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The value of Taobao.com and TMall.com in China, as well as outside
From now classic Taobao.com to the brand-oriented TMall.com, the Taobao story as presented by a Taobao agent for the customers outside China, and then by the players themselves: businesses even in the remote rural areas, the most successful one growing into recognizable brands on the TMall.com, the couriers who are the lifeblood of Taobao operations, not least the customers themselves, as well as a local small business becoming a global one.
Disclaimer: I have no association either with Alibaba Group or with Go2Taobao/BuyWithAgents. The sole purpose of this post is to provide an illustrative follow-up to The Upcoming Mobile Internet Superpower [Aug 13, 2013], Assesment of the Xiaomi phenomenon before the global storm is starting on Sept 5 [Aug 30, 2013], and Opinion Leaders and Lead Opinions: Reflections on Steven Sinofsky’s “Era of Continuous Productivity” vision [Sept 1, 2013] posts on my ‘Experiencing the Cloud’ trend-tracking blog.
- How to buy from Taobao? Best Taobao Agent [Go2Taobao.com YouTube channel, April 25, 2013]
How to order from Taobao? Check http://www.Go2Taobao.com Follow us: https://www.facebook.com/Go2Taobao https://twitter.com/Go2Taobao http://gplus.to/Go2Taobao Best Taobao Agent. Go2 Taobao Agency provide professional english service, international shipping and secure payments. How to Shop on Taobao? Check it right now, and safely buy from Taobao. - Buy from Taobao – Business Model [Go2Taobao.com YouTube channel, May 9, 2013]
- Taobao information [June 8, 2013]
Taobao is an online shopping platform where you can purchase anything and everything and have it delivered directly to your home. Sellers are able to post new and used goods for sale on the Taobao Marketplace either through a fixed price or by auction. The overwhelming majority of the products on Taobao Marketplace are brand new merchandise sold at a fixed price; auctions make up a very small percentage of transactions. Buyers can judge the sellers’ credit from their selling prestige, or the history of comment and complaint.
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- What is Taobao? [AlibabaGroupPage, May 1, 2013]
Interviews with people on the street, asking them what they know about Taobao – and how it helps them shop and sell. - Taobao.com preserves tradition of making Chinese lanterns [AlibabaGroupPage, July 16, 2013]
Taobao.com is the most popular online marketplace in China where thousands of small businesses and entrepreneurs have set up shop. In this Alizila video, we meet a 76-year-old Chinese lantern handicraft master who is keeping his traditional craft alive through the modern tools of Taobao. - E-commerce in Rural China [AlibabaGroupPage, April 25, 2013]
In this video from Alizila.com, e-commerce entrepreneur Du Qianli explains how his Taobao organic foods online store is helping poor, rural farmers in China’s Taihang Mountains earn extra income. For more on this story, go to http://alizila.com/can-e-commerce-ease-poverty-rural-china-video - 7Gege.com – Customer Success on Taobao.com and TMall.com [AlibabaGroupPage, May 13, 2013]
7GEGE.com’s CEO, Louise Cao, describes how she built her business into a success using Alibaba Group platforms Taobao.com and TMall.com. In business since 2009, she also offers advice on how to build an online fashion business. - Tmall.com Success: Joyme Furniture [AlibabaGroupPage, June 4, 2013]
Joyme Group is made up of several manufacturers who specialize in producing wooden furniture in northeastern Heilongjiang, China. For years, Joyme manufactured furniture for IKEA. However, with the rising costs of manufacturing and shrinking profits, Joyme decided to shift their business strategy from being IKEA’s OEM to launching their own retail brand. Find out how they used Tmall.com to make the transition successful. - The Life of Taobao Couriers [AlibabaGroupPage, May 1, 2013]
Learn about the life and dedication of Taobao couriers, working in rural and urban areas. They are the backbone of e-commerce in China. - A Mother’s Love on Taobao [AlibabaGroupPage, May 1, 2013]
To be a mother is a lifelong commitment and carrying milk for your baby is only the beginning. Learn how more than two million mothers have bought breastfeeding equipment on Taobao. - Small Business From Korea Finds Global Success [AlibabaGroupPage, July 23, 2013]
A look at how DS Global Corporation (DS글로벌) president, Heaon-Jae Lee, found success for his small business in the automotive industry using Alibaba.com from Korea. From early on, Lee understood how the internet could help him reach new markets around the world. He now does business with companies across 70 countries, including Turkey, USA, Spain, South Africa, Brazil and Russia.
General information
From: Xinhua Insight: Internet industry optimism to buoy China’s economy? [Aug 17, 2013]
At the 2013 China Internet Conference in Beijing, you felt like you had been teleported into a bazaar.
…
“Internet-related consumption of information products and services together with e-commerce are becoming the two biggest drivers of China’s economic growth and restructuring,” said Liang Chunxiao, vice president of the country’s top online trading platform Alibaba Group.
He predicted that online retail revenues would account for more than 16 percent of China’s total social sales in 2020 when the aggregated e-commerce volume exceeds 28.8 trillion yuan (4.7 trillion dollars).
“E-commerce will boost related sectors such as logistics and raw materials, and help release the consumption potential in many remote areas,” Liang added.
China’s Internet economy will take up 6.9 percent of its GDP in 2016, up from 5.5 percent seen in 2010, according to a research report by the Boston Consulting Group last year.
…
Alibaba has created 3 million direct jobs and over 100
billion[million] indirect ones, and the number will keep growing, according to Liang.Another big online retailer Jingdong hired more than 30,000 delivery men, most of whom are migrant workers, said vice president Zhao Guoqing.
From: China’s e-commerce prize [Bain & Company briefing (survey-based), Aug 30, 2013]
The year 2013 will be remembered as the one in which China surpassed the US as the world’s largest digital retail market. Last year, Chinese e-commerce shoppers spent RMB 1.3 trillion [$212 billion] online, a sum that has grown more than 70% annually since 2009 and is expected to continue on its amazing trajectory, reaching RMB 3.3 trillion [$490 billion] by 2015 (see Figure 1). Digital retailing has furiously transformed shopping and purchasing habits, opening up vast opportunities for retailers and brands that pay attention to the nuances of massively changing consumer behavior.
To better understand how Chinese consumers shop and purchase online—and what implications that has for retailers and brands—Bain & Company surveyed more than 1,300 online shoppers across all city tiers, incomes, ages and education levels. A follow-up to our initial 2012 China e-commerce report, it gave us the opportunity to dig deeper into the dramatic growth numbers to understand how the world of online retailing has changed their behavior (see Figure 2). We found Chinese shoppers have been more willing than shoppers in other markets to use their smartphones to make purchases, are comfortable with third-party payments and online banking, and are happy to rely on third parties for deliveries—as opposed to picking up products in stores. Perhaps most important for the years to come is that we learned that digital retailing now is the major influence on their actual purchasing decisions.
…
As it explodes, China’s digital retail market also is making a dramatic shift from consumer-to-consumer (C2C) sites like Taobao—which introduced shoppers to online buying—to business-to-consumer (B2C) sites like Tmall, which surveyed shoppers tell us they trust more than consumer sites. Between 2009 and 2012, the compounded annual growth rate for B2C platforms was 160%, and it’s expected to continue to grow 53% a year through 2015. By comparison, Taobao, which represents the vast majority of the C2C market, grew by a compounded annual rate of around 65% in the years 2009 to 2012.
The Tmall phenomenon
As retailers and brands frame their strategies, they can’ t minimize the importance of Tmall, the dominant site where the majority of China’s B2C purchases take place. Tmall generated revenues of RMB 180 billion [$29.4 billion] in 2012, and the site has deftly shaped online retailing in China. Consider its iconic 11.11 digital retail event, in which shoppers are offered up to 50% discounts on most products. The single 24-hour period in November delivered fully 7% of Tmall’ s annual revenues in 2012, according to company reports. By the end of the day 213 million unique visitors had logged on, the company reported, accounting for 106 million transactions.
A presence on Tmall is critical for any merchant trying to establish a foothold with China’s online shoppers. Given its scale and ability to deliver enormous traffic, Tmall serves as a good entry option for brick-and-mortar retailers or brands that want to get shoppers comfortable with the experience of buying online. Then retailers can focus on convincing shoppers to make purchases on their own sites. Trouble is, our survey found that consumers often confuse flagship stores on Tmall with retailers’ own e-commerce sites. The challenge is to clearly differentiate the retailer’s e-store from its Tmall offering.
Ultimately, Tmall helps everybody grow, and fast. Its 11-11 digital holiday creates a halo effect that makes those 24 hours an exciting time for all online retailers in China.
The potential is huge for B2C sites to win away shoppers from C2C sites. Based on our survey, 96% of C2C revenues come from shoppers buying new—not second-hand—products like those sold on B2C sites. Tmall, probably the only profitable B2C e-store, is poised to gain from this trend. Its sister company, C2C giant Taobao, feeds traffic to Tmall without a fee.
These online-only pure plays lead the market over omnichannel retailers, those with both a physical and online presence. The pure player world supports three major business models. On Pure Platforms, such as Tmall and Taobao, vendors operate their e-store and own the products. These sites have no in-house logistics, relying on third-party players to fulfill orders. However, they integrate delivery into their sites, making it easy for shoppers. Taobao established a common platform that allows its third-party logistics partners to track the route and delivery status of orders. An Open Platform is a variation of this model. In sites like Jingdong (formerly 360buy), vendors own the products but only partially operate the e-store, although the platform will operate an e-store for a vendor for a service charge. While the Open Platform model has in-house logistics capabilities, an e-store may opt to use a third party and pay a service fee. Meanwhile, B2C pure players like 51buy operate the e-store, fully owning the products and using in-house logistics, except in remote regions.
Logistics revolution in China: Will delivery companies deliver? [CKGSB Knowledge, June 24, 2013]
…
Alibaba, the world’s biggest business to business (B2B) online platform, is probably the one facing the biggest challenge. It’s popular customer to customer (C2C) online marketplace Taobao receives more than 20 million orders a day (70% of China’s deliveries). The parcels are delivered by third-party providers that have to deal with China’s underdeveloped delivery infrastructure. This is a common problem the whole industry is facing, prompting other e-commerce players like Jingdong Mall (JD.com which was formerly known as 360buy.com), Suning and VANCL to invest in self-owned and managed logistics systems to ensure they are in control of the whole process.
In contrast, Alibaba is not interested in owning its delivery network and since 2011 it has been lobbying for what it sees as a “logistics revolution”.
In May this year, it announced the formation of a new company, Cainiao Network Technology. With Alibaba’s former CEO, Jack Ma, as the Chairman, Cainiao is an alliance of logistics companies, couriers and e-commerce companies such as Yintai Group, Alibaba Group and SF-Express, that are willing to collectively work for the development of a nationwide IT logistics platform. An Alibaba group spokesperson told CKGSB Knowledge that the company is “spearheading the project in cooperation with industry partners with a common goal of enhancing the existing logistics network, whether it be on the IT or physical delivery and warehousing levels”. With a planned initial investment of $16.3 billion, the consortium marks a critical step in Alibaba’s vision of developing what it calls a China Smart Logistics Network within this decade. The ultimate aim is to solve a common problem that the company describes as a “key industry bottleneck for e-commerce growth in China”, the spokesperson says.
…
Only sophistication and specialization can ensure that Alibaba’s Taobao and Tmall platforms will function efficiently in the future. The company wants to be able to guarantee same-day delivery nationwide. And it believes this will be possible only if all the parties involved form partnerships and strategic alliances to actively participate in the development of a ‘Modern 21st Century Logistics Network’.
It’s an ambitious attempt. According to the company, over the next 5-10 years, the newly formed Cainiao will oversee the construction of a nationwide warehousing network that will cover a total area as large as 560 American football fields (3 million square meters approximately). Beijing, Tianjin, the Yangtze River Delta and the Pearl River Delta are some of the locations under consideration to build these logistics hubs. Since the project is conceived as an Open Logistics Platform, its partners, Taobao sellers and B2C websites can openly share facilities and all the logistics data.
China M-commerce Market Research 2012 [Advangent AG, May 15, 2013]
2012 is a triumphant year for e-commerce in China.
Alibaba, the owner of Taobao and TMall online store has reached top place as the most profitable Internet company in terms of net profit in Q4; several leading e-commerce providers are contending for larger market share while continuing to fuel the growth of the market. M-commerce is also booming.
Here’s a look at what China market holds for M-commerce in 2012 and beyond.
First of all, M-commerce user base has been growing steadily since 2009, it reached 149 million by the end of 2012 and expects to top 352 million by 2015.
In terms of market share, No one can beat Taobao‘s dominance at 62.7%. Jingdong, previously called 360 buy, remains a distant second at 16.7%, followed by a few other players like QQ, Suning, Vancl, Dung-dung and Yihaodian.
Moneywise, total revenue of M-commerce was merely 100 million US dollars in 2009, the figure topped 7.7 billion mark in 2012 and expects to reach 40.8 billion by 2015.
For M-commerce users, almost equal percentage of men and women shop online, the difference is less than 1%. However the number of women users is expected to catch up with men quickly.
China still has a regionally imbalanced economy. Most M-commerce shoppers come from affluent areas in the eastern part of China characterised by mega cities and dense population. For instance, 31.3%, 22.2% and 17.2% shoppers are from south China, east China and north China respectively where three largest metropolitan cities Guangzhou, Shanghai and Beijing are located.
There’re quite few choices for smartphone operation system. Android leads the market at 62.5%, followed by iOS at 32.7% and Symbian at 4.5%, which is still used on large number of low-end devices. Windows has got only 0.3% and there is lots of catch up to do for Microsoft.
Shoppers on Android, iOS and Symbian follow similar trends in time of shopping. However, while shopping on Android and iOS peak during the rush hours in the morning and afternoon, on the other hand, a large number of users on Symbian shop close to midnight.
Women and men have quite different tendencies in products bought. Women’s top purchases include women’s clothing, shoes, bags, cosmetic and skincare, and mother and baby products; men’s purchases include men’s clothing, women’s clothing, and 3C products.
Now, the average monthly spend for Q1, Q2, Q3 and Q4. While the spend under 8 dollars went down from 27.2% to 19.7%, spend in the 8 dollars to 48 dollars range has shown steady growth throughout the year. The spend level is expected to grow along with the improvement of living standard and maturization of large payment on mobile phone.
Concern for payment security is clearly indicated in payment method. 33.2% shoppers choose cash on delivery and 32.6% 3rd party payment such as Taobao’s Alipay. Only 13.2% choose online banking and 11.2% mobile payment. Less than 5% pay through China Mobile payment Easyown, and 2.4% through bank transfer.
For delivery method, around 67% shoppers use privately-run courier services due to price advantage and speed of delivery, around 21% choose EMS, a service run by China Post for security and better coverage as it’s often the only option for delivery to remote regions in China.
For users not choosing online shopping on mobile phone, the leading concerns are payment security, small screen that doesn’t provide good user-experience and slow network speed. Other concerns include, heard too many negative reviews, it’s troublesome to set up mobile payment, don’t have the right resources, worry about not good at using mobile online shopping, don’t know how to set up, don’t like online shopping, and don’t know smartphone can do online shopping.
This video infographic is presented by Advangent — a digital link to your business in China. Visit us to find more at http://www.advangent.com. Thank you for watching.
Chinese B2C E-Commerce driven by Luxury Goods and Social Commerce [preview for ‘Asia B2C E-Commerce Report 2013’ by yStats.com, Feb 5, 2013]
The recent “China B2C E-Commerce Report 2013” by Hamburg-based secondary market research company yStats.com provides information about the Chinese B2C E-Commerce market. Aside from trends, it covers revenues, the share of B2C E-Commerce on total retail sales, product categories, Internet user and shopper data, as well as information about leading players in B2C E-Commerce in China.
Chinese B2C E-Commerce expected to grow by approximately 30 Percent annually over the next Years
B2C E-Commerce is gaining more and more ground in China. According to forecasts, it is expected to grow by more than 30 percent annually between 2010 and 2016. Overall, fashion, shoes and bags, as well as computers and household appliances are among the most popular product categories online. B2C E-Commerce with luxury goods is one of the leading trends. In recent years, this segment has grown more strongly than traditional B2C E-Commerce.
A growing number of Chinese residents use social networks to purchase products online. Social Commerce is expected to become even more significant in China than in the USA. M-Commerce is also gaining in importance. Between 2011 and 2012, M-Commerce grew approximately fivefold and now accounts for more than four percent of total B2C E-Commerce sales.
Amazon is only in fifth Place among Online Retailers in China
Leading Chinese online retailers include Tmall [of Alibaba Group], 360buy, Tencent and Suning.com. Amazon is only in fifth place in China, with a market share of less than three percent. In 2011, Alibaba Group’s Tmall.com generated more than 100 billion CNY [$16.3 billion] in revenue, increasing its revenue by a three-digit growth rate. Some foreign companies also try to gain a foothold in the Chinese B2C E-Commerce market. In 2012, US company Toys’R‘Us opened its first online shop in China. However, online retailers face problems with the delivery of products ordered online. Consequently, retailers such as VANCL and 360buy are currently developing their own delivery solutions as shown in yStats.com’s “China B2C E-Commerce Report 2013”.
B2C E-Commerce and M-Commerce in China are expected to continue growing by double- to triple-digit percentage figures. However, the share of Internet users who also make purchases online is still much lower than in other countries of the Asia-Pacific region such as Japan and Australia.
Study on global B2C E-Commerce trends sees more personalization and increased use of mobile devices [yStats.com press release, April 11, 2013]
A newly released study by the Hamburg based secondary research company yStats points to trends expected to affect the B2C E-Commerce market in the coming years. Online shopping is likely to become more personalized, with retailers customizing their services and integrating online sales channels such as websites and social networks on any device that will connect to the Internet. M-Commerce is expected to play an ever larger role in the future, with over half a billion customers following the trend to shop via mobile devices by 2016. Moreover, throughout the world, online shoppers are forecasted to increasingly prefer to pay online when buying over the Internet, causing the online and mobile payment markets to grow strongly, especially in Asia.
Worldwide B2C E-Commerce growth will be led by large increases in the Asia-Pacific region
As current trends continue, Asia-Pacific is expected to overtake North America as the region with the highest B2C E-Commerce sales in 2013 and to account for over a third of global B2C E-Commerce revenues. By 2016, the Asia-Pacific region’s share is likely to increase further, while the North America and Western Europe shares of world total B2C E-Commerce are expected to steadily erode. Still, in 2013 USA is projected to remain by far the largest B2C E-Commerce market worldwide. One of the major trends there is expected to be growth of M-Commerce, reflected in triple-digit growth rates of mobile payments in the years to 2016. The Asia-Pacific region’s growth is expected to be led by China, with the number of online shoppers there projected to reach almost 2.5 times the number in the USA by 2016. M-Commerce is gaining popularity in China as well, with mobile sales on total B2C E-Commerce sales projected to triple by 2015. The online sales of luxury goods such as health and beauty products, apparel and watches has led the recent surge in B2C E-Commerce in China. New delivery systems and payment methods are being implemented in that country as well, helping to tap into the great potential for online commerce.
Intense growth foreseen in other nations
The other BRIC countries, Brazil, Russia and India, are also projected to see their B2C E-Commerce markets boom in the coming years. In India B2C E-Commerce is expected to see intense growth as soon as the payment environment is improved, since the current cash-on-delivery method of payment is seen as a hindrance to growth. The growth of Russian B2C E-Commerce is driven by the increasing Internet audience, already the largest in Europe, and increased online sales are anticipated as the challenge of product fulfillment is overcome. In Brazil online shopping benefits from growing mobile Internet penetration and social commerce. In Mexico B2C E-Commerce is forecasted to grow at double-digit rates in the years to 2015, with online travel sales leading the market. Another emerging B2C E-Commerce market is Africa. Growing smartphone penetration, especially in South Africa, is expected to boost M-Commerce and mobile payment markets on the continent.
Another trend influencing worldwide growth in online sales is the concept of group buying. In the Middle East particularly, group buying and daily deals websites have boosted B2C E-Commerce. Sales of Groupon in one nation in the region were so strong last year that the vendor could not keep up with the demand.
Growth expected in travel and gaming sectors
Among other trends highlighted in the yStats report, social media are forecasted to play an increasing role in the travel segment of the global B2C E-Commerce market, by helping customers research information for a trip. Moreover, the demand for travel arrangements adjusted for use on smartphones is likely to grow. Another market segment, online gambling, is expected to undergo a change in the years to 2015, with sports betting losing some of its share to lottery and casino.
Now automatic Go2Taobao.com => BuyWithAgents.com:
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Assesment of the Xiaomi phenomenon before the global storm is starting on Sept 5
Follow-up: Xiaomi announcements: from Mi3 to Xiaomi TV [‘Experiencing the Cloud’, Sept 5, 2013] with detailed information links and videos about the two market leading SoCs used in Mi3:
– NVIDIA Tegra 4 with 4+1 Cortex-A15 CPU, 72 GeForce GPU and the absolutely unique Chimera™ solution for HDR (High Dynamic Range imaging) photography and video recording
– Qualcomm Snapdragon 800 with the high-end Krate 400 CPU cores and Adreno 330 GPU
(Actually the benchmark performances are roughly equal although Qualcomm needs for that a much higher frequency.)
The news came yesterday declaring not less than
A new Android chapter [Hugo Barra on Google+, Aug 29, 2013]
After nearly 5½ years at Google and almost 3 years as a member of the Android team — the most amazing group of people I’ve ever worked with in my life — I have decided to start a new career chapter.
In a few weeks, I’ll be joining the Xiaomi team in China to help them expand their incredible product portfolio and business globally — as Vice President, Xiaomi Global. I’m really looking forward to this new challenge, and am particularly excited about the opportunity to continue to help drive the Android ecosystem.
It has been an amazing ride and true honor to be part of the Android team at Google, and I especially want to thank +Andy Rubin , +Hiroshi Lockheimer , +Sundar Pichai and +Vic Gundotra for their phenomenal support and mentorship over the years.
+Android team, I will truly miss you all!
To which co-founder and president of Xiaomi Corporation Bin Lin responded on his facebook account on August 29:
I am truly grateful to have Hugo joining Xiaomi to help lead our international business.
Being Google’s VP of Product Management for Android, Hugo has a deep understanding of Xiaomi’s unique business model of building a fully compatible Android OS (aka MIUI) by embracing the openness of the internet, building top performance device with great user experience, and selling direct to consumers at substantially lower price. We’ve achieved some level of success in China market. Hugo is the best person to drive this globally.
Being ex-Googler myself, I’ve always made sure that Xiaomi shares many of the believes as Google Android. For instance, we believe in protecting the Android ecosystem and therefore our handsets have always passed Android CTS [i.e. achieving Google Play compatibility]. We believe in top performance device and eCommerce sell-direct would benefit consumers. We are committed to drive the Android ecosystem moving forward.
Welcome to Beijing, Hugo!
Last time we have seen Hugo Barra at a press event in San Francisco with
Google’s Nexus 7 goes full HD [CNETTV YouTube channel, July 24, 2014]:
News were first leaked in: Android’s Hugo Barra Departs Google for China’s Xiaomi [AllThingsD, Aug 28, 2013 at 5:15 PM PT]
What’s going on? After Sundar Pichai expanded his Chrome responsibilities to Android as well, and Andy Rubin left the Android scene, so Hugo Barra became the #1 man in Google’s Android efforts, he is leaving for a much less influential Chinese maker of Android forked smartphones? What is the sense for him to have such a move?
In what follows below I will be able to give all the well justified reasons for that. Moreover, thanks to my earlier posts analyzing the Xiaomi phenomenon in all details, I will be able to convince every reader of this post in the most concise way that Hugo Barra was absolutely right about his decision to move to Xiaomi, as an even bigger thing is on the Horizon than what Google may become in the future.
Let’s start with the all-new RMB799 ($130) low-end superphone segment of Xiaomi: Xiaomi Red Rice (Hongmi) review
[a Xiaomi video on Youku via phonezilla2013 YouTube channel, Aug 21, 2013]
More information: UPDATE Aug’13: Xiaomi $130 Hongmi superphone END MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [‘Experiencing the Cloud’, Dec 12, 2012; Aug 1, 2013]
Note: Xiaomi Red Rice (Hongmi) manufacturing cost (BOM) has been estimated by TrendForce to be $84.7. See the press release, also included here in the very end of this post.
Then let’s see (note the Sept 5 warning on the illustration which is from Xiaomi itself):
| Previous segments |
Aug 16, 2011: | Aug 16, 2012: | April 9, 2013: |
| USD$326.6 | Xiaomi smartphone | Xiaomi 2 | Xiaomi 2S |
| USD$249.9 | Xiaomi 1S | Xiaomi 2A |
![image_thumb5[1]](https://lazure2.files.wordpress.com/2013/08/image_thumb511.png "image_thumb5[1]")
Detailed further information and market analysis:
– Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation [‘Experiencing the Cloud’, Aug 1, 2013]
– The Upcoming Mobile Internet Superpower [‘Experiencing the Cloud’, Aug 13, 2013]
Note: Only when you read The Upcoming Mobile Internet Superpower post (not only the e-book included there) completely (i.e. with the follow-up and global analysis parts) your understanding of the all-new Xiaomi Horizon could be sufficiently complete. It is only possible to give as a teaser certain crucial facts here:
– “The broader vision of Xiaomi, Lei [the founder and CEO of Xiaomi] pointed out, is to ship more than 100 million smartphones annually for one model by 2016” that was published in China Daily back 15 months ago. With Hugo Barra now in charge of Xiaomi Global it will be easy to achieve that, even far overcome.
– There is a new (maybe final before an IPO) round of financing said to be disclosed also on Sept 5 by Xiaomi. The amount was rumored as being not less than $2B and “from Chinese internet and mobile services firm Tencent (0700.HK), with Russian investment firm Digital Sky Technologies (DST) acting as an intermediary”. DST already invested $90 million into Xiaomi in Dec 2011, and another $216 million in Dec 2012.
– Then, DST is controlled by Russia’s richest man Alisher Usmanov with ~20B of private wealth and an additional ~13B wealth of its two business partners also controlled by Usmanov via 100% voting rights in his USM Holdings empire. USM Holdings has three groups of assets in its portfolio: Internet (with DST and a complete Mail.Ru Goup), Telecoms (with Megafon, Russia’s second largest mobile operator in terms of revenue and subscribers and the market leader in the mobile data segment, as well as Yota, the leader of the mobile broadband sector in Russia), Media and Steel & Mining.
– Tencent is controlled by Naspers (33.9%) which also heavily invested into the Mail.Ru Group earlier (29%), and might have some minority share of DST itself, indirectly via Tencent definitely (getting not less than 10.26% of DST with a $300M investment into it in April, 2010). Although Naspers’s CEO, Koos Bekker has a personal fortune of ‘only’ $580M (mid’12, so now closer to $1B probably) but has been the unquestioned leader and decision maker of the company, which has a market capitalisation of about $57B (mid’12, now much higher). Also Tencent’s own market capitalisation is not less than $88.6B (Aug 15, 2013).
– Also, Venture Capital Dispatch reported in January this year that “DST Global counts Chinese e-commerce giant Alibaba and online retailer JingdongMall [pre April 2013 360buy] as part of its Asian portfolio. DST, alongside other private equity firms like Silver Lake agreed to buy shares in Alibaba at a tender offer of $1.6 billion in 2011. That same year, DST Global also participated in a $1.5 billion third round of funding in Jingdong [pre April 2013 360buy] , with media reports stating that DST bought a 5% share in the online retailer for $500 million. … DST Global spent around $1.5 billion on both of those deals, said [DST partner John] Lindfors [responsible for the Chinese market].”
(AND THE FACTS DO NOT END HERE BUT ARE GOING TO EVEN HIGHER ECHELONS OF GLOBAL CAPITALISM. GOLDMANN SACHS AND LARRY SUMMERS ARE THE MOST NOTABLE EXAMPLES. BUT DO NOT FORGET J.P. MORGAN EITHER WHICH IS HAVING A 5% OWNERSHIP OF TENCENT AS WELL. So read The Upcoming Mobile Internet Superpower post completely.)
Now an additional focus on Xiaomi’s design and user experience leadership must be emphasized here, out of all that above (the illustration below is again from Xiaomi):
Xiaomi MI2 Product 3D View [Xiaomi China YouTube channel, Aug 25, 2013]
Xiaomi Fans Festival: MIUI V5 Design Concept [MrMiui YouTube channel, April 9, 2013]
Xiaomi One Minute Show 01 Smooth MIUI [Xiaomi China YuTube channel, May 22, 2013]
0:04 This is our smooth MIUI v5
0:07 You can feel the smooth animation effect from every detail of MIUI v5
0:11 when switching the list in apps like Contacts or App Market
0:18 Feel the smooth switch of the background in the interface of Music
0:22 even the tiny volume icon is smoothly optimized as well
0:25 Your playlist, album photo and lyrics are perfectly combined
0:31 Switch between the camera and gallery swiftly and smoothly
0:37 When you open a photo album, you can see photos smoothly blossom on your screen
0:43 You can also have a quick and smooth slide when there are a lot of photos in your album
0:48 All the icons vibrate smoothly after reordering
0:51 We also redesigned the animation of deleting apps
0:55 You can feel the smooth animation everywhere in MIUI v5
1:00 What do you think of MIUI v5?
1:03 For more Xiaomi One Minute Show, please visit Xiaomi Community
Note: The Xiaomi community is on https://www.facebook.com/xiaomichina. The other shows are available when one click on the “YouTube” in the header (not all of them are one minute long). The “proper” One Minute Shows I found on XiaomiHK: currently 11, unfortunately all in Chinese.
There is also a MIUI community around the world which will make Barra’s job much easier. With ‘MIUI fan clubs’ – already available in 23 countries 15 months ago – the localization problem has been well solved. These fan clubs are producing MIUI ROMs for modding a range of already existing phones. And the results are quite good:
MIUI 5 on Samsung Galaxy s4 !!! (Review) [TheExilimus YouTube channel, July 28, 2013]
Note: this is why 20+ million MIUI users were indicated on the previous illustration by Xiaomi vs. 15+ million Xiaomi phone users.
Moreover, MIUI is continously evolving, and updated every Friday based on feedback from its users. The latest example (full description of the update):
MIUI ROM 3.8.30 Update Highlights [MrMiui YouTube channel, Aug 29, 2013]
Also the marketing hype generated by Xiaomi should be emphasized separately here as well. It is best demonstrated by this:
Xiaomi 2012 Conference Start Show [Xiaomi China YouTube channel, Aug 27, 2013]
What kind of company Xiaomi is, after all?
Explanation: Xiaomi CEO: Don’t call us China’s Apple [Reuters TV YouTube channel, Aug 15, 2013]
Based on this interview Reuters published its news article For China’s Xiaomi, it’s what’s on the inside that counts [Aug 16, 2013] from which the following excerpts are the most relevant ones here:
Xiaomi looks a bit like Apple but is really more like Amazon with some elements of Google,” Lei said in an interview in Beijing, dressed in a blue shirt, blue jeans and brown shoes.
“The mobile phone is only the carrier,” Lei said. “Microsoft used to sell Windows in a box with a CD in it. Does that make Microsoft a paper box company?”
…
The 43 year-old chief executive said it was high time for the Apple comparisons to end and the rivalry with local tech giants Alibaba Group Holding, Baidu Inc and Tencent Holdings Ltd to start.
Xiaomi currently makes around 20 million yuan ($3.27 million) a month in revenue from its mobile Internet platform, which includes a game centre, an online marketplace and a social messaging app that competes with Tencent’s popular WeChat.
In the first half, that figure was equivalent to less than 1 percent of monthly revenue, company data shows.
Lei estimated mobile Internet revenue may rise to as much as 150 million yuan [$24.41 million] a month by the end of next year as Xiaomi develops what he called its software ecosystem.
He declined to give specific details, but said Xiaomi had the hardware it needed to expand into online services.
“Xiaomi selling mobile phones is like Amazon selling Kindles,” he added.
This points quite clearly to the expansion of Xiaomi’s application (and operations) portfolio towards the e-commerce. Only this way would be possible to increase the current annualized revenue of about $40 million from the mobile Internet platform to about $300 million in just one a half year. This also means that in the long-run Xiaomi is going to be a mobile e-commerce company with affordable mobile devices offered as well, and not a premium device company, like Apple. Similarly, there are fundamental differences of the same kind from the business model of Samsung as well. Even more, this means an all-encompassing disruption of the whole industry.
Finally read this 3d party analysis:
TrendForce：Xiaomi’s New Red Rice Phone Takes China by Storm, Carries $US 85 BOM [press release, Aug 29, 2013]
(Note that Xiaomi’s own superphone segments are different as was shown above:
USD$326.6 for high-end superphones, USD$249.9 for mid-range superphones, and
?USD$130? for low-end superphones, with the latest question mark for the reason of not yet announced global prices – as the USD$130 equivalent RMB799 is China only price. Wait for Sept 5.)
According to global market research firm TrendForce, smartphone manufacturing costs are decreasing – in 2014, low-end devices that cost less than US$150 are expected to represent 14% of total smartphone shipments worldwide, up from 11% forecasted for this year. Mid-end smartphones, which cost between US$150 and US$450, are projected to account for more than 50% of shipments in 2014. Clearly, smartphone makers looking to expand their market share cannot overlook the low to mid-end sector. Fully aware of this, Chinese smartphone manufacturer Xiaomi has released a Hongmi, or Red Rice, a device with decent specifications and a low price tag of RMB799 [$130].
Taking a look at Red Rice’s hardware, its MediaTek MT6589 chipset accounts for 20% of total manufacturing cost. The 4.7-inch, 312 ppi IPS display by AUO represents 22% of cost and is a significant upgrade from the 220 ppi display commonly used in similarly priced devices. Based on component cost, total manufacturing cost for the Red Rice device is estimated at US$85 (4Q”13). With a retail price of RMB799, roughly equivalent to US$130, Xiaomi is profiting at a rate difficult for other smartphone makers to keep up with.
Xiaomi is not relying on traditional sales channels for its new device but turning to Internet retailers instead – the company hopes to garner revenue from software, advertising, etc., creating a new smartphone profit model. TrendForce believes Xiaomi is able to offer Red Rice at such a low price because the maker has a solid grasp on three important points of cost control.
– First, Xiaomi usually unveils new products very early, at least a quarter before the actual release date, which gives component cost time to decrease.
– Second, Xiaomi controls inventory better than its competitors. Using an Internet pre-order sales model, Xiaomi is able to get a more exact estimation for initial production, thereby avoiding risk if sales are not as strong as expected.
– Third, by marketing via social networks, Xiaomi cuts down on advertising costs, enabling the manufacturer to continue causing a stir on the market with each new device release.Red Rice’s groundbreaking price will inevitably have an influence on other smartphone manufacturers’ pricing strategies, especially for low to mid-end products. Currently, Xiaomi’s main market is China. The company is eagerly expanding on foreign markets as well, but results have been limited. Whether Xiaomi’s low prices will have an effect on smartphone makers in other markets will depend on the Chinese manufacturer’s foreign sales.
TrendForce believes Xiaomi’s long-term strategy includes continued expansion on the domestic market as well as breaking into foreign markets with high price-performance ratio devices. As social networking platform services and software are the company’s main sources of profit, Xiaomi will need to develop new strategies to attract consumers in foreign markets. As the company’s recently closed funding round has skyrocketed its valuation, Xiaomi is financially set to expand in foreign markets, potentially by acquiring local businesses. Or, the funds could be used to improve manufacturing and ensure timely product delivery, a notable weakness of the growing company.
Mark Zuckerberg’s personality is hyped (again) with a quite worthwhile initiative (otherwise) but with substantial global financial interests behind it as well
The internet.org initiative for the next 5 billion people is even a bigger announcement than the Steve Ballmer’s retirement from Microsoft announcement given The Upcoming Mobile Internet Superpower [Aug 13, 2013, with extensive follow-up & ‘The global forces behind …’ analysis, later in the post, as of August 22 at 9:08pm] and the substantial global financial interests (uncovered there and) otherwise also tied to the creation of the whole global Facebook phenomenon (also indicating that Mark Zuckerberg has been just a strawman of something significantly bigger going on behind the scenes from the very beginning). Just two images which were included into the The Upcoming Mobile Internet Superpower as a reminder of that (before documenting the internet.org initiative in this post):
While the true intent of this announcement is covered by things described above, here is what was officially told to the world:
Every one of us. #ConnectTheWorld [Internet.org YouTube channel, Aug 20, 2013]
Technology leaders launch partnership to make internet access available to all [joint press release available from http://internet.org/ and number of other sources, Aug 20, 2013]
Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm, Samsung to be founding partners
MENLO PARK, Calif., Aug. 20, 2013 – Mark Zuckerberg, founder and CEO of Facebook, today announced the launch of internet.org, a global partnership with the goal of making internet access available to the next 5 billion people.
“Everything Facebook has done has been about giving all people around the world the power to connect,” Zuckerberg said. “There are huge barriers in developing countries to connecting and joining the knowledge economy. Internet.org brings together a global partnership that will work to overcome these challenges, including making internet access available to those who cannot currently afford it.”
Today, only 2.7 billion people – just over one-third of the world’s population – have access to the internet. Internet adoption is growing by less than 9 percent each year, which is slow considering how early we are in its development.
The goal of Internet.org is to make internet access available to the two-thirds of the world who are not yet connected and to bring the same opportunities to everyone that the connected third of the world has today.
The founding members of Internet.org –Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung – will develop joint projects, share knowledge, and mobilize industry and governments to bring the world online. These founding companies have a long history of working closely with mobile operators and expect them to play leading roles within the initiative, which over time will also include NGOs, academics and experts as well. Internet.org is influenced by the successful Open Compute Project, an industry-wide initiative that has lowered the costs of cloud computing by making hardware designs more efficient and innovative.
In order to achieve its goal of connecting the two-thirds of the world who are not yet online, Internet.org will focus on three key challenges in developing countries:
Making access affordable: Partners will collaborate to develop and adopt technologies that make mobile connectivity more affordable and decrease the cost of delivering data to people worldwide. Potential projects include collaborations to develop lower-cost, higher-quality smartphones and partnerships to more broadly deploy internet access in underserved communities. Mobile operators will play a central role in this effort by driving initiatives that benefit the entire ecosystem.
Using data more efficiently: Partners will invest in tools that dramatically reduce the amount of data required to use most apps and internet experiences. Potential projects include developing data compression tools, enhancing network capabilities to more efficiently handle data, building systems to cache data efficiently and creating frameworks for apps to reduce data usage.
Helping businesses drive access: Partners will support development of sustainable new business models and services that make it easier for people to access the internet. This includes testing new models that align incentives for mobile operators, device manufacturers, developers and other businesses to provide more affordable access than has previously been possible. Other efforts will focus on localizing services – working with operating system providers and other partners to enable more languages on mobile devices.
By reducing the cost and amount of data required for most apps and enabling new business models, Internet.org is focused on enabling the next 5 billion people to come online.
Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm, Samsung and other partners will build on existing partnerships while exploring new ways to collaborate to solve these problems.
“For more than 100 years, Ericsson has been enabling communications for all and today more than 6 billion people in the world have access to mobile communications,” said Hans Vestberg, President and CEO of Ericsson. “We are committed to shaping the Networked Society – where everyone and everything will be connected in real time; creating the freedom, empowerment and opportunity to transform society. We believe affordable connectivity and internet access improves people’s lives and helps build a more sustainable planet and therefore we are excited to participate in the Internet.org initiative.”
“As a world leader in mobile solutions for emerging markets having powered more than 300 million smart devices within 2 years, MediaTek whole heartedly supports the Internet.org initiative,” said MK Tsai, Chairman of MediaTek. “Global internet and social media access represent the biggest shift since the industrial revolution, and we want to make it all-inclusive.”
“Nokia is deeply passionate about connecting people – to one another and the world around them,” said Nokia President and CEO Stephen Elop. “Over the years, Nokia has connected well over a billion people. Our industry is now at an exciting inflection point where internet connectivity is becoming more affordable and efficient for consumers while still offering them great experiences. Universal internet access will be the next great industrial revolution.”
“Today, more than 300 million people use Opera every month to access the internet. Tomorrow, we have a chance to serve the next 5 billion people connecting on mobile devices in developing countries. It’s in Opera’s DNA to save people time, money and data, and through Internet.org we think we can help advance these goals,” said Lars Boilesen, CEO Opera Software.
“Mobile has helped to transform many people’s lives in the emerging regions where often a computing device will be the first and only mobile experience they’ll ever have” said Paul Jacobs, chairman of the board and CEO of Qualcomm Incorporated. “Having shipped more than 11 billion chips, Qualcomm is a market leader that is committed to the goal of bridging the digital divide. We’re pleased to be a part of Internet.org and to be working with key ecosystem players to drive this initiative forward.”
“This new initiative has big potential to help accelerate access to the internet for everyone,” said JK Shin, CEO and President of the IT & Mobile Communications Division at Samsung Electronics. “We’re focused on delivering high quality mobile devices to ensure that the next five billion people have great mobile internet experiences.”
The Internet.org website launches today and provides an overview of the mission and goals, as well as a full list of the partners. In the coming weeks, it will feature interviews with technology leaders and experts, along with the latest news on Internet.org activities.
The embedded video on the internet.org site explains further: Mark Zuckerberg aims to put the entire world online [CNN YouTube channel, Aug 21, 2013]
adding more fuel to the campaign, as two follow-up videos on CNN channel as well:
– Zuckerberg, tech companies look for “next 5 billion… [CNN YouTube channel, Aug 21, 2013]
– Mark Zuckerberg’s Internet plan: realistic or impossible? [CNN YouTube channel, Aug 22, 2013]
And the leading global media was awash with extensive coverage of this as evidenced here just with the following videos:
– Mark Zuckerberg’s World-Wide Plan for the Internet [Bloomberg YouTube channel, Aug 21, 2013]
– Mark Zuckerberg Announces Plan To Get Billions More People Online [HuffPost Live YouTube channel, Aug 21, 2013]
– Facebook-led project pushes for wider internet access – corporate [Euronews YouTube channel, Aug 22, 2013]
– Chinese manufacturing grows and Facebook wants to spread the internet worldwide [FRANCE 24 English YouTube channel, Aug 22, 2013]
From the participant companies we had the following corporate communications in addition to the joint press release:
Ericsson and Internet.org – providing the internet for everyone, everywhere [Aug 21, 2013]
The Networked Society will bring significant economic, social and environmental benefits to hundreds of millions of people, one of which is providing internet access to the remaining two-thirds of the planet. Today (Aug 21, 2013), Ericsson, Facebook and a number of other tech giants took a step closer to realizing these benefits through the announcement of a global initiative we call Internet.org. Through this, we aim to reduce the cost of delivering basic internet services and make them available to everyone, everywhere.
So, why is this initiative so important? In the Networked Society, connectivity is the starting point for new ways of innovating, collaborating and socializing. It’s about creating freedom, empowerment and opportunity, transforming industries and society while helping find solutions to some of the greatest challenges facing our planet.
Hans Vestberg, President and CEO of Ericsson, says: “For more than 100 years, Ericsson has been enabling communications for all, and today more than 6 billion people have access to mobile communications. We are committed to shaping the Networked Society – where everyone and everything will be connected in real time; creating the freedom, empowerment and opportunity to transform society. We believe affordable connectivity and internet access improves people’s lives and helps build a more sustainable planet, and therefore we are excited to participate in the Internet.org initiative.”
Some of the initial areas that are considered barriers to increasing access to the internet are the cost of smartphones, the cost of delivering data, and inefficient data-hungry applications. Cheaper phones, improved data compression techniques, and apps that use less data and reduce battery usage are some of the initial areas of investigation. Others include more efficient allocation of spectrum, edge caching, sharing hardware design, and efficiency optimization.
Ericsson has several areas of expertise to offer the initiative, including: knowledge of scale, its global presence and local expertise, and its technology leadership in the area of mobile networks and supporting service enablers.
Ericsson believes that communication is a basic human need, and fulfilling this has been our mission since the foundation of our company.
Opera helps connect the next 5 billion online [Opera News, Aug 21, 2013]
Today, only 2.7 billion people are connected to the internet. The cost of getting online is one of the biggest challenges for users worldwide. We want to help get the next five billion online.
For the last 17 years, we have built products and services to get people online. We believe in the power of sharing ideas. Opera Mini is our mobile browser that uses compression technology to save you time and money. Operators around the world have embraced Opera Mini and Opera Web Pass as the best choice for their users to get online.
WE HAVE PARTNERED WITH FACEBOOK TO GET THE NEXT 5 BILLION ONLINE
Meet Internet.org – a partnership between Facebook, Opera, and other technology companies. This is a global effort that will also involve help from local communities, non-profit organisations and experts across the world. We are proud to contribute to the project with our competence in Internet technology.
WE WANT TO HEAR FROM YOU
Are you among the few in your country who has access to the internet? Tell us how you spend your time online. How has the internet helped you? We’d love to hear from you. Get in touch with us on Twitter, Facebook or byemail.
“Today, more than 300 million people use Opera every month to access the Internet.
Tomorrow, we have a chance to serve the next 5 billion people connecting on mobile devices in developing countries. It’s in Opera’s DNA to save people time, money and data, and through internet.org we think we can help advance these goals.”
— Lars Boilesen, CEO Opera Software.
Further information about the other companies’ involvement you can find in the following article also linked on the internet.org homepage:
Facebook Leads an Effort to Lower Barriers to Internet Access [The New York Times, Aug 20, 2013]
MENLO PARK, Calif. — About one of every seven people in the world uses Facebook. Now, Mark Zuckerberg, its co-founder and chief executive, wants to make a play for the rest — including the four billion or so who lack Internet access.
On Wednesday, Facebook announced an effort aimed at drastically cutting the cost of delivering basic Internet services on mobile phones, particularly in developing countries, where Facebook and other tech companies need to find new users. Half a dozen of the world’s tech giants, including Samsung, Nokia, Qualcomm and Ericsson, have agreed to work with the company as partners on the initiative, which they call Internet.org.
The companies intend to accomplish their goal in part by simplifying phone applications so they run more efficiently and by improving the components of phones and networks so that they transmit more data while using less battery power.
For Mr. Zuckerberg, the formation of the coalition is yet another way in which he is trying to position himself as an industry leader. He has been speaking out more forcefully than other tech executives on topics like immigration overhaul, which the industry sees as critical to its hiring needs. With Internet.org, he is laying out a philosophy that tries to pair humanitarian goals with the profit motive.
“The Internet is such an important thing for driving humanity forward, but it’s not going to build itself,” he said in a recent interview. “Ultimately, this has to make business sense on some time frame that people can get behind.”
But the effort is also a reflection of how tech companies are trying to meet Wall Street’s demands for growth by attracting customers beyond saturated markets in the United States and Europe, even if they have to help build services and some of the infrastructure in poorer, less digitally sophisticated parts of the world.
Google, for example, began a program with phone carriers last year that offers wireless users in some developing countries free access to Gmail, search and the first page clicked through from a search’s results. Google is also reaching for the sky with Project Loon, an attempt to beam Internet access down to earth from plastic balloons floating more than 11 miles in the atmosphere.
Twitter, which is preparing to offer shares to the public in an initial stock offering, has struck its own deals with about 250 cellphone companies in more than 100 countries to offer some free Twitter access, and worked to make sure its service is easy to use on even the cheapest cellphones.
These companies have little choice but to look overseas for growth. More than half of Americans already use Facebook at least once a month, for instance, and usage in the rest of the developed world is similarly heavy. There is nearly one active cellphone for every person on earth, making expansion a challenge for carriers and phone makers.
Poorer countries in Asia, Africa and Latin America present the biggest opportunity to reach new customers — if companies can figure out how to get people there online at low cost.
The immediate goals of the new coalition are to cut the cost of providing mobile Internet services to 1 percent of its current level within five to 10 years by improving the efficiency of Internet networks and mobile phone software. The group also hopes to develop new business models that would allow phone companies to provide simple services like e-mail, search and social networks for little or no charge.
While that sounds far less exciting than, say, Google’s idea of delivering the Internet by balloon, Mr. Zuckerberg says small efforts can add up to big changes.
“No one company can really do this by itself,” he said.
Facebook is already working on techniques to reduce the average amount of data used by its Android mobile app from the current 12 megabytes a day to 1 megabyte without users noticing.
Qualcomm, whose chip technology is prevalent in advanced cellphones, has created new designs to stretch a phone’s battery life, slice the amount of data needed to transmit a video and extend the reach of mobile networks through tiny devices similar to Wi-Fi routers.
The coalition partners have also begun trying new ways of reducing the data charges paid by cellphone customers while still enabling phone makers and carriers to make money.
For example, Nokia, the Finnish cellphone maker, ran a recent experiment with Facebook and the Mexican phone carrier Telcel, in which it bundled free Facebook access with some of its Asha feature phones. Sales rose significantly, and the company decided to run similar promotions for customers of Bharti Airtel, a mobile carrier in India and Africa.
[Note that with new Nokia Asha platform, which is a full platform enhancement of the earlier Asha Touch upgrade of the legacy S40 platform, Nokia has done already the most among the internet.org founding members to achieve the now declared common challenges of Making access affordable, Using data more efficiently and Helping businesses drive access. You can check that by reading the posts behind the indicated tags on this blog.]
However, the Internet.org team does not plan to tackle some thorny infrastructure issues that are huge barriers in the developing world, particularly the long-distance transmission of data to far-flung places.
Michuki Mwangi, regional development manager for Africa at the Internet Society, a nonprofit group that has long worked to expand global Internet access, said the continent sorely lacked local interconnection points, forcing most requests for content like YouTube videos to be routed through Europe at high cost. Creating more connection points would require navigating a thicket of government interests and powerful incumbents. But at the very least, the group would like Facebook and Google to put copies of their content on a greater number of African servers to deliver it more quickly and cheaply, something that both companies say they are considering.
As with the Open Compute coalition started by Facebook in 2011 to improve the efficiency of data centers, Facebook will seek to add other partners to Internet.org, including national governments, wireless phone carriers and Microsoft, a longtime Facebook ally that has its own projects to expand access.
But Google — whose search and YouTube video products are as fundamental as Facebook’s social network to many Internet users — is likely to remain outside the group.
For one, its own efforts to expand Internet access are aggressive. In addition, the company is constantly refining its Android software, which runs the majority of new smartphones sold, to improve efficiency and battery life.
“We’re always making investments in technology and programs to help people get online,” said Courtney Hohne, a Google spokeswoman. “We have teams around the world working on products tailored to local needs.”
Bill Gates, the chairman of Microsoft and co-chairman of the Bill and Melinda Gates Foundation, recently suggested that Project Loon and similar projects were not the best use of resources to help people in the poorest nations.
“When a kid gets diarrhea, no, there’s no Web site that relieves that,” he said in a recent interview with Bloomberg Businessweek.
Mr. Zuckerberg acknowledged that basic health care is essential, but said that “if you can afford a phone, I think it would be really good for you to have access to the Internet.”
The potential is already obvious in places like the Philippines, where the second-largest mobile phone company, Globe Telecom, has used free Twitter, Facebook or Google access as promotions to increase the number of its 37 million users who also subscribe to a mobile data plan to 20 percent from virtually zero in two years.
“Once you’re connected, you’re connected, and you don’t want to look back,” said Peter Bithos, Globe’s senior adviser for consumer business.
For Facebook, which generates most of its revenue from selling advertising that it shows to its users, the immediate profits from expanding Internet access will be minimal, Mr. Zuckerberg said, although he acknowledged that the long-term potential was there.
“We’re focused on it more because we think it’s something good for the world,” he said, “rather than something that is going to be really amazing for our profits.”
Android to overtake the overall PC market?
I came to this after the recent posts of mine (between July 20 and August 17, 2013):
- With Android and forked Android smartphones as the industry standard Nokia relegated to a niche market status while Apple should radically alter its previous premium strategy for long term
- Google Play catchup with iOS App Store and its way of assuring compatibility across Android 1.6 to 4.3
- The Upcoming Mobile Internet Superpower
- China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web
- Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price
- Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation
- GiONEE (金立), the emerging global competitor on the smartphone market
- Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung
as well as after the accumulated contents of my separated website on the whole issue of ‘USD99 Allwinner’ devoted to a multifaceted disruption to not only the traditional PC market but even to the current tablet market as the analyst companies are viewing that.
Those analyst companies are already hinting indirectly to the possibility of Android (sooner or later) overtaking the overall PC market via the following headlines which I derived from their recent press release contents:
- IDC: ‘Tablets will surpass portable PC volumes already this year’
- Gartner: ‘Traditional PC shipments to decline as tablets are becoming the primary consumption device’
- Digitimes Research: ‘Overtaking iPad will happen in 2H13’
- Canalys says ‘Yes’
- EnfoDesk (Analysys International) from China says ‘For sure, as it is already happening against the iPad in China even at a nascent stage of the local tablet market’
You can read those release in the detailed sections given below.
Before that first note: Everything is rooted in the established fact that: TrendForce: iPad Marked Historically Low Market Share 35% of Global Q2 Tablet Shipment [press release, July 25, 2013] (although the exact number differs between the different market research organisations, as you will see in the detailed sections below)
According to the survey by WitsView, the display research division of the global market intelligence provider TrendForce, the global shipment of the 7” tablets with WSVGA resolution and above attained 41.1 million units, dropping 12.4% from the previous quarter. The seasonal factor, the generation shuffles for some mainstream products, and the inventory adjustments amid the weakening sales were all key reasons for declining shipments.
WitsView’s research director Eric Chiou says that Apple, as one single brand that controls the most volumetric tablet shipment, saw its 9.7” iPad entering the end of life cycle in Q2, and iPad mini’s relatively selling prices caused slow sales and the impacts from the inventory adjustments, leading to a dropping shipment of 14.6 million units compared with 19.5 million units in Q1. On top of the quarterly drop as high as 25%, its market share has dropped to 35.5%, the new historical low.
Samsung’s ambition of boosting the tablet shipment was also shown on the Q2 shipment. Despite its slightly decreased shipment of 8.8 million units from the previous quarter, the Korean maker’s market share, supported by the newly launched 8” model, grew from 20.2% to 21.5%, still a remarkable result. As for the two leading PC brands, Asus and Acer, their business cores both were placed on the under-$130 7” products, and the price-cutting strategy helped them become the two of a few brands counter to the declining trend, seeing excellent QoQ growth of 60% and 36%, respectively.
“The two long-term winners of the entry-level tablet segment, Amazon and Google, showed unideal shipment results, holding shipment volumes of only 1.1 million and 0.9 million units, respectively,” Chiou indicates. Amazon’s 2013 new models are all concentrated after September and the brand is in an empty-product period, while Google’s fighter model Nexus 7 had the 1st generation approach the end of life cycle in Q2 and saw a significantly dropping shipment. The single-quarter shipment will bounce back to more than 2 million units in Q3 as the 2nd generation product is projected to ship smoothly.
The white-box tablet couldn’t avoid the decline in Q2. The price increases and the short supply for the key component RAM led to double strikes of cost increase and insufficient supply to white-box tablets that had smaller production scales, in addition to brands’ strongly promoted entry-level tablets that squeezed their room for survival. Under both the internal and external impacts, the white-box tablet saw a shipment volume of only 9.7 million units, declining 7% QoQ
Based on WitsView’s analysis, on top of Amazon’s yearly new 7” model and the 2nd generation of Nexus 7, several highly-anticipated models will be revealed in Q3, including Apple’s heavyweight Generation 5 iPad and the new Android 10.1” tablet intensively designed by PC brands. With the stimulation of improved spec and tempting prices, the Q3 shipment is projected to reach an amount of 49.6 million units, challenging a QoQ growth of 21%. The tablet shipment for the entire 2013 is estimated at 196.5 million units, including 153.2 million units of brand tablets and 43.3 million units of white-box tablets.
The second well established fact affecting the future is that Surface RT was a huge market failure first recognized indirectly via the FORM 10-K submission of the Microsoft on July 18, 2013.
… The general availability of Surface RT and Windows 8 started on October 26, 2012. The general availability of Surface Pro started on February 9, 2013. …
ITEM 6. SELECTED FINANCIAL DATA
… includes a charge for Surface RT inventory adjustments recorded in the fourth quarter of fiscal year 2013, which decreased operating income by $900 million, net income by $596 million, and diluted earnings per share by $0.07. …
RESULTS OF OPERATIONS
…
- Cost of revenue increased $2.7 billion or 16%, reflecting increased product costs associated with Surface and Windows 8, including an approximately $900 million charge for Surface RT inventory adjustments, higher headcount-related expenses, payments made to Nokia related to joint strategic initiatives, royalties on Xbox LIVE content, and retail stores expenses, offset in part by decreased costs associated with lower sales of Xbox 360 consoles and decreased traffic acquisition costs.
- Sales and marketing expenses increased $1.4 billion or 10%, reflecting advertising of Windows 8 and Surface.
…
Windows Division
…
Fiscal year 2013 compared with fiscal year 2012
Windows Division revenue increased $839 million. Surface revenue was $853 million. …
Cost of revenue increased $1.8 billion, reflecting a $1.6 billion increase in product costs associated with Surface and Windows 8, including a charge for Surface RT inventory adjustments of approximately $900 million. Sales and marketing expenses increased $1.0 billion or 34%, reflecting an $898 million increase in advertising costs associated primarily with Windows 8 and Surface.
…
The possibility of such failure was already recognized in my other posts:
- Microsoft Surface with some questions about the performance and smoothness of the experience [Nov 12 –28, 2012]
- Steven Sinofsky, ex Microsoft: The victim of an extremely complex web of the “western world” high-tech interests [Nov 13-20, 2012]
IDC: ‘Tablets will surpass portable PC volumes already this year’
IDC Forecasts Worldwide Tablet Shipments to Surpass Portable PC Shipments in 2013, Total PC Shipments in 2015 [press release, May 28, 2013]
According to a new forecast from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker, tablet shipments are expected to grow 58.7% year over year in 2013 reaching 229.3 million units, up from 144.5 million units last year. IDC now predicts tablet shipments will exceed those of portable PCs this year, as the slumping PC market is expected to see negative growth for the second consecutive year. In addition, IDC expects tablet shipments to outpace the entire PC market (portables and desktops combined) by 2015. (A press release summarizing IDC’s latest PC market forecast can be found here.)
“What started as a sign of tough economic times has quickly shifted to a change in the global computing paradigm with mobile being the primary benefactor,” said Ryan Reith, Program Manager for IDC’s Mobility Trackers. “Tablets surpassing portables in 2013, and total PCs in 2015, marks a significant change in consumer attitudes about compute devices and the applications and ecosystems that power them. IDC continues to believe that PCs will have an important role in this new era of computing, especially among business users. But for many consumers, a tablet is a simple and elegant solution for core use cases that were previously addressed by the PC.”
While Apple has been at the forefront of the tablet revolution, the current market expansion has been increasingly fueled by low-cost Android devices. In 2013, the worldwide average selling price (ASP) for tablets is expected to decline -10.8% to $381. In comparison, the ASP of a PC in 2013 is nearly double that at $635. IDC expects tablet prices to decline further, which will allow vendors to deliver a viable computing experience into the hands of many more people at price points the PC industry has strived to meet for years.
“Apple’s success in the education market has proven that tablets can be used as more than just a content consumption or gaming device,” said Jitesh Ubrani, Research Analyst for the Worldwide Quarterly Tablet Tracker. “These devices are learning companions, and as tablet prices continue to drop, the dream of having a PC for every child gets replaced with the reality that we can actually provide a tablet for every child.”
In addition to lower prices, another major shift in the tablet market has occurred around screen sizes. Apple’s first generation iPad, which included a 9.7-inch display, was perceived by many as the sweet spot for tablets. That is, until 7-inch Android-based tablets began to gain traction in the market. Apple responded with the iPad mini in the fourth quarter of 2012, and in the space of two quarters the sub-8-inch category exploded to overtake the larger-sized segment in terms of total shipments.
Worldwide Tablet Market Share by Screen Size Band, 2011 – 2017
Screen Size
2011
2013
2017
< 8″
27%
55%
57%
8″ – 11″
73%
43%
37%
11″+
0%
2%
6%
Total
100%
100%
100%
Source: IDC Worldwide Tablet Tracker, May 28, 2013.
* Forecast Data
Table Notes:
- Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
- IDC considers all LCD-based slate devices with screens between 7 and 16 inches as tablets, regardless of whether or not they include a removable keyboard (such as the Surface RT). Convertible devices with non-removable keyboards (such as Lenovo’s Yoga) are not counted as Tablets.
Tablet Shipments Slow in the Second Quarter As Vendors Look To Capitalize on a Strong Second Half of 2013, According to IDC [press release, Aug 5, 2013]
As expected, worldwide tablet shipment growth slowed in the second quarter of 2013 (2Q13), according to preliminary data from the International Data Corporation (IDC)Worldwide Quarterly Tablet Tracker. Worldwide tablet shipments finally experienced a sequential decline as total volumes fell -9.7% from 1Q13. However, the 45.1 million units shipped in the second quarter was up 59.6% from the same quarter in 2012, when tablet vendors shipped 28.3 million devices.
Lacking a new product launch in March to help spur shipments, Apple’s iPad saw a lower-than-predicted shipment total of 14.6 million units for the quarter, down from 19.5 million in 1Q13. In years past, Apple has launched a new tablet heading into the second quarter, which resulted in strong quarter-over-quarter growth. Now, Apple is expected to launch new tablet products in the second half of the year, a move that better positions it to compete during the holiday season. Meanwhile, the other two vendors in the top 3 also saw a decline in their unit shipments during the quarter. Second-place Samsung shipped 8.1 million units, down from 8.6 million in the first quarter of 2013, although up significantly from the 2.1 million units shipped in 2Q12. And third-place ASUS shipped a total of 2.0 million units in 2Q13, down from 2.6 million in 1Q13.
“A new iPad launch always piques consumer interest in the tablet category and traditionally that has helped both Apple and its competitors,” said Tom Mainelli, Research Director, Tablets at IDC. “With no new iPads, the market slowed for many vendors, and that’s likely to continue into the third quarter. However, by the fourth quarter we expect new products from Apple, Amazon, and others to drive impressive growth in the market.”
Not all vendors experienced a slowdown during the quarter. PC stalwarts Lenovo and Acer both re-entered the top five this quarter. Lenovo continued to make headway into the world of mobility and for the first time had shipments surpass the million unit mark in a quarter, shipping a total of 1.5 million devices. This was up 313.9% from a year ago and enough to capture 3.3% market share. Rounding out the top 5 was Acer, which shipped 1.4 million tablets in 2Q13 for 247.9% year-over-year growth and an increase of 35.4% over the first quarter of 2013.
“The tablet market is still evolving and vendors can rise and fall quickly as a result,” said Ryan Reith, Program Manager for IDC’s Mobility Tracker programs. “Apple aside, the remaining vendors are still very much figuring out which platform strategy will be successful over the long run. To date, Android has been far more successful than the Windows 8 platform. However, Microsoft-fueled products are starting to make notable progress into the market.”
Top Five Tablet Vendors, Shipments, and Market Share, Second Quarter 2013 (Shipments in millions)
Vendor
2Q13 Unit Ship-ments
2Q13 Market Share
2Q12 Unit Ship-ments
2Q12 Market Share
Year-over-Year Growth
1. Apple
14.6
32.4%
17.0
60.3%
-14.1%
2.Samsung
8.1
18.0%
2.1
7.6%
277.0%
3. ASUS
2.0
4.5%
0.9
3.3%
120.3%
4. Lenovo
1.5
3.3%
0.4
1.3%
313.9%
5. Acer
1.4
3.1%
0.4
1.4%
247.9%
Others
17.5
38.8%
7.4
26.2%
136.6%
Total
45.1
100.0%
28.3
100.0%
59.6%
Source: IDC Worldwide Tablet Tracker, August 5, 2013.
See additional Table Notes following the last table.
Top Tablet Operating Systems, Shipments, and Market Share, Second Quarter 2013 (Shipments in Millions)
Vendor
2Q13 Unit Ship-ments
2Q13 Market Share
2Q12 Unit Ship-ments
2Q12 Market Share
Year-over-Year Growth
1. Android
28.2
62.6%
10.7
38.0%
162.9%
2. iOS
14.6
32.5%
17.0
60.3%
-14.1%
3.Windows
1.8
4.0%
0.3
1.0%
527.0%
4. Windows RT
0.2
0.5%
N/A
N/A
N/A
5.BlackBerry OS
0.1
0.3%
0.2
0.7%
-32.8%
Others
0.1
0.2%
N/A
N/A
N/A
Total
45.1
100.0%
28.3
100.0%
59.6%
Source: IDC Worldwide Tablet Tracker, August 5, 2013
Table Notes:
- All data are preliminary and subject to change. Vendor shipments are branded shipments and exclude OEM sales for all vendors.
- Some IDC estimates prior to financial earnings reports.
- Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
- IDC considers all LCD-based slate devices with screens between 7 and 16 inches as tablets, regardless of whether or not they include a removable keyboard (such as the Surface RT). Convertible devices with non-removable keyboards (such as Lenovo’s Yoga) are not counted as Tablets.
Gartner: ‘Traditional PC shipments to decline as tablets are becoming the primary consumption device’
Gartner Says Worldwide PC, Tablet and Mobile Phone Shipments to Grow 5.9 Percent in 2013 as Anytime-Anywhere-Computing Drives Buyer Behavior [press release, June 24, 2013]
Traditional PC Shipments to Decline 10.6 Percent in 2013, While Tablet Shipments Increase 67.9 Percent
Worldwide devices (the combined shipments of PCs, tablets and mobile phones) are projected to reach 2.35 billion units in 2013, a 5.9 percent increase from 2012, according to Gartner, Inc. The market is being driven by sales in tablets, smartphones, and to a lesser extent, ultramobiles, as PC shipments are on the decline.
Worldwide traditional PC (desk-based and notebook) shipments are forecast to total 305 million units in 2013, a 10.6 percent decline from 2012 , while the PC market including ultramobiles is forecast to decline 7.3 percent in 2013 (see Table 1). Tablet shipments are expected to grow 67.9 percent, with shipments reaching 202 million units, while the mobile phone market will grow 4.3 percent, with volume of more than 1.8 billion units. The sharp decline in PC sales recorded in the first quarter was the result in a change in preferences in consumers’ wants and needs, but also an adjustment in the channel to make room for new products hitting the market in the second half of 2013.
“Consumers want anytime-anywhere computing that allows them to consume and create content with ease, but also share and access that content from a different portfolio of products. Mobility is paramount in both mature and emerging markets,” said Carolina Milanesi, research vice president at Gartner.
Table 1
Worldwide Devices Shipments by Segment (Thousands of Units)
Device Type
2012
2013
2014
PC (Desk-Based and Notebook)
341,273
305,178
289,239
Ultramobile
9,787
20,301
39,824
Tablet
120,203
201,825
276,178
Mobile Phone
1,746,177
1,821,193
1901,188
Total
2,217,440
2,348,497
2,506,429
Source: Gartner (June 2013)
Demand for ultramobiles (which includes Chromebooks, thin and light clamshell designs, and slate and hybrid devices running Windows 8) will come from upgrades of both notebooks and premium tablets, such as the Apple iPad or Galaxy Tab10.1. Analysts said ultramobile devices are gaining in attractiveness and drawing demand away from other devices. This will be even more evident in the fourth quarter of 2013 when the combination of new design based on Intel processors Bay Trail and Haswell running on Windows 8.1 will hit the market. Although these devices will only marginally help overall sales volumes initially, they are expected to help vendors increase average selling prices (ASPs) and margins.
The tablet and smartphone markets are facing some challenges as these devices gain longer life cycles. There has also been a shift as many consumers go from premium tablets to basic tablets. The share of basic tablets is expected to increase faster than anticipated, as sales of the iPad Mini already represented 60 percent of overall iOS tablet sales in the first quarter of 2013.
“The increased availability of lower priced basic tablets, plus the value add shifting to software rather than hardware will result in the lifetimes of premium tablets extending as they remain active in the household for longer. We will also see consumer preferences split between basic tablets and ultramobile devices,” said Ranjit Atwal, research director at Gartner. “With mobile phones, volume expectations for 2013 have been brought down as the life cycles lengthen as consumers wait for new models and lower prices to hit the market in the Fall and holiday season. The challenge in the smartphone market is also that, as penetration moves more and more to the mass market, price points are lowering and in most cases so do margins.”
“Although the numbers seem to paint a clear picture of who the winner will be when it comes to operating systems (OS) in the device market (see Table 2), the reality is that today ecosystem owners are challenged in having the same relevance in all segments,” said Ms. Milanesi. “Apple is currently the more homogeneous presence across all device segments, while 90 percent of Android sales are currently in the mobile phone market and 85 percent of Microsoft sales are in the PC market.”
Table 2
Worldwide Devices Shipments by Operating System (Thousands of Units)
Operating System
2012
2013
2014
Android
505,509
866,781
1,061,270
Windows
346,464
339,545
378,142
iOS/MacOS
212,878
296,356
354,849
RIM
34,584
25,224
22,291
Others
1,118,004
820,592
689,877
Total
2,217,440
2,348,497
2,506,429
Source: Gartner (June 2013)
Additionally, with enterprises’ growing acceptance of bring your own device (BYOD), there is an increase in consumer-owned devices in the computing world. Gartner forecasts that computing devices bought by consumers will grow from 65 percent in 2013 to 72 percent in 2017. This signifies the growing importance of designing for the consumer inside the enterprise.
Gartner’s detailed market forecast data is available in the report, “Forecast: Devices by Operating System and User Type, Worldwide, 2010-2017, 2Q13 Update.” The report is on Gartner’s website athttp://www.gartner.com/resId=2524916.
Gartner Says Worldwide PC Shipments in the Second Quarter of 2013 Declined 10.9 Percent [press release, July 10, 2013]
PC Industry Continues to Shrink as the Installed Base Restructures to Accommodate Tablets as the Primary Consumption Device
Worldwide PC shipments dropped to 76 million units in the second quarter of 2013, a 10.9 percent decrease from the same period last year, according to preliminary results by Gartner, Inc. This marks the fifth consecutive quarter of declining shipments, which is the longest duration of decline in the PC market’s history.
All regions showed a decline compared to a year ago. The fall in the Asia/Pacific PC market continued, showing five consecutive quarters of the shipment decline, while the EMEA PC market registered two consecutive quarters of double-digit decline.
“We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption in mature and developed markets,” said Mikako Kitagawa, principal analyst at Gartner. “In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market.”
HP and Lenovo’s neck-and-neck competition continued. This time, Lenovo was back in the top position by only a small difference in share (see Table 1). Lenovo showed mixed regional results, as it experienced strong growth in the Americas and EMEA, while showing a major decline in Asia/Pacific. Weakness in China was most likely the contributor of Lenovo’s shipment decline in the region as the majority of Lenovo’s volume came from China.
While HP was slightly behind Lenovo, HP is a market leader in key regions including the U.S., EMEA and Latin America. Asia/Pacific has been a weakness the last three years for HP, but preliminary second quarter results suggest an improvement of their performance in the region.
Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q13 (Units)
Company
2Q13 Ship-ments
2Q13 Market Share (%)
2Q12 Ship-ments
2Q12 Market Share (%)
2Q12-2Q13 Growth (%)
Lenovo
12,677,265
16.7
12,755,068
14.9
-0.6
HP
12,402,887
16.3
13,028,822
15.3
-4.8
Dell
8,984,634
11.8
9,349,171
11.0
-3.9
Acer Group
6,305,000
8.3
9,743,663
11.4
-35.3
ASUS
4,590,071
6.0
5,772,043
6.8
-20.5
Others
31,041,130
40.8
34,675,824
40.6
-10.5
Total
76,000,986
100.0
85,324,591
100.0
-10.9
Note: Data includes desk-based PCs and mobile PCs, including mini-notebooks but not media tablets such as the iPad.
Source: Gartner (July 2013)
Dell’s shipments declined compared to a year ago, but its 2Q13 results showed a smaller decline than the past several quarters. Dell showed good growth in the U.S. and Japan, but struggled to increase shipments in Asia/Pacific and EMEA. Both Acer and ASUS showed steep declines compared to the second quarter last year. The decline was partly affected by their strategies to exit the mini-notebook market.
“While Windows 8 has been blamed by some as the reason for the PC market’s decline, we believe this is unfounded as it does not explain the sustained decline in PC shipments, nor does it explain Apple’s market performance,” Ms. Kitagawa said.
In the U.S. market, PC shipments totaled 15 million units in the second quarter of 2013, a 1.4 percent decline from the second quarter of 2012 (see Table 2). This decline was less than the past seven quarters, and the market grew 8.5 percent sequentially.
“Our preliminary results indicate that this reduced market decline was attributed to solid growth in the professional market,” Ms. Kitagawa said. “Three of the major professional PC suppliers, HP, Dell and Lenovo, all registered better than U.S. average growth rate. The end of Windows XP support potentially drove the remaining PC refresh in the U.S. professional market.”
Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 2Q13 (Units)
Company
2Q13 Ship-ments
2Q13 Market Share (%)
2Q12 Ship-ments
2Q12 Market Share (%)
2Q12-2Q13 Growth (%)
HP
3,957,761
26.4
3,976,041
26.2
-0.5
Dell
3,681,725
24.6
3,458,736
22.8
6.4
Apple
1,740,500
11.6
1,818,959
12.0
-4.3
Lenovo
1,515,562
10.1
1,266,109
8.3
19.7
Toshiba
848,984
5.7
1,006,900
6.6
-15.7
Others
3,230,717
21.6
3,659,220
24.1
-11.7
Total
14,975,249
100.0
15,185,965
100.0
-1.4
Note: Data includes desk-based PCs and mobile PCs, including mini-notebooks but not media tablets such as the iPad.
Source: Gartner (July 2013)
PC shipments in Europe, Middle East and Africa (EMEA) were weakened in the second quarter of 2013, with a 16.8 per cent decline over the same period last year, marking the fifth consecutive quarter of decreasing shipments.
“The sharp decline in the second quarter of 2013 was partly due to the shift in usage patterns away from notebooks to tablets, and partly because the PC market was exposed to inventory reductions in the channel due to the start of the transition to new Haswell-based products,” said Isabelle Durand, principal research analyst at Gartner. “Touch-based notebooks still account for less than 10 per cent of the total consumer notebook shipments in the last quarter.”
“Shipment levels remained weak in Western Europe in the second quarter of 2013 as PC replacement rates continued to be extremely low, while the challenging economic environment is muting spending in consumer markets,” said Ms Durand. “Shipments in Eastern Europe also remained low as this is typically a quiet quarter for business buyers in the region, and consumers are predominantly looking for Android-based tablets. In the Middle East and Africa, tablet and smartphone adoption also continued to draw demand away from PCs in the second quarter of 2013.”
Despite the steep shipment decline, HP retained the top position in EMEA due to better results in the professional PC market. Lenovo was the only top five vendor to exhibit shipment growth, recording a fourth consecutive quarter of growth and taking second place in the EMEA PC vendor rankings in the second quarter of 2013.
Acer exhibited the worst performance of the second quarter with a shipment decline of 38.5 percent year-on-year. Most of Acer’s decline resulted from its portfolio shifting away from netbooks to Android tablets. ASUS also experienced a PC shipment decline in the second quarter 2013. The drop of its netbooks continued to impact its overall notebook results.
Table 3
Preliminary EMEA PC Vendor Unit Shipment Estimates for 2Q13 (Units)
Company
2Q13 Ship-ments
2Q13 Market Share (%)
2Q12 Ship-ments
2Q12 Market Share (%)
2Q12-2Q13 Growth (%)
HP
3,779,160
17.8
4,683,376
18.3
-19.3
Lenovo
2,641,622
12.4
2,180,362
8.5
21.2
Acer Group
2,456,255
11.5
3,995,518
15.6
-38.5
Dell
1,979,895
9.3
2,173,552
8.5
-8.9
ASUS
1,743,345
8.2
2,670,268
10.4
-34.7
Others
8,675,143
40.8
9,864,285
38.6
-12.1
Total
21,275,420
100.0
25,567,361
100.0
-16.8
Notes: Data includes desk-based PCs and mobile PCs, including x86 tablets equipped with Windows 8. All data is estimated, based on a preliminary study. Final estimates will be subject to change. The statistics are based on the shipments selling into channels.
Source: Gartner (July 2013)
In Asia/Pacific, PC shipments surpassed 26.8 million units in the second quarter of 2013, an 11.5 percent decline from the first quarter of 2012. All country markets across the region showed weakness, but India performed slightly better due to a state PC tender fulfillment. China’s PC shipment remained weak as the consumer market was hampered with lack of new demand generation programs, such as subsidized PC program in the rural cities.
These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. Additional research can be found on Gartner’s Computing Hardware section on Gartner’s website at http://www.gartner.com/it/products/research/asset_129157_2395.jsp.
Digitimes Research: ‘Overtaking iPad will happen in 2H13’
Digitimes Research: iPad sees its first on-year shipment drop in 2Q13 [July 29, 2013]
Global tablet shipments reached 29.32 million units in the second quarter of 2013, down 8.2% sequentially, but still up 46.6% compared to the same period a year ago. As overall market demand is declining, both iPad and non-iPad product shipments have been impacted. Because of the iPad mini’s significant shipment drop, Apple’s tablet shipments in the second quarter were only 14.6 million units, down 25.1% sequentially and 2.7% on year, according to Digitimes Research’s latest figures.
As for non-iPad tablet shipments, non-Apple brand vendors’ new products and the second-generation Nexus 7 have both contributed to the volume, helping it to grow 18.5% on quarter and reach 14.72 million units. However, since Samsung Electronics and Lenovo have both increased their in-house production rates, Taiwan’s share of global tablet shipments dropped below 70% in the second quarter with shipments of only 20.38 million units, Digitimes Research figures showed.
In terms of brand vendors’ ranking, Apple and Samsung Electronics were the top-two players, followed by Asustek Computer third, Lenovo fourth and Acer sixth. As for processor rankings, MediaTek was the third-largest supplier in the second quarter thanks to its strategy of pushing mainly in the entry-level segment, only behind Apple and Texas Instruments (TI). Nvidia was the fourth largest with Samsung and Intel following closely behind.
Digitimes Research: Tablet shipments to grow 17.7% on year in 2H13 [Aug 6, 2013]
Tablet shipments in the second half are expected to reach 82.07 million units, up 17.7% on year; however, several changes will also occur during the period: hardware brand vendors will dominate the small-size tablet segment; non-iPad tablet shipments will surpass those of iPad; closed Android platforms will be impacted by the official Android platform; and Qualcomm and MediaTek will replace Texas Instruments (TI) and Nvidia in the non-Apple camp, according to Digitimes Research’s latest figures.
Small-size devices are expected to become mainstream products of the tablet market, accounting for 70% of total shipments in the second half. Non-iPad tablet shipments are also expected to surpass those of iPad and reach 45.07 million units. With the non-iPad camp’s strong shipments, over 50% of global tablets will adopt the Android operating system in the second half, Digitimes Research estimates.
Android’s large market share will also strongly impact closed Android platforms such as Amazon’s operating system for its tablets due to lack of key application support.
The Retina display-featured iPad mini may not appear before the end of 2013 due to the panel’s weak yield rate and the possibility that the device may undermine sales of the new high-end iPad. As a result, Apple’s shipments in the second half may drop to 37 million units with an on-year growth of 3%.
As for Windows-based tablets, although Microsoft is offering more price cuts for its Small Screen Touch (SST) program, the deal is unlikely to help push vendors to release Windows-based devices and the platform will only account for 3.8% of second-half tablet shipments.
Qualcomm became the processor supplier of the second-generation Nexus 7 and the third-generation Kindle Fire, replacing Nvidia and TI. Qualcomm will ship close to 10 million processors in the second half of 2013, becoming the largest CPU supplier of the non-Apple camp. MediaTek, thanks to its hardware brand clients’ small-size tablet orders, will become the second largest supplier, followed by Samsung Electronics and Intel, both of whom will ship over seven million units.
Taiwan makers’s tablet shipments will reach 59.45 million units in the second half, but as Samsung and Lenovo are increasing their in-house production rates, Taiwan makers’ share of global tablet shipments will drop to around 70%. As ODMs are aggressively competing for orders, Apple, Amazon and Asustek Computer will no longer place most of their orders with only Foxconn Electronics (Hon Hai Precision Industry) and Quanta Computer and will spread out their orders more evenly, Digitimes Research believes.
Canalys says ‘Yes’
Small tablets drive big share gains for Android [Canalys press release, Aug 1, 2013]
– Android overtakes iOS with 53% market share in tablets
Over 34 million tablets shipped in Q2 2013, a 43% year-on-year increase. Tablets now account for 31% of worldwide PC shipments. But Apple’s performance faltered. Its tablet shipments declined 14% on Q2 2012 and its market share dropped to 43%. The chasing pack of Samsung, Amazon, Lenovo and Acer each grew annually by over 200%, driven by increasing demand for small-screen tablets. Canalys estimates that 68% of tablets shipped in Q2 had a screen size smaller than 9″. ‘Consumers have been evaluating tablets and the results are now in,’ said Tim Coulling, Canalys Senior Analyst. ‘With touch-screens contributing to a high proportion of the build cost of a tablet, small-screen products can be priced very aggressively.’
Apple’s decline in shipments and share has been partly attributed to its aging portfolio. But Canalys believes that new product launches will have less impact on its shipments in future. ‘When Apple does decide to refresh its iPad range it will not experience the buzz of previous launches,’ said Canalys Analyst James Wang. ‘Tablets are now mainstream products and hardware innovation is increasingly difficult. With branded Android tablets available for less than $150, the PC market has never been so good for consumers, who are voting with their wallets.’ The move to smaller tablets has sparked a price war that has real consequences for the entire supply chain. These products generate little absolute margin for channel partners, vendors or component manufacturers. Content, applications and accessories (especially cases and keyboards) are now even more important to boost margins – areas where Apple remains a leader.
In addition to disappearing margins, inventory management is emerging as a major challenge. If a vendor overcommits at the product planning stage, unsold inventory can play havoc with a company’s balance sheet, even with other hit products in a portfolio. The market for full-sized tablets has stalled and even Apple has found it harder to sell its larger iPads in recent quarters. ‘Microsoft’s inventory issues with the Surface have been well publicized,’ said Coulling. ‘Heavily discounted Surface RTs will fly off the shelves. Expect prices to continue to fall though, as the starting price of $350 is still too expensive to spark an HP TouchPad-style buying frenzy.’
Despite its 53% share, Android still lags far behind iOS in the availability of fully-optimized tablet apps, and tablet app downloads from the Apple App Store dwarf those from Google Play. But Android is expected to continue to close the ecosystem lead iOS has in tablets and increase share in coming quarters. ‘Developers can and will quickly switch their priorities as different opportunities evolve and improve,’ said Canalys Senior Analyst Tim Shepherd. ‘We expect to see a substantial increase in the quantity, as well as the quality, of apps built or optimized for Android tablets over the next 12 months, as Google brings more attention to them through improvements to the Play store, and as the addressable base of devices continues to soar.’
While it is true that Apple is losing its stranglehold on the tablet market in terms of volume, it will remain its most profitable vendor for years to come. Apple has already faced a similar battle in the smart phone market, and it now looks increasingly likely that it is readying a product that can address lower price tiers and high-growth markets in that space. If this is indeed the case, Apple could replicate a similar portfolio play in the tablet market. It will be in no rush – after all, the launch of the iPad mini was designed to address this segment. But its hand could be forced if competitors’ prices continue to plummet. The margin models in the smart phone and tablet markets are very different. It will still make good margin on a cheaper iPhone but will struggle to do so with a cheaper tablet, and would instead need to rely increasingly on accessory sales and, likely, subsidy from apps and content purchases.
PC market flat in Q2 2013, despite tablet growth [Canalys press release, Aug 6, 2013]
– Android takes 17% of PC market in Q2 as PC vendors turn to Google for tablets
The worldwide PC market experienced a quarter without growth, as a 42.9% increase in tablet shipments was offset by declines in desktop and notebook shipments, which fell 7.4% and 13.9% respectively. Despite tablet growth slowing in Q2, Canalys still believes that tablets will outsell notebooks by Q4 of this year.
PC shipments in EMEA fell by 3% year-on-year in Q2, the first decline after two successive quarters of double-digit growth. Western Europe and Central and Eastern Europe continue to be challenging for vendors, with annual declines of 10% and 3% respectively. PC shipments in the Asia Pacific region declined 0.5% year-on-year to just over 40 million units. The region was badly affected by slow shipments in the People’s Republic of China, which accounted for almost 45% of the region’s shipments and declined by approximately 6%. Demand for smart phones and tablets is increasing around the world. Faced by an industry in transition, channel partners are exercising caution when planning and placing orders.
Apple remained the top PC vendor in Q2, with a 4.5 million unit lead over second-placed Lenovo. But Apple’s share fell more than two percentage points to 17.1% from 19.4% in Q2 last year due an annual decrease in iPad shipments. Desktop and notebook shipments only accounted for around 20% of its total PC shipments. With tablet vendors attacking Apple on price it must bring fresh innovation to future generations of its iPad range if it is to maintain the lead it has built in the PC market.
Lenovo had a strong quarter, gaining share in its core notebook and desktop categories, as well as tablets. Its performance in Q2 was helped by strong annual growth in EMEA (34%), the US (28%) and Latin America (93%). Lenovo’s tablet business also performed well – it shipped around 1.5 million units. ‘It is striking how successful it has been in globalizing its PC business and breaking the 1 million unit barrier is an important milestone for its tablet shipments,’ noted Canalys Analyst James Wang. ‘Lenovo is on an upward curve with its tablets, expanding in mainland China and Latin America, where there is little competition from the likes of Google or Amazon.’
HP has overtaken Samsung to regain third place. HP has recently changed its tablet strategy and launched its first Android tablet in Q2, the Slate 7. ‘HP has a broad enterprise portfolio, channel relationships and global reach that others still cannot match,’ said Canalys Research Analyst Pin-Chen Tang. ‘To increase its market share it should look to leverage its strengths in the enterprise to advance Android in business.’
iOS and Android have profited from the shift to tablets, as they have proved to be the only type of PC with any momentum. Android’s share of the total PC market increased to 17% in Q2 2013 from 6% a year ago. With the likes of HP, Lenovo and Samsung looking to use Android to compete with iOS in the tablet space, the platform is well placed to continue increasing its share. Google is targeting the consumer market and has its sights set on beating Apple in the smart phone and tablet space. Android remains weak in management and security, which is preventing commercial uptake. Google, or its partners, must address this shortfall quickly if it is to penetrate the enterprise
There has been rapid innovation in the Windows category, as vendors such as HP, Lenovo, Toshiba and Acer have built PCs using a variety of new form factors. These products are struggling to take off as the difference in price between Android and Windows-based tablets remains high. ‘Component pricing has been an issue, particularly with multi-touch screens, though scale economies make this less of an issue as demand increases. The price of Windows itself is a contributing factor and one that Microsoft must address as a matter of urgency. Its PC OEM partners are in an increasingly difficult position and consolidation in the PC market is inevitable within the next 12 months,’ said Tim Coulling, Canalys Senior Analyst.
Half a billion PCs to ship in 2013 as tablet sales rocket [Canalys press release, June 11, 2013] – Tablet shipments to grow by 59% this year to reach 182.5 million units
Canalys’ latest forecasts for the PC market (desktops, notebooks and tablets) predict that 493.1 million units will ship in 2013, representing 7% year-on-year growth. The key driver behind this growth will be tablets, which will account for 37% of the market, up from a quarter in 2012. Looking ahead to 2017, Canalys expects that 713.8 million PCs will ship worldwide (a CAGR of 9.7%), with 64% being tablets and 25% notebooks.
Worldwide demand for tablets has gone from strength to strength, while that for desktops and notebooks has waned. In the first quarter of 2013, the desktop market fell 10.3% and the notebook market declined 13.1%. The size of the tablet market, however, more than doubled in Q1 2013, with a 106.1% increase in shipments to 41.9 million units. Shipments show no sign of slowing and Canalys forecasts that in 2013 tablet shipments will reach 182.5 million units, with global tablet shipments surpassing those of notebooks in the final quarter of the year.
The reception to Windows 8 has not reinvigorated demand for Microsoft-based PCs but there is a glimmer of hope for OEMs with Microsoft’s plan to release Windows 8.1 as a free upgrade. ‘Microsoft will continue to innovate. New versions will come and its OS release cycle will gain speed. But it must address some of the criticisms that have been directed at the OS’s user interface or it risks losing even more ground to iOS and Android in the PC space,’ said Tim Coulling, Senior Analyst at Canalys.
A plethora of PC vendors have now come to market with cheaper Android devices, notably Acer, Asus and HP, but these vendors are joining a crowded market. ‘Shipment numbers can be high but absolute margins on these products are expected to be small. Low-priced tablets will not be lucrative but it is necessary to compete or a vendor will simply lose relevance and scale. In fact, accessories, particularly cases, as well as the new generation of high-tech ‘appcessories’ will likely provide higher margins than the products themselves,’ said Pin-Chen Tang, Research Analyst. ‘This new influx of Android devices will provide a boost to the platform and
Canalysthereforeexpects Android to take a 45% share this year, behind Apple at 49%[this prediction failed already for Q2 results as was reported on Aug 1 by Canalys: ‘Android overtakes iOS with 53% market share in tablets‘]. The iPad mini is expected to continue selling well, becoming more significant in terms of the product mix and spawning a further increase in consumer demand for smaller tablets.’The great hope for Windows 8 was that it would unleash new PC form factors, combining the best of both PCs and tablets. But James Wang, an Analyst at Canalys, noted, ‘These convertible products have disappointed so far. Convertibles are too heavy in tablet form and too expensive when compared with clamshell products. Canalys therefore expects that, for at least the next 18 months, consumers will buy separate products, rather than compromise on a Windows 8 convertible or hybrid PC. Even for Android products, alternative form factors are not expected to grow rapidly due to the category being sandwiched between low-cost slates and more familiar Windows-based clamshell notebooks.’ Out of the 388.1 million mobile PCs (notebooks and tablets) that Canalys forecasts will ship in 2013, it estimates that less than 2% will be hybrids or convertibles.
Another ray of light for PC vendors is that PC sales to businesses are, and will continue to be, far stronger than those to consumers. This trend favors the likes of HP and Lenovo, though competition will increase as others shift resources toward the commercial channels to maximize their opportunity.
Canalys definitions
Appcessories: Products that connect to applications on smart devices (smart phones, tablets and notebook PCs).
Clamshell: A notebook with keyboard/second screen fixed with a one-directional hinge only enabling movement up to 180⁰.
Convertible: A notebook with keyboard/second screen that can be converted to a tablet form factor.
Slate: A tablet that is not designed by its manufacturer to be fixed to a keyboard accessory with a hinge.
Hybrid: A tablet that is designed by its manufacturer to be fixed to a keyboard accessory with a hinge.
About Canalys
Canalys is an independent analyst firm that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. Our customer-driven analysis and consulting services empower businesses to make informed decisions and generate sales. We stake our reputation on the quality of our data, our innovative use of technology, and our high level of customer service.
EnfoDesk (Analysys International) from China says ‘For sure, as it is already happening against the iPad in China even at a nascent stage of the local tablet market’
Industry data: 2013Q2 Chinese Tablet PC market sales of 3.58 million, the rapid expansion of domestic [products], apple [products] decline significantly [enfodesk.com, Aug 14, 2013] as translated by Google and Bing, with manual edits:
According to Analysys think tank EnfoDesk latest monitoring data shows that in the second quarter of 2013 tablet PC sales in China reached 3,576,000 units, up 5.2% Q/Q growth.
According to Analysis think tank EnfoDesk in the last quarter of 2013 sales growth on the tablet PC market in China slowed down to only 5.2% Q/Q growth rate, mainly due to weak sales of Apple’s tablet computers, as its sales fell for the first time. And Samsung had eye-catching performance this quarter, after N5110 Galaxy Note 8 has been released, and sought after by the market, so the Samsung Tablet PC overall sales increased dramatically, pulling the overall market growth. Worth mentioning this quarter is that domestic brand tablet PCs, such as Teclast (台电) [see Teclast’s Tmall site in Chinese, or Pandawill’ Teclast global online site in English] and ONDA (昂达) [see ONDA’s global site in English] have gained more market share with their low prices, ultra high yield of price/performance, and best selling online channels.
Throughout the three major tablet platforms, iOS declined significantly, it will be difficult to stop its market share erosion trends; Windows was tepid, the release of Microsoft Surface and continuous price cuts did not enhance the Windows market activity; Android cut right through the market, by virtue of many manufacturers to compete, high performance models being abundant, covering all price points of consumer groups, and with product prices constantly being refreshed, quickly seized the tablet PC market. If Apple can not launch innovative tablet PC products in the near future, [the event of] Android surpassing iOS market share is around the corner.
Compare this to the situation in 2012:
- China market: Apple shares over 71% of 4Q12 consumer tablet sales, says Analysys [DIGITIMES, April 19, 2013]
Apple occupied 71.6% of consumer tablets sold in the China market during the fourth quarter of 2012, according to China-based Analysys International.
For business-use tablets alone, Eben had the largest market share at 41.9%, followed by Samsung Electronics with 21.0%, Asustek Computer with 6.6% and Lenovo with 4.5%, Analysys indicated.
Vendor
Market share
Apple
71.6%
Lenovo
10.2%
Eben
4.0%
Samsung
3.9%
Acer
2.3%
Asustek
1.5%
Teclast
1.0%
Source: Analysys, compiled by Digitimes, April 2013
- Analysys International: iPad Sales Share Fell in Q3, 2012 [Analysys International, published in English on May 17, 2013]
According to the Quarterly Survey of China’s Tablet PC Market 2012Q3, 2.60 million sets tablet PC have been sold in Chinese market in Q3, 2012. Apple occupied 71.4% market share with a slight drop, Lenovo ranked second, reaching 10.52% and Ereneben ranked third with its market share being 3.61% and Samsung ranked fourth, taking up 3.53% market share.
EnfoDesk, Analysys International finds that 4 factors require our attention concerning China’s tablet PC manufacturers’ market layout in Q3, 2012:
- Compared with last quarter, Apple’s market share dropped from 72.66% to 71.42%. New iPad marketing promotions were made mainly in Q2. In Q3, iPad 2and The New iPad were in normal sales.
- The sales volume of Lenovo tablet PC rose considerably with its market share being 10.52%. Such a growth is resulted from the issue of its new products S2107 and S2109 and promotions when new semester begins for students.
- Ereneben issued its new product T5 in Q3, which drives the overall sales volume, and the price of T4 came down slightly in some provinces, thus increasing the sales volume of Ereneben.
- Samsung tablet PC enjoyed relatively stable sales in Chinese market. The company doubled their efforts in the marketing of tablet PC Note series (7 inches or above versions). Its branding effects gradually brought about and increased its sales in the Chinese market.
Besides, the research on e-business tablet PC market conducted by EnfoDesk, Analysys International shows that Ereneben ranked first with market share being 41.07%. Samsung offered Galaxy Note 10.1 e-tablet PC to consolidate its positioning in e-business tablet PC market. Its market share was 19.66% of total e-tablet PC market. Lenovo’s Thinkpad was in normal sales, only occupied 3.89% market share.
…
Analysys International: iPad took up 73% of Tablet PC Market 2012Q2 [Analysis International, published in English on May 16, 2013]
According to the Quarterly Survey of Tablet Market in China 2012Q2, released by EnfoDesk, Analysys International, market share of Apple rose to 72.66% with a sequential growth rate rising by 20.06%. Top 2 was Lenovo that witness a drop of its market share (Its market share was 8.38%). Eben ranked third with its market share being 3.63% and the market share of Samsung came down to 3.59% with its sequential growth rate dropping by 7.69%.
EnfoDesk Analysys International believes that three aspects should be noticed concerning the market layout of tablet PC market in Q2, 2012.
First, the market share of Apple has risen from 65.21% in Q1 to 72.66% in Q2. New iPad came into the market in March; however, since no substantial improvement has been made on the new products, consumers would rather wait to buy in Q2. The price reduction of iPad 2 promoted the sales volume of Apple products, allowing its market share to grow.
Second, compared with Q1, market share of Lenovo shrank. On one hand, it was a dull season; on the other hand, it was caused by its internal policy. In September, Lenovo will launch its promotion of new products when new term begins in September (during the peak season) and the company would rather clean up stocks of its other products in Q2.
Finally, iOS tablet PC suffers less seasonal factors than Android tablet PC. Currently, Android tablet PC market is getting stabilized. Solely relying on traditional sales channel to educate consumers was too slow and manufacturers could carry out more promotions to increase brand influence and brand concentration, grab the market share of smuggled products and clarify market layout of Android tablet PC. In addition, other tablet PC manufactures except Apple should consider its own market position and offer its unique products, gradually getting rid of homogenization of Android tablet PC. Eben as a leader in business tablet PC market offers unique products and its market positioning is clear.
…
- Analysys International: 2.34 Million Tablet PCs Were Sold in China 2012Q2 [Analysis International, published in English on May 16, 2013]
According to the statistics recently released by Analysys International, 2.34 million tablet PCs were sold in China in Q2, 2012. The sequential growth rate has reached 7.8%.
Analysys International holds that sales growth of China’s tablet PC in Q2, 2012(The growth rate has reached 7.8%) is due to the following factors:
iPad directly triggered the market fluctuation. The price reduction of iPad forced the average price of tablet PC to go down. As a result, consumers with cash in hand developed their desire to buy and such a desire transformed into procurement, which allowed the sales volume to grow in the dull season.
EnfoDesk, Analysys International predicts that the future market layout will be even clearer. Android manufacturers and others will target middle and low-end consumers with an attempt to avoid direct competition with Apple. Even though the sales volume of Apple will increase, its market share will continue to shrink. The market share of Android manufacturers is expected to grow and the market concentration will increase. The smuggled products will face the question of survival and the market will get further standardized.
Research Definitions
Tablet PC is a portable mobile internet device accessible to the network. It has independent mobile OS and is able to expand its applications. The screen ranges from 5 to 11 inch. Touch screen or pen is served as a basic input device.
The Sales Volume is tablet PC manufacturers’ sale in China, including some overseas brands which are sold by a purchasing agency (OEM labeling products is regarded as the labeled brand. Some device manufacturers also sell some products to market abroad. This part of sales volume is not calculated in the said report).
Research Statement
The industrial analyses, provided by Analysys International, mainly reflect the current situation, trend, inflection point, commercial law and manufacturers’ situation. The figures and statistics are drawn by adopting a unique industrial analysis model combined with the research and study methods used by market, industry and manufactures. All the data are based on industrial macro and historical data, seasonal end-users’ and business information.
It is believed that data concluded from research into market and trade is within acceptable errors. It can reflect the trend and commercial laws accurately.
Results obtained by the means of professional research methods are for reference. The actual data can be obtained by checking on financial report issued by manufacturers.
About Analysys International
Analysys International is a leading advisor on the technology, media and telecom (TMT) industries in China. We provide data, information and advice to 50,000 clients worldwide representing 1,500 distinct organizations, deliver over 150 consulting engagements a year, and hold more than 20 events that draw in over 8,000 attendees. Our clients include executives from companies as technology vendors, vertical information technology users, as well as professionals from professional service companies, the investment community and government agencies. Our mission is simple and clear: we help our clients make better business decisions. For more information, please visit our website at http://english.analysys.com.cn.
About EnfoDesk
EnfoDesk is an industrial data base for subscription offered by Analysys International. It aims to help you perceive opportunities and risks in the Internet age with online database search, analyst interaction, market alarms and other functions. EnfoDesk can help you get information in time and know more about:
– The business mode and trend of the Internet and mobile web market
– The trend in policy towards the Internet and Internetized market
– The activities and preferences of Internet and mobile web users
– The potential clients and commercial opportunities
– The more valuable partners and cooperation mode
– The trend and effects of e-marketing
With Android and forked Android smartphones as the industry standard Nokia relegated to a niche market status while Apple should radically alter its previous premium strategy for long term
Here is the chart reflecting the performance of the market-leading mobile phones upto Q2’13:
From this the most visible things are:
- Android and Android-forked (Xiaomi etc.) smartphones are the undisputed industry standards to dominate the market in years to come
- Both the Symbian to Windows Phone and S40 to Asha Full Touch smartphone platform transition strategies from Nokia could survive the continued Android onslaught but only in a niche market status
- There is no room for Apple’s further growth, and both the platform and the company could face a gradual decline in the smartphone market
My other observations about the state of the smartphone market after Q2’13 were already presented in the following posts:
- Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price [‘Experiencing the Cloud’, Aug 3, 2013] OR Samsung is leapfrogging Apple while the Chinese local brands are coming close to Samsung but at less than 40% price. Meanwhile the superphone segment of the market becomes saturated.
- Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation [‘Experiencing the Cloud’, Aug 1, 2013]
- GiONEE (金立), the emerging global competitor on the smartphone market [‘Experiencing the Cloud’, July 22, 2013]
- Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the Cloud’, July 20-29, 2013]
- China: Entry-level dual core IPS WVGA (480×800) smartphones $65+ now, quad-core $70+ in June [‘Experiencing the Cloud’, April 29, 2013]
In essence we came to a point when the superphone market came down in price to as low as $110 and up, while the entry-level segment of good quality came down to a $65+ price level. Also the smartphone market became saturated in all segments which brings an end to Samsung’s ability to base its premium profitability ambitions on smartphones alone (almost), as it was reflected in 20 years of Samsung “New Management” as manifested by the latest, June 20th GALAXY & ATIV innovations [‘Experiencing the Cloud’, July 2-26, 2013]:
… innovations in the broadest sense of the world: technology, hardware and software engineering and design, marketing in general and branding in particular etc.
Updates: Q2 record-high operating profit + smartphone worries deepen + overall business situation + nonproportionally high capex of the semiconductor business + the #2 capex beneficiary, the Display Panel Segment
These observations also led to much greater conclusions about the upcoming changes:
- China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web [‘Experiencing the Cloud’, Aug 5, 2013]
- The Upcoming Mobile Internet Superpower [‘Experiencing the Cloud’, Aug 13, 2013]
Below I will assess the ‘Nokia Q2’13 market situation and changes’ as well as include ‘Gartner’s own assessment of the Q2’13 overall market situation and the changes’ to complete the picture.
Nokia Q2’13 market situation and changes:
Looking at the progress of Nokia Symbian to Windows Phone transformation Q2’13 was a straight continuation of the trends noted for Q1’13 in 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] as you could also well observe from the chart included here as well:
Nokia was extensively discussing its Windows Phone transition in Nokia Corporation Interim Report for Q2 2013 and January-June 2013 [press release, July 18, 2013]:
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Lumia Q2 volumes increased 32% quarter-on-quarter to 7.4 million units, reflecting strong demand from customers for a broadened Lumia product range.
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Commenting on the second quarter results, Stephen Elop, Nokia CEO, said: “ … In our Smart Devices business unit, we continue to focus on delivering meaningful differentiation to consumers around the world. We are very proud of the recent creations by our Lumia team, from the Lumia 520 – our most affordable Windows Phone 8 product which has enjoyed a strong start in markets like China, France, India, Thailand, the UK, the US and Vietnam – to the Lumia 1020, our star imaging product which we unveiled to the world last week. Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue.”
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In the third quarter 2013, supported by the wider availability of recently announced Lumia products as well as recently announced Mobile Phones products, Nokia expects higher Devices & Services net sales, compared to the second quarter 2013.
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The year-on-year decline in our Smart Devices volumes in the second quarter 2013 continued to be driven by the strong momentum of competing smartphone platforms and our portfolio transition from Symbian products to Lumia products. The decline was primarily due to lower Symbian volumes, partially offset by higher Lumia volumes. Our Symbian volumes decreased from 6 million units in the second quarter 2012 to approximately zero in the second quarter 2013. Our Lumia volumes increased from 4.0 million in the second quarter 2012 to 7.4 million in the second quarter 2013.
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On a sequential basis, the increase in our Smart Devices volumes in the second quarter 2013 was due to higher Lumia volumes, as we started shipping the Lumia 520 and 720 in significant volumes. In the second quarter 2013, the vast majority of Smart Devices volumes were from Windows Phone 8-based Lumia products.
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The year-on-year increase in our Smart Devices ASP in the second quarter 2013 was primarily due to a positive mix shift towards sales of our Lumia products which carry a higher ASP than our Symbian products, partially offset by our pricing actions. Sequentially, the decrease in our Smart Devices ASP in the second quarter 2013 was primarily due to a negative mix shift towards sales of our lower priced Windows Phone 8-based Lumia products as well as our pricing actions.
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Nokia announced and started shipments in select markets of the Nokia Lumia 925, a new interpretation of its award-winning flagship, the Nokia Lumia 920. The Nokia Lumia 925 introduces metal for the first time to the Nokia Lumia range and includes the most advanced lens technology and next-generation imaging software to capture clearer and sharper pictures and video even in low light conditions. The Nokia Lumia 925 offers a variety of exclusive services such as Nokia Music for unlimited streaming of free playlists, integrated HERE services, and the option to add wireless charging with a snap-on wireless charging cover.
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Nokia announced the Nokia Lumia 928 smartphone, exclusive to Verizon Wireless. With a 8.7MP camera and Nokia’s PureView imaging innovation, the Nokia Lumia 928 delivers superior imaging and video performance that enables people to capture bright, blur free photos and videos, even in low light conditions. The sleek and stylish smartphone comes with the latest high-end Nokia Lumia experiences, including Nokia Music, HERE services, and built-in wireless charging.
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Nokia started shipping in volumes the Nokia 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 Nokia Lumia 920, Nokia Music for free music out of the box and even offline, and HERE services.
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Nokia’s Lumia range of smartphones continued to attract businesses, including Miele & Cie. KG, a global leader in domestic appliances and commercial machinery, which has chosen the Nokia Lumia range as the smartphone of choice for its global employees.
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The Windows Phone Store continued to strengthen in terms of the quantity and quality of applications. The Windows Phone Store today offers more than 165 000 applications and games.
The Q2’13-related improvements mentioned above and influencing the below chart were even more extensively discussed in my earlier posts:
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High-volume Nokia Lumia superphones with Windows Phone 8 extended on the top for China, and on the entry level needed for Asia and Middle-East as well UPDATE: at even lower price by 27% [‘Experiencing the Cloud’, Dec 5, 2012 – March 21, 2013] Note that the Lumia 520 W-CDMA mentioned there for ¥ 1299.00 [$209] is now (Aug 17) ¥ 899.00 [$147] while in India it is even lower priced at Rs 7,667+ [$124+]
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Nokia’s expanded, new risks and uncertainties for its Windows Phone strategy for 2013 [‘Experiencing the Cloud’, March 17, 2013]
while the Q3’13-related actions of improvements in these posts:
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Nokia Lumia 1020: an excellent case of Nokia’s contribution to Microsoft as a key innovation partner [‘Experiencing the Cloud’, July 12, 2013]
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Minutes of a high-octane but also expert evangelist CEO: Stephen Elop, Nokia [‘Experiencing the Cloud’, July 12, 2013]
Now look again at the performance chart for the reflections:
From the further decline of Asha Full Touch you could see that the Temporary Nokia setback in India [‘Experiencing the Cloud’, April 28, 2013] continued into the Q2’13 as well as the result of entry-level local brand Android smartphones being in heavy price competition with Nokia Asha Full Touch during Q2 while having superior hardware specifications. Even Samsung’s REX 70 competed in price with Asha Full Touch.
Nokia was talking in his Nokia Corporation Interim Report for Q2 2013 and January-June 2013 [press release, July 18, 2013] only about the following future-oriented actions that were introduced in Q2 in order to remedy this situation:
In Devices & Services, our Mobile Phones business unit started to demonstrate some signs of recovery in the latter part of the second quarter following a difficult start to the year. Also, towards the end of the second quarter, we started to ship the Asha 501, which brings a new design and user experience to the highly competitive sub-100 USD market. While we are very encouraged by the consumer response to our innovations in this price category, our Mobile Phones business unit is planning to take actions to focus its product offering and improve product competitiveness.
On a year-on-year basis, our Mobile Phones volumes in the second 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. Compared to the second 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, partially offset by higher sales volumes of Asha full-touch smartphones.
Nokia started production at its new manufacturing facility in Hanoi, Vietnam. The new site has been established to produce our most affordable Asha smartphones and feature phones.
Nokia announced and started shipments of the Nokia Asha 501, the first of a new generation of smartphones to run on the new Asha platform. Retailing at a suggested price of USD 99, the Nokia Asha 501 offers users affordable smartphone design with bold color, a high-quality build and an innovative user interface. The new Asha platform also allows developers who write applications for the Nokia Asha 501 to reach all smartphones based on the new Asha platform without having to re-write code.
These things were already extensively discussed in my earlier posts:
- Nokia’s non-Windows crossroad [‘Experiencing the Cloud’, May 2, 2013]
- New Asha platform and ecosystem to deliver a breakthrough category of affordable smartphone from Nokia [‘Experiencing the Cloud’, May 9, 2013] my composite post of the all relevant launch information
- New Nokia Asha platform for developers [‘Experiencing the Cloud’, May 9, 2013] my composite post of the all relevant development platform information
- Nokia becoming the next Samsung from its new Vietnamese manufacturing base? [‘Experiencing the Cloud’, June 24, 2013]
And here is how Gartner was assessing the Q2’13 overall market situation and the changes:
Gartner Says Smartphone Sales Grew 46.5 Percent in Second Quarter of 2013 and Exceeded Feature Phone Sales for First Time [press release, Aug 14, 2013]
- Worldwide Mobile Phone Sales Grew 3.6 Percent in Second Quarter of 2013
- Microsoft Has Become the No. 3 Smartphone OS Overtaking BlackBerry
Worldwide mobile phone sales to end users totaled 435 million units in the second quarter of 2013, an increase of 3.6 percent from the same period last year, according to Gartner, Inc. Worldwide smartphone sales to end users reached 225 million units, up 46.5 percent from the second quarter of 2012. Sales of feature phones to end users totaled 210 million units and declined 21 percent year-over-year.
“Smartphones accounted for 51.8 percent of mobile phone sales in the second quarter of 2013, resulting in smartphone sales surpassing feature phone sales for the first time,” said Anshul Gupta, principal research analyst at Gartner. Asia/Pacific, Latin America and Eastern Europe exhibited the highest smartphone growth rates of 74.1 percent, 55.7 percent and 31.6 percent respectively, as smartphone sales grew in all regions.
Samsung maintained the No. 1 position in the global smartphone market, as its share of smartphone sales reached 31.7 percent, up from 29.7 percent in the second quarter of 2012 (see Table 1). Apple’s smartphone sales reached 32 million units in the second quarter of 2013, up 10.2 percent from a year ago.
Table 1
Worldwide Smartphone Sales to End Users by Vendor in 2Q13 (Thousands of Units)
Company
2Q13 Units
2Q13 Market Share (%)
2Q12 Units
2Q12 Market Share (%)
Samsung
71,380.9
31.7
45,603.8
29.7
Apple
31,899.7
14.2
28,935.0
18.8
LG Electronics
11,473.0
5.1
5,827.8
3.8
Lenovo
10,671.4
4.7
4,370.9
2.8
ZTE
9,687.6
4.3
6,331.4
4.1
Others
90,213.6
40.0
62,704.0
40.8
Total
225,326.2
100.0
153,772.9
100.0
Source: Gartner (August 2013)
In the smartphone operating system (OS) market (see Table 2), Microsoft took over BlackBerry for the first time, taking the No. 3 spot with 3.3 percent market share in the second quarter of 2013. “While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users,” said Mr. Gupta. Android continued to increase its lead, garnering 79 percent of the market in the second quarter.
Table 2
Worldwide Smartphone Sales to End Users by Operating System in 2Q13 (Thousands of Units)
Operating System
2Q13 Units
2Q13 Market Share (%)
2Q12 Units
2Q12 Market Share (%)
Android
177,898.2
79.0
98,664.0
64.2
iOS
31,899.7
14.2
28,935.0
18.8
Microsoft
7,407.6
3.3
4,039.1
2.6
BlackBerry
6,180.0
2.7
7,991.2
5.2
Bada
838.2
0.4
4,208.8
2.7
Symbian
630.8
0.3
9,071.5
5.9
Others
471.7
0.2
863.3
0.6
Total
225,326.2
100.0
153,772.9
100.0
Source: Gartner (August 2013)
Mobile Phone Vendor Perspective
Samsung: Samsung remained in the No. 1 position in the overall mobile phone market, with sales to end users growing 19 percent in the second quarter of 2013 (see Table 3). “We see demand in the premium smartphone market come mainly from the lower end of this segment in the $400-and-below ASP mark. It will be critical for Samsung to step up its game in the mid-tier and also be more aggressive in emerging markets. Innovation cannot be limited to the high end,” said Mr. Gupta.
Nokia: Slowing demand of feature phone sales across many markets worldwide, and fierce competition in the smartphone segment, affected Nokia’s mobile phone sales in the second quarter of 2013. Nokia’s mobile phone sales totaled 61 million units, down from 83 million units a year ago. Nokia’s Lumia sales grew 112.7 percent in the second quarter of 2013 thanks to its expanded Lumia portfolio, which now include Lumia 520 and Lumia 720. “With the recent announcement of the Lumia 1020, Nokia has built a wide portfolio of devices at multiple price points, which should boost Lumia sales in the second half of 2013,” said Mr. Gupta. “However, Nokia is facing tough competition from Android devices, especially from regional and Chinese manufacturers which are more aggressive in terms of price points.”
Apple: While sales continued to grow, the company faced a significant drop in the ASP of its smartphones. Despite the iPhone 5 being the most popular model, its ASP declined to the lowest figure registered by Apple since the iPhone’s launch in 2007. The ASP reduction is due to strong sales of the iPhone 4, which is sold at a strongly discounted price. “While Apple’s ASP demonstrates the need for a new flagship model, it is risky for Apple to introduce a new lower-priced model too,” said Mr. Gupta. “Although the possible new lower-priced device may be priced similarly to the iPhone 4 at $300 to $400, the potential for cannibalization will be much greater than what is seen today with the iPhone 4. Despite being seen as the less expensive sibling of the flagship product, it would represent a new device with the hype of the marketing associated with it.”
Lenovo: Lenovo’s mobile phone sales grew 60.6 percent to reach 11 million units in the second quarter of 2013. Lenovo’s quarter performance was bolstered by smartphone sales. Its smartphone sales grew 144 percent year-over-year and helped it rise to the No. 4 spot in the worldwide smartphone market for the first time. Lenovo continues to rely heavily on its home market in China, which represents more than 95 percent of its sales. It remains challenging for Lenovo to expand outside China as it has to strengthen its direct channel as well as its relationships with communications service providers.
Table 3
Worldwide Mobile Phone Sales to End Users by Vendor in 2Q13 (Thousands of Units)
Company
2Q13 Units
2Q13 Market Share (%)
2Q12 Units
2Q12 Market Share (%)
Samsung
107,526.0
24.7
90,432.1
21.5
Nokia
60,953.7
14.0
83,420.1
19.9
Apple
31,899.7
7.3
28,935.0
6.9
LG Electronics
17,016.4
3.9
14,345.4
3.4
ZTE
15,280.7
3.5
17,198.2
4.1
Huawei
11,275.1
2.6
10,894.2
2.6
Lenovo
10,954.8
2.5
6,821.7
1.6
TCL Communi-cation [Alcatel]
10,134.3
2.3
9,355.7
2.2
Sony Mobile Communications
9,504.7
2.2
7,346.8
1.7
Yulong [Coolpad]
7,911.5
1.8
4,016.2
1.0
Others
152,701.5
35.1
147,354.60
35.1
Total
435,158.4
100.0
420,120.0
100.0
Source: Gartner (August 2013)
“With second quarter of 2013 sales broadly on track, we see little need to adjust our expectations for worldwide mobile phone sales forecast to total 1.82 billion units this year. Flagship devices brought to market in time for the holidays, and the continued price reduction of smartphones will drive consumer adoption in the second half of the year,” said Mr. Gupta.
Additional information is in the Gartner report “Market Share Analysis: Mobile Phones, Worldwide, 2Q13.” The report is available on Gartner’s website at http://www.gartner.com/document/2573119.
The Upcoming Mobile Internet Superpower
download this PDF-format mini e-book
(now with an extensive follow-up & ‘The global forces behind …’ analysis, later in this post)
Subtitle:
China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web
Put* together by Sándor Nacsa in August 2013
This mini e-book is a follow-up to the findings of “China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web” [Aug 5, 2013] post from my trend-tracking blog “Experiencing the Cloud”, as well as the following posts which lead to those findings:
download this PDF-format mini e-book
Now an extensive FOLLOW-UP
(& ‘The global forces behind …’ analysis after that)
China emerging as ‘mobile only’ in sharp contrast to the US multiscreen market [DIGITIMES, Aug 19, 2013]
With smartphone penetration still in the early stages in China, a new study indicates that the country could become a “one screen nation,” outpacing the US in consumers who use smartphones as their sole or primary media device, according to research developed by the Interactive Advertising Bureau (IAB) and the Interactive Internet Advertising Committee of China (IIACC).
The research revealed that media consumption is more impacted by smartphone ownership in China. More than a quarter of China-based smartphone owners report less TV watching and reduced print consumption as a result of owning a mobile connected device (28% and 27% respectively). In comparison to their US counterparts, China-based smartphone owners are 86% more likely to report less TV usage and 42% more likely to report less print usage.
In contrast to China smartphone owners’ concentrated focus on the small screen, US smartphone owners are much more likely to consume other media with their mobile devices in hand. For example, while watching TV, smartphone users report participating in Internet communication (51% US vs. 10% China), reading social media (38% US vs. 9% China), and conducting a local search (34% US vs. 8% China). The data shows similar disparities when it comes to reading print media, the research found.
The two firms said the research also illustrates Americans’ greater dependency on their smartphones as devices that they would “never leave home without” (69%). In comparison, merely 6% of their China counterparts said the same. Approximately one-third (34%) of Americans said that their smartphone is the “first thing I reach for when I wake up,” as opposed to 7% of China-based smartphone owners.
China-based consumers are also more apt to use their smartphones for web browsing than Americans (32% China vs. 21% US), the research found. More than one fifth (23%) of China-based respondents said that they spent three hours or more per day in the last week accessing the Internet with their smartphones. The top reason they cited for turning to their smartphones was “entertainment.”
Slush 2012: Keynote by John Lindfords (Digital Sky Technologies – DST) [startupsauna YouTube channel, Nov 24, 2013]
How Social Media & E-Commerce Operate in China [Tim Swanson YouTube channel, Aug 13, 2013]
China’s E-Commerce Boom: Millennials Shop Alibaba & ASOS [ForaTv YouTube channel, Aug 3, 2013]
Weibo: How Chinese Microblogs Sneak Fashion Past Censors [ForaTv YouTube channel, June 14, 2013]
Alibaba investment spooks some of China’s online shoppers [Reuters TV YouTube channel, Aug 4, 2013]
Chinese Tech Giant Sets Sights on $265 Billion “Smart TV” Market [TheMotleyFool YouTube channel, July 24, 2013]
In China smartphone market, cheap rules – and Apple suffers [Reuters TV YouTube channel, Aug 19, 2013]
FACTBOX: Will China Mobile deal widen Apple’s wedge? [Reuters TV YouTube channel, Aug 20, 2013]
‘Broadband China’ aims to speed up network [CCTV News YouTube channel, Aug 18, 2013]
More foreign carriers to deploy TD-LTE [China Daily video published on March 14, 2012 via SPHRazorTV YouTube channel]
TD-LTE Subscriptions to Surpass 500 Million by 2017, Representing Annual TD-LTE Operator Service Revenues of $91 Billion Worldwide [Research and Markets announcement via PRNewswire, Aug 16, 2013]
More than 50 mobile carriers worldwide have so far committed to TDD LTE technology, and over 30 OEMs have commercially launched TD-LTE compatible devices, with a major proportion of these devices supporting both FDD and TDD modes of operation.
This forecast datasheet presents revenue and shipment market size and forecasts for both infrastructure and devices, along with subscription and service revenue projections for the LTE market as a whole, as well as separate projections for the TD-LTE and FDD-LTE sub-markets from 2012 through to 2017. Historical figures are also presented for 2010 and 2011, along with vendor market share data.
Driven by large scale TDD spectrum availability and the technology’s lower deployment costs, the industry witnessed several prominent TD-LTE network deployments in late 2011 and early 2012, including Softbank in Japan, Etisalat Mobily and STC in Saudi Arabia, and Bharti Airtel in India. More recently, in October 2012, the TD-LTE ecosystem received a major boost when China’s Ministry of Industry and Information Technology announced that the entire 190 MHz of spectrum in the 2.5/2.6 GHz band will be allocated for TD-LTE deployments in China, which harmonizes its TDD spectrum with Japan and the US, two major LTE markets.
These developments could allow the TD-LTE ecosystem to reach significant economies of scale, boosting further infrastructure and device investments in TD-LTE technology.
20130430 SoftBank、Sprintについての会見。質疑最終部分と囲み [Tamotsu Hashimoto YouTube channel, May 1, 2013]
Sprint shareholders approve $21 6 billion deal with SoftBank [KansasCityNews YouTube channel, news article and video on June 25, video published via YouTube on Aug 13, 2013]
Sprint CFO: SoftBank deal lets us take Clearwire spectrum nationwide [FierceWireless, July 30, 2013]
Sprint (NYSE:S) will be able to deploy Clearwire’s 2.5 GHz spectrum for TD-LTE service on a nationwide basis now that it is flush with fresh capital from SoftBank, which now controls 78 percent of Sprint, according to Sprint CFO Joe Euteneuer. Sprint formally took control of Clearwire earlier this month.
Steve Elfman, president of network operations at Sprint, noted during the company’s second-quarter earnings conference call that Sprint now plans to deploy Clearwire’s 2.5 GHz spectrum on all 38,000 of its planned Network Vision cell sites and even more sites than that in a nationwide rollout. Previously, Sprint had said it would use Clearwire’s spectrum as a “hotspot” LTE network to offload traffic in urban markets.
In an interview with FierceWireless, Euteneuer said SoftBank’s $21.6 billion acquisition–which includes $5 billion in new capital and allowed Sprint to buy Clearwire–spurred Sprint to make the shift in strategy. The move will let Sprint add more capacity to its own FDD-LTE network, which it is still in the process of being built out. Euteneuer noted that Sprint and Clearwire originally planned to deploy Clearwire’s spectrum on around 5,000 cell sites as an offload network in urban markets. Those plans are still proceeding this year, but Sprint now wants to expand that to improve the customer experience.
“Now that we own 100 percent of Clearwire, with the help of SoftBank, we said, how do we take full advantage of the 2.5 GHz spectrum?” Euteneuer said. “The best way to do that is to have it fully integrated with the rest of your spectrum capabilities. And to do that you really need to put it on every tower.”
The Sprint CFO said because of the weaker propagation characteristics of 2.5 GHz, Sprint will deploy small cells and other sites beyond the 38,000 Network Vision sites the company has mapped out. He said it is unclear at this point if the nationwide deployment of Clearwire’s spectrum will be finished by the end of 2014. Clearwire commands around 160 MHz of spectrum in the top 100 markets.
It is unclear exactly how many TD-LTE cell sites using Clearwire’s spectrum will be online by year-end. Iyad Tarazi, head of network development and integration for Sprint, recently told CNET that Sprint will have 5,000 Clearwire sites on air by year-end, but on Tuesday Elfman was less specific, and said “we’ll have several thousand sites up this year because of the work that Clearwire was doing before us.”
“We are working with Clearwire on plans and will share more soon,” Sprint spokeswoman Roni Singleton said in a follow-up statement.
…
Sprint CEO Dan Hesse said the deployment of a nationwide LTE network on 2.5 GHz will help give Sprint “competitive parity” with its rivals. “And the important thing in terms of what we believe will be a better, a superior network experience will depend upon how quickly we roll out the 2.5 [GHz spectrum], because that will give us extraordinary capacity and some speed and performance advantages in the market,” he said. …
Xiaomi CEO: Don’t call us China’s Apple [Reuters TV YouTube channel, Aug 15, 2013]
China’s Tencent tops leaderboard, but rivals loom [Reuters TV YouTube channel, Aug 15, 2013]
WeChat, Made-in-China Messaging App Grows in Popularity [CCTV News YouTube channel, July 30, 2013]
Tencent Corporate Video [Alison Lee YouTube channel, Aug 6, 2013]
The global forces behind the overall setup of Chinese Internet giants:
- China Deals Represent Half of DST Global’s Recent Investments [The Wall Street Journal – Venture Capital Dispatch, Jan 29, 2013]
China’s doors may be closed to social network company Facebook, but for its pre-IPO investor DST Global, the gates are wide open.
As a result, the firm has managed to invest about $1.5 billion into China-based companies over the past four years, translating into around half the amount of capital it has invested worldwide, Partner John Lindfors told Venture Capital Dispatch.
Unlike some foreign investors, DST Global is happy to take a minority shareholding in portfolio companies, and being a late-stage investor with the ability to write bigger checks, it has also encountered less competition among China-focused investors when targeting new deals.
“We don’t want to take control. If you think about it, some of the most successful companies have been run by their owners. We’re trying to find the next Bill Gates, and back him,” said Lindfors.
DST Global counts Chinese e-commerce giant Alibaba and online retailer Jingdong Mall as part of its Asian portfolio. DST, alongside other private equity firms like Silver Lake agreed to buy shares in Alibaba at a tender offer of $1.6 billion in 2011. That same year, DST Global also participated in a $1.5 billion third round of funding in Jingdong, with media reports stating that DST bought a 5% share in the online retailer for $500 million.
Although DST Global spent around $1.5 billion on both of those deals, said Lindfors, he noted that the firm is also “happy” to invest far less in a deal, even from $50 million, as deal sizes in China can often be smaller due to the general market size.
Other firms active in China’s Internet space include Kleiner Perkins Caufield & Byers and Sequoia Capital, which typically target lesser-sized deals than DST Global, opening the playing field for the Russian investment firm. In fact, KPCB China Investment Partner Wei Zhou last year told Venture Capital Dispatch that it had even started investing in pre-Series A deals.
DST Global, headed by Russian billionaire Yuri Milner, expects to invest in a “few” more deals in the next year or two across China’s Internet sector, specifically in e-commerce and mobile Internet, on expectations that growing domestic consumption and increasing users of mobile devices will bolster growth in these areas, said Lindfors.
“We see an explosion of smartphone usage,” said Lindfors. Indeed, industry insiders, including Kai Fu Lee, founder of Chinese investment firm Innovation Works, predict China will have 500 million smartphone users by the end of this year, jumping up from the current 330 million.
On the other side of the Pacific Ocean, DST Global has invested in the likes of Twitter and now-Nasdaq-listed Facebook–which faces restricted use in China–and manages three funds. Last year, Bloomberg reported that DST Global was raising $1 billion for a new technology fund, and separately reported that DST Global I achieved an annual 151% gross internal rate of return. Lindfors declined to comment on the firm’s funds.
DST Global likes other countries across Asia such as Indonesia and India, but for the meantime, opportunities are too early stage, said Lindfors, who previously worked at investment bank Goldman Sachs.
DST Global, which has an Asia-based office in Hong Kong, was set up by entrepreneur Milner, and is best known for investing $200 million in Facebook in 2009, and then a subsequent round in 2011 worth $500 million with Goldman Sachs.
Milner Discusses Social Networking Companies, Facebook: Video [Bloomberg YouTube channels, March 23, 2012]
2012 – My Recipe for a Better Tomorrow – Mr. Yuri Milner [PresidentialConf YouTube channel, June 24, 2012]
Encouraging Innovation – Yuri Milner at European Zeitgeist 2011 [zeitgeistminds YouTube channel, May 17, 2011]
Юрий Мильнер с 2005 года началась эра социального Интернета [Umid Matnazarov YouTube channel, Sept 20, 2011]
Alibaba Said to Have Applied for HK Listing [The China Perspective, July 23, 2013]
Alibaba Group Holding Ltd, China’s dominant e-commerce service provider, has lodged its application for listing at the Hong Kong stock exchange aimed at raising up to $20 billion, Hong Kong-based Oriental Daily reported. The company is expected to float in October with a valuation of $100 billion. Approximately $7 billion from the money raised will be used to buy back Alibaba’s share owned by Yahoo! Inc (Nasdaq: YHOO), the source said. Alibaba delisted its B2B site Alibaba.com a year ago in preparation for the initial public offering of the group as a whole. Its Taobao.com is China’s top C2C site; its Tmall.com is China’s top B2C site; its Alipay is China’s top third party billing service provider. Japan’s Softbank is Alibaba’s largest shareholder, holding a 35% stake; Yahoo owns 23%, Alibaba’s management owns 24.7%; some private equities and institutional investors own 10.3%; its founder Jack Ma owns 7%.
Masayoshi Son [Wikipedia]
Masayoshi Son (Japanese: 孫 正義 Hepburn: Son Masayoshi?, Korean: 손정의 Son Jeong-ui; born August 11, 1957) is a Japanese businessman and the founder and current chief executive officer of SoftBank, the chief executive officer of SoftBank Mobile, and current chairman of Sprint Corporation. According to Forbes magazine, his net worth is $8.1 billion as of 2011 and he is the second richest man in Japan,[1] despite having the distinction of losing the most money in history (approximately $70 billion during the dot com crash of 2000). [2] Forbes also describes him as a philanthropist.
Masayoshi Son is known for his extreme persistence to achieve his business goals. As example, when Japan’s Post and Telecommunications Ministry denied his application for a particular telecommunications license, he is reported[3][4] to have threatened to set himself on fire inside the Ministry if his company is not awarded the desired license (however, he is reported[5] not have brought any fuel along to back up his threat).
Former Amazon manager takes Chinese e-commerce company global [GeekWire, Aug 16, 2013]
Watch out, Amazon.com. A Chinese e-commerce company is out to redefine notions of customer service. If you think free shipping in two days is fast, how about in three hours?
In cities across China, customers can order everything from fresh produce to a new laptop, get it delivered for free the same day, pay cash on delivery and even refuse the goods at the door if they fail to meet expectations.
It’s all part of a strategy of JD.com (formerly 360buy) to become China’s largest e-commerce company and expand globally. China’s booming and highly competitive e-commerce market gets more interesting all the time, and JD.com is a major player to watch.
JD.com stands for parent company Jingdong, which has grown to become China’s largest online company that sells directly to consumers, with 100 million registered users, 5 million orders a day, and a whopping 60 billion RMB in sales ($10 billion) in 2012. The company rebranded itself earlier this year and may be planning a U.S. IPO.
Jingdong Vice President and General Manager Shi Tao, who spent more than three years working for Amazon China, visited Seattle this week to introduce the company and meet with prospective customers and partners.
JD.com operates differently than its major competitor, Alibaba’s Tmall, in that Jingdong spent years building its own network of warehouses and fulfillment centers, allowing it to manage its own delivery rather than simply matching buyers and sellers or relying on third parties to ship the goods.
“Chinese consumers want to shop on the platform with the best experience, especially shipping and post-sales customer services,” Shi said. In May Jingdong introduced nighttime and three-hour delivery services in six Chinese cities: Beijing, Shanghai, Guangzhou, Chengdu, Wuhan and Shenyang. The company offers same-day delivery in 27 major cities and next-day delivery in more than 150 cities across China.
Tmall is still the leading B2C company in China overall, with more than 51 percent of the market, compared to Jingdong’s 17 percent, according to iResearch. Amazon China has about 2 percent of that market.
…
China’s e-tailing industry has posted 120 percent annual growth since 2003, and online sales in China could reach $650 billion by 2020, according to McKinsey Global Institute.
What was not mentioned in the DST/Lindfors interview earlier:
DST has strong ties to
|
Goldman Sachs. The majority of
|
From Digital Sky Technologies is …
Asia Awards: VC Deal of the Year – Xiaomi [Asian Venture Capital Journal, Dec 5, 2012]
Validation of Xiaomi’s approach was provided by Yuri Milner of DST Advisors who led a $216 million third round of funding in June – valuing the company at $4 billion – with Government of Singapore Investment Corp. (GIC) also involved.
DST Founder Yuri Milner Invests in Xiaomi [Tech In Asia, Dec 23, 2011]
We already knew Xiaomi had scored $90 million
RMBin new financing — they announced that at their press conference with China Unicom on Tuesday — but Lei Jun has now revealed on Weibo where at least some of that money came from: DST founder Yuri Milner.
Xiaomi’s market value could reach US$10bn after new financing [WantChinaTimes.com, July 28, 2013]
Xiaomi Technology, a Chinese manufacturer of own-brand budget smartphones, will soon launch another round of financing worth more than US$2 billion, with insiders suggesting the main investor will be Russian venture capital firm Digital Sky Technologies (DST), the Shanghai-based First Financial Daily reports.
Leading Chinese internet firm Tencent Holdings invested US$300 million in DST in April 2010 and would therefore become an indirect investor in Xiaomi, the report said, though both Tencent and Xiaomi have declined to comment.
Rumor: Tencent Invests in Xiaomi via Russian VC [Marbridge Consulting, July 23, 2013]
According to industry insiders, Beijing-based Android handset developer Xiaomi has secured a new round of funding exceeding USD 2 bln from Chinese internet and mobile services firm Tencent (0700.HK), with Russian investment firm Digital Sky Technologies (DST) acting as an intermediary.
The latest round of funding values Xiaomi at approximately USD 10 bln.
Tencent Invests $300m in DST and Establishes Strategic Partnership [Tencent press release, April 12, 2010]
Tencent Holdings Limited (“Tencent” or the “Company”, SEHK 00700), a leading provider of Internet and mobile & telecommunications value-added services in China, and Digital Sky Technologies Limited (“DST”), one of the largest Internet companies in the Russian-speaking and Eastern European markets, today jointly announced that Tencent will invest approximately US$300 million in DST, thereby establishing a long-term strategic partnership between the two companies.
The aggregate consideration of approximately US$300 million, which will be paid in cash, gives Tencent approximately a 10.26% economic interest in DST upon completion of the transaction. Tencent will hold approximately 0.51% of the total voting power of DST and have the right to nominate one observer to the DST Board.
DST and Tencent will embark on a long-term partnership and co-operation as they seek to benefit from each other’s insights gained from their respective markets. DST’s deep understanding of the Russian Internet market, together with its leading brands such as Mail.ru, Odnoklassniki and VKontakte, will enable Tencent to benefit from the high growth of the Russian-speaking Internet market. At the same time, Tencent’s leading position in China will provide DST and its companies with unique and valuable operational insights and access to its regional network that can help DST further accelerate its growth path.
Chief Executive Officer of DST, Mr. Yuri Milner, said, “We are extremely pleased to welcome Tencent as a shareholder in DST. This investment is a vote of confidence in DST from the market leader in China and one of the world’s most successful and dynamic Internet companies overall. Our teams share many common views and beliefs and a clear vision about the significant opportunities that lay ahead. We look forward to working together with Tencent and benefiting from their expertise as we both push forward with our plans to capitalize on this immense growth in our markets.”
President of Tencent, Mr. Martin Lau, said, “We are excited to enter into a long-term strategic partnership with DST, a key global Internet player and a leader in Russian-speaking Internet markets. The investment allows us to benefit from the fast-growing Internet market in Russia, as well as to leverage our technical and operational know-how to strengthen the leadership position of DST and explore new business opportunities in the Russian-speaking Internet markets.”
Details of the transaction can also be obtained from the statutory disclosure documents available on http://www.hkexnews.hk website and http://www.tencent.com/ir .
About Digital Sky Technologies
DST was founded in 2005 and is one of the largest Internet companies in the Russian-speaking and Eastern European markets and one of the leading investment groups globally to exclusively focus on internet related companies. DST, together with its affiliate DST Global, also hold stakes in Internet world leaders such as Facebook and Zynga. DST is a privately held company backed by leading Russian and Western financial institutions. For more information please visit http://www.dst-global.com .
About Tencent
Tencent aims to enrich the interactive online experience of Internet users in China by providing a comprehensive range of Internet and wireless value-added services. Through its various online platforms, including Instant Messaging QQ, web portal QQ.com, QQ Game portal, multi-media social networking service Qzone and wireless portal, Tencent services the largest online community in China and fulfills the user’s needs for communication, information, entertainment and e-Commerce on the Internet.
Tencent has three main streams of revenues: Internet value-added services, mobile and telecommunications value-added services and online advertising.
Shares of Tencent Holdings Limited are traded on the Main Board of the Stock Exchange of Hong Kong Limited, under stock code 00700. The Company became one of the 43 constituents of the Hang Seng Index (HSI) on June 10, 2008. For more information, please visit http://www.tencent.com/ir .
Naspers makes strategic investment in DST [press release, July 14, 2010]
DST to assume full control of Mail.ru upon share swap with Naspers
Johannesburg and Moscow, 14 July 2010 – Naspers Limited (“Naspers”), the broad based international media group, and Digital Sky Technologies Limited (“DST”), one of the largest internet companies in the Russian-speaking markets, announces today that Naspers’s subsidiary Myriad International Holdings B.V. (“MIH”) will take a 28,7% stake in DST. The transaction will be effected by Naspers contributing its 39,3% stake in Mail.ru into DST and investing US$388m in cash. Concurrently, Mail.ru management and other minorities will also convert their shares into DST.
Upon the close of this transaction, DST will own over 99,9% of Mail.ru. Mail.ru is the leading communication and entertainment platform in the Russian-speaking internet world, with over 50m registered email accounts, leading market share in MMO games and one of the leading social networks in Russia.
Naspers and DST have worked closely together over the past three years as co-owners of Mail.ru and today’s transaction will enable them to further strengthen that relationship.
Chief Executive Officer of DST, Yuri Milner, said, “Naspers’s strategic insight has already proven to be valuable in our partnership and we welcome the expertise they will bring to DST. We are delighted to announce this transaction and look forward to creating further value through our relationship.”
Antonie Roux, head of Naspers’s internet operations, commented: “We have known DST and its management for years and we share a similar view and approach. We are excited to strengthen our partnership. This opportunity further expands our exposure to emerging markets and the fast-growing internet sector.”
About Digital Sky Technologies
DST was founded in 2005 and is one of the largest internet companies in the Russian-speaking and Eastern European markets and one of the leading investment groups globally to exclusively focus on internet related companies. DST, together with its affiliate DST Global, also holds stakes in internet world leaders such as Facebook, Zynga and Groupon. DST is a privately held company backed by leading international financial institutions and companies. For more information please visit http://www.dstglobal.com.
About Naspers
Naspers is a leading emerging market media group operating in 129 countries. It is listed on the Johannesburg Securities Exchange (JSE), with an ADR (American Deposit Receipt) listing on the London Stock Exchange. The group’s principal operations are in internet platforms (focusing on commerce, communities, content, communication and games), pay-television and the provision of related technologies and print media (including publishing, distribution and printing of magazines, newspapers and books). The group’s most significant operations in emerging markets include South Africa and subSaharan Africa, China, Central and Eastern Europe, India, Brazil, Russia and Thailand. For more information visit http://www.naspers.com.
Tencent (700 HK) [RHB OSK Securities (Thailand) report, Aug 15, 2013]
Internet – Online Games and Media
Market Cap: USD88,608mShareholders (%)
MIH China (Naspers) 33.9
Ma Huateng [Pony Ma] 10.2
JP Morgan 4.5…
Good WeChat progress. The pace of development on Tencent’s mobile social platform WeChat has exceeded our expectations since its launch. Monthly active users (MAU) breached 236m in 2Q13 (1Q13: 194m) while new services such as sticker sales, targeted ads and the first game released on the platform, TTAXC (天天爱消除), showed monetisation potential.
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Online advertising is a major earnings driver at the gross profit level.
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SWOT Analysis
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Company Profile
Tencent is a leading internet conglomerate in China with operations in online games, social networks, advertising and e-commerce. The company operates leading online games in China while its mobile chat application, which has expanded globally, has a user base exceeding 300m.
Business overview
Founded in 1915, Naspers is a leading multinational group of eCommerce and media platforms, with operations in more than 133 countries. Listed on the Johannesburg Stock Exchange (JSE) since September 1994, it also has an ADR listing on the London Stock Exchange (LSE).
The group’s principal operations are in e-commerce, paytelevision & related technologies and print media. It also has minority investments in listed, integrated social-network platforms Tencent (SEHK 0700) and Mail.ru (LSE: MAIL).
The group focuses on attaining sustainable market positions in growing emerging markets which it believes to present above-average growth opportunities. These markets include South Africa and the rest of sub-Saharan Africa, China, Brazil and the rest of Latin America, Central and Eastern Europe, Russia, Southeast Asia, India and the Middle East.
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INTERNET
Naspers operates platforms that offer customers fast, intuitive and secure environments where they can communicate, participate, entertain and shop. The group’s e-commerce services include marketplaces, general and vertical e-tail, classifieds, lead-generation and payments.
Naspers major e-commerce operations are:
Allegro (97%), a leading e-commerce business in Central and Eastern Europe.
BuscaPé (95%), a major e-commerce platform in Brazil.
OLX (84%), a strong classifieds operator in a number of emerging markets.
Other investments include 36Boutiques, Avito, Brandsclub, Dealfish, Dubizzle, eMag, Fashion Days, Flipkart, Fixeads, ibibo Group, kalahari.com, Korbitec, LevelUp!, Markafoni, Movile, Netretail, OLX, PayU, PriceCheck, redBus, Ricardo, Sanook!, Souq, Sulit, Tokobagus, Travel Boutique Online and Trendsales.
Naspers also holds minority positions in:
Tencent (34%) – China’s largest and most used internet services platform.
Mail.ru Group [DST] (29%) – the leading internet company in Russian-speaking markets.
Naspers rides Tencent to Internet fortune [TechCentral (South Africa), Aug 31, 2012]
When Naspers stumbled on a little-known Chinese Internet company in 2001, it could not have dreamed that a US$32m investment would account for more than 80% of the media conglomerate’s R200bn market cap now.
Tencent Holdings is the largest Internet solutions provider in China and Naspers, which owns a 34% stake, is its largest shareholder. R4,8bn of Naspers CEO Koos Bekker’s personal fortune of R6bn in shares is linked to Tencent.
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It [Naspers] has a market capitalisation of about $57bn and its total revenue for the year to 31 December 2011 was up by 45% to $4,4bn. Profit attributable to equity holders was $1,6bn — 27% higher year on year — and its profit for the second quarter of 2012 was up by 32%. The p:e ratio (share price compared with its earnings) is 33.
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Founded in November 1998, Tencent has become one of China’s largest and most widely used Internet service portals and, in 2004, it was listed on the main board of the Hong Kong Stock Exchange.
More than 50% of Tencent employees are research and development staff and the company has obtained patents relating to technology for instant messaging, e-commerce, online payment services, search engines, information security, gaming and more.
Its leading Internet platforms in China include instant messaging, social networking (with 580m active users) and a mobile chat and micro-blogging service known as Weixin. It is also the largest online gaming company in the world.
And the DST money is said to come from:
- Faces of the Facebook Corruption [Americans For Innovation or FB Cover-up opinion blog, Jul. 11, 2013]
47 million “likes” undermine the U.S. Constitution and the Rule of Law
THE THREE KINGS & THEIR PRINCES(S)“Larry Summers is ethically challenged.”
Former Economist ColleaguesLarry Summers and his Facebook Friends conspire to undermine U.S. “checks & balances” and take control of the world economy by stealth, we believe.
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First see a specially written article to understand very easily the whole affair with the judicial and other systems in U.S. in Facebook — a force for freedom perhaps, but at odds with the rule of law in the U.S. [Americans For Innovation (AFI) via Open Trial, July 26, 2013] from which I will include here only the following excerpts:
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In the late 1990s Innovator Leader Technologies invented a technology we now call “social networking.” By the time they filed for their first patents in 2002, they had invested 145,000 man-hours and over $10 million. Literally within three months of Leader perfecting the lynch-pin of their invention, Mark Zuckerberg and his PayPal associates were in the market, on February 4, 2004. Zuckerberg claims to have done all the work himself in “one to two weeks” while chasing girls and studying for finals.
New evidence indicates he received Leader’s source code from a mole who was cooperating with Zuckerberg’s apparent mentor, James W. Breyer, of Accel Partners LLP and with Fenwick & West LLP, who was also Leader’s attorney at the same time. It appears that they were waiting for Leader to finish debugging its invention so that they could roll out the Harvard-boy-genius-Facebook-origins myth, with Zuckerberg in the leading role.
Not so coincidentally, Lawrence Summers was President of Harvard at the time. Summers arranged for the 19-year old Zuckerberg to get more Harvard Crimson news coverage than any world leader or event. Breyer was a big alumni contributor. PayPal COO, Reid Hoffman (later LinkedIn CEO) was coaching Zuckerberg and feeding him spending money, as was Peter Thiel, co-founder of PayPal. Tellingly, these three sold over $6 billion of their Facebook stock on Day 3 of the Facebook IPO, at the highest price anyone received for their stock before it crashed. Summers popped up in Silicon Valley before the IPO too—as “special advisor” to Instagram that sold their 13-man company to Facebook for $1 billion. Could it be that their CEO, Matt Cohler was able to exert some influence over Zuckerberg, as he knew about the theft of the Leader invention?
Forty-four months after filing for their patents, Leader received their first patent on November 21, 2006—U.S. Patent No. 7,139,761. On November 19, 2008, Leader filed a patent infringement lawsuit against Facebook. Leader Technologies, Inc., v. Facebook, Inc., 08-cv-862-JJF-LPS (D.Del. 2008).
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Current Federal Reserve Chairman candidate, Lawrence “Larry” Summers has mentored Facebook’s COO, Sheryl Sandberg since the early 1990’s. He also mentored Russian Yuri Milner, who has close ties to Russian oligarch Alisher Asmanov and the Kremlin. Summers was one of the Harvard-wunderkind architects of the disastrous Russian voucher system in the early 1990’s while Chief Economist for the World Bank. Milner is Facebook’s second largest shareholder and is partnered with Goldman Sachs and Morgan Stanley. With Goldman’s and Morgan’s help, Milner moved billions of dollars into Facebook pre-IPO. Curiously, Cohler helped Hoffman start LinkedIn in 2004. There appears to have been a feeding frenzy surrounding the debugging of Leader’s invention.
This occurred after the US taxpayers bailed out Goldman and Morgan Stanley in 2008. To this day no one knows the origins of those funds, which pumped Facebook’s valuation up to $100 billion. Milner is also connected with Bank Menatep, which was caught laundering $10 billion in Russian mob funds and diverting $4 billion in IMF funds. Summers’ conduct here has never been scrutinized, even though he was appointed to oversee the bailout soon after Barack Obama was elected President. See Congressional Briefings.
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Georgia [Beardslee] interviews the real inventor of social networking, Michael McKibben, CEO of Leader Technologies, Columbus, Ohio: GEORGIA! KSCO AM 1080, Apr. 10, 2013 Michael McKibben interview, CEO of Leader Technologies, Inc. [leadertv100 YouTube channel, April 12, 2013]
Georgia: “One of the most interesting, complicated and disturbing stories of the decade.” On April 10, 2013, news-talk show host Georgia Beardslee interviewed Michael McKibben, CEO of Leader Technologies, Columbus, Ohio on her weekly radio show GEORGIA! KSCO 1080 (Santa Cruz, CA) about Leader’s battle with Facebook over Leader’s U.S. Patent No. 7,139,761.
The interview covers
- background on the LEADER V. FACEBOOK patent infringement lawsuit;
- [18:30] the suspicious split verdict;
- [34:25] the Harvard back story;
- the Federal Circuit judge’s stock in Facebook;
- the refusal of the Federal Circuit court to disclose their Facebook stock holdings;
- the likely undue influence of the federal courts by financiers, bankers, underwriters, Silicon Valley venture capitalists;
- the questionable conduct of the U.S. Patent Office;
- the judges’ ignoring of Zuckerberg’s concealment of 28 hard drives and Harvard emails;
- the Facebook-doctored trial evidence;
- the ruling against Leader without a shred of evidence;
- the involvement of billions of pre-IPO investments in Facebook by Russian companies,
- Goldman Sachs’ and Obama bailout director Larry Summers’ involvement, and now
- the interference of the White House at the U.S. Patent Office. This case appears to have exposed an underbelly of corruption at the national and international levels that is much worse and even more organized than we might have otherwise suspected.
While the video plays, pages from Leader’s Petition for Writ of Certiorari, Leader Technologies, Inc. v. Facebook, Inc., No. 12-617 (U.S. Supreme Court Nov. 16, 212) will display, page by page (41 pages not counting the appendices). This document can be obtained at: http://www.scribd.com/doc/113545399/P…
For background facts, see also http://americans4innovation.blogspot….
This broadcast and these notes may contain opinion. As with all opinion, the information should not be relied upon without independent verification.
Obama is protecting his 47 million Facebook “likes” at the expense of the U.S. Constitution [Georgia! KSCO-AM1080, May 31, 2013]
(My collaboration with a listener, 5/31/2013):Washington D.C. is toxic and fiendishly deceptive these days. Speaker John Boehner described the flow of scandal developments as “Drip, drip, drip.” I take this to mean that the Deception Tank is full and starting to leak. (At last!)
Investigators are now uncovering common people driving these scandals. The Leader v. Facebook property rights debacle seems to have been another one of their pet deception projects. Remember, Facebook was judged guilty on 11 of 11 counts of stealing the inventions of Columbus-based innovator Leader Technologies, Inc., yet the federal courts ruled for Facebook anyway. They had to ignore the Consitution to do it.
Many people lusted after Leader’s innovations that we know as “social networking.” Obama and his handlers needed it to raise election dollars and polish Obama’s persona many times a day. Larry Summers, Accel Partners and the PayPal Mafia wanted it as their global financial transactions platform, Zuckerberg and his fellow thieves wanted it as a global voyeur platform to invade everyone’s privacy, the Kremlin wanted it as a money-laundering vehicle, James W. Breyer wanted it as his ‘pump and dump” stock manipulation scheme, the greedy law firms wanted it to rake in fees. And, at least two Federal Circuit Judges Alan D. Lourie and Kimberly A. Moore were beefing up their financial portfolios with the pump of their undisclosed Facebook shares at the IPO. Wow, that’s a lot of interests all lusting after Michael McKibben’s innovation! (I have interviewed him on this show twice.)
Beware of McBee Strategic lobbyist Jeff Markey bearing gifts
Americans for Innovation has smoked out intimate, undisclosed relationships among Facebook’s chief litigator in Leader v. Facebook, Cooley Godward LLP’s Michael Rhodes, Obama’s Justice Department Cooley “Advisor,” Donald K. Stern, the failed $1.6 billion BrightSource Obama “green” stimulus project, big Facebook IPO winner J.P. Morgan Chase and McBee Strategic’s Steve McBee and Jeff Markey.
This is so convoluted I asked by resident artist to do me a diagram of these relationships. No wonder Washington is so confused. It’s intentional on the part of some morally bankrupt people and organizations (click to enlarge):
Figure 1: Conflicts of Interest Map among Barack Obama, Executive Branch, Justice Department, Cooley Godward Kronish LLP, Michael Rhodes, Donald K. Stern, McBee Strategic, Steve McBee, Jeff Markey, Judge Leonard P. Stark, Judge Alan D. Lourie, Judge Kimberly A. Moore, Leader v. Facebook, BrightSource, Solyndra,Tesla Motors, Solar City, Elon Musk and 47 million “likes” on Facebook.
McBee Strategic and their lobbyist Jeff Markey have lied at least twice on disclosures that we have already identified. On their BrightSource Senate disclosure on 11/20/2009 they answered “No” to affiliated organizations that actively participate in their activities. This was false since on 4/23/2009 they had publicly announced their alliance with Facebook’s attorney Cooley Godward Kronish LLP specifically about helping companies access Obama’s “green energy” money. That’s LIE #1. Then, we discover that Jeff Markey is accustomed to lying whenever it is to his benefit. On 4/30/2004 Markey lied on a financial disclosure that he was an Executive for SAIC in an apparent deception to gain access to the National Congressional Republican Committee. That’s LIE #2.
Markey clearly plays on both sides of the ball in Washington. While he is busy spending Obama’s billions, he donates mostly to Republicans, including MITCH MCCONNELL, ROB PORTMAN, ARLEN SPECTER, LINDSEY GRAHAM. Republicans beware of this wolf in sheep’s clothing. Such cynical parlaying of contacts just to keep one’s job in Washington is why Washington is failing. These people are there for the wrong reasons. They need to get real jobs. Professional bureaucrats and politicians (and the lobbyists who feed on the rotted meat) are the death knell of a democracy.
While we’re on the subject of lying to Congress, then Magistrate Judge Leonard P. Stark told Congress in his 4/22/2010 confirmation hearing that he would follow the decisions of the Supreme Court and the Appeals Courts. However, three months later he ignored that promise and even after instructing the jury to do so, he ignored the Supreme Court’s Pfaff test of on-sale bar evidence, as well as the Federal Circuit’s Group One tests. Obama and his Facebook “friends” just seem to lie all the time.
Don’t believe me? Check out the source material yourself. Here are some of them we downloaded quickly. Please share more as you find your own information.
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Detailed information is available in Mark Zuckerberg used Leader white paper to build Facebook [Origin of Facebook technology?, Aug 27, 2011] post, from which I will include just the most relevant excerpt in my opinion:
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The court documents reveal how Mark Zuckerberg was able to accelerate from 0-to-60 mph in “one or two weeks” while studying for his Harvard finals to start Facebook on February 4, 2004. The idea for the student facebook was already known at Harvard from three well-documented sources prior to Mr. Zuckerberg: (1) the Winklevoss twins’ ConnectU,[1] (2) Aaron Greenspan’s houseSYSTEM,[2] and (3) from the Harvard computer administration.[3] And, if Leader Technologies (“Leader”) is right, Mr. Zuckerberg lifted the ideas for the structure of the platform from Leader Technologies’ patent pending white papers, one published on October 22, 2003, along with Leader’s first patent publication on June 24, 2004—exactly when Mr. Zuckerberg says “Steven Dawson Haggerty” was hired to build the “groups functionality” which is disclosed in the Leader patent publication.[4][5][6][7]
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More on Yuri Milner
:
Mark Pincus, founder of Zynga: I Love Yuri Milner [PandoDaily YouTube channel, July 19, 2012]
Russian Billionaire buys $100 Million U S Mansion Yuri Milner [estarcobusiness10 YouTube channel, (originally made the news on March 31, 2011) April 2, 2012]
Home Brings $100 Million [WSJ.com, March 31, 2013]
A Russian billionaire investor paid $100 million for a French chateau-style mansion in Silicon Valley, marking the highest known price paid for a single-family home in the U.S.
The purchase of the 25,500-square-foot home in Los Altos Hills, Calif., underscores the strength of some luxury properties in an otherwise depressed housing market.
The buyer, Yuri Milner, 49, who heads Digital Sky Technologies and whose investments include Facebook Inc., Groupon Inc. and Zynga Inc., had no immediate plans to move into the home, said a spokesman.
Mr. Milner is the stocky founder of DST, a Moscow-based fund that’s made a splash in Silicon Valley via its investments. Its first in the U.S. was a $200 million check for Facebook in 2009. His primary residence is in Moscow, where he lives with his wife and two children.
The sky seemed to be the limit for Mr. Milner’s new house, a symmetrical limestone mansion with San Francisco Bay views that was inspired by 18th-century French chateaux.
The home has indoor and outdoor pools, a ballroom and a wine cellar. The grounds include a tennis court and inside are chandeliers and a frieze around a skylight in the entryway, among other details.
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Mr. Milner bought the home through a limited-liability company; the home wasn’t on the market, according to people familiar with the deal.
Mr. Milner, who studied theoretical physics in Moscow and attended the University of Pennsylvania’s Wharton School of Business, began his career in Moscow in the 1990s. By 1999, he had focused on the Internet after dabbling in everything from private equity to a macaroni-and-cheese factory. …
Larry Summers
:
- Update: Larry Summers had already a much larger influence over the global affairs since 1990 than anybody could have only imagined. Read Greg Palast’s latest finding of Larry Summers and the Secret “End-Game” Memo [Aug 22, 2013] related to second half of 90s when Summers was Deputy Secretary of U.S. Treasury and Summers was leading what Palast calls “top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet”. Note as well that the author of the secret “End Game” memo written to Summers was nobody else than Timothy F. Geithner than Assistant Secretary to Summers.
- AFF 2013 Keynote Luncheon with Lawrence Summers [HKTDC YouTube channel, Jan 23, 2013]
- Larry Summers Seeks Edge in Search for Next Fed Head [Bloomberg YouTube channel, July 29, 2013]
- The Disastrous Larry Summers For Fed Chair? [golefttv YouTube channel, Aug 10, 2013]
- Peter Schiff – Next Fed Chair Will Lead US to ‘Economic Ruin& Crisis’ economy, economic, crisis, collapse, dollar, crash, us, debt, 2013, 2014 [Gold, Silver & Economy News YouTube channel, Aug 15, 2013]
Alisher Usmanov
(+Irina Viner):
- Sunday Times Rich List 2013 reveals wealthiest members of UK Jewish community [JewishNewsOne, April 22, 2013]
BBC News – Sunday Times Rich List: Alisher Usmanov [BBCWorldNewsWatch YouTube channel, April 21, 2013]
Moshiri Becomes Billionaire Helping Usmanov [jagan washpost YouTube channel, July 9, 2012]
Russia’s Usmanov – Fed Tapering ‘Vital & well-balanced’ (CNBC) [gmshadowtraders YouTube channel, July 11, 2013]
Full video: Russia’s Richest Man Supports Fed [CNBC, June 20, 2013]
Форум в Давосе. Интервью А.Усманова [Моше Кац YouTube channel, Jan 23, 2013]
Алишер Усманов: на Россию надвигается этап сложностей [Моше Кац YouTube channel, June 23, 2013]
Без галстука с Ириной Винер [Russia24TV YouTube channel, Nov 7, 2012]
Russian Billionaire Usmanov Bets $100M on Apple’s Rebound [Bloomberg YouTube channel, April 30, 2013]
- Results of the year for Alisher Usmanov [Моше Кац YouTube channel, Dec 21, 2012]
- USM Holdings – Internet [Feb 24, 2013]
USM Holdings is a leading global investor in companies in the digital space. Its deep understanding of the internet sector has played a key role in the success of its businesses and the development and diversification of
internet services.USM Holdings is a major shareholder in Mail.ru Group, with a 17.9% economic stake and 58.1% voting power, and the largest investor in the Digital Sky Technologies (DST ) family of funds, an investment company specialising in late stage, high growth private businesses in the global internet sector. USM Holdings recognises the future growth prospects of e-commerce, social networks, online video, online gaming, mobile internet and online advertising.
MAIL.RU GROUP
Founded in 1998, Mail.Ru Group is the number one internet company in the high growth Russian-speaking internet market reaching c. 85% of Russian users on a monthly basis. It is the world’s fourth largest internet company based on total page views, with a global monthly audience of 97.4 million users.
In line with its ‘communitainment’ strategy, the company is moving rapidly to build an integrated communications and entertainment platform. Mail.Ru Group comprises the most popular Russian free email service Mail.Ru and two popular Russian-language internet instant messengers. The company operates two leading Russian social networks, My World and Odnoklassniki.ru, and owns a 40% stake in VKontakte, Russia’s number one social networking site. Mail.Ru Group is also a leading player in the online games market.
In 2010, Mail.Ru Group successfully completed an IPO on the London Stock Exchange worth c. US$92 million.
Mail.Ru Group’s aggregate segment revenue in 2012 was RUR 21,151 million, representing a 39% year-on-year increase.
PORTFOLIO INVESTMENTS WITH DST
DST was the group’s first internet investment. In 2008, DST became a backer of Facebook based on a firm belief in the strong growth potential of the internet, and particularly social networking. The current market valuation of Facebook exceeds the initial value at the time of DST ’s entry by approximately seven times.
In 2009, DST spun off DST Russia, later renamed Mail.Ru Group (see above), which is a separate business at present.
Through DST and Mail.Ru Group investments, USM Holdings gained international prominence with stakes in some of the world’s leading and most valuable internet assets, including Facebook, Twitter, Groupon, Zynga, Spotify, Zocdoc, Airbnb, Alibaba and 360buy.
- USM Holdings – Telecoms [April+, 2013; extracted on Aug 22, 2013]
USM Holdings is a major investor in some of Russia’s leading telecoms businesses. It is ideally positioned to leverage its assets
and experience in the rapidly growing market
for 4G and other mobile services.
USM Holdings owns 82% of Garsdale, a telecoms holding, which in turn controls 50% plus 100 shares of MegaFon, Russia’s second largest mobile operator; 100% of Yota, a pioneering international 4G services provider; and 51% of Peter-Service, a billing services company. Through Garsdale and MegaFon, USM Holdings owns 50% of Euroset, Russia’s number one mobile retailer.
MEGAFON
Formed in 1993, MegaFon is Russia’s second largest mobile operator in terms of revenue and subscribers and the market leader in the mobile data segment.
With over 33,000 employees, MegaFon is a leading universal telecommunications provider with c. 62.7 million wireless subscribers in the Russian Federation as of 31 March 2013. The company offers a full range of voice, data and other mobile and fixed-line telecommunications services, including digital TV and IP telephony, to retail customers, businesses, government clients and telecommunications services providers. MegaFon operates one of the most extensive 3G networks in Russia and renders a wide range of mobile services in Tajikistan, Abkhazia and South Ossetia. The company has a strong track record in innovation and pioneered the introduction of a number of services in Russia, including the launch of MMS and mobile TV in 2004, free incoming calls in 2006, 3G services in 2008, significant reduction in roaming charges in 2011, and 4G/ Long Term Evolution (LTE ) services in 2012.
Through MegaLabs, a fully owned subsidiary, the company develops a variety of new projects in the promising value-added service (VAS) market in a number of areas, including content and media, mobile finance, mobile advertising, cloud and IT solutions, M2M, e-government and m-health.
MegaFon owns a large distribution network. As of the end of 2012, it included 1,785 owned and operated stores and 1,757 third-party points of sale operating solely under the MegaFon brand. In addition, its acquisition in late 2012 of a 25% stake in Euroset, the largest wireless mobile equipment retailer in Russia, is expected to enhance the company’s initiatives focused on improving the quality of MegaFon’s subscriber base and broadening the marketing of its products.
In November 2012, the company listed c. US$1.7 billion worth of shares in an IPO. The company’s shares are traded on MICEX-RTS , and its GDR s on the London Stock Exchange.
In 2012, MegaFon’s revenue grew 12.4% year-on-year to RUR 272.6 billion. The company demonstrated a strong performance in Q1 2013, achieving consolidated revenue growth of 7.6% y-o-y to RUR 67.7 billion.
YOTA
Yota was founded in 2007. It is the leader of the mobile broadband sector in Russia. It was the first company to offer its subscribers access to services based on WiMAX and LTE technologies, and is one of the leading companies in this segment globally.
In 2013, Yota was divided into two companies: Scartel, which is involved in construction and management of 4G infrastructure, and Yota (Yota LLC), a mobile operator.
Scartel operates LTE networks and provides access to its networks for telecom operators using a mobile virtual network operator (MVNO) model. It was the first company worldwide to launch LTE-Advanced technology for a commercial network, enabling data transfer rates of up to 300 Mbps. The company’s LTE networks are currently available in 31 regions and more than 100 cities in Russia. Its total investments in LTE infrastructure in Russia to date exceed US$400 million and are set to reach US$1 billion by the end of 2014.
Yota provides communication services to its subscribers through Scartel’s platform. Yota owns an extensive retail and dealer network throughout Russia, offering its users a truly unlimited LTE experience, coupled with the provision of hardware and the highest level of customer service. At present, Yota services are available in more than 20 major cities in Russia.
Yota and Scartel are 100% owned by the telecoms holding Garsdale, which is part of USM Holdings.
EUROSET
Founded in 1997, Euroset is the largest mobile retail chain in Russia, with more than 5,000 outlets. Its stores offer a wide range of goods, such as handsets, accessories, tablets and netbooks; and services, such as mobile top-ups, repairs and financing.
Euroset is one of the best known brands in the Russian market for consumer goods and services. The retailer’s share of Russia’s mobile phone market is approximately 30%. The company operates in more than 1,500 towns and cities in Russia and Belarus, and attracts more than 40 million customers to its stores each month.
The company today is one of the largest Russian employers, providing jobs to over 30,000 people.
PETER-SERVICE
Peter-Service is the first Russian developer of billing systems for telecoms operators. It provides billing solutions along with product installation, integration and support services. The company has regional offices across Russia and in Ukraine. Since its establishment in 1992, Peter-Service has completed over 100 projects for more than 50 operators of fixed and mobile networks in 10 countries.
- USM Holdings – Media [Feb 23, 2013]
USM Holdings owns 50% of UTH Russia, one of the country’s fastest growing commercial television broadcasters. The company aims
to capitalise on the expansion of the youth entertainment
market and the ever increasing interest
in youth lifestyle and wellbeing.
UTH RUSSIA
Through UTH Russia, USM Holdings owns some of the country’s most popular outlets in broadcast and digital media. Building the main framework on its two free-to-air channels – the Disney Channel and U channel – and the cable MUZ-TV channel, UTH Russia is on its way to becoming the leader in youth entertainment and lifestyle programming. U channel and the Disney Channel broadcast in more than 880 cities, and the company continues to expand its market share.
The UTH platform also houses the specialist online video service ClipYou, which offers licensed content from leading Russian and international music companies, including some of the top labels, such as Universal Music, Warner Music Group, Sony Music Entertainment and EMI.
- USM Holdings – Steel & Mining [Feb 23, 2013]
USM Holdings invests in a number of Russia’s steel and mining companies. It owns 100% of METALLOINVEST, a leading global iron ore
and hot briquetted iron (HBI) producer
and one of the regional steel producers.
METALLOINVEST
METALLOINVEST extracts and exploits iron ore from the second largest measured reserve base in the world (c. 14.9 billion tonnes).
In 2011, the company was the largest commercial iron ore producer in Russia/CIS and the fifth largest globally, the leading producer of pellets in Russia/CIS and the third largest globally, and the leading producer of merchant HBI globally.
The main production assets of the company are strategically located in the European part of Russia and the Urals.
The company is organised into three integrated operating segments focusing on mining operations, steel production and auxiliary businesses and other assets. The mining segment includes Lebedinsky GOK and Mikhailovsky GOK, and the steel segment includes OE MK, Ural Steel and Ural Scrap Company. In addition to its mining and steel businesses, the company owns several supporting businesses and other assets that provide services and raw materials to the mining and steel segments.
Lebedinsky GOK is a leading manufacturer of iron ore products in Russia and operates as an integrated mining company whose assets comprise iron ore extraction facilities and secondary processing facilities, including beneficiation and secondary beneficiation plants, a pellet plant and two HBI plants.
Mikhailovsky GOK is the second largest iron ore extraction and processing operation in Russia, after Lebedinsky GOK. In 2014, Mikhailovsky GOK intends to finish construction of what is expected to be the largest pelletising plant in Russia, with a capacity of five million tonnes a year.
OEMK is one of the most modern steel mills in Russia, employing Midrex DRI technology. The unique application and properties of the steel and finished products from OE MK have ensured stable demand in Russia, the CIS and worldwide. It is located close to Lebedinsky GOK, which supplies OEMK with high grade iron ore concentrate through a 26-kilometre slurry pipeline. OEMK sells products for engineering, automotive, pipe, hardware and bearing industries in the domestic market, and exports its high quality pipe and cast billets and long rolled products such as wire coil and bar to foreign customers.
Ural Steel is a major manufacturer of strips for large diameter pipes, pipe billets, bridge construction steel and heavy plates. Ural Scrap Company purchases, processes and delivers ferrous scrap to METALLOINVEST’s steel producing assets.
Baikal Mining Company, a subsidiary of METALLOINVEST, holds the licence for the development of the Udokan copper deposit, which has a mineral resources base of c. 2.7 billion tonnes. Udokan is one of the world’s largest undeveloped deposits of copper amounting to c. 25.7 million tonnes of metal. The licence covers 60% of copper deposits in Russia.
With a 21% holding, METALLOINVEST is a major shareholder of the Canadian company Nautilus Minerals. Nautilus Minerals commercially explores the seafloor for massive sulphide systems, which are a potential source of high grade copper, gold, zinc and silver. The company is developing the world’s first seafloor copper-gold project in Papua New Guinea.
METALLOINVEST has a shareholding of approximately 5% in Norilsk Nickel, the world’s largest producer of nickel (18% of the market) and palladium (41%), as well as a leading producer of platinum (11%) and copper (2%). Norilsk Nickel also produces multiple by-products, such as cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium and sulphur.
In 2012, METALLOINVEST’s net income grew by 20.4% year-on-year to US$ 1.7 billion.
USM Holdings – Alisher Usmanov Founder of USM Holdings [June 12, 2013]
Mr. Usmanov is an investor, industrialist and philanthropist.
He created and built up USM Holdings by identifying
and focusing on growth businesses.
Mr. Usmanov was born in 1953 in the town of Chust in the Namangan region of Uzbekistan, which was then part of the USSR . He graduated in 1976 from the Moscow State Institute of International Relations, a leading Russian university, with a degree in international law. In 1997, he received a degree in banking from the Finance Academy under the Government of the Russian Federation. He is fluent in English, French, Russian and Uzbek.
Mr. Usmanov has played a number of key roles in businesses essential for the advancement of the Russian economy. Since February 2006, he has been a member of the Board of the Russian Union of Industrialists and Entrepreneurs, and currently heads its Committee for Updating of Control and Supervision and Elimination of Administrative Barriers. Mr. Usmanov has served as General Director of Gazprom Investholding since 2000, prior to which he was as an Advisor to the Chairman of Gazprom and was First Deputy General Director of Gazprom Investholding. From 1994 to 1998, Mr. Usmanov held the position of General Director of Interfin Investment and Finance Company. From 1995 to 1997, he served as the First Deputy Chairman of MAPO-Bank, and from 1994 to 1995, he was an Advisor to the General Director of Moscow Aviation Industrial Enterprise. From 1990 to 1994, Mr. Usmanov worked as the Deputy General Director of Intercross JSC.
Mr. Usmanov is the President of the International Fencing Federation and a member of the councils of the 2014 Sochi XXII Olympic Winter Games and XI Paralympic Winter Games, the 2013 Kazan XXVII Summer Universiade and the Russian Olympian Sportsmen Support Fund. He is a Trustee for a range of social, educational and cultural organisations, including the Russian Geographical Society, Moscow State Institute of International Relations, National Research University Higher School of Economics, and European University at St. Petersburg.
Mr. Usmanov is the founder of the Arts, Science and Sports Charity Foundation.
In 2013, Mr. Usmanov was awarded the Order for Service to the Fatherland IV class in recognition of his services to the state, as well as his community and charitable activities. In 2004, he was presented with the Order of Honour of the Russian Federation for his contribution to business and charity.
In 2011, he received the Order of Friendship of the Republic of Kazakhstan.
Alongside his investments within USM Holdings, Mr. Usmanov owns Kommersant Holding, the leading Russian business media group, as well as almost 30% of Arsenal, an English football club.
USM Holdings – About us [June 21, 2013]
USM Holdings Limited (“USM Holdings”) is a diversified, international company with significant interests across the metals and mining,
telecoms, internet and media sectors. It was established in 2012
to consolidate the various investments and holdings of
Alisher Usmanov, which are the result of more than
30 years of his investment and business
development activities.
In consolidating Mr. Usmanov’s interests into one company, USM Holdings has the right structure to enable the sharing of both intellectual and financial capital amongst its various businesses. The group’s companies benefit from a global network of relationships and a wealth of experience, which enable them to access international investment opportunities. Through its structure, reporting and transparency, USM Holdings aims to ensure that its companies adhere to the highest international standards of corporate governance.
In carrying out its operations, USM Holdings acts in a socially responsible way, investing in long-term sustainable enterprises, stimulating economic development and creating employment opportunities in Russia. The group cares about the communities in which it conducts its business, and supports them through a wide range of social projects in the fields of education, sports, arts, science and ecology.
The main shareholders of USM Holdings are Alisher Usmanov, Vladimir Skoch and Farhad Moshiri. Their economic interests are divided 60%, 30% and 10% respectively, while Mr. Usmanov holds 100% of the voting rights with respect to USM Holdings.
Russian Billionaire Usmanov Links Fortune to Partnership [Bloomberg, Feb 6, 2013]
Alisher Usmanov, Russia’s richest man, and two of his long-time billionaire investment partners have joined all of their assets in USM Holdings, a limited liability company based in the British Virgin Islands.
Conceived in early 2012 and completed in December, the new formation holds the trio’s assets in mining, technology, telecommunications and media, and carries a value of more than $29 billion, according to the Bloomberg Billionaires Index.
“We have completed the process of consolidating assets into USM Holdings,” Usmanov, 59, said by e-mail Feb. 5. “The formation of a single holding company enables us to optimize business processes, enhance the efficiency of managing subsidiary companies, and provide more opportunities to access international capital markets.”
According to the company’s website, which went live late last month, USM was established to consolidate the holdings Usmanov has built up during the last 30 years, including closely held Metalloinvest Holding Co., Russia’s largest iron ore producer, publicly-traded mobile phone company MegaFon OAO and Internet company Mail.Ru Group Ltd., as well as the technology investments he has made through the DST investment funds.
USM shareholders include Usmanov, who holds 60 percent; Vladimir Skoch, who holds 30 percent on behalf of his son, Russian Duma deputy Andrey Skoch; and Ardavan Farhad Moshiri, an Usmanov adviser of 23 years, who owns 10 percent.
Usmanov and Moshiri continue to hold their shared 29.9 percent stake in London-based Arsenal Football Club Plc separately. Usmanov owns all of newspaper Kommersant outside of USM.
‘One Roof’
Usmanov controls all of USM’s voting rights and also has the ability to block his partners from selling any assets it holds without his consent. He first disclosed his plans for the holding company in April 2012, and released further details of its formation in MegaFon’s preliminary prospectus, which was released in November.
Ivan Streshinskiy, who has helped manage Usmanov’s investments since 2006, was appointed to the USM Holdings board and named chief executive officer of USM Advisors, an affiliated company that will provide advisory services to the holding entity.
“Having all of the assets under one roof makes it easier to manage them and value them,” Kirill Chuyko, head of equity research at BCS Financial Group said by phone Jan. 21, explaining the possible reasons for structure.
Longtime Allies
The two minority partners acquired their stakes in USM by swapping their existing equity in holding companies controlled by Usmanov and making a cash investment. After the transaction, Usmanov has a net worth of $21.4 billion, according to the Bloomberg Billionaires Index, while Moshiri controls a $1.7 billion fortune. Skoch is valued at $6.2 billion.
Rollo Head, a spokesman for Moshiri at London-based RLM Finsbury, said Moshiri declined to comment on his net worth. Albert Istomin, a spokesman for Skoch, declined to comment on the net worth calculation. Usmanov also declined to comment.
Usmanov first met Andrey Skoch in 1992, when he was importing cigarettes to Russia and Skoch was working as an oil trader. At the time, the country was suffering from a deficit of consumer goods, which enabled Usmanov to build a thriving trade business.
He and Skoch purchased metal and mining assets during and after the country’s chaotic privatization years, including a steel plant in the Belgorod region, central Russia, and iron ore producer Lebedinsky GOK. In 2006, after buying Mikhailovsky GOK from Georgia’s current prime minister, billionaire Bidzina Ivanishvili, they created Metalloinvest, now Usmanov’s most valuable asset.
Government Ally
Usmanov’s rise to prominence was boosted in the early 2000s, when he proved to be an ally to the new government led by Russian President Vladimir Putin. As head of Gazprominvestholding, the investment arm of Russia’s gas monopoly OAO Gazprom, Usmanov helped negotiate the return of assets to state-run Gazprom that had been moved out of the company under previous management.
In 1999, Skoch was elected as a deputy of the State Duma, Russia’s main legislative body, representing the Belgorod region. He later transferred the fortune he had built to his father, Vladimir, shielding himself from public criticism. He was re-elected to the Duma four times.
Iranian Emigrant
Moshiri, an Iranian emigrate to London who now resides in Monaco, first met Usmanov in 1989, and has served as Usmanov’s financial consultant ever since. Through the years, he earned shares in some of Usmanov’s most important assets, including Metalloinvest, MegaFon and Arsenal.
The former accountant, who is a British citizen, resisted Usmanov’s diversification into technology investments, which began in 2008, using billionaire Yuri Milner’s DST funds.
“Moshiri also didn’t believe in the prospects for investments in Facebook and Groupon,” said Usmanov in an April 2012 phone interview with Bloomberg News.
His hesitation did not prevent Usmanov from allowing him the chance to participate, which has given Moshiri holdings through DST in publicly-traded Facebook Inc., Zynga Inc. and Groupon Inc., as well as other investments in a number of closely-held technology companies, including Twitter Inc.
USM did not disclose how much Moshiri and Skoch may have paid to make those investments, or their exact stakes.
New Valuation
The new holding company requires a revised method for the Bloomberg ranking to calculate the net worth for Usmanov and Moshiri, and established a valuation for Skoch’s fortune.
Prior to the transaction, Usmanov and Moshiri controlled half of Metalloinvest through Cyprus-based Gallagher Holdings Ltd., which has since been renamed USM Steel & Mining Group Ltd. That stake was combined with the 30 percent held by Skoch. The remaining 20 percent of Metalloinvest was bought back by the company from Moscow-based OAO VTB Bank at the end of 2012 through debt financing, consolidating all of the company under the control of USM.
Further details on the debt financing will be provided when Metalloinvest releases its earnings in April, the company said.
Alisher Usmanov: Uzbek eyes a prize listing [Financial Times, Nov 16, 2012]
The billionaire businessman reflects the new style of oligarch that puts a premium on loyalty and predictability
When Alisher Usmanov met Lloyd Blankfein on the sidelines of the St Petersburg Economic Forum in June, the two men appeared to strike up a rapport. The Uzbek-born billionaire and the chairman of Goldman Sachs discussed the planned initial public offering of Megafon, the mobile phone company owned by Mr Usmanov, say people familiar with the conversation. Mr Blankfein courted Mr Usmanov, one of Russia’s most powerful and best-connected businessmen, for an insight into upcoming deals.
Within months, everything had changed. By early October, Goldman had dropped Mr Usmanov and the Megafon deal, throwing a spanner in the company’s IPO plans and launching a storm of bad publicity around Mr Usmanov personally.
Goldman declined to comment on its reasons for quitting the IPO. Morgan Stanley, Sberbank, Citigroup, Credit Suisse and VTB are still working on the deal, which began formal marketing on Thursday after receiving delayed approval from the UK regulator, which appeared to have been shaken by Goldman’s exit.
Should the deal, which could raise as much as $2.1bn, go through, it would be the biggest flotation by a Russian company in nearly three years. If it flops, it will be another setback for Mr Usmanov, a symbol of a class of powerful Russian businessmen who work closely with the state, and his plans to take his empire public.
Businessmen close to the 59-year-old oligarch say he was dumbstruck by Goldman’s move. In his world, loyalty and predictability are prized above all else, and it is partly because of his strict adherence to such a code that he has risen so far in the Russia of President Vladimir Putin.
Today’s oligarchs are not the brash, buccaneering variety of the 1990s, who wielded both wealth and influence in Boris Yeltsin’s Kremlin. Putin-era billionaires such as Mr Usmanov are expected to respect state power in order to thrive.
It was in this context that Mr Usmanov – worth $18bn, according to Forbes – bought the art estate of cellist Mstislav Rostropovich and then donated it to the state. It was also for that reason, analysts say, that he agreed to take a stake in Megafon, interceding in a years-long shareholder feud that was damaging Russia’s investment climate.
“Usmanov is known as a person able to resolve delicate situations to the satisfaction of all the parties,” says Ivan Streshinsky, a long-time associate.
That is not all he is known for. The 45 pages of Megafon’s IPO investor prospectus entitled “Risk factors” includes “media speculation” about Mr Usmanov’s alleged mafia ties and the six years he spent in an Uzbek jail in the 1980s, along with more media speculation that the real owner of a large share in Megafon might be Leonid Reiman, a former communications minister.
This week it also emerged that a public relations firm had tampered with Mr Usmanov’s Wikipedia page to remove mention of an incident in which the billionaire had allegedly threatened bloggers who repeated allegations that he was a “gangster and racketeer”, and also edited out mentions of his jail term.
Mr Usmanov and his partners deny issuing such threats, deny having any ties to organised crime groups, and he and Megafon’s management deny Mr Reiman is a shareholder. Andrei Skoch, a long-time friend and business partner, blames Mr Usmanov’s fraud conviction in 1980 on enemies of his father, a local Uzbek prosecutor. The criminal charges were overturned in 2000.
The criminal conviction did dash Mr Usmanov’s dreams of a career as a diplomat moving between the world’s capitals, an ambition forged in a remote corner of central Asia in his native Uzbekistan, where he was born in 1953 in the small city of Chust, a place renowned as home of the traditional Uzbek skullcap.
Once out of jail Mr Usmanov built up a number of small businesses before consolidating some of Russia’s biggest metal and steel holdings into holding company Metalloinvest in 2006. Since then he has expanded outside Russia: acquiring stakes in internet groups such as Facebook and Groupon, and buying properties and trophy sporting assets in London as well as some of Russia’s most prestigious media properties.
Some international ventures have been less than happy. At Arsenal, the English Premier League football club in which he holds a near 30 per cent stake, he has waged a running battle with the board, criticising strategy and complaining that the best players have been let go.
Football is one of his passions, along with opera, ballet and fencing.
His approach to business involves close attention to detail. Despite poor eyesight, he is said to read up to 300 pages of analytics, reports and news items a day that are tirelessly rewritten into Russian by a retained group of round-the-clock translators.
Close links to the Kremlin have not harmed his prospects, say analysts. In 2009, at the height of the financial crisis, Metalloinvest received Rb61bn in bailout loans from state bank VTB, allowing Mr Usmanov not only to emerge from the crisis unscathed but also in the same year to spend $200m on a 2 per cent stake in Facebook through Digital Sky Technologies, a company in which he is a shareholder.
Associates say any political connections are normal. “With the scale and size of his business it would be misleading to say he has no relationship with the authorities – just like any major business leader in the world,” says Mr Streshinsky.
But Mr Usmanov’s political allegiances came under scrutiny last year when he fired two executives at his news weekly Kommersant Vlast because of a cover, published at the peak of mass anti-government protests in Moscow, that featured an obscene comment about Mr Putin.
Critics saw this as trampling on editorial freedom. Friends say he acted for reasons of taste. “He’s an old-fashioned guy. This overstepped the bounds of decency,” says Mr Streshinsky. “This has nothing to do with freedom of speech”.
The ‘Facebook Corruption’ accusations via a U.S. Congress Representative:
- Briefing For Representative Jim-Jordan [better to use PDF from Leader]
CORRUPTION OF US FINANCIAL SYSTEMS and COURTS Oct 19, 2012
…
in addition a page from Who is Lawrence “Larry” Summers? [FB Cover-up opinion blog, Jul. 31, 2013]
China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web
My preceding posts on this site are already leading to such a massive conclusion. Read:
The latest information collected to support my headline here is providing further evidence:
- The new frontier: application service (e.g. WeChat) global expansion with lead market advantage and tremendous growth opportunity lying ahead
- Online shopping growing very fast
- Applications, applications to be added to the search
- Xiaomi to take Apple place
- Strong central government support
- Country-wide 4G roll-out by year end 2013 after extensive trials
- From operator branded to white-box superphones supporting all that
Lead #1: Choosing Sides: Who’s Partnered with Who in China’s Internet War? [Tech In Asia, Aug 5, 2013]
The battle between China’s internet giants is only becoming more contentious, and the nation’s major companies seem to be making acquisitions and partnerships at a breakneck pace this year (not to mention rolling out products designed to invade rivals’ markets).
In the interest of clarity, I thought it would be fun to do a roundup of who’s on whose team so far, based on China’s three most internet profitable companies. Obviously none of this is cast in stone, but it’s still quite an interesting way to understand the internet sector. (Note: these lists only include acquisitions and partnerships from 2013).
Team Alibaba:
- Sina Weibo – a huge new partnership that’s likely to yield more social products from Alibaba.
- Qihoo 360 – Arguably an independent player, but Qihoo has worked with Alibaba on a product search engine. Qihoo is itself rumored to be buying Sogou.
- Autonavi – Alibaba invested a boatload in the online mapping company, though it’s not yet clear what role this will play in Alibaba’s long-term strategy.
- Xiami (acquisition) – Another likely part of Alibaba’s social plan.
Shots fired: Alibaba has been especially harsh to Tencent this year, banning third-party communication tools (mostly WeChat and QQ) in its offices andshutting down the Taobao-WeChat interface. But it has also taken a swipe at Baidu via the launch of its own search engine.
Team Tencent:
- Xiaomi – A very new partnership, but one that could see Tencent strengthen its strangehold in mobile.
- China Unicom – WeChat’s popularity has got all of China’s telecoms trying to cozy up to Tencent to get in on the money train.
Shots fired: New security features in WeChat 5 will challenge Qihoo, and Tencent is also rumored to be interested in buying Sogou which would put it at odds with Baidu. Additionally, Tencent dealt old rivals Qihoo a loss in the courts this year.
Team Baidu:
- 91 Wireless (acquisition) – A huge buy that shows Baidu is serious about mobile.
- PPS (acquisition) – Another major buy that turned Baidu into one of the major players in internet video.
- Qunar – Baidu has invested big in the online travel company.
- Kingsoft – Baidu has also invested in Qihoo rival Kingsoft.
Shots fired: Baidu really hates Qihoo, and has launched an antivirus suite and Baidu Guard, both of which are designed to break into Qihoo’s PC security market. Entering Alibaba’s domain, it has also released a product search engine. Plus, just like Tencent, Baidu has spanked Qihoo in court this year.
First watch this video about Baidu [firecracker888 YouTube channel, Dec 4, 2012]
as well as about Baidu’s recent expansion by acquiring 91 Wireless, the biggest 3d party appstore in China: Baidu Gains Mobile Share in $1.9B 91 Wireless Deal [BloombergMarket YouTube channel, July 16, 2013], note Baidu’s earlier platform attempts—Baidu Site App Platform [Sept 3, 2012] and Baidu Yi [Sept 2, 2011]—now joined by 91 open mobile platform [Oct 11, 2012] as well.
Jin Yoon discusses Baidu on CNBC World [BeyondPixInterviews YouTube channel, July 30, 2013]
Jin Yoon, Nomura Live at Beyond Pix Studios in San Francisco, CA. July 16, 2013. http://www.beyondpix.com
Then go deeper first with:
Alibaba is one of China’s largest–and most successful–online retailers, and its IPO could command upwards of $70 billion dollars. With a offering coming as early as September, Alibaba appears to be taking steps to limit the counterfeit merchandise on its platform. The Wall Street Journal reports:
Unlike Amazon.com Inc. (AMZN), Alibaba doesn’t sell products itself but operates websites that help sellers find buyers. While Alibaba doesn’t have much control over who sells what on Taobao–a mammoth site with more than 800 million product listings—it has been continuously upgrading the system to delete listings for counterfeit goods. In Alibaba’s efforts to maintain credibility, Tmall, another shopping site that became independent from Taobao in 2011, plays a key role. While anyone with a national identification document can become a seller on Taobao, Alibaba’s criteria for Tmall, which hosts storefronts for major brands such as Nike Inc. (NKE) and Gap Inc. (GPS), are more stringent as it tries to make the site a piracy-free zone…
…Alibaba said it blocks some items from being posted on Taobao using filtering mechanisms based on certain keywords used by sellers to describe counterfeit goods. Brands like[guitar-string manufacturer] D’Addarioconstantly monitor Taobao and report any counterfeit items to Alibaba.
which provides a good introduction to Jack Ma: E-commerce in China and Around the World [Credit Suisse YouTube channel, March 20, 2013]
With 242 million people in China expected to shop online in 2013, spending an estimated US$265 billion, China’s e-commerce industry is a force no-one can afford to ignore. Jack Ma, the head of Alibaba Group, China’s largest e-commerce company, discusses how the sector has been generating grassroots economic opportunities and changing lives in China and beyond, and what the future of e-commerce will be like.
And now it’s time to learn via an authentic video of how that business started in 1999 (with the experience of the first Internet company “China Pages” started in 1995 and then 14 months of work for the goverment behind) Jack Ma Speech From “Crocodile In The Yangtze” [PandoDaily YouTube channel, Jan 16, 2013]
Alibaba founder Jack Ma gives an inspirational speech to his recruits in the company’s first office: his apartment. This clip is from Porter Erisman’s documentary film about Alibaba: “Crocodile In The Yangtze.” See http://www.crocodileintheyangtze.com/
Then continue with Alibaba Founder Jack Ma: Ideas & Technology Can Change the World [stanfordbusiness YouTube channel, June 19, 2013] the same appeared as Jack Ma: E-Commerce and the China Opportunity [TeamAlibaba YouTube channel, May 9, 2013] with “… talks about his unusual entrepreneurial beginnings at …. See what else he has to say about e-commerce and the China opportunity.”
Jack Ma reflects at Stanford during final days as CEO; says ‘people bet I’d be a loser’ [By Daniel Limón on SPRIE, May 14, 2013], see also the full transcript in English (PDF)
Speaking without notes or visual aids on May 4th at Stanford University’s NVIDIA Auditorium, founder and former CEO of Alibaba Group Jack Ma unspooled a farewell talk that at moments turned highly personal and deeply reflective: Ma spoke openly about his persistent failures in school, including spending seven years in elementary school and being rejected by Harvard ten times, and about his struggles to jumpstart Alibaba with only 50,000 RMB.
Less than two minutes into his talk at the event co-hosted by Alibaba Group and the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) of the Stanford Graduate School of Business, Ma touched on the trials and travails he had faced early on as an internet and e-commerce pioneer in China. “Back in 1995,” revealed Ma, “I felt I was a loner and people thought I was a cheater. They said I was trying to make something out of nothing.” In fact, added Ma, his first interview with CCTV was censored at the behest of the producer, who feared Ma’s talk about giving the Chinese government internet access was “not a positive influence” and made Ma “look like a bad guy.”
Ma’s personal struggles, however, began well before he knew anything about e-commerce—in elementary school—where Ma confessed to being such a bad pupil that no school in his hometown of Hangzhou wanted him. In high school, he spent three years taking the college entrance exam before scoring high enough to enroll in a local teachers college. Harvard rejected him ten times. “Nobody said that I would be a very capable person that would do something significant or meaningful in the future,” Ma admitted to a silent and still audience of about 100 people. Ma also recalled his father asking him to focus and do calligraphy. “I couldn’t really do it—I didn’t have good penmanship,” he said.
It’s clear the former English teacher turned internet billionaire never let the doubts of his detractors or the rejections from Harvard spoil his high aspirations—in fact, Ma credited the Silicon Valley for inspiring him to bring internet innovation to China amid the setbacks: “I knew nothing about technology, but every time I came to Silicon Valley, on the weekends I would see cars fill each and every parking lot… I saw the lights were on at each and every office building. When everyone spoke, their eyes were filled with sparkles. They were really hopeful about the future. So I was really inspired when I went back to China—I thought that I should do an internet business.”
So Ma did, founding Alibaba Group in 1999 with 17 other co-founders. Today, Alibaba is China’s largest e-commerce firm, something Ma readily admitted exceeded his wildest dreams: “I never thought that Jack Ma would have, in the future, a day like today. I never thought that Alibaba or Taobao or any type of transaction developed by Taobao would have a day like today. I never thought the internet would have a day like today.”
Midway through the speech, the 49-year-old seasoned entrepreneur also struck a philosophical and political chord, making tacit references to god, social conflict, war, and generational change. He encouraged the audience to be grateful for living in an era of great opportunity, adding “the worst thing is that mankind experiences war… if we can actually solve problems through economic development, we will not need wars and we can actually use economic development to influence many people.” He warned, nonetheless, that in the next 30 years the world would face a host of unknown vicissitudes, including “lots of social conflicts,” which Ma described as opportunities for young people. “If everything stays stable, we are not going to have any opportunities.”
Ma also gave the audience his views on the state of China’s present social milieu: “This is the best of times, this is the worst of times,” remarked Ma. “Nobody is happy in China… there’s a lack of trust and nobody is happy. The poor people are unhappy; the rich people are unhappy. The government doesn’t trust media; the media doesn’t trust government. We are in an era of constant change.”
At least twice during his speech, the founder of China’s most profitable e-commerce company also took spirited swipes at some of his personal critics. “You know, we are experiencing economic and political restructuring and they want me to commit suicide. Lots of people are asking, ‘why are you not advocating for political restructuring?’ I don’t feel that’s actually something that can be done. I feel that lots of people encouraging me to do that have foreign passports. And they aren’t going to stay in China as long as they see the situation changing. They’re going to flee the country.” Ma also took to task those that ask why he runs a technology company if he knows so little about technology. He said it’s like asking a real estate developer “you know nothing about constructing a house—how can you be a real estate developer?”
Fourteen years removed from when he founded Alibaba, Ma’s personal belief is that one shows respect and admiration for technology and the people that develop it. “That you don’t know about technology,” said Ma, “doesn’t mean you don’t respect technology.”
You can understand the role of Alibaba in global e-commerce (already) via Small Business Success: DS Global Corporation (DS글로벌) [TeamAlibaba YouTube channel, July 17, 2013]
and for making simple the task of global sourcing for potential customers there is an all-encompassing service on Alibaba.com, the AliSourcePro [TeamAlibaba YouTube channel, July 3, 2013]
More information:
– Why Alibaba’s Future Looks Bright [Tech In Asia, May 21, 2013]
– Why Alibaba could be China’s next $100bln IPO [Reuters’ Analysis & Opinion blog, April 25, 2013]
– Interview with Alibaba.com’s Chairman, Jack Ma [a bmpcroxon article now available only via Alibaba Trade Forums, Oct 23, 2006]
– Jack Ma, In the Chinese Cave of Alibaba – La Tribune, Business section [Alibaba Trade Forums, Aug 13, 2007]
Lead #2: Here’s why a war has started between Chinese Internet giants Tencent and Alibaba [The Next Web, Aug 5, 2013]
Chinese Internet giant Tencent has been on a roll recently — for a while last week, it seemed that plenty of other Chinese tech companies wanted to be friends with the firm behind WeChat, a wildly popular messaging service in the country.
However, a huge crack appeared in its veneer of popularity toward the end of the week when Chinese e-commerce giant Alibaba suddenly suspended its working relationship with WeChat, marking the start of war.
A series of collaborations and one break-off
Last week, Chinese telecom operators did a surprise turn-around after previously getting upset that WeChat was allegedly stealing users away from traditional SMS.
China Unicom officially announced the introduction of a new SIM card that includes an independent data package for WeChat. Subsequently, it was reported that China Telecom would launch a plan that includes 2GB worth of data specifically for WeChat as well as Sina Weibo — though WeChat was obviously the focus of this package.
Following that, Chinese smartphone manufacturer Xiaomi launched its latest Hongmi phone — at $130, it is the lowest-priced in Xiaomi’s range — in collaboration with Qzone, a social networking website owned by Tencent.
Tencent seemed to be riding the wave of popularity throughout last week — until all of a sudden, Alibaba announced that it was suspending all WeChat-related marketing applications from its e-commerce sites.
Alibaba cited misuse by sellers as the reason for doing so, but in the next moment, the company announced that it was launching a “Weibo-Taobao” platform to make it easier for customers on the Twitter-like microblogging platform to shop on e-commerce site Taobao. Interestingly enough, it was also revealed that Sina Weibo will provide Taobao sellers with marketing services.
This suspension of any existing working relationship is a clear indication that war has started between the two Chinese Internet giants — Tencent and Alibaba.
Unlikely rivals cross paths
It would seem that the two make unlikely rivals. The former focuses on providing service portals, while the other mainly dabbles in e-commerce.
However, Alibaba — which makes more money than eBay and Amazon combined — has been showing interest in tapping into the social market. It took an 18 percent stake in Sina’s Weibo in a bid to slow down Tencent’s WeChat success and also bought 28 percent of AutoNavi, China’s top mapping system, suggesting that it is focusing on maps as another prong of its social strategy.
This comes as Tencent revealed last year that it was looking to expand its business into a number of new areas as it sought to increase its already sizable online presence and appeal to advertisers — one of which was e-commerce, which would infringe on Alibaba’s presence. Subsequently, it created an e-commerce subsidiary called Tencent E-Commerce Holding Company.
Just recently, Tencent also led a $150 million investment in design-focused e-commerce service Fab.com, aimed at helping the firm learn more about global e-commerce models.
Alibaba’s fear of Tencent’s social power
Why would Alibaba be so afraid of Tencent though, given that Tencent has not yet made its big jump into e-commerce? The reason is simple:
Tencent’s dominance in the social market.
The power of social is something that every company aspires to have. Communities form opinions and can ultimately define future products and services, according to Jeremiah Owyang, an industry analyst and partner at Altimeter Group.
Right now, it is clear that even if communities haven’t entirely started defining products and services yet, they can decide which ones should get the love. This means that if you have the community on your side, you have a significant advantage.
And Tencent has the power of communities on its side, which could easily become a force to be reckoned with. QQ had close to 800 million active accounts at the end of 2012, while WeChat has nearly 400 million users in all, out of which there are 195 million monthly active users.
This means that any new initiative rolled out by Tencent, such as e-commerce, could very possibly tip the scale to its favor.
Even though Tencent has not started mapping a clear route to develop e-commerce, its dabbling into selling peripherals such as stickers and games could see it inch slowly toward rolling out more products.
Furthermore, Tencent has the payments solution in place to enable possible e-commerce. The company owns Tenpay, a PayPal-like online payments solution. Its QQ platform also has a virtual currency already, while the latest update to Weixin (what WeChat is known as in China) saw it introduce mobile in-app payments linked to a banking account which is in turn supported by TenPay.
A Sina Tech report noted that by introducing payments onto WeChat, Tencent is literally declaring war on Alipay, the mobile payments company spun off by Chinese e-commerce giant Alibaba. The report cites a source close to Alipay as saying that the company had already sensed the impending threat of TenPay being integrated into WeChat, and has been developing new techniques to head off the challenge – for example, it recently announced a major update of its mobile app, Alipay Wallet.
Who will win the war?
Alibaba has shown all intentions of fighting this war to victory. Newly-installed Chief Executive Jonathan Lu has pledged to continue the e-commerce giant’s recent string of big investments as it continues focusing on improving its services for mobile. Lu wants Alibaba’s service – and in particular its two biggest e-commerce businesses: virtual ‘mall’ for brands Tmall and eBay-likeTaobao marketplace – to make better use of customer data to provide a more tailored user experience.
However, even Tencent’s rival — and Alibaba’s ally – Sina has publicly admitted that WeChat is causing its users to spend less time on the Twitter-like Sina Weibo service.
In other words, Tencent isn’t China’s biggest Internet company without a reason. By harnessing the power of social, Tencent has laid its foundation well and could easily spread its influence into a wider variety of businesses.
John Hancock once said: The greatest ability in business is to get along with others and to influence their actions.
The community that Tencent has painstakingly built up over the years will lead to much easier influence in the future, which bodes well for its business. On the other hand, Alibaba needs to brush up on its social influence in China. It is doing swimmingly well in its main businesses — which include e-commerce, financial solutions and big data — and has been tipped for a multi-billion-dollar initial public offering (between $60 billion-$70 billion), but its lack of a persuasive social strategy still sticks out like a sore thumb.
Could the tables turn though? Definitely, considering that Alibaba has already recognized this and is taking steps to beef up its social strategy. In war, victory is always possible as long as you keep fighting. Who knows, Alibaba could one day just as easily roll out a phenomenal success like WeChat.
Then I recommend to watch Tencent [firecracker888 YouTube channel, Dec 4, 2012], note that the “weixin” service (mentioned in the video by Chinese) is WeChat mentioned above
To close this lead section is best with these 13 months old Tencent CEO interview which speaks for the whole Internet industry in China, also by clearly expressing its global expansion potential: Tencent’s Pony Ma (马化腾) on China’s internet economy [NUS Business School YouTube channel, July 1, 2012]
End of the Lead Contents
My preliminary investigation was concluded in an ‘April 13, 2013 Report’, which is following after the above sections, and organized around the following findings:
– Digitimes Research: Smartphone sales to reach 329 million in China in 2013 [DIGITIMES Research, March 18, 2013]
– China Mobile aims to sell 100-120 million TD-SCDMA handsets in 2013 [DIGITIMES, March 15, 2013]
– China Mobile 2013 capex increases 49% on year [DIGITIMES, March 14, 2013]
– China Mobile to build world’s largest 4G network [CCTV News via GoUTube123 YouTube channel, Feb 27, 2013]
– China Mobile launched 100 cities 1 million terminals-covered 4G plan to create world’s largest 4G network [GTI News, March 8, 2013]
– China Mobile to procure TD-LTE devices from Huawei, ZTE, Samsung [DIGITIMES, March 19, 2013]
– China Mobile: 4G licensing expected by year-end [China Daily, March 13, 2013]
– China to lead mobil payment technology [CCTV News via GoUTube123 YouTube channel, Feb 27, 2013]
– Commercializing 4G in China needs 1 yr: minister [China Daily, March 15, 2013]
– FRANCE 24 Report : Chinese smartphone brands take bite out of APPLE [france24englishYouTube channel, Feb 18, 2013]
– Rise of Chinese smartphones [CNNInternational YouTube channel, Feb 26, 2013]
– Mike Walsh on Global Innovation [cmispeakers YouTube channel, Feb 5, 2013]
– China Smartphone Sector [Asia Pacific/China Equity Research, Credit Suisse, Jan 7, 2013]
– Chinese Smartphones [FinancialTimesVideos YouTube channel, April 5, 2012]
– Chinese smartphones going big [CCTV News via the GoUTube123 YouTube channel, July 11, 2012]
– Handset Industry 2013 Outlook [Asia Pacific/China Equity Research, Credit Suisse, Jan 7, 2013]
– SED Electronics Market (Tablets Market) in Shenzhen walk-through [Charbax YouTube channel, March 17, 2013]
– Allwinner A31 9.7″ Retina factory tour at Celeb Tech [Charbax YouTube channel, March 17, 2013]
Then followed by More information
This getting even more interesting as the quite dramatic by itself introductory information is only one of the reasons (more will follow below) why we can say that China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web … even if such a power of influence is too new for the country to be able to exercise that to a greater degree (yet): China Knocks Off U.S. to Become World’s Top Smart Device Market [Peter Farago on the Flurry blog, Feb 18, 2013]
…
Nevertheless the collection given below in the ‘Background’ section is showing that potential. Just look at the major headlines in that section:
China becomes world’s top smartphone producer |
China’s e-commerce revenue hits over 1 trillion yuan in 2012: minister |
China’s top microblog site boasts 500 mln users |
China expected to issue 4G licenses this year: minister |
Preparing for a 4G network across China |
ZTE leads in 4G wireless networks |
EU telecom demands raise tensions with China |
China has till June for solar, telecoms trade deal: EU |
China’s mobile phone users reach 1.11 bln |
China market: Samsung takes up 22.5% of 2012 smartphone sales, says iiMedia Research |
Smart phones cover 70 pct of mobile market: report |
Android powers a third of all mobile phones shipped in 4Q12, says Canalys |
Google controls too much of China’s smartphone sector: ministry |
Too late for China to develop own mobile operating systems, say Taiwan makers |
China handset makers hope to reduce reliance on Android |
China to modify plan to open up mobile telecom sector |
4M[bps] broadband to cover 70 percent of Chinese users in 2013 |
Broadband network expansion in the pipeline |
DETAILS
1. The new frontier: application service (e.g. WeChat) global expansion with lead market advantage and tremendous growth opportunity lying ahead
The new frontier: WeChat striving for global expansion [ChinaDaily, Aug 5, 2013]
Lisa Tseretzoulias, a 51-year-old office administrator living in Montreal, Canada, came across WeChat a year ago and instantly fell in love. “I like it a lot and have recommended it to family and friends.”
WeChat, known as weixin in Chinese, is the country’s most popular messaging and social media app developed by Tencent, China’s biggest Internet firm. WeChat is often likened toWhatsApp, developed by a US firm, and Japan’s Line.
But WeChat is more than a messenger app and packs a host of other features, including a hold-to-talk function that allows users to send audio messages to other WeChat users, much like a walky-talky. It’s also a social media platform to post photos and make comments, much like Facebook. Companies and celebrities can open a special account to interact with fans and build a following. NBA basketball player LeBron James has an account.
Founded in 1998 in the southern city of Shenzhen, Guangdong province, Tencent has over the past decade proven itself to be China’s undisputed king of messaging, with its banner instant messaging service called QQ, China’s largest instant messaging service with over 800 million users. With a shift in Internet usage from personal computers to smartphones and tablets, Tencent launched WeChat in 2011.
By the end of the first half of 2013, the number of WeChat users in China had exceeded 400 million, driving revenue growth from mobile traffic up by 56.8 percent, according to the Ministry of Industry and Information Technology.
Just like the impact Skype has had on landlines, the heavy use of WeChat in China now poses a challenge for telecom operators, whose revenues for text messaging—its most profitable business—fell markedly, leading to a debate overwhether or not to charge a user fee for the application. The attempt by telecom operators to pressure WeChat to charge for the service was roundly condemned by Chinese netizens and others who called on the phone companies to leave WeChat alone and develop their own products to compete. So far, Tencent has no plans to charge users for the popular app but says it will cooperate with China’s big telecom players in other ways.
WeChat is already a huge domestic success and is used by everyone from teenagers to their parents to their grandparents. But Tencent is not satisfied with success in the home market and is branching out globally tooth-and-nail. Roadblocks, however, remain.
With an eye on the international market, WeChat is now available in 18 languages, including English, Indonesian, Spanish, Portuguese, Thai, Vietnamese and Russian. The app can be used on almost all mainstream mobile phone systems thanks to a first-class research and development team at Tencent. WeChat is growing quickly in overseas markets. Tencent announced on July 3 that WeChat has accrued over 70 million registered overseas users, a sharp jump from the 40 million users it claimed it had back in April.
“The software has been especially successful in Indonesia, India, Malaysia, Mexico, Singapore and the Philippines,”said Martin Lau, President of Tencent, at a developer conference held in Beijing on July 3.
To further expand its user coverage, Tencent has unveiled an advertising campaign featuring internationally famed soccer star Lionel Messi to run in 15 countries, including Argentina, Brazil, India, Italy, Mexico, South Africa, Spainand Turkey.
WeChat has adopted a localization strategy when branching out by hiring celebrities as part of its marketing efforts. A much-loved feature of WeChat is a wide range of cartoon emoticons that users can send to each other, called emoji. With overseas markets in mind, WeChat hasd esigned emoticons featuring local big names. For instance, in India, Tencent roped in popular Bollywood actors Parineeti Chopra and Varun Dhawan as brand ambassadors. Emotes featuring the two Bollywood stars caused a sensation in the country. WeChat is also working closely with businesses overseas and is cooperating with Chang, a well-known beverage company in Thailand.
WeChat’s fun features coupled with Tencent’s strong marketing skills have made the app popular across different markets and helped the app’s popularity soar. User growth is one encouraging sign for the tech company, one of several Chinese Internet companies that have ambitions to expand their businesses abroad. “Successful or not, this is an once-in-a-lifetime opportunity for Tencent,” said Ma Huateng, co-founder and Board Chairman of Tencent, speaking about Tencent’s global layout.
Not easy
While boosting popularity among users outside China, WeChat is faced with competition in the global mobile-chat app market from WhatsApp, Line and Kakao from South Korea.
WhatsApp announced in June it has racked up over 250 million active monthly users worldwide. Line announced on July 23 that it has amassed 200 million global users, and Kakao said in July that the number of its users has topped 95 million. The four are bound to duke it out in the global market.
WeChat has made a splash in emerging nations, especially in Southeast Asia, and has yet to gain a foothold in a large developed economy like the United States, a highly coveted market. By the end of September 2012, there were 100,000 registered WeChat users in theUnited States, a distant cry from the numbers WeChat will need to make an impact beyond the limited population of Chinese-Americans and Chinese students studying there. To that end, Tencent opened an office in February to study the US market and form partnerships with US firms to boost the app’s popularity.
In comparison with the boom in Southeast Asia, WeChat is in its nascent stages of development inthe United States. WeChat faces stiff competition from Line and the Japanese company also has designs on the US market. For now, it’s unclear exactly how WeChat stacks up against its rivals in the battle for the UnitedS tates.
“The US market is a difficult and important one for any Internet company. Many first-class Internet products and companies were born there. The US market is highly sought out by many foreigncompanies and products, and WeChat is no exception,” reads a recent statement from Tencent in February.
“The United States is the most difficult market to tap in our global campaign,” said Ma. “China’s Internet companies lag far behind their globally successful peers and have never been a globals uccess. But now mobile phone and Internet use is developing faster in Asia than in the West. This has given China’s Internet companies a precious opportunity to surpass Western ones,” said Ma, who touts that WeChat is more innovative and user-friendly than its rivals.
But one major concern has Tencent worried: If its popularity grows, could other nations erect the same kind of roadblocks to expansion that have plagued Chinese telecommunications companies like Huawei and ZTE? Both companies have seen their efforts to expand into the United States halted over “national security” concerns.
WeChat has already run into such resistance. India’s intelligence bureau has reportedly proposed a ban on WeChat, saying that the app has already possessed too much personal information on Indians. The United States and other Western nations may suggest the same, fearing that too much citizen data could easily fall into the hands of the Chinese Government.
In response, a spokeswoman for Tencent said, “We have taken user data protection seriously in our product development and daily operations, and like other international peers, we comply with relevant laws in the countries where we have operations.”
Given the recent revelations that the US National Security Agency has been snooping on the e-mails of Americans, users may have few nagging doubts about downloading the Chinese app.
Another issue is whether China’s global image will hold back WeChat in international markets since China is often associated with producing cheap, low-quality products. Persistent foods candals and toxic toys have created a lack of trust of Chinese-made goods in developed countries and beyond.
Duncan Clark, Chairman of BDA China, a consulting firm that specializes in China’s technology and Internet sectors, told The New York Times that WeChat has the potential to overcome anylingering doubts in the West over the made-in-China label, saying potential users would haveno idea the product is Chinese when visiting, for example, an app store, thereby leveling theplaying field for mobile-chat app developers.
Robin Pinsto, a 54-year-old WeChat user in Canada, said she was surprised the app is Chinese.
“I started using WeChat six months ago and I use it every day now. I think WeChat is even better than WhatsApp, with its wide range of cartoon images and other functions,” said Pinsto. “I think WeChat has a shot at being a global success.”
Tseretzoulias, the office administrator in Montreal, has no qualms about WeChat’s origins.
“It doesn’t concern me which country developed it, as long as it’s good to use.”
The lead market advantage: China´s online population nearly 600 mln [CCTVupdates YouTube channel, July 19, 2013]
China’s online population hits 591 million [Shanghai Daily via Xinhuanet, July 18, 2013]
China’s Internet population reached 591 million by the end of June, fueled by a booming mobile Internet user base, a top industry group said yesterday.
More than 70 percent of the new users accessed the Internet via smartphones or other wireless devices. These users are already accustomed to services like instant messaging such as Tencent’s WeChat and payment modes like Alibaba’s Alipay on handsets, according to the China Internet Network Information Center (CNNIC), a government-authorized Internet research organization based in Beijing.
CNNIC publishes China’s Internet development report twice a year, which is regarded as an authoritative dot-com review of the country.
“The traditional Internet applications (e-mail and search engine) have developed smoothly in the period but mobile Internet has come into the spotlight,” CNNIC said in a statement on its website.
By the end of June, China had 591 million Internet users, a 10 percent growth from a year ago, and indicating that 44.1 percent of the country’s population uses the web. The Internet penetration rate was 2 percentage points more from the end of last year, CNNIC revealed.
The growing web applications were online music, video, games and literature, according to CNNIC.
China’s mobile Internet user base reached 464 million by June, 78.5 percent of the total Internet users, compared with 72.2 percent a year ago, the center said.
Mobile Internet has become new economy development engine with an increasing number of users and latest innovation, according to Analysys International, a Beijing-based research firm.
WeChat, which is mainly used on mobile platforms, has attracted more than 400 million users in China within about a year. Its developer Tencent has launched WeChat in overseas markets and expects to reach the 500-million user mark soon.
GSMA, a global mobile communications industry association, said last month that by 2017, the Asia Pacific region will have 1.9 billion mobile subscribers, accounting for almost half of the predicted global total of 3.9 billion.
The popularity of smartphones and wider coverage of 3G network, which provides faster web access, will continue to boost the user base of mobile Internet, CNNIC added.
And there is tremendous growth ahead. Here are the latest quarterly trends for the current situation of the mobile Internet according to operators’ company data:
China’s H1 telecom income up 8.9% [Xinhua, July 24, 2013]
China’s telecom business income increased 8.9 percent year on year in the first half of 2013, with 319 million users of 3G technology, a Ministry of Industry and Information Technology (MIIT) official said on Wednesday.
At a press conference about the communication industry, Zhu Hongren, the MIIT’s chief engineer, also said that from January to May, the country’s information consumption surged 19.8 percent year on year to 1.38 trillion yuan (223.68 billion U.S. dollars).
He said the mobile Internet sector has grown along with broadband access, online shopping and mobile payments.
Information consumption has become a new way to stimulate domestic demand and has been crucial in boosting China’s economy as foreign trade of goods and services only contributed 0.9 percent to the gross domestic product in the first half of 2013.
Zhu said China had more than 400 million users of Weixin, a popular free WhatsApp-like messaging service with all the functions of short messaging service (SMS) by the end of June.
The application, developed by one of the country’s largest information technology (IT) companies, Tencent Holdings Ltd., helped income through mobile Internet data traffic rise “56.8 percent in the January-June period,” according to Zhu.
Thanks to new platforms like Weixin and Sina Weibo, China’s most popular Twitter-like microblog, the country’s e-commerce market size grew 38.5 percent year on year to 5.4 trillion yuan and sales of smart phones and televisions both surged over 25 percent, Zhu added.
Chinese Premier Li Keqiang demanded at a meeting of the State Council, China’s Cabinet, on July 12 an average growth rate of over 20 percent in information consumption in the next three years.
Zhu Jun, another MIIT’s official, said the ministry is mapping out measures to realize the growth objective through building and upgrading the network communication infrastructure, enhancing the application and service of 3G technology and promoting the private capital in the telecom market.
Meanwhile, the government will push the share of education and medical treatment resources, encourage innovation in e-commerce and strengthen the safety of private network information, Zhu Jun added.
Digitimes Research: China 3G service subscribers to top 300 million in 1H13 [DIGITIMES Research, June 26, 2013]
The number of 3G service subscribers in China is expected to top 322 million by the end of the first half of 2013, representing a penetration rate of 27.1%. Meanwhile, sales of smartphones in China will total 170 million units in the first half of 2013, up 51% on the prior six-month period, according to Digitimes Research.
In the second quarter of 2013, Samsung Electronics delivered a total of 14.5 million smartphones, including entry-level to mid-range 3G models and the high-end Galaxy S4, in China, accounting for a 15.7% share.
Lenovo ranked second with smartphone shipments totaling 8.6 million units in the second quarter, followed by Coolpad with 8.4 million units, Huawai with 8.0 million units and Apple with 7.7 million units.
Buoyed by brisk sales of its 3.5-inch entry-level models and CNY1,000 (US$163) dual-core models, Coolpad outperformed both Huawei and Apple to take the third-rank title in China in the second quarter and accounted for a 9.1% share.
Sales of Apple smartphones were lower than expected in the second quarter as the US-based vendor did not release any new models during the period. But Apple may see its sales rebound in the second half of 2013, powered by the planned launch of a low-priced model as well as a TD-SCDMA version iPhone.
The penetration rate of 3G telecom services in China is expected to reach 30-40% for all of 2013, and total smartphone sales will reach 390 million units in the year, including 280 million units sold through the retail channels of telecom carriers, estimated Digitimes Research.
The world biggest operator, Chinal Mobile is heavily increasing its 3G penetration. Here are the latest monthly change trends for the current situation according to operators’ company data:
CBBC Webinar – The Evolution of Social Business in China [China-Britain Business Council YouTube channel, recorded on July 17, published on July 30, 2013]
Half of Chinese urban kids surf Internet [Xinhua, July 30, 2013]
About half, or 52.6 percent, of kids aged four to six in urban areas of China know how to use the Internet, according to a report on the lifestyle of Chinese children.
In the survey, which covered 9,114 four-16 year olds in 10 provincial areas or cities including Beijing, Wuhan and Qingdao, 93.2 percent of 13-16 year olds have used the Internet, The Beijing Times cited the report as saying on Saturday.
The report put the proportion of seven-nine year olds and 10-12 year olds accessing the Internet at 58.6 and 77.1 percent respectively, according to The Beijing Times.
In addition, it showed that 57.5 percent of the respondents use mobile phones, about 26 percent use Twitter-like microblogs, and 17.9 percent use tablet computers.
China’s netizen population, the world’s largest, continues to grow and reached 591 million at the end of June, according to the China Internet Network Information Center.
China Blocks Swedish Town Because of It’s Name [ChinaForbiddenNews, Feb 16, 2013]
Beijing launches platform for debunking online rumors [Xinhua, Aug 1, 2013]
Six Chinese websites jointly launched a platform on Thursday to refute online rumors, a move that an official has termed Beijing’s latest endeavor to clean up the “Internet environment.”
The platform is a website that collects statements from Twitter-like services, news portals and China’s biggest search engine, Baidu, to refute online rumors and expose the scams of phishing websites.
The platform operates under the instruction of the Beijing Internet Information Office (BIIO) and the Beijing Internet Association, a non-profit social organization.
The popular use of the Internet has expanded Chinese people’s channels of expression, but also facilitated the circulation of rumors and false information, said Chen Hua, director of the Internet information service and management department under the BIIO.
“The platform will be a new try by Beijing’s websites to eradicate online rumors and raise Internet users’ awareness of telling rumors from the truth,” he said.
The platform was jointly launched by websites Qianlong, Sogou, Sohu, Netease, Baidu and Sina Weibo, a Chinese Twitter-like microblogging service.
So far, the first phase of the platform has been completed, said Chen.
It has collected about 100,000 brief statements on online rumors and phishing websites and offered Internet users about 30 websites through which they can report online rumors or scams.
Operators of the platform will spend another year finishing the second phase. Once that is complete, more entertaining and interactive programs will be introduced to encourage the public to report online rumors.
WHY RUMORS TRAVEL FAST
Some Internet users create rumors to attract attention, while others do it to blow off some steam. But rumors fabricated on purpose can be dangerous and incite panic, said Min Dahong, a researcher on Internet usage.
Based on Wu Chenguang’s observations, rumors travel especially fast in times of emergency such as natural disasters and other mass incidents.
Wu is the news center director of Sohu. In June last year, the web portal’s news center launched a program called “Rumor Terminator” and has handled 300 rumors to date.
Soon after downpours hit Beijing on July 21, 2012, Internet users began disseminating photos of severe flooding that had been taken years earlier.
Another example involves rumors about earthquake forecasts. Internet users claim that people had successfully predicted that an earthquake would shake Lushan County, Sichuan Province, as early as five years ago, but these claims weren’t made until after a 7.0-magnitude earthquake struck Lushan County on April 20, leaving at least 196 dead.
Such rumors had an extremely harmful influence, Wu Chenguang said, adding that the government’s slow pace in releasing information has allowed Internet users to spread their rumors easily.
When explaining why rumors travel fast in China, Min Dahong proposed that it is because rumors touch on issues of common concern.
The Chinese people now care about their surroundings. Rumors travel fast because they cater to public curiosity and concern about environmental protection, food safety and corruption, he said.
2. Online shopping growing very fast
CHINA’S SHOPS SUFFER AS ONLINE RIVALS BOOM [CCTVupdates YouTube channel, June 4, 2013]
CBBC Webinar – yourcompany com cn — Online Presence in China [China-Britain Business Council YouTube channel, recorded on Jan 16, published on July 30, 2013]
China Focus: Online shopping penetrates smalltown China [Xinhua, July 30, 2013]
Online shopping is no longer exclusively for city dwellers, as residents of smaller locales are now spending more money buying goods on the Internet.
People living in counties and townships each spent an average of 5,628 yuan (910.7 U.S. dollars) online in 2012, almost 1,000 yuan more than their urban counterparts, according to a report released Monday by Taobao, China’s leading online shopping website.
The report showed that township residents placed an average of 54 orders each on Taobao in 2012, far more than the 39 orders placed by e-shoppers living in China’s first- and second-tier cities.
Major international brands like Estee Lauder have sold well in counties and townships. Shoppers in those locations spent an average of 765 yuan apiece on Estee Lauder cosmetics, slightly more than the 652 yuan spent by first- and second-tier city residents.
Over 30 million county residents spent a combined total of 179 million yuan on Taobao, according to figures posted online by the company.
Although residents’ incomes tend to be lower in small towns and counties, their online spending habits are similar to those of urban residents, according to a report released in March by McKinsey Global Institute.
The McKinsey report said that for every 100 yuan spent online, 57 yuan is spent by people in third- and fourth-tier cities, greater than the national average of 39 yuan.
The county-level city of Yiwu, ranked by Forbes as the richest county in China, topped the Taobao ranking, with online spending totaling 3.4 billion yuan.
Residents in Qingliu County in southeast China’s Fujian Province spent a staggering 20,151 yuan, or 72.55 percent of their combined income, on online shopping. In first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, the ratio has yet to exceed 27 percent.
The report also showed that 22 percent of Taobao customers in small towns used its mobile application to shop online. But the percentage declined to 17 percent in first- and second-tier cities.
Commentary: Global online shopping benefits Chinese manufacturers [Xinhua, July 16, 2013]
With just a few clicks on a shopping website, a Nigerian girl buys her favorite wig, to be delivered to her home several days later from China.
That was a scene shown Sunday by Chinese national broadcaster CCTV.
An African girl buying Chinese products on the Internet is, by no means, an isolated case. In fact, cross-border online shopping has become quite a frenzy in recent years.
Despite that, though, online sales of Chinese-made goods in foreign markets are still a new phenomenon and represent a strategic opportunity for China’s giant manufacturing sector.
If the popularity of global online shopping continues to grow, it would provide a vital channel for China to sell more of its products to the rest of the world. In the long run, it may even reshape the face of global trade.
Overseas consumers can save a lot of money by purchasing quality goods from China via the Internet because the products are generally cheaper than their counterparts from elsewhere in the world.
This comparative advantage has made Chinese goods popular among online shoppers in Russia, Brazil, America and Europe. Chinese-made commodities such as clothes, suitcases, mobile phones and shoes are among the best-selling items.
In the larger picture, the trend may also help modify the unfair distribution of profits in global trade.
China has been the world’s largest exporter since 2009. However, it receives only a small portion of the profits generated by goods that are domestically produced but sold through retailers in developed economies.
The situation may be corrected, though, if online shopping continues to prosper across the globe and the made-in-China label can be brought directly to individual consumers.
Global online shopping, however, is still in its infancy and its future is closely tied to the development of online payment mechanisms, cross-border deliveries and tax issues.
It is safe to say, meanwhile, that online shopping is a rising wave sweeping the globe. Online shopping boasts unprecedented vitality and its significant role for Chinese-made goods should not be underestimated.
Mobile payment new technology [NFC] changing ways of consumption [CCTVupdates YouTube channel, July 3, 2013]
Beijing China Mobile users can make purchases with phone [cntv.cn via Xinhuanet, July 23, 2013]
Transit cards make taking the bus and subway in Beijing an easy thing. But they may soon be unnecessary.
Starting Monday, China Mobile users can use near-field-communication, or NFC-enabled handsets to get access to public buses and subway lines in Beijing. They can also make payments below 1,000 yuan at a number of up-scale shops. Beijing China Mobile customers can visit any of six designated China Mobile shops to switch their SIM cards out for new ones that will allow them to connect their phones to their bank accounts.
Samsung’s Galaxy S4, the HTC One, and some Huawei and ZTE models can support NFC functions.
China’s mobile payments to exceed 9 trln yuan in 2015: report [Xinhua, July 30, 2013]
Online payment transactions handled by Chinese mobile payment service providers will exceed 9 trillion yuan (1.45 trillion U.S. dollars) in 2015, according to an industry report published on Monday.
In 2012, the country’s mobile banking sector handled 800 billion yuan in online payment transactions, an increase of 265.3 percent from a year earlier, according to a report published by the Internet Society of China (ISC).
Last year, the country’s online payments rose 66 percent to nearly 3.7 trillion yuan, with fast growth in payments on premiums, according to the report.
Online premiums payments grew 123.8 percent year on year to 3.66 billion yuan in 2012, the report said.
The country’s online payment market is maturing with an accelerated growth of internet finance, said Shi Xiansheng, deputy secretary-general of the ISC.
Online payment transactions handled by Chinese payment service providers totaled 830 trillion yuan in 2012, according to data from the Payment & Clearing Association of China (PCAC).
China’s online payments total 830 trln yuan in 2012 [Xinhua, June 27, 2013]
Online payment transactions handled by Chinese payment service providers totaled 830 trillion yuan (about 134.3 trillion U.S. dollars) in 2012, according to an industry report published on Thursday.
In 2012, banks handled 19.2 billion online payment transactions totaling 823 trillion yuan, according to a report published by the Payment & Clearing Association of China (PCAC).
Another 10.46 billion online payment transactions amounting to 6.89 trillion yuan were handled by other payment agencies last year, the report said.
Online transactions are being used not only in traditional areas, such as online shopping and bill-paying, but also in areas related to education, tourism, fund products, insurance, community services and medical and health services, the report said.
But experts noted that the increasing variety of payment tools has also caused problems concerning the safety of funds and customer information, calling for strengthened regulation and supervision.
“The payment business is closely linked with people’s daily lives, so customers will be less tolerant of risks,” said PCAC’s deputy secretary-general Kang Lin.
The People’s Bank of China, or the central bank, has so far approved 197 non-financial institutions to provide payment services, of which 72 are eligible for online payment business, tPCAC data showed.
The association said mobile payments, or online payments made through mobile phones, totaling 2.31 trillion yuan were handled by banks in 2012, as well as 181.2 billion yuan in transactions handled by non-bank payment service providers.
China cloud computing conference kicks off [CCTVupdates YouTube channel, June 6, 2013]
Alibaba, e-concierge, soon at your service [ChinaDaily via Xinhuanet, July 26, 2013]
Chinese e-commerce giant Alibaba Group Holding Ltd plans to boost its presence in China’s online market, and is adding services to ease consumers’ daily lives, from ordering food to booking movie tickets.
The company expects the new business area to become a major revenue source in the future.
Online shopping has become a new way of life for many Chinese consumers, said Zhang Jianfeng, vice-president of Alibaba Group. And the company has realized that customers are not satisfied with merely buying items on Internet.
“Gradually, consumers are developing a strong demand for daily life services, in fields like catering, entertainment and travel,” Zhang said at a Beijing news conference on Thursday.
Taobao Life, a platform owned by Alibaba that provides such services, has been receiving unprecedented attention from Alibaba’s management since the beginning of the year. In March, Alibaba’s chairman Jack Ma said that “amazing” things will happen if everyday activities are combined with mobile Internet services.
Ma compared the growing importance of e-commerce in people’s lives to “the rising sun at 5 or 6 am”, and Alibaba expressed its ambition to develop the new business to reach a scale similar to its booming Taobao Marketplace.
If so, investors who are eyeing Alibaba’s possible initial public offering will find another bright spot for the company’s future profitability, analysts said.
Alibaba is said to be planning to include its e-commerce platforms – Taobao Mall, Taobao Marketplace and eTao – into the planned IPO package. Last year, Taobao Mall and Taobao Marketplace posted about 1 trillion yuan ($163 billion) in total transaction value.
Zhang revealed that the Taobao Life platform has three strategic business sectors. One is Taobao Diandian, a mobile application launched in July that helps customers order food. More than 100 restaurants in Beijing, Shanghai and Hangzhou have opened services on Diandian.
Meanwhile, Taobao Movie is the nation’s biggest mobile platform to buy film tickets. It allows clients in more than 100 Chinese cities to select seats from about 800 theaters, Zhang said.
The company also set up a platform on Taobao Life, known as Offer, which provides people with classifieds in areas such as apartment rentals and housekeeping services.
Song Yang, e-commerce senior analyst with the Beijing-based research firm Analysys International, said that there’s a promising future for companies able to successfully combine people’s everyday needs with the Internet-based services.
“There are no official statistics about the size of the market, but this is the future of e-commerce. Because the services are all about making people’s everyday life better and easier, ” Song said.
Video Alibaba Group launches China Smart Logistics Network [CCTVupdates YouTube channel, May 30, 2013]
Tencent invests in Fab, takes on Alibaba [ChinaDaily via Xinhuanet, June 20, 2013]
US e-commerce website Fab.com said on Wednesday it had raised investment of $150 million from companies including Chinese Internet giant Tencent Holdings Ltd.
Analysts said Tencent may help Fab enter the Chinese online market, which is expected to record nearly 2 trillion yuan ($326 billion) in sales by the end of this year.
Shenzhen-based Tencent said it will make a “minority investment” in the US company, but has not disclosed the value of its investment.
Tencent will have a seat in Fab’s boardroom after the deal is done.
Fab could take on as much as $100 million in further investment over the following months, company CEO Jason Goldberg told The Wall Street Journal.
The funds will be used to build its online stores, develop exclusive products and expand its international footprint, he said.
“Fab is one of the leading online design retailers in the world. Tencent believes Fab has the potential to further develop under the wave of the global, social and mobile transformation of the e-commerce industry,” Tencent said via e-mail.
Founded in June 2011, Fab recorded revenue of $120 million last year. That figure is likely to reach $250 million by the end of this year, tech news website TNW said.
The Manhattan-based startup has 14 million registered members.
Tencent said its social strength and technical capabilities will help bring Fab to Internet users around the world.
Fab’s other investors include Japanese retail conglomerate Itochu Corp, an indication the company may be looking toward Asian markets.
China’s online shopping business is dominated by the Alibaba Group Holding Ltd. The company’s customer-to-customer platform, Taobao, contributed roughly 70 percent of the sector’s turnover. Alibaba also owns Tmall, the country’s No 1 business-to-customer portal.
Tencent has been vigorously building up its e-commerce segments to challenge Alibaba’s dominance. Its most recent attempt is authorizing payments via WeChat, its popular smartphone application.
Statistics from the China Internet Network Information Center revealed that China had 242 million online shoppers by the end of 2012 – or more than 40 percent of the country’s entire Internet population.
Internet giants enter online pay market [ChinaDaily via Xinhuanet, July 11, 2013]
Chinese Internet giants Baidu Inc and Sina Corp received third party payment licenses from the People’s Bank of China, the central bank, to conduct related online payment services within the country.
According to the bank, the two Internet companies received official approval on July 6. Both companies were granted a five-year permission to conduct Internet payment businesses. Sina, which operates the twitter-like micro-blogging service Weibo, also got the nod to run a mobile phone payment business.
It means all major Chinese Internet companies, including Alibaba Group Holding Ltd and Tencent Holdings Ltd, have obtained third party payment licenses. Alipay, the online payment arm of Alibaba, together with Tencent’s Tenpay, were among the first companies to receive licenses from the People’s Bank of China – in May 2011.
The reasons why Baidu and Sina are latecomers in the online payment industry, even lagging far behind some Chinese telecom companies, is because their online payment branches are weak and didn’t receive much attention from their management, said Zhang Meng, an analyst with Beijing-based research firm Analysys International.
“Baidu’s and Sina’s application for online payment licenses have more strategic significance than immediate practical meaning for the two,” Zhang said.
Sina started to explore the Internet payment business in 2011. It launched the online payment tool SinaPay that year and upgraded the service into WeiboPay (micro-blogging wallet) in 2012. Every Weibo user automatically has a WeiboPay account. Sina said it hopes to provide a more convenient way for micro-blogging users to conduct transactions online and developers to charge users for products and services.
Sina Weibo introduced Alibaba as a stakeholder in May to act as a bridge for Sina to make use of the Alipay service. Analysts said it’s safer for Sina to have its own payment tool as it’s important to keep transaction data in Sina’s own realm.
“An online payment service will prompt Sina Weibo’s commercialization process,” Zhang said. Previously, Sina had made some attempts to generate money from its Weibo platform. It cooperated with mobile phone manufacturer Xiaomi Corp to sell Xiaomi smartphones through WeiboPay last year. However, some shoppers complained after WeiboPay was paralyzed for a while through excessive use.
Baidu started investigating an online payment service as early as 2008 but the company’s enthusiasm for it cooled alongside the fall of its e-commerce business Baidu Youa.
Alibaba’s Alipay still dominates the Chinese Internet payment market. According to a report issued by Analysys International, Alipay had a 46.3 percent share of the online payment market in the first quarter of 2013, followed by Tencent’s Tenpay, with 20.3 percent.
Alipay had a total of 800 million registered accounts by the end of April. Tenpay said it had 200 million registered users by the end of last year.
Alibaba´s new online investment tool faces regulation challenge [CCTVupdates YouTube channel, June 24, 2013]
Say no to streaking to ensure online payment security [CRIENGLISH.com via Xinhuanet, April 12, 2013]
Seven leading internet companies, including Baidu, Microsoft and Alibaba, have formed an Internet Security Working Group.
It’s hoped the new collaboration will help lead to the better safeguarding of users’ and companies’ online profiles.
While Consumers enjoy the ease and the financial benefits of online shopping, sometimes their financial security and personal information can be threatened during the online payment process.
Many so-called phishing scams and malicious websites try to cheat consumers by convincing them to transfer money to their accounts instead of an online dealer’s accounts.
Li Xiaoling is a product manager with Alipay, the largest third-party payment company in China.
“Phishing websites imitate a popular website, like taobao.com and some other shopping websites. Consumers have to tell from small details whether they are really the websites that they want to visit.”
Ding Rui, a senior product manager with Microsoft, says no matter how strong systems become, phishing websites will never completely disappear.
“Driven by a strong financial interest, someone always wants to take the risk. And the word ‘risk’ is not so accurate, as there isn’t too much risk as a result of a lack of supervision and difficulty in handing out punishment.”
Alipay began fighting the problem of phishing sites at the end of 2007.
Li Qiushi is Alipay’s leading expert on market security.
“Actually, merchants, payment platforms, banks and consumers online are all victims of such behavior. We joined together to prevent these problems from occurring in advance initially. That has yielded noticeable effects.”
To be more alert, Alipay product manager Li Xiaoling suggests web users don’t access the internet without some sort of internet protection, such as an anti-virus software program or other safe control programs.
“Firstly, we hope consumers do not use the same pass code for various accounts online. Secondly, do not input personal information like ID numbers into unfamiliar websites or into those websites that the browser reports as being dangerous. Thirdly, check clearly the usage of different verification codes and do not tell strangers the codes.”
The internet companies taking part in the collaboration say it’s their hope they can raise consumer awareness to try to bring down the number of cases of online fraud here in China.
3. Applications, applications to be added to the search
Baidu searches for growth [TheDealVideo YouTube channel, July 17, 2013]
Baidu to buy 91 Wireless for 1.9 bln USD [Xinhua, July 16, 2013]
China’s leading search engine, Baidu, Inc. announced Tuesday that it will buy all equity interests in smartphone apps distributor 91 Wireless Websoft from NetDragon for a record 1.9 billion U.S. dollars.
The move, which is Baidu’s latest effort to diversify beyond its core search engine business, is set to mark China’s biggest merger and acquisition (M&A) in the Internet market after Yahoo’s 1-billion-U.S. dollar deal with Alibaba in 2005.
According to the MOU, Baidu will purchase the entire issued share capital of 91 Wireless for a total of 1.9 billion U.S. dollars.
Baidu and NetDragon will further negotiate and agree on the relevant terms of the proposed acquisition by Aug. 14 as the “Long Stop date” to buy Hong Kong-listed NetDragon’s 57.41-percent stake in 91 Wireless.
NetDragon is restricted from approaching or discussing with any third parties the sale of 91 Wireless.
Baidu said it intends to purchase the remaining equity interests in 91 Wireless from other shareholders based on terms and conditions similar to those offered to NetDragon, if they are willing to sell by Aug. 14.
In May, Baidu announced its plan to buy the online video business of PPS to rival industry leader Youku Tudou, which was created last year through the merger of the country’s two major video giants, Youku and Tudou.
My own insert: China’s Alibaba Buys Stake in Sina Weibo [NTDonChina YouTube channel, April 30, 2013]
The deal came on the heels of Alibaba‘s announcement in April that it would take an 18-percent share in Sina Corp‘s microblogging service Weibo and a 28-percent stake in digital mapping company AutoNavi Holdings Ltd.
Experts said the M&A spree highlights the intense competition among Internet giants to secure dominance of the mobile Internet market, as an increasing number of Chinese are going online through mobile devices.
Data from the China Internet Networks Information Center show that China’s online population reached 564 million as of the end of last year, with the number of mobile Internet users hitting 420 million.
Baidu Buys Up China’s Internet [TheStreetTV YouTube channel, July 16, 2013]
Baidu, 91 Wireless deal epitomizes mobile Internet scramble [Xinhua, July 17 2013]
The attempt by China’s biggest search engine, Baidu, to buy a leading apps platform epitomizes Chinese Internet giants’ quickening steps in mobile Internet, even though some question if the company to be bought is worth the price offered.
NASDAQ-listed Baidu Inc. announced on Tuesday its bid to buy all equity interests in smartphone apps distributor 91 Wireless Websoft for 1.9 billion U.S. dollars. The deal, if completed, will mark China’s biggest merger and acquisition in the Internet market after Yahoo’s 1-billion-U.S. dollar deal with Alibaba in 2005.
Analysts viewed the alliance as complementary in that Baidu will promote 91 Wireless’s smartphone app distribution systems, and in return, Baidu will be better able to contend for a position as a leading access portal for mobile Internet.
“Through the acquisition, Baidu not only gains access to app distribution, it will also attract around 100,000 app developers to its own platform in the future,” according to Ge Jia, an Internet analyst who was quoted in a Tuesday report by the Beijing News.
Ge said that digital mapping, voice, and app distribution represent the three battle grounds in the mobile Internet market in the future, and the deal could turn around Baidu’s current disadvantages in a market that already boasts strong rivals including Tencent and Alibaba.
On the same day as Baidu’s announcement, China’s e-commerce giant Alibaba also confirmed that it has made a strategic investment in outbound travel site qyer.com, as it seeks to boost its travel offerings, including plane tickets and hotels, on its marketplace site Taobao.
Industrial analysts even labeled this year’s mergers and acquisitions in the Internet industry as major players’ efforts to split the mobile Internet market and obtain a lion’s share.
In May, Baidu announced its plan to buy the online video business of PPS in order to rival industry leader Youku Tudou. Just one month earlier, Alibaba revealed it would take an 18-percent share in Sina Corp’s microblogging service Weibo and a 28-percent stake in digital mapping company AutoNavi Holdings Ltd.
Ge Jia said that Baidu expects to attract large numbers of advertisers through its purchase of 91 Wireless. Data shows that 12.9 billion apps had been downloaded through 91 Wireless’s two leading smartphone app distribution platforms in China as of Dec. 2012.
However, some believe that the 1.9-bln-U.S.-dollar tender by Baidu is too high for a company with an estimated value of only 140 million U.S. dollars two years ago.
“Baidu has no better choices because its strategic arrangements for the mobile Internet came too late and it has been at a disadvantaged position. So it is seeking to change the status quo through the costly deal,” said Wang Jun, a mobile Internet analyst with Analysys International.
Data from the China Internet Networks Information Center show that China’s online population reached 564 million as of the end of last year, with more than 74 percent of them, or 420 million, using cell phones to access the Internet.
“The Internet giants will not miss any opportunity amid the boom of mobile Internet,” said IT commentator Hong Bo. In a report published Tuesday by the China Business News, Hong said that Alibaba’s advantages lie in its strong capabilities to do business, while Tencent has flagship apps including WeChat, a free app that enables all-round communications in text, voice, picture and video form.
However, the commentator added that with advantages in technology, Baidu is also seeking to become a titan in app distribution through the acquisition of 91 Wireless.
Official stresses Party building in non-public enterprises [Xinhua, May 22, 2013]
A senior Communist Party of China (CPC) official has called for efforts to strengthen Party building in the country’s non-public enterprises.
Zhao Leji, head of the Organization Department of the CPC Central Committee, made the comments on Wednesday during an inspection in Beijing.
Visiting Baidu, China’s leading online search engine operator, Zhao called for more efforts to integrate businesses’ own developments with the progress of the country and society.
Moreover, the fostering of a corporate culture should be consistent with the practicing of socialist core values, the official said.
During his inspection, Zhao also underlined efforts to improve China’s talent pool, including innovations to attract, train, use and support talented people.
China’s Internet giants in acquisition spree [Xinhua, May 14, 2013]
China’s Internet giants have gone on a new acquisition spree in recent months as they ramp up efforts to diversify businesses amid the industry’s constantly changing dynamics.
Alibaba, China’s leading e-commerce firm, announced last week that it will pay 294 million U.S. dollars for a 28-percent stake in digital mapping company AutoNavi Holdings Ltd..
The move, following Alibaba’s previous deal to take an 18-percent share in Sina Corp’s microblogging service Weibo, is the giant’s latest attempt to map out a strategy in the key mobile Internet market, in which major companies have been vying for presence.
Li Zhi, an analyst with Internet service provider Analysys, noted that rather than developing new products on their own, the Internet giants have preferred to make up for their weak areas through mergers and acquisitions (M&A) to consolidate their positions.
Earlier this month, China’s online search leader Baidu Inc. announced its plan to buy the online video business of PPS, to rival industry leader Youku Tudou, which was created last year through the merger of the country’s two major video giants, Youku and Tudou.
The purchase is Baidu’s latest step to diversify beyond its core search sector.
The string of M&A deals has highlighted the heated competition among Internet giants to secure dominance of the mobile Internet market as an increasing number of Chinese are going online through mobile devices.
Currently, Tencent, which has so far attracted 300 million users to its popular voice messaging platform Wechat, is widely regarded as having secured a dominant seat in the mobile Internet market.
But Ma Huateng, Tencent’s chairman and CEO, took a cautious view about the company’s position.
“No matter how well-placed we are now in the mobile market, a slight oversight may cause a shipwreck,” he said at an Internet conference earlier this month.
According to data from the China Internet Networks Information Center, China had 420 million mobile Internet users as of the end of 2012.
With the market potential yet to be tapped, the Internet giants’ M&A activity will likely to go on for a while, according to Li.
4. Xiaomi to take Apple place
Xiaomi takes aim at Apple after big increase in sales [ChinaDaily via Xinhuanet, July 17, 2013]
Chinese smartphone manufacturer Xiaomi Corp said on Tuesday it sold 7.03 million Xiaomi mobile phones in the first half of this year and realized unaudited revenue of 13.3 billion yuan (2.16 billion U.S. dollars) during the same period.
According to a news release sent to China Daily, Xiaomi disclosed that its half-year revenue in 2013 exceeded the company’s 12.6 billion yuan revenue from all of 2012 but it did not reveal the profitability ratio.
The company is on track to reach its annual goal of selling 15 million Xiaomi smartphones by the end of the year, according to officials from Xiaomi’s public relations department on Tuesday.
As of June, Xiaomi had more than 14 million smartphone users on the Chinese mainland, Hong Kong and Taiwan, the news release said.
Lei Jun, founder and chief executive officer of Xiaomi, attributed the good performance to the company’s more influential branding, better industry partner support and an improved logistics and warehouse system.
Founded in 2010, Xiaomi has experienced rapid growth. The company launched its first smartphones in August 2011 and quickly gained market share, beating some traditional mobile phone giants.
“In the Chinese market, with the exception of Apple and Samsung, if the shipment of one smartphone model exceeds 1 million during its life cycle, it can be described as ‘quite successful’,” said James Yan, an analyst with the research firm IDC China.
Xiaomi has managed to sell every one of its smartphone models above the 1 million level and is easily ahead of companies such as Huawei Technologies Co Ltd and ZTE Corp in terms of single smartphone shipments, Yan added, pointing out the latter firms have been selling mobile phones for about a decade.
Xiaomi is now directly challenging international giants Samsung Electronics Co Ltd and Apple Inc, which both keep single smartphone sales records in China. According to IDC, Apple had sold about 16 million iPhone 4 and 15 million iPhone 4S handsets in China as of March.
Xiaomi’s Lei sees Apple as a target to overtake in the future. During a previous interview with China Daily, Lei expressed Xiaomi’s ambition to ship more than 100 million smartphones annually worldwide for each model by 2016.
Apple, based in Cupertino in the United States, managed to break the 100 million iPhone devices mark in 2012, less than five years since the first iPhone was sold in 2007.
Lei dreams of achieving a similar, or even faster, pace of development.
“I know it is crazy, but we would like to have a try,” Lei said last year.
[in the Q1 2013, see below]
Overall, Xiaomi’s smartphone shipments in China, if they are not counted on the basis of single device shipments, are still small. The company even failed to become a top 10 smartphone supplier in China in the first quarter, according to the Beijing-based research firm Analysys International.
Samsung was the top smartphone company after acquiring a 17.3 percent share in the Chinese market in the first quarter, followed by Lenovo with 13.1 percent and Coolpad with 10.3 percent. The country had sales of 75.3 million smartphones, a year-on-year rise of 141.5 percent, in the first quarter ending on March 31.
Fewer Chinese consumers picking Apple’s iPhone [ChinaDaily via Xinhuanet, July 25, 2013]
Apple said on Tuesday that its revenue from China
fell 14 percent year-on-year to $4.6 billion in the
quarter ended June 29. Provided to China Daily
The devices are becoming so common in China these days that many people lost their once strong desire to own one. Also, iPhones are considered too expensive, and many consumers are opting for cheaper phones with similar capabilities.
And the Chinese market’s hesitation has showed in Apple’s latest quarterly financial report. Even though the California-based company delivered better-than-expected global iPhone shipments of 31.2 million units during the quarter ended June 29, its performance in Greater China, including Hong Kong and Taiwan, was sluggish in the period.
Apple said on Tuesday that its revenue from China fell 14 percent year-on-year to $4.6 billion in the quarter ended June 29. The figure, which represents a 43 percent decline from the previous quarter, marked the first time that revenue decreased in the region.
Overall, Apple’s quarterly global revenue remained flat at $35.3 billion.
Apple said its growth in the Chinese market had slowed, particularly due to economic headwinds. China’s GDP growth eased to 7.6 percent in the first half, compared with 7.8 percent a year earlier.
Apple’s chief executive officer Tim Cook said that he wasn’t discouraged by the numbers from just one 90-day period.
“I continue to believe that in the arc of time here, China is a huge opportunity for Apple,” Cook said on an earnings call on Tuesday.
However, analysts believe that fiercer competition, together with other factors, played a much bigger role in Apple’s lackluster performance in China than the macro-economic effects.
“The iPhone 5 was less popular than its predecessor, the iPhone 4S, in China during the first 100 days after they hit the market,” said James Yan, an analyst with research firm IDC. IPhone 5 handsets also saw stronger competition from brands such as Samsung Electronics Co Ltd and HTC Corp, as well as some local brands like Huawei Technologies Co Ltd and Xiaomi Corp, Yan said.
Meanwhile, Chinese telecom operators have cut their subsidies for iPhone 5 devices.
“Consumers and industry partners adopted a wait-and-see attitude toward the iPhone 5,” Yan said. On the consumer side, they started to look for other high-quality smartphones with lower prices, or they are planning to buy the upcoming iPhone 5S or the iPhone 6, which seem to be more innovative products, he added.
Kevin Wang, an analyst with IHS iSuppli, said that Apple’s pricing strategy also discouraged some first-time smartphone buyers and low-end customers. A 16 GB iPhone 5 costs at least 5,000 yuan ($809.80), more than the average monthly salary of people working in Beijing.
“The situation will only change when Apple introduces a less-expensive version of the iPhone, then we’ll see a new sales surge in the country,” Wang said.
For instance, Chinese telecom equipment maker Huawei, which in recent years expanded to the smartphone market, launched its P6 model in June, targeting high-end users but selling at a mere 2,688 yuan.
Huawei said on Wednesday that its first-half revenue was 113.8 billion yuan, up 10.8 percent year-on-year.
Meanwhile, the Beijing-based Xiaomi is selling high-quality smartphones at extremely low prices, usually below 2,000 yuan. Xiaomi said it sold more than 7 million smartphones in the first half.
But Apple still has ways to protect its status as a major player in China, said Xiang Ligang, a telecom industry insider.
Xiang said that Apple will likely quicken the pace of its collaboration talks with China Mobile Ltd, the nation’s biggest telecom operator, to boost iPhone sales.
China Mobile and Apple have been in talks for years, but the two have yet to reach an agreement. Some industry sources said that the two companies will likely start cooperating soon, since all the preliminary work is done.
5. Strong central government support
IT push aims to boost domestic demand [ChinaDaily via Xinhuanet, July 14, 2013]
China is to promote consumption of IT-related products and services as it seeks to spur domestic demand and push economic upgrading.
It will speed up work to issue licenses for the fourth generation (4G) mobile network this year and accelerate development of broadband Internet access, according to a statement released after an executive meeting of the State Council presided over by Premier Li Keqiang.
The nation is aiming for annual average growth of 20 percent in the information consumption industry from 2013 to 2015, the statement said.
The meeting demanded implementation of the “Broadband China” strategy, stepped-up efforts to construct and upgrade network infrastructure, pushing forward the FTTH (Fiber To the Home) project and improving Internet speed.
China, which has the largest number of mobile phones in the world at 1.2 billion, is already building 4G trial networks in major cities.
…
Liu Lihua, vice-minister of industry and information technology, said last year that China aims to have more than 250 million broadband users by 2015.
The central government is also encouraging private capital to enter the basic telecom service market, such as the voice and messaging business, by setting up joint ventures with State-owned players.
Projects to merge telecommunications, television and Internet services will also move forward on a nationwide basis this year, according to Friday’s meeting.
The meeting also called for quicker development on energy saving, with the goal of ensuring the market share for efficient energy-saving products reaches 50 percent by 2015.
Private capital set to enter telecom industry [CCTVupdates YouTube channel, June 18, 2013]
China eyes energy-saving, IT industries to spur domestic demand [Xinhua, July 12, 2013]
China is to speed up development in the energy-saving industry and promote consumption of IT-related products and services as it looks to spur domestic demand and push economic upgrading.
Stimulating growth in the two sectors is a multi-purpose approach aimed at easing resource restraints, unleashing consumption potential, stimulating effective investments and fostering emerging industries, according to a statement released after an executive meeting of the State Council presided over by Premier Li Keqiang on Friday.
…
Regarding IT-related consumption, including communication services and e-commerce, the State Council said China will press ahead with the construction of network and telecommunication infrastructure and strive to issue 4G licenses by the end of this year.
Efforts to boost consumption in the area also include widening Internet-based information services, piloting “smart city” schemes, boosting e-commerce, and increasing information securities.
Through these plans, China aims to achieve an annual growth of over 20 percent in IT-related consumption for the 2013-2015 period, the State Council said.
In the first five months of 2013, China consumed 1.38 trillion yuan (22.4 billion U.S. dollars) worth of IT-related products and services, up 19.8 percent year on year, data from the Ministry of Industry and Information Technology has showed.
Sub-anchor: China’s industrial structure optimized [CNETTV.cn via Xinhuanet, July 24, 2013]
The Ministry of Industry and Information Technology held a press conference this morning — it’s about China’s industrial output in the first half of this year, and what’s being done to boost the IT industry.
Let’s chat to our reporter Guan Xin — who has been following the press conference.
…
Q2. IT industry is one of the strategic emerging industries, what initiatives can we expect?
A: The Ministry says IT will become a new engine to boost China’s consumption, with explosive growth of IT services and products. The spokesman shared some figures this morning….revenue from mobile internet traffic grew some 57% in the first half. The e-commerce market reached a whopping 5.4 trillion yuan, growing 38.5%, and sales of smart phones and smart TVs, are up more than 25%. The Ministry is now working on new measures to further boost IT consumption…including IT infrastructure building, expanding IT products supply, and improving public services. And these new measures will come out soon.
6. Country-wide 4G roll-out by year end 2013 after extensive trials
China’s telecom firms reveal 4G strategies [ChinaDaily.com.cn via Xinhuanet, June 27, 2013]
China’s three telecom operators have laid out their strategies on the development of fourth-generation, or 4G, mobile networks, as the official issuance of 4G licenses is expected to happen soon.
China Mobile Ltd – the world’s biggest telecom operator by subscribers – has always been an aggressive promoter of the domestic Time Division-Long Term Evolution, or TD-LTE, 4G technology.
Xi Guohua, its chairman, briefed the press on the company’s latest progress on TD-LTE network deployment at Shanghai’s Mobile Asia Expo on Wednesday.
Xi said that China Mobile has built more than 22,000 4G base stations in 15 Chinese cities, but that it plans to set up 200,000 base stations in 100 cities by the year-end.
However, the other two smaller Chinese telecom operators – China Unicom (Hong Kong) Ltd and China Telecom Corp Ltd – have expressed their willingness to adopt the Frequency Division Duplex-Long Term Evolution, or FDD-LTE, technology, or at least to build a converged network under both standards.
TD-LTE and FDD-LTE are the two major 4G international standards, but the latter has gained more popularity across the globe and has stronger industry support.
Lu Yimin, general manager of China Unicom, said the company is conducting tests for 4G wireless networks with mixed technologies. It is the first time that China Unicom has admitted that it is actively preparing to launch 4G services.
However, Lu added that because the Chinese government has not yet awarded the 4G licenses, China Unicom’s final strategy is still “uncertain.” Lu also made the remarks at Shanghai’s Mobile Asia Expo.
Last weekend, Wang Xiaochu, China Telecom‘s chairman, confirmed that the company is stepping up efforts for its LTE network trials.
“It’s inevitable (for China Telecom) to adopt a converged network, since the spectrum is at the core of every carrier’s resources,” Wang said.
Even though Chinese authorities have not said exactly when they plan to issue the 4G licenses, industry experts expect the licenses to be awarded shortly.
He Shiyou, executive vice-president of ZTE, expressed an optimistic view on TD-LTE’s prospects in China.
“I think that all the three Chinese telecom carriers will get TD-LTE 4G licenses because the rich TD-LTE spectrum resources in China allow the government to do so,” he said.
Shang Bing, vice-minister of the Ministry of Industry and Information Technology, said the development of the TD-LTE technology has entered a fast-track phase.
“The Chinese government will firmly support TD-LTE industry development, and help create a favorable policy and market environment,” he said on Wednesday.
The moves by the three Chinese carriers will help to further back the development of 4G technology globally, said Anne Bouverot, director-general of the GSM Association, an industry alliance of mobile operators and related companies.
“In general, what matters is not to have the absolutely best technology, but that everybody agrees to deploy it. That’s where you get the economy of scale, and get the equipment for networks and handsets to improve each time there is a new release,” she said.
Analysts have said that LTE 4G technology will usher in a society much more connected and convenient for people.
Jin Lee, senior managing director at Accenture’s mobility department in South Korea, said that LTE will provide speeds about 50 percent higher than current Wi-Fi networks.
“Once consumers get to taste that speed, they will never go back,” Lee said.
Related:
5,000 city users to put 4G services to the test
BEIJING, May 18 (Xinhuanet) — Long-awaited 4G services, which provide mobile users with Internet access 20 to 50 times faster than 3G network, make their debut in Shanghai next month when China Mobile begins large-scale trials, the carrier said yesterday.
The trial in the world’s biggest mobile phone market indicates that the country is ready to adopt the most advanced mobile technology for more than a billion handset users, and create a billion-dollar market for telecommunications equipment and handsets. Full story
4G market set to ignite hot competition
BEIJING, March 25 (Xinhuanet) — Foreign telecom companies are keen to join China’s fourth generation (4G) mobile network deployment with the country looking likely to issue the relevant licenses as early as this year.
Minister of Industry and Information Technology Miao Wei said the country is expected to award 4G licenses to domestic telecom operators by the end of 2013. Full story
China expected to issue 4G licenses this year: minister
BEIJING, March 6 (Xinhua) — China is expected to start licensing telecom operators to offer services on its fourth-generation (4G) mobile phone network within 2013, a senior official has said.
“China has made breakthroughs in R&D of 4G technologies, but is still facing restrictions in commercial use,” Miao Wei, minister of industry of information technology, said on the sidelines of the ongoing annual session of the country’s national legislature. Full story
China likely to issue 4G licenses by year end [CRIENGLISH.com via ChinaDaily, July 26, 2013]
Internet users in China are eagerly looking forward to ultra-fast 4G mobile Internet services.The anticipation has heated up following the government’s announcement that licenses tooperate such wireless system will be issued before the year’s end.
At a 4G service center of China Mobile in Henan’s Zhengzhou city, customers are trying out the new service with high expectations for faster speeds and easier access.
“I look forward very much to the availability of 4G service, which will be faster than the current3G network. But I’m not sure if it will be able to synchronize with televisions and other homeappliances.”
“I hope it will be launched soon. I really want to experience it as soon as possible.”
The fourth-generation wireless service is designed to deliver a speed four to ten times faster than today’s 3G system, the most widespread, high-speed wireless service at the moment.
China Mobile, China’s largest cell phone provider, is now promoting a homegrown 4G standard and hopes to start commercial rollout soon.
The core technologies are ready and the company has been ramping up installations of its base stations, which will be shared by both 3G and 4G networks.
Li Xiaobang is an engineer with China Mobile.
“We need to examine all the base stations currently used for 3G services, including the machine room and the roof, and carry out Long Term Evolution upgrade, either to F frequency band or to D frequency band, based on overall conditions of the base stations.”
According to Li, the company is hoping to finish the work as soon as possible so people can use the new service once the 4G license is issued.
The government says it will press ahead with building infrastructures and hopes to issue 4G licenses by the end of this year.
There are 1.2-billion mobile phones in China, more than any other country in the world.
New battle for 4G equipment market share [ChinaDaily, June 25, 2013]
China Mobile Ltd has officially launched its largest tender ever for the construction of its fourthgeneration (4G) network in China, igniting a new battle among telecom gear makers for marketshare.
On June 21, China Mobile, the world’s largest telecom operator by subscribers, posted an online tender saying it plans to purchase equipment for 207,000 4G base stations.
That purchase means the number of China Mobile’s 4G base stations is likely to catch up with that of its 3G base stations soon.
China Mobile is using the domestic Time Division-Long Term Evolution technology for its next-generation mobile network.
Unlike its 3G tenders, China Mobile said it will not accept agent bidders or those who make allcritical equipment on an original equipment manufacturing basis.
The Chinese telecom operator’s capital spending will jump 49 percent year-on-year to 190.2billion yuan ($30.5 billion) in 2013. More than half of the company’s network expenditure, or 42billion yuan, will go on 4G projects this year.
Foreign and domestic telecoms equipment vendors have shown strong interest in ChinaMobile’s 4G network deployment.
Yuan Xin, president of Alcatel-Lucent China, said he is very optimistic about achieving a satisfactory result in the third quarter, when China Mobile announces the final bidding results.
“TD-LTE business will be the core foundation for Alcatel Lucent’s future development,” Yuan said at a Shanghai news conference on Monday. China’s 4G industry is about to take off, since the market environment for LTE development has matured, he said. “Based on our solid technology and 4G experience in and out of China, we are confident of performing well,” headded.
Alcatel-Lucent had the largest share, or 14.5 percent, among foreign telecom gear makers during China Mobile’s first round of 4G tenders last year, according to research firm IHS iSuppli.
The company is the major telecom equipment supplier for Verizon Communications Inc’s 4G network, which covers about 200 million subscribers in the United States.
“We even dream of introducing TD-LTE technology to the US market, which follows the trendthat carriers worldwide want to make the best use of spectrum resources,” he said.
Because foreign telecom equipment vendors achieved less than a 30 percent market share in total during the first round bidding of China Mobile’s TD-LTE tender, they seemed more anxious to improve their positions by grabbing bigger shares this time.
“We are not satisfied with the results Ericsson achieved in China Mobile’s first-round 4G bidding last year,” said Mats H. Olsson, senior vice-president of Ericsson Asia-Pacific, duringthe 2013 Mobile World Congress held in Spain in February.
“In the past Ericsson paid a lot of attention to countries including the United States, Japan and South Korea and mainly focused on the deployment of FDD-LTE networks. Now we have turned our sights on China and TD-LTE technology,” Olsson said.
However, analysts argued that domestic rivals still hold advantages over foreign players. ChenPeng, analyst with China Merchants Securities Co Ltd, said he expected Huawei Technologies Co Ltd and ZTE Corp to gain more than half of the share in China Mobile’s 4G bidding.
Guangxi to build wireless cities with 4G network [ChinaDaily Liuzhou Guangxi, June 25, 2013]
The Guangxi branch of China Mobile, which is the world’s biggest telecom carrier, said it will start construction of a fourth-generation network in 14 cities in the autonomous region in the second half of this year in a bid to build high-speed “wireless cities”.
Nanning, Liuzhou and Guilin are among the 14 cities, which will soon be covered in the 4G network in Guangxi. The 4G technology transmits data to wireless devices and has a theoretical speed as high as 100 Mbps.
It takes a 2G network 16 hours to download a 1 gigabyte movie, while it takes a 3G network two hours to download the same movie. The 4G network can complete the download within two minutes.
In addition, with the growing popularity of mobile phones, tablets and other wireless devices, 4G networks can effectively link people with each other and eventually build a convenient “wireless city”.
A woman surnamed Lin, who works in the media sector, said she is looking forward to the 4G networks in Guangxi. “We often need to carry a laptop on business trips in order to send stories back to our headquarters. With the 4G network, I will be able to do it with my mobile phone in the near future,” she said.
Though the 4G network is very high-end, the cost of using the network is even lower than 3G technology because 4G is a Chinese home grown technology.
China Mobile has spread its 4G network in 13 cities in China, including Guangzhou, Shenzhen and Hangzhou, and it plans to include 100 cities into its 4G network by the end of 2013. With the completion of the project, China Mobile is expected to build the largest 4G network in the world, covering 500 million people.
4G network covers Pingtan [ChinaDaily Pingtan Fujian, May 21, 2013]
The city of Fuzhou, capital of Fujian province, launched a fourth generation, or 4G, wireless Internet service on May 17, which was also World Telecommunication Day.
The 4G network mainly covers the downtown area within Second Ring Road, the university zone, and the Pingtan Comprehensive Pilot Zone, said the Strait News on Saturday.
Fuzhou became a pilot city for 4G trial network in September 2012. After eight months of construction, it has built 1,138 base stations and carried out several rounds of signal upgrading.
With the launch of the 4G network, residents in both Fuzhou and Pingtan will enjoy free high-speed Wi-Fi to play videos, surf the Internet, and start online video chats on their mobile phones.
Telecom giants tap Internet potential [ChinaDaily via Xinhuanet, May 18, 2013]
Chinese telecom operators have stepped up their efforts to boost their business through exploring online channels, since more people in the country prefer shopping on the Internet.
On World Telecommunication and Information Society Day, which fell on Friday, Chinese mobile carriers launched different e-commerce campaigns to attract clients’ attentions.
China Mobile Ltd, the nation’s biggest mobile carrier with 726 million subscribers, said that Friday was its first “Online Shopping Day” and offered favorable prices for people topping up accounts, purchasing mobile phones, or registering a telecom service plan.
The operator, which suffered weak profit growth in the first quarter, said it has also developed an optional package, consisting of diversified telecom services, for customers to build up tailored telecom contracts.
Xing Hongtao, an official from China Mobile’s market operation department, said that the new service was a bit like “going to a cafeteria, looking at the menu and choosing your favorite dishes”.
“Previously, the operators designed the service plans, but now it is up to customers to devise the contracts,” he said.
China Mobile is the first telecom operator in the nation to deliver this kind of service. The company started a pilot of the optional package in 13 provinces in the second half of last year, which more than 8 million customers have signed up to so far.
On Friday, China Mobile officially rolled out the service across the nation.
China Mobile’s sales from e-commerce channels have grown rapidly in recent years, according to the company.
By April, China Mobile had sold around 250,000 mobile phones per month on its website, an increase of 30 percent on the figure in January.
Ma Jingxin, deputy general manager of China Mobile Terminal Co, said in an earlier interview with China Daily that the company aims to sell up to 30 percent of its customized mobile phones through e-commerce channels by 2015.
China Unicom (Hong Kong) Ltd, the nation’s second-biggest telecom carrier, started building its e-commerce channels in 2007.
The average daily sales on China Unicom’s online platform now surpass 150 million yuan ($24.4 million) and its daily user base is more than 10 million, according to Zong Xinhua, general manger of China Unicom’s e-commerce department.
From May 17 to May 23, China Unicom plans to offer 10,000 smartphones at discounts to new telecom service subscribers.
The growing number of Internet users in China, combined with the public’s growing acceptance of e-commerce, is driving online sales of mobile phones.
“The most important reason for choosing a device online is because mobile phones are cheaper on the Web,” said Deng Kuibin, deputy general manager of SINO Market Research Co.
7. From operator branded to white-box superphones supporting all that
China Mobile launches own-brand smartphones [ChinaDaily via Xinhuanet, Aug 3, 2013]
China Mobile Ltd officially entered the booming mobile terminal market on Friday as it unveiled its own-brand smartphone models.
The China Mobile M701, a 5-inch screen Android-based smartphone equipped with MediaTek Inc’s 1.2-gigahertz quad-core processor, is priced at 1,299 yuan ($212). The China Mobile M601 is a 4-inch screen, dual-core Android smartphone that targets lower-end users with a price of 499 yuan.
The two smartphones are produced by original equipment manufacturers, Hisense Group and Shenzhen-based BYD Co Ltd, respectively. They will hit the Chinese market through China Mobile’s online and offline outlets this month.
Li Yue, chief executive officer of China Mobile, the world’s biggest telecom operator by subscribers, said the company has about 740 million customers.
Li said those customers usually change their mobile phones every 23 months, so at least 300 million new mobile devices are needed every year.
“China’s mobile terminal industry has a very bright future,” Li said, during a Beijing news briefing on Friday.
Analysts pointed out some additional implications for China Mobile’s smartphone launch.
James Yan, an analyst with research firm IDC China, said China Mobile’s move aims to create a platform that seamlessly integrates its current mobile services, such as the instant messaging tool Fetion, and other mobile applications.
“Chinese mobile carriers hope to decrease the risks of being a ‘dumb pipe’ and to relieve the pressure from Internet companies’ challenges,” Yan said.
Lingxi, the Chinese version of Apple Inc’s Siri service, will be installed on the new China Mobile smartphones. A year ago, China Mobile struck a $214 million deal to acquire a 15 percent stake in Anhui USTC iFlytek Co Ltd, a Chinese company that develops software and apps related to voice input services.
“Lingxi is a highlight of China Mobile smartphones,” said Li Lin, a marketing manager with iFlytek. Compared with Siri, Lingxi is more localized and has partnered with third-party service providers such as Dianping.com and douban.com to offer helpful daily living information for customers, Li said.
“You can ask Lingxi to make a phone call, send a text message or find a nearby restaurant,” Li explained.
The other benefit for China Mobile in its launch of own-brand smartphones is that it helps the carrier to expand and strengthen coverage in county-level markets.
“In tier five, tier six cities, which most mobile phone companies fail to reach, China Mobile can successfully sell smartphones through its powerful distribution channels,” Yan from IDC said. Those areas are usually remote from bustling cities and have less intense market competition, he said.
Kevin Wang, an analyst with the research firm IHS iSuppli, said China Mobile’s move will help reinforce its branding, but he said that he doubted the smartphone business will be a major revenue driver for the company.
“Foreign telecom operators such as AT&T and Vodafone have offered own-brand products for many years, but the own-brand smartphone proportion they sell is still small,” Wang said.
China white-box vendor introduces ultra-thin smartphone [DIGITIMES, July 3, 2013]
China-based white-box smartphone vendor UMeox Mobile has joined the world’s ultra-thin smartphone market by introducing its UMeox X5, which has a thickness of only 5.6mm.
The Umeox X5 is equipped with a 5.3-inch touchscreen and is powered by a dual-core processor set on Android 4.2.2 Jelly Bean. It has an 8-megapixel rear camera and a 3-megapixel front camera.
The UMeox X5 comes less than a month after fellow company Huawei unveiled on June 18 its ultra-thin model, the Ascend P6, which the vendor claimed to be the world’s slimmest smartphone at 6.18mm during a launch event. The Ascend P6 has a 4.7-inch 1280 by 720 in-cell display and is powered by a HiSilicon 1.5GHz quad-core K3V2E processor.
In China, the ultra-thin segment was previously dominated by branded players including Huawei, ZTE and Oppo; the entry of white-box vendors will eventually heat up the competition in the sector, said industry watchers.
April 13, 2013 Report:
Digitimes Research: Smartphone sales to reach 329 million in China in 2013 [DIGITIMES Research, March 18, 2013]
There will be 329 million smartphones sold in the China market in 2013, hiking 67.0% from 2012 due to large growth in the total number of 3G subscribers, while sales of feature phones will drop 39.9% to 146 million units, according to Digitimes Research.
The 2013 sales of smartphones will consist of 110 million TD-SCDMA models [88M till end of 2012 in total !!!], increasing 155.8% from 2012, 77 million WCDMA models [76.5M till end of 2012 in total !!!], up 45.3%, 67 million CDMA models [80M till end of 2012 in total !!!], up 59.5% and 75 million EDGE models, up 27.1%.
The average production cost of entry-level smartphones will decrease from US$35 in the fourth quarter of 2012, to US$31 in the first quarter of 2013, according to Digitimes Research.
Here is the monthly change trend for the current situation according to operators’ company data:
So 2013 indeed will be quite a different year, especially for the biggest by far operator China Mobile (having the world’s largest customer base which is 64% of the market in terms of the overall number of 1.11 billion Chinese subscribers there), with new 3G subscribers to be added greatly exceeding even the total number of 3G subscribers accumulated so far over the last 4 years (since February 2009, precisely):
China Mobile aims to sell 100-120 million TD-SCDMA handsets in 2013 [DIGITIMES, March 15, 2013]
China Mobile, the only TD-SCDMA mobile telecom carrier in China, aims to sell 100-120 million TD-SCDMA handsets in 2013, 80% of which will be smartphones, according to company president Li Yue.
China Mobile saw the total number of TD-SCDMA subscribers increase by 36.72 million in 2012 to 87.93 million at the end of the year, China-based sina.tech.com indicated. There were 242 models of TD-SCDMA handsets, including 138 smartphones, launched in the China market in 2012 and the total sales volume stood at 56 million units, of which more than 60% were smartphones, sina.tech.com pointed out.
China Mobile spent CNY23.8 billion (US$3.77 billion) to subsidize purchases of TD-SCDMA handsets bundled with contracts in 2012, and has set aside a budget of CNY27.0 billion for 2013, the company indicated.
source: 2012 Annual Results presentation [China Mobile, March 14, 2013]
So a dramatic change will be not only for 3G but for 4G/LTE as well:
China Mobile 2013 capex increases 49% on year [DIGITIMES, March 14, 2013]
China Mobile, one of the biggest telecom carriers in China, reported 2012 total revenues of CNY560.4 billion (US$90 billion, up 6.1% on year. Net profits were CNY129.3 billion, representing an on-year increase of 2.7%, said the firm. China Mobile reported that 2013 capex will reach CNY190.2 billion, an on-year growth of 49.29% compared to CNY127.4 billion in 2012.
In particular, the capex for 4G networks will be CNY41.7 billion in 2013. The capex is for investments regarding 200,000 TD-LTE base stations. However, currently, TD-LTE service coverage is only 35-40%, and according to company CEO Li Yue, if the firm pushes TD-LTE service coverage to 90%, another CNY40 billion needs to be invested. China Mobile currently has no schedule for this type of investment.
China Mobile currently has 710 million users with 87.93 million being 3G users, a relatively low 3G service penetration rate. According to China Mobile chairman Xi Guo-hua, the firm’s sales of handsets in 2013 will reach around 100-120 million units and 80% will be smartphones.
In addition, China Mobile has been seeing strong growth in the usage of mobile networking among users. According to the firm, 2012 usage increased 187.6% on year and revenues from mobile networking services increased 53.6% on year, accounting for 12.2% of total revenues.
China Mobile to build world’s largest 4G network [CCTV News via GoUTube123 YouTube channel, Feb 27, 2013]
source: 2012 Annual Results presentation [China Mobile, March 14, 2013]
Note that GTI stands for the Global TD-LTE Initiative
China Mobile launched 100 cities 1 million terminals-covered 4G plan to create world’s largest 4G network [GTI News, March 8, 2013]
On February 26th, Mr. Xi Guohua, Chairman of China Mobile announced China Mobile’s new 4G plan at the Mobile World Congress 2013 (MWC) in Barcelona that China Mobile will build the world’s largest 4G network covering over 100 cities in China and purchase more than 1 million 4G terminals by this year.
Since GTI announced the GTI Plan & Actions that was initiated to construct over 500,000 TD-LTE base stations in 2014 covering over 2 billion population, global commercialization of TD-LTE has seen a great leap forward. At present, TD-LTE has set up a complete end-to-end industry chain involving widespread participation of global industries and highly mature products. Significant progress has also made in terms of chips. In addition, the scale of TD-LTE commercial networks and user base has been enlarged to a large extent. The capability of LTE global roaming has also been proven.
Mr. Xi Guohua expressed in his opening address, “TD-LTE technology and industry have been mature enough for large-scale development. China Mobile will scale up the construction of trial network to create the largest LTE network in the world. Besides, China Mobile will purchase more than one million units of TD-LTE terminals, with a hope to promote TD-LTE multi-mode multi-band terminal to reach 3G standard as soon as possible and lay a good foundation for its complete commercialization.
It was reported that China Mobile, as a leader and main driving force for the global deployment of TD-LTE, has built pilot TD-LTE networks in 15 cities across China, among which the networks in Hangzhou, Shenzhen and Guangzhou have achieved full coverage in main districts. China Mobile also launched diversified TD-LTE trial commercial services, receiving high praise from consumers. According to this latest released program, China Mobile’s TD-LTE network will cover all the prefecture-level cities and above with over 200,000 base stations covering more than 500 million population, which will be the largest 4G network in the world.
Dynamic development in the field of TD-LTE terminals has also been seen. At the summit, China Mobile and its industry partners, including Huaiwei, ZTE, Samsung, HTC and LG, jointly launched 5 models of TD-LTE multi-mode multi-band smart phones. Remarkably, China Mobile also released 3 eye-catching independently branded MiFi [wireless router that acts as a mobile WiFi hotspot, the abbreviation stands for “My Wi-Fi”] products. With the joint efforts by global chip vendors, the technologies for TD-LTE multi-mode multi-band smart phones are getting mature increasingly. It is estimated that booming development of TD-LTE terminals will be realized in a diversified, large-scale manner in the coming two years. Beside high-end mobile phones, middle and low end mobile phones will enter into the market. This will provide consumers with enriched choices while allowing seamless global roaming.
In pace with further promotion in the fields of commercial network deployment, multi-mode multi-band terminals, global roaming test and commercialization as well as the application of automotive consumer electronics, 2013 will be a key year for the global deployment and large-scale development of TD-LTE.
China Mobile to procure TD-LTE devices from Huawei, ZTE, Samsung [DIGITIMES, March 19, 2013]
China Mobile, the only TD-SCDMA mobile telecom carrier in China, will procure TD-LTE terminal devices from Huawei Technologies, ZTE, and Samsung Electronics, and will offer two own-brand Mi-Fi models, according to industry sources in Taiwan.
China Mobile will procure Huawei Mi-Fi model E5375, ZTE Mi-Fi model MF91S and offer own-brand CM510 and CM512. It will procure Huawei’s Ascend D2-TL smartphone, Samsung’s Galaxy I9308D smartphone and ZTE’s network interface card MF820T. These devices support TD-LTE, FDD-LTE, TD-SCDMA, WCDMA and GSM standards and 10 frequency bands.
CM512 will be produced by Tech-Full (Changshu) Computer, a China-based subsidiary of Quanta Computer.
China Mobile: 4G licensing expected by year-end [China Daily, March 13, 2013]
The chairman of China Mobile, the world’s largest carrier by subscriber base, says the rollout of4G technology in the country is just around corner. Speaking on the sidelines of the on-going two sessions, Xi Guohua, a CPPCC member, also said that the carrier is extending a trial of 4G networks
<embedded video worth to watch>
According to China Mobile, the fourth generation technology offers 10 times bigger bandwidthand 10 times transmission speed than its 3G predecessor. The operator plans to build more than 200,000 4G base stations. The network, when completed, will be the largest of its kind worldwide, and will cover a population of more than 500 million.
Xi Guohua, chairman of China Mobile, said, “We will further expand the current trial on a large scale network. We plan to build 4G base stations in 100 cities, and purchase 1 million terminals.”
Xi also expects the government to issue its fourth generation license before the end of thisyear.
Xi said, “The timing of licensing should be in line with technological development. I think it is appropriate to do that by the end of this year.”
China Mobile started its large-scale 4G trial last year. Industry insiders say if commercialized, the new technology will give a major boost to every part of China’s telecommunications industry.
China to lead mobile payment technology [NFC] [CCTV News via GoUTube123 YouTube channel, Feb 27, 2013]
Commercializing 4G in China needs 1 yr: minister [China Daily, March 15, 2013]
With the third-generation communication network flourishing in China, consumers are eager to know when they will be able to start using the next generation’s network, 4G. On the sidelines of the NPC sessions, the Chinese Minister of Industry and Information Technology, Miao Wei,said that the large-scale commercialization of 4G is currently in a testing phase, but that the network coverage still has a long way to go.
<embedded video worth to watch>
Miao Wei, Minister of China Ministry of Industry & IT, said, “Some factors are blocking the 4G development. First is the network. At the moment, even the 3G network is not fully received in many places across China, as it always drops to 2G due to poor network coverage. We have to speed up the installation of coverage technology so as to realize the smooth switching between 3G and 4G. Licenses will still be given to China Mobile, China Unicom and China Telecom. 4G will first be commercialized in six pilot cities as the network coverage will be available there. But it needs at least one year to commercialize it across the country.”
FRANCE 24 Report : Chinese smartphone brands take bite out of APPLE [france24english YouTube channel, Feb 18, 2013]
Rise of Chinese smartphones [CNNInternational YouTube channel, Feb 26, 2013]
Mike Walsh on Global Innovation [cmispeakers YouTube channel, Feb 5, 2013]
China Smartphone Sector [Asia Pacific/China Equity Research, Credit Suisse, Jan 7, 2013]
…
A specific growth opportunity within China
The Chinese market is a critical market for the local branded Chinese smartphone brands, whitebox and chipset suppliers into that channel. Overall market growth is poised to continue, driven by a significant step-up in subsidies of sub-Rmb1,000 smartphones from Chinese brands and much better low-cost handset availability and quality.
…
The market is also a key market not dominated by the traditional Tier 1 brands, with feature phones traditionally 60% served by whitebox and local brands. The initial ramp of smartphones was dominated by the traditional global Tier 1s at 70% share in 2011. In 2012, however, this market made a marked turn and is now only 36% supplied by Tier 1s, 35% by the Top 4 Chinese brands (Huawei, ZTE, Lenovo and Coolpad), and 29% by the whitebox and Tier 2 Chinese brands. The key shift was substantial lowering of entry barriers due to higher quality chipset reference designs, better availability of components (panels, touch, image sensors, low cost mobile DRAM) and a stable Android platform.
The availability of these smartphones has already prompted a substantial rise in smartphone penetration of device purchases, from 17% of units in 2011 (78 mn smartphones out of 458 mn handset sales) to 38% of units in 2012 (197 mn of 512 mn handset sales). By 2015, we model in our global forecast 421 mn of 570 mn handset sales (74% of device units). The export channel has taken off a bit slower, with penetration in emerging markets increasing YoY from 16% to 23% in 2012 and projected to reach 54% in 2015 (619 mn of 1.13 bn devices), a potential area of further upside.
…
Based on rising affordability and quality continuing to improve, we expect the Chinese smartphone market to grow from 197mn units in 2012 to 421mn in 2015, with 30% from tier one’s, 33% from the top Chinese brands and 37% from other brands.
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We note that the whitebox and other brands can expand as Tier 2 brands (Hisense, BBK, Oppo, Gionee, Tianyu/K-Touch, TCL, Xiaomi) become household names in China and emerging markets and the quality of clone Galaxy and iPhones improve with better touch, quad core and sweeter flavours of Android versions.
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Chinese Smartphones [FinancialTimesVideos YouTube channel, April 5, 2012]
Chinese smartphones going big [CCTV News via the GoUTube123 YouTube channel, July 11, 2012]
Handset Industry 2013 Outlook [Asia Pacific/China Equity Research, Credit Suisse, Jan 7, 2013]
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Increased push towards lower end smartphones. One of the common themes emerging out of all three carriers in China is the increased push toward bringing down smartphone price points. During 2011, the focus had been on launching smartphones priced at around Rmb1,000 with a number of product introductions in that price range. For 2012, the target seems to be to further price point reductions.
China Mobile noted that out of 166 smartphone models it offered during mid-2012, 126 of them are being sold at a price point of around Rmb1,000 (or US$150), with the company already working towards launching smartphones priced at Rmb500.
China Unicom highlighted that after having successfully launched a series of Rmb1,000 smartphones in 2011, it has been working on to introduce smartphones priced at Rmb700 (US$ 100) or below during 2012.
China Telecom had an offering of around 240 models for smartphones in mid-2012, compared to only 100/200 models at the end of 2010/2011. Further, the carrier sold 16mn smartphone devices in 1H12 compared to 17mn in 2011 (up 2x yoy).
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And the Chinese industry and supply chain positions are even better in the tablet ecosystem space as well described in my spinoff blog:
SED Electronics Market (Tablets Market) in Shenzhen walk-through [Charbax YouTube channel, March 17, 2013]
Allwinner A31 9.7″ Retina factory tour at Celeb Tech [Charbax YouTube channel, March 17, 2013]
More information
This getting even more interesting as the quite dramatic by itself introductory information is only one of the reasons (more will follow below) why we can say that China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web … even if such a power of influence is too new for the country to be able to exercise that to a greater degree (yet): China Knocks Off U.S. to Become World’s Top Smart Device Market [Peter Farago on the Flurry blog, Feb 18, 2013]
Nevertheless the collection given below in the ‘Background’ section is showing that potential. Just look at the major headlines in that section:
| China becomes world’s top smartphone producer | China’s e-commerce revenue hits over 1 trillion yuan in 2012: minister | China’s top microblog site boasts 500 mln users |
| China expected to issue 4G licenses this year: minister | Preparing for a 4G network across China | ZTE leads in 4G wireless networks |
| EU telecom demands raise tensions with China | China has till June for solar, telecoms trade deal: EU | China’s mobile phone users reach 1.11 bln |
| China market: Samsung takes up 22.5% of 2012 smartphone sales, says iiMedia Research | Smart phones cover 70 pct of mobile market: report | Android powers a third of all mobile phones shipped in 4Q12, says Canalys |
| Google controls too much of China’s smartphone sector: ministry | Too late for China to develop own mobile operating systems, say Taiwan makers | China handset makers hope to reduce reliance on Android |
| China to modify plan to open up mobile telecom sector | 4M[bps] broadband to cover 70 percent of Chinese users in 2013 | Broadband network expansion in the pipeline |
| China Unicom’s 3G [W-CDMA] subscribers hit 76.46 mln |
For the mobile Internet world, and consequently for the next-gen HTML5 web there is still a huge untapped potential in China, especially for the far the biggest network operator, China Mobile:
China Mobile’s untapped potential in the 3G space is even greater than that of other two operators as from Q4’11 to Q2’12 it was operating at much lower quarterly growth rate of 3G penetration than its bigest domestic rival, China Unicom (see the chart in the middle). In fact during the last 2 years both China Unicom (W-CDMA) and China Telecom (CDMA) had a consistently faster growth of 3G subscribers than China Mobile (TD-SCDMA) as well illustrated by the first chart on the top. In fact the resulting 3G penetration rates by the end of the period (Q4’12) speak for themselves:
– China Mobile (TD-SCDMA): 12.4% (vs. 3.5% in Q4’10)
– China Unicom (W-CDMA): 32% (vs. 8.4% in Q4’10)
– China Telecom (CDMA): 43% (vs. 13.6% in Q4’10)
The major reason for China Mobile’s significant underperformance between 2010 and 2012 is related to all the difficulties related to the stubborn attempt to deliver a completely homegrown solution in the 3G space, 100% of China’s own, end-to-end: TD-SCDMA, SoCs, operating system, services etc.
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TD-SCDMA defined and developed totally independent of the Qualcomm driven CDMA and the Europe driven W-CDMA (including HSPA) which both had broad involvement of all kind of interested parties, especially the final 3G+ winner W-CDMA (including HSPA). This is well expressed by the following technology adoption chart (which includes forecast for the recently launched 4G LTE as well):
From: Report: LTE Connections To Hit 90 Million By Year’s End, 1 Billion By 2017 [TechCrunch, May 17, 2012], i.e. LTE was in its 3d year in 2012 -
China Mobile, as a SOE (State Owned Company, see SOEs and state coexistence in China [‘Experiencing the Cloud’, June 19, 2011]) with only 25.82% of shares not in the state hands as of 31 December 2011, got full support of the state via different financial means and other TD-SCDMA related companies of the state as well. See China Mobile repositioning for TD-LTE with full content and application aggregation services, 3G [HSPA level] is to create momentum for that [‘Experiencing the Cloud’, June 18, 2011]. China Mobile awards 12 companies TD-SCDMA research grants [May 17, 2009] and China Mobile Reveals TD-SCDMA Handset Subsidy Bidding Results [May 17, 2009] there are particulary revealing such efforts in the very beginning.
There was no lack of resources for everything, despite of doing it all alone, nevertheless it took no less than 3 years from the TD-SCDMA launch to have a workable plan which resulted just in the end of the fourth year in the significantly improved results of greater quarterly TD-SCDMA penetration growth of 14.4% in Q4’12 Q vs. 13.2% in Q1’12, 10% in Q2’12 and 10.2% in Q3’12. The plan was TD-SCDMA: US$3B into the network (by the end of 2012) and 6 million phones procured (just in October) [‘Experiencing the Cloud’, Oct 18, 2011] and the Q4’12 result is quite visible in the penetration growth rate jump (copied here as well for convenience):
-
It was clearly identified from the very beginning that SoCs would be needed from several sources. China Mobile was getting that quite early from local chip design houses Spreadtrum and Leadcore as well as from ST-Ericsson, MediaTek and Marvell coming from outside (see Marvell beaten by Chinese chipmakers in sub 1,000 yuan handset procurement tender of China Mobile [‘Experiencing the Cloud’, Nov 15, 2010] and Marvell’s single chip TD-SCDMA solutions beaten (again) by two-chip solutions of Chinese vendors [‘Experiencing the Cloud’, July 11, 2011]). Despite of Marvell’s very strong and early 2008 commitment to capitalise on the TD-SCDMA opportunity only, even strengthening that with Kinoma is now the marvellous software owned by Marvell [‘Experiencing the Cloud’, March 8, 2011] and ASUS, China Mobile and Marvell join hands in the OPhone ecosystem effort for “Blue Ocean” dominance [‘Experiencing the Cloud’, March 8, 2011], it was much more later that there were First real chances for Marvell on the tablet and smartphone fronts [‘Experiencing the Cloud’, Aug 21, 2011].
Then, in fact, rather its long-time local competitor gained the upper hand with World’s lowest cost, US$40-50 Android smartphones — sub-$100 retail — are enabled by Spreadtrum [‘Experiencing the Cloud’, Dec 11, 2011] which was already at the time of China becoming the lead market for mobile Internet in 2012/13 [‘Experiencing the Cloud’, Dec 1, 2011] and The new, high-volume market in China is ready to define the 2012 smartphone war [‘Experiencing the Cloud’, Jan 6, 2012]. In the end not Marvell but Spreadtrum exploited best the tremendous volume opportunities when it was possible to state that Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets [‘Experiencing the Cloud’, July 26 – Nov 9, 2012] as the 2.5G only $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] arrived. And the increase in the number of TD-SCDMA subscribers was still not that much more: 12.3 million in Q4’12 vs. 8.5 million in Q3’12.
So Spreadtrum’s H2’12 success came much more from its extremely low-cost with 2.5G+WiFi (SC6820) capability than from the one which included as well the TD-SCDMA capability. This also means that for our final word about the maturity of the TD-SCDMA technology stack from the network basestations through the TD-SCDMA SoCs we will able to say just in 2013, after similar kind, or even higher, increases in the number of TD-SCDMA subscriber additions would indeed be reported by China Mobile. The findings of the market research panels published just last week are well supporting this reasoning (see the full press release much more below of the excerpts included here):
Wi-Fi is the Data Beast of Burden among Smartphone Panelists [Arbitron press release via PRNewswire, March 4, 2013]
… Even as carriers aggressively promote their newest generation of cellular data networking, the Arbitron smartphone panelists in the United States, United Kingdom, Germany, France, and China, still consume nearly two thirds of their mobile data through public and private Wi-Fi networks. …
… China and France have the lightest users of mobile data … However, their respective share of Wi-Fi networks as a data source stands at a polar opposite. China panelists consume the largest share—70 percent—on Wi-Fi networks. French panelists, consume the smallest share—53 percent—of mobile data on Wi-Fi. …
This means that the Chinese were well satisfied with their less costly 2.5G mobile connections for less data consuming tasks, while for most consuming ones the great majority of them were relying on the Wi-Fi networks available to them in the various hotspots and at home (probably at the workplace as well). Considering that along with the 4G/LTE there is the upcoming 5G WiFi with Wi-Fi CERTIFIED™ ac Miracast™ from Broadcom for streaming content to UHD (4K) TVs as well [‘Experiencing the Cloud’, March 3, 2013] this situation will not change in the future either, definitely not in the much more cost-concious Chinese market (see: China: going either for good quality commodities or the premium brands only [‘Experiencing the Cloud’, Nov 21, 2012]).
-
Wi-Fi is the Data Beast of Burden among Smartphone Panelists [Arbitron press release via PRNewswire, March 4, 2013]
How much mobile data Arbitron smartphone panelists consume varies by country and mobile platform
Wi-Fi® remains the leading data network for on-the-go data consumption in the five leading Arbitron Mobile-based smartphone panels.
Even as carriers aggressively promote their newest generation of cellular data networking, the Arbitron smartphone panelists in the United States, United Kingdom, Germany, France, and China, still consume nearly two thirds of their mobile data through public and private Wi-Fi networks.
Wi-Fi Data Consumption by Arbitron Mobile-based Smartphone Panelists
Sorted by average mobile data consumption per month (cellular +Wi-Fi)
% via
Wi-FiCell + Wi-Fi Data
MB/User/Month% of panelists
> 1,000 MB/monthU.S.
61%
1,496
49%
U.K.
69%
1,181
37%
Germany
63%
861
37%
France
53%
730
24%
China*
70%
719
25%
Source: Arbitron Mobile Index: Executive Summary Reports, 4th quarter 2012
* Operated by iResearch using Arbitron Mobile technology
The United States and United Kingdom have the heaviest users of mobile data in their Arbitron smartphone panels. A substantial share of the data consumption—61 and 69 percent respectively—relies on Wi-Fi networks.
China and France have the lightest users of mobile data in their Arbitron Mobile-based smartphone panels, both in terms of the average monthly data consumed and the share of the panel who consume more the 1,000 MB a month. However, their respective share of Wi-Fi networks as a data source stands at a polar opposite.
China panelists consume the largest share—70 percent—on Wi-Fi networks. French panelists, consume the smallest share—53 percent—of mobile data on Wi-Fi.
In all five of the Arbitron Mobile panels, Apple iOS users are heaviest consumers of mobile data and are the heaviest users of Wi-Fi for their on-the-go data needs.
Data Consumption by Leading Mobile Operating Systems
Sorted by average mobile data consumption per month (cellular +Wi-Fi) on iOS
Apple iOS
Android
MB/User
/Month% via
Wi-FiMB/User
/Month% via
Wi-FiU.S.
2,512
66%
821
57%
U.K.
2,216
80%
740
64%
China*
1,636
81%
347
65%
France
1,527
70%
635
52%
Germany
1,203
71%
566
56%
Source: Arbitron Mobile Index — Executive Summary Reports, 4th quarter 2012
* Operated by iResearch using Arbitron Mobile technology
Apple iOS was the predominant operating system among the heavy data users in these five smartphone panels. Seventy-two percent of iOS users in the U.S. and German panel were in 1,000+ MB/month club; in the U.K., 76 percent, and in China 60 percent. In stark contrast, only 29 percent of the iOS users in the France panel consumed more than 1,000 MB/month in the fourth quarter 2012.
About iResearch Consulting
iResearch Consulting, founded 2002, is the leading consulting and media measurement company in the Internet industry in China. With more than 200 employees, iResearch, headquartered in Shanghai, has been at the forefront of Chinese Internet measurement and operates a currency Internet audience rating service for China.
About Arbitron Mobile
Arbitron Mobile Oy, a wholly owned subsidiary of Arbitron Inc., uses a proprietary, on-device software meter to provide marketers, the media, content providers, app developers, and wireless access suppliers with information on how mobile consumers use apps, surf the web, engage in social media, participate in e-commerce, and employ their devices to communicate.
For more information, visit www.arbitronmobile.com or contact mobile@arbitron.com.About Arbitron
Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving the media—radio, television, cable and out-of-home; the mobile industry as well as advertising agencies and advertisers around the world. For more information, visit www.arbitron.com.Wi-Fi® is a registered trademark of the Wi-Fi Alliance.
Background
China becomes world’s top smartphone producer [Xinhua, Jan 16, 2013]
Chinese shipments of smartphones totaled 224 million units in 2012, making the country the world’s largest smartphone producer, official data showed Wednesday.
In 2012, over 730,000 Chinese apps were launched on the iPhone, iPod Touch and iPad platforms, and the number of apps in China Mobile’s online Mobile Market approached 150,000, according to a statement from the China Academy of Telecommunication Research under the Ministry of Industry and Information Technology.
Beijing-based research firm Analysys International predicted that China’s mobile Internet market will reach 429.6 billion yuan (68.19 billion U.S. dollars) in 2015.
China added 50.9 million Internet users in 2012, bringing the total to 564 million at the end of last year, according to data released Tuesday by the China Internet Network Information Center.
The number of mobile Internet users increased 18.1 percent to 420 million, with mobile phones becoming the primary channel for using the Internet in China.
More information:
– Huawei challenges Apple, Samsung with world’s biggest smartphone [Xinhua, Jan 7, 2013]
– Lenovo seeks top smartphone spot [in China] [China Daily via Xinhuanet, Jan 5, 2013]
– China’s ZTE unveils latest Android smartphone in Indonesia [Xinhua, Dec 19, 2012]
– Smartphones give family ties the busy signal [Xinhua, Oct 18, 2012]
– Smartphones in use top 1 bln worldwide: report [Xinhua, Oct 17, 2012]
The number of smartphones in use in the world has risen to over 1 billion, 16 years after they were first put into market, report from Strategy Analytics showed on Wednesday.
According to the third quarter figures released by the research firm, the number of smartphones in use increased by around 330 million from the third quarter of 2011 and by 79 million from the second quarter of this year.
Executive Director at Strategics Analytics Neil Mawston said one in seven people in the world now has a smartphone.
Mawston pointed out that there will be more smartphone penetration in the future because of the “huge scope for future growth, particularly in emerging markets such as China, India and Africa.”
It is calculated that although 16 years were needed for the first billion smartphones to come into use, it will need just three years for that number to double to 2 billion.
China’s e-commerce revenue hits over 1 trillion yuan in 2012: minister [Xinhua, March 8, 2013]
China’s booming online commerce industry is expected to reap more than 1.1 trillion yuan (about 175 billion U.S. dollars) in revenue in 2012, Minister of Commerce Chen Deming said on Friday.
“The total revenue of online commerce is estimated to be around 1.1 trillion yuan (about 175 billion U.S. dollars) to 1.2 trillion in 2012,” said Chen, noting that the exact figure was not available.
China’s online commerce has experienced rapid growth in recent years, with its total revenue expanding from 25.8 billion yuan in 2006 to 780 billion in 2011, the commerce minister told a press conference held on the sidelines of the ongoing national legislature.
“Online shopping is changing people’s way of life and consumption, taking advantage of the huge potential of China’s industrialization and urbanization,” Chen said.
The commerce minister said the growth dwarfed that of many western countries, attributing to the fact that China’s commerce industry was not as developed in the first place, and online shopping could serve to reduce the cost of logistics by a huge margin.
More information:
– Chinese booming e-commerce nibbles traditional retailers [Xinhuanet, Feb 18, 2013] with internal headlines: online business booms + traditional retail industry threatened
– Conference updated on China’s regulation of e-commerce [Xinhua, Nov 27, 2012]
– Securing China’s e-commerce growth [Jeff Liao, country manager of Visa China on Xinhuanet, Nov 20, 2012]
Between June 2011 and 2012, China’s Internet population reached 538 million, of which some 194 million had shopped online. Online retail sales in China have soared in recent years and are expected to hit 360 billion U.S. dollars by 2015 – up from about 121 billion dollars in 2011 – according to The Boston Consulting Group.
Impressive as the numbers are, there’s another set of statistics that’s even more striking: Nearly one-third of the online shoppers in China fell prey to fraudulent websites during that period, costing them 4.7 billion dollars, according to the China Electronic Commerce Association.
<quite worth to read after that>
China’s top microblog site boasts 500 mln users [Xinhua, Feb 20, 2013]
Sina Weibo, the Chinese equivalent of Twitter, had attracted over 500 million users by the end of 2012, a year-on-year increase of 74 percent, Sina Corp. announced on Wednesday.
Sina Weibo’s active daily users have exceeded 46.2 million, the company said.
The site’s revenues totaled 66 million U.S. dollars in 2012, of which 23 percent came from surging income from value-added services.
The other 77 percent came from advertising, the revenues of which exceeded 50 million U.S. dollars.
The company plans to further improve its user experience and expand its services while veering its focus to mobile Internet, said Cao Guowei, CEO and president of Sina.
Some 75 percent of Sina Weibo’s active users log in using mobile devices.
Sina also issued financial reports for the last quarter and full fiscal year of 2012 on Wednesday, showing that its net revenues hit 529.3 million U.S. dollars with a year-on-year increase of 10 percent.
Web China: Xi Jinping fan microblog triggers curiosity [Xinhua, Feb 6, 2013]
… a personal microblog on Sina Weibo, the Chinese equivalent of Twitter, which has released exclusive photos and other news regarding China’s top leader Xi Jinping, has raised eyebrows with its candid coverage.
…
Netizens have become increasingly curious about the blog, titled “Xuexifensituan” (“Learning From Xi Fan Club”), which covers the latest moves made by Xi, general secretary of the Communist Party of China (CPC) Central Committee, during his inspection tours.
Entries on the blog are often written in the style of a tabloid, with brief phrases (“he’s returned to the hotel”) describing Xi’s whereabouts. However, the posts are exclusive and always come ahead of reports from official media.
Sometimes there are rare first-hand pictures — distant shots of Xi dozing in a van or photos taken by a shaky camera while Xi walks through a crowd of people.
The microblogger refers to Xi as “Xi Dada,” a term that translates as “Uncle Xi” in some parts of China. “Pingping,” a dual-syllable nickname often used by intimate friends or relatives, is also used to describe China’s top leader.
The blog has attracted nearly 500,000 followers since going online in November 2012. Although the information contained in the blog has interested the public, netizens are also curious about the real identity of the blog’s owner.
The blog does not feature a “V” emblem, a mark which indicates that the blog owner’s identity has been verified by Sina Weibo. The only clues are profile details stating that the blog’s owner is a female from northwest China’s Shaanxi province.
The mysterious blog is suspected to be maintained by someone very close to Xi, as the information it contains is supposed to be unavailable to the public and some of its photos were shot from vantages close to Xi.
…
The blog’s owner has denied claims that he or she is close to Xi. “I am just an ordinary office worker, not a CPC member, nor an official,” an entry on the blog said.
China expected to issue 4G licenses this year: minister [Xinhua, March 6, 2013]
China is expected to start licensing telecom operators to offer services on its fourth-generation (4G) mobile phone network within 2013, a senior official has said.
“China has made breakthroughs in R&D of 4G technologies, but is still facing restrictions in commercial use,” Miao Wei, minister of industry of information technology, said on the sidelines of the ongoing annual session of the country’s national legislature.
China needs to speed up base station construction and provide more terminal products, which require greater financial and technological input, he said on Tuesday.
“We will promulgate supporting policies at an appropriate time to guide the construction and development of the 4G network,” Miao added.
In early February, two cities in east China’s Zhejiang Province launched a 4G mobile phone network for commercial use on a trial basis, marking a new age of high-speed mobile Internet in the country.
With a 500-yuan (80 U.S. dollars) deposit, subscribers to China Mobile in Hangzhou, capital of Zhejiang, and Wenzhou, can access the service.
China Mobile, China’s largest mobile operator, employs TD-LTE technology, or Time Division Long Term Evolution, one of two international standards, for the 4G network. Its maximum Internet speed is up to 10 times faster than 3G.
4G user should be able to download a 10-megabyte piece of software in two seconds, and a two-gigabyte HD movie in just several minutes.
With the advancement of 4G technology, 4G wireless cards and 4G mobile phones are expected to be ready for commercial use this year.
China Mobile began building a trial 4G network in several Chinese cities, including Hangzhou, in 2011. The city is currently home to over 2,400 4G base stations, covering an area of around 500 square km.
The minister also reiterated that China will further encourage private investment in the telecom industry.
More information:
– China Mobile expands 4G trials to Zhejiang [China Daily via Xinhuanet, Feb 6, 2013]
– East China cities launch commercial 4G network [Xinhua, Feb 4, 2013]
– Preparing for a 4G network across China [China Daily via Xinhuanet, Nov 19, 2012]
… The ministry officially defined the TD-LTE spectrum – 2,500-2,690 MHz – in China in October, paving the way for future TD-LTE network commercial use.
Xi Guohua, chairman of China Mobile, said in June that China Mobile plans to have a total of more than 200,000 TD-LTE base stations through new builds and upgrades by 2013.
Rumors have circulated in Chinese media that China Telecom, the nation’s smallest mobile carrier, will probably adopt TD-LTE technology when it starts to deploy its 4G network. If true, it would be a great boost for the TD-LTE industry both at home and abroad.
– ZTE leads in 4G wireless networks [China Daily via Xinhuanet, July 22, 2012]
ZTE Corp revealed on Friday that it has gained an upper hand over rivals in the construction of fourth generation TD-LTE wireless networks globally, after it grabbed more than 70 percent of the world’s contracts of this kind by May.
…
“We had absolute advantages … since the number of ZTE’s TD-LTE projects accounted for more than 70 percent of the world’s total,” said [ZTE Vice-President] Liu [Peng].
…
“We had absolute advantages … since the number of ZTE’s TD-LTE projects accounted for more than 70 percent of the world’s total,” said Liu.
ZTE announced on Thursday that it had been selected as one of two telecom equipment suppliers by China Mobile Hong Kong Ltd, a subsidiary of the world’s largest mobile operator China Mobile Ltd, to build a seamless converged LTE TDD and LTE FDD network in Hong Kong. The other selected supplier was Sweden-based Telefon AB LM Ericsson.
…
It is also the first commercial TD-LTE network set up and operated by China Mobile, and because of that, it will play a critical role in China Mobile’s overall plan to promote TD-LTE technology both at home and abroad, analysts said.
Chen Jinqiao, deputy chief engineer of the China Academy of Telecommunication Research, said: “It is a real, tangible commercial TD-LTE network, and China Mobile will learn operating experience from it and may do a better job in the commercial use of TD-LTE technology in the Chinese mainland.”
Implications of ZTE’s $20 Billion Credit Line [TBRIChannel YouTube channel, Feb 21, 2013]
EU telecom demands raise tensions with China [CNTV.cn via Xinhuanet, Feb 3, 2013]
According to a report in the Financial Times, Europe’s top trade official has urged China to grant it a bigger share of the Chinese market in telecoms network equipment.
The EU trade commissioner, Karel De Gucht, is reported to have requested a 30 percent share of China’s telecoms market to EU suppliers in return for dropping a highly contentious EU investigation into alleged subsidies to Chinese companies.
It’s also claimed De Gucht is insisting that Chinese telecom suppliers Huawei Technologies and ZTE Corp raise the price of their exports by 29%. The case centres on Brussels’ contention that Beijing has awarded illegal export subsidies to the two companies in order to fuel their growth in foreign markets.
A delegation from China’s Ministry of Commerce met with top EU trade officials on Friday to seek a way to settle the issue without sparking a trade war.
The EU is currently carrying out its biggest ever anti-dumping investigation into Chinese solar panel exports. It’s expected to make a formal decision on whether to impose temporary duties by the end of May.
China has till June for solar, telecoms trade deal: EU [Reuters, Feb 27, 2013]
China has until June 7 to negotiate a deal with the European Union on state subsidies for solar panels and mobile telephone networks or face possible punitive measures, the EU’s trade chief said on Wednesday.
European Trade Commissioner Karel De Gucht told a Reuters Summit on the future of the euro zone the Chinese had told Brussels they wanted to negotiate an amicable solution to EU concerns over alleged trade distortions in the two cases.
…
“It is the Chinese who have requested that we would have negotiations on a possible amicable solution. We have already have contacts, we have already sent people to Beijing, and the Chinese already came to Brussels,” he said.
The hi-tech telecoms case is less advanced but potentially far bigger in political and economic impact.
The EU is collecting evidence to prepare a possible case against Chinese network equipment makers Huawei (002502.SZ) and ZTE (000063.SZ) over state subsidies, but has not received a formal complaint from European industry.
De Gucht said the Commission had the power to initiate proceedings on its own authority even if no European competitor came forward.
A complaint is the normal starting point for an investigation, but European manufacturers Ericsson (ERICb.ST), Alcatel-Lucent (ALUA.PA) and Nokia Siemens Networks NOKI.UL have remained silent because trade experts say they fear retaliation against their business in China.
…
The case over mobile network equipment makers would dwarf that in size. The European telecoms industry accounts for an estimated 4.8 percent of the EU’s gross domestic product.
Such self-initiated cases can be awkward for the Commission, as it appears to be both complainant and judge and still needs evidence from EU producers and approval from EU member states, which ultimately vote on Brussels’ proposals to impose duties.
De Gucht said that talks over alleged state subsidies by China to the telecom firms were running in parallel with negotiations to avoid duties on Chinese solar panels.
There were also “serious security concerns” involving mobile telecom networks, which had become the backbone of modern European society, he said, noting that the United States and Australiahad effectively shut Huawei out of their markets.
Diplomats said EU countries are divided in their approach to Huawei, with Britain and the Netherlands embracing the Chinese firm as a major job provider while others are more wary of Chinese inroads into such a sensitive sector.
A leaked internal EU report last year said that action against Chinese telecom equipment makers was needed because their increasing dominance of mobile networks makes them a threat to security.
China’s mobile phone users reach 1.11 bln [Xinhua, Jan 25, 2013]
The number of Chinese mobile phone users reached 1.11 billion as of the end of 2012, according to official data unveiled Thursday.
The Ministry of Industry and Information Technology (MIIT) said in a statement that mobile phone users represent 80 percent of all phones users in the country.
The number of mobile phones owned by every 100 people reached 82.6 by the end of 2012, up by nine from a year earlier, according to the statement.
Last year, the country recorded 125.9 million new mobile phone users, among whom 104.38 million were 3G mobile phone users, bringing the total number of 3G users to 232.8 million, the MIIT said.
The ministry said the number of Internet users rose by 51 million to 564 million people, among whom 74.5 percent, or 420 million people, surf the Internet with their mobile phones.
The Internet penetration rate reached 42.1 percent by the end of last year, up 3.8 percentage points from a year earlier.
China market: Samsung takes up 22.5% of 2012 smartphone sales, says iiMedia Research [DIGITIMES, March 7, 2013]
There were 169 million smartphones sold in the China market in 2012, hiking 130.7% from 2011, and Samsung Electronics was the largest vendor with a market share of 22.5%, according to China-based consulting company iiMedia Research.
Lenovo was the second largest vendor accounting for 10.7% of the smartphone sales volume, followed Huawei Device, Coolpad and ZTE with 9.9%, 9.5%, 8.9% respectively, Apple with 7.7%, GiONEE with 6.4%, HTC with 4.7%, Motorola Mobility with 3.5% and Nokia with 3.1%.
In terms of operating system, Android occupied 68.6% of the smartphone sales volume, followed by iOS with 12.8%, Symbian with 12.4% and Windows Phone with 3.8%.
There were 380 million smartphone users in the China market at the end of 2012, increasing 72.7% from a year ago.
iiMedia: Percentage breakdown of smartphones
sold in China by price, 2012
Price range (CNY)
Market share
Below 1,000 (US$158)
34.9%
1,000 to below 2,000
42.2%
2,000 to below 3,000
14.6%
3,000 to below 4,000
5.2%
4,000 and above
3.1%
Smart phones cover 70 pct of mobile market: report [Xinhua, March 6, 2013]
Seventy-million smart phones were shipped in China in the last quarter of 2012, covering 73.2 percent of the country’s mobile market share, newly released statistics showed Wednesday.
The volume of smart phone shipments saw a 112.1 percent year-on-year increase, according to statistics by the International Data Corporation (IDC), a global market research, analysis and advisory company.
Figures showed that shipments of mobile phones in the last three months of 2012 stood at 96 million, a 1.6 percent year-on-year rise.
Total shipments of mobile phones in China last year reached 362 million, among which smart phones recorded 213 million, a year-on-year increase of 135 percent, said IDC.
The corporation said that strong demand, subsidies from phone operators and new smart phone arrivals were the driving force behind the boom.
“Producers’ heavy investments in smart phones also contributed to the success,” said Wang Jiping, an analyst with IDC’s China subsidiary.
The company forecasts that the country’s smart phone industry will witness steady growth in the next few years.
It said smart phone shipments are expected to reach 460 million in 2017, which will take up 90.1 percent of the country’s total mobile phone sales.
More information:
– China smartphone shipments to rise to 460 million by 2017-IDC [Reuters, March 7, 2013]
– Smartphones Expected to Outship Feature Phones for First Time in 2013, According to IDC [IDC press release, March 4, 2013]
… Smartphone shipments to China, Brazil, and India will comprise a growing percentage of the device type’s volume in each forecast year. Smartphone demand is burgeoning in these large, populous nations as their respective economies have grown; this has made for a larger middle class that is prepared to buy smartphones. China, which supplanted the U.S. last year as the global leader in smartphone shipments, is at the forefront of this shift.
“While we don’t expect China’s smartphone growth to maintain the pace of a runaway train as it has over the last two years, there continue to be big drivers to keep the market growing as it leads the way to ever-lower smartphone prices and the country’s transition to 4G networks is only just beginning,” said Melissa Chau, Senior Research Manager, IDC Asia/Pacific. “Even as China starts to mature, there remains enormous untapped potential in other emerging markets like India, where we expect less than half of all phones shipped there to be smartphones by 2017, and yet it will weigh in as the world’s third largest market.”
Brazil is another market where smartphone growth will remain high over the course of the forecast as its economic fortunes improve. “Brazilians have yet to turn in their feature phones for smartphones on a wholesale basis,” said Bruno Freitas, Consumer Devices Research Manager, IDC Brazil. “The smartphone tide is turning in Brazil though, as wireless service providers and the government have laid the groundwork for a strong smartphone foundation that mobile phone manufacturers can build upon.” …
Android powers a third of all mobile phones shipped in 4Q12, says Canalys [DIGITIMES, Feb 8, 2013]
Canalys: Worldwide smartphone shipments and share by vendor, 4Q12 (m units)
Vendor
4Q12 shipments
Market share
Samsung
62.9
29%
Apple
47.8
22.1%
Huawei
11.5
5.3%
ZTE
10.1
4.7%
Lenovo
9.5
4.4%
Others
74.7
34.5%
Total
216.5
100%
Source: Canalys, compiled by Digitimes, February 2013
Canalys: Worldwide smartphone shipments and share by OS vendor, 4Q12 (m units)
OS vendor
4Q12 shipments
Market share
OHA (Android)
149.8
69.2
Apple
47.8
22.1%
BlackBerry
7.6
3.5%
Microsoft
5.1
2.4%
Nokia
3.2
1.5%
Others
3.0
1.4%
Total
216.5
100%
Source: Canalys, compiled by Digitimes, February 2013
More information:
– Mobile device market to reach 2.6 billion units by 2016, says Canalys [DIGITIMES, Feb 26, 2013]
– Entry-level smartphone sales expected to stay strong in China throughout 2013 [DIGITIMES, Jan 2, 2013]
Google controls too much of China’s smartphone sector: ministry [March 5, 2013]
Google Inc has too much control over China’s smartphone industry via its Android mobile operating system and has discriminated against some local firms, the technology ministry said in a white paper.
The white paper, authored by the research arm of China’s Ministry of Industry and Information Technology, also said China had the ability to create its own mobile operating system. (here)
“Our country’s mobile operating system research and development is too dependent on Android,” the paper, posted online on Friday but carried by local media on Tuesday, said.
“While the Android system is open source, the core technology and technology roadmap is strictly controlled by Google.”
The paper said Google had discriminated against some Chinese companies developing their operating systems by delaying the sharing of codes. Google had also used commercial agreements to restrain the business development of mobile devices of these companies, it added.
A Google spokesman in China declined to comment.
The ministry did not recommend any specific policies, regulatory actions or other measures.
Analysts said the white paper, which lauded Chinese companies such as Baidu Inc, Alibaba Group and Huawei Technologies for creating their own systems, could be a signal to the industry that regulations against Android are on the horizon.
“In China, regulators regulate regularly especially where they can position the regulations as helping out domestic companies,” Duncan Clark, chairman of technology consultancy BDA, said in an email to Reuters.
“Ironically, Android’s success has underpinned a lot of the growth in China smartphone vendors in recent years,” Clark said. Home-grown companies had failed previously in China’s market for simple handsets, he said, due to weakness in software and operating systems.
South Korea’s Samsung Electronics Co Ltd, the world’s largest smartphone maker, uses the Android system, as do Chinese manufacturers Huawei and ZTE Corp.
Last September, the launch of a smartphone between Acer Inc and a unit of Alibaba Group was cancelled due to what Alibaba said was pressure from Google on the Taiwanese group. Representatives for Acer and Google declined to comment on the matter at that time.
Technology research firm IDC has estimated that China surpassed the United States as the world’s biggest smartphone market in 2012, accounting for 26.5 percent of all smartphones shipped.
In 2010, Google conducted a partial pullout from China on the basis of censorship and after it suffered a serious hacking episode that the company said emanated from China. Since then, Google’s search market share in China has fallen from almost 30 percent to 15 percent at the end of 2012. Android has been Google’s bright spot in China.
In the third quarter last year, Android accounted for 90 percent of all mobile operating systems in China while Apple Inc’s iOS system was at just 4.2 percent.
Too late for China to develop own mobile operating systems, say Taiwan makers [DIGITIMES, March 7, 2013]
While China Academy of Telecommunication Research under the Ministry of Industry and Information Technology in its white paper calls for China’s development of own operating systems for use in smartphones, tablets and other mobile terminal devices to lessen existing heavy reliance on Google Android, sources with Taiwan-based handset supply chain makers pointed out that it is too late for such development because of difficulties to develop related technologies and establishing necessary ecosystem as well as lack of relevant patents.
It will take at least three to five years for a new mobile operating system to become competitive in market, and if China-based companies – such as device vendor Lenovo, Huawei Device, ZTE and Coolpad, and Internet service providers Alibaba and Baidu – only begin to develop own mobile operating systems now, it is already too late to catch up with competitors, the sources indicated.
Instead of developing own mobile operating systems, China-based companies can ask Google to loosen its regulations on using Android, for example, to allow development of various operating system versions based on the Android architecture, the sources said. In addition, the China government can encourage China-based companies to provide rich mobile services and develop various mobile applications based on not only Android but also iOS, Windows Phone and other operating systems, the sources indicated.
China handset makers hope to reduce reliance on Android [DIGITIMES, March 6, 2013]
The China Academy of Telecommunication Research for the Ministry of Industry and Information Technology has published a white paper stating that China’s handset industry has been relying heavily on the Android platform. In fact, China’s handset industry has been hoping to reduce its reliance on Google’s Android platform by switching to other platforms such as Windows Phone, Tizen, and Firefox OS. Industry sources believe the percentage of products using the Android platform is likely to fall continuously in China.
Android is an open platform, and with price advantages, many handset makers in China are using the Android platform. Currently, Android has more than 80% of share in the China smartphone platform market. The heavy reliance has been causing concerns in China.
Some China-based handset brands have been seeking cooperation with other platform developers. ZTE and TCL are the first two firms to cooperate with Mozilla and plan to introduce new products with Firefox OS platform in mid-2013. The new products are aimed at emerging markets such as Central and South America and Eastern Europe. Huawei is cooperating with Mozilla and Tizen.
However, handset makers believe China-based firms are unlikely to massively adopt other platforms in the short run as Android continues to be the most attractive and mature open platform on the market.
Handset firms noted that most China-based handset brands face the problem of relying heavily on the Android platform, which is the same problem for Samsung and HTC, but Samsung has been putting effort into diversifying by acquiring MeeGo, integrating Bada and developing Tizen while other handset makers simply do not have the resources and time to do the same.
China to modify plan to open up mobile telecom sector [Xinhua, Jan 23, 2013]
The government is considering adjusting a plan that will allow privately-owned companies to enter the mobile telecommunications sector, a government official said on Wednesday.
Zhang Feng, director of the telecommunications development department of the Ministry of Industry and Information Technology (MIIT), said at a news briefing that the ministry is reviewing opinions collected from the public and will improve the plan based on its review.
In early January, the MIIT created a pilot plan that will allow Chinese-funded private companies to buy basic mobile telecom services from the country’s major operators, add their own services and then sell the services to customers through their own brands.
Private companies will not have to build mobile telecoms infrastructure, but only set up a customer service system and other supporting networks if necessary, the plan said.
The ministry said the pilot program aims to allow private capital to further enter the telecom industry and give full play to the flexibility and creativity of private firms, as well as promote market competition and improve mobile telecom services.
The plan was published online on Jan. 7, with public opinions to be solicited until Feb. 6.
At present, China’s mobile telecom sector is dominated by the state-owned companies China Mobile, China Unicom and China Telecom.
More information:
– News Analysis: China to open up mobile telecom sector [Xinhua, Jan 15, 2013]
… Shi Wei, an expert with the Institute of Economic System and Management under China’s top economic planner, said that private firms participating in the program must strive to make innovations in their services, or else they will become just agents for major carriers.
“Private companies should develop more innovative applications and provide differentiated services to win their share of the market,” Shi said. …
… The pilot program is designed to last for two years.
Private enterprises can send applications to telecom authorities within the first year of the program.
China has attached great significance to encouraging private investment, as it plays an important role in creating jobs, boosting domestic consumption and maintaining sustainable economic growth.
In 2010, China’s State Council, or the Cabinet, announced policies to open a range of government-run industries to private investment, including water projects, power generation, mining, as well as the telecommunication sector.
To help implement those policies, the MIIT made a detailed plan for guiding private capital to enter the telecom industry in June 2012.
So there are wider reasons for such a change of attitude as well:
– 2012 profits slow at China’s central SOEs [XinHua, Feb 8, 2013]
– Private, collective businesses’ trade outpaces SOEs [Xinhua, Jan 3, 2013]
Private and collectively-owned businesses saw their foreign trade expand faster than that of state-owned enterprises (SOEs) and foreign-funded companies in the January and November period, according to the national economic planner.
In the first 11 months, foreign trade at private and collectively-owned companies totaled 1.09 trillion U.S. dollars, up 18.1 percent year on year, according to data released by the National Development and Reform Commission on Thursday.
The total figure included 687.32 billion U.s. dollars in exports, up19.4 percent, and 402.75 billion U.S. dollars in imports, up 15.9 percent, the data showed.
In contrast, foreign-funded firms saw foreign trade rise 1.9 percent year on year to reach 1.72 trillion U.S. dollars between January and November.
Meanwhile, trade for SOEs dropped 1.1 percent from a year earlier to 685.9 billion U.S. dollars in the first 11 months, as exports declined 4 percent in the period while imports posted a slight increase of 0.9 percent, the data showed.
The General Administration of Customs previously released disappointing trade data for November due to slackened external demand. China’s exports grew just 2.9 percent year on year in November, while the growth of imports remained unchanged from a year earlier.
4M[bps] broadband to cover 70 percent of Chinese users in 2013 [Xinhua, Feb 26, 2013]
More than 70 percent of China’s Internet users will enjoy access to broadband Internet services in 2013, the Ministry of Industry and Information Technology (MIIT) said Tuesday.
The percentage of users with access to 4M[bps] or faster services climbed 23 percentage points to 63 percent in 2012 from the previous year, said Miao Wei, minister of industry and information technology.
Fiber-to-the-home (FTTH) services will cover 35 million households this year, as FTTH households grew by 49 million to reach 94 million in 2012, Miao said.
The government also hopes to add more than 25 million new fixed-line broadband subscriber households, as the number of fixed-line broadband subscriber households rose by 25.1 million to 175 million in 2012, Miao said.
Other goals expanding the number of public wireless hot spots by 1.3 million, Miao said.
FTTH refers to a form of fiber-optic communication delivery that reaches one living or working space. The fiber extends from a central office to the subscriber’s living or working space.
Broadband network expansion in the pipeline [China Daily via Xinhuanet, March 31, 2013]
China is expected to have 20 million new broadband Internet subscribers this year and a total of 250 million subscribers by the end of 2015, the country’s top industry regulator said on Friday.
“The nation needs to improve broadband speed. Our aim is to install fiber-to-the-home (FTTH) broadband connections for 35 million families this year,” said Industry and Information Technology Minister Miao Wei.
The announcement came after an investigation of two domestic telecom giants over alleged monopolistic practices in November.
[see: China Telecom, China Unicom pledge to mend errors after anti-monopoly probe [Xinhua, Dec 2, 2011]]
The broadband development plan is a part of China’s 12th Five-Year Plan (2011-15), which is to increase the country’s average broadband speed to 20 megabytes per second by the end of 2015.
China had 156 million Internet broadband users in 2011, 83 percent of the users’ Internet speed exceeding 2MB/s. About 45 million families were covered by the FTTH network, and the Internet surfing fee decreased by 30 percent compared with 2005.
However, Wu Hequan, vice-president of the Chinese Academy of Engineering, said in an earlier report that the average download speed of China’s broadband is 1.15MB/s, half of the global speed.
China’s three telecom carriers will implement the plan and invest more in the industry.
As the major provider of China’s Internet broadband infrastructure, China Telecom will invest 40 billion yuan ($6.3 billion) to build the FTTH network this year, and attract 25 million new FTTH users, bringing the total number to 55 million, said Wang Xiaochu, chairman of China Telecom.
Xi Guohua, China Mobile‘s new chairman, said the company has built a broadband network for 4,100 villages and that number is expected to reach more than 8,000 by the end of this year. He also said the company will add 1.4 million WLAN wireless hotspots this year, and 1.2 million new Internet users.
China Unicom has more than 44 million broadband users, 90 percent of them connected at more than 2MB/s. The company has injected 60 billion yuan into broadband development in the past three years, said its Chairman Chang Xiaobing.
Sixteen Internet giants, including Baidu and Sina, attended the meeting and promised to improve their services online.
China Unicom’s 3G subscribers hit 76.46 mln [Xinhua, Jan 19, 2013]
China Unicom [W-CDMA], the country’s second-largest mobile operator by subscribers, said in a latest report that it added 3.13 million 3G subscribers in December, bringing its total 3G users to 76.46 million.
The carrier’s 2G subscribers totalled 163 million as of the end of December, a decrease of 36,000 from November, according to the report filed with the Shanghai Stock Exchange.
The operator’s Internet users with broadband access amounted to 93.87 million as of last year, the statement said.
Statistics from the Ministry of Industry and Information Technology (MIIT) showed China’s 3G users had reached 220 million by November.
The MIIT said China will add an estimated 100 million new 3G subscribers this year.
Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price
OR Samsung is leapfrogging Apple while the Chinese local brands are coming close to Samsung but at less than 40% price. Meanwhile the superphone segment of the market becomes saturated.
This is even more important as coinciding with:
– Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the cloud’, July 20-29, 2013]
– GiONEE (金立), the emerging global competitor on the smartphone market [‘Experiencing the cloud’, July 22, 2013]
– Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation [‘Experiencing the cloud’, Aug 1, 2013]
– UPDATE Aug’13: Xiaomi $130 Hongmi superphone END MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [‘Experiencing the Cloud’, Dec 12, 2012; Aug 1, 2013]
Now the following things are coming in addition to that:
- [Samsung is] Leapfrogging Apple while regaining only some high-end SoC supply to it
- Chinese local brands are coming close to Samsung but at less than 40% price
- The superphone segment of the market becomes saturated
- Previous (pre-saturation) milestones according to Samsung
This will be the organization of the ‘DETAILS for the assesment of upcoming changes’ part of this post.
To appreciate the real significance of the sudden change characterized above let’s first get acquainted with the current state of the lead market as described in China Report: Device and App Trends in the #1 Mobile Market [by Mary Ellen Gordon on Flurry Blog, July 23, 2013]
Smartphones and tablets have gone from being the latest gadgets for relatively affluent people in relatively affluent countries to ubiquitous devices in mainstream use in many countries around the world. In fact, as we reported in February of this year China surpassed the US to become the country with the largest installed base of connected devices as measured by Flurry Analytics. As we also reported, a second wave of countries around the world is now experiencing the type of growth mobile pioneer countries experienced previously. For example, the mobile markets in the BRIC countries are now all growing faster than the mobile markets in the U.S., U.K., and South Korea.
Knowing that the landscape is constantly shifting, we are beginning a series of blog posts reporting on the use of smartphones, tablets, and apps in particular countries and geographic regions around the world. Given China’s world-leading installed base and considering the China Joy conference (China’s largest digital conference) is this week we thought we would begin there.
In June of this year Flurry Analytics measured 261,333,271 active smartphones and tablets in China. That represented a whopping 24% of the entire worldwide connected device installed base measured by Flurry. The chart below documents the growth in the installed base. The left axis and blue line show China’s growth over the years. The right axis and red line show growth in the world as a whole (including China) a basis of comparison. As can be seen from the gap between the two lines growing through 2010 and much of 2011, growth in smartphones and tablets in China lagged the world as a whole through that period. But starting toward the end of 2011, the installed base in China began a period of exponential growth. During this period it surpassed the growth rate for the world as a whole, as shown by the blue line catching the red line in the graph. We expect China to maintain its leadership (in terms of active installed base) for the foreseeable future because device penetration rate is still relatively low and much opportunity remains, as we reported in a previous post.
Xiaomi Is A Local Manufacturer To Watch
Examining a random sample of 18,310 of the devices in our system in China that run iOS or Android apps revealed that Apple and Samsung are the top two device manufacturers, as they are most everywhere. China’s own Xiaomi was a strong third, with a 6% share of the market, ahead of HTC, Lenovo and a multitude of others. As we noted in a previous post, Xiaomi has been successful in accumulating a large number of active users for each device model it releases. Worldwide, only Apple, Amazon, and Samsung have more active users for each device model released.
It will be interesting to see if Xiaomi can continue to gain share in China – possibly by mopping up share from smaller manufacturers of Android devices – and also if they can begin making gains in other markets outside of China to become more of a global player. With rumors of a Xiaomi tablet circulating, we will also be watching to see if their entry into the tablet market will increase the use of Android tablets in China. Currently 21% of the iOS devices in our randomly drawn sample were tablets compared to only 4% of the Android devices.
Chinese Users Over Index in Reading, Utility, Productivity
In looking at how Chinese people use their connected devices we see similarities and differences compared to the rest of the world. As a general rule worldwide, games dominate time spent in apps measured by Flurry Analytics, and China is no exception. On average, Chinese owners of iOS devices spent 47% of their app in games. The percentage of app time devoted to games was even greater for Android at 56%.
Smartphones and tablets are not just about fun and games in China. Compared to iOS device owners elsewhere, the average time Chinese owners spend using Books, Newsstand, Utility, and Productivity apps is greater than the rest of the world (1.8x, 1.7x, 2.3x, and 2.1x respectively). On average Chinese owners of Android devices spend more than seven times as much time in Finance apps (7.4x) than Android owners elsewhere spend in Finance apps, but they also spend more time in Entertainment apps (1.7x).
Will China’s Exponential Growth Change The Device And App Markets?
It will be interesting to see how China now having leadership in terms of its installed base will impact the device and app markets elsewhere. Given Xiaomi’s success at building a large number of users for each model it releases, it might try to add further scale by expanding internationally – particularly to the other rapidly-growing BRIC markets where brand preferences are not already well-entrenched.
Within China itself, Chinese competitors may have an even greater advantage in the app market since cultural influences and differences are likely to be even more important in the app market than in the device market. There are already strong Chinese app companies such as Baidu and Tencent and clusters of app developers emerging in places like Chengdu. At first they are likely to concentrate on apps for the large local market, but that may eventually lead to growing app exports. For example, the fact that Chinese consumers over-index on some more work and educational-oriented apps may encourage Chinese developers to focus on those areas and innovate, and that could lead to creation of apps that end up being adopted elsewhere in the world. We’re looking forward to discovering what app is to China what Angry Birds was to Finland.
And it is also important to understand that as far as the current situation is concerned Samsung’s China magic upstages Apple [Reuters TV, July 25, 2013]
Insight: How Samsung is beating Apple in China [Reuters, July 26, 2013]
Apple Chief Executive Tim Cook believes that “over the arc of time” China is a huge opportunity for his pathbreaking company. But time looks to be on the side of rival Samsung Electronics Co Ltd, which has been around far longer and penetrated much deeper into the world’s most populous country.
Apple Inc this week said its revenue in Greater China, which also includes Hong Kong and Taiwan, slumped 43 percent to $4.65 billion from the previous quarter. That was also 14 percent lower from the year-ago quarter. Sales were weighed down by a sharp drop in revenues from Hong Kong. “It’s not totally clear why that occurred,” Cook said on a conference call with analysts.
Neither is it totally clear what Apple’s strategy is to deal with Samsung – not to mention a host of smaller, nimbler Chinese challengers.
Today, in the war for what both sides acknowledge is the 21st century’s most important market, Samsung is whipping its American rival. The South Korean giant now has a 19 percent share of the $80 billion smartphone market in China, a market expected to surge to $117 billion by 2017, according to International Data Corp (IDC). That’s 10 percentage points ahead of Apple, which has fallen to 5th in terms of China market share.
Cook said Apple planned to double the number of its retail stores over the next two years – it currently has 8 flagship stores in China and 3 in Hong Kong. But, he added, Apple will invest in distribution “very cautiously because we want to do it with great quality.”
Samsung, with a longer history in China, now has three times the number of retail stores as Apple, and has been more aggressive in courting consumers and creating partnerships with phone operators. It also appears to be in better position, over an arc of time, to fend off the growing assault of homegrown competitors such as Lenovo Group Ltd, Huawei Technologies Co Ltd and ZTE Corp, former company executives, analysts and industry sources say.
Apple declined requests for comment for this article.
VARIED MODELS
Samsung’s history and corporate culture could hardly be more different than Apple’s, the iconic Silicon Valley start-up founded by Steve Jobs and Steve Wozniak in 1976. Lee Byung-Chull started Samsung in 1938 as a noodle and sugar maker. It grew over the decades into an industrial powerhouse, or chaebol as Koreans call the family owned conglomerates that dominate the nation’s economy and are run with military-like discipline.
Apple, by contrast, became the epitome of Californian cool, an image the company revels in. That hip image translates in China – its stores are routinely packed – but hasn’t been enough to overcome the more entrenched Samsung.
A stuffy electronics bazaar in the southern Chinese city of Shenzhen illustrates part of the reason why.
Samsung Galaxys and Apple iPhones of different generations sit side by side, glinting under bright display lights as vendors call out to get customers’ attention. With its varied models, Samsung smartphones outnumber iPhones at least four to one.
While Apple releases only one smartphone a year, priced at the premium end of the market, Samsung brings out multiple models annually with different specifications and at different price points in China.
And those models, analysts say, are loaded with features tailored specifically for the local market: apps such POCO.cn, the most popular photo sharing site in China, or the two slots for SIM cards (Apple offers one), which allows service from multiple cell carriers, either at home or abroad.
“The Chinese just love features. They want their phone to have 50 different things that they’re never going to use,” said Michael Clendenin, managing director of technology consultancy RedTech Advisors. “Apple just doesn’t play that game. Unfortunately, if you want to hit the mainstream market in China, and you want a lot of market share percentage points, you have to offer the Swiss army knife of cellphones.”
“SETTING THE PACE”
Analysts believe Samsung’s increasing strength in China is a critical reason behind its rival’s possible intention to introduce globally a new and cheaper iPhone model, as well as one with bigger screens – a staple of Samsung’s offerings.
Said a Samsung executive with experience in China: “We definitely think we’re setting the pace there. They are having to respond to us.”
Most audaciously, Samsung has gone after Apple not simply by offering lower priced smartphones, but by attacking its rival directly in the pricier end of the market. “We put a lot of emphasis on the high end market in China,” co-CEO J.K. Shin told Reuters in an interview.
Samsung launched a China-only luxury smartphone together with China Telecom marketed by actor Jackie Chan that retails for about 12,000 yuan ($2,000). The flip phone, named “heart to the world,” is encased in a slim black and rose gold metal body. The sleek look – called “da qi” (elegantly grand) – is coveted by Chinese when they shop for cars, sofas or phones.
“There are a lot of ‘VVIP’s’ in China, and for them we launched luxury phones promoted by Jackie Chan. This helps target niche customers and build brand equity,” said Lee Young-hee, executive vice president of Samsung’s mobile business.
While Samsung won’t sell millions of these smartphones, the creation of the phone in conjunction with a carrier reinforces Samsung’s willingness to go local – and tap into niche markets.
“The key point is that Samsung consistently adapts to the local market,” said TZ Wong, a Singapore-based technology analyst with IDC.
Apple’s latest mobile operating system offers links to popular Chinese applications like Sina’s microblogging platform Weibo, but the application itself must be downloaded onto the phone. On all of Samsung’s entries, it’s already there.
“People know intellectually that Samsung is from Korea, but when it comes to the messaging there is always a local face,” Wong said.
RETAIL PRESENCE
Samsung opened its first office in China in 1985 in Beijing – an era in which it was all but inconceivable that Apple and Samsung would end up in one of the world’s most intense corporate grudge matches. Like other South Korean chaebols, Samsung was a first mover in China, using the market primarily as a base to produce electronics for the world.
In contrast, Apple’s big push in China came only recently, with the advent of the smartphone age roughly five years ago.
The early entry gave Samsung an undeniable edge, and it adapted fast to a rapidly changing environment. By the mid-1990s, with the economy booming, Samsung made the strategic decision to treat the Chinese market not just as a production base, but to start marketing to China higher-priced electronics, said Nomura researcher Choi Chang-hee, who wrote a history of Samsung’s experience in China.
That shift has meant Samsung’s retail presence in China far outstrips Apple’s. Aside from selling via the distribution outlets of the three major telecom carriers, Samsung also has a strong retail presence through its partners Gome Electrical Appliances and Suning Commerce Group, as well as its own “Experience” stores and small retailers all over the country.
Apple works through the same channels, but its relatively late entry means it has a significantly smaller presence. Samsung, for example, has more than 200 official distributors and resellers in Guangzhou province, while Apple lists 95.
Over the last two decades, Samsung has also taken pains to build relationships with Chinese government officials and -perhaps more critically – the three major telecom carriers.
The notion of the importance of connections – or “guanxi” – in China is occasionally overrated in business. Not, according to Samsung’s Shin, in this case. “It’s our core policy to keep friendly relationships with the operators,” he said. In China, each carrier uses a different technology and that requires Samsung “to tweak our smartphones to their request.”
“It’s not easy,” Shin said, “but we do this to be more operator friendly.”
Contrast that with the ongoing negotiations Apple has had with China Mobile, the largest cellphone operator. For years the two sides have been unable to come to an agreement on revenue sharing, effectively precluding Apple from hundreds of millions of potential customers.
SCRUTINY FROM THE TOP
Samsung’s reach extends higher than just the CEOs of the top state-owned telecom companies. Top executives have met each of the last several Chinese leaders, most recently Xi Jinping, who spent time in April with vice chairman Jay Y. Lee, son of K.H. Lee, Samsung Electronics chairman.
“What surprised me most,” said Lee later, “was that they (Chinese leadership) know very well about Samsung. They even have a group studying us.”
The Chinese government has also made clear it’s well aware of Apple – though not always in a good way. In April, state media bashed Apple for its “arrogance,” protesting among other things that its current 1-year service warranty was insufficient. Apple initially dismissed those criticisms, but Cook later apologized to Chinese consumers.
Samsung’s success in China has its roots, one former executive said, in a previous obsession for the company: its desire not to replicate the mistakes made by Japanese rivals.
“Samsung spent a lot of time benchmarking Sony, Toshiba and Panasonic,” said Mark Newman, who spent six years in Samsung’s global strategy group and is now an industry analyst at Sanford C. Bernstein in Hong Kong.
“One of the things that came out of that is the realization that the insular approach has its drawbacks, and so Samsung has made an effort over the last 10 years to be much more global.”
This strategy of decentralization is plainly evident in China, he said, home now to more Samsung employees than any country outside South Korea.
FIGHTING HIGH AND LOW
Samsung now leads in both low-end and high-end segments in China, according to IDC, and its logic of going after both ends of the market is straightforward. In China, where the average wage is roughly $640 per month, many users looking to upgrade from feature phones to smartphones cannot afford Apple.
By bracketing the market with multiple models, Samsung can breed deep relationships with customers, many of whom, market research shows, trade up to more expensive models as they get older. Playing high and low also positions Samsung to fend off the intensifying competition from Chinese firms such as Lenovo and Huawei and literally hundreds of smaller local players.
“That’s where the next battle for Samsung will be fought,” said Newman. “We’ll have to see if Apple does introduce a new, cheaper model for China – and the world.”
DETAILS for the assesment of upcoming changes
1. Leapfrogging Apple while regaining only some high-end SoC supply to it:
Samsung sells 76 mln smartphones in Q2, boosting market share-report [Reuters, July 26, 2013]
Samsung Electronics Co Ltd sold 76 million smartphones in the second quarter, expanding its market share to 33.1 percent, Strategy Analytics said on Friday.
Overall, the global smartphone market grew 47 percent to a record 229.6 million, the research firm said.
Second-ranked Apple Inc saw its market share shrink to 13.6 percent after selling 31.2 million iPhones, as smaller rivals such as LG Electronics Inc, ZTE Corp and Huawei Technologies Co Ltd seized larger slices.
Strategy Analytics: Samsung Becomes World’s Most Profitable Handset Vendor in Q2 2013 [PRNewswire, July 26, 2013]
According to the latest research from Strategy Analytics, Samsung became the world’s most profitable handset vendor in Q2 2013. Apple slipped into second position, as margins have been hit by lackluster iPhone 5 volumes and tougher competition in China.
Neil Shah, Senior Analyst at Strategy Analytics, said, “We estimate Samsung’s operating profit for its handset division stood at US$5.2 billion [61% of the overall, see below] in the second quarter of 2013. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of US$4.6 billion. With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry’s largest and most profitable vendor.”
Neil Mawston, Executive Director at Strategy Analytics, added, “Apple’s reign as the world’s most profitable handset vendor lasted almost four years, from Q3 2009 to Q1 2013. Apple’s profit margin for its handset division has been fading recently due to lackluster iPhone 5 volumes and tougher competition from rivals. Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China. Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013.”
Exhibit 1: Global Handset Operating Profits in Q2 2013 [1]
Global Handset Operating Profits (US$ Billions)
Q2 ’13
Samsung
$5.2
Apple
$4.6
Source: Strategy Analytics
The full report, Samsung Becomes World’s Most Profitable Handset Vendor in Q2 2013, is published by the Strategy Analytics Wireless Device Strategies (WDS) service, details of which can be found here: http://tinyurl.com/cr7fhmb.
But: while handset revenue was up by 9% the operating profit for handsets and network products together were down by 3%. Considering that 97.3% of the IM (IT & Mobile Communications) revenue is for handsets that essentially means a similar operating profit drop of ~3% for handsets alone. Note as well that while the margin was 17.7% a year ago (in 2Q ’12) now (in 2Q ‘13) it was the same 17.7%, so with that 3% drop there was no fundamental problem (yet).
From: Earnings Release Q2 2013, Samsung Electronics, July 2013 presentation [July 26, 2013]
Samsung explains that by “marginal profit decline due to increased costs of new product launches, R&D and retail channels investments, etc.” as you could see below:
Fundamental problem could well be with the market share outlook, as neither for 2Q ‘13, nor for the outlook market share was talked about at all.
Samsung Electronics Announces Earnings for Q2 in 2013 [press release, July 26, 2013]
Samsung Electronics Co., Ltd. today announced revenues of 57.46 trillion won [$51.6B] on a consolidated basis for the second quarter ended June 30, 2013, a 9-percent increase from the previous quarter. Consolidated operating profit for the quarter reached 9.53 trillion won [$8.53B, ~61% of which is estimated for its handset division, see above], representing a 9-percent increase on quarter, while consolidated net profit for the same quarter was 7.77 trillion won [$6.98B].
In its earnings guidance disclosed on July 5, Samsung estimated second quarter consolidated revenues would reach approximately 57 trillion won [$51.2B] with consolidated operating profit of approximately 9.5 trillion won [$8.53B].
Samsung Regains Its Biggest Client Apple [The Korea Economic Daily, July 15, 2013]
Samsung Electronics will supply mobile application processor (AP) to Apple Inc. from 2015. The mobile AP is a brain of Apple’s iPhone. Samsung Electronics will supply 14 nano A9 chips that will be used for Apple’s iPhone 7.
Samsung Electronics had supplied the AP to Apple since 2007 but lost the contract to supply 20 nano AP A8 chips [for iPhone6] to Apple to Taiwan’s TSMC last year when it was engaged in patent disputes with Apple. Samsung Electronics developed state-of-the-art 14 nano models ahead of its rival TSMC, regaining the order from Apple.
According to industry sources on July 14, Samsung Electronics signed an agreement with Apple to supply the next-generation AP that it will produce in 2015. The AP that will be produced using 14 nano FinFET technology is mounted on Apple’s iPhone 7 to be released in the second half of 2015.
Since its relations with Samsung Electronics worsened due to patent disputes, Apple has refrained from using Samsung parts since the second half of last year. Apple excluded Samsung memory chips, including mobile DRAMs, from iPhone 5 that it released in September 2012. Apple also decided to procure iPhone 6 APs from TSMC, the world’s No. 1 foundry company.
TSMC reaches deal with Apple to supply 20nm, 16nm and 10nm chips, sources claim [DIGITIMES, June 24, 2013]
Taiwan Semiconductor Manufacturing Company (TSMC) and its IC design service partner Global UniChip have secured a three-year agreement with Apple to supply foundry services for the next A-series chips built using 20nm, 16nm and 10nm process nodes, according to industry sources.
In response, both TSMC and Global Unichip said they do not comment on customer orders and statuses.
TSMC will start to manufacture Apple’s A8 chips in small volume in July 2013, and substantially ramp up its 20nm production capacity after December, the sources revealed. The foundry will complete installing a batch of new 20nm fab equipment, which is capable of processing 50,000 wafers, in the first quarter of 2014, the sources said.
A portion of the upcoming production capacity, estimated at 20,000 wafers, can later be upgraded to process wafers used to build 16nm chips, the sources continued. TSMC is scheduled to volume produce the Apple A9 and A9X processors starting the end of third-quarter 2014, the sources said.
The upcoming Apple A8 processor will be found in a new iPhone [iPhone 6] slated for release in early 2014, and the A9/A9X chips will be used in the newer-generation iPhone and iPad products, the sources claimed.
The sources did not identify whether TSMC will be the sole supplier of these Apple-designed chips.
TSMC’s phase-4, -5 and -6 facilities of Fab 14, its 12-inch fab located in southern Taiwan, will be dedicated to making Apple’s A-series processors, the sources further noted. The foundry will initially allocate a capacity of 6,000-10,000 12-inch wafers for the manufacture of those chips, and output will rise gradually starting 2014, the sources said.
TSMC chairman and CEO Morris Chang remarked previously that the foundry’s 16nm FinFET process would enter mass production in less than one year after ramping up production of 20nm chips. Risk production for its 20nm process kicked off in the first quarter of 2013.
Samsung Electronics is the Biggest Beneficiary of LTE-A [Korea IT News, July 15, 2013]
Samsung Electronics has emerged as the biggest beneficiary of the commercialization of LTE-A services by all of the three South Korean telecom operators. This is because the Samsung Galaxy S4 LTE-A is the only LTE-A smartphone put on the market at the moment. Thus, sales of the Galaxy S4 LTE-A has a good chance of making up for slower than expected domestic sales of the Galaxy S4. LG Electronics and Pantech plan to launch their LTE-A smartphones sometime next month.
150,000 Galaxy S4 LTE-A smartphones were activated in 14 days with SK Telecom alone. In other words, an average of 10,000 Galaxy S4 LTE-A smartphones went into service a day. Sales of the Galaxy S4 LTE-A is much faster than the Galaxy S4, propped up by Samsung-SK Telecom joint marketing campaigns and growing expectations of LTE-A’s twice faster speeds [LTE=75Mbps –> LTE-A=150Mbps] than LTE.
Sales of the Galaxy S4 LTE-A is projected to surge in the weeks to come since LG and Pantech’s LTE-A smartphones are scheduled to come out as early as next month.
The world’s first LTE-A [SK telecom YouTube channel, June 25, 2013]
More information:
– SK Telecom Launches World`s First LTE-Advanced Network [press release, June 26, 2013]
– World’s First Mobile Device with LTE Advanced Carrier Aggregation Powered by the Qualcomm® Snapdragon™ 800 Processor [OnQ Blog, June 26, 2013]
– Qualcomm Snapdragon 800 Processors Power World’s First LTE-Advanced Smartphone [press release, June 26, 2013]
– Samsung LTE Leadership and Future-Focused Innovation Produces World’s First LTE-Advanced Smartphone [press release, June 26, 2013]
From: 25 things my new Android phone does that makes my iPhone feel like it comes from the 1990s [ZDNet, July 11, 2013]
A few weeks ago, I told you about my plans to ditch my old iPhone 4S and get a brand-new Samsung S4 Android phone. Well, a few days later, I did just that.
- You can replace the battery
- You can add an memory card to your phone
- You can replace the back cover
- It supports wireless inductive charging without a bulky sled
- Wonder-of-wonders: you can actually plug a USB cable into it and drag and drop files from your computer
- It’s got a full 1080p HD display
- You don’t have to use iTunes
- You can completely replace your launcher
- Your home screen can be alive
- You can replace your unlock screen with a customized version
- It’s a frickin’ tricorder
- It supports near field communications (NFC)
- It has an IR emitter
- You can turn your phone into a stealthy TV-B-Gone
- The thing senses hand gestures above it
- It watches your eyes
- It has a 13 megapixel camera
- Its camera can remove objects that don’t belong in the image
- Its camera can take multiple images and composite them together automatically
- You can install apps from a browser on your PC
- It can show two apps on-screen at once
- You can automate almost everything
- When you buy something on the Google Play store, you get an email receipt within minutes, not weeks
- It integrates (mostly) nicely with Google Voice
- You can have a new hobby (whether you want it or not)
- Samsung Galaxy S4 GT-I9500 [16GB] Factory Unlocked: $618 on Amazon ($700 list)
– Exynos 5 Octa 5410 SoC with 2GB RAM
– Quad-core 1.6 GHz Cortex-A15 & quad-core 1.2 GHz Cortex-A7 CPU with tri-core 533MHz PowerVR SGX544 GPU - Samsung Galaxy S4 GT-I9505 16GB 4G/LTE Factory Unlocked: $611 on Amazon($999 list)
– Snapdragon 600 SoC with 2GB RAM
– Quad-core 1.9GHz Krait 300 CPU with 450MHz Adreno 320 GPU
2. Chinese local brands are coming close to Samsung but at less than 40% price
Let’s take Jiayu* quad-core smartphone offerings as of July 15, 2013 in China (as they are the price leaders among the MT6589/MT6589T-based devices in China):
– Jiayu G3 Quad Edition (G3s) is from $110 in retail shops throughout the country
(Note that this price is even lower than the spec-wise similar Xiaomi $130 Hongmi superphone.)
– Jiayu G4 Standard (on sale for $155 (thin) and $163 (thick) list price since April 10) now with summer offer is from $130 in retail shops throughout the country
– 1.5GHz Jiayu G4 Advanced (G4s) is $216 since July 6 with 7 working days delivery
– 1.5GHz Jiayu G4 thin version is $160 since July 13 with not later than July 24 delivery
* About Jiayu (佳域)
Baoji Jiayuyutong Electronic Co., Ltd was established in April 2009, is one of the high-tech enterprises, committed to the mobile communication product, research and development, manufacturing, sales and service. The company has more than 800 employees, including more than 30 R & D personnel and 60 engineering and technical people. At present, the company has 10 complete product lines, 2 laboratory rooms, a variety of advanced testing equipment.
Brand interpretation: “good domain”, the Chinese word for pioneering domestic smart phone “Best of the Realm”; “JIAYU” to “good domain” Chinese spelling.
Jiayu G3S quick review [nikchris69 YouTube channel, July 13, 2013]
Jiayu Store links: Jiayu S1, Jiayu G4 and Jiayu G3s (other link: Mobile Dad, July 13)
Update: JiaYu S1 CNC machining process [Gizchina YouTube channel, Aug 6, 2013]
Yiayu S1 (see above) at 1.7GHz is on par with Samsung Galaxy S4 in performance:
according to the Antutu benchmark results at http://www.jiayu-store.com/blog/
Update: JiaYu S1 wireless charging demo Video [Gizchina YouTube channel, Aug 6, 2013]
JiaYu G4 Hands On [Gizchina YouTube channel, May 13, 2013]
3. The superphone segment of the market becomes saturated:
Smartphone slowdown could spell trouble in Taiwan [Reuters TV YouTube channel, July 9, 2013]
Samsung’s smartphone champ braves a tough crowd [Reuters TV YouTube channel, July 4, 2013]
Samsung Confronts Saturated Smartphone Market [Bloomberg YouTube channel, July 5, 2013]
Has Apple lost its cool factor? [CNNInternational YouTube channel, June 10, 2013]
China smartphone aims to rival Apple [Financial Times YouTube channel, Jun 25, 2013]
China’s Huawei launches world’s slimmest smartphone [AFP YouTube channel, June 18, 2013]
Huawei Ascend P6 — 2-Minute Encounter [HuaweiDeviceCo YouTube, June 18, 2013]
The rise of Chinese smartphones [CNN YouTube channel, May 30, 2013]
Google and Motorola’s Moto X (hands-on) [The Verge YouTube channel, Aug 1, 2013]
More information:
– Moto X. All Yours. [The Official Motorola Blog, Aug 1, 2013]
– Motorola Moto X vs. Samsung Galaxy S4 [Gizmag, Aug 2, 2013]
– 16GB Motorola Moto X to cost $575 SIM-free [GSMarena.com, Aug 2, 2013]
Motorola Moto X was unveiled yesterday and the smartphone will soon be available from the top 5 carriers in the USA. The 16 GB variant of the Moto X is priced at $200 and the 32 GB unit costs you $250 with a two-year contract.
At the announcement event Motorola did not announce the pricing details of the SIM-free editions, but they are no longer a mystery as AT&T has confirmed the pricing of the device without a contract. At launch, the 16 GB model of the Moto X will cost you $575, while the 32 GB is priced at $629.
Moto X – Motomaker [motorola YouTube channel, Aug 1, 2013]
BBC News – Can Moto X revive Motorola’s fortunes? [BBCWorldNewsWatch YouTube channel, May 30, 2013]
Moto X Phone release date, news and rumours [TechRadar YouTube channel, July 2, 2013] “could be landing in installs in October”, and “to undercut the big players of the market such as the Samsung Galaxy S4 and the HTC One –meaning we might see some very competitive pricing”
From: Samsung Electronics 2Q13 review: Fading growth momentum vs improving valuations [The Korea Economic Daily, July 8, 2013]
Samsung Electronics (Samsung) announced 2Q13 preliminary sales of W57trn [$51B] and OP of W9.5trn [$8.5B], a record quarterly high. However, OP fell short of the consensus (W10.2trn) by 6.5% and our estimate (W10trn) by 5%. Despite strong memory prices due to supply shortages and higher OLED sales and margins, OP disappointed on lower smartphone ASP and IM margins due to increased marketing costs.
As the growth of the smartphone market slows due to commoditization, concerns are mounting over eroding ASP and margins. In fact, we estimate OP at the IM division eroded from W6.51trn with an OPM of 19.8% in 1Q13 to W6.23trn [$5.6B] with an OPM of 18.4%. Considering Apple lawsuit provisions were booked in 1Q13, the effective decline in OPM is over 3% as sales of the Galaxy S3 and Note 2 deteriorated.
We revise down our earnings forecasts to reflect lower handset OPM. Specifically, we estimate 3Q13 OP at W10.1trn [$9B] (previously W11.0trn) and full-year 2013 OP at W38.1trn [$34.2B] (previously W40.3trn). We cut Galaxy S4 3Q13 sales to 20mn units (previously 23mn) to reflect the poor sales; however, we maintain OP and OPM at 2Q13 levels given the global launch of the Galaxy S4 Mini and Note 3.
*Source: Korea Investment & Securities Co.
From: Galaxy S4, 20 million sales in just two months … 40 days faster than the previous [ChosunBiz, July 3, 2013] as traslated from Korean by Google and Bing with manual edits
Samsung Electronics (005930) launched the Galaxy S4 20 million sales in two months (on the carrier supply basis) of the fastest selling Samsung smartphones ever, according to industry.
The Galaxy S4 was released only two months ago by the end of June, and the carrier supply sales exceeded 20 million.
When this morning president JK Shin of Samsung Mobile met with reporters in Samsung Electronics Seocho building in response to a question whether the amount of Galaxy S4 sales would be 20 million he told “You know, there are”, and this is a 20 million breakthrough.
Since the official launch of the Galaxy S4 on the 26th of April in 60 countries 4 million were sold in just five days, then went on to sell 10 million units in a month.
… On the other hand a Samsung official said, “as regards the Galaxy S4 sales numbers there is no answer”.
From: Analyst: Samsung Galaxy S4 Sales vs. Apple iPhone 5 Sales [Wall St. Cheat Sheet, July 7, 2013]
Although the Galaxy S4 has sold faster than any other Samsung device, it appears that it still couldn’t surpass the sales rate for the iPhone 5. Citing the slowing demand for the Galaxy S4, a mid-June report from J.P. Morgan lowered the 2013 earnings estimate for Samsung by 9 percent. After the report was released, Samsung lost $12.4 billion in market capitalization, falling to $187.8 billion.
Samsung analysts ask hard questions as S4 marketing charm wears off [Reuters, June 16, 2013]
(Reuters) – Analysts fell under Samsung Electronics Co Ltd’s marketing spell when they made what they now admit were hopelessly optimistic forecasts for its smartphone sales.
Samsung’s huge share of the high-end smartphone market also persuaded some analysts to downplay industry data pointing to a fast-saturating segment, a reality that is already eating into sales of Apple Inc’s iPhone 5.
Woori Investment & Securities, one of South Korea’s largest securities firms, cut its outlook for Samsung’s earnings and target share price on June 5. It was the first to adjust its view.
A massive wave of downgrades has since followed, with forecasters including JPMorgan, Morgan Stanley and Goldman Sachs taking a harder look at their assumptions of how well the S4, Samsung’s latest Galaxy smartphone, would actually do.
Sales estimates for the S4 were slashed by as much as 30 percent, stirring investor concerns over Samsung’s mobile devices division – the company’s biggest profit generator.
Investors in the South Korean IT giant have paid dearly. Samsung lost nearly $20 billion in market value in a week as shares plunged following the downgrades.
“I’d say most forecasters including myself had this conviction that they’ll outperform again – because it’s Samsung,” said Byun Hanjoon, an analyst at KB Investment & Securities. “They had beaten expectations before, which led many to believe they are bound to excel again with the S4.”
The S4 sold 10 million sets in just one month of its debut in late April, outperforming its predecessor, the S3.
Yet analysts now say the high-end smartphone segment is slowing, citing lacklustre prospects in Europe and South Korea in particular.
The S4, in reality, also lacks any real wow factor, they say.
“The Street, including Goldman Sachs, admittedly extrapolated the first-quarter earnings momentum through the year,” Goldman Sachs analyst Michael Bang said in a report. “This resulted in very optimistic earnings expectations.”
Most analysts have reduced their estimates for S4 shipments to around 7 million units a month from their previous average expectation of 10 million.
Bank of America Merrill Lynch has lowered its S4 sales estimate for this year by 5 million to 65 million units.
Some analysts say a loss in potential sales of 5 million S4 units would cut around $1 billion of Samsung’s operating profit.
“S4 sales are solid. It’s just that some analysts had higher expectations and then they lowered them,” J.K. Shin, head of Samsung’s mobile devices division, told reporters last week.
Over the past month, 17 out of 43 analysts have downgraded their earnings estimates for Samsung, leading to a 0.6 percent drop in their average forecast for the company’s April-to-June earnings to 10.4 trillion won ($9 billion), according to Thomson Reuters StarMine.
The lowered forecast, however, would still be a quarterly record.
Many analysts say weaker-than-expected S4 sales will not necessarily stop Samsung from posting record quarterly profits. The company has diversified into many segments of the smartphone market, Merrill Lynch says.
MID-TIER PHONES
Still, the scale of the downgrades has cast a shadow on Samsung’s dominance in the $250 billion smartphone market.
Doing it no favour, Chinese rivals are aggressively growing their market share, aided by strong sales of mid-tier models – a segment in which Samsung has relatively weak positioning, according to analysts.
The mid-tier segment accounted for less than 15 percent of Samsung’s total shipments last year.
Analysts say Samsung has to focus on this lower tier in the medium term.
The high-end segment is losing momentum, with manufacturers struggling to differentiate themselves and consumers calling for a leap in innovation, they say.
To be sure, Samsung has not sat idle.
It has gradually expanded its offerings. Among four varieties of the S4 introduced in recent weeks, there was one stripped-down version called the Galaxy Mini.
By comparison, Apple has had no new offerings since the iPhone 5 hit the market in September last year.
Samsung bulls are also pinning their hopes on product launches later this year including the Galaxy Note 3, a phone-tablet hybrid.
Some analysts say conservative forecasts will prevail.
“Expectations for innovation have been lowered, and I don’t think there’ll be as much buzz surrounding new product launches as it used to be,” said Byun at KB.
Samsung’s stock, which slumped to a six-month low on Thursday, inched up 0.9 percent on Friday.
($1 = 1134.4000 Korean won)
(Reporting by Miyoung Kim; Editing by Ryan Woo)
Samsung GALAXY S4 Hits 10 Million Milestone in First Month [Samsung Mobile Press, May 23, 2013]
Samsung Electronics Co., Ltd. today announced that global channel sales of its GALAXY S4, a life companion for a richer, fuller, simpler life, has surpassed 10 million units sold in less than one month after its commercial debut. Launched globally on April 27, the phone is estimated to be selling at a rate of four units per second.
The GALAXY S4 sets a new record for Samsung, generating sales quicker than any of its predecessors. Sales of the GALAXY S III reached the 10-million mark 50 days after its launch in 2012, while the GALAXY S II took five months and the GALAXY S seven months to reach the same milestone.
“On behalf of Samsung, I would like to thank the millions of customers around the world who have chosen the Samsung GALAXY S4. At Samsung we’ll continue to pursue innovation inspired by and for people,” said JK Shin, CEO and President of the IT & Mobile Communications Division at Samsung Electronics.
The GALAXY S4 was developed to enhance the meaningful moments in our lives through its innovative features and superior hardware. It has the world’s first Full HD Super AMOLED display that showcases images at their very best on a 5-inch screen with 441ppi. Equipped with a powerful rear 13MP camera, the GALAXY S4 also boasts a Dual Camera function that allows simultaneous use of both front and rear cameras. The GALAXY S4’s new and innovative software features include Air View and Air Gesture for effortless tasks, while it also keeps users up-to-date with information about their health and wellbeing using S Health.
Samsung GALAXY S4 is available in more than 110 countries and will gradually be rolled out to a total of 155 countries in cooperation with 327 partners.
Samsung is planning to introduce more color variations to meet various consumer tastes and preferences. In addition to the currently available Black Mist and White Forest, new color iterations will be added this summer, including Blue Arctic and Red Aurora, followed by Purple Mirage and Brown Autumn.
＊ All functionality, features, specifications and other product information provided in this document including, but not limited to, the benefits, design, pricing, components, performance, availability and capabilities of the product are subject to change without notice or obligation.
＊＊ Availability of colors will vary depending on the country and carrier/retailer.
Is Samsung’s Growth at the Expense of Apple? [Bloomberg YouTube channel, April 26, 2013]
4. Previous (pre-saturation) milestones according to
Samsung Mobile Press (with relevant video inserts from other sources):
See: Samsung GALAXY S II reaches 3 Million global sales [July 3, 2011]
From: Samsung GALAXY S II reaches new heights with 5 million global sales [July 28, 2011]
Samsung Electronics Co., Ltd, a global leader in digital media and digital convergence technologies, today announced that the Samsung GALAXY S II (Model: GT-I9100) has passed the 5 million global sales milestone.
The GALAXY S II is Samsung’s flagship smartphone device; a beautifully thin, (8.49mm) and lightweight dual-core smartphone that combines an unmatched Super AMOLED Plus viewing experience with incredible performance, all on Android – the world’s fastest-growing mobile operating system. The next generation smartphone also includes exclusive access to Samsung’s four new content and entertainment hubs, seamlessly integrated to provide instant access to music, games, e-reading and social networking services.
The 5 million mark has been reached in just 85 days, a rate which is 40 days faster than the original GALAXY S took to reach the same sales mark. This rate is set to accelerate as Samsung has just launched GALAXY S II in China, the world’s largest market.
…
From: Samsung GALAXY S II continues success reaching 10 Million in global sales [Sept 26, 2011]
Samsung Electronics Co., Ltd, a global leader in digital media and digital convergence technologies, today announced that the Samsung GALAXY S II (Model: GT-I9100) has achieved 10 million global channel sales, doubling from five million in just eight weeks.
The GALAXY S II is Samsung’s flagship smartphone device – a beautifully thin (8.49mm) and lightweight dual-core smartphone that combines an unmatched SuperAMOLED Plus viewing experience with powerful performance, all on Android, the world’s fastest-growing mobile operating system. The next generation smartphone also includes Samsung’s four content and entertainment hubs, seamlessly integrated to provide instant access to music, games, e-reading and social networking services.
Samsung celebrates 30 million global sales of GALAXY S and GALAXY S II [Oct 17, 2011]
Samsung Electronics Co., Ltd, a leading mobile handset provider, today announced that its Samsung GALAXY S and GALAXY SII smartphones have achieved a combined total of 30 million global sales.
GALAXY SII has set a new record for Samsung, generating more than 10 million sales – quicker than any device in Samsung’s history. The device also recently received five out of the total ten Mobile Choice Consumer Awards 2011 in the UK as well as 2011 Gadget Award for being chosen as the best smartphone of the year by T3, confirming it as a run-away favorite smartphone with consumers this year. It continues to gain traction as Samsung’s flagship smartphone – a stylishly designed, slim and ultra-portable device combining an unrivalled viewing experience with powerful dual-core processor performance.
Launched in 2010, Samsung GALAXY S reached almost 20 million unit sales, making it the highest-selling mobile device in Samsung’s portfolio to date, and another record-breaker for the company and the mobile market.
Since launching to high critical acclaim two years ago, the GALAXY S range has continued to gain popularity among consumers and propelled the GALAXY brand to one of the most recognized mobile brands in the world, with Samsung now the largest Android smartphone vendor and the second largest phone vendor overall worldwide (IDC).
“Since its launch only five months ago, GALAXY SII has seen tremendous sales success and garnered enthusiastic reviews from consumers and mobile industry watchers across the globe. This is in addition to the continued sales momentum behind GALAXY S, which we launched at Mobile World Congress 2010 as continues to be a run-away success with consumers,” said JK Shin, President and Head of Samsung’s Mobile Communications Business.
“The phenomenal success of these smartphones once again demonstrates how the GALAXY S smartphones is setting the standard for smart mobile technology around the world.”
From: Samsung GALAXY S II awarded “Best Smartphone” by GSMA at Mobile World Congress 2012 [Feb 29, 2012]
This honor comes in recognition of the device’s powerful performance and overwhelming response from consumers. GALAXY S II, Samsung’s flagship smartphone, achieved worldwide sales of over 10 million units in only 5 months, quicker than any device in Samsung’s history and surpassed over 20 million sales in 10 months.
With SIII, Samsung makes smartphone duopoly official – Tech Tonic [Reuters TV YouTube channel, June 21, 2012]
From: Samsung GALAXY S III Reaches 20 Million Sales Milestone in Record Time [Sept 6, 2012]
Samsung Electronics Co., Ltd, a global leader in digital media and digital convergence technologies, today announced that the GALAXY S III smartphone has achieved 20 million unit sales in just 100 days since its debut in May 2012. As Samsung’s most successful smartphone to date, the GALAXY S III has set a new record, generating sales quicker than any of its predecessors.
From: The Samsung GALAXY S III achieves 30 million sales in five months [Nov 4, 2012]
Putting this number into perspective, during a similar selling period (150 days), the acclaimed GALAXY S II, launched in 2011, globally sold 10 million devices.
Now upgradable to Android™ 4.1 (Jelly Bean)＊, the nature-inspired GALAXY S III is a revolutionary smartphone packed with intelligent features that make everyday life easier. Its expansive 4.8-inch HD Super AMOLED display lets users view multimedia and web content in brilliant color and clarity; and its camera understands human gestures to make using the phone incredibly natural and intuitive. A powerful hardware ensures blazing-fast performance and seamless multi-tasking.
…
＊ Availability and timing of the Jelly Bean upgrade will vary depending on the country and mobile carrier.
Samsung GALAXY S Series Surpasses 100 Million Unit Sales [Jan 14, 2013]
- Samsung has announced that global channel sales of the company’s flagship smartphone, GALAXY S III and its two predecessors GALAXY S and GALAXY S II have surpassed 100 million units sales as of January 13, 2013.
- Samsung GALAXY smartphones are intuitive and easy to use, display photos and videos on dazzling screens, and deliver a premium user experience with a design that is elegant and feels natural.
- The GALAXY S, has reached over 24 million global channel shipments, achieving 10 million of these during the first seven months after its launch in June 2010.
- Building on this success Samsung launched the GALAXY S II in April 2011. This smartphone reached around 40 million shipments, achieving 10 million global channel sales in just five months.
- In May 2012, Samsung unveiled the GALAXY S III – a smartphone designed for humans and inspired by nature. It revolutionized the user experience, and was critically acclaimed, achieving 20 million global channel sales in just 100 days – which made it Samsung’s fastest selling smartphone yet.
- GALAXY S III has now passed the mark of 40 million unit channel sales.
How Did Samsung Come to Rule Smartphones? [Bloomberg YouTube channel, March 14, 2013]
March 14 (Bloomberg) — Bloomberg West Editor-at-Large Cory Johnson examines how Samsung came to build its smartphone business as it takes aim at Apple’s iPhone with today’s launch of the Galaxy S4. He speaks on Bloomberg Television’s “In The Loop.” — Related Story: http://bloom.bg/ZNshKu — For more “In the Loop” videos: http://bloom.bg/LbOTQk
Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation
The branded superphone business is skyrocketing in China with news such as:
– GiONEE (金立), the emerging global competitor on the smartphone market [‘Experiencing the Cloud’, July 22, 2013]
– MIUI ROM 3.8.2 Update Highlights [MrMiui YouTube channel, Aug 1, 2013]
– UPDATE Aug’13: Xiaomi $130 Hongmi superphone END MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [‘Experiencing the Cloud’, Dec 12, 2012; Aug 1, 2013]
– XiaoMi Mi3 No Longer Feature Tegra 4, Launch Delays To September [GSMinsider, July 28, 2013]: “NVIDIA unable to fulfil the terms from XiaoMi and the Chinese firm had decided to end the discussion. The Chinese source mentioned that XiaoMi turns to Qualcomm after the partnership with NVIDIA failed.”
– New funding round values Xiaomi at $10bn [Shanghaiist, July 28, 2013]
– Tencent Holdings to invest US$2 billion in Xiaomi, says paper [DIGITIMES, July 25, 2013]
China-based Tencent Holdings, which runs one of the largest web portals in China, QQ.com, reportedly plans to commit an investment of US$2 billion into China-based smartphone vendor Xiaomi Technology, according to a Chinese-language Economic Daily News (EDN) report.
Tencent is likely to complete the planned investment in Xiaomi through one of its investment arms in Russia, Digital Sky Technologies, said the paper, quoting media reports in Hong Kong and China.
Neither Tencent nor Xiaomi has confirmed the reports.
Xiaomi shipped 7.03 million smartphones, valued at US$1.32 billion, in the first half of 2013, the paper quoted Xiaomi CEO Lei Jun as saying.
– Xiaomi sells over 7 million smartphones in 1H13 [DIGITIMES, July 16, 2013]
Xiaomi Technology sold 7.03 million own-brand smartphones in the first half of 2013, close to the 7.19 million units sold in 2012, according to the company.
Xiaomi recorded revenues of CNY13.27 billion (US$2.14 billion) for the first half of 2013, more than the CNY12.65 billion posted for 2012, the company indicated.
Xiaomi launched smartphones initially in the China market in August 2011, and in Taiwan and Hong Kong in the first half of 2013. As sales of existing Xiaomi smartphones will continue and new-generation models will be launched in August, Xiaomi said it is confident of reaching its target shipments of 15 million smartphones for 2013.
In addition to smartphones, Xiaomi has launched Xiaomi connected set-top boxes (STBs) and is likely to launch large-size LCD TVs and tablets for own-brand sale in the second half of 2013, the company indicated. Xiaomi smartphones are produced by Taiwan-based ODMs Inventec Appliances and Foxconn International Holdings (FIH), while Inventec Appliances additionally undertakes ODM production of Xiaomi STBs. Xiaomi may have Taiwan-based ODM Wistron produce TVs, and FIH tablets.
Two and a half months ago we had even the news that Meitu Kiss Released. Will It Be Another Xiaomi? (built specifically for ladies) [TechNode blog in China, May 16, 2013] having the following lead:
We once introduced how the photography-focused Meitu Kiss phone came into being and it is backed by Cai Wensheng, a legendary figure in China’s tech industry. Today it is officially released, together with MeituAir, the cross-platform photo management software.
With Android 4.2, quad-core MT6589 processor and 4.5-inch 1280 x 720 display and 8 mega-pixel front & rear camera, it’s priced at 2199 yuan (US$357)
and conclusion:
The strategy sounds the same with Xiaomi’s — to gain users with comparatively good-value-for-money smartphones, build ecosystem with software and make profits from consumer-facing paid services and business-facing offerings. As Xiaomi is backed by Lei Jun, another classic figure in China’ s tech sector, it is speculated the two companies would be direct competitor in near future. Also the same with Lei Jun, Mr. Cai has invested a variety of tech companies, from gaming to Weibo content marketing agencies, that would help provide Meitu Kiss with content and services.
So it is quite actual to have a look at the domestic premium brand situation in China:
The 10 most talked about products in the domestic mobile phone market of China in April 2013 and their main parameters (source: http://www.tqun.com/article-16949-2.html):
For the top 3 most innovative brands I’ve extended the table of main parameters coming next as follows (the source is the same: http://www.tqun.com/article-16949-2.html): 
and prepared a table showing similar parameters about the market leading models:
Then here is and appraisal of the strengths of the most innovative Chinese domestic brands as of May 15, 2013 :
- 小米 Xiaomi
- 魅族 Meizu
- OPPO
- Chinese domestic brand expansion into the global market: the AndroidGuruz initiative from India
1. 小米 Xiaomi
Lei Jun: Xiaomi is Here to Stay [mobiSights, May 7, 2013, image insert from the same day MIUI News]
Lei Jun, founder and CEO of Chinese smartphone maker Xiaomi said he is determined to continue creating world-class phones, capable of competing with the global heavyweights at a fraction of the price.
“I admire giant companies like Huawei, Tencent, Sina and Alibaba, but I don’t want to create another Huawei, Tencent, Sina or Alibaba. My dream is to maintain my current company as a small one. (like a) small restaurant that people line up outside of to buy my products, and my friend will call me to reserve seats for them.” Jun said during a keynote address to the 2013 GMIC [Global Mobile Internet Conference] Beijing.
In late April, Xiaomi’s new smartphone, the Mi-2S 32GB sold out (200,000 units) in less than a minute after it went up for sale.
Lei went on to explain he bases Xiaomi’s business strategy on the examples set by two Chinese companies – Tong Ren Tang traditional medicine chain, which has a history of more than 300 years in China, and Hai Di Lao Hot Pot, which is famous for fast and friendly customer service.
Two of Tong Ren Tang’s business principles appeal to Lei Jun – its adherence to strict moral and quality baselines and its fair and reliable treatment of its employees.
Hai Di Lao’s exceptional customer service inspires Lei Jun, who said he wants his staff to communicate with their clients and customers as much as possible so that his company can pinpoint problems and get feedback from the users.
Despite criticism from many outside sources, Lei Jun said he will continue working towards perfecting Xiaomi’s business model and will keep striving towards the “perfect” smartphone.
The 3 years anniversary event:
[HD] 2013 Xiaomi Fans Carnival Full Official Presentation (Chinese & English Subtitles) [Xiaomi China YouTube channel, published April 19, recorded April 9, 2013]
See also: Xiaomi’s Third Founding Anniversary in Numbers [TechNode blog in China, April 9, 2013] from which some worthwhile excerpts are:
Lei Jun, co-founder and CEO, revealed that the company made 12.65 billion yuan [$2B] in pre-tax sales in 2012 with a total of 7.19 million Xiaomi phones sold (1.37 million were sold through China Unicom while the rest sold online). Mr. Lei said earlier that the net profit could be about USD 200 million and their sales goal for 2013 was 15 million Xiaomi phones. ( the presentation in Chinese)
MIUI, a custom Android ROM built in Xiaomi phones and available for download, announced earlier that its users surpassed 15 million. According to today’s release, the app store within MIUI has 20 thousand apps, with daily downloads reaching 3.5 million and the total exceeding 500 million; the game center, launched in last September, has 10 thousand games, with a total of 60 million downloads and one million each day; the MIUI theme designs have been downloaded for a total of 600 times and 3.5 million daily. All the mentioned categories have become MIUI’s revenue sources and we heard that the monthly income had become considerable [¥ 10M = $1.6M] earlier this year.
The cloud storage service, released about half a year ago, now is holding 300 million photos, two billion text messages. 6 million photos and 13 million are uploaded onto it daily. As for the number of users, Mr. Lei said “one to two million”.
…
It’s no secret that Lei Jun and his team want to make an iPhone-style business to have as many users as possible buy Xiaomi phones and accessories, and consume software and digital content there. The difference must be they don’t plan to make high profits from selling hardware — it helps gain users — but count on the MIUI platform as source of long-tail income. As for the future, you can’t see a lack of investments or talent happen to the company. How far can it go? Behold.
Xiaomi Phone 2S and 2A announced with MIUI v5, the former entering Hong Kong and Taiwan [engadget, April 9, 2013]
After selling 7.19 million phones in China last year, Xiaomi is now one step closer to world domination with a new device that’ll take it to new territories: the Xiaomi Phone 2S (or Mi-2S). As the name and look suggest, this is pretty much the same device as the 4.3-inch Xiaomi Phone 2, except it comes with Qualcomm’s newer Snapdragon 600 quad-core chip clocked at 1.7GHz, plus a beefed up camera of 13-megapixel resolution (with F2.2 aperture) on the 32GB model. The 16GB 2S, on the other hand, gets the same old 8-megapixel F2.0 imager. The rest of the hardware is the same old: 2GB RAM, 2,000mAH removable battery, 720p IPS display, dual-mic noise cancellation, 2-megapixel front-facing camera and WCDMA 850/1900/2100MHz radio (there’s also a CDMA version for China Telecom).
Unlike the previous launch, the 16GB flavor of this phone is already in stock on the day of announcement and is ready for purchase in China today for ¥1,999 or about $320 unsubsidized. Actually, strike that — apparently the first lot of 200,000 units promptly sold out (likely thanks to scalpers). Luckily, Xiaomi is finally tapping into the Hong Kong market via its xiaomi.hk website starting April 23rd, so chances are genuine buyers in Hong Kong won’t have to compete against the machines from mainland China; and Taiwan customers will also be able to buy a 2S from either local carrier Far Eastone towards the end of this month, or from xiaomi.tw starting next month. No word on the availability of the 32GB model just yet, but it’s already priced at ¥2,299 or about $370 unsubsidized.
The familiar-looking phone on the right is the Xiaomi Phone 2A. Much like how the original Xiaomi Phone got a “Youth Edition” fork, the 2A serves as a budget variant of the Xiaomi Phone 2, which is why the CPU’s been “downgraded” from the quad-core APQ8064 to the dual-core MSM8260A (with just 1GB RAM). On the other hand, this particular version of MSM8260A does utilize Qualcomm’s newer Krait 300 architecture instead of Krait 200, and it’s clocked at 1.7GHz instead of 1.5GHz. The same old 16GB storage space, 2,000mAh removable battery, 8-megapixel main camera, 2-megapixel front-facing camera and the powerful Adreno 320 graphics chip are here to stay.
That said, the rest of the 2A is rather peculiar considering this model is meant to be a cheaper offering: the 720p IPS screen has been bumped up from 4.3 inches to 4.5 inches, and the phone also comes with NFC, 5GHz WiFi plus a new audio engine co-developed with Sweden-based Dirac (instead of using Dolby’s). It’s no wonder that this phone is a “2A” instead of yet another “Youth Edition,” but it is also baffling that Xiaomi has avoided throwing in NFC for the 2S as well. Anyway, the 2A will be available in China three weeks from now. The price? ¥1,499 or about $240 unsubsidized.
Of course, let’s not forget the software. Both phones are graced with the presence of the new MIUI v5, which benefits from not only a leaner look (with a new system font, general visual tweaks and also less distracting stock wallpapers) but also from live icons. Here are a handful of new software features added to the already rather intuitive Android fork from Xiaomi:
- Pre-identification of unknown incoming caller ID (based on Chinese crowd-sourced phone number database, so China only), so you’d know if it’s a spam call or just the delivery man calling
- Phone book is able to look up the most common service hotline numbers in China, including banking services and restaurants
- Toggle automatic call-recording for specific incoming callers (CEO Lei Jun said this was his idea)
- Voice recorder supports 168 hours of continuous recording, saved on the fly, wouldn’t be interrupted by incoming calls or notifications (which are muted automatically); and the recorded MP3 files won’t show up in the native music player
- System lets you monitor and control data traffic from each app
- Unified background sync of apps for longer standby time — up to twice as long compared to vanilla Android 4.1
- MiChat (which is also available outside MIUI) now supports walkie-talkie-style video messages instead of just audio
Lei also used his stage time at today’s packed “Xiaomi Fans Carnival” to bolster Xiaomi’s position in the mobile content world. According to the CEO, his company’s app store MiStore today offers 20,000 apps and has seen a total of 500 million downloads so far, while its Doukan store now has 3,000 legit e-books, and Xiaomi’s game center comes with 10,000 games — including PopCap’s official China debut of its classic titleBejeweled today — with a total of 60 million downloads. As for video content, the Xiaomi Box has yet to take off properly after its botched launch due to demands from a provincial regulator, but 50,000 of them have already been sold in the three launch cities so far. We’ve been told to expect a full China roll-out in May, so stay tuned.
The question now is whether Xiaomi can extend this aspect of the company to around the world. Sure, Hong Kong and Taiwan make a good first step towards the international market, but it’s also a relatively easy step given the similar cultural backgrounds. Xiaomi’s real success will only be proven when it does eventually enter, say, Europe as we had once heard; and it wouldn’t hurt to see some improved hardware design instead of just software. We shall take another pulse check in about a year’s time.
[Exclusive] Xiaomi Co-founder Hong Feng on MIUI [TechNode blog in China, April 17, 2013]
We heard that the monthly revenue from MIUI reached 10 million yuan. Hong Feng, co-founder and lead of MIUI, confirmed the number in an interview at our ChinaBang 2013. He added that that’s just the beginning of monetization.
Hong Feng used to work at Google China as senior product manager leading local services such as music search and input method. Three years ago he was invited by Lei Jun, CEO of Xiaomi, to become one of the seven founders. The first version of MIUI was launched four months after the inception of Xiaomi company.
MIUI announced 15 million installs and officially release the latest version, MIUI V5, not long ago. Approaching 10 million were in Xiaomi phones shipped and the rest were installed in non-Xiaomi Android phones. Xiaomi claims MIUI is the best customized Android ROM on the market.
Hong Feng is proud that MIUI has a group of core, loyal users who are active on its platform. MIUI is well-known for its online forum that engineers would answer questions from users and collect user needs there. His team also visit users in different cities regularly. He’s also proud that fans around the world did 22 language versions, apart from three official language versions, for MIUI.
Apart from gaming, other revenues generated from MIUI are mainly derived from the built-in browser with paid placements on the start-page, paid search, and the app center, according to Mr. Hong. Also, the company has been selling paid theme designs that the sales must be minor compared with gaming.
ARPU of gaming, in general, is relatively high. It’s no wonder more and more Chinese mobile service providers, such as UCWeb and 91, set up gaming platforms to monetize their big user pools. The users, 3-4 mn, of the games center within MIUI are very active, Hong said. Xiaomi also partners with game companies to custom editions of popular games tailored to MIUI users.
Duokan, the mobile reading platform acquired by Xiaomi last year, is exclusive of the sources that make up the 10 million monthly revenue. Duokan has been selling digital books and now has 30 thousand paying users. It hopes to make profits in 2014 that needs one million paying users, according to Hu Xiaodong, VP at Duokan.
When asked about the monetization plans in the near future, Hong said that they’d just try to produce the best possible products at the lowest possible prices — which means they’d try to gain as many users as possible and profit from them later and gradually.
It’s no secret that companies with considerable user bases, Qihoo, Sogou, UCWeb, 91 and the like, are trying to profit from every possible source, gaming, CPM/CPC-based advertising, CPC/CPS-based e-commerce transactions, paid digital content, etc. When it comes to a customized Android ROM? It works the same.
Xiaomi Mi2S vs HTC One / Samsung Galaxy S4 / LG Nexus 4 [News – MIUI Official English Site, April 26, 2013], note that the first bechmark is Antutu
Xiaomi Mi2S vs [new] HTC One [having also Snapdragon 600 SoC]
Xiaomi Mi2S vs Samsung Galaxy S4
Xiaomi Mi2S vs LG Nexus 4
[3.5.10][ROM Download] Unofficial MIUI V5 for 41 devices released for public! [Beta Team – MIUI Official English Site, May 10, 2013]
New devices this week (10, May, 2013):
OPPO Finder
Samsung E120L (Galaxy S II HD LTE)Hey MIUIers,
After a week’s testing by MIUI Beta Team, MIUI V5 for the following devices developed by MIUI unofficial devs are released for public today!Guys please report bugs in respecting bugs sections to keep developers posted about bugs and to avoid unnecessary confusion.
Note:
1. OTA update of unofficial MIUI V5 released once a week.
2. Download links of full rom updated every Monday.
– Google Nexus S
– Google Galaxy Nexus
– Samsung Galaxy S II I9100g
– Samsung Galaxy S II I9100
– Samsung Galaxy Note I9220
– Samsung Galaxy S I9000
– Samsung E120L (Galaxy S II HD LTE)
– ZTE U970
– ZTE U930
– ZTE N880E
– ZTE N909
– Sony Ericsson Lt18i– MOTO Defy
– MOTO Defy+
– MOTO Atrix 4G Me860
– Lenovo K860i
– Lenovo K860
– Huawei C8812
– Huawei C8812E
– Huawei Honor U8860
– Huawei U8818
– Huawei Honor2 U9508
– Huawei Ascend D1 XL U9510E
– Huawei C8860E
– OPPO Finder– LG LU6200
– LG SU640
– LG P990
– LG P970
– SKY A820
– HTC Desire Z
– HTC Desire HD
– HTC OneS S4
– HTC OneS S3
– HTC Incredible S
– HTC Sensation (G14/G18)
– HTC HD2
– HTC Desire S
– HTC Mytouch 4G
– HTC EVO 3D(CDMA)
– HTC EVO 3D(GSM)
MIUI: 999 days! [News – MIUI Official English Site, May 10, 2013]
MIUI was officially launched on August 16th, 2010. Today, May 10, 2013, means that MIUI ROM has been inexistence for 999 days! Tomorrow will be our 1000th day!
In these 999 days, we have accumulated over 15 million fans worldwide and the ROM can now be flashed across 33 Android devices.
Of course, we can only have achieved this milestone with the help of our dedicated fans. They have made unofficial versions of the ROM and in various languages so even more users can enjoy MIUI worldwide.
Although, this milestone is something we are proud of, we also realize there are many areas of improvement and problems to be solved. In essence, this means that MIUI is still growing and there will be challenges along the way. But with the help of our dedicated fans and hardworking MIUI team we hope to celebrate the next milestone and continue to see MIUI thrive!
Xiaomi MI-Two – [ENG SUBS] Full Official Presentation 2012 [XiaomiUnofficial YouTube channel, published on Sept 7, 2012, recorded on Aug 16, 2012]
Official promotional video of Xiaomi MIUI V4 (English Subtitles) [MrMiui YouTube channel, Aug 10, 2012]
Introducing Xiaomi MIUI V5 (HD) [MrMiui YouTube channel, April 10, 2013]
As Xiaomi Sells Out of New Flagship Phone, Bin Lin Talks About the Disruptive Chinese Start-Up’s Approach (Video) [AllThingsD, Oct 30, 2012]
Xiaomi co-founder Bin Lin was in many ways the perfect speaker for our Dive Into Mobile conference. Xiaomi is one of the most interesting corporate stories from the transformative global spread of smartphones, but its quick ascent is not widely known about outside of China.
The company, which is just two-and-a-half-years old but already has sold more than five million phones and employs 1,700 people, has disrupted the Chinese home handset market by making and selling top-of-the-line smartphones direct to consumers for a fraction of the expected price.
Today, Xiaomi launched its second major phone, known as the Xiaomi Phone 2, or the Mi-2. A run of 50,000 units sold out in two minutes and 51 seconds.
While companies might shy away from literally naming one of their phones a “me too,” the new Xiaomi phone has much in common with Apple’s iPhone 5, including the size and shape of the handset, the way application icons tile on the screen in Xiaomi’s modified version of the Android Jelly Bean OS, and the look and feel of the built-in camera application.
But Lin was quick to pull his iPhone 5 out and show that the (slightly larger) Mi-2 has a better display — 720 by 1280 with a pixel density of 342 pixels per inch.
Sitting on a red couch (instead of our signature D conference red chairs) at the hotel to which we had evacuated for Hurricane Sandy, Lin told me about his company’s plans for the Mi-2 launch as well as its long-term strategy.
As we spoke on Monday, Lin seemed remarkably unstressed on the eve of his company’s big launch. That’s because Xiaomi phones are offered only online and typically sell out in a matter of minutes to fans who apparently follow the company’s progress like they would a rock band.
In fact, last week, a block of 300,000 of the older Mi-1s model — that is, a phone that everyone knew was a week away from being outdated — sold out in only four minutes and 15 seconds.
Xiaomi released just 50,000 phones for order today and said it would have 250,000 more available in mid-November.
To date, Xiaomi has sold 3.5 million Mi-1 units and 1.8 million of the between-upgrades Mi-1s. That’s only a single-digit percentage of the Chinese smartphone market, where as many as 200 million smartphones are expected to be sold this year.
The base model for the Mi-2 costs just $230. Lin said Xiaomi spends “almost that price” to manufacture the phone, but that the company doesn’t mind its low margins because it is pursuing a strategy similar to Amazon’s Kindle Fire.
Xiaomi doesn’t spend any money on retail and barely any on marketing. Instead, the company corresponds with fans on Weibo and in forums, asking for their product feedback and sometimes incorporating it.
Xiaomi creates its own hardware and its own modified-Android software, and expects revenue to flow in from e-commerce in the future.
“As we see huge adoption of smartphones, we see e-commerce getting more mature, with logistics and payment systems,” Lin said. “As we get more adoption of software, the money will come after.”
E-commerce is the specialty of Xiaomi co-founder Lei Jun, who founded Joyo.com, which is now Amazon.cn. Meanwhile, Lin is the software guy, having most recently led Android development in China as an engineering director of Google. Others from the seven-member Xiaomi founding team include a Motorola hardware expert and a Microsoft development director.
That unified approach has a familiar precedent in Apple, though Lin noted that Xiaomi is not yet at the point where it custom-designs its own chips.
As for what Xiaomi will do next, Lin said that the company is working to expand internationally and sees Taiwan and Hong Kong as its most likely targets, given their similarity to China. He also acknowledged rumors about Xiaomi building a set-top box, saying that kind of personal computing device might be a natural extension.
But for now, Xiaomi’s approach is really quite simple, Lin said. “The strategy is to build top-end handsets. That’s what we’re good at.”
More information: Bin Lin tag on AllTingsD
CO-FOUNDER AND PRESIDENT
XIAOMI CORPORATION
Bin Lin co-founded Xiaomi Corporation with angel investor Lei Jun in April 2010. He is now president of Xiaomi Corporation, and is in charge of Xiaomi’s day-to-day operation, business and product strategy, carrier relationships, and business development with strategic suppliers and business partners.
Lin worked at Google Inc. as engineering director from 2006 to 2010. He founded and led Google China’s engineering effort for Mobile, Android apps, and Google Music. Under his leadership, his team successfully launched many Google products for the China market, including Google Mobile Maps, Mandarin voice search, mobile verticals such as video, dictionary, finance, and local, Android Pinyin IME, Android Dictionary, Android News and Weather widget, Google Music (free streaming and download of legal music online), Google Pinyin IME, and various OneBoxes.
Prior to joining Google, he worked at Microsoft from 1995 to 2006, and held various senior positions, including software design engineer and development lead at Microsoft’s Redmond headquarters. Lin admits that he is older than he looks, but says, “It’s never too late to start your own business if you have a young heart.” His first cellphone was a Motorola StarTAC.
POSTS WITH BIN LIN
…
And how that innovation started: Xiaomi Tech Unveils Its Own Smartphone: RMB 1999 with Dual-Core 1.5G CPU, Fastest Ever [TechNode blog in China, Aug 16, 2011]
Xiaomi Tech, a mobile apps vendor, has just unveiled its long-rumored smartphone today. The phone is equipped with dual-core 1.5G CPU which makes it the fastest smartphone in terms of CPU clock speed in the whole world
Some of its technical specifications:
*Qualcomm MSM8260 Dual-Core 1.5G CPU, 1G RAM,
– 4 GB capacity,
– can expand to 32G.*Sharp 4 inch display, resolution: 854-by-480-pixel resolution.
*Battery: 1930mAh.
– Standby time:up to 450 hrs.
– Talk time: up to 15 hrs.
– Audio playback: up to 45 hrs.
– Video playback: up to 12 hrs.
– Play game: up to 6 hrs.*Cellular and wireless
– GSM+WCDMA
– GPS, GLONASS, A-GPS, Wi-Fi, Bluetooth*Size and weight
– 125×63×11.9mm
– 149 gramsXiaomi Mobile is built on on MIUI OS (based on Android 2.3.5). As we wrote before, MIUI has strong user base around the world, with several global fans clubs in US, UK, Germany, Italy, Spain,Australia, Russia and more.
Honestly, the sheer specification of Xiaomi Mobile is already stunning, while its price is something even more surprising and unexpected. With only RMB 1999 (US$ 312), you can get the fastest mobile in the world and a bunch of powerful hardware. The Android phone market is expected to see mounting competitions in the near future.
Xiaomi Mi2A VS Meizu MX2 [phonezilla2013 YouTube channel, May 10, 2013]
小米 Xiaomi vs. 魅族 Meizu
2. 魅族
Meizu
Meizu MX2 Flyme 2.0 OS Official Introduction [androidsales YouTube channel, May 7, 2013]
Flyme 2.0
[Meizu microsite in English, the original Chinese version came on-line on Dec 22, 2012]
New system: Flyme 2.0
Based on the latest Android kernel, Flyme 2.0 is specificall designed as the soul of MX. The brand-new system, coming with a full suite of apps and powerful cloud services, is sure to surprise you.
Dedicated Design
3452 improvements of interaction and 417 new features are added to Flyme 2.0, which means greater visual elegance and ease in operation. We care about your experience in using our product and hence dedicate ourselves to optimize every detail in concern and recover them to original simplicity.
The most frequently used icons are moved to the top of the screen and automatically hidden in full-screen display. The buttons like Back and More will appear on the innovative Smart Bar. The beautiful breathing light is designed to wake the phone is a stylish manner.
Unparalleled Built-in Service
Flyme 2.0 does not only meet what you want, but also helps you find out more you want. The unparalleled built-in services we developed for you are going to surprise youl like never before.
GPU acceleration, HTML5 streaming, and smart interaction better the browser performance. Enjoy surfacing with the Flyme Web Browser.
When you can’t pick up the phone, Flyme Voicemail will record the message for you. No carrier involvement, no fees.
Add filters, rotate, crop, and enhance the image on photos – you can easily edit photos on MX and share them.
Tree-structure file arrangement app allows you quickly browse, access, copy and move files on the go.
Doodle, insert photos, and add text – the new Notes app brings note-taking to the next level.
Closer Networking
We are dedicated to integrated the most valuable network resources and connect you with the world close at hand.
Music
Online Music is the fruit of year’s concentrated R&D endeavor and the best music app at present. Plenty of copyrighted lossless music is available and its payment is simplified. All you need is connect to the network and indulge your ears in your favorite tune.
Video
Online Video marks a new level of video services. With greater network expansion, you can search and watch online video as you like. The most resourceful video app is at your service.
App Center
We encourage third-party apps to fertilize the soil for virus-free software development, tapping boundless potential for more applications. You can quickly browse, search for and install the apps you want, with the ease of mind that they have all gone through our strict audit system.
Powerful Flyme Cloud Services
A free Flyme account is all you need to get full cloud services to manage over MX. The latest Flyme Web helps you browse and manage data on your MX at ease. It get everything for you smartly.
Flyme can automatically sync your contacts, text messages, phone settings, and call logs; bringing you concenience like never before.
Featuring voice messages, Flyme messages lets you communicate more efficiently. Now you can insert voice messages in SMS and send to friends who have Flyme accounts. You are going to love this new way of messaging!
Flyme Blacklist is intelligent enough to acurately filter unwanted calls and block spam messages to free you of the annoyance.
Flyme reminds you at once when new versions of Flyme OR are released. OTA (Over The Air) download and upgrade with nothing more than a few swipes and taps.
Flyme Sharing enables you to share files of any format any size with your friends at ease.
Phone Finder helps you locate your lost phone, with remore lock and alerts.
MEIZU MX2 MX5S A9 Quad Core with Flyme 2.0 4.4 Inch 1280*800 RAM 2GB 1.6GHz 16G Version [blogmerimobiles YouTube channel, April 1, 2013]
Flyme X for Meizu MX2 coming soon [phonezilla2013 YouTube channel, May 10, 2013]
How that innovation has started:
For The First Time, People Queue for a Chinese Phone, Meizu M9 [TechNode blog in China, Jan 3, 2011]
If you see people are queuing for a new product from Apple, you would not be surprised; if you see Chinese buyers queue for something from a Chinese brand, you may think it is weired and would not take it serious. We have tens of local mobile phone brands in China, some are Shanzhai and some are not, some are really in bad quality and some are not only relatively cheaper but also quite handy and powerful. But, never ever, we’ve seen people are so thirsty for a new phone model and even queueing for it.
M9, produced by Meizu and regarded as the best iPhone 4 replacement from a local manufacturers, is out at 2st, Jan 2011. And in Huaqiangbei, the cradleland for China Shanzhai phone, over a thousand Meizu-fans were queued for their dream-phone, M9 made by Meizu which they have been waiting for 2 years since the release of M8.
We thumb up to Meizu M9. Although you might see a different story when M9 comes to Beijing, Shanghai etc where people are more addicted to iPhone, I appreciate the courage and ambition Meizu has to compete with iPhone. As some people said, Chinese see the hope beyond Shanzhai.
[image via qq.com]
Here is a video report about that product: Meizu M9, $380 Android phone with Retina Display [Charbax YouTube channel, April 7, 2011]
See also: Meizu, Chinese Best iPhone-Liker Is Testing Its App Store [TechNode blog in China, Nov 11, 2009]
Meizu Technology Co. Ltd, the maker of the best Chinese iPhone-liker, Meizu M8 officially entered the hype of Chinese mobile App Store. Its application store, aka Meizu Developer Network is now available on http://developer.meizu.com/.
According to this official announcement, application is required to become a Meizu developer. Once the application is accepted, the developer can develop and submit his application which will be verified and tested by Meizu operation team. Meizu user will be able to download the tested applications via a client (mobile version of the app store?) running on Meizu mobile phone.
It’s at very early stage. Roughly counting, there are only 23 applications listed on the site right now. But the comments posted by J. Wong, CEO of Meizu on its official BBS are quite interesting:
Meizu developers will be given 70% of the revenue share;
A voucher worthy of RMB 15 yuan will be given to Meizu VIP users (I am not sure how to become a VIP) to stimulate the market;
The mobile version of application store will come with the new UI (screenshots) of Meizu M8 by this year.
See also: Chinese firm clones Apple’s mystique [The Los Angeles Times, Sept 7, 2010]
After M9 they had Meizu MX, Exynos4412 quad-core 4″ retina Android phone [Charbax YouTube channel, Oct 28, 2012]
See also:
– MEIZU outs its MX Quad-core Android smartphone, Galaxy S III unveiling rumored for May 3 [Yahoo! News, April 16, 2012]
– “Meizu’s third-ever smartphone is its best product yet” [Engadget, Dec 15, 2011]
– “…here in China a home-grown brand is inspiring its own platoon of highly-motivated buyers” [Reuters TV, Jan 4, 2012]
– “Samsung’s TouchWiz and Motorola’s MotoBlur skins could learn a thing or two from Meizu” [CNET Reviews, Jan 25, 2012]
The good: Meizu’s MX runs a unique and capable Android skin made to look like iOS. This compact smartphone is fast, fun to use, and boasts penta-band GSM compatibility.
The bad: The Meizu MX’s camera isn’t quite up to the superphone camera caliber of the iPhone 4 or Android, and its China-only availability puts it out of reach for most smartphone shoppers.
The bottom line: If you think you have no use for a Chinese iPhone clone running Android, the Meizu MX could drastically change your worldview. Despite a few quirks, the MX is a slick Android- and iOS- inspired hybrid that also flaunts a few tricks of its own.
Then came $400 Meizu MX2, 4.4″ 1280×800 Exynos4412 [Charbax YouTube channel, March 11, 2013], actually in December 2012
But in fact the whole smartphone business development started with M8 first shown by Meizu at CeBIT 2007 [Charbax YouTube channel, March 26, 2007], as traditionally they were an MP3 player manufacturer
3. OPPO
Updates:
OPPO to Attend XDA DevCon in Miami [press release, June 21, 2013]
SHENZHEN – June 21, 2013 – OPPO today announced they will be attending XDA DevCon as an Elite Sponsor. The conference, hosted by the popular XDA Developers site in honor of their tenth anniversary, will take place in Miami, FL from August 9-11. The conference will feature the developing community’s top speakers and developers and feature the leading names in mobile technology in an effort to nurture and enable greater innovation.
Sponsor to Support Development Community
A core part of OPPO’s company culture lies in its commitment to working with its fans to develop and deliver the best products possible. For that reason, OPPO is a strong proponent and supporter of the developer community. In fact, OPPO recently worked closely with XDA to bring CyanogenMod to Find 5 for Android enthusiasts around the world.
DevCon provides a setting for the best and brightest in the developer community to meet, engage and collaborate face-to-face. OPPO is proud to sponsor an event which encourages this kind of innovation and will further immerse OPPO into a community which can help OPPO create the best smartphones on the market.
“We have been working with XDA Developers for a few months” said Pete Lau, Vice President of OPPO, “At first, we were a bit skeptical. Then gradually, as we opened up more, we saw the developer community become really passionate about OPPO.” …
OPPO & CyanogenMod at XDA:DevCon 2013 [OppoOfficial YouTube channel, July 30, 2013]
Nemesis [Steve Kondik CyanogenMod Founder, till 2013 with Samsung, July 26, 2013]
My goal for CM has always been to break open these mostly proprietary mobile devices so we can turn them into the product we really want. I think over the last few years, we have largely accomplished this goal- CM is available in some for almost every device imaginable. What’s most important to me is that anyone can get the code, hack on it and change whatever you want, build it, and flash it to your device.
It’s a huge amount of work, and has left us little time to work on other things. This is good and bad though. Just as Google made it easy for so many people to get into mobile with Android, we’ve made it easy for anyone to get into making their own aftermarket ROMs. It’s awesome. There’s so much crazy stuff that people are building that nobody has thought of before.
Nemesis is our plan to improve the user experience in the right places. The new camera app, Focal [created by Guillaume Lesniak, see interview], is just the start. Without giving too much away, invoking teaser videos, or giving ETAs, I can confidently say that awesome things are going to keep coming. Watch out 🙂
Read also: CyanogenMod Team Introduces Nemesis Stage 1: Focal [xda developers, July 29, 2013]
Coinciding with the release of Android 4.3 and and an updated stock camera, stage one of the CyanogenMod team’s top secret “Project Nemesis” was finally unveiled on July 26. According to the development group’s weekly wrap-up on www.cyanogenmod.org, the goal of this project is to bring users the best custom operating experience possible. As such, Focal, a feature-packed camera application, was announced as the first component geared towards reaching that goal. CyanogenMod developer Guillaume Lesniak (XDA Recognized Developer XpLoDWilD) posted details about the new camera on Google +, explaining almost a dozen new and improved features that were integrated into the Open Source app. …
End of Updates
Oppo Find 5 Full Review – Everything You Need to Know – Cursed4Eva.com [Cursed4Eva TV YouTube channel, April 1, 2013]
Oppo, the Apple of China to Enter India With Find 5! [Trak.in, May 15, 2013]
Oppo is that to China what Apple is to USA and Oppo has decided to enter the Indian smartphone arena and it has chosen its flagship device, the Find 5 for doing so.
The Oppo Find 5 will be made available in India courtesy of AndroidGuruz and the smartphone provides a pretty good alternative to the flagship devices like the Samsung Galaxy S4, Sony Xperia Z and the HTC One.
And it will come at a price around Rs.10,000 [$182.5] less than those flagship devices.
The Oppo Find 5 will retail for Rs. 27,445 [$501] for the 16GB variant whereas the 32GB variant will set you back by Rs.31,259 [$571].
Oppo will be selling Find 5 on their own website hosted on AndroidGuruz domain. I am surprised that will not be listed on e-commerce sites that may really shoot up the numbers of units sold.
Having said that, Oppo cannot be compared to other Chinese brand, due to the kind of specs and quality it provides.
…
Quality Meets Style with the OPPO Find 5 – The Fifth Element Unfolds [press release, Dec 12, 2012]
OPPO Find 5 Unveiled With 5” 1080P Screen, 13 Megapixel HDR Camera and More
BEIJING －December 12, 2012 －At the OPPO Find 5 “The Fifth Element” Launch Event held in 798 Art District today, OPPO introduced one of this year’s most mysterious and anticipated mobile products, the OPPO Find 5. The all new, industry leading OPPO Find 5 was announced to an audience of over 500 members of the international press, OPPO fans, developers, and partners, in what marks a spectacular end of year for the mobile industry.
See – like you’ve been blind all along
The OPPO Find 5 features a 5.0” 1080p IPS screen with a staggering 441 PPI pixel density, allowing you to experience a world of crystal clarity and the most realistic colors. With OGS technology that combines touch sensors with display, colors are more vivid and lifelike, and you’ll feel as if the screen contents are floating on its surface.
Despite its large screen, the OPPO Find 5 is easy to hold thanks to its super slim 3.25mm bezel. When the screen is off, the front becomes a borderless sheet of pure black, mysteriously calming yet satisfying to the eye.
Touch – and your fingers won’t stop
Industrial design has always been one of OPPO’s core strengths. An example is the Find 5 front frame. Although it only weighs a mere 6.3 grams, the front frame alone takes four hours to craft. Starting with a 210 gram piece of stainless steel, it undergoes 12 manufacturing processes, after which it is given a black chrome plating in a 1470 °F (800 °C) vacuum environment. The result from this demanding process not only protects the screen from impact, it also contributes to the Find 5’s amazing look and feel.
The overall design of the Find 5 is minimalist, relying on straight lines and simple shapes that removes distractions, while at the same time being built using the best materials and techniques available, giving OPPO Find 5 a simple and understated, yet refined and premium look and feel.
Cherish and share, the beauty from every journey
On the backside, OPPO Find 5 comes with the most advanced 1/3.06-type 13-megapixel camera sensor available on the market, adept at taking great photos in low light conditions. With market-leading Stacked CMOS technology, it features an f/2.2 aperture, 4-layer coating and blue glass filters. On the front, Find 5 it is fitted with a 1.9-megapixel camera.
OPPO Find 5 is the world’s first smartphone with hardware supported HDR photography and video recording. It redefines smartphone video recording, with its capability of recording video in 120 FPS, five times the speed that the human eye can perceive. Apart from videos being silky smooth in normal playback, they will also be smooth during slow-motion playback and clear during freeze-frames. In addition, the camera on the Find 5 is capable of taking 100 photos at 5 per second with Burst Mode.
OPPO Find 5 will bring you into a new era of wireless sharing. With NFC functionality, gently touching two phones will pair them in less than a tenth of a second, 50 times faster than Bluetooth pairing. OPPO’s NFC SmartTags with preset actions will add simplicity and convenience to your life. Find 5 also supports Wi-Fi Display and DLNA, two technologies that allow you to wirelessly project screen contents onto your television in HD.
Listen, and rhythm will touch your heart
Find 5 comes with the powerful Dolby 3D surround sound technology and the exciting Dirac HD technology, combination of hardware and software usually only found in high-end audio and cinema sound systems. With Dirac, you will clearly hear a difference, and become immersed in music the way the artist originally wanted to express it.
Love, for it is the Fifth Element
OPPO never set out to create the most powerful phone. Internally, we have always said that we create products in the intersection of romance and technology, and Find 5 is a product that OPPO employees worked passionately and relentlessly on. Just like Plato was convinced of quintessence, an element beyond thematerial world, there is more to the Find 5 than the mere sum of its parts. There is an element beyond the purely rational, and that element is love. OPPO Find 5 is infused with of our love, a love we wish to explore with the world.
OPPO Find 5 is set to launch in early 2013 across selected markets.
OPPO Find 5 Specifications
Network: UMTS/HSDPA/HSUPA/HSPA+/HSPA+42 (850, 1700, 1900, 2100MHz), GSM/EDGE (850, 900, 1800, 1900MHz)
Processor: Qualcomm APQ8064 Quad-Core 1.5GHz
Display: 5.0” 1080P 441PPI IPS (1,080×1920)
Memory: 16GB ROM, 2GB RAM
Camera: Main: 13 megapixel Stacked CMOS sensor with HDR, Front: 1.9 megapixel, 120 FPS video recording, f/2.2 aperture, blue glass filters
Connectivity: 802.11a/b/g/n Wi-Fi (802.11n 2.4GHz and 5GHz), Wi-Fi Direct, Bluetooth, NFC
Features: Android 4.1 (Jelly Bean), GPS, Wi-Fi Display, DLNA, Gyroscope, Digital compass, Microphone, Sensors (light, proximity, magnetic and gravity)
Battery: 2500 mAh built-in lithium-ion battery
Included Accessories: Power adapter, USB Cable, Headphones
OPPO Find 5 – When Technology Meets Affection [OppoOfficial YouTube channel, May 13, 2013]
OPPO Find 5 – Features [OppoOfficial YouTube channel, March 17, 2013]
OPPO Find 5 – OGS One Glass Solution Technology [OppoOfficial YouTube channel, Feb 28, 2013]
OPPO Find 5 – Camera [OppoOfficial YouTube channel, Feb 20, 2013]
The Journey of OPPO [OppoOfficial YouTube channel, Nov 30, 2012]
OPPO Finder – Ultra-slim Smartphone [OppoOfficial YouTube channel, Nov 28, 2012]
OPPO is a globally registered technology brand, with a long history of serving customers in North America, Europe and Asia, delivering products that receive high ratings from experts around the world.
Since entering the mobile market in 2008, we have been restless in our pursuit of the latest technology, the highest quality and the most user friendly products.
Leaders in Technology
We are passionate about exploring the latest that technology has to offer. Since the start, our products have pushed the boundaries of technology. An example is the 6.65mm OPPO Finder we released in mid-2012, then the world’s thinnest smartphone. Towards the end of 2012, we announced one of the world’s most anticipated smartphones, the OPPO Find 5, featuring a 5″ 1080p display and a 13 megapixel stacked CMOS sensor, it was the world’s first smartphone with hardware supported HDR.
The Highest Quality Standards
OPPO uses only highest quality components available on the market. Alliances with the leading international partners ensure that we have the latest and best hardware available. With an uniquely independent R&D capacity, we design, develop, manufacture, market, and sell our products ourselves.
We have full control over the entire supply chain, from our factories to the hands of our customers. This way, we can design for the end product in mind and ensure that only the best quality products reach our customers.
Customers First
Our customers are the core of our business, and satisfying them is the precondition to our existence. OPPO products are co-developed with our customers, with customer feedback playing a big role in both hardware and software development. For our smartphones, we have adopted rapid release cycles, releasing firmware updates every other week based on customer feedback.
4. Chinese domestic brand expansion into the global market: the AndroidGuruz initiative from India
Our overview of the most innovative Chinese brands is even more actual as with question Will AndroidGuruz change the way we perceive Chinese smartphones? [Trak.in, April 24, 2013] it is stated first time that the current “below standard” perception about Chinese phones could seriously change outside their domestic market:
We Indians perceive Chinese phones as something below our standard but we’ll gladly go in for a smartphone from an Indian vendor like Micromax and Karbonn.
But Chinese are all set to change that as the inherent flaws that the Chinese phones have had of warranty and reparability are going to be taken care of in near future when Androidguruz [website], a consortium of about 50 Chinese smartphone brands set up shop in India.
What is AndroidGuruz?
AndroidGuruz [Facebook site] is a retail smartphone chain that has been floated by Zopo Mobiles and the brand will set up 200 retail shops in India soon and they will be responsible for the warranty and servicing of the Chinese smartphones in India.
Why it would change the game?
Indian smartphone vendors such as Micromax, Karbonn and Lava get their smartphones made from China and these are then imported into India. These are nothing but rebranded Chinese handsets and these can be found in different markets under different names.
For instance, the most popular smartphone from an Indian manufacturer today is the Micromax Canvas A116 HD which is made by a Chinese company, Beidou Chi and it can be bought in Pakistan under the name of Qmobile A16 HD.
So companies which manufacture smartphones for Indian companies have tied up and will be entering the Indian markets with their products on their own. Why I think these would make for better devices is because the middlemen, in this case the Indian manufacturers would be eliminated from the scenario and we could have the smartphones directly from the manufacturers, thus resulting in money saving.
Servicing Issues
Chinese manufacturers have a servicing issue but AndroidGuruz would take care of that issue. They’ll offer a 3 month replacement warranty for each handset and the standard one year warranty. The company will take care of the servicing issues as well through these centres.
What you should look forward to?
Companies such as Umi, Zopo, Jiayu and Gionee have already made their way into Indian markets but due to the lack of service centres have not been able to get a strong footing despite having some real great products in their portfolio.
So what AndroidGuruz will do is that it will take those great products to the masses and since the service centres would be in place, the after sales issues would be taken care of.
The Only Hiccup
The only reason why I think this great venture might fail is the perception of the Indians. For instance, Fiat’s 1.3 litre Multijet engine is the reason cars such as Swift, Dzire, Manza and the likes are famous but the company’s own offering, Punto has literally bombed at the sales charts.
As Indians, we trust Micromax more than Zopo or UMI and that is the reason why the Indian manufacturers will continue to have a dominance despite the fact that Chinese smartphones will offer similar products at a lower price point.
Verdict
I’ll say go in for the Chinese smartphones as they are relatively new in the market so they’ll ensure you get the best service to build a loyal customer base as happy customers account for free advertisement. The middlemen will be eliminated and you’ll get a product that is absolutely value for money.
Chinese mobile firms use start-up to enter India [The Hindu, April 9, 2013]
The Shenzen-based consortium wants a franchisee network in the country
A consortium of Chinese mobile makers are planning a quiet entry into India with the help of a start-up, which would set up over 200 sales and service centres for nearly 50 different manufacturers.
The start-up, a company called AndroidGuruz, plans to set up sales and experience zones, giving the Chinese companies a foothold into the Indian market.
“The Government has already given FDI clearance or is in the process of granting clearance to these 40-45 brands which are in the mobile phone business. We are looking to give the consortium, which is made up of these brands, a support network,” said Vivek Despande, Asia Support Manager of AndroidGuruz.
The Shenzen-based consortium wants a franchisee network in the country, which will comprise brands such as Zopo, UMI, JiaYu and Mogu.
The first such store will open in New Delhi over the next three months [opened on July 8, 2013] with more in Bangalore and Mumbai to follow by the end of the year.
According to Mr. Despande, while the companies would initially sell Android-based phones, it could serve as a prelude to offering tablets and other such devices.
India battleground
The smartphone battleground in India has received tough Chinese competition over the last one year, with established brands such as Huawei and Lenovo managing to make slow inroads into the market. Huawei, in fact, plans to set up nearly 250 experience centres by the end of 2013.
Three months ago, Chinese firm Konka announced its entry into India with an investment of $30 million.
As of May 2013 only OPPO Find 5, one of the Top 3 most innovative domestic brands in China, was “available” on the AndroidGuruz as shown by the screenshots (see the below image on the left) but pages for six other brands were prepared as well (see the below image on the right):
Here is how the already available Oppo Find 5 Review! [Marques Brownlee YouTube channel, Feb 9, 2013] included in the Find 5 Description page is presenting this top of the class product:
More information:
– Oppo Now in India !! [on Androidguruz FB timeline, May 11, 2013] which had the following reply
Androidguruz Our arrangement is official approved for online sales in India, will start retail sales in 1 month, tech support and service warranty will be given, please note the prices of oppo are internationally same !!!!
Yesterday [May 15] at 4:54pm
– however there is a recent information from China that Oppo Not Launching In India, Androidguruz Fake?!! [GizChai, May 15, 2013] containing the following reply from OPPO
Update as of Aug 1, 2013:
Two and a half months later the sitemap shows the following changes:
Note that Caesar brand has gone and THL Mobiles appeared. Looking at the menu row there is the BLU brand as well. But the reality is:
– Umi: both XII QUADCORE and X1S QUAD CORE are out of stock
– Zopo: both ZP 900S (LITE) and ZP900 LEADER are out of stock
– Jiayu: from June 24
G2 1 GB RAM, Rs9,999 ($165)
G2 512 MB RAM, Rs8,900 ($147)
G2S 1 + 4 GB ROM, Rs11,500 ($190)
G3 (Quad-core + 1 GB + 4 GB ROM), Rs12,500 ($206)
G4 (Quadcore + 1 GB + 4 GB ROM), Rs14,500 ($239)
G4 ( Quadcore 1.5 GHz + 32 GB ROM), Out of stock
– Xiaomi: none
– THL Mobiles: none
– Iocean:
X7 Youth Plus, Rs15,999 ($264)
X7 Youth Turbo, Rs12,500 ($206)
|
July 9: Blu Mobiles Coming to India in August !!! July 9: Blu Nex Technology July 9: Blu Product Roadmap (36 photos) July 9: Blu Feature Phones (23 photos) July 10: AndroidGuruz Store in New Delhi July 17: AndroidGuruz Franchise Campaign July 19: Blu Dash coming next week to India |
So it seems to be that the originaly Indian initiative is starting to move with Jiayu, Iocean and soon with Blu brands.
GiONEE (金立), the emerging global competitor on the smartphone market
In the Top 10 on the Q1 CY13 Chinese smartphone market Lenovo (w/13.1%), Huawei (w/10.1%) and ZTE (w/6.9%) are well-known brands globally. The #3 Coolpad (w/10.3%) is not, neither the #7 K-Touch/Tianyu (w/4.1%), nor the #8 GiONEE (w/3.8%), nor the #10 OPPO (w/2.9%).
When I looked into these companies I got interested only in GiONEE (金立), as the one with the best chance currently to succeed in the broad global market as well. Not least there is a very strong determination by GiONEE Group President Lu Wei Bing (卢伟冰) / William Lu (see the below picture that was taken on the July 10 launch) to succeed overseas as evidenced by his latest interview with Tencent Digital.
He is absolutely convinced that after doing 10 million unit ODM sales abroad the company is ready to expand under its own brand as well. Moreover he was in 2009 with K-Touch/Tianyu as responsible for mobile GSM and overseas business unit there, so has pretty much experience in overseas efforts from China.
Update:
Elife E7 Product Video [Gionee India YouTube channel, published on Dec 30, 2013]
The New Gionee E7 [Gionee India YouTube channel, published on Jan 2, 2014]
We’re now in the new smartphone era. Meet the New Gionee.
With 100 million users and presence in 40 countries. Wherever you are, Gionee is always easily approachable!
Our motto, “Innovations and advance with the times.” The integration of hardware and software in creating the perfectly balanced ecosystem.
Gionee has the largest Intelligent Manufacturing base in Asia. Over 10 years of experience accumulation. Today, Gionee has 4 R&D Centers and over 1,500 engineers worldwide and an annual investment of USD83 Million in R&D. Over 100 patents of mobile technology.
More than 8000 employees based in the Gionee Industrial Park, built with an investment of USD 125 Million with production capacity of 40 million units/ year which can be upgraded to 80 million units / year. China’s 1st lab developed specifically for supporting product design.
We cooperate with the World’s Top Developors including Google, Qualcomm, Samsung, Sharp who have now become Gionee’s strategic partners.
Technology will continue to change and shape our future. With our world class partners, Gionee will continue to bring innovations into your work and life. We will continue to expand and provide the best user experience in a Smartphone to more users worldwide.
Connect with us:
- Facebook: https://www.facebook.com/gionee.india
- Twitter: https://twitter.com/gioneeindia
- Instagram: http://instagram.com/gioneeindia
- Pinterest: http://www.pinterest.com/gioneeindia
How the handset newbie Gionee is on the route to take on Apple, Samsung [The Economic Times of India, Jan 17, 2014] “Lu Weibing …the 38-year old … President of the $2.5 billion Gionee” about “the Gionee disruption model”:
Weibing wants the 8,000-people-strong Gionee to be among the top five global brands in the smartphone business and claims that three Chinese brands will be in that bracket in the next five years. By then, he wants to lead the pack in India taking on the likes of Samsung and Apple.
Annually, Gionee sells about 25 million handsets compared to Samsung’s 396.5 million and Apple’s 135.8 million. It may be a long road, but his role model is Apple founder Steve Jobs—”because he was a product manager and back home in China, I’m a product manager involved in every step of the product”.
- Exclusivity with distributors
…- Own manufacturing
…- Ability to work with multiple partners
…- Exit ODM, enter brand
…- Own the OS
In the future, for any brand to succeed, it must have its own operating system (OS). We started work on our OS, Amigo, two years back, and it is up and running today with its cloud service, book centre, shopping, app store, browser. The OS is obviously being customized for different geographies.
- Innovate before others
…- Straddle all price points
…
Gionee Elife E7 – specifications, features and review [Gionee India YouTube channel, published on Jan 2, 2014]
Gionee announces the launch of its flagship ELIFE E7 smartphone in India. [Gionee India YouTube channel, published on Dec 29, 2013]
ELIFE E7 powered by the Qualcomm® Snapdragon™ 800 processor is an incredible Camera Smartphone.
New Delhi – December 24, 2013: Gionee Smartphones, a global leader in mobile manufacturing, design and R&D, today announced the launch of its new flagship Smartphone ELIFE E7 in India. ELIFE E7 is powered by the Qualcomm Snapdragon 800 processor and android based operating system AMIGO 2.0. Qualcomm Snapdragon processors are a product of Qualcomm Technologies, Inc., a wholly-owned subsidiary of Qualcomm Incorporated. Gionee ELIFE E7 is designed specifically to bring the technology of professional digital cameras to smartphones with a best-in-class lens and a breakthrough image sensor.
ELIFE E7 runs on the Qualcomm Snapdragon 800 processor featuring a 2.2GHz quad Krait CPU, designed for 3D gaming, faster processing and a professional photo shooting experience. The ELIFE E7 comes in two variants that support 3G and 4G respectively. The ELIFE E7 4G will be powered by the Qualcomm Snapdragon 800 processor featuring a 2.5 GHz quad Krait CPU.
The Gionee ELIFE E7 possesses a 16 MP rear camera and a stunning 8 MP front camera. Beside its powerful sensor and stunning resolution, the ELIFE E7 has been developed and customized with a large lens based on professional Largan M8 lens solution. ELIFE E7 features a 13.9 cm (5.5 Inch) FHD (JDI) Display with 1920 x 1080 and 401 PPI for spectacular viewing quality. ELIFE E7 is equipped with the latest 3rd Generation Gorilla Glass which is 20 times more scratch resistance than regular classes and twice as durable as the second generation of Gorilla Glass. The sensitive ELIFE E7 touch screen is also responsive to gloves, wet hands, and keys to ensure photographers can take pictures in any weather and any situation.
ELIFE E7 comes with built in 12 Levels of Auto Beauty feature to ensure that the user will always look flawless in every picture. An innovative SR Auto — Intelligent Scene Recognition Function also eliminates the hassle of changing the settings every time as it automatically changes the settings to automatic, portrait, Micro, night, night portrait, backlight, backlight portrait. ELIFE E7 has a new way for wakeup screen which can be performed by a simple Double Tap. Another interesting feature is the Black Screen Gesture that simply draws the gestures on the black screen and goes directly into the customized corresponding procedures.
“Since its launch in India, Gionee’s ELIFE series has been extremely well received by consumers. ELIFE E7 is sure to create buzz and recreate benchmarks in the industry. Gionee has crafted its unique space in the Indian market in a very short time supported with unmatched quality, distribution and service. ELIFE E7 is sure to set the Indian smartphone market ablaze with its never seen before features and great hardware.” added Mr. Arvind.R.Vohra, Director Syntech Technology Pvt. Ltd.
“We designed ELIFE E7 with the best in class hardware and software that will make it stand out on any parameter. While creating the most powerful camera for ELIFE E7, the idea was to come up with a way to create the perfect combination and balance of image resolution and picture quality. A joint development with OmniVison has enabled the Elife E7 to sport a 16 megapixel sensor with 1.34 μm pixels which enables users with the ability to shoot razor sharp images without compromising the photo’s resolution or image quality”, says Mr. Lu Weibing, President of Gionee Smartphones.
Additional Features of ELIFE E7
· NFC — Share your work anywhere
Share photos, MP3, videos, and anything you want in the blink of an eye, users can define different modes.
· OTG
Interconnection and freedom to share, connecting a usb to smartphone to instantly view or save documents.
· Sound
ELIFE E7 sports three-mic noise cancellation for reduced noise and clearer conversation in every situation.
The GIONEE ELIFE E7 will be available in black, white, blue, pink, green, yellow and orange colour and will be available in India starting January 2014.
The Price of Elife E7 32 GB and 16 GB is Rs. 29,999 [US$487] and Rs. 26,999 [US$438] respectively.
Qualcomm and Snapdragon are trademarks of Qualcomm Incorporated, registered in the US and other countries. Other product and brand names may be trademarks or registered trademarks of their respective owners.
End of Update
Then GiONEE has the largest manufacturing facility of its own among those additional players, with 40 million units capacity per year, and with an expansion capability already prepared in its industrial park for another 40 million when the market opportunity will arise. Finally the company was quickly exploiting MediaTek advances towards the high-end in H1 with prompt introductions even on the Indian market (where it is directly represented only since February), and this would bring even better, “Samsung and Apple beating” offerings in H2, especially with the eight-core MT6592:
MediaTek quad-core Cortex A7 CPU (MT6589 @1.2GHz, MT6589T @1.5GHz)
+ PowerVR Series5XT GPU + Dual SIM, Dual Standby + Android OS Jelly Bean:
| March 2013 |
July 23: $268+ (Rs. 15,999+) |
 DREAM D1 |
1.2 GHz 1GB/4GB 4.65″ HD Super AMOLED Plus 316ppi 8MP/1MP v4.1 Android |
| May 2013 |
July 23: $214+ (Rs.12,757+) |  Gpad G2 |
1.2 GHz 1GB/4GB 5.3″ qHD IPS, 960*540 8MP/1MP v4.1 Android |
| May 2013 |
July 23: $251+ (Rs. 14,999+) |
Elife E3 |
1.2 GHz 1GB/16GB 4.7″ IPS HD, 1280*720 8MP/2MP v4.2 Android |
| July 2013 |
July 23: $335 (Rs. 19,999 list) |
Elife E5 |
1.5 GHz 1GB/16GB 4.8″ AMOLED, 1280*720 8MP/5MP v4.2 Android |
This report will be organised into the following sections:
- Current situation in China:
Consolidation among Chinese mobile phone brands and manufacturers would escalate in the following months - Considering the well known Lenovo, Huawei, ZTE and HTC situation the most interesting Chinese brand for me quickly became GiONEE. Why?
- Earlier information about GiONEE
– From the company itself
– From my trend-tracking blog, ‘Experiencing the Cloud’
– From current media reports
Sidenote #1: K-Touch/Tianyu (天语) is only trying to regain its lost fame (when sold 17 million K-Touch phones in 2007, emerging as #2 cell-phone maker in the China market, second only to Nokia). Moreover it had also a U-turn in overseas expansion last year, and now concentrating on the domestic market only. In addition it is quite picky in SoC vendor selection: with Qualcomm Snapdragon 200 MSM8225Q for a $163 4.5”-er quad-core from April, then with Broadcom for a $98 4”-er dual-core from May, finally with Qualcomm Snapdragon 400 MSM8930 for a $163 TD-LTE dual-core from August, as the latest ones. This is all independently from its original, February, 2012 Qualcomm commitment. With this it looks like that it is also trying to avoid MediaTek which made its original success possible, while for others MediaTek has become an even more important partner than Qualcomm.
Sidenote #2: OPPO has a visibly lesser effort to expand abroad, and Coolpad (as a wholly owned subsidiary of China Wireless Technologies Limited), although “has established strong and close strategic cooperation relationships with certain global telecommunications operators” according to its parent, “in the year of 2011, most of the Coolpad smartphones were shipped to the domestic telecommunications operators” according to the chairman of the parent company. For 2012 the parent stated in the Market Share of Coolpad Smartphones Ranks No. 4 in China only these facts: “the Group has started to launch 4G FDD-LTE smartphones in the United States in 2012, a further expansion into overseas markets. … Except for the existing market in India and Taiwan, the Group successfully rolled out its proprietary 4G FDD-LTE smartphone in the American market. The affordable Coolpad smartphones not only enabled more and more American users to enjoy the 4G high-speed network, but also enhanced the brand awareness of Coolpad in the United States. … Meanwhile, the Group continued to partner with the tier-one chipset suppliers to successfully roll out the 4G FDD-LTE smartphone in the United States.” With that Coolpad has a very focused geographical, and even more focused technology segment strategy abroad than GiONEE.
Complementary posts reminder:
Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung[‘Experiencing the Cloud’, July 20, 2013] from which the following excerpts I will include here as the ones directly related to the content given here as well:
… according to Zhu Shangzu (朱尚祖), MediaTek Global Smartphone General Manager in the [Part 2] MediaTek to push 8 small cores, the mystery [ESM 国际电子商情 (International Electronic Business), July 18, 2013] exclusive interview … I think the future of high-end smartphones innovation will focus on the expansion of big screen multimedia applications, and this is our direction. …
Judging from the current situation, customers of high-end flagship phones are still using the products of the competitors, but there is flagship in our quad-core case as well, and OPPO, Vivo and GiONEE and other quad-core phones are also very popular. Our next goal is to get the customers of flagship machines using our platform via helping customers to achieve stronger performance on the big screen multimedia.
Evolution of Indian Handset OEMs – History, Current State and Future Outlook [Convergence Catalyst blog, March 27, 2012]
Many Indian handset brands were started by former national and regional distributors of global OEMs (such as Nokia, Motorola, Samsung, etc). These companies partnered with Mediatek (MTK), a fabless System-on-Chip (SoC) provider and ODMs based in Taiwan and China to source white-labeled devices (with basic Indian market hygiene requirements like long battery life and high audibility)
…
The Chinese handset market has undergone a similar influx of local vendors in partnership with MTK in 2007. Tianyu (market facing brand of Chinese telecom player K-Touch) was the first Chinese vendor to launch mobile handsets based on MTK’s turnkey solution in early 2007. Tianyu’s key success factors include products with feature set that address local market needs, faster turn-around time, wide spread distribution and high channel margins to distributors. By end of 2008, a number of local vendors such as Bird, Amoi, ChangHong, Gionee, etc had entered the Chinese market using Tianyu’s business model. Increased competition among numerous vendors resulted in ASP (Average Selling Price) reduction, in turn affecting handset margins adversely.
End of complementary posts reminder
Current situation in China:
Consolidation among Chinese mobile phone brands and manufacturers would escalate in the following months
The recent message from China was blunt: Xiaomi (小米), Lenovo (联想), ZTE (中兴) and GiONEE (金立) are pushing new products – Mobile phone industry, welcome to the final competitive play (小米联想中兴金立争推新品 手机业迎来淘汰赛) [IT Business News Network (IT商业新闻网), July 13, 2013]:
From Xiaomi mobile phone, Lenovo K900, HTC devices having depth customization with operators, and then to ZTE Geek phones in recent days, in addition to Meitu Kiss [rooted in a highly popular “picture beautifying software” made in China], the GiONEE mobile phone and a number of domestic brands, there were a number of new product launches in the first half. In the second half the smart phone will probably usher in a decisive knockout.
Then the message continues with an earlier information which I would take here in a little more detail from China’s mobile phone shipment up 36.4% in June [China Knowledge, June 12, 2013]
China saw its shipment of mobile phones in the domestic market surge 36.4% year on year to 42.29 million units in June this year, according to a report released by China Academy of Telecommunication Research of MIIT.
The figure last month was 29.1% lower than the 59.08 million it realized in May 2013.
China’s shipment of domestic brand mobile phones in the country hit 34.31 million units in June, accounting for 81.1% of the total.
A detailed media report is in the 6月份全国手机出货4248.8万部下降近三成，国产机处于“小学生”阶段 [China Industry Inside Network, July 12, 2013] which contains the explanation for the May market contraction as well. I will again include an already available explanation in English: China’s mobile phone shipment dips [ZDNet, July 12, 2013]
Some smaller cellphone manufacturers in China have been cutting production on inventory and funding issues, according to a Sina news report, which cited a report by First Financial Daily. iiMedia CEO Zhang Yi told the Chinese newspaper many Chinese brands also were adjusting their pace to reduce the frequency of new product launches as they aimed for higher profit.
Zhang believed consolidation among Chinese mobile phone brands and manufacturers would escalate in the following months.
Many domestic market players are struggling to stay afloat. Faced with falling margins and profits, smaller handset makers have been forced to close and these have included veteran market players in the market who had been in business for over two decades. OEM cellphone manufacturers are competing for orders, some agreeing to lower their profit to just 1 percent in order to secure the big orders.
A cellphone manufacturer told First Financial Daily that major local telcos, including China Mobile and China Telecom, were promoting mobile handsets priced between 299 and 499 yuan (US$48.7 to US$81.3), which basically cut off sales of other lower-end cellphone brands. The market was now a “playground for [well-known] foreign and domestic cellphone brands”, he added.
As far as the market share split between the leading brands the latest information was China market: Smartphone sales over 75 million units in 1Q13, says Analysys [DIGITIMES, May 22, 2013] and 78% of the market is shared by Top 10 vendors, with Samsung and Apple joint share just 24.1% while the domestic top brands held not less than 53.9%, according to the table below:
There were 90.54 million handsets sold in the China market during first-quarter 2013, growing 23.5% sequentially and 34.8% on year, and 75.28 million units of them were smartphones, increasing 32.2% sequentially and 141.5% on year, according to Analysys International.
Analysys: Main smartphone vendors in China by sales volume, 1Q13
Samsung: 17.3% Lenovo: 13.1% Coolpad: 10.3% Huawei: 10.1% ZTE: 6.9% Apple: 6.4% K-Touch: 4.1% GiONEE: 3.8% HTC: 3.1% OPPO: 2.9%
Considering the well known Lenovo, Huawei, ZTE and HTC situation the most interesting Chinese brand for me quickly became GiONEE. Why?
With the Facebook message on September 5, 2012 of the GiONEE FB site:
If you are waiting something new, something that does not only fancy your eye but also touch your heart, wait just with patience and GiONEE is coming…
GiONEE came to the international scene. On September 27, 2012 we were told:
… here unveils the mystic 4.65 inch Android device from GiONEE: Super AMOLED Plus display with QHD resolution (960*540 pixels), 8.0 Mega pixels autofocus camera, 1.0 Mega pixels front-facing camera, dual core 1.2GHz CPU, Android OS v4.0 Ice Cream Sandwich. …
referring definitely to a previous September 25, 2012 message and related image:
… see more about the Super AMOLED Plus screen. The color contrast ratio and brightness is the best, and it is most power saving. Do you like this?
I won’t detail further steps taken by the company on the international market, as documented on its Facebook site, but jump to the latest one of July 10:
Finally we unveil the latest flagship product of Elife series– Elife E6. We hope our fans and curious folks will like it.
the 2699 yuan price equals to not less than $440. Isn’t it too steep? GiONEE’s next message of July 10 seems to target that question with:
Full spec for E6
On July 13 we further learned that:
GIONEE E6 manufactured with CNC technology and handcraft [GioneeMobile YouTube channel, July 12, 2013]
and on July 14:
ELIFE E6’s delicate hand-polished sides allow it to standup by itself in order to take handsfree photos. Never again would someone be left out of a group shot!
on July 16:
This is Gionee Elife E6 – the revolutionary smartphone with more than just a smartphone.
GIONEE ELIFE E6 Smartphone [GioneeMobile YouTube channel, July 14, 2013]
the next July 17:
ELIFE E6’s 5-inch LCD includes the latest LTPS Technology with 1080 pixels and ultra Retina Standards of 441 pixels; allowing you to view the the details of every moment
finally on July 18:
ELIFE E6’s Content Adaptive Backlight Control automatically adjusts screen brightness according to display, maximizing power consumption reduction, and allows power saving up to 30%
Next day we got reminded that:
With all the excitement surrounding Elife E6, don’t forget its 7.9mm curvy, colorful, and stylish little brother Elife E3!
Aha, that “little” device which was reported as Gionee’s Slim New Droid Totally Stole Samsung’s Thunder! [Gizmodo India, May 21, 2013]
… Just a day after Samsung flexed its muscles with a mid-range quad core dual-SIM offering – the Galaxy Grand Quattro, they’ve pretty much been left in the dust by, of all people – Gionee. The ELife E3, from the relatively unknown Chinese ODM (which entered India with its own brand earlier this year) seems to have whipped the Quattro in every department – at least on paper. Here’s the score-line of the tech-spec showdown:
ELife E3 vs Galaxy Grand Quattro: A 6-1 whipping!
1-0: 1.2GHz Quad Core A7 (Mediatek) vs 1.2GHz Quad Core A5 (Snapdragon)
2:0 16GB internal memory vs 8 GB
3:0 8MP/2MP rear/front cameras vs 5MP/VGA
4:0 Android Jelly Bean 4.2.1 vs 4.1.2
5:0 4.7″ IPS 1280×720 display vs 4.7″ 800×480
6:0 Priced at Rs. 15,000 [$252] vs Rs. 17,000 [$286]
6:1 1800 mAh battery vs 2000 mAh
Relative to all that above the original press release for E6 appeared as Gionee Launch ELIFE E6 smartphone – Simply Smart For all, the world’s first White OGS phone [Core Sector Communique, July 11, 2013] from which I will include here only those excerpts which provide additional information:
As the world’s first White OGS phone [OGS = One Glass Solution, touchscreen technology, see also the review within this], its 2.54mm narrow edge and 6.18mm thin miniature size allows it to slide comfortably into your pockets. … weighing only 128g …
Unibody Design
ELIFE E6’s innovative design features an unibody exterior in Pearl White and Stunning Black. …
The Best Display Technology across the Globe
Powered with a full HD Reality Display Resolution, 441PPI high pixel density and super bright AMOLED, ELIFE E6 automatically reduces 80% of sunlight reflection and increases the brightness of images by 20%, bringing you crispier and clearer razor sharp images. Full Lamination Technology allows 20% reduction in overall thickness and Light Transmittance increased by 10%.
Capturing Pictures Have Never Been Easier
ELIFE E6’s innovative camera technology redefines how photos are meant to be captured. Forget about dragging a camera around for high quality photos and videos. With the goal to make life better through technology, ELIFE E6’s camera sports the second generation of Backside Illumination Technology, antireflection coatings, anti-fingerprint film and finishes off with 5 layers of blue glasses, giving it its powerful 13MP rear-end camera for ease of picture taking and 1080P full HD video recording. Its 5MP front-facing camera comes with 12 levels of auto beauty effects, object tracing focus, instant facial beauty support and more; providing its user with Photoshop-polished photos with just a smile.
The GIONEE ELIFE E6 is available in black, white with matching color cases. ELIFE E6 will be available in China from Mid July 2013 with suggested retail price at CNY2699 and will be available in India, Nigeria, and Vietnam after August 2013.
About Gionee
Established in 2002, Gionee Communication Equipment Co. Ltd is a hi-tech company engaging in mobile device designing, R&D, manufacturing, sales in international markets, and mobile internet application services. Today, Gionee sells over 23 million handsets per year in China mainland alone. With innovation at the core of its R&D, in November 2011, Gionee ranked in as the No.3 brand in the 2G market and in August 2012, Gionee ranked in as the No. 2 in the GSM market. Gionee adheres to the motto “integrity, teamwork, innovation”.
Therefore I had two questions for GiONEE (I will add their answers as I get them):
GiONEE In the global press release – see it e.g. here: http://corecommunique.com/gionee-launch-elife-e6-smartphone-simply-smart-for-all-the-worlds-first-white-ogs-phone/– “White OGS” is indicated without any explanation. Even around the web I found only one explanation, as “OGS in white color”. If that is a right wording than it is still not understood. Could you explain?
Gionee India Is IPS Panel and 7.7 thickness is right for your country? As you published it with this picture: https://twitter.com/GioneeIndia/status/355217623287472128/photo/16.18mm
My problem is that in the global press release – see it e.g. here: http://corecommunique.com/gionee-launch-elife-e6-smartphone-simply-smart-for-all-the-worlds-first-white-ogs-phone/– 6.18mm thickness with OGS, super bright AMOLED and Full Lamination Technology has been stated, which is indeed possible with such things (vs. IPS).
Twitter / GioneeIndia: Gionee Elife E6 Specs compared …
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Earlier information about GiONEE
From the company itself:
Gionee Brand Introduction Video– Who we are and what we do? [Gionee India YouTube channel, Feb 2, 2013]
From the content it becomes obvious that this company video was produced well back in 2012, presumably around August 2012 when the ‘About’ was first published as given here: Brand_GiONEE Communication Equipment Co., Ltd ShenZhen [with first content in Aug 15, 2012]
“An international fast growing brand”
Established in 2002, Gionee is a hi-tech company engaged in mobile device designing, R&D, manufacturing, and sales in international markets, and offering mobile internet application service.Gionee started the international branding firstly in China mainland in 2005 which was the gold mine for global investors and enterprises. Now Gionee sells over 23 million handsets per year in China mainland, ranking as No.3 brand in 2G market share after Samsung and Nokia in Nov 2011, and No. 2 in GSM market after Samsung in Aug 2012.
As a brand to be recognized as durable, long standby and easy to use, Gionee now is featured with new tags like fashionable, stylish, and premium user experience. Many Asian super stars have high praise for Gionee products and they are willing to tell people how nice the products are.
Asian super star Mr. Andy Lau, Korean TV play star, all young men’s dream princess, Miss. Yun Enh Huy, Taiwan movie prince Eric Ruan, the most popular music band Phoenix Legend in China mainland, etc, all have acted in Gionee product movies and the beautiful mobile phone stories once moved thousands of people.
Since 2011, Gionee moved rapidly for branding in Nigeria, Vietnam, Taiwan, Myanmar, India, Thailand,
Phillips[Philippines], and so on. And once launched one product, it soon became a best seller in the market, even in some cities and countries customers need to wait for new deliveries. Gionee is a hot word as everyone is talking about where to buy one.Gionee is working for the No.1 brand which is most welcomed by customers. The praises from Gionee customers is the only precious crown for Gionee.
Gionee Industrial Park Manufacturing Facility Video [Gionee India YouTube channel, March 4, 2013]
described in Manufacture_GiONEE Communication Equipment Co., Ltd ShenZhen [with first content in Aug 3, 2012]
With a total investment of more than 1 billion RMB and an area of 330,000 square meters, Phase 1 of Gionee Industrial Park was completed and went into production in 2006, with an annual production capacity of 40 million units. After the project is completed, the park’s annual production capacity will hit 80 million units as China’s largest and best professional mobile phone manufacturing base.
Gionee products are now selling to India, Bangladesh, Pakistan, Indonesia, Vietnam, Thailand, Philippines, Malaysia, Russia, Middle East and Africa. The export already increased to 1 Million phones per month to the overseas market.
A tight partnership with MediaTek and Qualcomm allows Gionee to offer a wide product portfolio covering both low end feature phone and high end smartphone. As all products are designed and manufactured by Gionee and as the company is only working with tier-1 suppliers, Gionee is awarded the Best Quality Mobile Phone Manufacturer in China.
Welcome to visit our industrial park!
Finally RD_GiONEE Communication Equipment Co., Ltd ShenZhen [with first content in Aug 3, 2012]
The company has over 10,000 employees, out of which 1000 belong to R&D and 8000 belong to the factory.
Technology reflects the strength of an enterprise; R&D is the key to sharpen the competitive edge of mobile phone industry chain roundly, and Gionee always insists on the strategy of independent R&D and innovation. At present, Gionee’s R&D system mainly comprises six professional R&D organs: Application R&D Institute, Smartphone R&D Institute, Overseas BU R&D Institute, CDMA R&D Institute, GOSO R&D Institute and AORA R&D Institute.
Persistence in quality is the impetus for Gionee’s sustained development. With deep R & D as core, lean manufacturing as foundation, outstanding after-sale service as guarantee and high-tech products as core competitiveness, Gionee has kept developing practical and handy products. Gionee has persisted in independent R & D by establishing professional R & D institutions in cities like Shenzhen, Shanghai and Hangzhou, thus ensuring its outstanding R & D performance.
And I will include here the following 3d party information as a very relevant one:
Gionee UX Design Training – PEOPEO [Peopeo UX Training information, Aug 9, 2012]
Introduction:
Peopeo was contracted by Gionee to give their headquarter team in Shenzhen a series of training program around user centered product design and development. Different level of teams, from management, product manager, designer, and engineers, had participated in this training course, to form a consistent acknowledgement.
Content:
Nowadays China is at a period of changing from Made in China to Designed by China, all companies have to facing such a challenge. Only through a professional user experience centered product design and development process, through in-depth research and understating on the users, the companies can save tremendous cost, can develop better product which meet users’ demands, fir users’ habits, bring users with great experience, hence win the market.
For companies like Gionee, while they compete with other big phone companies and other big companies in the internet industry, they have to establish a different competitive strategies and form a localized strategic advantage. So they have to have a clear understanding of user experience, to make UCD as the core in the product development process, which need to be implemented in the future work and to be reflected in all aspects of the company operation; they have to have a coherent, consistent user-centric and unified understanding, and put them into specific implementation, to ensure that users’ needs are met, to ensure that the users have expected user experience, and to further help the company to establish the core DNA.
Peopeo senior consultants Tingbin Tang, Sean Wee and Kelly Shi provided Gionee team this training. Courses combined with a large number of classical and forward-looking cases; together with presentations and discussions to improve every training participants’ knowledge and skills for user-centric design and development process. Including: lecture; case studies; interactive games; video playback; Q&A discussion; interactive workshops, etc.
From my trend-tracking blog, ‘Experiencing the Cloud’:
Be aware of ZTE et al. and white-box (Shanzhai) vendors: Wake up call now for Nokia, soon for Microsoft, Intel, RIM and even Apple! [‘Experiencing the Cloud’, Feb 21, 2011]
While the mainstream business model for manufacturing and distributing mobile handsets remains leveraging the OBM/ODM/OEM/EMS model, a whole new paradigm has developed within China’s domestic market, according to a new report from Digitimes Research.
The local China-based industry called “Shanzhai,” but translated as “white box,” is based on small-scale or underground factories whose products are seldom sold through regular sales channels, but the scale of the market now rivals that of global top-10 brands or major Chinese brands in the domestic China market, Digitimes Research pointed out. The “white-box” industry currently accounts for more than 100 million handset shipments, and some players in the market, such as K-Touch (Beijing Tianyu Communication Equipment) and Gionee have made the leap to become recognized brands.
…
According to MediaTek, the upcoming handset solution, codenamed as MT6252, supports serial flash memory and is cost efficient for handset makers as it uses lesser passive devices and smaller printed circuit board than existing solutions. Also, the MediaTek solution supports four-SIM, four-standby mobile phones, convincing the mainland`s home-grown handset makers including Gionee Communications Equipment, Ragentek Communication Technology Co., Ltd. and Leatek Technologies International Co., Ltd. to support it.
Boosting the MediaTek MT6575 success story with the MT6577 announcement – UPDATED with MT6588/83 coming early 2013 in Q42012 and 8-core MT6599 in 2013 [June 27, July 27, Sept 11-13, Sept 26, Oct 2, 2012]
Digitimes Research believes that market share rankings for the China smartphone market will change significantly during 2012. Samsung and Apple will take the top two places, while the big four China-based brands –Huawei, ZTE, Lenovo and Coolpad – will take third to sixth places, whileNokia will drop to seventh; these seven firms will collectively account for 85% of shipments.
In other words, the many other brands hoping to seize a share of the market will essentially be confined to competing for a potential market of just 15% of overall shipments or around 21 million handsets. Given such a situation, Digitimes Research projects that many of China’s best known smaller brandssuch as Xiaomi, TCL, Gionee, Tianyu, Oppo and BBK will see shipments of no more than a few million handsets.
…
Industry sources claim that China’s smartphone prices could drop to RMB 600 in H2 2012 due to increasing availability of low-priced smartphone chips. Smartphones featuring Taiwanese fabless semiconductor company MediaTek’s (MTK) MT6573 processor are available on B2C e-commerce sites such as Taobao and Paipai for RMB 800 and below. MediaTek’s MT6575 chipset, released in March, has already appeared in handsets from domestic handset vendors such as Lenovo (0992.HK), Gionee, ZTE (0763.HK; 000063.SZ), and Yulong (Coolpad), as well as foreign brands such as Motorola. The MT6575 is currently available for between RMB 1,000 to RMB 1,500. Taiwanese chipmaker MStar Semiconductor plans to release its first dual-core chipset solution for RMB 1,000 smartphones next week.
The low priced, Android based smartphones of China will change the global market [‘Experiencing the Cloud’, Sept 10, 2012]
Stellar growth sees China take 27% of global smart phone shipments, powered by domestic vendors [Canalys press release, Aug 2, 2012] – Android is the clear platform of choice, accounting for 81% of Chinese shipments … Local tier-one vendors have worked hard in recent quarters to greatly improve their brand resonance among consumers and to expand and enhance their relationships and influence within operators,’ said Canalys Research Director for China, Nicole Peng. ‘But the tier-two vendors — the likes of Oppo, K-Touch and Gionee — have also stamped their mark, boosting smart phone shipments into tier-three and tier-four cities, predominantly through the open channels. As feature phone vendors, they already have established partnerships and strong brand awareness. These domestic vendors are making significant progress transitioning their portfolios and customer bases to be more focused on smart phones.’
Apple Should Take The $199 Chinese Smartphone Seriously [Seeking Alpha, Sept 6, 2012] At a time when China is set to overtake the U.S. as the world’s largest smartphone market, little-known Chinese firms are prepared to battle it out for market dominance with the maker of the game-changing iPhone, Apple (AAPL). … There are a number of Chinese brands offering similar capabilities, nominally, as the iPhone at half the price, most of them using a forked version of Google’s (GOOG) Android. The names include ZTE Corp., Lenovo Group, and other small private firms like Xiaomi, Gionee, and Meizu Technology. Even cheaper smartphones are offered by Alibaba Group, Shanda Interactive, and Baidu (BIDU) for fewer than ¥1,000 (~$150 U.S.).
MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [‘Experiencing the Cloud’, Dec 12, 2012]
Currently Oppo, ZTE, Huawei, Lenovo, Gionee and even Sony have confirmed to be working on phones using the new quad-core CPU, with prices from some smaller brands expected to start at around $200.
Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the Cloud’, July 20, 2013]
[Part 2] MediaTek to push 8 small cores, the mystery [ESM 国际电子商情 (International Electronic Business), July 18, 2013] exclusive interview … [with] Zhu Shangzu (朱尚祖), MediaTek Global Smartphone General Manager … Judging from the current situation, customers of high-end flagship phones are still using the products of the competitors, but there is flagship in our quad-core case as well, and OPPO, Vivo and GiONEE and other quad-core phones are also very popular. Our next goal is to get the customers of flagship machines using our platform via helping customers to achieve stronger performance on the big screen multimedia.
From current media reports:
Gionee and Opera get more people connected [Opera press release, Jan 24, 2013]
Opera Software and Gionee, one of the TOP 3 mobile phone brand in China and famous global smartphone solution supplier, are working together to get more people connected with the Opera Mini mobile phone browser.
Opera Mini will be pre-installed in Gionee’s Android-based smartphones to give Gionee users quick access to the internet. These handsets are already available in Vietnam and Nigeria.
Gionee always highlights innovation and makes continuous efforts to bring new features to its users, and is known as a leading provider of mobile phone solutions, products and services to global market.
“The trend that smartphones are replacing feature phones requires more of our inputs in high-end mobile platforms such as Android,” said William Lu, vice president, Gionee. “With a better browser for Android, Opera Mini, in the mix, we can bring better user experience to our customers.”
Opera is one of the most used mobile browsers with 229 million users worldwide. Opera Mini is designed for fast browsing on both 2G and 3G networks.
“The best possible user experience on any device and any network is what Opera works toward,” said Lars Boilesen, CEO, Opera Software. “With Opera Mini, Gionee will provide its users with all the advantages that Opera Mini users benefit from, including its speed and ease of use.”
Gionee has also launched Opera Mini in its Java and MRE based feature phones.
Lenovo, Huawei, Coolpad, Gionee, Xiaomi: 5 Chinese ‘Underdog’ Smartphone Brands Taking Your Sales [International Business Times, Feb 25, 2013]
Apple has been at the top of the smartphone industry since it came out with the iPhone. Five iterations later, it still holds a pretty big share of the industry. But lately, Chinese brands are making a name for themselves, starting in their own country.
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Gionee
The good
Gionee’s flagship phone, Dream D1 features a 4.65-inch display with super AMOLED, a 1.2GHz Cortex A7 Processor, Android 4.1 Jelly Bean OS, 1 GB RAM, 4 GB of Rom with microSD card, an 8-megapixel rear camera, and a 1-megapixel front camera, reports GoTechMax.
The bad
Aside from the lower-than-normal pixel count of the camera, Gionee’s Dream D1 also has an HD 720p display, so you can’t expect full HD. Otherwise, it gives a pretty solid run for a phone that’s rumored to be sold at Rs 10,000 in India (approximately $185 USD), reports Droidify.
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Cornucopia of Choices Spurs Smartphone Market to Double by End of 2017 [IHS iSuppli press release, July 17, 2013]
…
Apple’s iPhone franchise appears to be stalling as first-quarter shipments of 37.4 million fell below expectations. With the next iPhone model not expected until the second half of the year, there is a real possibility that the full-year 2013 sales volume of the iPhone may be essentially flat at around 150 million units, compared to 134 million units in 2012.
“The possible slowing growth of the iPhone and the rapid pace of competitive smartphones releases speak to the ferocious nature of the handset business, especially now as the market continues to pivot from a market dominated by lower-end handsets known as feature phones to one that is increasingly smartphone-centric,” Lam said.
Outshipped
The trend of deeper smartphone penetration continued in the fourth quarter of 2012 and the first quarter this year, as smartphones outshipped feature phones in the overall branded cellphone market.
After a seasonally high fourth quarter, which saw total mobile handset shipments topping 400 million units for the first time, handset shipments in the first quarter of 2013 contracted by nearly 50 million units quarter-over-quarter, keeping with seasonal sales trends.
Samsung continued its strong growth in the first quarter with a sequential increase of 9 million units, while brands such as Coolpad and Gionee outshipping the likes of HTC and Motorola in the first quarter.
Chinese smartphone OEMs were able to accomplish such growth on the back of a catalog of largely affordable smartphones, while Samsung rolled out a number of low-cost variants to its high-end flagship products.
These competitive forces, as well as changing consumer demand, will place pressures not only on Apple but also on other OEMs, IHS believes, forcing players to innovate and diversify smartphone offerings in order to continue growing.
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Gionee To Launch Series Of Smart Phones In India [EFYTimes.com portal, Feb 19, 2013]
Established in 2002, Gionee is a specialized mobile device design company from China. Gionee over the years has believed in keeping Innovation as its Core Value Proposition which has helped the company’s growth over the last decade. Research & Development is an institution with over 2000 employees. A state of the art In house Manufacturing Unit ensures Gionee products deliver more than the best to its customers, creating new benchmarks of quality each time.
Gionee currently sells over 23 million handsets per year in China mainland and has been ranked No. 2 brand in the GSM market. With an investment of over 160 Million Dollars and 8000 employees, Gionee has a current annual production capacity of 40 million units. The company is already in the process of expansion with an area of 330,000 square meters, the Gionee Industrial Park is China’s largest and best managed mobile phone manufacturing facility unit on completion will have an annual production to hit 80 million units. Gionee’s export is in access of a million units monthly catering to well established brands overseas as an ODM.
Gionee will be launching its entire range of mobile devices in India, from feature phones to smart phones with a special focus on the smart phones. Gionee promises to offer its Indian customers the best in class experience, every time and would be available with its entire range of products for Indian customers by the end of Feb 2013. Gionee has also tied up 4 leading import and distribution and import partners including based out of Chandigarh, Jaipur, Kolkata & Bangaluru.
To support the India Operations Gionee has already set up an office in New Delhi and is in the process of building the core team. The India Office will help strengthen its brand presence by providing Marketing / Sales Support / Service Support to its Indian Partners & Consumers. The office will be playing a key role in product testing / validation and customization for the India Market. The India Office has already appointed Goosebumps as their Advertising agency and Intellect Digest as its Digital Media Partner.
Gionee has always believed in an integrated business approach and has therefore based its biz on its 3 pillars of strength being Own Design/ Own Manufacturing/ Own R&D. A close association with MediaTek and Qualcomm allows Gionee to offer a wide product portfolio covering both feature and smart phones. Living up to its name Gionee Meaning “Golden Quality” the brand has always kept quality and experience at the top. Tight partnerships with key Tier 1 suppliers and an innovative Sales & Marketing Approach have developed Brand Gionee.
Gionee started international branding in 2005 from mainland China and is now in the process of setting up its Brand business globally and having a strong presence in the Middle East, Northern Africa, Vietnam, Taiwan, Myanmar, Thailand and NOW India.
Gionee Dream D1 launched in India for Rs 17,999, features a 4.65-inch screen, quad-core processor and runs on Android Jelly Bean [BGR India, March 12, 2013]
Following UMI which recently launched the X2, Gionee, another Chinese mobile maker, has launched the Dream D1 in India. This 4.65-inch smartphone will be available by the end of this month at retail stores across the country for Rs 17,999 [$302].
The Dual-SIM Dream D1 sports a 4.65-inch Super AMOLED Plus HD (1280×720 pixels) display and is powered by a 1.2GHz quad-core Cortex A7 processor, PowerVR Series5XT GPU and 1GB RAM. The phone also includes features like 8-megapixel rear camera with LED flash and support for 720p video recording, VGA front camera, 4GB of internal memory which can be expanded up to 32GB and a 2,100mAH battery. On the software side of things the Dream D1 has a built-in Digital Theatre System (DTS) Sound for enhanced audio and runs on Android 4.1 Jelly Bean.
The phone is priced at a slightly higher price than the UMI X2, LAVA Q800 and the Micromax Canvas HD that offer similar features.
Gionee Elife E6 with 5-inch 1080p display announced, coming soon to India [Fone Arena, July 10, 2013]
Gionee has finally announced the most expected Elife E6 at an event in China just now. The Elife E6 packs a 5-inch (1920 x 1080 pixels) display based on one-glass solution (OGS+) technology, powered by a 1.5 GHz quad-core Mediatek MT6589T processor and runs on Amigo ROM Android 4.2 (Jelly Bean). It packs a 13-megapixel rear camera with f2.2 wide angle lens, BSI sensor, LED flash and a 5-megapixel front-facing camera with f2.4 wide angle lens. The phone is 7.9mm thick and has just 2.54mm thin bezel around the display. It weighs just 128 grams. It has DTS surround sound technology and has dedicated Yamaha audio chip for enhanced audio experience.
The phone has CABC screen brightness regulation technology that automatically reduces screen brightness automatically and the synchronization heartbeat technology that reduces application wake up time) to save power. The phone packs a 2000 mAh battery with intelligent power meter that minimizes charging and discharging errors.
At the launch Gionee listed India in the global launch countries among several countries. So we can expect the phone to launch in India soon. Gionee launched the Elife E5 in India recently.
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