Dixons Carphone: What’s It All About?

Posted: September 1, 2014 in Others

Source: 1clicknews.com

In Spring 2014, Dixons Retail (Currys and PC World) and Carphone Warehouse (CPW) announced a merger between the two stores to create the biggest technological superstore in the UK which will be known as Dixons Carphone. As the new mega-company was founded in 7th August 2014, we look into more detail on the merger and discuss the reasons behind it and the potential risks and gains.

 

BACKGROUND OF THE TWO FIRMS

– History of Carphone Warehouse

Founded as “Car Phones” by Sir Charles Dunstone and Julian Brownlie, the company started in 1989 based in London. With the help of an old friend (and chartered accounant) David Ross who became a financial director, the company expanded to 20 stores within 4 years of opening. With continued success over the 90’s with stores opening in Western Europe and with Guy Johnson joining as a Logistics and Distribution director, the firm was truely independent and didn’t need assistance from investors by the start of the 21st century.

In 2002, it took over the fixed line operator Opal Telecom PLC and a year later launched TalkTalk by using the assets of Opel Telecom and taking advantage of the liberation of the UK fixed line market. In 2006, it also launched Virgin Mobile France was launched as a joint venture between the Carphone Warehouse group and Virgin as a leading mobile network. In 2007 the company launched Geek Squad, a support centre for all home technology.

Also in 2007, Best Buy Mobile was launched as a cooperative agreement with Best Buy (a major technology retailer in the US) and a year later Best Buy Europe was created from the 50% acquisition of the Carphone Warehouse group from Best Buy. By 2010, Carphone Warehouse and TalkTalk demerged creating seperate entities and over the next few years Best Buy failed to meet expectations and was eventually closed in Europe. Carphone Warehouse brought back its 50% share in the group and the deal was completed in June 2013 for £471m.

More information on the history of Carphone Warehouse can be found here

– History of Dixons retail.

The firm which was started by Charles Kalms registered in 1937 as Dixons Studios in Southend as a photographic studio. Unusually, the name “Dixons” was actually chosen at random from the telephone directory rather than the surname from the founder or the name is directly associated with the market the company is in (e.g. PC World selling PC’s). It expanded to seven stores in London by the late 1930’s/early 1940’s but was reduced to a single store in Edgware, North West London by the end of the second world war.

By the 1950’s the company took advantage of the demand of photography under the advice of Stanley Kalms (Charles’s son) and sold physical cameras as well as accessories. With this plus aggressive marketing and a mail order division allowed Dixons to be a market leader in the 1950’s and resulted in rapid expansion – so rapid that in 1957, the firm had to relocate its head office. During the 1960’s, the company continued to expand from acquisitions of rivals such as Ascotts and Bennetts (1962 and 1964 respectively) and entering the audio and hi-fi market by the end of that decade.

By the 1980’s the company further expanded its portfolio by acquiring The Currys Group, Mastercare (which was the nationwide electrical appliance service organisation) and Bridgers – goods discount stores which was the basis of today’s Curry’s megastores. In the 1990’s the Vision Technology Group (VTG) who operated under the name of PC World was purchased by Dixons. Also Dixons opened “The Link” which was its first step into telecommunications.

Dixons eventually opened 295 The Link stores across the UK. Pictured above is one in Derby. Source: grosse.is-a-geek.com

In the start of the 21st century, the company was the UK leader in household and media appliances and a strong competitor for other markets such as telecommunications and gaming. It continued to strengthen its portfolio by opening megastores in the UK, investing into the internet by launching the biggest online electrical store. and buying and selling companies across Europe. Acquisitions included Ei System (a leading PC retailer based in Spain and Portugal) in 2000, UniEuro – an electrical retailer based in Italy – in 2002 and had an “long-term co-operation agreement” with the Eldorado Group – a specialist electrical retailer from Ukraine and Russia. However in 2006, The Link was sold to O2 (UK). At the end of the decade the company suffered at the global recession and announced company restructuring which kept them afloat during a difficult time. Despite most high street stores closing down or operating at a loss, Dixons announced in 2010 that had a 61% rise in full year profits. With most direct rivals now in administration now (e.g. Comet) Dixons leads the way in electrical household goods in the UK.

More information about Dixons history can be found here

 

REASONS BEHIND THE MERGER

– Planning For The Future: The “Internet Of Things”

With both firms publishing strong sales at the end of 2013, the reasons behind the merger are not to do with any current financial problems. The Carphone Warehouse and Dixons both announced a 59% rise and 76% increase in earnings in the financial year 2013-14 respectively, compared to the year before. The main reason why the two organisations will be merged together is because they’re planning for the future with the “Internet of Things”. The Internet of Things (IoT) is simply where physical products can be digitalised, all connected to the internet and can communicate with each other – which then has the potential to be become far more useful. There was smartphones, then smart TV’s, now smart watches and next will be smart homes and smart cars (not Smart Automobile – a division under Daimler AG) and all these objects would be connected to the internet and interact with each other. For example, watches only just tell the time but with smart watches built by companies such as Samsung and Motorola, they can communicate with your current smartphone, by letting you read texts and display maps without having to get your phone out of your pocket.

Currently with the IoT, the trend seems to be everything in the household connected and run by mobile gadgets. Smartphones and smart watches will be able to communicate with bigger appliances such as TV’s, dishwashers and even central heating systems. At the consumer electronics show (CES) 2014, there was innovative ideas from firms that showed possible concepts for a smart kitchen. These ideas included a wifi-enabled refrigerator, a cooker that warns users via text when their food is ready and even a touchscreen cooktop. Korean manufacturers LG and Samsung showcased smartphone apps that allowed users to control their appliances. Of course it’s not all about what’s in the kitchen but also the living room. Currently there are apps on smart phones that work with TV’s and gaming consoles such as Microsoft’s Xbox and Sony’s Playstation. Other possibilities could include car tech by Geek Squad (by CPW). Geek Squad is a “24/7 tech support team” that offers advice and help in selected Carphone Warehouse stores, for those unfamiliar with the latest technology. Android Drive and CarPlay by Google and Apple respectively will be available for consumers soon and Microsoft’s version of a operating system in a car is currently in development. Some user may find installing or even using the car software difficult and could need assistance.

 

LG's HomeChat app allows users to communicate with home appliances as if they are real people. Source: foodtechconnect.com

LG’s HomeChat app allows users to communicate with home appliances as if they are real people. Source: foodtechconnect.com

So what does this mean for Dixons and the Carphone Warehouse? With the IoT, there’s a massive opportunity for these firms for expansion and instead of investing possibly billions of pounds, they would even save as much as £100m by merging together due to overlapping offices. However, since all these appliances would be connected to the smartphone it could be seen as more of a benefit to Dixons rather than CPW since their knowledge and expertise on mobile technology is much more valuable than home appliances. For Carphone Warehouse though there’s another reason why the merger makes sense – defence.

– Defence: CPW vs. Mobile Networks

Mobile phone Networks want third parties like CPW and Phones4U gone since they will have better control over their network and save on costs. The UK’s 3 major mobile networks with contracts available to Carphone Warehouse (O2, EE and Vodafone) are rumoured to have falling profits, potentially part due to the dying of smartphone and tablet sales. EE have already started considering to continue its partnership with CPW and the other 2 networks could follow suit. Three – the 4th biggest network in the UK – already pulled out of CPW in November 2013. It’s worth remembering that Vodafone did pull out of CPW back in 2006 due to a disagreement on much commission Vodafone had to pay, but then re-joined 3 years later. A repeat of Vodafone discontinuing their partnership with Carphone Warehouse cannot be overlooked.

“The networks would like to be more reliant on their own direct channels and take the same route as Three, but they do too much volume through Carphone. There is a lot of noise, but they are all waiting for each other to show their hand”

Matthew Campelli – News Site Mobile Today

During 2013, O2 sold their broadband and fixed line business to BSkyB and Vodafone returned their 45% stake in Verizon in one of the biggest corporate agreements in history. The mobile networks say that these deals will allow them to concentrate on 4G and their core business, but you can almost feel that one of the main reasons was to save costs.

Also, with further increases in operating costs due to legislation in the next few years, mobile networks want more independence on the high street by cutting out the middleman. Ofcom announced that not only will it cost networks “up to 430% more to use radio spectrum” but also in 2015, roaming charges while using a phone abroad in Europe will be gone. As a result, there is a fear that these operating costs would be pass down to consumers, but networks are already at risk losing customers coming off mobile phone contracts due to increased financial pressure in the current climate.

So what does this all mean for Carphone Warehouse? With the combination of spending money on installing 4G equipment, higher legal operating costs in the future and the slowdown of sales on smartphones and tablets, networks will be in financial trouble in the next few years. One way to save on all these liabilities would be to withdraw their partnerships with third-parties like CPW but with their merger with Dixons, if a network was to pull out it could risk losing too much business – even more than before the merger was announced – and made it even more difficult for the likes of EE, O2 and Vodafone to become truly independent.

 

WILL IT WORK?

– Failed Attempts: Carphone Warehouse with Best Buy.

As discuss earlier in the history of CPW, Carphone Warehouse and Best Buy did have a 50:50 partnership formed in 2008 and planned to expand throughout the country opening 200 American-style electronic “mega-stores”. However, the joint venture didn’t work – it only manage to open 11 stores – and in 2011 pulled out of the UK market completely costing the 2 companies around £200m each. Officially Best Buy blamed “economic downturn, low brand recognition and a stiff competition from British market.” but looking deeper into why the plan failed, it could only blame itself…

  • Economic Downturn – with the recession during around the same time as Best Buy entering the UK market, sales targets should of been realistic. However, they were over ambitious with CPW predicting sales of between £600-£700 per square foot – over 20% more than Dixons at the time. Established retailers Dixons and Comet were already suffering from the economic downturn (with Comet closing down all together eventually) so Best Buy’s targets were never going to be met.

 

  • Low Brand Recognition – while in the US Best Buy is successful electronics company, in the UK it could easily be mistaken for a firm to compete with for Aldi or another discount grocer, according to research by a rival retailer. Also, due to the nature of the market consumers would only enter a electronics retail store a few times a year – after all, how many times would you need a new fridge? With the vast majority of the public not knowing the company and a very small footfall in stores, advertisement and promotion would be the only way to let the public aware of Best Buy and drive them into their stores, as long as it was relevant to the UK market. Unfortunately this was never the case and it got criticized for being too American which never helped. Best Buy should of adapted better to its new environment – especially since it had CPW at hand.

 

  •  Stiff Competition – in all technological markets competition is very fierce, therefore all firms would need to find as much advantages as possible. Best Buy’s rivals once had a reputation for its shops to be not organised or clean with staff not customer-friendly – only concerned with their commission due to the amount of pressure on them. However, in 2007 Dixons overhauled everything with staff having the proper training required and stores receiving a full refurbishment. Best Buy did not follow suit and was even described as “immature” which lead to its rivals having a stronger case. Also when announcing its plan to open its 200 mega-stores, it gave Dixons and Comet a chance to react because the plans were 2 years ahead of its time (i.e. the first store didn’t open until 2 years after the announcement). Best Buy should not of made its plans public at first – or at least not have released so much details.

 

Despite its success in the US, Best Buy was a failure in the UK. Source: soultsretailview.co.uk

Despite its success in the US, Best Buy was a failure in the UK. Source: soultsretailview.co.uk

 

Of course, most of the reasons why Best Buy failed will not apply to Dixons Carphone. The economy is now recovering (slowly), both brands are well known in the UK and the rest of Europe and it’s only direct competitor would now be Phones4U with other threats from high street retailers such as Argos and Richer Sounds. Also there’s a huge opportunity with the IoT, but Dixons Carphone must not forget why its previous partnership with an electronic store failed.

– Potential Online Threats: “Click-And-Collect”

Online shopping is on the rise, both on a PC and now on smartphones due to its convenience, range of products available and pricing compared to high street stores. However, one of the issues with online shopping is with delivery – you must be available at a given time and date to collect your goods which could be a nuisance. To get around this problem, companies such as Tesco offer time slots which allow customers to choose when they have their items delivered – at a cost. The more popular time slots such as weekday evenings would be more expensive compared to lunchtime during the week.

Other companies – like Dixons – offer an alternative service called “click-and-collect”. Viewed as “the potential saviour of the high street as it connects the fast-growing online shopping world with physical stores”, in short, the customer does all their shopping on the internet, pays of it online and then collect their good(s) at their local store whenever it’s best of them. In Dixons case, they offer to hold a customers items for up to 28 days after it’s been delivered in store. This gives customers of all the benefits of online shopping without the hassle of delivery – provided they’re willing to collect the item(s) themselves. This might not be suitable for home appliances like fridges and washing machines but for smaller gadgets like tablets and gaming consoles it could be an advantage.

The problem is popular online shopping sites like eBay and Amazon are starting to offer (or already offering) a similar service which could be a potential threat to Dixons Carphone. eBay has extended its partnership with Argos to offer a click-and-collect service with “65,000 eBay sellers are expected to offer items for collection at Argos, rising to 80,000 in 2015”. Amazon on the other hand will soon release trials to offer online shopping pick-up lockers in London Underground station car parks. What all this means is customers could feel persuaded to use rivals firms like eBay and Amazon since one of the advantages of using the high street rather than online would be effectively be gone. One of the reasons Dixons and CPW merged in the first place was to provide an service on technological products and gadgetry like no other on the high street, but this could be pointless if everyone switches to online shopping and uses click-and-collect. Dixons Carphone must keep an eye on consumer behaviour and be ready to adapt.

 

Dixons Carphone is one of the most exciting mergers to come out in recent history due to not only the success of the 2 companies in question but also the opportunities that lie ahead. However it must not get too complacent, especially due to the rapid change in the market it is in and of course the economy. How Dixons Carphone manages in the next few years we will have to wait and see…

2014 marks the 20th Anniversary since the 1st PlayStation was launched to the general public. We look back at how it became a dominate player in the gaming world.

PLANNING STAGES & ORIGINS

Even though the first PlayStation was released in 1994, the idea of the firm entering the gaming market was actually first introduced 6 years before that. In 1988 Sony and Nintendo had a collaboration between them to develop a console that used compact disk technology. This project driven by Ken Kutaragi led to a SNES prototype with a CD-ROM drive with was unveiled at the Consumer Electronics Show in 1991. However this partnership failed to materialise and a day after the CES, the original partnership ended with Nintendo opting to go with Phillips instead. The main reason behind the break-up was due to the two companies unable to agree on how the revenue would be split from the joint venture.

The SNES-CD prototype shown at the CES 1991

The SNES-CD prototype shown at the CES 1991

This enraged Sony and after this decided to stay in the game. After a meeting in July planning litigation against Nintendo, the president Norio Ohga was quoted saying “We will never withdraw from this business. Keep going.” However during this time there was still talks between the two companies, with Nintendo offering a non-gaming role but this was rejected. Talks finally ended in 1992 and a few months later, Sony decided to push forward with their plans.

1993 saw the establishment of Sony Computer Entertainment Inc. which was a joint venture between Sony Corporation and Sony Music. The partnership was formed so that Sony Music could assist Kutaragi with attractive talent with developing computer and video games and also helping manufacturing processes with CD-ROM’s. Sony then finally gave the green light for production of the PlayStation which was released a year later.

More Information about the origins of the PlayStation is here

ENTERING THE MARKET

The end of 1994 saw the launch of the PlayStation in Japan, and it was an instant success. Not only was it cheaper for customers than its main rival at the time the Sega Saturn, but it was much cheaper for game developers to use the PlayStation platform as well. Companies such as Namco took advantage of this and released games at launch such as Ridge Racer which was praised for its gameplay and 3D graphics. Eventually, the PlayStation was released in September 1995 in North America and Europe and at that point its arch-rival Nintendo responded to the fifth-generation of gaming with its Nintendo N64. Despite the increased competition the PlayStation continued to sell well in all regions. In North America, between September and December 1995 Sony managed to sell 800,000 units compared to 400,000 Sega Saturn’s sold since May of that year. By 1998, the PlayStation had completed dominated the market and continued to appeal to the masses with the new “Dualshock” controller and more popular games were available such as Crash Bandicoot, Gran Turismo and Tekken. It went on to become the first console to sell over 100 million units worldwide and eventually sold 104.25m.

Also in 1999, Sony released the PocketStation which was a memory card peripheral for the PlayStation. With its monochrome display, flash memory and infrared connection capabilities, the PocketStation allowed users to download mini-games from full game titles such as Crash Bandicoot 3 and Ridge Racer Type 4. It was so popular in Japan that to satisfy demand it was never released in any other market.

PLAYSTATION EXPANSION

By the start of the 21st century, Sony released a redesigned version on the PlayStation called the PSOne and unveiled the successor – the PS2. The PSOne had the same specifications as the original PlayStation but was much smaller and had other changes such as the reset and power button combined. Sony also released a “combo pack” that inculded a 5″ LCD screen that can be attached to the back of the PSOne. It went on to be the best-selling console in 2000.

The PlayStation 2 was also launched in 2000 and was an even bigger success than the PlayStation. With its backward-compatibility for PlayStation, next generation graphics (at the time) and built-in DVD player, Sony really struggled to cope with demand due to not only the sheer amount of people who wanted to get their hands on a PS2 but also there are maunfacturing delays. Nevertheless, in the first 24 hours of its release, Sony managed to make $250 million through PS2 consoles, games and accessories. Even though the Sega Dreamcast got discontinued, Microsoft entered the market with its Xbox and Nintendo responded with its GameCube. However the PS2 went on to be the best-selling console of all time with over 157 million consoles sold worldwide.

With the PS2, there were a few firsts for the company. The expansion of online gaming started in 2001 when online services were lanuched for its games. This required an adapter that slots in the back on the console which was sold separately. Also in 2003, Sony released the EyeToy – a motion detecting camera – which allowed gamers to play using their body rather than the traditional way of a controller. Over 10.5 million EyeToy’s were sold.

Not all PlayStation unveilings were successful however. In Japan Sony released the PSX in 2003 which was a combination on a DVR (Digital Video Recorder) and a PS2. The high price of 79,800 yen (£463, $778 as of 21/04/2014) resulted in poor sales and it was never released outside of Japan.

The PSX failed to reach sales targets

The PSX failed to reach sales targets

Following the trend of downsizing with the PSOne, Sony released a “silmline” version of the PS2 in 2004. As before other than its dramatic decrease in external size, there was very few other changes. For the PS2, the silmline had the following changes;

  • a built-in ethernet port (and in some countries a modem as well)
  • the removal of the 3.5″ expansion bay which is needed for the internal HDD
  • doesn’t feature a interal power supply
  • has a modified multi-tap expansion

In 2004, Sony entered the portable gaming market with its 1st proper attempt to take on its arch-rival Nintendo with the release of the PlayStation Portable (PSP) in Japan (2005 in all other markets). A rival to the Nintendo DS, but it took a different approach to what was considered the best handheld. It had a 5″ LCD screen as opposed to touchscreen controls and arguably focused more on “reality” than “old-fashioned fun”. It is also the only device that uses a disc – UMDs (Universal Media Disc) – as an storage medium. Over 80 million were eventually sold.

7TH GENERATION WAR

November 2006 saw the release of the PlayStation 3 (PS3) which was launched in Japan first and then North America and Europe a week later. Its rivals were Nintendo’s Wii and Microsoft’s Xbox 360. Unlike its predecessors, Even though the console was released in all global markets around the same time, it wasn’t an instant success. In its first 2 full years of when all 3 consoles were available (2007 & 2008), the PS3 only sold 6.1 million units – compared to 16.44 million and 9.35 million for the Wii and Xbox 360 respectively. In the end it went on to sell over 80 million – just over half the amount the PS2 sold and 20m less than the original PlayStation.

Like its predecessors however, it set the trend for new disc technology for a games console. The original PlayStation had a CD player, the PS2 had a DVD player and the PS3 was the first to use a Blu-Ray disc drive. At the time when the PS3 was launched, Sony was in a war with Toshiba regarding what should be the standard format for storing high definition audio and video and the PS3 helped Sony win the Blu-Ray vs HD-DVD war. Other technological advances for the PlayStation platform was its Sixaxis controller (and later the Dualshock 3) which had motion-sensors built-in.

Also with the PS3, the PlayStation Network (PSN) was officially launched. It was a competitor to Microsoft’s Xbox Live and it effectively replaced the online services provided for PS2. With the PS2 every game had its own specific service online and so the PlayStation Network, was able to provide a unified online service for all the games released. There’s a standard subscription that was originally free (up until 2013) and during registration the user’s required to create a Online ID for online services. With the PlayStation Network came the PlayStation Store as well. Available on the PS3 at first and then eventually other Sony products, it was an online virtual market that allowed users to download demos, add-on contact and full games, movie trailers and also themes for PlayStation consoles.

In 2007 the PlayStation Eye was available as a successor to the EyeToy. Like the EyeToy for the PS2 it was a gaming webcam but with “two times the sensitivity” and had improved specifications. When launched it was bundled with games such as The Eye Of Judgment. Also just like other consoles in the PlayStation family the PSP was re-released as a silm model. Called the PSP-2000 (also called Silm & Lite in some other markets), the redesign featured changes such as double the internal memory and brighter 5″ LCD screen. A year later the PSP-3000 replaced the Slim & Lite and had new additions like a microphone and a further improved LCD screen.

2 years after the first PSP was redesigned, the PS3 had its makeover as well. Launched in 2009 to address some of the criticisms of the original “fat” model, not only was the slim version was 32% smaller, 36% lighter and consumed at least 34% less power, but it also had 4 times at much memory available (320GB compared to 80GB). However unlike the original model, it didn’t have backward-compatibility, therefore it couldn’t play PS1 and PS2 games. To address this, Sony released PS1 games available for download on the PlayStation Network and also launched the “Classics HD” series which was a number of PS2 games (usually 3) re-mastered for high definition onto a blu-ray disc.

Also in 2009, Sony released another version of the PSP called the Go. Unlike the pervious versions, the Go was completely redesigned with a sliding mechanism and didn’t have a UMD slot – games have to be downloaded from the PlayStation store online when connected to a Wi-Fi network. Other differences include 16GB internal memory, a M2 memory slot rather than a Pro Duo slotand the battery isn’t removable. As a result of the redesign, the Go was 43% lighter and 56% smaller than the original PSP-1000, and 16% lighter and 35% smaller than the PSP-3000. However like the PSX in 2003, due to its high asking price it wasn’t a success and resulted in poor sales. As various reviewers pointed out, the PSP Go’s RRP in the UK was £225 at a time when the PSP-3000 was £150 which allowed downloaded games AND games on UMDs. Also the PS3 was only £25 more and had a built-in Blu-Ray DVD player.

The PSP Go was criticised for its high price

The PSP Go was criticised for its high price

By 2010, the success of Nintendo’s Wii had created a demand for motion-sensing games that allowed the players movements be the gaming input rather than the regular controller. Microsoft and Sony both responded and Sony’s answer was the PlayStation Move. With its new Motion and Navigation controllers (similar to the Wii Remote and Nunchuk respectively) and the PlayStation Eye, it had similar gameplay to Nintendo’s console but with much more accuracy and responsiveness. It was praised by critics with the only downside being the games itself that use the Move’s functionality.

In 2011 in Japan (2012 in all other main markets), the PlayStation Vita (PSVita) was released as a successor to the PSP and as a rival to the Nintendo 3DS. Like the PSP before it, it had a super oval design and featured a dominating large screen with PlayStation’s signature control buttons (cross, triangle, square and circle). However, the screen on the Vita was 1.2″ (3cm) bigger than the original design of the PSP and was also touch-sensitive. The PSVita also had a rear touchpad and Sixaxis motion-sensing as other gaming inputs. Like tablets, it was available with either 3G & Wi-Fi or Wi-Fi only models. Also the PSVita had its own format for software in the form of a “game card” rather than using the UMD’s that was used for the PSP and had its own memory card instead of using MicroSD’s or even Sony’s own M2 or Memory Stick Pro Duo memory cards. It got positive reviews but had the same criticisms as the PS3 – impressive technology but too expensive.

Around the same time as the PSVita was launched the PSP had one last redesign in the form of the E-1000. Released as a budget model alongside the PSVita, it doesn’t feature Wi-Fi capabilities, it doesn’t have a microphone and has a mono speaker as opposed to a stereo speaker. Also another portable PlayStation product released in 2011 in the form of the Sony Ericsson Xperia Play. It was Sony’s attempt to combine a Sony Ericsson phone running on Google’s Android software and Sony’s own PSP gameplay experience. In terms of design it was very similar to the PSP Go with a large screen and all the PlayStation signature controls only on display when the handheld is slided open. Sales of the product was been low – part due to the high asking price.

During 2011 it wasn’t all hardware that Sony unveiled. During that year the PlayStation App was released in Europe and Australia (2013 in North America) for iOS and Android. The app doesn’t have any gaming functionality but it provides users to access and manage their online ID account and send and receive messages between PlayStation systems.

Shortly after the PSVita and PSP E-1000 was launched another redesign of the PS3 was also released in the second half of 2012. Dubbed the “super-slim”, like the 1st slim back in 2009 it was smaller, lighter and had more memory available. Unlike the first two designs of the PS3 the disc loader is different. Rather than having a “slot-loading drive” it has a “sliding-disc cover” which gave the super-slim a “cheap” feel to the console which was criticised. Also PlayStation Mobile – known as the PlayStation Suite when launched – was available during 2012. It allows Sony machinery (and eventually others like HTC) to download PlayStation software as long as they’re PlayStation Certified. The first handset was the Xperia Play and as of April 2014 there are over 40 phones ans tablets. So far only Android handsets that’s running at least 2.3 Gingerbread and other unknown requirements and the PSVita are PlayStation Certified.

NOW AND THE FUTURE

At the end of the 2013 (in North America and Europe (2014 in Japan) the PlayStation 4 (PS4) was released and Sony made sure it had learnt from the mistakes with its predecessors launch. There was much more emphasis on the console for its gaming and social abilities rather than its technical specifications (part due to the Blu-Ray vs HD-DVD war) and it wasn’t as expensive as the PS3 at launch. However like its predecessor it was the most powerful console in its generation with its class-leading specifications. Its rivals are Nintendo’s Wii U and Microsoft’s Xbox One and as of April 2014 it is the best-selling in the eighth-generation consoles of despite being the last to be released. As of April 2014 7 million console have been sold worldwide.

With the PS4, Sony launched the PlayStation camera. As an successor to the PlayStation Eye and an rival for the Xbox One’s Kinect, it features 2 1280×800 pixel cameras which can be used for different applications. Also to compete with the Wii U’s gamepad and the Xbox One’s SmartGlass app, the second screen feature for the PS4 was added onto the existing PlayStation App and also the PSVita.

Also in Q4 2013 the PlayStation Vita TV was launched in Japan. As the name suggests, it’s a small set-top box/microconsoles device that allows users to not only stream media from the internet but also play PSVita games on a TV with a PS3 or PS4 controller (via HDMI rather than its large 5″ screen). Even though some PSVita games are not compatible with the Vita TV because they depend on the handheld’s touchscreen, touchpad, microphone and/or camera, they’re over 100 games available as of April 2014.With its dual usages, its rivals are not only set-top boxes like Apple TV, Google’s Chromecast and Amazon’s Fire TV but also other microconsoles like the Ouya. As of April 2014, sales outside Japan hasn’t been confirmed.

At 6x10cm, the PSVita TV is about the same size a pack of playing cards. Here it is compared to a Dualshock 3 controller.

At 6x10cm, the PSVita TV (right) is about the same size a pack of playing cards. Here it is compared to a PS3 controller.

 

In January 2014 Sony annouced Playstation Now – a video game streaming service to allow playstation games to work on PS3, PS4, PSVita and eventually other Sony products like smartphones, tablets and Bravia TV’s. Once its released (due to be sometime in Q2-Q3 2014 in North America and later in other markets) and linked to the PlayStation store, users will have the opportunity to either pay a subscription to explore a range of games or just rent them out for a period of time. Its origins goes back to the previous year when it purchased Gaikai in June. Gaikai was responsible for delivering PC titles on TV’s from deals with Samsung and LG but once Sony brought the technology from the firm in 2013 it found a way to emulate PS3 titles as well. In theory, this will allow PS1, PS2 and PS3 titles to be played on PS4 to address the criticisms Sony received for the PS4 not being backward-compatible.

2 months after PlayStation Now was announced, Sony unveiled its Virtual Gaming Headset for the PlayStation 4. In its 4th year of development and currently only a prototype. Currently codenamed Project Morpheus, the VG Headset is a head-mounted unit with a 5″ LCD display with 1080p resolution and a 90 degree view. It also has accelerometer and gyroscope sensors, binaural audio, and its tracking and motion control works with the PS Camera and PS Move respectively. For now it won’t be available until at least 2015.

Sony have definitely taken the world by storm with the PlayStation brand by pushing new technology to the masses and producing setting record-breaking sales. They have changed the way people think of gaming by setting new standards and by the looks of it that trend it set to continue…

 

Nokia is one of the greats in the mobile phone industry but it’s been in the news in recent years for all the wrong reasons. Once a dominate force in its own right and now owned by another company, Nokia hopes to create its former glory days again and take on Apple, Samsung, HTC and others. So what went wrong?

“THE RISE”

Even though Nokia is best known for its mobile phones, the company can be traced back as far as 1865 as a riverside paper mill. It didn’t get involved in telecommunications until the late 70’s and eventually in 1992 the management decided to concentrate on manufacturing mobile phones and telecommunications systems. With this decision, the firm released its first portable headset – the 1011 the same year. With further investment in GSM and the popularity of mobile phones over the 90’s, despite Nokia suffering a breakdown in its logistics and supply-chain management, in 1998 it became the biggest company in telecommunications in the world. Nokia capitalised on this, by releasing further products such as the 8800 series which had a gross profit margin of between 70-80%. Other models such as the 3210 and its successor the 3310 were also a massive hit selling over 160 million and 126 million handsets respectively. Eventually by the start of the 21st century, Nokia had a market share of 35% – in other words, 1 in 3 phones sold globally was a Nokia. In the UK, it was a question of not what phone to do you have but what Nokia do you have.

The 3210 (left) and the 3310 (right) sold very well

The 3210 (left) and the 3310 (right) sold very well

“THE FALL”

The first sign of a potential threat for Nokia was its competition during the start of the 21st century. During this period of time, technology was moving at a phenomenal rate which gave its rivals the opportunity to be a stronger force in the market. Motorola and LG biggest success in this era was their “fashion” phones, choosing style over substance with the RAZR V3 and the “Chocolate” respectively. Arguably, Sony Ericsson meanwhile went the opposite direction and created sub-brands for their phones with the Walkman and Cyber-Shot series, focusing on media and its camera respectively. Samsung seemed to try and combine both by making handsets with a flip or slider design rather than the traditional “candybar” but still with specifications impressive in its time.  As a result, Nokia’s market share by the end of 2004 was down from 35% to 28%.

Despite this drawback, Nokia was still a major player in the business. It reacted quickly and released popular handsets to compete which its rivals which kept it in the game such as the 6230 which eventually sold 50 million worldwide. Eventually Nokia released handset for all markets which helped the firm regain its market share. It released a lot of entry-level phones such as the 1600 that was not only popular for 1st-time phone owners and those who’s more interested in ease of use rather than the latest features, but also for emerging markets across the globe. They also unveiled the “N-Series” in 2005 which was handsets with leading specifications and had as much features that the technology allowed it to. As a result, the market share by 2007 was 49.4% – nearly 1 in 2 phones was a Nokia in the world.

The second sign of a potential threat was the release of Apple’s iPhone and the start of the smartphone era. Apple started the trend which all phones followed eventually with a full touchscreen and a dedicated online store full with applications you can download straight to your mobile.  Eventually other rivals followed suit with built-in online features, with Google releasing the first Android powered phone the HTC Dream/T-Mobile G1, and BlackBerry (RIM at the time) offering its existing online services to a much wider audience by releasing mid-range phones such as the “Curve” series as well as phones in the top-end market. To compete with their rivals Nokia purchased Symbian OS in June 2008 and eventually made headsets exclusively for the operating system. However, this time it did not react quickly enough and it was arguably Nokia’s complacency and failure to keep up with the other manufacturers that resulted in its decline. The hardware of the mobile phones was never out of the question – more the software. For example, with the Nokia N8 which was released in 2010, reviewers praised the specifications of the phone but was often frustrated with the Symbian software. The guardian says that;

“I can’t recommend the N8 to anyone but hardened Nokia fans or people who really want a fantastic camera that can also make phone calls. Certainly, anyone who’s used an iPhone will find its interface enraging.”

CNET UK also did a review on the handset and said that,

“We don’t like to point fingers, but we blame Symbian for the N8’s problems. This is the first phone with the latest version of the operating system, Symbian 3, and, although there are improvements, it’s just not good enough.”

TechRadar added their verdict and said that,

“Everything that we didn’t like about this phone can be traced back to the user interface and Nokia’s stubborn approach to updating its ageing platform and user interaction”

The N8’s software was heavily flawed

During this period of time, Nokia’s failure to adapt quickly enough to the smartphone era resulted in a massive drop in its market share. Even though the market had expanded, the share still decreased from over 49% in 2007 it to as far down as 28% in 2010 – almost halved in 3 years. The main reason it didn’t decrease any further is because of its strong sales of entry-level handsets in emerging markets.

In the hope to regain its position in the high-end mobile phone sector and to compete with Apple’s iPhone and Google’s Android partners Samsung, Sony and HTC, Nokia made an agreement with Microsoft in February 2011 to feature its Windows Phone operating system. The main reason behind it was because Android was the only other open-source operating system available (iOS and BBOS is only available to their respective owners), and if Nokia chose Android it was no guarantee that it would save the company due to the strong internal battle with Samsung, Sony, HTC and LG. To makes matters worse, even as far back as 2010 there were fears that one of those manufacturers would dominate Android and some of the others could end up making a loss.  Also, North America is an important market for Nokia and Microsoft.

Sales started slow but eventually picked up with 13.3 million Lumias (the Windows Phone sub-brand) handsets sold worldwide in 2012. Compared to Apple’s 26 million iPhone’s and Google’s 104.8 million Android headsets in Q2 alone – Nokia was still in decline in the smartphone market. With a decrease to under 5% by 2013 from 40% in 2010 and from 25% since the Nokia-Microsoft partnership, the company’s performance overall started to affect the low-end phones in the Asha range as well. Even though the Asha range was strong, the market share decrease to 19.9% from 22.8% a year earlier with the company posting a loss every quarter. Even with Lumia sales more than doubled in 2013 and Windows Phone OS overtaking BlackBerry as the 3rd largest OS in terms of market share, it wasn’t enough to save the company due to the amount of investment into Microsoft’s operating system. Arguably, Microsoft had no other choice but to purchase the Finnish company. Back in July 2013 (a few months before the announcement of the purchase of Nokia), according to AdDuplex Nokia had a 85.4% share on Windows Phone 8 devices – which is nearly 7 in 8 phones. If Nokia was to declare bankruptcy then Windows Phone could potentially fail due to the lack of support from not only other manufacturers such as HTC and Samsung but also the software developers since not a lot of apps get released for Windows Phone compared to iOS and Android.

Nokia’s and Microsoft’s smartphone market share between 2010-2013

“THE RISE AGAIN (HOPEFULLY?)”

With Nokia now part of the Microsoft family, there are plans to better integrate the software and hardware for a much better user experience. The CEO of Microsoft at the time, said that

“having one company making decisions on everything from innovations to marketing would make things more efficient, with higher returns.”

By doing this, Microsoft plan to increase the market share to around 15% of Windows phone by 2018.  With 12 in 13 Windows Phone 8 handsets branded a Nokia (92.3% – as of February 2014) , this is an golden opportunity for Nokia to regain its position as a market leader in the mobile phone market. There are various ways Microsoft plan to do this and these include;

– Using Nokia’s Maps

As Microsoft also purchased the patents as well, they see an opportunity for moving in the right direction with Nokia HERE technology and using it in Windows Phone saying that “there’s needs to be another alternative other than Google” and “more than one digital map of the world”. Already given fair praise, Microsoft sees an opportunity to further enhance the HERE maps into Windows Phone (and possibly the Asha range as well) to boost their chances of reaching their market share goal. Of course the maps is a small part of the overall smartphone experience, but judging from the intense criticisms Apple received when it dropped Google maps in favour of their own maps, it shows that maps are important and could be a deciding factor when an user is selecting a new handset.

Microsoft sees great potential in Nokia HERE maps

– Savings In Ownership

Also as it stood with the Nokia and Microsoft agreement, it was reported that Microsoft themselves were making less than $10 (£7.30) per phone. Now that Nokia is owned by Microsoft, that should rise to around $40 (£29.20) per phone and save $600 million (£438 million) within 18 months. Of course that doesn’t necessarily mean that this will be an automatic boast for Nokia, but it means that there’s an opportunity for further investment in the Windows Phone platform with these savings from bringing Nokia in-house.

– Feature Phone Opportunity

Features phones have higher specifications than basic cell phones but are not as advanced as top-end phones like the Samsung Galaxy S4, iPhone 5S or the HTC One. Already strong in the field, Nokia now has the opportunity to increase its lead because not only is there bigger profit margins but also it’s considered “the future” by some experts due to price differences between feature phones and smartphones. It was also reported that 52% of Windows Phone users previously owned a feature phone. What this means is that not only do Nokia have a leading position in what is thought to be the future of mobile phone, but also for those wishing to go onto to smartphones, the Windows Phone OS is more than likely the best choice. It could be said however that this was always the case even before Microsoft’s purchase of the Finnish company but now with the full support of Microsoft it could lead to greater opportunities.

Nokia is without doubt one of the most successful technological companies in the world and was once a very dominant player in its market. Of course now things are different with Microsoft’s purchase of the organization, but this could open doors for it to be dominant once again…

The Samsung Ativ S. A phone that had the potential to be a game changer. For a start it was pretty much a Samsung Galaxy S3 in terms of hardware and looks. They both had a 4.8″ HD screen, they both had a 1.9MP front and 8MP rear camera, they both had a MicroSD memory card slot for expandable storage and both had the same build materials. Even in the design they were very similar with only where the camera and back button is located (due to the different operating systems) being the biggest difference. However, this wasn’t a bad thing. The S3 was the best selling phone in 2012 and had award-winning specifications that are still impressive today. Also the Ativ S was the 1st phone to be announced with Microsoft’s new Windows Phone 8 software back in August 2012. WP8 was a complete overhaul on WP7 and was designed to work with not only much more powerful phones like the Ativ S but also have a better correlation with other Microsoft services like Windows 8 for PC’s, Office, Skype and Xbox. This gave Samsung a head start on rivals HTC and Nokia with the aim to become the best selling Windows Phone manufacturer. Read the rest of this entry »

There’s been a lot of talk in recent years on physical media slowly dying. More and more people are downloading media such as games, music and films onto their computers rather than buying them on a storage medium on the high street.

As a result physical storage such as CD’s and SD DVD’s are soon to be forgotten like cassette tapes are now, and only blu-ray DVD’s are thought to be the only way to sell media physically rather than downloading. Even now some computing manufacturers are even considering making their machines without a disc drive built in. Apple’s new iMac doesn’t have one as they argue that “these old technologies are holding us back”. Microsoft even had discussions on whether to make the new Xbox One completely disc free but decided against it because it would “create issues”.

This media shift from physical to digital is due to mainly two things: the increased speeds of the internet and the vastly increased storage capacities. Eventually discs will be phased out but not as soon as some may believe…

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wiiu

The Nintendo Wii U. You may have forgotten about it over the majority of 2013. You maybe didn’t even realise some Wii U exclusive well – received games like Pikmin 3 and Super Mario 3D World was released that year. …and you would be forgiven since in the gaming world in that period of time, all the headlines was dominated by the Wii U’s rivals – Sony’s PlayStation 4 and Microsoft’s Xbox One. Read the rest of this entry »