Facebook snatches limelight in mobile

2014-02-20 16:30
Facebook intends to use messenger application WhatsApp to grow its user base. (Duncan Alfreds, News24)

Facebook intends to use messenger application WhatsApp to grow its user base. (Duncan Alfreds, News24)

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Madrid - Facebook's €14bn takeover of smartphone messaging service WhatsApp staked the social network's place in dramatic fashion as a pivotal player in the mobile world.

The US social networking giant's 29-year-old founder Mark Zuckerberg snatched the limelight ahead of his debut as the star speaker on the opening day of the 24-27 February World Mobile Congress in Barcelona, Spain.

Overshadowing even the hotly anticipated release of Samsung's new Galaxy S5 smartphone at the mobile fair, Facebook's cash-and-stock deal reflects a structural shift towards mobile by internet and related technology industries.

For Facebook, smartphones and tablets represent a fast-growing and crucial source of advertising revenue.

Microsoft sees its future in mobile, too, with a €5.44bn takeover of Finnish group Nokia's loss-making mobile phone division.

Sony, which may launch a new Xperia smartphone at the mobile fair, announced this month the sale of its stagnant PC business to focus instead on smartphones and tablets.

"Suddenly, mobile is not this separate industry from the Internet and technology, it is part of the same mix," said Ian Fogg, senior principal analyst at research house IHS.

"We can see smartphones are now ubiquitous. We can see they are something consumers interact with throughout the day, wherever they are, including when sitting at the desk," he added.

"That is fundamentally different for media companies, for communications companies, for retail companies and for pretty much every blue chip that wants to engage with consumers."

Samsung remains, however, the titan of the mobile device manufacturers.

Galaxy S5

On the opening day of the mobile fair in Barcelona, it will almost certainly be unveiling a new Galaxy S5 smartphone with rumoured Apple-fighting features such as a fingerprint scanner and larger screen.

The top smartphone maker coyly announced to journalists an "Unpacked 5" event for Monday.

"We are holding a global launch event of our new flagship product in 2014," its invitation said, using a well-worn technique of not naming the smartphone so as to build anticipation.

The new device will be at the vanguard of Samsung Electronics's defence of its number-one position.

The South Korean group sold 300 million smartphones last year, 31% of the nearly one billion sold globally and double archrival Apple's 15.6-percent share, according to US technology research house Gartner.

The Galaxy S5 is variously rumoured to have a fingerprint scanner on the home button; a 5.24-inch, full high-definition display; a water and dust-proof case, possibly metallic; and a 16 megapixel camera.

At the same time, the industry anticipates that Samsung will reveal the latest, possibly thinner, version of its smartwatch, the Galaxy Gear 2, after the first version failed to win over many critics.

It will be one of an array of new "smart devices" to launch at the show, analysts predict, as manufacturers seek alternative sources of revenue during a slowdown in the well-developed smartphone market.

A 42.3% surge in smartphone sales to 968 million units last year was propelled almost entirely by developing markets such as Africa, Asia, and Latin America, a report by Gartner showed.

But sales in mature markets such as Western Europe and the United States actually declined in the final quarter of 2013, it said.


Adding to the challenges faced by the likes of Samsung and Apple, China's highly competitive smartphone manufacturers are battling for a bigger space in the industry.

China's Huawei and Lenovo held the number three and four positions for smartphone sales in the final quarter of 2013, according to Gartner, with their compatriot ZTE not far behind.

"Chinese players are looking beyond their own borders to scale up," said Melissa Chau, senior research manager for the Asia Pacific at technology analysts International Data Corp.

China's Lenovo took a big step in that direction in January, agreeing the $2.9 billion purchase of the loss-making Motorola Mobility from Google to grab a strong platform in the Americas and a foothold in Europe.

Apple traditionally skips the mobile fair. But a slew of other smartphones are set for release in Barcelona.

Nokia is rumoured to be unveiling new devices including, ironically, a smartphone using a version of Android rather than its future owner Microsoft's Windows in an attempt to capture sales in emerging markets.

But the connected world is now moving well beyond mobile phones and tablets, as the "Internet of things" phenomenon hooks to everything from your television or fridge to the lightbulb.

It is a development that also presents some security challenges.

Security provider Thinkpoint said last month it had uncovered more than 750 000 malicious emails from more than 100 000 everyday consumer gadgets such as home-network routers, multimedia centres, televisions and at least one refrigerator.

Read more on:    samsung  |  facebook  |  china  |  spain  |  mobile  |  technology

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