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China: Entry-level dual core IPS WVGA (480×800) smartphones $65+ now, quad-core $70+ in June

China market: Qualcomm, Spreadtrum cutting quad-core processor prices [DIGITIMES, April 25, 2013]

Qualcomm and Spreadtrum Communications have both cut prices for their quad-core products to better compete against MediaTek, which controls half of the smartphone-chip market in China, according to industry sources.

Qualcomm recently quoted its quad-core solutions at less than US$10, slightly cheaper than MediaTek’s offerings, the sources indicated. Meanwhile, Spreadtrum has lowered its quad-core processor prices to similar levels. Both firms are trying to gain market share through aggressive pricing, the sources said.

Monthly shipments of MediaTek’s smartphone chips have topped 15 million units recently, and even approached the 20 million level, the sources revealed. The booming shipments already lifted MediaTek’s share of China’s smartphone-IC market to 50%, the sources said.

MediaTek’s quad-core solutions reportedly have attracted orders from Coolpad, Huawei, Lenovo and ZTE.

In other news, MediaTek has reported higher-than-expected sales for the first quarter of 2013. The firm has scheduled an investors meeting on May 6 to discuss its performance in the first quarter, and business outlook.

Remark: the inserted slides are from 1Q13 Investor Roadshow Presentation [Feb 26, 2013] from Spreadtrum

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And as $48 Mogu M0 “peoplephone”, i.e. an Android smartphone for everybody to hit the Chinese market on November 15 [Nov 9, 2012]
now Mogu S2 went on sale today [China Smartphones, April 22, 2013]

A leader in the production of super cheap smart phones, the Chinese company Mogu, today held a preliminary sales of its new budget smartphone Mogu S2. The official price of the unit is 399 yuan, or about $65. Today, the sale was put on a limited batch of 5000 smartphones at the price of 299 yuan ($48).

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Mogu S2 is running the 2-core processor with a clock speed of 1.2 Ghz, and used 4-inch screen with a resolution of WVGA [480×800] to display the information. In addition there is 512 MB RAM, 4GB of ROM and a 5-megapixel camera. A nice addition is its support for two SIM cards, modules, WIFI, Bluetooth, and GPS. The operating system is installed MOGO OS (Android 2.3 Gingerbread).

Additional key information from the company’s product page [MOGU蘑菇手机, April 20, 2013]: i.e. IPS display and the Spreadtrum SC8825 or SC6825 SoC

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We’ve seen the effect of the earlier SC6820 SoC leading to Temporary Nokia setback in India [‘Experiencing the Cloud’, April 28, 2013]. This is how Spreadtrum presented this situtation recently:

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The two new SoCs are the same to the maximum as SC8825 has only the following additional functionality:

TD-SCDMA standards (3GPP R7), 2010~2025MHz / 1880~1920MHz/2300~2400MHz

and prospects for that additional functionality (internal to China) were presented as exceptionally bright by the company: 

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Spreadtrum Announces Commercial Launch of Dual-Core Smartphone Chipsets for TD-SCDMA and EDGE [press release, April 2, 2013]

SC8825 (TD-SCDMA) and SC6825 (EDGE) set new standard for dual-core smartphone chipset cost and performance with high level of integration, standout graphics performance and best-in-class TD-SCDMA technology
Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider inChina with advanced technology in 2G, 3G and 4G wireless communications standards, today announced the commercial availability of its dual-core 1.2GHz smartphone chipsets for TD-SCDMA (SC8825) and EDGE (SC6825), following the successful qualification of its platform by China Mobile.
“With our new dual-core chipsets, Spreadtrum has leveraged our expertise in system design to deliver the lowest-cost dual-core platform in combination with high end graphics performance for the TD-SCDMA and EDGE markets,” said Dr. Leo Li, chairman and CEO of Spreadtrum. “This combination of low-cost architecture, standout graphics performance, and best-in-class TD-SCDMA technology provides smartphone designers with unprecedented value in bringing high end features to low-cost devices.”
Spreadtrum’s SC8825, which supports dual-mode TD-SCDMA/HSPA & EDGE/GPRS/GSM and the SC6825, which supports EDGE/GPRS/GSM, are based on a highly efficient multi-core architecture delivering the lowest cost platform available for dual-core TD-SCDMA and EDGE smartphone products. The single-chip chipsets integrate a dual-core 1.2GHz Cortex-A5 core processor, a dual-core Mali 400 graphics processor and multimedia and hardware accelerators for differentiated performance and user experience. Both chipsets are further paired with a single-chip mutimode RF transceiver for a high level of integration and are pin-to-pin compatible, enabling handset makers to leverage a common handset development effort for products shipping to China as well as to emerging markets.
In addition to their high level of integration and low-cost architecture, Spreadtrum’s chipsets further deliver standout graphics performance. The solutions’ powerful graphics processing capability enhances the user experience for games and other graphics-rich applications, and enables Spreadtrum to bring high end features such as the larger screen sizes more commonly found in premium smartphones to low-cost devices.
“The benchmark results we are achieving for our dual-core solution, measured by popular benchmark programs such as AnTuTu and GLBenchmark 2.5, significantly outperform other commercial dual-core products,” added Dr. Li. “This powerful processing capability provides our customers with an even more cost-effective and power-efficient way to deliver high end features in low-cost smartphones.”
Other features of Spreadtrum’s SC8825 and SC6825 chipsets include support for HD 1280×720 LCD display, H.264 720p video playback, up to 8 megapixel RGB camera and dual-SIM, dual-standby capability. The chipsets ship with turnkey Android and systems software, reducing the engineering time and resources required by handset makers to bring devices to market, with reference implementations available for both 4-layer and 6-layer PCB layouts.
The SC8825 and SC6825 are commercially available now. The chipsets have already been incorporated by leading China handset makers into smartphone models that are expected to ship commercially during 2Q 2013.
About Spreadtrum Communications, Inc.
Spreadtrum Communications, Inc. (NASDAQ:SPRD; “Spreadtrum”) is a fabless semiconductor company that develops mobile chipset platforms for smartphones, feature phones and other consumer electronics products, supporting 2G, 3G and 4G wireless communications standards. Spreadtrum’s solutions combine its highly integrated, power-efficient chipsets with customizable software and reference designs in a complete turnkey platform, enabling customers to achieve faster design cycles with a lower development cost. Spreadtrum’s customers include global and China-based manufacturers developing mobile products for consumers in China and emerging markets around the world. For more information, visit www.spreadtrum.com.

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SC8825 TD-HSPA+/TD-SCDMA/GSM/GPRS/EDGE Baseband Chip [product site, April 2, 2013]

Spreadtrum’s SC8825 is a highly integrated mixed signal baseband processor for dual-mode TD-SCDMA/HSDPA/HSUPA/HSPA+ and GSM/GPRS/EDGE applications. SC8825 integrates a dual-core 1.2GHz ARM Cortex-A5 processor, a dual-core Mali 400 graphics processor and multimedia and hardware accelerators in a highly efficient system architecture that brings differentiated performance and user experience to low-cost smartphones. SC8825 is coupled with Spreadtrum’s single-chip tri-band TD-SCDMA/quad-band EDGE/GPRS/GSM RF transceiver for small footprint, and ships with turnkey Android systems software for rapid time to market and efficiency in handset design.

SC8825 Baseband Chip Diagram

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SC8825 Key Features

Core Description

  • ARM Cortex-A5 dual-core, clock speeds up to 1.2GHz
  • 32KB I-Cache, 32KB D-Cache
  • 32KB I-Cache, 32KB D-Cache
  • 128bit FP data path

Communication Features

  • GSM/GPRS/EDGE standards, GSM850/EGSM900/DCS1800/PCS1900
  • EGPRS Class 12
  • TD-SCDMA standards (3GPP R7), 2010~2025MHz / 1880~1920MHz/2300~2400MHz
  • HR, FR, EFR, AMR-NB
  • HSPA+ 4.2 Mbps,HSUPA 2.2 Mbps

Multimedia Support For

  • Mali 400 GPU MP2, 40MTri/s, 700Mpix/s, OpenGL ES 1.1/2.0
  • Decoder: MPEG4/H.263 720p@30fps; H.264 720p@30fps ; VP8 720p@30fps
  • Encoder:H.263/H.264/MPEG4 D1@30fps
  • Video Streaming: MPEG4/H.263/H.264 720p@30fps
  • 3G-324M Video Telephony
  • 8 MP Camera Sub-system JPEG decoder/encoder
  • Support MP3/AAC/AAC+/MIDI/AMR-NB/WAV format
  • Audio codec included

LCD Display Features

  • Support up to HD resolution
  • Built-in LCD Controller,touch panel controller
  • MIPI and RGB @60fps
  • Support OSD / Rotation / Scaling

Memory I/F Support For

  • NAND flash(8bit and 16 bit devices)
  • HW ECC, multi-bit ECC
  • 2G byte SDR/LPDDR1/LPDDR2 (16bit and 32bit devices)
  • eMMC(4.4.1) boot

Peripheral I/F Support For

  • HS USB 2.0
  • 4 x UART
  • 3 x SPI interface , 3-wire SPI,4-wire SPI, synchronous SPI
  • 4 x I2C interfaces
  • 2 x I2S and PCM interface
  • 3 x SDIO interfaces
  • 1 x eMMC interfaces
  • 2 x SIM/USIM interfaces
  • 4 x PWM outputs
  • ETM port
  • More than 100 GPIO pins
  • 8*8 keyboard interfaces

Other Features

  • Operating ambient temperature range: -45 to +95 degrees centigrade
  • 12.1mm×12.1mm 517-ball, 0.4mm ball pitch

SC6825 GSM/GPRS/EDGE Baseband Chip [product site, April 2, 2013]

Spreadtrum’s SC6825 is a highly integrated mixed signal baseband processor for GSM/GPRS/EDGE applications. SC6825 integrates a dual-core 1.2GHz ARM Cortex-A5 core processor, a dual-core Mali 400 graphics processor and multimedia and hardware accelerators in a highly efficient system architecture that brings differentiated performance and user experience to low-cost smartphones. SC6825 is coupled with Spreadtrum’s single-chip quad-band EDGE/GPRS/GSM RF transceiver for small footprint, and ships with turnkey Android systems software for rapid time to market and efficiency in handset design.

SC6825 Baseband Chip Diagram

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SC6825 Key Features

Core Description

  • ARM Cortex-A5 dual-core, clock speeds up to 1.2GHz
  • 32KB I-Cache, 32KB D-Cache
  • 256KB L2 Cache
  • 128bit FP data path

Communication Features

  • GSM/GPRS/EDGE standards, GSM850/EGSM900/DCS1800/PCS1900
  • EGPRS Class 12
  • HR, FR, EFR, AMR-NB

Multimedia Support For

  • Mali 400 GPU MP2, 40MTri/s, 700Mpix/s, OpenGL ES 1.1/2.0
  • Decoder:MPEG4/H.263 720p@30fps; H.264 720p@30fps ; VP8 720p@30fps
  • Encoder:H.263/H.264/MPEG4 D1@30fps
  • Video Streaming: MPEG4/H.263/H.264 720p@30fps
  • 3G-324M Video Telephony
  • 8 MP Camera Sub-system JPEG decoder/encoder
  • Support MP3/AAC/AAC+/MIDI/AMR-NB/WAV format
  • Audio codec included

LCD Display Features

  • Support up to HD resolution
  • Built-in LCD Controller,touch panel controller
  • MIPI and RGB @60fps
  • Support OSD / Rotation / Scaling

Memory I/F Support For

  • NAND flash(8bit and 16 bit devices)
  • HW ECC, multi-bit ECC
  • 2G byte SDR/LPDDR1/LPDDR2 (16bit and 32bit devices)
  • eMMC(4.4.1) boot

Peripheral I/F Support For

  • HS USB 2.0
  • 4 x UART
  • 3 x SPI interface , 3-wire SPI,4-wire SPI, synchronous SPI
  • 4 x I2C interfaces
  • 2 x I2S and PCM interface
  • 3 x SDIO interfaces
  • 1 x eMMC interfaces
  • 2 x SIM/USIM interfaces
  • 4 x PWM outputs
  • ETM port
  • More than 100 GPIO pins
  • 8*8 keyboard interfaces

Other Features

  • Operating ambient temperature range: -45 to +95 degrees centigrade
  • 12.1mm×12.1mm 517-ball, 0.4mm ball pitch
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Temporary Nokia setback in India

According to “Samsung Nokia India GfK-Nielsen” search from April 25 to April 28, 2013:

  • Samsung beats Nokia to become largest Mobile Phone seller in Urban India
  • Samsung Leads In Phone Sales & Grabs Leadership Position From Nokia
  • Samsung topples Nokia, emerges No. 1 phone seller
  • Samsung overthrows Nokia to become the largest seller of mobile phones in India (see that report well below in detail)
  • Samsung topples Nokia to turn largest mobile phones seller in India
  • Samsung emerges new ‘king’ of India mobile mkt
  • Samsung dethrones Nokia Corporation
  • The Fall Of Nokia Continues

Indeed Nokia has sold only 5 million Asha full touch smartphones during the quarter, registering a 46% decline QoQ. CEO Stephen Elop noted that Asha Full Touch smartphone series is currently into its 9 month, and that Nokia wouldin the very near termrefresh the product line. See: Nokia: Continued moderate progress with Lumia, urgent Asha Touch refresh and new innovations to come against the onslaught of unbranded Android and forked Android players in China and India [‘Experiencing the Cloud, April 18, 2013]

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Remark: The above ones were The Hottest Selling Handsets in India Below Rs 5000 [$92] [Gizbot, April 19, 2013]. Their prices are as of April 28, 2013. They are only 2.75G but with dual SIM support. The Micromax Bolt A35 is using the Spreadtrum SC6820 SoC for which it was already indicated that:
$48 Mogu M0 “peoplephone”, i.e. an Android smartphone for everybody to hit the Chinese market on November 15 [‘Experiencing the Cloud, Nov 9, 2012]
–  Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets [‘Experiencing the Cloud, July 26 – Aug 16, 2012]
World’s lowest cost, US$40-50 Android smartphones — sub-$100 retail — are enabled by Spreadtrum [‘Experiencing the Cloud, Dec 11, 2011 – Feb 27, 2012]
Note that the XMM 2250m is the latest incarnation of the XMM 2250 SoC from Infineon (now Intel).

Note, however, that the upcoming “in the very near term” refresh of the Asha Full Touch product line will continue with Nokia’s strategy for “the next billion” based on software and web optimization with super low-cost 2.5/2.75G SoCs [‘Experiencing the Cloud, Feb 14 – April 23, 2012] which was well proven in H2’12 as seen on the above diagram. As described in the post its software optimization is based on the unique Smarterphone end-to-end software solution for “the next billion” Nokia users [‘Experiencing the Cloud, Jan 9-11, 2012], while its web optimization on an even more unique browser technology which “reduces data consumption by up to 90%”.

In fact Nokia “just” needs to improve its value proposition against the entry level Android phones of the local brands (like Micromax and Karbonn) because its stance against the competing Samsung REX model is not bad at all (and the optimisations were even not taken into the account):

Nokia Asha 305 “6” vs “5” Samsung Rex 70 S3802 [MoreCellPhone, March 11, 2013]

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And the Mobile Phone chosen is…

The choice of the MoreCellPhone is Nokia Asha 305

18 Items in common between the devices

More internal storage for photos and files
10MB user available
More external storage with the use of memory cards
Until 32GB
This device has a TFT LCD screen, which are brighter and more vivid
TFT LCD
More colors on the screen is better quality images and videos
65 thousand
Larger screen
3″
Higher resolution camera
2 MegaPixels (1.92)
The zoom allows for better focus and approach to take pictures
Only digital zoom
The 2G EDGE network is newer and faster
2G EDGE
Faster for surfing the internet and download files
0.236 Mbps
Better touch type. Multitouch allows to use more fingers at the same time
Multitouch
Headsets with 3.5mm Jack size are more common and easy to find in stores
3.5mm plug
Sensors help you use the device
Accelerometer / Proximity
Removable battery can be replaced easily
Lithium-ion – Removable
Speakerphone is useful when you are driving and on other occasions
Supported
The vibration of the device aids in the use of several features
Supported
With more SIM card slots you can have more operators and choose which one to use
2 slots DualSIM
The radio lets you listen to your songs and sports in general
FM with RDS / FM
More speed data transfer as mp3 and photos via USB
USB 2.0 Micro-B (Micro-USB)

In detail: Samsung overthrows Nokia to become the largest seller of mobile phones in [urban] India [The Economic Times, April 26, 2013]

KOLKATA: Samsung has overtaken Nokia to become the largest seller of mobilephones in the country’s major markets, as consumers lap up its new feature phones and its smartphones continue to do brisk business.
According to market tracker GfK-Nielsen’s data, Samsung‘s volume market share in urban areas in March rose to 31.4%, surpassing Nokia‘s 30.1%. GfK-Nielsen urban panel tracks sales in 793 cities and towns with a population of over 50,000, which account for more than 70% of India’s total handset sales.
This is the first time the Korean company’s volume market share has crossed that of Nokia’s in the GfK-Nielsen survey. The all-India figures, which will include rural sales, will be released shortly.
Some months ago, Samsung’s market share, measured in value terms, had exceeded that of Nokia’s, and there is now a considerable gap between the two due to growing demand for the Korean firm’s smartphones.
NEW MODELS PUSH SALES
Last month, Samsung‘s value market share in urban markets stood at 42.2% compared with Nokia‘s 20.7%. Analysts say Samsung’s gain in volume market share last month is led by the recent introduction of the Rex feature phone series and strong demand for smartphones such as Galaxy Grand and Note 2, the top-selling models at multi-brand retail outlets. Its newest premium smartphone, Galaxy S4, will be launched in India on Friday.
imageA Nokia India spokesperson said the company did not comment on country-specific market data, and added that it was executing its strategy with ‘urgency and at a new clock speed’. The spokesperson said at the higher end of the price spectrum, the company had launched ten Nokia Lumia devices in the past 16 months and claimed that Asha 305 was the best-selling smartphone in India.

“We are competing at every price point with better mobile experience. Nokia will continue to deliver new and innovative solutions to consumers,” she said.

Notwithstanding these initiatives, analysts and experts feel that Nokia’s more than a decade-long leadership in the Indian handset market is under threat. The company, which once enjoyed a dominant 80% market share, has never completely recovered from its failure to anticipate and react to the dual-SIM handset boom a few years ago.

“It’s truly unbelievable the way Nokia fell in India in the past six years. The brand failed to rejuvenate itself and fell prey to customer fatigue. Add to that the speed of execution – while Samsung was taking six months to launch a new model from the drawing board to retail store, Nokia was taking more than a year,” said former BlackBerry India head Sunil Dutt, who was Nokia’s head of sales till 2007. A Samsung India spokeswoman declined comment on the market share data. But Samsung India’s Country Head (mobile phone & digital imaging) Vineet Taneja said the company has gained market share.
“Samsung has created new segments, such as the Note series or the Rex series, which was developed in India. We have developed a strong product portfolio straddling across entry-level smartphones till the premium segment,” said Taneja. The Korean company has been the leader in the smartphones segment since end-2011, even as it trailed Nokia in the overall handset market.

Are smartphones in India at a tipping point with 10% overall mobile shares? [The Economic Times, April 23, 2013]

Ten per cent. It’s a number that has come to mean much for smartphones — the category of phones with computing prowess. It’s the point where a critical mass of buyers meets a pool of sellers to create the perfect storm. This phenomenon — 10% share as a tipping point — played out in Western economies. It played out in China, where the share of smartphones in total phone shipments rocketed from 9% to 59% in two years. And it’s playing out in Brazil and Russia, where the corresponding number surged to 32% and 46%, respectively, in the same period.

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Will India, where smartphones hit 10% earlier this year, follow suit? A sustained build-up is underway to add charge to that figure. The price of entry-level smartphones has dropped to around Rs 4,000 [$74], from Rs 15,000 [$276] two years ago. “It’s compelling buyers to opt for fancier phones,” says Anshul Gupta, principal research analyst of Gartner India, who feels something fundamentally changed for the Indian market in the last quarter of 2012. “We are at the tipping point.” However, Sashi Shankar, chief marketing officer of Idea Cellular, says handset prices have to fall further.
“The market is expanding fast, but a tipping point is still about a year away,” he says. “We need smartphones for around Rs 3,000 [$55].” Even that new floor may not be far away. During his visit to India last month, Eric Schmidt, executive chairman of Google, hinted at a $50 ( Rs 2,700) smartphone powered by its Android operating system. At the other end of the price spectrum, Apple and Samsung are in the midst of a blitz to package affordability through financing schemes and replacement offers. And the number of sellers has hit 30, with recent entrants including a Chinese computer company (Lenovo), a Chinese phone company (Gionee) and consumer durable manufacturers (Videocon and Salora).
They are all looking to add to the pool of 50 million smartphone owners in India. The challenge for them is to coax India’s 700 million users, 70% of whom have handsets that cost below Rs 2,000, to switch. “The replacement market is driving the bulk of sales,” says Amar Babu, MD of Lenovo India. IDC, a technology consultancy, projects smartphone sales growing at a compounded 57% in the next five years, against 10% for feature phones. “About 20% of the phones that Samsung sells are smartphones, and this has doubled in the past one year,” says Asim Warsi, VP, Samsung Mobile, which has a dozen smartphones priced from Rs 7,000 to Rs 42,000.
By 2015, about a third of shipments will be smartphones, 67 million out of an expected market of 230 million,” adds Vipul Mehrotra, director, smart devices, Nokia India. Although that is phenomenal growth by any yardstick, it might still not translate into the hockey-stick trajectory that other markets witnessed because of the way the Indian mobile ecosystem is set up and its inherent weaknesses.
No Carrier-Based Model
While handset makers say the tipping point is here, analysts feel the real tipping point is still 18-24 months away. “It will come when users see value in it beyond a fashion accessory — like use it for mcommerce, m-banking and even entertainment,” says Mohammad Chowdhury, leader, telecom, PricewaterhouseCoopers. “Mobile will be the main mode of internet access, but we need cheaper data plans, better phones at lower costs, and content in Indian languages.” According to Chowdhury, China and western markets took off at 10% as, unlike India, theirs is a carrier-based model. “Phones came bundled with the internet and were sold by operators,” he says.
In India people buy a phone independent of the carrier. “About 95% of the mobile base in India is pre-paid,” he adds. “They don’t have credit cards, debit cards or e-payment services, essential for a carrier-based model.” A carrier-based model requires a telecom company to buy handsets and manage inventory. “The cost is higher for telcos and they have to enter into revenue share agreements with device makers,” says Arvind Vohra, director of Gionee India. “In a market where margins are low, a carrier-based model won’t work.” Instead, at the lower end, sellers are playing the price card.
“It’s beginning to pick up,” says Warsi. “Smartphone makers are able to push a dearer phone, where the margins are better, for a monthly instalment no more than a cost of a family dinner outing.” Features and Data Plans Although prices are falling, the value for a user at the lower-end centres more around the feel and an initial experience of a smartphone, rather than an expanding engagement. According to Vohra, entry-level devices currently account for 30% to 35% of the market.
“Location based services or high-definition gaming apps may not run on them,” says Saurav Singh, founder-CEO, AppStudioz, a mobile app developer. But, adds Shashin Devsare, executive director of Karbonn Mobiles: “For a new smartphone buyer opting for an entry-level phone, being able to browse, chat with friends on Facebook or send emails is a new thing. He can then upgrade.” Data is the other hurdle towards a speedy transition. Device makers blame operators, who are exhausting their spectrum capacity and have limited money to buy more, for not upgrading their networks to 3G, compromising the internet experience.
One-third of the smartphones sold are not 3G, but 2.75G,” says Jerold Pereira, business head, handset division, Videocon. “And in remote areas, 3G is still not there. So, users won’t get value out of their top-end smart device.” For example, of its subscriber base of 117 million, Idea Cellular had 4.7 million 3G users. Shankar of Idea argues that prices of data plans have dropped by half to Rs 250 [$4.5]per month for 1GB, and that it’s the content and devices that need to improve. Despite teething troubles, the mobile is gaining traction in data transactions.
According to Reserve Bank of India, mobile banking transactions in January 2013 doubled to 5.6 million and trebled in value to Rs 625 crore, from a year ago. Elsewhere, Flipkart reports a three-fold increase in transactions via handsets. Gupta of Gartner believes such usage will accelerate the migration to smartphones, which offer a better experience. Pereira of Videocon points to falling prices and doubling sales across industry to drive home the point that, despite hiccups, mobile phones are set for a upgrade. “In 2011, 10 million smartphones were sold and all were at least Rs 10,000 [$184] or higher,” he says.
“In 2012, the market doubled to 20 million, at Rs 8,000- Rs 10,000 [$147-184]. This year, 45-50 million devices will be sold and prices have dropped below Rs 6,000 [$110].” Even if this is not the tipping point, it’s formidable by numbers. And the real tipping point is not far away.

Samsung’s REX series aims to take on Nokia’s Asha but misses the point [BGR India, Feb 14, 2013]

Samsung today announced its REX series of feature phones, which intend to take on Nokia’s Asha range. Unlike Nokia, which calls its Asha full-touch devices smartphones, Samsung correctly calls its REX series as smart feature phones, considering it is based entirely on Java. While some of the phones in the series, especially the REX 90, share design cues with Samsung’s Galaxy S III and feel very premium for its price, there is no real reason for the products to exist apart from having something in the portfolio to counter Nokia’s Asha series.
Unlike Nokia, which seems to be investing both time and R&D dollars on taking the S40 platform a few steps further than what it was originally built for, the Java-based REX phones have no future path. “As far as S40 goes, think of it as if it had been sleeping all this while and has just woken up. We are working to make it even better and there is lot more to come. We are also getting many big developers to make apps for Asha series,” Calin Turcanu, the head of Nokia’s mobile phone division for Middle East and Africa, told me earlier this week at the global launch of the Asha 310.
The REX series, on the other hand is severely limited by its operating system and there is very little Samsung can do to improve the experience. Samsung also does not have a content story in place – it does not have a huge music store (Samsung typically ties up wih Hungama for its music offering in India) and it does not have any navigation or location play either. In other words, I don’t see these REX phones any different from Samsung’s Star and Pop series, which it introduced a few years ago. And there is nothing that app developers can do to give users a better experience, which is close to smartphones.
Considering how far Samsung was able to go with creating an ecosystem with its Bada operating system, which was more scalable and had more scope for apps and services, I don’t see any way that the Korean vendor can take the REX series’ experience a few notches above its current state.
Samsung knows a Rs 5,000 Android smartphone cannot give the same experience as Nokia’s Asha and it did not have any other in-house platform that could do what Nokia’s ageing but still alive S40 did with the Asha phones. I don’t see the REX series surviving very long, though it would do well initially if we consider Samsung’s marketing muscle and the push it would give to counter Asha full-touch phones. But it certainly has no future when it comes to addressing the needs of the consumer or taking them to the next level.

[REX 70] Introducing Samsung REX 70 [SAMSUNGmobile YouTube channel, Feb 25, 2013]

Everyday users can discover the pleasure of full featured mobility. Faster and more intuitive, REX 70 looks and feels like a smartphone. It starts with the large 3″ touch screen, handy clock and search widgets, more icons on main menu, screen capture capability, preloaded free games — so advanced and effortless. Easy on-the-go access of your Facebook and Twitter accounts through native or downloaded apps. Multiple messaging options through one IM portal plus free ChatON. Greater multimedia and connectivity options via microSD, BT 3.0, Wi-Fi option. Dual SIM enables two lines in one phone so you never miss a call. All in an organically curved, ergonomic design with premium accents that conveys your understated style. The Samsung REX 70. (The Samsung REX series consists of four devices: REX 90, REX 80, REX 70, and REX 60.)

More information: Samsung REX [company microsite]

Samsung Introduces the New REX Series Smart Feature Phones [press release, Feb 13, 2013]

Samsung aims to evolve mobile communications in emerging markets through easily accessible smart feature phones

Samsung Electronics Co., Ltd, a global leader in digital media and digital convergence technologies, today announced the launch of REX, a new series of smart feature phones that combine intelligence and capability to deliver an accessible, next-generation mobile experience for all.
“As the number one mobile leader and innovator, we are committed to developing the best possible mobile solutions to suit all lifestyles and budgets, which is why we are so excited to launch the REX series across a number of the world’s fastest growing markets,” said JK Shin, President and Head of IT & Mobile Communications Division at Samsung Electronics. “REX devices are designed to seamlessly prioritize and consolidate essential mobile functions that matter most to customers across diverse markets. The result is an extraordinary end-to-end mobile experience with the best value for money.”
The Samsung REX series consists of four devices: REX 90, REX 80, REX 70, and REX 60. Each device has been tailored to give users access to a variety of unique features that have been developed to enhance their day-to-day needs and lifestyles at a highly affordable budget. Merging advanced functionality and intuitive usability, the REX series delivers practical solutions to complement daily mobile needs. Its responsive QVGA touch-screen user interface with intelligent features is designed to deliver a simpler, intelligent user experience for those who value the essentials.
Other features include:
– Intuitive and easy full touch UX : The simple, user-friendly Touchwiz interface makes it easier to navigate your mobile phone. Menu choices are organized into icons arranged 4×4 on the large display for easy viewing. Access to social networking services is just a click away, and practical widgets offer easy access to weather and other frequently-used  applications.
– Stylish and compact design : The curved design of the Samsung REX series is inspired by the aesthetics of nature. Its compact size gives users a comfortable grip and allows convenient one-hand operation. The brushed metal frame, organic nature-inspired design, and delicate back cover create a modern, sophisticated look that will fit perfectly with your personal life.
– Dual SIM Always-On : Customers who want to keep their personal and work calls separate will enjoy the convenience of Dual SIM on the Samsung REX series, offering the functionality of having two phones with just one mobile unit. To ensure no calls are missed, Dual SIM Always On allows you to receive calls on one SIM even when you are on the phone using the other. The Samsung REX series allows you to switch between a maximum of five SIM cards without rebooting your mobile. Ideal for business trips to different coverage areas or for those wanting more flexibility between calling plans, the Dual SIM feature puts you in control of your mobile experience.
– Essential mobile intelligence : Featuring all the essentials for an intelligent mobile experience, the Samsung REX series guarantees fast web-browsing and app support through the Opera Mini. By doing so, the REX series enables seamless communication through social networking and messaging services, including the cross-platform ChatOn, which means users can remain connected with their friends at all times.
“Feature phones continue to represent a large opportunity for mobile handset makers, especially in price-constrained emerging markets,” said Ian Fogg, senior principal analyst, mobile and telecommunications research at IHS. “IHS estimates that there will be 653 million feature and entry-level mobile phones shipped globally in 2013. Entry-level smartphones must compete with ever smarter touch screen feature phones that offer many of the same social network, games, and mobile Internet benefits as smartphones but at an even more compelling price.”
A clear indication of Samsung’s commitment to pioneering mobile communication growth across the emerging markets, the REX series devices will drive the “new normal” in future full-touch feature phone development.
Product Specifications
[Rex 90]
[Rex 80]

[Rex 70]

Network

EDGE (850/900/1800/1900MHz)

Display

3.0” QVGA TFT LCD, C[apacitive]-Type

Camera

2.0 Megapixel Camera

Video

H.263+AMR , MPEG4+AMR

Audio

AAC, AAC+, AMR, MP3, i-Melody, MIDI, Polyphonic, WAV

SIM

Dual SIM with hot swap (option)

Contents 

Services

  • Samsung TouchWiz
  • Samsung ChatOn mobile communication service
  • Yahoo Messenger (Push IM), Gtalk, Facebook chat
  • Enhanced SNS (Java Facebook, Twitter)

Web Browser

Opera Mini, Access NF

Connectivity

  • USB 2.0 Host
  • Bluetooth® v 3.0 HS
  • WiFi 802/11(b/g/n)

Sensor

Proximity

Memory

  • 10MB User Memory
  • microSD Slot (up to 32GB)

Dimension

104.9 x 57.2 x 11.99 mm

Battery

1,000mAh

[Rex 60]

As much as up to 10 million of new small touch Microsoft Surface devices could be sold in H2 2013?

Despite of the initial state of Microsoft Surface with some questions about the performance and smoothness of the experience [‘Experiencing the Cloud’, Nov 12 – 28, 2012] Forbes says that Microsoft Surface Outsells The Nexus 10 And Points To Redmond’s Post-PC Future [April 20, 2013]:

Nexus 10 numbers are from Evans, who takes the relatively unique screen size of the Nexus 10 tablet, identified as ‘xlarge XHDPI’ in the development data that Google provides. Take these numbers, exclude China, and apply it equally to the Google Play user base (which Google now use for all their Android usage numbers) and Evans comes out with an initial figure, albeit with caveats, of 680,000 Nexus 10 tablets in use.

Microsoft Surface slaes numbers are also hard to come by, but Bloomberg’s call of 1.5 million Surface RT and Surface Pro devices is in line with many analysts, so let’s run with that number. Even allowing for some give and take in the calculations, Microsoft’s Surface is doing better than the Nexus 10.

Certainly Surface as a brand is nowhere close to the sales of the iPad (over 23 million units sold). But if you take the Surface Pro (which Bloomberg reckons makes up around 400,000 of those sold units, and that’s with just one month of availability in the quarter), and give Microsoft a healthy margin on the unit of around $500 on the Pro, that gives Redmond’s Surface division a potential revenue of $200 million.

Yes the volumes are low, and the Surface range is not as attractive as the iOS choices available. But if Microsoft can build up the sales of the Surface Pro in 2013 and reach four to five million unit sales a year, they will have a healthy income stream from their Surface range. Much like sales estimates, there is conjecture and assumption in making a jump from 400,000 sales in one month and extrapolating a similar sales level throughout the whole year, but it’s not an impossible jump to make. It’s certainly within Redmond’s reach.

For Google, the Nexus 10 is almost a technology demonstrator. But Microsoft’s Surface is a key part of the companies future, and sales of the hardware are a key part of their strategy. The advantage to out-selling the Nexus 10 is that Microsoft are reaching more than the developers, hackers, and geekerati that the Nexus 10 reaches… but they need to keep reaching out and selling to create a place in the new mobile computing era.

The chain which lead to the above mentioned “680,000 Nexus 10 tablets” estimation is:
Nexus tablet sales: not many [Benedict Evans, April 17, 2013]
Nexus 7 maths [Benedict Evans, Feb 19, 2013 with update on March 6, 2013]
Issue 2: Condé Nast, Nexus 7 sales, Chinese Android, Lonely Planet, Tumblr, Verizon & Vodafone [Benedict Evans, March 10, 2013]

Given that now we know from Microsoft: With cloud services investments starting to pay off Windows 8 and Windows Blue will bring more competitive devices particularly in new smaller form factors targeting the tablet market [‘Experiencing the Cloud’, April 19, 2013]

… we are expanding both the product set and distribution, and that is broadly, all devices, inclusive of Surface. We are expanding distribution of Surface. We are now in 22 countries, 70 retailers. And we’ll continue to look to expand that. Not only just expanding, but improving the experience. And that’s true not just for Surface, but for broadly Windows 8 devices. And sowe’ll be investing against that for both Surface and a broader array of Windows 8 devices at multiple price points, including lower price pointsgoing forward.

….

Over the last couple of months, we’ve started seeing devices that take full advantage of Windows 8, and we expect to see more devices across more attractive price points over the coming months. As part of this, we are also working closely with OEMs on a new suite of small touch devices powered by Windows. These devices will have competitive price points, partly enabled by our latest OEM offerings designed specifically for these smaller devices, and will be available in the coming months.

so, given that we may predict that there could be as much as up to 10 million of these new small touch Surface devices sold in H2 2013 (as according to Nexus tablet sales: not many [Benedict Evans, April 17, 2013] there were “5.35m [Nexus 7 tablets sold] in the second half of 2012”).

Microsoft: With cloud services investments starting to pay off Windows 8 and Windows Blue will bring more competitive devices particularly in new smaller form factors targeting the tablet market

This statement is the essential  summary of Microsoft current performance according to the results  in the first 3 months of 2013 and the near term actions the company declared now to further improve its stance, particularly in the market which Microsoft critics are calling “PC market”, but not Microsoft, as its Earnings Call discussion was started with the following:

Before I dive into more details on our progress …, I want to address what’s top of mind for many of you, which is our Windows business.
There is no doubt that the device market is evolving. Consumers and businesses are increasingly shifting their focus to touch and mobility, and as a result, they want touch-enabled computing devices that are ultrathin, lightweight, and have long battery life. While Windows revenue has been impacted by the transition from the traditional PC to a new era of computing devices, the overall addressable markets are growing, and we are excited by the opportunities ahead of us.
We built Windows 8 with touch and mobility at the center of the experience, which positions us well in this new era. However, the transition is complicated, given the size of our hardware and software ecosystem. We still have an immense amount of work to do, yet we feel good about the foundation we have laid and are optimistic about the long term success of Windows.
I want to take some time now to be clear about where we are in this journey, and what we are doing to help drive this change. With Windows 8, we are setting a new, accelerated pace for updates and innovations, as we focus on making the Windows experience richer and better.
Since launch we have delivered several important updates to improve our mail, storage, search, music, and video services. During the quarter, we also added to the Surface family of devices with Surface Pro, which combines the performance capabilities of a PC with a modern tablet design.

This means that Microsoft is showing clear signs of staying relevant unlike some recent conclusions just stemming from the initial market difficulties of the new Windows 8 platform:

When Gartner issued its “Forecast: Devices by Operating System and User Type, Worldwide, 2010-2017, 1Q13 Update.” on April 4 and stated in its related press release that:
Traditional PC Market Predicted to Decline 7.6 Percent as Change in Consumers’ Behavior Drives Transition to Tablets and Ultramobiles
The proliferation of lower-priced tablets and their growing capability is accelerating the shift from PCs to tablets. “While there will be some individuals who retain both a personal PC and a tablet, especially those who use either or both for work and play, most will be satisfied with the experience they get from a tablet as their main computing device,” said Carolina Milanesi, research vice president at Gartner. “As consumers shift their time away from their PC to tablets and smartphones, they will no longer see their PC as a device that they need to replace on a regular basis.”
the Daily Ticker of Yahoo! Finance came to conclusion that Microsoft Could Be Obsolete By 2017: Gartner Report.

So let’s examine all this in detail:

Microsoft Reports Third-Quarter Results [press release, April 18, 2013], the sales revenue historic diagram is from qz.com while that of the Online Services Division operating income from businessinsider.com

Microsoft Corp. today announced quarterly revenue of $20.49 billion for the quarter ended March 31, 2013. Operating income, net income, and diluted earnings per share for the quarter were $7.61 billion, $6.06 billion, and $0.72 per share.

image

The bold bets we made on cloud services are paying off as people increasingly choose Microsoft services including Office 365, Windows Azure, Xbox LIVE, and Skype,” said Steve Ballmer, chief executive officer at Microsoft. “While there is still work to do, we are optimistic that the bets we’ve made on Windows devices position us well for the long-term.”

The Microsoft Business Division posted $6.32 billion of revenue, an 8% increase from the prior year period. Adjusting for the net recognition of revenue related to the Office Upgrade Offer and Pre-Sales, Microsoft Business Division non-GAAP revenue increased 5%. During the quarter, we launched the new Office, enhancing productivity and the user experience through new mobility, social, and cloud features.

The Server & Tools business reported $5.04 billion of revenue, an 11% increase from the prior year period, driven by double-digit percentage revenue growth in SQL Server and System Center.
Our enterprise business continues to thrive,” said Kevin Turner, chief operating officer at Microsoft. “Enterprise customers are increasingly turning to Microsoft for their IT solutions and as a result, we continue to take share from our competitors in key areas including hybrid cloud, data platform, and virtualization.”

The Windows Division posted revenue of $5.70 billion, a 23% increase from the prior year period. Adjusting for the recognition of revenue related to the Windows Upgrade Offer [see: How Microsoft got Windows revenue to go up despite PC sales going down [The Guardian, Feb 19, 2013]], Windows Division non-GAAP revenue was flat. During the quarter, we added to the Surface family of devices with Surface Pro.

The Online Services Division reported revenue of $832 million, an 18% increase from the prior year period. Online advertising revenue grew 22% driven by an increase in revenue per search.
image
The Entertainment and Devices Division posted revenue of $2.53 billion, an increase of 56% from the prior year period. Adjusting for the recognition of revenue related to the Video Game Deferral, the division’s non-GAAP revenue increased 33% for the third quarter. Xbox LIVE now has over 46 million members worldwide, an 18% increase from the prior year period.
“Our diverse business continues to deliver solid financial results, even as we navigate the evolving device market,” said Peter Klein, chief financial officer at Microsoft. “Looking ahead, we will continue to invest in long-term growth opportunities to drive our devices and services strategy forward and deliver ongoing value to shareholders.”

Microsoft’s Management Discusses F3Q 2013 Results – Earnings Call Transcript [Seeking Alpha, April 18, 2013] from which I extracted the following excerpts as the most notable ones:

Peter Klein – Chief Financial Officer

I think one of the main takeaways for me is in particularly some of our cloud services, we’re really starting to get scale. Bing continues to improve, their margins. And Office 365 is really starting to get to scale. So those things are really encouraging.

Ed Maguire – CLSA

You just launched your Azure infrastructure as a service. Just went generally available this week. And I’d love to get some color on how much that’s figuring in the growth in long term contracts, and what your expectations might be for more traditional infrastructure as a service uptake over the next several quarters.

Peter Klein – Chief Financial Officer

Great question. It’s clearly a key enabler of our [unintelligible] cloud OS story, and how we’re driving what we’re doing with enterprise in the data center. We have infrastructure as a service, we have now the most complete end-to-end offering through platform, and software, identity, and access.

But having the infrastructure is a key enabler, and I think a real accelerator for the Windows Azure strategy, and really more broadly the cloud OS strategy. We now have a complete end-to-end story through the data center, from private, to hosted, to public, from infrastructure to platform, so I think it’s, again, a key enabler of that [all up] strategy, and an accelerator.

Gregg Moskowitz – Cowen & Company

In recent periods, we’ve seen your MBD [Microsoft Business Division]growth significantly outpace PC unit growth, although we now have a dynamic where your Office subscription is really resonating with customers. So the question is, just looking at it on a directional basis, is MBD revenue outperformance relative to PC units something that you think is sustainable going forward?

Peter Klein – Chief Financial Officer

The answer is that it will depend, and certainly an offset between attach gains we’re making against the market, offset against some deferrals as revenue moves to a subscription. And so it will kind of depend each quarter. Long term, it’s a great trend, because we’re building up a banked book of business on the subscription side, which will become less and less connected to the PC market.

Then I focused on four subjects for which made further extracts from the Earnings Call:

  1. The Windows and Office (productivity) markets
  2. Q3 FY13 performance for that
  3. Q4 FY13 outlook for that
  4. PC market

1. The Windows and Office (productivity) markets: Peter Klein – Chief Financial Officer

Looking ahead, we will release the next version of Windows, codenamed Windows Blue, which further advances the vision of Windows 8 as well as responds to customer feedback. The assortment of touch-enabled devices that are built for Windows 8 by our OEM partners is also improving.

Over the last couple of months, we’ve started seeing devices that take full advantage of Windows 8, and we expect to see more devices across more attractive price points over the coming months. As part of this, we are also working closely with OEMs on a new suite of small touch devices powered by Windows. These devices will have competitive price points, partly enabled by our latest OEM offerings designed specifically for these smaller devices, and will be available in the coming months.

In the upcoming back to school selling season, we expect to see devices that incorporate advances from throughout the supply chain, including chipsets. As well, Intel’s fourth generation Core processor will help enable new devices that combine performance benefits with power savings. Later in the year, we expect to see devices based on Intel’s upcoming Bay Trail Atom processor, which promises to deliver tablets and hybrid PCs with extended battery life at competitive prices.

Today in the Windows Store, there are six times as many apps since launch, and we expect more to be added as we gain traction with Windows 8 adoption. In June, we will host Build, our developer conference, where we will provide more tools and information for developers to build great Windows 8 apps.

In retail, we are working to improve the consumer purchasing experience. Our initiatives include focused efforts to further educate and incentivize retail sales professionals and to have better in-store product differentiation.

In summary, Windows is transforming to the new era of computing. As I said on our last earnings call, growth in Windows depends on our ability to give customers the exciting hardware they want at the price points they demand, and a wider range of apps and services to meet their diverse need. We are hard at work with our partners to meet these goals, and we’re confident we are moving in the right direction.

Now, switching gears to productivity, this quarter we launched the latest version of Office, which brings mobility, social, and cloud features to the world’s most popular productivity app. Importantly, the new Office represents a fundamental shift in our model. Now both businesses and consumers can access Office through subscription.

With this shift, we expect to grow our customer base, increase customer satisfaction via continuous updates, and reduce piracy. As our enterprise customers modernize their productivity infrastructures, we are confident that they will continue to deploy Office 365. We also expect our transactional customers to increasingly transition to the cloud with Office 365.

It’s been a while now that we’ve been talking about our investments in the cloud, and I’m pleased to share that we are starting to realize the benefits of those investments in a meaningful way.

Office 365 lights up with this latest release, as evidenced by our growing customer adoption. This quarter was our strongest ever, with net seat additions up 5 times of the prior year. One in four of our enterprise customers now has Office 365, and the business is on a $1 billion annual revenue run rate.

2. Q3 FY13 performance: Chris Suh – General Manager of Investor Relations

In the Windows Division, revenue was flat this quarter. Within that, OEM revenue performance was in line with the underlying x86 PC market, which continues to be challenged as the PC market evolves beyond the traditional PC to touch and mobile devices. This quarter, inventory levels were drawn down as the channel awaits new Windows 8 devices.

Non-OEM revenue grew 40% this quarter, driven by sales in Surface and continued double digit growth in volume licensing. Businesses continue to value the Windows platform, and volume licensing of Windows is on track to deliver almost $4 billion in revenue this year, and nearly three-quarters of enterprise agreements that we signed this year include Windows.

Additionally, this quarter we saw continued progress in the transition of Windows XP to Windows 7, and now two-thirds of enterprise desktops are running Windows 7.

Now, I’ll move on to the Microsoft Business Division, where revenue grew 5%. Within that, business revenue grew 10%, driven by 16% growth in multiyear licensing. In January, we launched the new Office for consumers. The new Office introduces touch, social, and mobile scenarios as well as tight integration with SkyDrive, enabling access to documents from any device.

The new Office is also available as a subscription, which benefits customers as they are always using the most modern version of Office. As Peter stated, we expect the shift to grow our customer base, and we saw strong early adoption of the subscription service.

I would like to remind you that with subscription, the revenue is earned ratably over the length of the subscription, rather than at the initial purchase. All up, consumer revenue was roughly in line with the consumer PC market, influenced by the shift to subscription and strong [attach] gain.

Peter Klein – Chief Financial Officer

We are seeing [near term impact from going to subscription revenues on our revenues], particularly in our transactional business, in MBD [Microsoft Business Division], as people move from what may have been a transactional to a perpetual license, where the revenue is recognized up front, to a subscription service, where it’s recognized ratably. So you’re basically deferring the rest of the term of the subscription. So in the short term, you’ll be deferring revenues that were not in a subscription, and would have been recognized immediately.

And as the subscription business is growing, you’ll see that impact growing, but over time, what you’ll get is what looks like an annuity revenue stream, that’s more predictable and has higher customer satisfaction and probably higher retention rates going forward. But in the short term, that will impact mostly in the transactional side of the MBD business.

It is a fact that we are starting to get scale in our cloud services, and so the growth that we’re seeing in Office 365 is really coming at an improved margin as we scale that out.

3. Q4 FY13 outlook: Peter Klein – Chief Financial Officer

In the Windows Division, similar to this quarter, revenue will continue to reflect sales of Surface and strong volume licensing, while OEM revenue will be impacted by the declining traditional PC market as we work to increase our share in tablets.

In the Microsoft Business Division, multiyear licensing revenue, which is approximately 60% of the division’s total, should grow low double digits. Excluding the recognition of revenue from the Office upgrade offer, transactional revenue, which is the remaining 40% of the division total, should be in line with the x86 PC market.

As a reminder, when updating your Q4 models, we expect to recognize approximately $780 million of revenue related to the Office upgrade offer.

… we are expanding both the product set and distribution, and that is broadly, all devices, inclusive of Surface. We are expanding distribution of Surface. We are now in 22 countries, 70 retailers. And we’ll continue to look to expand that. Not only just expanding, but improving the experience. And that’s true not just for Surface, but for broadly Windows 8 devices. And so we’ll be investing against that for both Surface and a broader array of Windows 8 devices at multiple price points, including lower price points going forward.

4. PC market: Peter Klein – Chief Financial Officer

On the PC market, I would look to some of the third parties, IDC and Gartner. They’re sort of in the 12-13-14 [%] down range this quarter. And in terms of the chipsets, we’ve always felt that with Windows 8, it was a process of the ecosystem of innovating across the board, and really starting to see that on the chips. And we’re very encouraged by both Haswell and some of the Atom processors to really improve the overall user experience that Windows 8 delivers. And over the coming selling season, I think that’s very encouraging and we’re optimistic about that.

I think broadly, in improving our position in tablets, and generally in devices, there’s five or six dimensions ranging from what we’re doing with OEMs on the devices and the range of devices, and how they can have a range of price points. What the chips can do, because I think that’s a part of it. Both first party and third-party apps, and we’ve seen improvements across the board there. The user interface, and how we’re innovating across the user experience. And then distribution

So if you start sort of from the bottom up, all the way to when you buy the product, we’re working across all those dimensions. And on the device side, we are working closely with the OEMs to help them take Windows 8 and show it off in all its glory, across different form factors. I talked about new smaller form factors and how Windows 8 can innovate to improve that experience.

So I think the biggest thing we’re doing is helping them develop new and improved user experiences across the board, across size, across price point, and deliver a really compelling Windows 8 experience. And it’s not just the devices, like I said, it’s chips, it’s the apps, it’s the buying experience, it’s the user interface. So we’re really focused on all five or six of those dimensions going forward.

Nokia: Continued moderate progress with Lumia, urgent Asha Touch refresh and new innovations to come against the onslaught of unbranded Android and forked Android players in China and India

Nokia Corporation’s CEO Discusses Q1 2013 Results – Earnings Call Transcript [Seeking Alpha, April 18, 2013]

… At the highest level, I am pleased that in Q1 2013 Nokia Group achieved underlying operating profitability for the third quarter in a row. In a moment, I will share my perspective on Nokia’s Q1 performance. However, I wanted to first note that we believe this quarter further underscored that Nokia, and other industry participants continue to operate in one of the most exciting and fast moving business environments in the world today.
Compared to a year ago a lot has changed in our industry, and I wanted to share some of the trends we’re seeing. For example, the distance between the various Android participants seems starker than ever before as the dominance of one hardware vendor becomes more visible. Additionally, unbranded Android and forked Android players continue to emerge from China and India creating new dynamics both within and increasingly outside of Asia. With this growth in low-priced fragmented versions of Android the Android experience is becoming inconsistent across the lower-end price range.
In February, Mobile World Congress highlighted the growth in startup alternative platforms with many new entrants placing bets on next generation technologies like HTML5. While we have not yet seen one of these alternative platforms gain broad scale we should not underestimate what could happen if a dominant Android provider shifts some of its focus to an alternative platform.
We also saw new attempts to disrupt existing business models, whether it is the new Facebook home forking the Android experience or Amazon providing a differentiated tablet that forks the Android stack, we see leading technology companies take deliberate steps to change Android and possibly disrupt our industry. There are some patterns of change that seem inevitable. For example, consumers are expecting their digital lives to be more and more mobile as evidenced by the recent statistics about the shift towards mobility at the expense of less mobile PC experiences. Consumers are also increasingly discerning about the capabilities and new experiences that attract their attention. They are less interested in counting cores and pixel density, and more interested in experiences that are truly innovative.
This constant pattern of change in our industry is an opportunity. We believe we can move through the industry fragmentation and churn within unrelenting focus on executing our strategy. Thus, we remain focused on improving the competitiveness of our products effectively managing our costs and moving with urgency. …

image

People are responding positively to the new innovation throughout the Lumia portfolio imaging, design and navigation are capturing attention among reviewers, operators, retail associates and ultimately consumers. We believe we have increased the competitiveness of our Smart Devices, and as a result Lumia is clearly making progress. We’re pleased that today Lumia is even out shipping the iPhone in countries like Argentina, India, Poland, Ukraine and of course in our home country of Finland.
Importantly, the positive consumer reaction to the innovation and differentiation in Lumia is starting to come through in our numbers. We are encouraged by the financial performance of our newer Lumia devices based on Windows Phone 8, which generated not only solid growth, but also a gross margin in Q1 that was somewhat above the Smart Devices average.
At the same time, we’ve recognize that we must continue to increase our sales and improve our retail execution for Lumia. For example, in the United States, securing what operators call hero status or the top spot at the point of sale is critically important, because it attracts premium subsidies and additional marketing investment.

Later this quarter, a new Lumia device is anticipated to have hero status with a leading U.S. operator, an event which will mark the beginning of a season of new product introductions. Additionally, Nokia, Microsoft and operators have committed to increase the global Windows Phone marketing dollars towards Lumia. Together with Microsoft we are working on major marketing campaigns, training more retail associates, improving how we leverage operator marketing that is available to us, and seeding more live devices to create a more engaging point of sale experience. Overall, we are very pleased with our progress around Lumia.

… indeed we plan a refresh of elements of our mobile phones portfolio. Some of which has been announced, and it’s just landing in the market. For example, the very lowest price points the Nokia 105, which when you look at the volumes for Q1, some of the significant movement in volume levels were at the end of the predecessor to the 105 product line, that space, and now we’re just entering the market with new product there. And, of course, we’ve also signaled that in the very near term you should expect to see a freshening in the Asha product line. If you know, we’re roughly 9 months or so into the Asha full touch line relative to when we began shipping it.

So, reasonable to expect that it’s due for freshening and we’re looking forward to that in the near-term.

With respect to the Lumia portfolio going into Q2 some of the principal drivers of additional volume relate to the newer products that are entering the market, the 720 and 520 are important in this, particularly the 520. 520 is obviously at a lower price point and moving into markets, where that’s far more competitive than some of the hero products could be except for the people willing to pay top dollar for a device.

Nokia Corporation Q1 2013 Interim Report [April 18, 2013]

Nokia Group net sales in Q1 2013 were EUR 5.9 billion
– Devices & Services Q1 net sales decreased 25% quarter-on-quarter to EUR 2.9 billion.
– Lumia Q1 volumes increased 27% quarter-on-quarter to 5.6 million units, reflecting increasing momentum.
– Mobile Phones Q1 volumes decreased 30% quarter-on-quarter to 55.8 million units, reflecting competitive industry dynamics and an estimated higher than normal seasonal decline in the market addressable by Mobile Phones.
– Nokia Siemens Networks net sales decreased 30% quarter-on-quarter to EUR 2.8 billion, reflecting industry seasonality.
Nokia Group net cash higher quarter-on-quarter
– Nokia Group ends first quarter 2013 with a strong balance sheet and solid cash position. Gross cash was EUR 10.1 billion and net cash was EUR 4.5 billion.
– Nokia Group strengthened its net cash position by approximately EUR 120 million sequentially. Nokia Siemens Networks contributed approximately EUR 210 million to the Nokia Group net cash position.
NOKIA OUTLOOK
– Nokia expects its Devices & Services non-IFRS operating margin in the second quarter 2013 to be approximately negative 2 percent, plus or minus four percentage points. This outlook is based on Nokia’s expectations regarding a number of factors, including:
>> competitive industry dynamics continuing to negatively affect the Mobile Phones and Smart Devices business units;
>> consumer demand for our products, particularly for our Mobile Phones products;
>> continued ramp up for our Lumia smartphones;
>> expected increases in Devices & Services’ operating expenses; and
>> the macroeconomic environment.
– In the second quarter 2013 supported by the wider availability of recently announced Lumia products, Nokia expects the sequential growth in Lumia unit volumes to be higher than the 27% sequential growth in the first quarter 2013.
– Nokia continues to target to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate of approximately EUR 3.0 billion by the end of 2013.
– Nokia expects HERE’s non-IFRS operating margin in the second quarter 2013 to be negative primarily due to lower recognized revenue from internal sales.
– Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRS operating margin in the second quarter 2013 to be approximately positive 5 percent, plus or minus four percentage points. This outlook is based on Nokia Siemens Networks’ expectations regarding a number of factors, including:
>> competitive industry dynamics;
>> product and regional mix; and
>> the macroeconomic environment.
– Nokia and Nokia Siemens Networks continue to target to reduce Nokia Siemens Networks’ non-IFRS annualized operating expenses and production overheads by more than EUR 1 billion by the end of 2013, compared to the end of 2011.
In the first quarter 2013, we received a quarterly platform support payment of USD 250 million (approximately EUR 188 million) from Microsoft. Our agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. Under the terms of the agreement governing the platform support payments, the amount of each quarterly platform support payment is USD 250 million. We have a competitive software royalty structure, which includes annual minimum software royalty commitments that vary over the life of the agreement. Software royalty payments, with minimum commitments are paid quarterly. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US dollars. Over the life of the agreement the total amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitment payments. In accordance with the terms of the agreement, the platform support payments and annual minimum software royalty commitment payments continue for a corresponding period of time.
The following table sets forth the mobile device volumes for our Devices & Services business for the periods indicated, as well as the year-on-year and sequential growth rates, by geographic area.

DEVICES & SERVICES MOBILE DEVICE VOLUMES BY GEOGRAPHIC AREA

million units
Q1/2013
Q1/2012
YoY
Change

Q4/2012
QoQ
Change

Europe
11.8
15.8
-25%
19.4
-39%
Middle East & Africa
15.5
21.4
-28%
21.8
-29%
Greater China
3.4
9.2
-63%
4.6
-26%
Asia-Pacific
23.1
26.1
-11%
28.7
-20%
North America
0.4
0.6
-33%
0.7
-43%
Latin America
7.7
9.6
-20%
11.1
-31%
Total
61.9
82.7
-25%
86.3
-28%
On a year-on-year basis, net sales decreased in all regions except North America where the increase was primarily due to our Smart Devices business unit. The largest relative year-on-year decline in net sales was in Greater China followed by Europe and Middle East and Africa. In Greater China and Europe the net sales declines were primarily due to our Smart Devices business unit whereas in the Middle East and Africa the net sales decline was primarily due to our Mobile Phones business unit.
On a sequential basis, net sales decreased in all regions except Greater China where the increase was primarily due to our Smart Devices business unit. The largest relative sequential declines in net sales were in North America followed by Middle East and Africa and Europe. The sequential net sales decline in North America was primarily due to our Smart Devices business unit, whereas in Middle East and Africa and Europe the net sales declines were primarily due to our Mobile Phones business unit.
At constant currency Devices & Services’ net sales would have decreased 33% year-on-year and 23% sequentially.

Volume
During the first quarter 2013 we shipped 55.8 million Mobile Phones units, of which 5.0 million were Asha full touch smartphones.
On a year-on-year basis, our Mobile Phones volumes in the first quarter 2013 were negatively affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio as well as an estimated higher than normal seasonal decline in the market addressable by Mobile Phones. Compared to the first quarter 2012, our Mobile Phones volumes declined across our portfolio, most notably for our non-full touch devices that we sell to our customers for above EUR 30. These declines were partially offset by sales volumes of Asha full touch smartphones in the first quarter 2013 that were not part of our portfolio in the first quarter 2012.
On a sequential basis, our Mobile Phones volumes in the first quarter 2013 were negatively affected by competitive industry dynamics, including intense competition at the low end of our product portfolio and smartphone competition at increasingly lower price points affecting the rest of our Mobile Phones portfolio, as well as estimated higher than normal seasonal decline in the market addressable by Mobile Phones. Compared to the fourth quarter 2012 our Mobile Phones volumes declined across our portfolio, most notably for lower priced devices that we sell to our customers for below EUR 30.
Asha full touch smartphones Q1 volumes decreased 46% quarter-on-quarter to 5.0 million units, reflecting intense competitive industry dynamics as well as lower seasonal demand.
During the first quarter 2013, our Mobile Phones channel inventory declined in absolute unit volumes.
Average Selling Price
The year-on-year decline in our Mobile Phones ASP in the first quarter 2013 was primarily due to general price erosion and an increased proportion of sales of lower priced devices, partially offset by a net positive impact related to foreign currency fluctuations.
The sequential decline in our Mobile Phones ASP in the first quarter 2013 was primarily due to general price erosion, a net negative impact related to foreign currency fluctuations and a higher proportion of sales of lower priced devices.
Gross Margin

The year-on-year decline in our Mobile Phones gross margin in the first quarter 2013 was primarily due to a negative product mix shift towards lower gross margin devices, as well as the net negative impact related to foreign currency fluctuations, partially offset by lower freight costs.
On a sequential basis, the increase in our Mobile Phones gross margin in the first quarter 2013 was primarily due to lower warranty costs, partially offset by higher price erosion than cost erosion and higher fixed costs per unit because of lower sales volumes.
Q1 OPERATING HIGHLIGHTS
DEVICES & SERVICES OPERATING HIGHLIGHTS

SMART DEVICES
– Nokia started shipping the Nokia Lumia 620, a compact smartphone with a colorful design that brings Windows Phone 8 to a more youthful audience.
– Nokia announced the Lumia 520, its most affordable Windows Phone 8 smartphone, delivering experiences normally found only in high-end smartphones, such as the same digital camera lenses found on the flagship Nokia Lumia 920, Nokia Music for free music out of the box and even offline, and the HERE location suite.
– Nokia announced and started shipping the Nokia Lumia 720, a midrange Windows 8 smartphone with high-end camera performance featuring a large f/1.9 aperture and exclusive Carl Zeiss optics designed to deliver clear pictures day and night. The sleek and stylish smartphone comes with the latest high-end Nokia Lumia experiences, including Nokia Music, the HERE location suite, and the option to add wireless charging with a snap-on wireless charging cover.
– Nokia’s Lumia range of smartphones continued to attract businesses, including Foxtons, London’s leading estate agent, which has chosen the Nokia Lumia 820 as its business smartphone; Mall of America, the United States’ largest retail and entertainment complex, which is switching from BlackBerry to the Nokia Lumia 920 because of the tight integration with Microsoft services and built-in Microsoft Office suite; and The Coca-Cola Company, whose sales associates in Vietnam and Cambodia are using Nokia Lumia smartphones for order processing, equipment validation and market execution improvement.
– The Windows Phone Store continued to strengthen in terms of the quantity and quality of applications. Windows Phone offers more than 135 000 applications and games. Key new applications that arrived in Store during the quarter included Pandora, United Airlines and Temple Run.
MOBILE PHONES
– Nokia announced the Nokia 301, the most affordable Nokia device to offer video streaming; it also comes with new smart camera features inspired by the digital camera lenses on Nokia’s Lumia smartphones.
– Nokia announced the Nokia Asha 310, which provides Dual SIM and Wi-Fi in the same device, a first for Nokia smartphones.
– Nokia announced the Nokia 105, its most affordable phone to date, retailing at a recommended price of EUR 15. The Nokia 105 is the ideal device for the first-time phone buyer, featuring a bright color screen with clear menus and essentials like FM radio, multiple alarm clocks, speaking clock and flashlight. The dust- and splash-proof, pillowed keymat and battery life of up to 35 days also make it ideal for people in search of a reliable back-up phone.     
HERE OPERATING HIGHLIGHTS
In the first quarter 2013, HERE continued to strengthen its offering on Nokia’s Lumia range as well as broaden the experiences available across the Windows Phone 8 ecosystem:
– HERE further integrated its location-based experiences to enable people to seamlessly transition from driving to walking to public transit thanks to improved app-to-app linking and syncing of favorites from here.com to any HERE experience. HERE now also offers unique capabilities for users to customize their home screen as a personal location dashboard.
– With LiveSight technology, HERE introduced innovation that is aimed at changing the way people interact with maps, and their world. After first showcasing the technology in the HERE City Lens application, HERE also announced that it is extending LiveSight to HERE Maps. LiveSight recognizes what people see through their phone’s camera and layers that view with relevant, place-based information.
– HERE further strengthened the Windows Phone 8 ecosystem by making its suite of location-based experiences available for non-Nokia Windows Phone 8 devices. HERE offers HERE Drive, HERE Maps and HERE Transit to owners of non-Nokia Windows Phone 8 devices in Canada, France, Germany, Italy, Mexico, Spain, the United Kingdom and the United States. HERE also continued to broaden access to its maps content and the HERE Platform through several new partnerships, including:
Mozilla, which as a first collaborative step with HERE now has HTML5-based HERE Maps for the new Firefox OS.
Toyota Motor Europe, which selected the HERE platform’s Local Search for Automotive to power its next generation Touch & Go navigation and infotainment systems. Local Search for Automotive is a specifically designed solution developed to fulfill the requirements of the automotive industry. This announcement marks a significant advancement in our longstanding partnership with Toyota and includes plans to collaborate with Nokia to study more services that leverage the HERE Location Platform.
– More than 10 companies decided to adopt the HERE Location platform, including Terra in Brazil and Tiscali and SEAT Pagine Gialle in Italy, demonstrating that the platform is gaining momentum across industries.
– Wetter.com, Europe’s largest German language weather portal with 13 million unique visitors, which is laying information from radar stations and satellite imagery on top of their HERE-powered map. For instance, this enables people to pinpoint where it is raining with great precision.
– Garmin, which is the first customer to launch Natural Guidance in the U.S. market and did so at the Consumer Electronics Show. Natural Guidance provides directions in a more humanized way with recognizable landmarks, buildings, traffic lights and stop signs, such as “turn right after the church” or “turn left at the traffic light.”
– HERE continued to strengthen its long lasting relationships within the automotive industry, with a number of companies deciding that they would continue to benefit from our automotive grade quality maps by selecting HERE as their partner for Map Updates. These included FujitsuTEN Australia Limited, KIA Europe, Mitsubishi Motor Corporation (MMC), Nissan Mexico, Subaru Canada and Volkswagen Europe.

Saving Intel: next-gen Intel ultrabooks for enterprise and professional markets from $500; next-gen Intel notebooks, other value devices and tablets for entry level computing and consumer markets from $300

imageimageOR “2 for 1” (or “two-for-one”) touch and voice enabled ultrabooks of convertible and detachable form factors with Haswell / 4th generation Intel Core processor family (shipping now and on track for Q2’13 launch) starting as low as $500.

Touch-enabled notebooks [other value devices and tablets]
with Bay Trail
down to the $300 to $400 range
in Q4’13, and as low as $200 later.

OR after Intel’s biggest flop: at least 3-month delay in delivering the power management solution for its first tablet SoC [‘Experiencing the Cloud’, Dec 20, 2012] AND Urgent search for an Intel savior [‘Experiencing the Cloud’, Nov 21 – Dec 11, 2012] Intel is finally ready to drop entry level prices to competitive levels in both enterprise/professional and entry level computing /consumer markets

Updates: a young Seeking Alpha investment research contributor reflected on it as Intel Just Made A Huge Decision [April 14, 2013] with the following reasoning to close his article which I wholeheartedly agree with:

Intel’s “Atom” chips command margins roughly in line with the corporate average. This makes sense given that Nvidia recently disclosed that its “Tegra” mobile SoC business carried roughly 50% gross margins. Given that Intel owns its own fabs (and doesn’t pay royalties to ARM), gross margins in the 60%+ range are completely plausible. The problem is that raw ASPs for the chips are much lower than that of the traditional notebook and desktop chips.
Selling a $25 – $30 processor isn’t going to give you the raw margin dollars that a $100 processor will, even if the gross margin percentage is the same. If we start seeing a trend where people are simply going with the Atom based solutions rather than the Core solutions, then this will of course be a problem for Intel at the top and bottom lines. But if we see the “Core” solutions staying mostly flat with the rejuvenated Atom helping to gain back market share from the ARM vendors, then this is pure upside for Intel.
My guess is that the “truth” is going to be somewhere in the middle. The people who need performance, will always need performance, and the people who generally bought low cost, would have bought the cheaper “Celeron” and “Pentium” products (these aren’t too much more expensive than an Atom/ARM SoC) anyway. I expect that the difference is that while today’s “Celeron” and “Pentium” products generally end up in crappy systems with bad screens, slow hard disks, and lousy battery life, the “Atom” products will end up in much more compelling systems, as the PC OEMs/Intel can’t really afford to keep the good stuff confined to expensive systems that people may not be buying anyway.
Conclusion
Intel made the right move to unleash Atom and to grin and bear the potential blended ASP erosion that is sure to happen. The key, then, is to focus not on blended ASPs, but to keep an eye on total revenue and gross margin dollars. If these grow as a result of Atom, then great – Intel gets rewarded with a higher multiple as it will have proven its viability going forward, and increased revenues/earnings will only further serve to amplify the share price. If revenues stagnate, then Intel still made the right decision (because it is likely that without Atom being competitive, ARM based chips would have caused continued negative growth), but will need to really focus on increasing the total # of devices that it serves.
In no way is making Atom more competitive a “mistake”, and Intel would rather cannibalize itself than let the other chip vendors do it. The big question mark is how total sales are going to be, and whether a competitive Atom at the low end PC + tablet spaces is going to be enough. My bet is “yes”, but nothing is ever sure when it comes to business.

Don’t forget meawhile that Intel promotes Android convertible notebooks, say vendors [DIGITIMES, April 19, 2013]

Viewing that Windows 8 has been unable to stimulate global demand for notebooks, and global sales of Android tablets have been increasing, Intel has begun to promote Android tablet-convertible notebooks, and China-based vendor Lenovo has taken the initiative to launch initial models in May while Hewlett-Packard (HP), Toshiba, Acer and Asustek Computer will launch models in the third quarter, according to sources from notebook vendors.
Lenovo’s Android-based Yoga notebook [see: Lenovo Yoga 11S ultrabook tablet-convertible [Notebookitalia YouTube channel, Jan 7, 2013] and the IDF Bejing slide inserted on the left in a smaller format, both embedded much below in this post], set for release in May, is expected to feature an 11-inch display, the sources noted.
Intel has estimated that the price sweet spot of Android-based notebooks is around US$500, and the machines will also need to feature detachable keyboard designs to allow transformation into a tablet, the sources said.
Since most consumers are familiar with Android, with the addition of document processing applications, the sources believe Android-based notebooks should be able to attract strong demand.

At the same time Some China-based white-box vendors plan to develop Windows 8 tablets [DIGITIMES, April 17, 2013]

Viewing that Android tablets, especially 7-inch models, have been under intense price competition and therefore profitability is thinning, some China-based white-box vendors are considering developing Windows 8 tablets equipped with Intel processors for market segmentation, according to industry sources at the 2013 China Sourcing Fair: Electronics and Components taking place in Hong Kong during April 12-15.
The products are expected to show up at the beginning of the third quarter, at the soonest.
The sources believe that since the volume of tablets using a Windows operating system is still low, if they are able to enter the market ahead of others, there may be a chance of gaining profits.
Although related costs are expected to increase by using Intel’s platform and Microsoft’s operating system, the sources pointed out that the advantage as an early mover will allow them to achieve better gross margins than for Android-based models. The fees from the operating system are not really a huge concern, the sources added.

End of updates

Sections of this post:

  1. Touch-enabled notebooks [other value devices and tablets] with Bay Trail down to the $300 to $400 range in Q4’13, and as low as $200 later.
  2. “2 for 1” (or “two-for-one”) touch and voice enabled ultrabooks of convertible and detachable form factors with Haswell/4th generation Intel Core processor family (shipping now and on track for Q2’13 launch) starting as low as $500.
  3. Intel’s CEO Discusses Q1 2013 Results – Earnings Call Transcript [Seeking Alpha, April 16, 2013]
  4. Earlier information from Intel


1. Touch-enabled notebooks [other value devices and tablets] with Bay Trail
down to the $300 to $400 range in Q4’13, and as low as $200 later.

image
Note that on this slide demoed on the screen of Bay Trail prototype (see the video embedded below) the targeted launch is set for “HR’13”, meaning “Holiday Revenue 2013”. Note as well that the Bail Trail SoC is both for entry desktop (i.e. Celeron) and entry notebook (i.e. current Atom) replacement. This why in the video below both an entry desktop motherboard prototype (from Gigabyte) and an entry notebook (from ASUS) is demoed. The range of devices with Bay Trail SoC is going to be however much wider than that, as is communicated already by Intel in the below excerpts. More exact information will be available later.

From: Intel’s CEO Discusses Q1 2013 Results – Earnings Call Transcript [Seeking Alpha, April 16, 2013]

… as we get into the Christmas selling season … we’ll see, because of Bay Trail coming into the marketplace, you’ll see touch-enabled thin notebooks with really good performance that are hitting kind of $300 price points. And then with our Android tablets, you’ll see things that are significantly …

… If you look at touch-enabled Intel based notebooks that are ultrathin and light using non-Core processors, those prices are going to be down to as low as $200 probably. …

Intel Bay Trail Prototype Hands On & HD Video Demo [minipcpro YouTube channel, April 9, 2013]

Intel Bay Trail http://www.mobilegeeks.com. At IDF Beijing Intel took the opportunity to quietly announce Bay Trail, this new processor line up will be aimed at entry level computing. The new product line will feature Baytrail M for Mobile and Baytrail D for desktop. The 22nm chipset will be aimed at smartphones and tablets and in desktop think All in One systems. Bay Trail will be the most powerful Atom processor to date as it will be offering a Quad Core SoC, it should double the computing performance on Intel’s current generation of tablet processors.

From: Intel Developer Forum: Transforming Computing Experiences from the Device to the Cloud [press release, April 10, 2013] Images are inserted from:
Reinventing the Computing Experience presentation at IDF 2013 by Kirk Skaugen, Intel senior vice president and general manager of the PC Client Group
Mobile Inside at IDF 2013 by Tan Weng Kuan, vice president and general manager of the Mobile Communications Group, Intel China
Developing on Innovative Intel® Atom™ Processor Based Tablet Platforms [April 11, 2013 presentation by Intel at the IDF Beijing]

Augmenting the company’s offerings for computing at a variety of price points, Skaugen announced plans for new market variants of its “Bay Trail22nm SoC with PC feature sets specifically designed for value convertibles, clamshell laptops, desktops and value all-in-one computers to ship later this year.

imageTaking full advantage of the broad spectrum of capabilities enabled by Intel® architecture, processor technology leadership, manufacturing and multi OS support across Windows* 8 and Android*, Tan discussed the company’s forthcoming smartphone and tablet products based on Intel’s leading-edge 22nm process and an entirely new Atom microarchitecture. Intel’s quad-core Atom SoC (“Bay Trail“) will be the most powerful Atom processor to-date, doubling the computing performance of Intel’s current-generation tablet offering1. Scheduled for holiday 2013 tablets [in market Q4’13], “Bay Trail” will help enable new experiences and designs as thin as 8mm that have all-day battery life and weeks of standby.

image

What’s New in Tablets? Intel Powers Android & Windows 8 [channelintel YouTube channel, Feb 27, 2013]

Intel continues its tablet expansion, now powering both Android and Windows 8 devices.


2. “2 for 1” (or “two-for-one”) touch and voice enabled ultrabooks of convertible and detachable form factors
with Haswell / 4th generation Intel Core processor family (shipping now and on track for Q2’13 launch) starting as low as $500.

From: Intel’s CEO Discusses Q1 2013 Results – Earnings Call Transcript [Seeking Alpha, April 16, 2013]

… as we get into the Christmas selling season, your expectation is you will see touch-enabled ultrabooks that are $499 and $599 pretty commonly out there. $599 commonly, and $499 as kind of special SKUs.

From: Intel Developer Forum: Transforming Computing Experiences from the Device to the Cloud [press release, April 10, 2013]
Images are inserted from Reinventing the Computing Experience presentation at IDF2013 by Kirk Skaugen, Intel senior vice president and general manager of the PC Client Group

Reinventing the Computing Experience

During his keynote, Kirk Skaugen, Intel senior vice president and general manager of the PC Client Group, provided a deeper look at the forthcoming 4th generation Intel Core processor family, which he said is now shipping to OEM customers and will launch later this quarter.

Ultrabooks based on the 4th generation Intel Core processor family will enable exciting, new computing experiences and all-day battery life delivering the most significant battery life capability improvement in Intel’s history,” said Skaugen. “It will also bring to consumers a new wave of ‘two-for-oneconvertible and detachable systems that combine the best of a full PC experience with the best of a tablet in amazing new form factors.”

NEW Architecture on 22nm Tri Gate

NEW Intel Power Optimizer: 20x Power Reduction
vs. 2nd gen Intel® Core™ Processors

NEW Integrated on package PCH [Platform Controller Hub]
for amazing form factors

NEW Integrated Audio DSP: more battery life, higher quality

Shipping Now and On Track for Q2 2013 Launch

The new Intel Core microarchitecture will allow the company to deliver up to double the graphics performance over the previous generation. In addition, the new graphics solution will have high levels of integration to enable new form factors and designs with excellent visual quality built in. Skaugen demonstrated these graphics improvements on the 4th generation Intel Core processor-based Ultrabook reference design called “Harris Beach.” The demo featured Dirt 3*, a popular gaming title, showing the same visual experience and game play as a discrete graphics card that users would otherwise have to add separately. He also showed the 4th generation Intel Core processor-based concept, codenamed “Niagara,” a premium notebook with the ability to play the unreleased enthusiast title Grid 2* from CodeMasters* without the aid of a discrete graphics card.

Along with touch capability, Intel® Wireless Display (Intel WiDi) will be enabled on all 4th generation Intel Core processor-based Ultrabook devices to allow people to quickly and securely stream content and apps from devices to the big screen, free from the burden of cables. Skaugen said the China ecosystem is taking the lead on integrating Intel WiDi into systems, and announced that the leading television manufacturer in China, TCL*, has a new model with the Intel WiDi technology built in. He also announced new receivers certified for Intel WiDi from QVOD* and Lenovo* and a set-top box from Gehua*.

Where the idea of “2 for 1” (or “two-for-one”) was already demonstrated in 
Convertible Ultrabook™ Features [channelintel YouTube channel, Feb 7, 2013]

A complimentary piece to the “Best of Both World’s” Live-action video. This animation is intended to educate the viewer on the specific features and details surrounding convertible Ultrabook™. Many different form factors are shown as well as several usage models to give the user an idea for the many different ways that a user can take advantage of a convertible Ultrabook™.

and here is The Best of Both Worlds, a Convertible Ultrabook™ Story (Long Version) [channelintel YouTube channel, Feb 27, 2013] live–action video for that

A day in the life of our favorite PC user, Alysha Nett. Watch as she uses her Intel-based Convertible Ultrabook™ for both work and play — follow the two sides of her story as she uses the Ultrabook™ by day in her interior design job and by night out with friends watching her favorite band, “We Will Be Lions”. A shorter version of this video is also available.

Shown first at CES 2013 for May’13 delivery: Lenovo Yoga 11S ultrabook tablet-convertible [Notebookitalia YouTube channel, Jan 7, 2013]

Lenovo unveiled the IdeaPad Yoga 11S at CES 2013, highlighting the ability of this 11.6-inch notebook to turn into an 11.6-inch tablet.

As well as a detachable form factor ultrabook reference design: IDF Beijing 2013 Keynote Demo – North Cape [channelintel YouTube channel, April 17, 2013]

Kirk Skaugen showcases the North Cape reference design at the Intel Developer Forum in Beijing.

Kirk Skaugen:

[0:17] This is a full 17 mm clamshell ultrabook. In this configuration it actually has 13 hours of battery life, and it is a full Core i5 computer. But what I can do here, as I can just very simply push in an electronic eject button, and lift it out very simply with one hand. About 3 hours of battery life comes from a battery that sits under the keyboard. But here then I have an amazing notebook that gives me a less than 3 pound tablet with 10 hours of battery life. [0:51]

At CeBIT 2013 in Hannover, Germany (March 5-9) North Cape was demonstrated as:
Haswell Ultrabook – North Cape Reference Design Hands-On [Steve Chippy Paine YouTube channel, March 5, 2013]

and in the companion article it was reported:

In a chat with one of the marketing managers I confirmed that there will be COnnected Standby and non-Connected Standby Ultrabooks on Haswell. The CS Ultrabooks are likely to be the cream of the crop and will be more expensive but will have lower power profiles. Clearly the hybrid designs are the perfect fit for CS-capable Ultrabooks but I’ wouldn’t be surprised to see Samsung have a CS-capable Series 9. Remember, CS is not just about being up-to-date with emails, it means apps can run when the Ultrabook is in your bag, without a fan, on an SSD, for days. It’s the mark of extreme battery life, it’s very exciting technology and likely to be exclusive to Ultrabooks.

then immediately before IDF the same source delivered the news that Haswell Ultrabooks could achieve Tablet-like 100mW Connected-Idle [April 9, 2013]

imageIn a presentation due to go out at the Intel Developer Forum over the next two days Intel will outline best practices for low-power idle on Ultrabooks. Today you’ll be lucky to see an Ultrabook idle to less than 3000mW (3 Watts) which is a background drain that’s always there. On Haswell, Intel says that you could get to a screen-off idle state of 100mW.
By effectively removing nearly 3W of background drain, all operations are going to benefit, not just idle. Where Internet browsing was a 9W operation, expect to see that go down to around 6W for a big increase in battery life.
The 100mW target requires both system designers and software engineers to build to the best standards but when it comes to laptops, it’s the Ultrabooks that have the best chance of getting the best engineers working on them. Low-power DDR3 memory, SSD storage, high-quality power components and tight board design mean the best systems won’t be cheap systems but all the ingredients and skills are now available to make laptops that idle like tablets.
Intel also want’s to see engineers using configurable TDP and other features to create systems in the 10W (fanless) range. High Density Interconnects on motherboards could also bring advantages. By reducing the mainboard size, space is created for more battery. Intel says there’s a chance to fit 20-45% more battery inside when motherboard sizes are reduced using HDI techniques.
imageWhile the ingredients and techniques might be on the shelf, it’s up to the OEMS to decide how they use them. Pricing pressures often lead to compromises so don’t expect all of the new engineering techniques to appear on anything but the high-end Ultrabooks.

 

More information: Form Factor and Average Power Innovations for Ultrabooks™
[April 10, 2013 presentation by Intel at the IDF Beijing] with the following abstract:

Intended Audience: OEMs and ODMs – Motherboard Layout Designers, Power Delivery, and Power Management Architects
In this session we propose methods to improve, form factor, battery capacity, and power consumption for Ultrabook™ devices. We show how High Density Interconnects (HDI) Printed Circuit Boards could free up considerable space for more battery and other features, especially in thinner Ultrabooks. We show current practices with HDI and propose better ways to achieve higher mother board area reduction to close the cost gap between type 3 and type 4 (HDI) designs. For power consumption, we also show design methods to reduce average power, especially by reducing platform idle power.

and agenda:

    • What is HDI?
    • Benefits of HDI in Form Factor Constrained Systems
    • Reducing the Cost of HDI
    • Reducing Platform Power
    • Thermal management an Power Configurability

North Cape was first shown at CES 2013, so OEMs had pretty much time to work on Haswell based offerings to be unveiled in Q2’13:
Intel Delivers Broad Range of New Mobile Experiences [press release, Jan 7, 2013]

      • 4th generation Intel® Core™ processor family (formerly codenamed “Haswell“) will enable a broad new range of Ultrabook convertibles, detachables and tablets with all-day battery life; the biggest battery life gain over a previous generation in company’s history3.
3 4th Generation Intel Core processors provide 3-5 hours of additional battery life when compared to 3rd Generation Intel Core processors, based on measurement of 1080p HD video playback.

Low Power Fuels Ultrabook Innovation

Since mid-2011, Intel has led the industry in enabling Ultrabook devices aimed at providing new, richer mobile computing experiences in thin, elegant and increasingly convertible and detachable designs. To enable these innovative designs, Intel announced last September that it added a new line of processors to its forthcoming 4th generation Intel Core processor family targeted at about 10 watt design power, while still delivering the excellent performance people want and need.

Skaugen announced today that the company is bringing the low-power line of processors into its existing 3rd generation Intel Core processor family. Available now, these chips will operate as low as 7 watts, allowing manufacturers greater flexibility in thinner, lighter convertible designs. Currently there are more than a dozen designs in development based on this new low-power offering and they are expected to enable a full PC experience in innovative mobile form factors including tablets and Ultrabook convertibles. The Lenovo IdeaPad Yoga* 11S Ultrabook and a future Ultrabook detachable from Acer will be among the first to market this spring based on the new Intel processors and were demonstrated by Skaugen on stage.

The 4th generation Intel Core processor family enables true all-day battery life — representing the most significant battery life capability improvement in Intel history. Skaugen disclosed that new systems are expected to deliver up to 9 hours of continuous battery life, freeing people from some of the wires and bulky power bricks typically toted around.
“The 4th generation Core processors are the first Intel chips built from the ground up with the Ultrabook in mind,” Skaugen said. “We expect the tremendous advancements in lower-power Core processors, and the significant ramp of touch-based systems will lead to a significant new wave of convertible Ultrabooks and tablets that are thinner, lighter and, at the same time, have the performance required for more human-like interaction such as touch, voice and gesture controls.”

To demonstrate the impact of the 4th generation Intel Core processor family, Skaugen showed a new form factor Ultrabook detachable reference design (codenamed “North Cape“) that converts into a 10mm tablet and can run on battery for up to 13 hours while docked.

Advancements made in the way consumers will interact with their computing devices were also demonstrated, including natural and more immersive interaction experiences using a 3-D depth camera. Intel showed applications running on an Ultrabook in which objects can be manipulated naturally with free movements of the hands, fingers, face and voice. One application that was demonstrated can be used for enabling new and immersive video collaboration and blogging experiences. These were all enabled using the Intel® Perceptual Computing SDK Beta. This year, Intel expects more Ultrabooks and all-in-one (AIO) systems to offer applications for voice control (Dragon Assistant*) and facial recognition (Fast Access*) for convenience and freedom from passwords.

So this was first shown at CES 2013 as well: IDF Beijing 2013 Keynote Demo — Perceptual Computing SDK [channelintel YouTube channel, April 17, 2013]

New gesture and voice capabilities shown during Doug Fisher’s keynote at the Intel Developer Forum in Beijing

which was used in the IDF Beijing 2013 Keynote Demo – Personified Chat [channelintel YouTube channel, April 17, 2013]

The latest in perceptual computing demonstrated using an example of personified chat at the Intel Developer Forum Beijing.

IDF 2013 Beijing Highlights Day One [channelintel YouTube channel, April 16, 2013]

Intel® UltrabookConvertible SBA v1 [channelintel YouTube channel, April 2, 2013]

Get the flexibility to move your business forward with the ultra versatile, ultra sleek, Ultrabook™. Inspired by Intel®

Intel® UltrabookPerformance SBA v2 [channelintel YouTube channel, April 2, 2013]

You have big business goals. Reaching them requires the right tools. The ultra responsive, ultra sleek Ultrabook™. Inspired by Intel®.


3. Intel’s CEO Discusses Q1 2013 Results – Earnings Call Transcript [Seeking Alpha, April 16, 2013]

Paul Otellini for the second half of the year for sales:

… as the OEMs start looking at new form factors that they can design around our new chips, Haswell in particular, and maybe Bay Trail, and Windows 8, enabling touch, the explosion in form factors and the competitiveness of that platform is going to be substantially different, at price points down into the $300 to $400 range enabling touch. We didn’t have that last year. So you go into the prime selling season with new products, new technologies, new form factors, and new capabilities that, up to now, were unapproachable price points.

Paul Otellini regarding his current view on Haswell’s potential to revitalize the PC market with Windows 8:

With Haswell, there’s a number of things. First of all, the overall performance goes up, graphics performance goes up, as well as the integer performance. So it’s a better punch in the package than we’ve had with Ivy Bridge. Point one. Point two, the power envelope, or the batter life for that level of performance, is exceptionally better than Ivy Bridge.

Third, it gets into the form factor innovation and the integration with touch as I spoke about earlier, which I think is really part of the recipe required for Win 8 adoption. I’ve recently converted personally to Windows 8 with touch, and it is a better Windows than Windows 7 in the desktop mode, when you implement the touch and the touch-based applications and operating environment. It’s just a lot easier to use.

There is an adoption curve, and once you get over that adoption curve, I don’t think you go back. And we didn’t quite have that same kind of adoption curve in Windows 7 versus XP before it. This requires a little bit of training. And I think people are attracted to touch, and the touch price points today are still fairly high, and they’re coming down very rapidly over the next couple of quarters.

Paul Otellini about technology transitions:

We’ve also got the technology transition to the 14 nanometers. [unintelligible] a first order, all of our spending is focused on 14 nanometers , which gives us a fairly significant ramp capability. If demand for older products exceeds what we could build on 14, we could still build 22 for quite some time. So I really think it depends on whatever demand scenario you see out there. In any event, the most important thing for us is to make that transition to 14 and continue to have the leading edge.

Lenovo Talks Tablets [detachable ultrabooks] at HIMSS 13 [channelintel YouTube channel, April 16, 2013]

At HIMSS 13, Lenovo Ambassador Ashley Rodrigue showed off the company’s new health IT convertible devices that feature the best of both worlds for clinicians—a detachable tablet and an Ultrabook laptop for more robust activity. The benefit for health IT professionals? Just one device to manage. Find out more information and read the latest blog posts on health IT in the Intel Healthcare Community: http://communities.intel.com/community/healthcare

Paul Ottelini on what Intel can do to help the PC ecosystem to become healthy again:

I think continue to give them the tools to innovate. And I wouldn’t paint the entire customer base with the same brush that you just did. Certainly if you looked at the last quarter, even inside the PC space, Lenovo outperformed everybody else, and actually had a very good year on year set of numbers, in a down year. Apple continues to do well.

Subsets of customers in different segments are also doing very well in terms of, say, those. Those providing products into the internet data centers. What I see when we look out is a tremendous amount of innovation, particularly at the ODM and Taiwanese OEM side, where the ability to miniaturize and bring things into extremely thin form factors is as revolutionary as the amount of changes I’ve seen in my time in this industry.

And so I think what we can do is give them the products, like Haswell and Bay Trail to innovate around. We can help them with other feature sets like voice and speech that go around them, and just help them build better products.

Paul Ottelini on Intel efforts to invest in things outside of what could called core PC, such as the set top box or in the foundry efforts or other areas of revenue that the company is seeking:

I don’t look at things with quite that level of granularity. The foundry thing, the investment is really going to be taking advantage, at least near term, with the current customer base, of capacity that we’re already putting in place. That doesn’t mean that at some point we won’t have to actually build extra capacity for a foundry customer or a foundry business, but today, up to this point, it’s certainly within our ability to absorb.

The set top box spending, or the stuff we’re doing in Intel Media, in the grand scheme of things, is not a lot of spending. So the real issue is inside of our core microprocessor and platform development, and we’re at the point now where roughly half of our spending is focused on System on Chip, inside the microprocessor world.

And the System on Chip environment is really a lot of the ultramobile products. It’s the phones, it’s the tablets. It’s embedded systems. It’s automotive, etc. Where we have fairly strong growth opportunities. So it’s not the same monolithic Tick-Tock model that we put in place eight years ago.

Paul Otellini on the proper interpretation of the new price points mentioned earlier in the earnings call:

We have a certain spec for ultrabooks, and that is the product that Stacy said is going to be centered at as low as $599 with some [diverse] SKUs to $499. If you look at touch-enabled Intel based notebooks that are ultrathin and light using non-Core processors, those prices are going to be down to as low as $200 probably.

Re: Stacy Smith (Chief Financial Officer, Executive Vice President) about the sources of increased confidence now in versus where Intel was three months ago talking earlier in the earnings call as follows:

First of all, just to make sure I’m not oversoaking things here, you really just need seasonal from where we are in order to achieve the low single digit revenue growth. So I don’t think we have a hugely high bar out there, and I went through a dissection of where I think the revenue comes from.

In terms of the things that give me confidence, or at least I personally believe it could be better than seasonal, it’s the things we talked about, improving macroeconomic environment, the fact that we now are participating across a range of compute devices, and so the mix between those don’t impact us nearly as much.

And then third, as Paul said, you have innovative form factors coming out in ultrabooks, in convertibles, and in detachables, that are hitting these really compelling mainstream price points that are touch enabled. And as we get into the Christmas selling season, your expectation is you will see touch-enabled ultrabooks that are $499 and $599 pretty commonly out there. $599 commonly, and $499 as kind of special SKUs.

And then we’ll see, because of Bay Trail coming into the marketplace, you’ll see touch-enabled thin notebooks with really good performance that are hitting kind of $300 price points. And then with our Android tablets, you’ll see things that are significantly, [hey, I have that]. So we’ll be participating across a broad range of compute devices as we get into the back half of this year.


4. Earlier information from Intel:

Intel Accelerates Mobile Computing Push [press release, Feb 24, 2012]

NEWS HIGHLIGHTS

  • Launches dual-core Intel® Atom™ Processor-based platform (formerly “Clover Trail+”) aimed at performance and mainstream smartphone market segments, and providing double the compute performance and 3x graphics capabilities1 with competitive battery life. Product to also debut in Android* tablets.
  • Reveals one of the world’s smallest2 and lowest-power multimode-multiband LTE solutions for global roaming in one SKU with envelope tracking and antenna tuning. Shipping single mode now with multimode shipments beginning first half of 2013.
  • Demonstrates continued momentum in emerging markets with Intel® Atom™ Z2420 processor, including new smartphone engagement with Etisalat* in Egypt. ASUS* to also debut a new Android* tablet based on the Atom Z2420 processor.
  • Announces support from leading ODMs for next-generation quad-core Atom SoC (“Bay Trail”), scheduled to be available for holiday 2013.
  • Extends mobile device enabling efforts to tablets, followed by phones.
MOBILE WORLD CONGRESS, Barcelona, Spain, Feb. 25, 2013 – Intel Corporation today announced a range of new products, ecosystem and enabling efforts that will further accelerate the company’s presence in mobile and help usher in new devices and richer experiences with Intel Inside®.
The announcements include a new dual-core Atom™ SoC (“Clover Trail+“) platform for smartphones and Android* tablets, and the company’s first global, multimode-multiband LTE solution that will ship in the first half of this year. Other disclosures included “Bay Trail” momentum, mobile device enabling efforts, and continued smartphone momentum in emerging markets with the Intel® Atom™ Z2420 processor-based platform.
“Today’s announcements build on Intel’s growing device portfolio across a range of mobile market segments,” said Hermann Eul, Intel vice president and co-general manager of the Mobile and Communications Group. “In less than a year’s time we have worked closely with our customers to bring Intel-based smartphones to market in more than 20 countries around the world, and have also delivered an industry-leading low-power Atom™ SoC tablet solution running Windows* 8, and shipping with leading OEM customers today. Looking forward, we will build upon this foundation and work closely with our ecosystem partners, across operating systems, to deliver the best mobile products and experiences for consumers with Intel Inside.”
New, Efficient Atom™ SoC Platform
Intel’s new Atom™ processor platform (“Clover Trail+“) and smartphone reference design delivers industry-leading performance with low-power and long battery life that rivals today’s most popular Android* phones. The product brings Intel’s classic product strengths, including high performance that lets you enjoy smooth Web browsing,  vibrant, glitch-free, full HD movies, and an Android* applications experience that launches fast and runs great.
The platform’s 32nm dual core Intel® Atom™ Processors — Z2580, Z2560, Z2520 — are available in speeds up to 2.0 GHz, 1.6 GHz and 1.2GHz, respectively. The processor also features support for Intel® Hyper-Threading Technology, supporting four simultaneous application threads and further enhancing the overall efficiency of the Atom cores.
The integrated platform also includes an Intel® Graphics Media Accelerator engine with a graphics core supporting up to 533MHz with boost mode, and delivering up to three times the graphics performance1 for rich 3-D visuals, lifelike gaming and smooth, full 1080P hardware-accelerated video encode and decode at 30fps.
“Our second-generation product delivers double the compute performance and up to three times the graphics capabilities1, all while maintaining competitive low power,” Eul said. “As we transition to 22nm Atom SoCs later this year, we will take full advantage of the broad spectrum of capabilities enabled by our design, architecture, 22nm tri-gate transistor technology, and leading-edge manufacturing to further accelerate our position.”
The new Atom platform also brings advanced imaging capabilities, including support for two cameras, with a primary camera sensor up to 16 megapixels. The imaging system also enables panorama capture, a 15 frame-per-second burst mode for 8 megapixel photos, real-time facial detection and recognition, and mobile HDR image capture with de-ghosting for clearer pictures in flight.
The platform is also equipped with Intel® Identity Protection Technology (Intel IPT), helping to enable strong, two-factor authentication for protecting cloud services such as remote banking, e-commerce, online gaming and social networking from unauthorized access. Since Intel IPT is embedded at chip-level, unlike hardware or phone-based tokens, it can enable more secure, yet user-friendly cloud access protection. Intel is working with partners including Feitian*, Garanti Bank*, MasterCard*, McAfee*, SecureKey* Technologies Inc., Symantec*, Vasco Data Security International* Inc. and Visa* Inc. to incorporate this technology into their services.
With WUXGA display support of 1920×12003, the platform will also enable larger-screen Android* tablet designs. It also includes support for Android* 4.2 (Jelly Bean), Intel Wireless Display Technology, HSPA+ at 42Mbps with the Intel® XMM 6360 slim modem solution, and the new industry-standard UltraViolet™ Common File Format.
Customers announcing support for “Clover Trail+” platform for phones and tablets include ASUS*, Lenovo*, and ZTE*.
Debuting at CES last month, the Lenovo* IdeaPhone K900* is based on the Intel® Atom™ processor Z2580 and delivers rich video, graphics and Web content at fantastic speeds. The IdeaPhone is 6.9mm thin and also features the world’s first 5.5-inch full high-definition 400+ PPI screen for increased clarity of text and images. The K900 will be the first product to market based on the Atom processor Z2580. Lenovo plans to introduce the smartphone in the second quarter of 2013 in China, followed soon by select international markets.
Building on the Atom processor platform (“Clover Trail+”), Intel also highlighted its forthcoming 22nm smartphone Atom™ SoC (“Merrifield“). The product is based on Intel’s leading-edge 22nm process and an entirely new Atom microarchitecture that will help enable increased smartphone performance, power efficiency and battery life.
Long-Term Evolution (4G LTE)
Intel’s strategy is to deliver a leading low-power, global modem solution that works across multiple bands, modes, regions and devices.
The Intel XMM 7160 is one of the world’s smallest2 and lowest-power multimode-multiband LTE solutions (LTE / DC-HSPA+ / EDGE), supporting multiple devices including smartphones, tablets and Ultrabooks™.  The 7160 global modem supports 15 LTE bands simultaneously, more than any other in-market solution. It also includes a highly configurable RF architecture running real time algorithms for envelope tracking and antenna tuning that enables cost-efficient multiband configurations, extended battery life, and global roaming in a single SKU.
“The 7160 is a well-timed and highly competitive 4G LTE solution that we expect will meet the growing needs of the emerging global 4G market,” Eul said. “Independent analysts have shown our solution to be world class and I’m confident that our offerings will lead Intel into new multi-comm solutions. With LTE connections projected to double over the next 12 months to more than 120 million connections, we believe our solution will give developers and service providers a single competitive offering while delivering to consumers the best global 4G experience. Building on this, Intel will also accelerate the delivery of new advanced features to be timed with future advanced 4G network deployments.”
Intel is currently shipping its single mode 4G LTE data solution and will begin multimode shipments later in the first half of this year. The company is also optimizing its LTE solutions concurrently with its SoC roadmap to ensure the delivery of leading-edge low-power combined solutions to the marketplace.
Intel® Atom™ Platform Z2420
As Intel expands its geographic presence, the company sees tremendous opportunity in delivering rich Intel-based mobile experiences to consumers across emerging markets.
As part of its strategy to take advantage of the fast growing market for value smartphones in emerging markets, which some analysts expect to reach 500 million units by 2015, Intel highlighted continuing momentum with the Intel Atom Processor Z2420 platform (formerly “Lexington“). Since it was first announced at CES, Acer* (Thailand, Malaysia), Lava* (India) and Safaricom* (Kenya) have all announced new handsets.
Etisalat Misr*, a leading telco operator based in Egypt and a subsidiary of Etisalat group UAE, in collaboration with Intel today announced plans for the Etisalat E-20 Smartphone with Intel Inside®. Set to debut in Egypt in April, the Intel-based handset will be the first in the Middle East and North Africa region, and the second introduction in Africa to-date, building on the recent launch of Safaricom* in Kenya.
Demonstrating the flexibility of the Atom SoC platform to accommodate a range of device and market segment needs, ASUS* later today will announce a new Android* tablet based on the Intel® Atom™ Processor Z2420.

Tablets with Intel Inside®

Building on the device momentum and industry-leading power-efficiency of the award-winning Atom processor Z2760, Intel’s first quad-core Atom SoC (“Bay Trail“), will be the most powerful Atom processor to-date — doubling the computing performance of Intel’s current- generation tablet offering and providing the ecosystem with a strong technology foundation and feature set from which to innovate. The “Bay Trail” platform, scheduled to be available for holiday 2013, is already up and running on Windows* and Android* and will help enable new experiences in designs as thin as 8mm that have all-day battery life and weeks of standby.

Intel is currently working with Compal*, ECS*, Pegatron*, Quanta* and Wistron* to accelerate “Bay Trail” tablets to the market. Intel is also extending its work with leading OEM partners globally, building on the strong foundation of  Intel Atom processor Z2760-based tablet designs in market from Acer*, ASUS*, Dell*, Fujitsu*, HP*, Lenovo*, LG Electronics and Samsung*.

Enabling Mobile Devices with Intel Inside®

Intel today announced an expansion of its ecosystem enabling efforts to deliver new device and market innovations across a range of Windows*- and Android*-based mobile devices.

Intel platform and enabling programs have been the foundation of OEM and ODM innovation for decades. The new program will focus on accelerating time to market for leading-edge mobile devices based on Intel® architecture with top OEMs and ODMs. The program will focus first on tablets, followed by phones, providing pre-qualified solutions with simplified building blocks to scale designs quickly for mature and emerging markets. The Atom Processor Z2760 and the company’s forthcoming 22nm Atom SoC, codenamed “Bay Trail,” will be the starting foundation for the effort.

1 Compared to the Intel Atom Processor Z2460 platform; Graphics clock will vary based on SKU: Z2580, Z2560, Z2520.
2 Compared with competitive solutions shipping in market today.
3 Corrected from misprinted ‘1900×1200’ to ‘1920×1200’ – Feb. 27,21013

Intel Developer Forum: Transforming Computing Experiences  from the Device to the Cloud [press release, April 10, 2013]
Images are inserted from Reinventing the Computing Experience presentation at IDF2013 by Kirk Skaugen, Intel senior vice president and general manager of the PC Client Group

Company Accelerates Expansion of 22nm Data Center Processor Families; Graphics Innovations, Intel® Wireless Display Coming to Next-Generation Ultrabooks

NEWS HIGHLIGHTS

  • Accelerates expansion of offerings across the data center processor product lines based on Intel’s innovative 22nm manufacturing technology.
  • Aims to revolutionize the server rack design by delivering an Intel rack scale architecture for increased flexibility, density and utilization of servers leading to lower total cost of ownership.
  • Next-generation, 64-bit Intel® Atom™ processor for microservers, codenamed “Avoton,” is being sampled to customers with broad availability expected in the second half of this year.
  • 4th generation Intel® Core™ processors are now shipping to customers and will launch later this quarter.
INTEL DEVELOPER FORUM, Beijing, April 10, 2013 – During Intel Corporation’s annual developer forum this week, company executives announced new technologies and partnerships aimed at transforming how people experience technology from the device to the cloud. The announcements included details on new data center product lines based on the 22-nanometer (nm) process technology and the new Intel rack scale architecture, along with details on the forthcoming 4th generation Intel® Core™ processor family.
During her keynote, Diane Bryant, Intel senior vice president and general manager of the Datacenter and Connected Systems Group, underscored the importance of the data center in enabling amazing personal computing experiences to deliver real-time information and services. She also outlined the steps Intel is taking to provide the hardware and software needed for data analytics to improve the capabilities of intelligent devices and data center infrastructure.
“People are increasingly demanding more from their devices through applications and services whether at home, at work or wherever they may be,” Bryant said. “Intel is delivering a powerful portfolio of hardware and software computing technologies from the device to the data center that can improve experiences and enable new services.”
Bryant outlined plans to accelerate the expansion of Intel’s offerings across the data center processor product lines based on its innovative 22nm manufacturing technology before the end of the year, thereby enabling a more cost-effective and efficient data center infrastructure. Intel’s broad portfolio of data center intellectual property enables Intel to quickly integrate features into new products and bring them to market. For example, Intel is launching the new Intel® Atom™ S12x9 processor family customized for storage today, just four months after the debut of the Intel Atom S1200 processor for microservers.
Intel plans to deliver two more Intel Atom processor-based products this year that promise to deliver new architectures, improved performance-per-watt and an expanded feature set. Bryant demonstrated for the first time the next-generation Intel Atom processor family for microservers, codenamed “Avoton,” and confirmed it is currently shipping samples to customers for evaluation. Avoton will feature an integrated Ethernet controller and is expected to deliver industry-leading energy efficiency and performance-per-watt for microservers and scale out workloads.
Re-Architecting the Data Center
Bryant also revealed details on Intel’s plans to develop a reference design for rack scale architecture that uses a suite of Intel technologies optimized for deployment as a full rack. Hyper-scale data centers run by companies that maintain thousands of servers and store vast amounts of data require continued advancements in rack designs that make it easier and more cost effective to deal with major growth in users, data and devices. Traditional rack systems are designed to handle a wide variety of application workloads and may not always achieve the highest efficiency under all hyper-scale usages. The reference design will help re-architect a rack level solution that is modular at the subsystem level (storage, CPU, memory, network) while providing the ability to provision and refresh or logically allocate resources based on application specific workload requirements. Benefits include increased flexibility, higher density and higher utilization leading to a lower total cost of ownership.
Additional information on these announcements as well as the new Intel Atom processor S12x9 product family for storage servers, Intel® Xeon® processor E3v3 product family, Intel Xeon processor E7v2 product family and Intel Atom processor for communication and networking devices codenamed “Rangeley” is available in the news fact sheet.

Reinventing the Computing Experience

During his keynote, Kirk Skaugen, Intel senior vice president and general manager of the PC Client Group, provided a deeper look at the forthcoming 4th generation Intel Core processor family, which he said is now shipping to OEM customers and will launch later this quarter.

Ultrabooks based on the 4th generation Intel Core processor family will enable exciting, new computing experiences and all-day battery life delivering the most significant battery life capability improvement in Intel’s history,” said Skaugen. “It will also bring to consumers a new wave of ‘two-for-oneconvertible and detachable systems that combine the best of a full PC experience with the best of a tablet in amazing new form factors.”

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NEW Architecture on 22nm Tri Gate

NEW Intel Power Optimizer: 20x Power Reduction
vs. 2nd gen Intel® Core™ Processors

NEW Integrated on package PCH [Platform Controller Hub]
for amazing form factors

NEW Integrated Audio DSP: more battery life, higher quality

Shipping Now and On Track for Q2 2013 Launch

The new Intel Core microarchitecture will allow the company to deliver up to double the graphics performance over the previous generation. In addition, the new graphics solution will have high levels of integration to enable new form factors and designs with excellent visual quality built in. Skaugen demonstrated these graphics improvements on the 4th generation Intel Core processor-based Ultrabook reference design called “Harris Beach.” The demo featured Dirt 3*, a popular gaming title, showing the same visual experience and game play as a discrete graphics card that users would otherwise have to add separately. He also showed the 4th generation Intel Core processor-based concept, codenamed “Niagara,” a premium notebook with the ability to play the unreleased enthusiast title Grid 2* from CodeMasters* without the aid of a discrete graphics card.

Along with touch capability, Intel® Wireless Display (Intel WiDi) will be enabled on all 4th generation Intel Core processor-based Ultrabook devices to allow people to quickly and securely stream content and apps from devices to the big screen, free from the burden of cables. Skaugen said the China ecosystem is taking the lead on integrating Intel WiDi into systems, and announced that the leading television manufacturer in China, TCL*, has a new model with the Intel WiDi technology built in. He also announced new receivers certified for Intel WiDi from QVOD* and Lenovo* and a set-top box from Gehua*.

Illustrating the low-power advances in Ultrabook devices, Skaugen showed off the new Toshiba Portege* Ultrabook detachable, based on the new low-power line of the 3rd generation Intel® Core™ processors.

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Furthermore, Skaugen revealed that voice interaction in Mandarin is now available on Ultrabook devices from Intel through Nuance*.

Augmenting the company’s offerings for computing at a variety of price points, Skaugen announced plans for new market variants of its “Bay Trail” 22nm SoC with PC feature sets specifically designed for value convertibles, clamshell laptops, desktops and value all-in-one computers to ship later this year.

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Mobile Inside
Tan Weng Kuan, vice president and general manager of the Mobile Communications Group, Intel China, highlighted how the company is working with ecosystem partners to deliver the best smartphone and tablet experiences with Intel inside. Tan discussed the company’s progress with the new Intel® Atom™ processor Z2580 (“Clover Trail+“) for smartphones and the Intel Atom Processor Z2760 (“Clover Trail“) for tablets, both of which are helping to usher in a range of new devices and user experiences.

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Taking full advantage of the broad spectrum of capabilities enabled by Intel® architecture, processor technology leadership, manufacturing and multi OS support across Windows* 8 and Android*, Tan discussed the company’s forthcoming smartphone and tablet products based on Intel’s leading-edge 22nm process and an entirely new Atom microarchitecture. Intel’s quad-core Atom SoC (“Bay Trail“) will be the most powerful Atom processor to-date, doubling the computing performance of Intel’s current-generation tablet offering1. Scheduled for holiday 2013 tablets [in market Q4’13], “Bay Trail” will help enable new experiences and designs as thin as 8mm that have all-day battery life and weeks of standby.

Tan also highlighted Intel’s Atom SoC, codenamed “Merrifield,” which is scheduled to ship to customers by the end of this year [in market Q1’14]. The product will deliver increased smartphone performance, power efficiency and battery life over the current-generation offering.
Tan closed his remarks by calling upon China developers for collective innovation in helping to accelerate and grow the mobile market together. He announced the creation of a China-specific expansion of the company’s platform and ecosystem enabling efforts, focused initially on Atom processor-based tablets running Android*, and designed to speed time-to-market of leading-edge mobile devices based on Intel technology. He added that China developers are instrumental to this effort and will bring speed, scale and ingenuity that will drive new innovation globally.
Day 2 IDF Preview
Doug Fisher, vice president and general manager of Intel’s System Software Division, will open the second day of IDF, addressing several myths surrounding the industry and providing a vision on the vast opportunities that await developers. Specifically, he will showcase Intel’s transformation of the PC experience and advances in device segments, support of multiple operating environments and efforts to help developers scale and modernize computing with new hardware features and software advancements for more compelling user experiences. He will discuss how developers can utilize HTML5 to help lower total costs and improve time-to-market for cross-platform applications development and deployment, incorporate touch and sensor interfaces to modernize applications, and use perceptual compute technologies to enable consumers to interact with PCs via voice control, gesture recognition and more.
Intel Chief Technology Officer Justin Rattner will also take the stage to discuss how Intel Labs is drawing up plans for a bright future. He will reveal a vision for connected and sustainable cities where information technology helps to address challenges of clean air, clean water, better health and improved safety. He will also explain how today’s mobile, urban lifestyle is demanding faster and cheaper wireless broadband communications. Forecasting a move beyond the information age, Rattner will describe a new era coined “the data society” and show how information in the cloud will work on everyone’s behalf, collaboratively and safely, by analyzing and relating different data to deliver new value to individuals, enterprises and society as a whole. Rattner plans to surprise the audience with an exclusive first look at Intel® Silicon Photonics Technology.

This was summarized by Intel in a New Ultrabook™ experiences unveiled at IDF Beijing 2013 [Intel Developer Zone blog, April 16, 2013] post as follows:

Last week at the Intel® Developer Forum held April 10-11, 2013 in Beijing, China, Ultrabooks™ were in the spotlight as new experiences based on the 4th generation Intel® Core™ processor family were announced:

“Ultrabooks based on the 4th generation Intel Core processor family will enable exciting, new computing experiences and all-day battery life delivering the most significant battery life capability improvement in Intel’s history,” said Skaugen. “It will also bring to consumers a new wave of ‘two-for-one’ convertible and detachable systems that combine the best of a full PC experience with the best of a tablet in amazing new form factors.” – Kirk Skaugen, Intel senior vice president and general manager of the PC Client Group

There are three major factors in this new announcement: amazing graphics, even more Ultrabook form factor designs, and low-power advances creating longer battery life. Touch capability will also be part of this new generation of devices, along with Intel® Wireless Display (Intel WiDi) enabled on all on all 4th generation Intel Core processor-based Ultrabook devices to allow people to quickly and securely stream content and apps from devices to the big screen.

4th generation Intel® Core™ processors

The Ultrabook computing category was first introduced in 2011 with a 2nd generation Intel® Core™ processor. This was ramped up greatly in 2012 with the addition of touch and mainstream price points, along with the 3rdgeneration Intel core processor. In 2013, we get to experience a 4th generation Intel Core processor and the concept of “2 for 1” computing; basically, we get to experience a table and a PC experience in one machine:

“The new Intel Core microarchitecture will allow the company to deliver up to double the graphics performance over the previous generation. In addition, the new graphics solution will have high levels of integration to enable new form factors and designs with excellent visual quality built in. Skaugen demonstrated these graphics improvements on the 4th generation Intel Core processor-based Ultrabook reference design called “Harris Beach.” The demo featured Dirt 3*, a popular gaming title, showing the same visual experience and game play as a discrete graphics card that users would otherwise have to add separately. He also showed the 4th generation Intel Core processor-based concept, codenamed “Niagara,” a premium notebook with the ability to play the unreleased enthusiast title Grid 2* from CodeMasters* without the aid of a discrete graphics card.” –Intel Newsroom

These new processors will include:

  • new architecture on 22nm Tri Gate
  • Intel Power Optimizer: 20x power reduction vs. 2nd gen Intel Core Processors
  • integrated on package PCH for amazing form factors
  • integrated audio DSP which means more battery life and higher quality

Graphics

With this new generation of processors comes increasingly higher level graphics support, including:

  • 3D graphics with up to 2x performance
  • integrated on-package EDRAM memory
  • API support
  • Display with new 3-screen collage display
  • enhanced 4k x 2k support
  • 2x bandwidth with display port 1.2
  • Media with new faster Intel Quick Sync Video
  • faster JPEG and MPEG decode
  • new OpenCL 1.2 support

(Source: IDF Keynote)

Touch

Touch is becoming more mainstream, and more consumers than ever before are expecting touch as a standard addition to their devices. In an Intel study of touch carried out in December of 2011, users chose touch nearly 80% of the time when given the choice between touch, keyboard, mouse, and track pad. These findings were echoed in another touch study by UX Innovation Manager Daria Loi:

“With touch capability becoming available in more and more Ultrabook devices, Intel undertook a research program to better understand if and how people might use touch capabilities in more traditional, notebook form-factor devices…… To spoil the ending, the results were positive-very positive, in fact. Users who were presented with a way to interact with their computers via touch, keyboard, and mouse found it an extremely natural and fluid way of working. One user described it using the Italian word simpatico-literally, that her computer was in tune with her and sympathetic to her demands.” – “The Human Touch: Building Ultrabook™ Applications in a Post-PC Age” [Intel Developer Zone blog, July 11, 2012]

Touch designs in Ultrabook form factors continue to ramp up, especially with the October 2012 launch of Windows*8, and this trend is expected to continue.

Power

One of the most intriguing announcements to come out of Beijing was the idea of heightened power consumption for the Ultrabook. Chips for notebooks, phones, and tablets are going to be greatly enhanced, boosting both runtime and standby power:

“By effectively removing nearly 3W of background drain, all operations are going to benefit, not just idle. Where Internet browsing was a 9W operation, expect to see that go down to around 6W for a big increase in battery life….. By reducing the mainboard size, space is created for more battery. Intel says there’s a chance to fit 20-45% more battery inside when motherboard sizes are reduced using HDI techniques.” – Ultrabooknews.com

Higher power expectations ties in with the announcement of 4th generation Intel Core processor Ultrabook systems that are coming out as early as June 2013 and on track for Q2 2013 launch.

Ultrabooks: just getting started

The experience you can expect from an Ultrabook with the new 4th generation core processor is, in a word, superior. These are extremely responsive machines that offer amazing performance, a natural UI with touch and voice, and AOAC (always on always connected) as a given. You also get to take advantage of Intel Identity Protection, anti-virus, facial log-in, vPro, and Small Business Advantage so your data is always safe. The machine itself is meant to be mobile, with all-day battery life, thinner lighter designs, and Intel Wireless Display. And let’s not forget that it just looks cool; great visuals, 2 in 1 convertibles and detachable form factors, not to mention a high res display.

Ultrabook as a PC category is continuing to drive market innovation; we’re seeing thinner form factors, intriguing designs (convertibles, detachable, etc.), and more natural human/computer interaction, such as voice control integration. Ultrabooks are able to deliver what is essentially a mobile computing experience; we’re looking at consumption usages similar to that of a smartphone or a tablet, with the productivity potential and sheer computing power of that of a full-blown PC. Is it a notebook or is it a tablet? The beauty of an Ultrabook is that it’s both.

Labor shortages in China as young people are much less willing to work under harsh working conditions–all this “compensated” for the time being with compulsory student labor required to get the graduation certificates

After a similar situation three years ago Help wanted: China’s labor shortage [CNNMoney, March 8, 2010], just in eastern China:

As China’s economy improves, Chinese workers have better options and employers are struggling to find cheap labor.

now ODMs, component makers face labor shortages in western China [DIGITIMES, April 12, 2013]

Mainly because Taiwan-based notebook ODMs have been accelerating the process of shifting production to plants in Chongqing and Chengdu, in western China, the factories of ODMs and component makers in the region are seeing increasing difficulty recruiting enough workers, according to Taiwan-based supply chain makers.
Since the ODMs and related upstream suppliers are already facing labor shortages during the slow season (the first half) of 2013, the sources are concerned that the shortages will become more serious in the second half.
Acer’s 7-inch entry-level tablet is also suffering from unstable supply due to a labor shortage at component suppliers.
Quanta Computer plans to move all its notebook production except those for Apple, to its plants in Chongqing in 2013. Compal Electronics will shift 90% of its notebook capacity to Chongqing plants and will expand capacity in the second quarter.

imageSince people in western China are less willing to work in factories, the governments are mainly pushing student workers to aid the IT firms. Currently, about 50% of IT firms’ workers in Chongqing are students, and in Chengdu the proportion is 60-70%, the sources noted.

Since students in western China are required to conduct internship activities at factories in order to graduate, the governments can easily mobilize a large number of student workers to help IT firms. However, student workers’ high rates of absenteeism is causing the makers difficulties managing their production line manpower.

In addition, recruitment competition will also become a serious issue as the makers will need to offer attractive packages to draw people’s attention, but it will impact their profits, the sources said.

TheNewYorkTimes YouTube channel, published on Dec 27, 2012 http://www.youtube.com/watch?v=JtcQMFeNeTw
  • Hewlett Packard’s better practices which could be a model for others in the electronics industry [1:00 – 3:50], see also the related written report:

The factory [with 14,000 workers], in Chongqing, makes computers for Hewlett-Packard, a company with little of Apple’s glamour. It is operated by Quanta, a little-known Taiwanese manufacturer.

Neither Quanta nor Hewlett-Packard claims it has solved every labor woe. And the amenities are partly selfish: one of the biggest problems for Chinese factories is that workers are constantly leaving. Hewlett-Packard hopes that by improving living conditions, turnover and training costs will fall.

With 1.4 million employees in China — the most of any private company — Foxconn is setting a bar that all manufacturers will be judged against, say executives at other companies.

“When the largest company raises wages and cuts hours, it forces every other factory to do the same thing whether they want to or not,” said Tony Prophet, a senior vice president at Hewlett-Packard. “A firestorm has started, and these companies are in the glare now. They have to improve to compete. It’s a huge change from just 18 months ago.”

Foxconn, more than any other company, has proved that Chinese plants can deliver obsessive attention to quality. The company has helped make China into a manufacturing juggernaut through strict discipline that is visible everywhere, even in the salutes managers give visiting executives. That discipline, say former Apple executives, is one reason every iPhone is put together so well. …

… Though Foxconn has trained managers to treat employees more gently, foremen still use profanity and intimidation, workers say. The managers speak in a manner that often feels like a threat,” said Mou Kezhang, who works in iPad quality assurance at the Foxconn factory in Chengdu [with 164,000 workers producing iPads for Apple out of 1.4 million employees in China].

Here is what was A typical work day for a Foxconn worker in Chengdu (animation only) [NMANewsDirect YouTube channel, May 10, 2011]

[Note the date, which is 2 years earlier!] This animation illustrates a routine day in the life of a Chinese worker working on an assembly line for the new iPad 2 at Apple supplier Foxconn’s two factories in Chengdu. According to a report by Hong Kong NGO Students & Scholars Against Corporate Misbehavior, Foxconn workers must work 80 to 100 hours of overtime per month, in addition to 174 hours of regular work, to make ends meet. They earn an average of $186 per month.

Background report: Foxconn and Apple Fail to Fulfill Promises: Predicaments of Workers after the Suicides [Students & Scholars Against Corporate Misbehavior, May 7, 2011]

FLA REPORT SHOWS SOME POLICY CHANGES AT FOXCONN BUT FEW IMPROVEMENTS FOR WORKERS [Students & Scholars Against Corporate Misbehavior, Aug 24, 2012]

On 21 August, the Fair Labor Association (FLA) released a verification report on labour practices at three Foxconn factories producing for Apple in China that were the subject of an earlier FLA investigation. In its report, the FLA trumpets the speedy progress at Foxconn in remediating widespread labour rights violations. However the FLA has overstated the improvements at Foxconn. Firstly, most of the actions completed by Foxconn are changes at the policy level only, but few substantial changes in labour practices were found at this stage. Secondly, Foxconn has deliberately delayed implementing many of the actions called for in the remediation plan, even those that are almost cost-free. Thirdly, workers have had no opportunity to participate in the remedial action process. SACOM has repetitively demanded democratic trade unions at Foxconn as an indispensable step in reforming its labour practices.

Terry Gou always speaks proudly of “Foxconn-speed”. The world’s biggest IT manufacturer can build a factory in 76 days in Chengdu. When talking about legal compliance, however, Foxconn buys time by undertaking “gradual reform.” To be fair, SACOM agrees that some reforms take time to accomplish. However, it makes little sense that Foxconn is reluctant to immediately rectify some problems that do not require expenditure of much of the company’s considerable resources. For instance, Foxconn still refuses to deliver a copy of the collective bargaining agreement to workers, and workers are kept in the dark about the company’s remedial action plan.
SACOM reiterates that factory inspection alone cannot eliminate labour rights violations. A democratic trade union trusted by workers is the most sustainable solution towards decent working conditions.

Those Were the Years, When I Was at Foxconn 那些年, 我在富士康 [sacom2005 YouTube channel, Feb 24, 2013]

The video is an interview of a young female former Foxconn worker’s work and resistance at the mold production shop floor. She tells having entered Foxconn when she was 18 years old, at first earning just 1 Chinese yuan a day as trainee but actually working the same as other workers. The dusty environment and corrosive chemicals used put the workers’ health at risk but when injured, workers had to apologize in work meetings instead of getting proper treatment and compensation. Workers who stood up for better protection would be pressured to keep silent. Her testimony adds to the growing number of stories we hear, of young migrant workers being exploited. We are left to reflect: do we really understand the thousands of human faces behind the successful images and huge profits of those IT brands, including Apple?

Current situation: [OPEN LETTER TO APPLE’S SHAREHOLDERS] INFLUENCE APPLE WITH YOUR SHARES [Students & Scholars Against Corporate Misbehavior, Feb 26, 2013]

Dear Apple’s shareholders,
On the eve of Apple’s annual shareholders meeting in the U.S., Students & Scholars Against Corporate Misbehaviour (SACOM) and other labour organizations in Hong Kongcome to the Apple Store located in Causeway Bay, to protest against the Apple Inc. (Apple) conniving at suppliers’ harsh labour practices. Meanwhile, SACOM also take the opportunity appeal to shareholders to look squarely at Apple’s shameless infringement on labour rights. Apple shareholders should use their influential power to take part in governing Apple and to force the management to adhere to the labour rights standards.
Since 2005, Apple has released the Apple Supplier Code of Conduct stating that suppliers should comply with the international labour standards, and requesting that “Apple’s supply chain provides safe working conditions, respect workers, that they are treated with dignity”. SACOM, however, find Apple fails in its responsibilities which laid down in its Supplier Code of Conduct. To make sure that workers can meet the daily production targets, the management adopt a number of inhumane management methods. For instance, depriving workers’ legitimate rights to take toilet breaks, ergonomic breaks and meal breaks.

Apple joined the Fair Labor Association (FLA) in January 2012, but the labour rights abuses are still widespread in Apple’s supply chain.. At the end of 2012, SACOM conducted investigation in three Apple’s suppliers, Foxlink, Pegatron and Wintek. Similar to Foxconn, military-style management is adopted in the factories. Rampant labour rights violations including unpaid overtime work, long working hours, forced internship, excessive use of dispatch labour, poor occupational safety. The following is the voice from a Sichuan student who worked at the polishing department of Riteng for producing iPads.

The production target is 5000 pieces per day. I am really exhausted…. I want to go back to the school, but my teacher said we would not receive our graduation certificates if we left.”

Apple always deploys its staff to monitor the on-site production process at its suppliers. Obviously, it knows very well on the non-compliance, but it keeps turning a blind eye to the problems. Apple’s net profit recorded at US$ 41.7 billion (about HK$ 325billion) last year. Yet, it still requires its suppliers to complete the production by urgent orders with a very low unit price and a short delivery time. Harsh management methods are inevitably adopted. Although Apple has been well-informed of these violations, it has intentionally neglected its corporate social responsibility. All these labour rights violations are incredibly shameful.
Shareholders, as the company’s investors, should bear the moral responsibility for the operation and purchasing practices of Apple, and monitor Apple to improve the labour practices at its suppliers. SACOM call on Apple’s shareholders to scrutinize the company to strictly enforce its commitment on its Code of Conduct and corporate social responsibility, that is:
  1. to allow workers to form trade unions by democratic elections in accordance with the Chinese Trade Union Law;
  2. to stop using student workers immediately;
  3. to provide a living wage of all workers which enables workers to support themselves and their families;
  4. to review management methods and to ensure workers are treated with respect and dignity;
  5. to conduct labour rights training for workers, particularly training on occupational health and safety; and
  6. to compensate victims for the non-compliance of the Apple’s Code of Conduct.

Yours faithfully,
Students & Scholars Against Corporate Misbehaviour

Chongqing – the unofficial biggest city in the world [stefhoffer YouTube channel, March 3, 2012]

This clip gives an introduction into Chongqing, to some accounts the biggest city, or municipality, in the world. While the urban population nears 10 million, the entire municipality currently has close to 32 million inhabitants. The city provides an insight into the rapid urbanization currently taking place in China. Migrant workers flock from the countryside to work in cities, where wages are often higher than in rural areas. Nevertheless, most of them end up making extremely long work days. China’s government considers merging populations of large cities in belts of ‘super cities’. Chongqing would form one of the major parts of such an urban sprawl, which would stretch all the way to Shanghai. Copyright of all footage: Stef Hoffer Media

Downtown Chongqing (Part 1) 重庆市区 [Austin Guidry YouTube channel, March 29, 2013]

Me and my buddy Ryan visit downtown Chongqing. Chongqing’s pretty much a province, but there is a “downtown”, which is Chongqing proper. Interesting place! Like me on Facebook:http://www.facebook.com/letchinasleep2

Three views of Chengdu, China [globaltravel196 YouTube channel, Oct 15, 2012]

The footage was taken in and around Chengdu, China. A bustling metropolis in the southwest of China, yet when you take a step back and look at the Sichuan locals, they enjoy life and move at their own pace.

Commentary: Labor shortages, rising wages in China push notebook component firms toward automation [DIGITIMES, April 1, 2013]

China continues to increase minimum wages but labor shortages along the coast continue sending the notebook supply chain moving inward to central China. The lack of labor is notebook firms’ biggest problem currently and some brands have decided to work with component providers to build automated production lines. However, some other firms have noted that automation is difficult to achieve because currently there are no standards or rules to follow.

China’s wage levels continue to climb despite the slowdown of the global economy. According to statistics, since the beginning of 2013, seven major provinces and cities such as Beijing, Zhejiang, Henan, Shaanxi, Guizhou, Guangdong, and Shenzhen have all increased their minimum wages. Take Shenzhen for example, the minimum wage was increased from CNY1,500/month (US$241/month) to CNY1,600/month [US$257/month], the highest in China. As for minimum hourly wages, the highest is Beijing at CNY15.2/hour [US$2.4/hour].
Actually many firms have been paying their workers more than the minimum wages in order to secure their workforce, and in the past this usually happend in the coastal areas, such as Kunshan, Shanghai and Guangdong, where big firms and major manufacturing facilities were mostly located. Now this is also happening in inland areas, as firms move away from the coast looking for cheaper labor.

In the notebook supply chain, most firms such as Foxconn Electronics (Hon Hai Precision Industry), Quanta Computer, Compal Electronics, Wistron, and Inventec are all gathered in Chongqing or Chengdu in central China, and this will raise the labor costs in those regions.

Some observers have noted that labor shortages in China are worsening because young workers are reluctant to enter the manufacturing sector. This will cause problems such as delayed shipments and increasing labor expenses.

Some component makers believe by upgrading to automated production process, the problems can be solved. Simplo, a Taiwan-based notebook battery provider which has a global market share of 20%, faces labor shortages during the boom season. The firm has been aggressive in increasing the percentage of automated production in recent years, which has helped the firm increase efficiency by 40%.
Notebook firms revealed that many in the supply chain were at first reluctant to move plants to Chongqing due to moving costs. They received subsidies from the local governments, but they know that it is not a long-term policy. Labor shortages and increasing labor costs will likely continue and firms may be forced to move again. Hence, automated production may be one of the solutions to this problem.

Foxconn reportedly to move production lines out of China [DIGITIMES, Feb 27, 2013]

Seeing that Foxconn Electronics (Hon Hai Precision Industry) has no plans to recruit standard workers in China, rumors have started circulating in the IT market that Foxconn is considering moving its investment focus from China to countries such as Brazil, Indonesia, Taiwan and the US.

Foxconn has declined to comment on the rumors, but some market watchers noted that China will still be an important investment target for the company in 2013, judging by the current market status.

Foxconn’s recent investments worldwide should not be regarded as moves out of China since the investments simply show the maker’s global market planning, the sources pointed out.

Although China’s rising labor costs and strict policies for environmental protection will gradually impact Foxconn’s profitability, compared to the US, Brazil and Indonesia, China currently still has advantages in terms of cost and infrastructure, the sources said.

Acer to shift 90% notebook production to Chongqing, China [DIGITIMES, March 1, 2013]

Acer recently decided to increase the percentage of notebook production in Chongqing, China to 90%, beginning in the second quarter of 2013, according to industry sources. Due to increasing production in Chongqing, as well as Chengdu (both being in western China), local supply of labor and components is expected to be tight.
As growth of the notebook industry slows down, ODM firms have been more sensitive to production cost changes. While scattered manufacturing plants mean higher production costs, the ODMs have been working towards centralizing their production. Nevertheless, brand clients have been more eager to diversify risks by issuing orders to plants in different locations. But the ODMs have managed to have Acer agree to shifting most of its production to western China.
HP has shifted production for most of its notebooks to Chongqing while Dell and Lenovo’s production mainly takes place in Chengdu. As for Acer, its major ODM partners Quanta Computer and Wistron have moved 100% of their notebook production capacity to Chongqing while Compal Electronics, which maintained 50% of capacity in Kunshan and 50% in Chongqing in 2012, will increase the proportion of capacity in Chongqing to 90% in 2013, the sources said, adding Compal will start moving its equipment in the second quarter.
With the exception of Apple products, Quanta’s notebook production for other brands will be moved to Chongqing, the sources said. To meet clients’ demand, Compal continues to have notebook production in Kunshan, Chengdu, Chongqing and Hefei. However, Compal’s Hefei plant is a joint venture with Lenovo and due to its location, production costs have been rising, and hence company president Ray Chen has disclosed plans to centralize capacity by moving production to the western regions in China. Compal’s Chengdu plant is predicted to ship more than 500,000 units per month in the second quarter and the Chongqing plant is expected to achieve the same figure starting in March and April.
The sources revealed that while notebook production will be concentrated in Chongqing and Chengdu, the ODMs will keep their tablet and server production lines in Shanghai, Songjiang, and Kunshan. Take Inventec for example, the firm plans to shift production focus at its Shanghai plant from notebooks to servers and all-in-one (AIO) PCs.
The centralization of notebook capacity in Chongqing and Chengdu has prompted component providers to consider moving production to the western regions of China as well.
The sources said the labor cost in inland China is relatively low compared to coastal regions but the transportation cost remains high. So far the cost difference in transportation has been subsidized by the local government but no one knows when the subsidy might end, the sources added.
According to statistics provided by the city government of Chongqing, export processing trade value increased 150% in 2012, reaching US$15.364 billion. Notebook exports reached 35.44 million units, an on-year growth of 130% with an export value of US$12.541 billion. Notebook export value accounted for almost 30% of total 2012 export value of Chongqing.

China’s Chongqing Plans 1.5 Trillion Yuan Investment: Xinhua [Xinhua via Bloomberg, Aug 20, 2012]

China’s southwestern municipality of Chongqing plans to boost industrial investment to 1.5 trillion yuan ($235.9 billion) in the five years through 2015, the official Xinhua News Agency said today, citing the local government.

The investment will help Chongqing expand its total industrial output beyond 3 trillion yuan, the report said.

China’s industrial-output growth unexpectedly slowed in July to a three-year low while investment and retail sales missed estimates, raising pressure on Premier Wen Jiabao to step up efforts to support expansion. Chongqing’s industrial investment plan will focus on building seven “big manufacturing industries,” including electronic information, automotive, equipment and parts manufacturing, oil refining, material and energy industries, according to Xinhua.

The electronic information manufacturing industry, which includes notebook computers, will receive 300 billion yuan [US$47.2 billion] in investment, while the car-manufacturing industry will receive 200 billion yuan, Xinhua said.

The equipment manufacturing sector will get an investment boost of 250 billion yuan, and Chongqing’s oil and ethylene refining sector will receive 150 billion yuan, the report said.

Chongqing consolidating IT role: Party chief [Xinhua, March 22, 2012]

CHONGQING, March 22 (Xinhua) — Chinese Vice Premier Zhang Dejiang, newly appointed Party chief of Chongqing, has promised unremitting efforts to consolidate the municipality’s role as a global leader in information technology.

Zhang told visiting Acer President Jim Wong on Wednesday that Chongqing would ensure “continuity and stability in its reform and opening-up policies” so as to make the drive.

Zhang was appointed Party chief of Chongqing, replacing Bo Xilai, under a decision by the Communist Party of China Central Committee last Thursday.

“Chongqing will diversify and optimize its policies to improve its opening-up,” Zhang said, while emphasizing the importance of upgrading vocational and technical education to train high-quality professionals for foreign-funded IT firms in Chongqing.

Wong and hundreds of other senior executives from the world’s leading IT firms including Hewlett-Packard (HP) and Intel have gathered in Chongqing to attend the China International Expo of Cloud Computing, which opened here Thursday.

The three-day event features symposiums and exhibitions of new IT technology, products and services.

Wong said Zhang’s reassurance helped enhance investors’ confidence.

He said the company plans to build Acer’s manufacturing base in Chongqing into the world’s largest communication technology research and manufacturing center in two to three years.

Taiwan-based Acer is the world’s largest vendor of completed PCs and notebooks. Acer’s plants in Chongqing, which only commenced business in December 2010, realized an output of 5 million notebooks in 2011.

In the year, 35 percent of Acer’s global notebook shipments were supplied from Chongqing. Meanwhile, rival HP plans to have 60-70 percent of its notebook shipments supplied from Chongqing in future.

Chongqing mayor Huang Qifan also met the entrepreneurs on Wednesday, saying the city has become home to the world’s five leading notebook producers and six vendors, as well 500 suppliers of the sector.

The city had a total output of 25 million notebooks in 2011 and is aiming for an annual output of 100 million of the products in three years.

Chongqing laptop output among top 3 nationwide [CQNEWS, Dec 17, 2012]

The output volume of laptops, printers and LCD screens in Chongqing is expected to be among the domestic top 3, only second to Shanghai and Jiangsu, according to Chongqing Municipal Commission of Economy and Information Technology.

Five global laptop brands including HP and Acer have established factories or placed big processing orders in Chongqing; while the world’s top 5 original equipment manufacturers like Inventec and Foxconn have also invested here. In addition, some 705 more laptop supporting enterprises gathered in the city too. The “5+6+700” industrial chain of the laptop sector has taken shape in Chongqing.

Statistics show that Chongqing produced more than 35 million laptops from January to October, 2012, up 99% year on year. According to the current momentum, Chongqing will see the total output volume of laptops, printers and LCD screens respectively hit 45 million, 9 million and 9 million in 2012, which will all rank among the top three in China.

Trans-Eurasia railway connects China with Europe [Abdi Ali YouTube channel, March 19, 2013]

The Yuxinou Railway connects China with Europe by crossing the vast Eurasian landmass. The 11,179 kilometer Yuxinou International Railway line, often referred to as the modern Silk Road, starts in Chongqing in southwest China, crosses the Alataw Pass into Kazakhstan, and then moves through Russia, Belarus and Poland before arriving in Duisburg, Germany. The railway started operations in 2011. Unlike on previous trips which only transported products from China to Europe, for the first time, products have been brought back from Europe to Chongqing on the line. After a 17-day journey, starting from Duisburg, Germany, and passing through five countries, this valuable shipment of vehicle components has finally arrived at the Changan Ford Chongqing factory in China’s southwest. Since 2011, the rail line has transported more than 2.5 billion US dollars worth of products from China to Europe. Deputy Director of Logistics Council of the Chongqing Gov’t, Yang Liqiong, said, “If the trains arrive empty, it does not help us in reducing transportation costs, then it’s not conducive for the formation of the global trade link.” The rail line is vital for foreign companies operating in Chongqing and for western China’s economic development. “This is a cost effective way to bring goods out of and in to Chongqing. So in terms of the scale, and efficiency, especially the goods devalue costs of time, it’s critical for the infrastructure of the development of Chongqing,” said Henley Travis, VP of HP Asia Operations. According to the Ministry of Commerce, in the first three quarters of 2012, trade between China and the EU reached about 420 billion US dollars. China has been relying on its advantages in labor and resources to export manufactured products to Europe. The Yu-Xin-Ou has given significant advantages to Chongqing and to the economic growth of western China. After 2 years in operation, the Yuxinou Railway system has resolved customs clearance of each country along the way. Regular service sets the scene for Chongqing to become the distribution center of European trade with China. Experts stress that they will be aiming to reduce the logistic costs to enhance the line’s economic value this year.

Rail linking Europe expected to open up China’s less-developed West [Xinhua, July 2, 2011]

CHONGQING, July 1 (Xinhua) — A cargo train filled with laptops and LCD screens has left Chongqing, a mega-city in China’s less-developed western regions, starting its 13-day trip to Duisburg, Germany, which marks the official launch of the new transcontinental rail freight route.

The new rail route witnessed its official opening on Thursday night, after three test runs since March last year.
Clattering out of the station at about 9 p.m., the cargo train is set to travel 11,179 kilometers across the far western Xinjiang Uygur Autonomous Region, Kazakhstan, Russia, Belarus, Poland, before finally reaching Germany.
The route offers a major shortcut to the more traditional sea trade routes from Shanghai and Guangzhou, cutting travel time to Europe from about 36 days by container ship to just 13 days by freight train, said Huang Qifan, mayor of the inland business hub.
Huang said that the train is also safer and less expensive than sea transport.
Though the rails have been there for over ten years, the route is new as no train services linking Chongqing and Europe have been provided before due to complicated customs checks and cargo transfers, according to Ma Zhongyuan, director of Chongqing customs.
Last year, China signed a strategic agreement with Russia and Kazakhstan to open the new freight route, as the country is trying to build the inland labor-rich municipality into an international high-tech hub, especially for laptops.
Foxconn, the world’s biggest contract electronics supplier, Acer, Taiwan’s leading computer maker, and Hewlett-Packard(HP) are already in place in Chongqing to produce laptops.
In the first five months this year, Chongqing sold 2.43 million laptop computers abroad. The exports were valued at 840 million U.S. dollars, accounting for 20 percent of the city’s total export value.
The city’s export of new- and high-tech products totaled 14.26 billion in the period, up 182.5 percent year-on-year.
Officials believe the shorter transport time to Europe by railway will make made-in Chongqing notebook computers more competitive.
Last month, a new cargo air route also became available between Chongqing and the European cities of Moscow and Luxembourg.
The province-sized city is already a major transport center at the junction of China’s prosperous East and poorer West, as cargo can be sent out of Chongqing along the Yangtze River, the country’s longest waterway,via air and railway.
The new rail route will be used to link south China’s Pearl River Delta manufacturing hub and the country’s southwest industrial belt with Europe, officials said.
Just last mouth, a rail route connecting Chongqing and a port in the southern manufacturing hub of Shenzhen went into operation.
The transcontinental track will also boost trade between southeast Asia and the Europe, as railways have already linked Chongqing with the southwestern border province of Yunnan and Guangxi Zhuang Autonomous Region, said Cai Jin, vice president of the China Logistics and Purchasing Association.
Currently, the train only leaves Chongqing for Duisburg once a month, but train services may be increased to once per day in the future as the city’s exports to Europe increase, according to Huang.
Related:
Freight rail across Eurasia cuts travel time for trading goods between China, Europe
CHONGQING, May 10 (Xinhua) — A new freight rail has started operating across Eurasia, linking the southwest Chinese economic hub of Chongqing with the Port of Antwerp in Belgium and cutting the travel time for goods traded between China and Europe in half, officials said Tuesday.
The 11,179 kilometers of rail, running through Kazakhstan, Russia, Belarus, Poland, and Germany, was first used on March 19. Transporting goods from Chongqing to Antwerp on this route takes about 16 days, or half the time required for the goods to be transported by sea, Chongqing Mayor Huang Qifan told reporters. Full story

HP to continue with investments in China [Xinhua, Sept 23, 2010]

NEW YORK, Sept. 22 (Xinhua) — Hewlett-Packard Co. will expand its presence in China, Larry Irving, the company’s vice president for global government affairs, said on Wednesday.
“Our goal in China is to be a good partner in China, to bring more products to the Chinese market and to be a good employer as well,” Irving told Xinhua at the Clinton Global Initiative annual meeting in New York.
HP’s presence in China began in 1981 with the opening of the first China HP representative office in Beijing. After years of solidifying business relationship, China Hewlett-Packard, the first high-tech joint venture in China, was established in 1985.
Nowadays, HP is the second-largest PC maker and a leading foreign PC vendor in China.
Earlier this year, to bolster its presence in China, HP joined hands with China’s Chongqing to announce a plan to operate a 20,000-square-meter facility in the city, where it will make state-of-the-art notebook and desktop PCs.
Irving said HP will continue to invest in China.
“We have private conversation with the Chinese government, about our particular circumstances,” he added. “HP’s presence has been grown in China. We are making more investment in China, not less investment in China. We see China as a great opportunity.”
Chinese Premier Wen Jiabao said last week that China is committed to building an open and fair business environment for foreign investors.
“All foreign enterprises registered in China enjoy national treatment,” Wen said in a speech at the opening ceremony of Summer Davos 2010 in Tianjin.

Chongqing, Chengdu among top investment destinations in China: U.S. businessmen [Xinhua, Feb 4, 2010]

NEW YORK, Feb. 3 (Xinhua) — The southwestern Chinese cities of Chongqing and Chengdu are among the best investment destinations in that country, several U.S. business executives agreed.
“Chongqing and Chengdu have such huge population centers, so they have greater opportunities than many other places,” David J. Hofmann, director for North America at Inter-China Consulting, told the China Investment Strategies Conference held here Wednesday.
Chongqing and Chengdu have enough labor forces to support the economic sector, especially some export-led industries, according to Hofmann, whohas 30-year business experience in China.
The two cities are also good places for innovators as they boast rich talent potentials, he added.
There are good universities and well-educated students in Chongqing and Chengdu who can play the operating and managing roles for investors’ companies, said the business executive.
Hofmann was echoed by Gene Huang, chief economist and vice president of FedEx, who said China’s strategy to develop its western regions is very supportive for doing business in Chongqing and Chengdu, which would remain attractive for U.S. investors “for quite some time.”
President and co-CEO of Tishman Speyer Rob Speyer also agreed that there are enormous government investments in the two cities.

State councilor stresses technological innovation for Chongqing’s development [Xinhua, April 9, 2010]

CHONGQING, April 9 (Xinhua) — State Councilor Liu Yandong has called for more efforts in scientific and technological innovation to boost development in China’s Chongqing Municipality.
Liu made the remarks during a recent inspection tour of Chongqing, the only municipality in China’s central and western regions.
She said innovation in science and technology is crucial to combat the financial crisis, optimize industrial structure, adjust the economic growth mode, and to achieve fast development.
Liu urged the municipality to make breakthroughs in its pillar industries, strive to foster technology-intensive burgeoning industries of strategic importance, speed up its building of a science and technology innovation center and an industrial base to apply scientific research to industrial production.
During her inspection, Liu visited schools, scientific research institutes, high-tech companies and cultural institutions.

Disposable income rises for Chongqing’s relocated urban residents in Three Gorges areas [Feb 21, 2010]

BEIJING, Feb. 21 (Xinhua) — Disposable income was at 8,231 yuan (1,205 U.S. dollars) per capita in 2009 for Chongqing’s urban residents relocated to make way for the Three Gorges project, said the National Bureau of Statistics (NBS) of China Sunday.
The figure was 11.5 percent up from the previous year, according to a statement on the NBS website.
The growth could mainly be attributed to the steady rise in salaries as the local government had taken measures to increase employment opportunities for relocated residents, according to the announcement.