Ronnie05's Blog

Is Blackberry looking at the wrong end of the market?

Posted in Mobile Devices and Company Updates by Manas Ganguly on February 3, 2013

OS- Smartphones 2009-2013

Continued from an earlier post: Why am I so deeply sceptical of BB10 as RIM’s comeback kid?

The Smartphone sector looks to be one of the most extreme oligopolies of the 21st century- even while the market is exploding at 35% YoY (700 million in 2012 versus 490.5 million in 2011) – there is little room left for any one but Android and Apple.

Apple and Android contribute to 92% of the Industry Volume and 102% of the Industry profits! All others combined for 8% of the market volumes but were edged out of the profits – leaving little space for investments into devices and the markets. The thing about market share is that it is liable to change rapidly in a rapidly growing market.However, with the base of 700 million it is possible that growth rate would have topped out. On the other hand, North Americas and Europe are visibly saturated in volumes/and growth is slowing down; and with maturity are only driving Revenues and profits as people tend to purchase more high-end smartphones, including the more expensive Android variants and the iPhone.

Blackberry with its Z10 and Q10 is targetting the high end of the smartphone market – The space that is dominated by Samsung Galaxy SIII, Apple iPhone, Nokia Lumia 920 alongwith handfull others. Instead of beating its competitors out on price, it wants to offer a genuinely quality product that the most tech-savvy consumer would be happy to purchase. This part of the market is by far the most cutthroat, and also the slowest growing.Ergo, even if Blackberry succeeds in creating space in this segment, it will be just a niche! Blackberry is trying to sell an expensive smartphone with a high margin, but it is competing against the most entrenched players imaginable. The part of the market that Blackberry is choosing to enter will not grow much, and RIM will face vicious competitors from every angle. There isn’t room in the lucrative high-end smartphone market for small fry ~ a $8billion Blackberry for instance! (Refer to the Blackberry Torch as an example – well crafted – but it didnot take BB where it was designed for)

POGUE-popup
Unveiling the new Blackberry!

On the other hand, the smartphone market is growing super because Android is powering the low end of the market. These markets are typically the South East Asian regions, Indian subcontinent, China and Africa. Even while Blackberry has a strong presence in nations like India, it is the Android army that it has to content with in such markets – and currently Blackberry’s portfolio in the low end is only based on the 4 year old Blackberry Curve which is appearing a little jaded and last generation.

Thus Blackberry really needs to be focussing on low end innovation, pricing, volumes and markets – currently there is no visibility of it doing this. Hopefully it gets its act together before its too late. A flagship device is one thing – numbers, profits, revenues is quite another.

The Apple- Samsung duopoly in Mobile Phones/ Smartphones space

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

Most of 2012 is behind us and it is still an Android – Apple duopoly on Smartphones and tablets. While Android devices and the iPhone make up an overwhelming majority of all smartphones being sold (85% as Gartner Q3, 2012), Windows Phone is still to get the traction it hoped for (although it registered a 1.5X growth over Q2, 2012).

In the mean time, Samsung and Apple dominate the smartphone landscape sharing between themselves 104% of the total mobile phone industry profits generated. iPhone cornered 63% of Mobile phone profits, Samsung made away with 40%. The only other OEM who has been in the black is HTC @ 1% of the mobile phone profits. Phone brands other than Samsung and iPhone have seen a reduction in market value of a combined 64 per cent (Q3, 2012 versus Q3, 2011).Over the last year (YoY Q3,2012 versus Q3, 2011), Samsung profits from Mobile operations jumped 231% while Apple increased 163%.

 

Mobile Phone Profits – Asymco- The Samsung/ Apple duopoly

The good news is that the industry has had net value creation–always a healthy sign that innovation is being valued and absorbed and there could be an outside chance for a third payer (possibly Microsoft) some chance at gate crashing into the industry profits. However, with most of the profits getting banked only at Samsung or Apple, there is very little room for other OEMs (i.e Nokia & RIM) to spend lavishly on devices and services.

 

The Samsung and Apple duopoly has played up in Smartphone segment volumes

On the good many others who are completely sidelines (the list includes Motorola, Nokia, Sony (Ericssson), LG, Blackberry) – the decline is monumental. They all saw Apple coming a mile off. The media had been speculating for several years on when iPod would become iPhone. Yet they sat on their hands, too busy creating monopolies of their own to see where the world was headed. And in doing too many things for too many segments across too many geographies on a varied range of price points – they never built a roadmap to what could be the future of mobile computing.

Interestingly enough, almost all the value from the Android ecosystem is concentrated in Samsung. From the mobile operators’ point of view this emerging duopoly must be deeply worrying. Having been forced to bend to Apple’s will, they were very happy to see the emergence of Android, with its promise of a multitude of manufacturers competing for their attention. Now it looks as though Samsung is in position to
call all the shots in the Android market

Going forward in Q4, 2012, the only thing that can be expected in this equation is Apple regaining ground basis the holiday season bookings of iPhone5 which has generated much of a hysteria around the world

Gartner: Q3, 2012 Mobile Phone and Smartphone Market shares

Posted in Industry updates, Mobile Devices and Company Updates by Manas Ganguly on November 15, 2012
  • Worldwide sales of mobile phones to end users reached almost 428 million units in the third quarter of 2012, a 3.1 percent decline from the third quarter of 2011.
  • However compatred to Q2, 2012, the market has grown by 2.3% propelled by the growth of smartphones which added 15.6 million units to its Q2, 2012 number

  • Smartphone sales accounted for 39.6 percent of total mobile phone sales, as smartphone sales increased 46.9 percent from the third quarter of 2011.
  • Smartphones continued to fuel sales of mobile phones worldwide with sales rising to 169.2 million units in the third quarter of 2012.
  • The smartphone market was dominated by Apple and Samsung. Both vendors together controlled 46.5 percent of smartphone market leaving a handful of vendors fighting over a distant third spot.
  • In the smartphone market, Android continued to increase its market share, up 19.9 percentage points in the third quarter of 2012.
  • Although RIM lost market share, it climbed to the No. 3 position as Symbian is nearing the end of its lifecycle. Channel destocking in preparation of new device launches for RIM, resulted into (lower than usual) 8.9 million sales to end users in the third quarter of 2012.
  • With the launch of iPhone 5, Gartner analysts expect iOS share will grow strongly in the fourth quarter of 2012 because users held on to their replacements in many markets ahead of the iPhone 5 wider roll out. Windows Phone’s share weakened quarter-on-quarter as the Windows Phone 8 launch dampened demand of Windows Phone 7 devices.

All figures as per gartner.com

Nokia’s second coming – The Lumia!

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 6, 2012

Too often technology is being used to protect old business models rather than unlock new ones. Fortunately for Nokia, it seems to have broken this paradigm as it embarks on a slow climb upward from it Symbian to Microsoft Windows 8 OS. O 5th Septmebre 2012, Nokia went to show the first Windows 8 devices for the record. The event tagline – SwitchtoLumia is very apt, timely and relevant as RIM & some Android users are looking for something different. Unboutedly, iPhone5 will pick up many of the BB/Android dissenters, but the latest Lumia launches by Nokia, gives it a chance – its real one in over 3-4 years.

The success story has rolled over from devices to platform and now on to eco-systems. Devices and apps are only a part of the story. Nokia’s latest efforts with Lumia has shown that it is focusing on the right thing: owning up eco-system and improving service delivery user-experience. Apple still has the big marketing edge as long as it’s the only company to consistently do this and owns end to end delivering the experience – it’s what happens when you control the end to end experience… it does matter. But the good part for Nokia and Microsoft is that they have made a start. Unlike iPhone and iPad, no single product shall define this approach for Nokia/Microsoft –

The good thing for the Nokia- Microsoft duo is that no one will ever confuse Windows Phone with Android or iOS. The challenge is can Nokia and Microsoft explain how different is better. Nokia’s second challenge is to differentiate Nokia devices from other Windows Phones. Samsung has already tried one-upp’ing Nokia by pre-announcing the ACTIV S 5 days before Nokia announced the Lumias.

Nokia has clearly raised the bar in terms of core hardware features. Visible differentiation is there in terms of the device look, finish and feel. On the positioning front, Nokia is betting big on Imaging,Music and Location as core differentiators that can drive adoption. WP8 is the enabler but getting the eco-system to ride on the top and provide key differentials is what’s going to differentiate these devices versus the Android Army. Thats a hell of a ask, with the number of partners involved and the fact that everyone needs to be in sync.

Lumia – the proposition list

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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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.

Apple & Samsung monopolize smartphone profits (Even as Apple pulverizes Samsung)

Posted in Industry updates by Manas Ganguly on August 8, 2012

Samsung shipped about 50 million smartphones last quarter — about double the number Apple sold and, according to IDC, the largest number of units ever shipped by a handset vendor in a single quarter. However, if Raymond James data is any indicator, Samsung’s 2:1 lead over Apple is a statistic in vain. Apple — thanks to the higher gross margins of the iPhone and iPad — far outshines its rivals in both revenue and operating profits.

Having generated only about 6 percent of the industry’s smartphones and tablets in the second quarter, Apple captured about 43 percent of the industry’s revenue and an astonishing 77 percent of the industry’s operating profits. Thats about 2.65 times that of Samsung’s. Interestingly enough, Apple and Samsung account for 96% of the global Mobile computings EBITs. Now you know why the rest of them are such a deep shade of Red! Apple’s statistic is of note especially in the light of the fact that Q2 in generally Apple’s weakest quarter and Samsung had the Galaxy SIII launch in Q2.

Ultimately, profits are the feedstock of innovation; and, innovation drives profit. Until Samsung starts generating more profits than Apple, we would not be overly concerned with who has the unit share lead. Remember, HP and Dell still sell a lot more PCs than Apple sells Macs, but does it matter. Probably not to Apple.

How the iPhone5 measures up?

Posted in Mobile Devices and Company Updates by Manas Ganguly on July 7, 2012

At launch, iPhone was christened Jesus Phone and over the last 5 years, while there have been challengers to crown of the “World’s best smartphone”, iPhone has seen most of the challengers and challenges off. The list of iPhone contemporaries includes Moto Droid, HTC Evo 4G and Samsung Galaxy SII prominently.

However with every iteration, the Android army has gotten nearer to the iPhone so much so that Samsung Galaxy SIII is arguably a better device than iPhone4S. With a 4.1 upgrade, the Siri factor should also take care of itself (Google Now).

However, if rumours are to be believed the iPhone5 will do what it is expected to do. Raise the bar a notch higher for the Samsungs, Motos and HTCs to aspire for. Here’s how the iPhone5 scores over the Samsung SIII

1. Samsung will retain the screen edge with the massive 4.8″ screen. However to iPhone5’s credit, this is the first screen size upgrade to iPhone in 5 iterations in 5 years. Apple will thus graduate to 16:9 resolution, rather than the 3:2 currently.

2. It is rumoured that the Exynos processor, which powers the SIII will be the one that will power iPhone5 with a quad core.

3. In terms of design, Apple will hold the aces with a supposed Liquid metal which is quasi glass feel which in terms of touch and feel will be heads and shoulders above the Plasticy Samsung SIII

4. Perhaps the most earth-shattering change in the iPhone 5 is that it’ll reject the 30-pin connector used across iPods, iPads and iPhones in favour of a much-smaller (reportedly) 19-pin model. While a converter would be in scheme of things, this could momentarily create inconveniences for hardware/accessory makers in Apple stable.

5. Apple has sacrificed an increase in battery power to maintain the slimness of the machine. However one expects that it would still be higher than the 1430 mAh in iPhone4S

6. iPhone5 slimness quotient is worth raving. iPhone5 would cut the slimness quotient by a factor of 19% for iPhone 4S and 11% against the Samsung Galaxy SIII

7. In terms of pixel density, iPhone5(325PPI) would be 6% more richer than Samsung Galaxy SIII (305PPI)  and 13% richer than iPhone4S(305PPI).

8. Last and final, rumours abound about 3D camera given the Apple patents around the same. While its a long shot, it is a dream shot. Hope Apple gets this through because the camera story needs to more than a linear progression into something more meaningful

Any bets on the Apple share price at iPhone5 launch? I would bet $700

Gartner: Q1, 2012 Mobile Phone and Smartphone Market shares

Posted in Industry updates by Manas Ganguly on May 21, 2012

Worldwide sales of mobile phones to end users reached 419.1 million units in the first quarter of 2012, a 2 per cent decline from the first quarter of 2011, according to Gartner, Inc. This is the first time since the second quarter of 2009 that the market exhibited a decline. The slow down in the first quarter was attributed to a low demand in Asia Pacific in view of generally less exciting product launches.

Samsung became the world’s top mobile handset vendor during the quarter, displacing Nokia which had held the No. 1 spot since 1998. Samsung took back the world’s No. 1 smartphone position from Apple, selling 38 million smartphones worldwide. In addition, Samsung’s Android-based smartphone sales in the first quarter of 2012 represented more than 40 percent of Android-based smartphone sales worldwide; no other vendors achieved more than a 10 percent share of the market.

Sales of smartphones continued to drive mobile device market growth, reaching 144.4 million units in the first quarter of 2012, up 44.7 percent year-over-year. This quarter also saw the top two smartphone vendors, Apple and Samsung, raising their combined share to 49.3 percent, up from 29.3 percent in the first quarter of 2011, and widening their lead over Nokia – which saw its smartphone market share drop to 9.2 percent. Nokia’s mobile handset sales reached 83.2 million units, a 22.7 percent decrease from the first quarter of 2011.

Android accounted for more than half of all smartphone sales (56.1 percent) in the first quarter of 2012. A very strong commoditization trend is setting in on the smartphone segment especially the ones based on Android OS. At the high end, hardware features coupled with applications and services are helping differentiation, but this is restricted to major players with intellectual property assets. However, in the mid to low-end segment, price is increasingly becoming the sole differentiator. This will only worsen with the entry of new players and the dominance of Chinese manufacturers, leading to increased competition, low profitability and scattered market share

The mobile phone market shares over the last 13 quarters are plotted above.  Interestingly, even while the market has grown in the last 13 quarters by 55% from 269.1 mln units in Q1 2009 to the present volumes, what explains Nokia’s loss in not an other incumbent but the rise of the “Others” category. One would associate Micromax, Karbonn, Spice, Lava and other local white labelled brands in this space. The irony is back in 2008, when Nokia was at its zenith, this threat was widely rubished by most of the high ups in Nokia as a passing fad.

Lumia fails to ignite sales for Nokia

Posted in Mobile Devices and Company Updates by Manas Ganguly on January 1, 2012

Ever since February 2011 and the “Burning Platform” memo from Stephen Elop, customers, tech geeks and consumers have awaited Nokia’s Windows Phone with baited breath. So then, Lumia was the prodigy even before it went to the drawing boards and there is a lot that rests on Lumia’s success for Nokia which in an year’s time has fallen from No.1 to No.3 in the smartphone race ceding its leadership to Apple and Samsung. Nokia’s Symbian smartphone market share declined from 36% in Q3 2010 to 17% in Q3 2011 in the smartphone operating system market while Microsoft’s Windows Phone 7 market share declined from 2.7% to 1.5% during the same period.

However things do not turn around that easy when you are on a downward trend with competitors galore and the competition is getting fierce every passing day. One has to put in more efforts that is required when there is a uphill task, but Nokia with Lumia did not give that impression. To woo the customers and bring back the loyal followers, a company like Nokia should have brought some uniqueness to the table but both the devices of the Lumia series do not give the customer anything significant, it does not make the customer feel special. Price of a product and more importantly value for money has and will always be the deciding factor to go for a product. But in the case of Lumia, Nokia fails to fulfill any.


Neither in terms of features nor in terms of price, Nokia Lumia could woo the customers.
• Lumia 800 features a 3.7 inch display-leading Android models moved to 4 to 4.5 inch display size some time ago
• Lumia 800 features pixel density of 250 ppi-about 80 below where new Apple, Samsung and, HTC models are
• Lumia 800 is 12 mm thick-about 40-70% thicker than the new wave of smartphones from Apple, Samsung, and Motorola
• Lumia 800 features only a single-core processor vs the dual-core chips from rival high-end smartphones
• Lumia 800 does not feature front-facing cameras or NFC technology, which is now arriving to cutting-edge Android models

No doubt, the Nokia Lumia is a great phone as appeared from the preliminary use and at par with the smartphones availability in the market in that price range of around Rs 30,000. Nokia can claim that if one can buy a smartphone at that price from a different vendor then why not from us? Well, the credibility of Windows phone comes as a big dampener. Nokia does not have to prove a point, it has been the leader so far but Microsoft’s mobile OS have never been a success when compared to the acceptance of Apple or Android OS. So, the customers would hesitate couple of times before putting $600 for a device that is as new as now, rather they would prefer to go for a product that is tested.

So, the big question for Nokia is how to drag those prospective customers for a Lumia experience. Nokia has to think out-of-the-box as well as put some more features in the device that is there in the box to get some new attention. Typically, you run twice faster to catch up if you have missed a single step in the race.

Bottomline: If Nokia were to regain its earlier halo in smart-phone space, it would be refuting a trend where a technology major who dominated the market at one point made a strong comeback after falling out of the market. Such comebacks are rare in Technology and mobility space. SO good luck Nokia!

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