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If you are smartphone maker, you shouldnot ignore the BRIC! (IDC)

Posted in Industry updates by Manas Ganguly on August 31, 2012

IDC today reports that China will by the end of this year over take US as the biggest smartphone market, globally. China will contribute a quarter of the global smartphone sales beating US at 17.8%. The growth in smartphone rightly comes from the top end as well as the economy-entry end. By 2016, IDC predicts China smartphone markets to come down to 24% of the globaal volumes.

India ranks in 4th with 2.5% contribution to the global smartphone sales. For the Indian markets this is up from 2.2% in 2011 and this figure is expected to grow to 8.5% by 2016. With 3G in nascency and the intrent habit catching on, the potential held forward by India is tremendous. Close on Indian heals is Brazil with 2.3% of the global numbers. Russia is also close at heals.

If you were a smartphone number the BRIC phenomenon is the “in” thing till 2016.

 

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PC Sales in India – Q2 2012 (Gartner)

Posted in Industry updates by Manas Ganguly on August 29, 2012

India PC market registers 17% growth in Q2, 2012 over Q2, 2011. The combined desk-based and mobile PC market in India totalled nearly 2.9 million units in the second quarter of 2012. Consumer buying accounted for 50 percent of total PC sales in the second quarter of 2012. Consumer PC sales grew 24 percent sequentially, which emphasizes the fact that media tablets are not yet cannibalizing the PC market in India like in the West. Consumer growth is being primarily being driven by entry level products. Computer makers such as HP, Lenovo, Asus and Samsung registered more than 50 percent growth in the consumer segment. Ultrabooks are still finding it difficult to penetrate the market. However, with the availability of the new Intel processor and declining price points, adoption of Ultrabooks would increase in coming quarters.

Laptops, which grew 54 percent compared to the second quarter of 2011, helped drive overall market growth. White boxes (including parallel import), which accounted for 45 percent of the overall desktop market, declined 18 percent in the second quarter of 2012 in comparison to the second quarter of 2011. The launch of Windows8 will impact the category in terms of certain vendors who will GTM the Windows8 first.

Lenovo has swung from a No.4 position in 2011 to No.1 position in 2012 basis a large TamilNadu govt order for the ELCOT project. On the other hand, Dell’s market share reduced by more than a fifth to 12.9% as compared to 16.7% in Q2 2011.

With Diwali coming up in November, the PC market is expected to continue showing momentum in the near future. Gartner believes that gifting during festivals along with subsequent shipments for the ELCOT deal will lead to further growth in the market. The study also reports a 25% growth in consumer purchases, which amounted to 50% of total PC shipments in Q2 2012.

From a long term perspective, it is unclear how the PC market will shape up when the average Indian turns to tablet as the primary computing device. While tablets have been eating into PC shipments – that hasn’t happened yet in India. The iPad posses less of a threat to PCs in the Indian market at least for now, because of its hefty price tag.

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Rise of India’s Digital Consumer (Part I)

Posted in e-commerce by Manas Ganguly on August 27, 2012

One of my earlier post deals with the e-commerce industry in India at this point of time. This series of posts will examine  the rise of India’s digital consumer.    

There are 124 million Internet users in India today, a growth of 41% Y-o-Y, out of which, 20 million users are through smartphones and tablet computers. Acccording to eBay, this number is expected to grow  100% over the next one year with the number of such devices growing everyday. comScore also reports India to be the fastest growing online market amongst the BRIC countries and India’s explosive online growth story will continue because, most online categories in India currently show below average penetration compared to global averages. With 124 million internet users, India is at a 10% level internet penetration. In correspondence to the rapid growth of Internet in India, Forrester estimates eCommerce revenue in India to increase from $1.6 billion in 2012 to $8.8 billion by 2016 accelerated by the increasing penetration of internet on mobile and social media.

Now heres the dope- for a country which is supposed to be technology phobic or plainly donot have access to technology because of the economics, Over 94% of the evolved internet shoppers surf internet, 87%  of the users compare product prices online and 68% of them have made online purchase using their smartphones and mobile devices.

As Internet penetration and the smartphones and tablets price accessibility increases – this will lead to increase in mobile commerce (mCommerce) volumes in India. Online purchasing through
mobile phones is catching up fast in non-urban and rural areas and the ratio between rural and urban buyers would be 1:10 right now but it may go up to 6:10 over next two years. Consumer Internet shopping habit is now forming quickly with most of these users using their mobiles as a window to transact ‘anytime and anywhere’.

To be continued.

Nokia-Microsoft – The real winner of the Apple-Samsung patent feud.

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 26, 2012

If the IBM PC was created in this patent environment there would be no Apple. They would have sued them out of existence.
If cars were invented today, one manufacturer would have a patent on using 4 wheels and all others had to pay a license fee for it.

While many have condemned the patent laws to be anti-thessis of innovation, the fact as of yesterday, the 25th of August 2012 remains that Apple has dealt a know-out blow on Samsung in the ongoing patent infringement case. Apple was awarded $1.05 billion for patent infringements by Samsung. Apple’s $1bln patent victory against Samsung is the third biggest patent victory. Centocor Ortho $1.67bln vs. Abbott Labs & Lucent $1.52bln vs Microsoft are higher. The current jury award of more than $1 billion isn’t going to kill Samsung, but the forthcoming possible injunctions against selling current devices is going to hurt Android more than anything. There are “others” who will re-evaluate the cost of licensing the patents on the ‘free’ Android OS.Expect Apple to be drafting invoices in the very near future.Most of these manufacturers will now want a fully licensed, covers all the patents and a user-accepted OS. The answer is obvious – the only alternative to Android is Microsoft. The timing is actually great for Microsoft too with Windows Phone 8 announcements coming in just a week and a half in New York.

As far as Samsung is concerned, the last thing Samsung will want to do is be left stranded in the courts holding their Android football while everyone else runs ahead to score with Windows Phone handsets. Nokia are all-in on the new platform, HTC could see it as a way to bypass Samsung’s dominance in Android, and both Huawei and ZTE are ready to leverage Microsoft’s OS. Samsung’s risk mitigation strategy of investing in multiple OSs and even in Windows will be very handy for them. Imagine where such a thing would leave Nokia, who are averse to distribute risks over multiple OSs.

Speaking of Nokia and Microsoft then – God could not have been kinder. 2 years into the Smartphone act, Microsoft was no-where with Windows and an year with Lumia, Nokia has barely cut through. Now Microsoft gets a few serious partners and Nokia benefits from an enhanced interest in the Windows phone. While there are many other factors that have benefitted Nokia’s share proce which has increased by 78% in the last month, the patent battle would be one of the underlying factors for the spike at Nokia.

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Overall, Apple took the victory, Samsung lost in court, but the true winner looks to be Microsoft.

Facebook, Big Data and Project Prism

Posted in Big Data by Manas Ganguly on August 24, 2012

Facebook processes 2.5 billion pieces of content and 500+ terabytes of data each day. It’s pulling in 2.7 billion Like actions and 300 million photos per day, and it scans roughly 105 terabytes of data each half hour. The speed of data ingestion keeps on increasing, and the world is getting hungrier and hungrier for data. Facebook’s latest effort is about putting all this data in some perspective, to mine this data for insights across different storage clusters with efficient use of resources and cost leading to real time live performance management on data outputs. And to achieve a seamless integration of data across huge data centres, Facebook has put in place initiatives such as Project Prism and Corona.

‘Project Prism,’ will allow Facebook to maintain data in multiple data centers around the globe while allowing company engineers to maintain a holistic view of it, thanks to tools such as automatic replication. Corona, makes its Facebooks’ Apache Hadoop clusters less crash-prone while increasing the number of tasks that can be run on the infrastructure.

So while Google is indexing information around the world, Facebook is indexing user behavior and reactions to a wide range of stimulus around the world. Now then, the only thing that Facebook would ideally want to fix is the ability to sell this data and get a good price for its share.

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Who says 3G is a disappointment?

Posted in Industry updates by Manas Ganguly on August 23, 2012

Data is the new revenue mantra for the Indian telcos as voice revenues have pile drived. According to Nokia Siemens MBIT report on the data consumption in India, there has been a 54% increase in mobile data traffic in India between December 2011 and June 2012. While the over all mobile traffic grew by 54%, the growth in 3G traffic (78%) was more than 2G, which grew by 47% over the same period last year. 3G data traffic has seen a surge this year, especially in last 3 months thanks to over 70% slashing on 3G rates

The Mbit Index report also revealed that 2G users in India are consuming three-quarters of the total mobile data traffic, on average, while 3G users consume four times more data than 2G users. At current pace, the report expects that India’s mobile data consumption to double by June next year.

Although the 3G consumption has growth thanks to 3G rates coming down and availability of cheap Smartphones & 3G phones, there is still quite a lot of room for improvement in 3G services. Even today, except for most urban areas, 3G coverage is rather minimal. Additionally, 3G data services have lot of scope of improvement in terms of consistent data transfer rates.

In most cases, even today, 3G transfer rates vary a lot from area to area depending on the coverage and network provider.

Other Interesting Highlights from Mbit Index Report

  1. By the end of June 2012, 3G has outpaced 2G in terms of data traffic growth.
  2. 2G traffic currently generates over 75% of the total data traffic generated.
  3. A first time 3G user consumes close to 400 MB (megabytes) of data every month compared to about 100 MB consumption over 2G.
  4. Recent tariff reductions in 3G services have resulted in doubling 3G data traffic month on month.
  5. Web browsing contributes 81% of 2G data traffic
  6. Only 17% of 2g traffic is used for downloading videos.
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Facebook’s Ambition Collides With Harsh Market!

Posted in Social context, media and advertising by Manas Ganguly on August 21, 2012

What Could Go Wrong with Facebook? Everything! (No this isn’t paranoia)

Once hailed as the most valuable technology company to hit Wall Street, Facebook is now worth just over half what it was three months ago, with shares closing at $19.87. The company is suffering from a classic disease — it went public at too high a value. In an earlier post I had argued that FB will find the going very difficult in terms of managing expectations because of the stretch in valuations that it had opted for in the IPO. The challenge for Facebook, is to persuade the market that it is not a fad and that its managers have a blueprint for making money. Analysts have pointed out that Facebook has been slow to figure out ways to make money from mobile devices; half of its users log in on phones and tablets. Given its exceptionally high valuation in its initial offering, FB is under intense pressure to show that its advertising model can deliver the lucre that Wall Street expects.

From a $100bn blockbuster debut to a $42bn valuation in 3 months, Faceboook’s twist of fate, in many ways, reflects the tension between two moneymaking cultures in America: Silicon Valley and Wall Street. They are as symbiotic as they are dismissive of each other. They are equally focused on making money, but their approaches are different. Wall Street wants to see swift growth in revenue, given Facebook’s still high valuation of around $50 billion. Facebook says that it is building tools that will forever change the world — but have yet to reveal any details about how they plan to quickly increase profits.

Quoting Doug Purdy, the director of developer products on FB’s future- One day soon, the Facebook newsfeed on your mobile phone would deliver to you everything you want to know: what news to digest, what movies to watch, where to eat and honeymoon, what kind of crib to buy for your first born. It would all be based on what you and your Facebook friends liked. In effect it moves from the search or pull economics to push economics which is purely analytics based. (In fine lines- Facebook’s future would be built on Google’s grave).

In the technology business, few companies can keep the fairy tale alive forever- Facebook has had a run like no other in the present – but sustaining the momentum and managing expectations is a balancing game that Zuckerberg and Co. need to master fast.

The most valuable company ever- Apple!

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 21, 2012

At the peak of dot-com bubble, Microsoft hit $620.6 bn valuation in 1999. The latest rally at Apple, has over-hauled Microsoft’s summit and made Apple the most valuable company of all time at $623.5bn.

Interestingly enough, all the tech titans such as HP, Google, Microsoft, Nokia, Blackberry, Amazon and facebook put together are able to shadow Apple’s m-cap, just abaout. Goven that iPhone5 is round the corner and the Q4 is traditionally Apple’s strongest season, there is a strong possibility that the share price at Apple could touch $750 overhauling the $700 bn m-cap for Apple. Apple is well on its way to becoming the first $trillion company in the world. Thats no mean feat because there are about 16-17 countires globally who have a annual GDP more than $trillion

SO what could trip Apple? Product and experience is Apple’s strength. What could really make the going tough for Apple is that the faster it grows the lesser head room it has in the future. The only thing that could trip Apple’s growth is really its base and the head room.

LTE in India: The deployment conundrum (and the operational challenges)

Posted in Industry updates by Manas Ganguly on August 19, 2012

While LTE is the future in telecommunications, in light of the negative business case around 2.3/2.6Ghz deployments, the Indian roadmap looks a little less promising then it should be. Please refer to my Slideshare presentation below-

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Gartner: Q2, 2012 Mobile Phone and Smartphone Market shares

Posted in Industry updates, Mobile Devices and Company Updates by Manas Ganguly on August 17, 2012

Worldwide sales of mobile phones to end users reached 419 million units in the second quarter of 2012, a 2.3 percent decline from the second quarter of 2011, according to Gartner. Demand of feature phones continued to decline, significantly weakening the overall mobile phone market

Demand slowed further in the second quarter of 2012. The challenging economic environment and users postponing upgrades to take advantage of high-profile device launches and promotions available later in the year slowed demand across markets.

Smartphone sales accounted for 36.7 percent of total mobile phone sales and grew 42.7 percent in the second quarter of 2012.

Samsung and Apple continued to dominate the smartphone market, together taking about half the market share, and widening the gap to other manufacturers. No other smartphone vendors had share close to 10 percent.

In the race to be top smartphone manufacturer in 2012, Samsung has consistently increased its lead over Apple, and its open OS market share increased to one-and-a-half times that of Apple in the second quarter of 2012.

In the smartphone OS market, Android extended its lead with an increase of 20.7 percentage points in market share in the second quarter of 2012. While Apple’s iOS market share slightly grew year over year (0.6 percent), it declined 3.7 percentage points quarter on quarter, as users postponed their upgrade decisions in most markets ahead of the upcoming launch of the iPhone 5.

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