G1, Android, and Cupcake

T-Mobile USA announced that Google Android-based G1 smartphone is now available in all markets nationwide. Previously, it was only sold in T-Mobile’s 3G service markets. Although the carrier has not publicly discussed the G1’s sales figure, Morgan Stanley projected around 300,000 unit G1 sales in 4Q08 for the carrier. Contrasting this number, Taiwan’s HTC (G1’s maker) in early January said that G1’s 2008 shipments reached the company’s one million goal as first reported by DigiTimes. Since G1 was only available in the U.S. and U.K. in 2008, the Morgan Stanley number looks a bit low unless either T-Mobile intentionally stocked up G1 during the holiday season or sell-through was very poor.

Entering into 2009, G1 will become available in additional countries. T-Mobile will introduce it to Netherlands, Czech Republic, and Austria in January, and to Germany and Poland in February. Expanded availability, like in the U.S. will favor G1 sales. But on the other hand, the competition is up too. Google’s Android will be featured in other smartphone models. Sprint and Motorola reportedly showed interest in the Android platform, and Huawei, Samsung, and Kogan (an Australian CE maker) are working on Android-based models. Competition also comes from other mobile brands. Apple’s iPhone is clearly the biggest threat, but Blackberry’s Storm also had decent sales in the past quarter (500K as reported by the Wall Street Journal).

More exciting to G1 users is the news (or rumor) that an Android update is coming soon. Codenamed “Cupcake,” the update will bring new features to the phone’s visual display and add a new on-screen interactive keyboard, among many other hyped features. There are even rumors that G1 will get multi-touch feature in the future. Of course, with today’s news regarding Apple's multi-touch related patents, vendors will rush to consult with their lawyers to figure out if their multi-touch feature is free of IP troubles.

Smartphone Market Competition Ratcheted Up

There were several news headlines regarding the mobile phone industry in the past couple of days. First, Nokia launched its N97 touch-screen smartphone yesterday and touted as the most revolutionary mobile internet device. Indeed, the specs are quite impressive: 5-megapixel camera, 32GB internal memory, tri-band HSDPA 3G, flash in the browser, and a 3.5-inch touch screen, etc. The price tag is eye-popping too—around $700. Separately, news from the U.K said that T-Mobile UK started to slash the price of the first Android phone G1. It is now not only free to customers who sign up for an 18-month contract with the carrier, but also costing less to a user on a monthly basis: the contract term is reduced from £40 to £30 per month. Consider the fact that G1 was only launched a month ago, the price cutting speed is unprecedented for a hotly pursued model. Then late yesterday afternoon, Research In Motion issued an earning warning for the 3rd quarter ending in November. The company will fall short on both subscriber numbers and the revenue goal, even its CEO described the new Blackberry Storm sales as “exceptional.”

All signs indicate that mobile handset makers have significantly boosted their efforts in the smartphone market. As a result, consumers will see not only more capable/enticing models out this year and the next, but also strong motivation from handset makers and carriers to push inventory through the channels. The hope is on the smartphone category to raise overall mobile handset sales volume, and all the sweeteners might come at the expense of margins from carriers and handset makers. RIM’s miss is a strong indication of the intensity of competition. Not that the Blackberry is no longer cool, but consumers today and in the future will have a lot more choices with an attractive service plan than in the past. This new reality clearly benefits consumers and will help shorten the replacement cycle for those who are in the mood for an upgrade.