It was just a regular Tuesday afternoon in Mountain View’s Red Rock coffee shop: rows of young entrepreneurs sitting behind their MacBook screens, working on what they hope might be the next WhatsApp.
The low-key cafe served as an office for Brian Acton and Jan Koum, WhatsApp’s founders, when they were starting out back in 2009. It was here that Sequoia’s Jim Goetz met them in 2011 before becoming their only venture-capital investor. WhatsApp’s modest, unmarked offices are still just around the corner.
It’s Tablet Tuesday, with Nokia announcing its entry into the market this morning, Microsoft releasing the Surface 2 and Apple expected to introduce new iPads at an event in San Francisco.
Microsoft’s €5.4bn acquisition of Nokia’s devices business was both long predicted and a bolt from the blue, coming so soon after its chief executive Steve Ballmer announced his retirement. Here Mr Ballmer explains the logic of the deal to investors.
Elop (l) and Ballmer in 2011
Why now? The key seems to be Microsoft’s ambition.
Since it joined forces with Nokia in mobiles in 2011, neither company has prospered. Microsoft remains a distant third to Google and Apple in terms of operating systems, while Nokia’s share of the smartphone market has collapsed from 17 per cent in 2011 to 3 per cent in the first half of this year, according to Gartner.
“We know we are number three in the market, we’re not number two or one and we need to accelerate,” Steve Ballmer, chief executive, told the FT’s Richard Milne.
Things are looking up for Nokia in the US, a territory where it was unloved and unrepresented by operators not so long ago.
Now it has not one but two carriers touting its latest Windows smartphones, with Verizon launching the Lumia 928 this week and T-Mobile having its own exclusive with the 925, unveiled in London on Tuesday and available at a date to be announced in the US. Both represent advances on its signature Lumia 920 launched last year.
Nokia trained its sights on iPhone users with the launch of a new metal Lumia handset on Tuesday, as latest figures showed its share of the market had fallen by almost five percentage points.
According to the latest data from Gartner, a steep decline in sales of cheaper feature phones – still popular in emerging markets – led to a loss of mobile market share in the first quarter of this year, from 19.7 per cent in the first quarter of 2012 to 14.8 per cent this year.
Poor Nokia just can’t catch a break.
The struggling Finnish phone maker had to apologise after it emerged that a YouTube advertisement for its new Lumia device, showing off its video-stabilisation technology, was not filmed on the smartphone.
The complexity – one is tempted to say complete muddle – of the European patent system was highlighted on Wednesday when Nokia and HTC won a key victory in their intellectual property battle with IPCom.
IPCom, which is based in Germany, has waged a battle for several years to get mobile handset companies to pay it royalties for some technology it owns related to how mobile phones connect to 3G networks. Some handset makers have bought licences from IPCom, but Nokia and HTC strongly denied the validity of the patents and refused to pay up.
For mobile gadget enthusiasts, the annual Mobile World Congress in Barcelona provides a smorgasbord of delights.
This year’s show, which ended on Thursday, was no exception. So here are three handsets which, for different reasons, stand out in an increasingly crowded smartphone market.