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2013: India Smartphone Markets

Posted in Industry updates by Manas Ganguly on February 1, 2014

Narrowing differences in the price bands of smartphones and feature phones, and consumer shift to larger screen devices is leading to massive increase in smartphone shipments in Indian context.

IDC
While, overall mobile phone shipments rose 18% to ~ 257 million units in 2013 from 218 million units in the 2012
The growth was powered by smartphones tearing down at 229% growth with a 44million CY 2013 shipment number
20% of these smartphones were the 5” phablet form factor
The 2nd half of the year saw a 60% groundswell in terms of smartphone shipment numbers
The roll of honour/market shares:
IDC

CMR
Overall mobile phone shipments reported at a minor deviation from IDC and reported at 247.2 million units as against 219 million in 2012
Smartphones contribution to 41.1 million units with 65.8% smartphones being 3G enabled
Overall contribution of smartphones to mobile phone volumes is 16.6%
What CMR also states is that 2013 is the foirst year when feature phone shipments shrunk by -.2% indicating the slow slide of the category – with growth being anchored by smartphones
The roll of honour/market shares
CMR

The multi-device ownership scenario amongst Indian internet users

Posted in Industry updates, Mobile Computing by Manas Ganguly on January 19, 2014

Multi device Ownership scenario

Intel tries to diversify as smartphones and tablets have no need for its processors

Posted in Industry updates, Sensor networks and devices by Manas Ganguly on January 8, 2014

Declassifying Inte’s future plans from the CEO’s CES key note address

Intel Chief Executive Officer Brian Krzanich will take the stage at the International Consumer Electronics Show with the message that the chipmaker will do what it takes to remain relevant as consumers switch to mobile devices for computing tasks.

Krzanich, who will make a keynote presentation at the trade show in Las Vegas, is set to feature a first public showing of some of the mobile and wearable technology from Intel’s New Devices division, led by former Apple executive Mike Bell. Krzanich could also emphasise how Intel has accelerated the pace at which it brings new products to market.

The world’s largest chipmaker, which dominates the market for semiconductors that run traditional computers, is seeking to branch out as consumers increasingly use smartphones and tablets that don’t contain Intel processors. With the personal-computer market forecast to decline for a third consecutive year and Intel failing to win significant market share in phones, Krzanich is working to ensure that the company doesn’t miss new opportunities such as wearable devices and other personal technology.

“PCs are slowing so you have to offset that with something else,” said Patrick Wang, an analyst at Evercore Partners in New York.

Intel Insular

The Santa Clara, California-based company, which Krzanich took over in May, remains heavily dependent on servers and PCs. Intel has more than 80% of the market for PC processors and more than 95% share in server chips, according to researcher IDC. In November, the company forecast that sales will be about the same as the $52.6 billion it will report for 2013, below the $53.7 billion analysts were projecting.

Since becoming CEO, Krzanich, a former semiconductor factory manager, has taken steps to diversify Intel’s business. He has said Intel will focus on providing what the market wants in chips rather than following the company’s traditional method of designing and producing products aimed at determining the direction of technology. In addition, the company’s plants, which Intel says are the industry’s most advanced, may produce chips for rivals, he said.

“However the market moves, wherever the compute need is, we want our products to do it best,” Krzanich said at a meeting at the company’s headquarters. “We’d become insular. We’d become focused on what was our best product rather than where the market was moving.”

Listen to the Market

The 53-year-old also has said he’s speeding up the time it takes from design to production of new chips and concentrating efforts on lower-power products. Intel has a new processor called Quark, which it’s trying to get into everything from household appliances to industrial equipment.

Krzanich’s openness to producing chips for other companies and to listening to what his customers want is a departure from predecessor Paul Otellini, who had said smartphones and tablets wouldn’t replace PC, says Stacy Rasgon, an analyst at Sanford C Bernstein & Co. “They had their head in the sand,” said Rasgon. “Their push now is to make sure they don’t get blindsided again.”

The CEO, who like his five predecessors was an internal appointment, may need to go further to make what Intel produces central again. While wearable devices could become the next billion-unit market, according to Rasgon, Intel isn’t fast enough at rolling out new products.

Wang said Intel’s factories might be its best bet for getting into new markets. The company will spend $11 billion this year on plants and equipment to maintain its lead in transistor technology. Intel said it is more than a year ahead of competitors in the manufacturing of the fundamental component of all semiconductors.

To participate in the market for smartwatches, glasses and the internet of things, where Intel has no track record in designing chips that are better than alternatives, the company should open its factories to rivals such as Qualcomm, which are more likely to win, said Wang. But that’s a step further than Krzanich may be ready to take.

Reported from Economic Times Article under the topic: CEP Chips in with Intel everywhere

Why the Samsung story feels unsustainable?

Posted in Uncategorized by Manas Ganguly on January 3, 2014

Samsung’s Chairman, Lee Kun-hee has upped the ante for the employees for Samsung 3.0 – asking for innovation and software focus. Mr. Lee is quoted saying “Research & development center(s) should work around the clock, non-stop” and that Samsung “get rid of business models and strategies from five, ten years ago and hardware-focused ways.” This comes after the President of Samsung, Lee Sang-hoon, said just in November that the company needed to focus on software quality, as they were severely lacking in quality software when compared to the competition.
2012-13 have been magical years at Samsung, but towards the end of Q4 2013, profit growth slowdown became a key concern at Samsung. The South Korean company is expected to report an operating profit of more than $9 billion for the fourth quarter, according to a survey of analysts. That’s more than the overall revenues of many tech companies, but it represents a 9.2% increase from the same quarter a year earlier. By comparison, Samsung’s profit in the third quarter was up 26% year-over-year. Declining profit growth was a top concern for Samsung for much of 2013.

Are these concerns exaggerated? Or the conglomerate referred to as the Fifth Horseman on the technology bandwagon is beginning to see a slow and consistent decline reminiscent of commodity companies. I think, what we are looking at is a slow marginalization of Samsung through 2014, very akin to Nokia through 2008-10. Here are my reasons

1. At its core, Samsung is a “device” company – the future belongs to those who “own” customers and eco-systems

a. A Google for instance is 40% of the web – mining, indexing customer details and customizing the web for individual customer in accordance making money in return on advertisements

b. Facebook is the social key to a person’s identity on the web. It follows the same principle as Google but it uses the social plank

c. Apple is the innovator – fusing experiences, services, devices, platforms into one seamless continuum. Personally, i think Apple’s innovation is far deeply entrenched than Google – and i await the iWatch to change the paradigm around the user

d. Microsoft is a little over the place and is yet to get its act in place – but it has very strong enterprise roots. How it capitalizes and leverages is to be seen

2. Apart from device dimensioning i.e a bigger screen, a better screen, alternate screen; Samsung has not been a significant force in services, customization, intelligence and experience.

3. Samsung’s OS strategy has also been unclear. It launched Bada – then EOL’ed it. Tizen is yet to find any traction. For all good reasons, Samsung is completely dependent on Android to drive volumes and value.

4. Also Samsung’s innovations have mostly been horizontals – a watch that is an accessory to a smartphone. They miss the whole perspective of wearables as a key to a much larger opportunity in terms of the user per se. That is where Apple is doing the trick.

5. Samsung has not invested in other variables of eco-system – a map for instance, a music service, or enterprise suit, a gaming platform – Remember Nokia did all this and still couldnot leverage itself.

6. Samsung has been working on chipsets – but again, it is the likes of Apple who steal the march on 64 bit chipsets. By the time Samsung gets one of these on road, Apple would have a 1yr of learning and experience driving their subsequent roadmap.

7. Samsung has been an outstanding innovator in touch interfaces… its video of touch centric world says it all

However, outside of its perspectives of touch centred interfaces, Samsung could be missing the other big interfaces of the future and it has made very little advances in other user interfaces – speech, augmented reality, alpha waves etc… (and they seem to be missing it)

… but then as a device maker, is it Samsung’s job to dab into making and owning user interfaces and users? Probably not! But then this is exactly what is required from a technology innovator. Will Samsung make the jump from a device maker to a service anchor – possibly not.

Amidst the device makers – Huawei, ZTE, Lenovo and the likes, Samsung will be miles ahead of the pack – but i am not sure if it could be the mythical fifth horseman of technology as is generally believed. I see a flaw which will make this story unsustainable.

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The market for plain-vanilla cameras is over

Posted in Device Platforms by Manas Ganguly on January 2, 2014

If you thought, it is the feature phone segment that is loosingheavily to Smartphones, you should sample the Click and Shoot sub Rs.10K compact cameras. I had earlier covered fall in worldwide sales numbers of Point & Shoot Cameras 6 months back.

Even big guns (Deepika Padukone, Anushka Sharma, Priyanka Chopra) and high budget, high decibel TV advertisements have been able to turn the tide for the Sub 10K Compact camera (also known as Point & Shoot Cameras) Category. Reeling under the relentless onslaught of Smartphones, the demand for the category is drying up and how.

Camera vs Smartphones

Smartphones trounce the need for Point & Shoot Cameras on 2 fronts
1. Very Elaborate proce options
2. Instant connectivity and social sharing

Pic Courtesy: Economic Times

Pic Courtesy: Economic Times

Digital SLRs in the same space have grown by 30% in 2013. What is interestingto note is the sudden death in the numbers in the category across all major players.

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Driven by a narrowing price gap, Smartphones begin to penetrate deep into Indian markets

Posted in Device Platforms, Industry updates by Manas Ganguly on December 29, 2013
India: Smartphone contribution to Mobile phones sales and %age

India: Smartphone contribution to Mobile phones sales and %age

1. Smartphone shipments to India exceeded 10 million units mark for the first time in Q3, 2013. For Q3, 2013, the numbers stood at 11.10mln mark.
2. The import numbers of smartphones to India have increased by 192% (Q3 2013 versus Q3 2012)
3. Coupled with the fall of volumes in featurephone shipments by a factor 25.5% (QoQ 2013 versus 2012), Smartphones now contribute 21% of the total mobile shipments in the country
4. Mobile phone markets in India have moved past the historic highs of 58-59 mln units/quater(Q3/Q4 2012).

Smartphones have now acquired the critical mass and threshold pricing (~Rs.3500-5000) to capture mass markets in India substituting the feature phone. The change agents for this rapid shift of consumer preference towards Smartphones have been the narrowing price gap between feature phones and smartphones.

Correspondingly, the number of internet users on handhelds (Smartphones) is expected to grow exponentially as per a recent IAMAI report which pegs a 20-30 million increase in internet mobile user base every quarter.

Indians on Internet

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India Smartphone Markets (Q3 2013) – IDC

Posted in Industry updates by Manas Ganguly on December 4, 2013

Indian smartphone markets is witnessing explosive growth in the smartphone segment primarily driven by lower priced smartphones from domestic handset makers are eating into market share of feature phones in India. IDC’s Q3 2013 report records increase in smartphone numbers by 229% (YoY) to clock 12.8 mln units in Q3, 2013.

India Smartphone Q3 2013

The overall mobile phone market (Feature Phones and Smartphones) had a 12% growth YoY and a 7% growth quarter over quarter (QoQ) with the share of feature phones sliding further to make 81% of the total market in 3Q13 despite the feature phone market growing at 3% in 3Q2013 over 2Q2013.

SP FP Contribution India Q3 2013

The growth trend in smartphones is expected to continue in the future because of the narrowing price points between high end feature phones and the entry price point of low end smartphones.

India Mobile Phone Q3 2013 market shares

India Mobile Phone Q3 2013 market shares

Q3 2013 India Smartphone Market shares

Q3 2013 India Smartphone Market shares

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Nokia after Nokia: Rise of the phoenix!

Posted in Mobile Devices and Company Updates by Manas Ganguly on November 22, 2013

Nokia’s not finished, Nokia’s device division is going out with a bang, and while most view Nokia as a device-less company once the Microsoft deal closes in Q1 2014, this post delves into the other halves of Nokia and the tricks up its sleeve.

Microsoft paid $7.2bln for the Nokia devices and services portfolio – expected to close by Q1, 2014. However the other “not so significant” parts of Nokia could provide the value up end in the next 2-5years horizon.

While Nokia hasn’t really created any splash around its Lumia range of smartphones, but it is in the process of diversifying portfolio to phablets, tablets and wearables (smartwatch). Wearables alone are expected to number 485million by 2015. However, analysts and industry mavens are betting their monies on Nokia diversifying its portfolio from phones to “any communication” device. This includes amongst others cloud operated devices, sensors and receivers powering the Internet of things.

However it is the alternate portfolio of Nokia that is particularly interesting-

1. Nokia Networks which contributes to 90% of the Nokia (minus devices and services) is a key holder of 4G patents and has been on a comeback trail with associations with Sprint, US Cellular, T Mobile working out post the Nokia takeover of the better half. Nokia Networks also has a good patent portfolio in the 5G space and is expected to be a network driver in this technology.

2. Here Maps – is possibly the unsung Hero in the Nokia portfolio. What started as acquisition of Navteq has ended up in a strong suit of solutions around Mapping- It allows Offline use, Augmented Reality wrappers and a good accuracy (compared to Apple atleast). However, it is Here Map’s telemetry portfolio that is the strongest asset – Here Maps can leverage a robust and long standing relationships with key car makers to push the solutions to driverless cars. Here maps is quite clearly a very strong alternative to Google maps.

3. Finally, Nokia has a good portfolio of patents. Nokia has allowed Samsung to continue licensing its patents for 5 years (2010-15), with a settlement amount to be determined by arbitration in 2015. Nokia will also receive additional compensation beginning in 2014. Given the number of smartphones that Samsung is selling, there is a significant windfall from this settlement that is due to Nokia. Nokia’s venture into 5G technology, self-driving cars, Graphene, and its current core holding of essential 4G patents should ensure royalty fees from many technology companies for years to come.

Bottomline – Nokia after Nokia looks to be a great series of propositions. Now then, do we expect the rise of the phoenix?

Q3, 2013 Smartphone Market shares- IDC

Posted in Industry updates by Manas Ganguly on November 1, 2013

The worldwide smartphone market grew 38.8% year over year in the third quarter of 2013 (3Q13), according to the IDC. Thus, a total of 258.4 million smartphones were shipped in 3Q13, establishing a new record for units shipped in a single quarter by more than 9.0%. The previous high was 237.0 million units shipped in the second quarter of 2013. Price points have declined significantly, driven largely by low-cost Android solutions.China has become one of the fastest growing smartphone markets in the world, accounting for more than one third of all shipments last quarter. This trend is expected to continue going forward. The Android smartphone platform has created vast opportunities for new vendors to get into the smartphone space and, in turn, has produced new competitive pressures at the top of the market. Vendors from outside the top 5 continue to control nearly half the worldwide smartphone market in terms of shipments. In 3Q13, Chinese vendors Huawei and Lenovo moved past LG, and not far behind are two more Chinese companies, Coolpad and ZTE. Any of these vendors could change position again next quarter. But in addition to having close shipment volumes, they all have one key ingredient in common: Android. This has been a huge factor in their success, but it also speaks to the challenges of differentiation on the world’s most popular platform.Looking ahead, strong momentum is expected to continue going into the fourth quarter, and another record quarter and year in the worldwide smartphone market. With already strong growth in 3Q13 and multiple vendors launching flagship models, the market will be poised to reach one billion units for the year. It’s a significant milestone considering the market shipped just half a billion units in 2011. Moving forward, what remains to be seen is how the various companies and platforms will stay differentiated and relevant in the increasingly competitive market.

Q3 IDC SP

In the worldwide mobile phone market (inclusive of smartphones), vendors shipped 467.9 million units in 3Q13 compared to the 442.7 million units shipped in 3Q12, representing 5.7% year-over-year growth. Third quarter shipments were up 7.0% when compared to the 437.4 million units shipped in 2Q13.

Q3 IDC MP

Interestingly enough the category of phones apart from the smartphones reduced by 18.4% from 256.5mln handsets in Q3 2012 to 209.5mln Q3 2013. Feature Phones are thus a shrinking category globally!

Smartphone Application Processors Update: Strategy Analytics

Posted in Device Platforms by Manas Ganguly on October 18, 2013

The global smartphone applications processor market continued to show strength and grew 44 percent year-on-year to reach $4.4 billion in Q2 2013, according to the Strategy Analytics. Qualcomm, Apple, MediaTek, Samsung and Spreadtrum captured the top-five revenue share spots in the smartphone processor market in Q2 2013. Qualcomm maintained its dominance in the smartphone applications processor market with 53 percent revenue share followed by Apple with 15 percent share and MediaTek with 11 percent share in Q2 2013.

Multi-core processors accounted for around 66 percent of all smartphone apps processor shipments in 1H 2013, up from 40 percent in 1H 2012. Quad-core smartphone applications processor shipments registered five-fold growth in 1H 2013 compared to 1H 2012, while single-core smartphone applications processor shipments declined by 14 percent in the same period. Qualcomm, Apple, Samsung, MediaTek and ST-Ericsson captured top-five volume share spots in the smartphone multi-core applications processor market in 1H 2013.

Low-cost suppliers MediaTek and Spreadtrum together captured over one-third volume share in the smartphone applications processor market in Q2 2013, thanks to the smartphone boom in emerging markets. MediaTek and Spreadtrum’s improving global footprint coupled with their maturing product portfolio could spell a threat to global players such as Qualcomm, Broadcom, NVIDIA and Intel.

Qualcomm maintained its dominance in the smartphone applications processor market helped by its LTE leadership. After a successful run with its Snapdragon 600 family of chips in the first half of 2013, Qualcomm is well-positioned to repeat it in the second half with its flagship Snapdragon 800 family of chips

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