and is keeping market share stable

- the high-end is getting weaker by the day and more and more under ASP pressure

Saying that the N8 delivers the best user interface experience ever delivered by a Nokia smartphone does not mean the experience will be great compared to other smartphones OSs.  It is much better than what they have done so far but that does not necessarily mean much.

Increasing competitive pressure. Let’s translate that to what it actually means. Competitors have jumped on the smartphone bandwagon and made great strides since last year while Nokia continues to promise improvement and delays execution. In particular, I wonder why the N8 has not been shipping yet considering that the prototype that was shown back in May when it was introduced looked pretty stable and almost finished from a software perspective. Did Nokia decide to add a few more tweaks now that we know Symbian ^4 is not likely to hit the market before June 2011?

More to come after the call in just over an hour. Let’s see if any invest analyst is brave enough to ask OPK if this will be his last earnings call.


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