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With Asha Touch starting at $83 [Feb 22: $65] and Lumia at $186 [Feb 22: $168] Nokia targeting the entry-level and low-end smartphone markets–UPDATED [Dec 19, 2012] new entry prices and Lumia 505 (? $220 ?) with AMOLED ClearBlack and Gorilla Glass
Preliminary information: Core post: Smartphone-like Asha Touch from Nokia: targeting the next billion users with superior UX created for ultra low-cost and full touch S40 devices[this same blog, July 20, 2012 – Feb 12, 2013]
Update as Feb 5, 2013:
– Lumia 510 lowest retail price in India is Rs.8,924/ – [$US 168]
– Asha 305 lowest retail price in India is Rs.4,045/ – [$US 76]
Feb 22, 2013: Rs. 3,548/ — [$US 65]
Update as of Dec 19, 2012 :
– Lumia 510 lowest retail price in India is Rs.9,375/- [$US 172]
– Asha 305 lowest retail price in India is Rs.4,399/- [$US 81]
– Nokia Lumia 505 Price in India and Leaked Features [Price India Review, Dec 7, 2012]:
“Nokia Lumia 505 Price in India will be around Rs. 12,000 [$US 220]”
– NOKIA LUMIA 505 EXCLUSIVE TO MEXICO WITH TELCEL [Usuario Celular (User Cell), Dec 18, 2012] as translated by Google from Spanish
Nokia decided to launch their exclusive Nokia Lumia 505 in Mexico with Telcel, a phone with Windows Phone 7.8.
Until recently not known official details of this phone [Lumia 505 product page dated Dec 15, 2012 on Nokia Mexico site], but Nokia has already shown the features and here we bring to all.
First, as already mentioned, the Lumia 505 comes with Windows Phone 7.8, which runs on a Snapdragon processor along with 256 MB of RAM and 4 GB of internal memory space.
The screen of the Nokia Lumia 505 is 3.7 inch AMOLED ClearBlack technology with a resolution of 800 x 480 pixels. Corning Gorilla Glass has to avoid scratches on the screen.
It has a single 8-megapixel camera with autofocus, which also allows you to record video with a resolution of 640 x 480 VGA resolution.
Obviously includes 3G, WiFi, GPS, Bluetooth, FM Radio, Accelerometer, among others. Furthermore, the purchase of this phone include 7 GB of free storage on SkyDrive storage service in the cloud from Microsoft.
It will be available in three colors: Black, red and pink.
At the moment there is no official price, but hopefully not as expensive as you see, its features are modest. Once we have this data will update the post
[from Wikipedia: Telcel is a Mexican wireless telecommunications company, owned by América Móvil. Founded in 1989 and based in Mexico City, Telcel is the leading provider of wireless communications services in Mexico. As of December 31, 2006, Telcel’s cellular network covered more than 63% of the geographical area of Mexico, including all major cities, and 90% of Mexico’s population. Telcel holds concessions to operate a wireless network in all nine geographic regions in Mexico using both the 850 megahertz and 1900 megahertz radio spectrum. According to Cofetel (Comision Federal de Telecomunicaciones–Mexico’s Federal Telecommunications Commission), as of July 2008, Telcel’s subscribers represented an estimated 77.2% share of the Mexican wireless market. On August 2011, Telcel reported it has 66.9 million cellular subscribers.]
Update:
– 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 [this same ‘Experiencing the Cloud’ blog, Dec 5, 2012] where detailed information about the Lumia 620 is given
– Marko Ahtisaari from Nokia and Steven Guggenheimer from Microsoft on the Internet of Things day of LeWeb Paris’12 [this same ‘Experiencing the Cloud’ blog, Dec 5, 2012] where you could watch Marko Ahtisaari launching the Lumia 620 in 6 minutes on the LeWeb Paris’12
– Nokia increasing competition in entry-level to mid-range smartphone segment [DIGITIMES, Dec 7, 2012]
Nokia is strengthening its deployment in the entry-level to mid-range smartphone market with the launch of Lumia 620, a move which will affect the sale of Windows Phone 8 handsets rolled out by HTC and China-based smartphone brands, according to industry sources.
The Lumia 620, priced at US$250 unlocked, will hit the shelves in some markets in Asia, including China, in January 2013, prior to the launch of WP8 models by China-based vendors, indicated the sources, noting that the Lumia 620 will be also available in Europe and the Middle East later.
The Lumia 620 comes only one month after Nokia launched its first wave of WP8 phones, the Lumia 920 and Lumia 820, indicating Nokia’s strong efforts to regain market share, particularly in India, China and other emerging markets, the sources commented.
The move by Nokia may force HTC to also roll out low-priced WP8 models, as well as affect the pricing strategies of China-based brands, including Huawei and ZTE, which are set to launch WP8 phones soon, added the sources.
In addition to penetrating into the entry-level to mid-range sector, Nokia has announced that it is partnering with China Mobile to launch the Lumia 920T for the high-end segment in China.
HTC has launched its WP8X and WP8S smartphones in cooperation with China Mobile, China Telecom and China Unicom, respectively.
New Nokia Lumia 510, our most affordable Lumia smartphone [nokia YouTube channel, Oct 23, 2012]
Nokia Lumia 510 now available online for pre-order for Rs 9,999 [$US 186] [BGR India, Oct 31, 2012]
Nokia’s newly launched Lumia 510 is now available for pre-order FlipKart for Rs 9,999. FlipKart says that it will ship the product in six to eight working days. Nokia had previously said that it will price the device under Rs 11,000 and going by the FlipKart price it looks like Nokia has made good on the promise.
For those who don’t know, the Lumia 510 is perhaps the cheapest Windows Phone based smartphone in the market. It features a 4-inch display with a resolution of 800×480 pixels, a 5-megapixel camera, an 800MHz single-core processor, 256 MB of RAM, 4GB of internal memory and has a 1,300 mAh battery.
Additionally, users will get 7GB of free SkyDrive storage and it will ship with Windows Phone 7.5, but it will receive the update to Windows Phone 7.8.
All prices are from the FlipKart.com.
More information on the above: Official Nokia Comparison of the Specifications
Nokia Lumia 510 brings Windows Phone to lower price points [Oct 23, 2012]
Bright 4-inch display and signature Lumia experiences in Nokia’s new entry-level Windows Phone
Espoo, Finland – Nokia today announced the Nokia Lumia 510, a smart and modern entry-level smartphone. Featuring a bright, 4-inch display, the Nokia Lumia 510 makes the unique benefits of Lumia and Windows Phone even more affordable.
“With the Nokia Lumia 510 we continue to meet our commitment to bring Windows Phone to new, lower price points,” said Jo Harlow, executive vice president of Nokia Smart Devices. “People who use Windows Phone quickly realize how much more intuitive it is than other smartphone platforms, and Nokia Lumia is the best embodiment of the Windows Phone experience. With the Nokia Lumia 510 we’re looking forward to welcoming more people into the Windows Phone experience.”
Following on from the success of the Nokia Lumia 610, this latest addition to the Nokia Lumia range comes in five vivid colors for a fun and personal way to enjoy Windows Phone.
Windows Phone is different to other smartphone platforms thanks to Live Tiles, making it easy to see incoming messages and updates; People Hub, which brings together contacts and updates from across social networks into one location, and access to Microsoft Office and Internet Explorer 9 on the mobile.
Unique Lumia experiences also make the Nokia Lumia 510 unlike any other entry-level Windows Phone. Downloading the Camera Extras app provides exclusive digital lens functionality to go with the five megapixel camera and built-in autofocus. Nokia Maps, Nokia Drive and Nokia Transport also offer the most comprehensive smartphone location and navigation experience available.
The Nokia Lumia 510 will be available in red, yellow, cyan, white and black. Nokia estimates the retail price for the Nokia Lumia 510 to be around USD 199, excluding taxes and subsidies. Sales are planned to begin in November 2012, starting with India and China, and followed closely by other Asia-Pacific countries and South America.
For more information see:
– Core post: Nokia Design direction [this same blog, Aug 1 – Oct 29, 2012]
– The precursor of 2012 smartphone war: Nokia Lumia vs. Samsung Omnia W in India [this same blog, Jan 3 – July 9, 2012]
– Nokia’s strategy for “the next billion” based on software and web optimization with super low-cost 2.5/2.75G SoCs [this same blog, Feb 14 – April 23, 2012]
– Core post: MediaTek’s ‘smart-feature phone’ effort with likely Nokia tie-up [this same blog, Aug 15 – Sept 3, 2012]
– The Where Platform from Nokia: a company move to taking data as a raw material to build products [this same blog, April 7, 2012]
China’s HW engineering lead: The Rockchip RK292 series (RK2928 and RK2926) example
It was totally unexpected for a US company starting a new device project in China back in 2007 what kind of support network of vendors and designers was available for them in Taiwan or just across the water from Taiwan on the mainland. Here is an authentic recollection of that experience:
WHERE THE MIDDLE CLASS MANUFACTURING JOBS GO? [David Dehghan’s tumblr microblog, Feb 5, 2012]
This NY times article [How the U.S. Lost Out on iPhone Work, Jan 21, 2012] is a great example of why it’s so hard to create middle-class jobs in the U.S. now. From personal experience I can confirm all the point made in this article with respect to electronics manufacturing.
A few years a go [according to this and that it was around 2007] we were building a new phone and a special base station for it at Microsoft.
We designed most of the electrical and mechanical parts in Taiwan because that was where the support network of vendors and designers existed around you. If you wanted a new PCB board re-designed and manufactured it would be ready for you within hours. That would have taken a week in US. In Xiamen (just across the water from Taiwan on the mainland) we designed and built the special base station for the phone. When we wanted to select cables and connectors we just called the sales rep from the neighboring factory and he was in our meeting room within 30 min. We didn’t like what they had and we called another one he too was there within 30 min. With samples and designs in hand. Whatever we wanted they could manufacture within a day. It was pretty incredible.
Also the quality of craftsmanship was very high. People took care of producing the PCB boards and plastic phone enclosures we had ordered. The vendor network had all the latest prototyping and design equipment you could think of. There was no reason to get out of Taiwan or south of China for anything. They would beat any one on price, flexibility, and quick turnaround.
There is zero chance you can bring that echo system back to US or western world. There is never ending supply of cheap, qualified and trained manufacturing workers coming from inland China.
Now lets continue our debates about same sex marriage, abortion and border guards. Or Tibo, or whatever the hell his name is.
Five years later we have now a significant evolution from that when China has not only manufacturing lead in the digital products, but engineering lead as well, and along the whole value chain, from designing the SoCs to the finished products themselves! Mainland China could even rely on itself in all that.
Here is a very recent video showing the latest results of leading hardware engineering from mainland China: the Rockchip RK2928 specifically developed for the $40 and up entry level market of 2013 Android tablets, which was just first shown on the HKTDC in October 13, and here they have the first tablets on show already:
$49 RK2928 7″, $95 RK3066 8″ and other tablets by Firstview [Charbax YouTube channel, Oct 24, 2012]
Major learning for me here: with the IPS screen the cost is only $6 more.
FirstView (ShenZhen FirstView Electronic Co.,Ltd.) is one of the typical midsize factories in Shenzhen with 200-300 actual employees, established in beginning of last decade (2001 actually), growing from simpler digital products like MP players, photo frames, digital cameras etc., but now producing mostly tablet PCs, netbooks etc. with production capacity of 10,000pcs-20,000pcs of finished products per day and exporting worldwide as described in their “About” page titled still Jing Han Optronics_Tablet PC _ books _ Digital Photo Frame _MP4 player _MP3 play:
We are proud of our internationalism— 80% of our products are sold to developed countries in Europe and the Americas with the remaining 20% being sold in Asia, Africa and domestically. All of our products get the ROHS, CE, FC C Certificate. Having been cooperating with world-famous companies, such as Wal-mart, we are able to keep up with the latest international trends.
Companies like FirstView have quite broad, quite price competitive products which technologically always represent the latest advances. How are they able to achieve that given not really big resources, especially in terms of engineering.
Let’s look at this from the example of the latest Rockchip SoCs through the whole engineering and manufacturing chain:
A single core Terminator: Rockchip launched the strongest single-core chip RK2928 on the 2012 Hong Kong Electronics Fair [Rockchip press release in Chinese, Oct 18, 2012] as translated by Google and Bing with all the necessary manual editions:
The annual Hong Kong Electronics Fair was held between October 13 and 16, 2012 in Hong Kong, as scheduled. As a world-renowned exhibition, each electronic exhibition will attract many domestic and foreign firms, and the media are invited to attend on a grand scale. The famous RK3066 chip brand was launched on the 2012 Hong Kong Electronics Fair in April, and Rockchip was again to bring new products to participate in the 2012 Hong Kong Electronics Fair.
Single-core Terminator chips: the RK292 series
On the current Electronics Fair Rockchip showcased its latest research and development of a new chip series – the RK292 series. Compared to the classic generation of RK29 series, the RK292 series chips are designed for the single-core Cortex A9 architecture and 1GB DDR3 memory, with which there will be nearly 30% increase in performance compared to the previous generation.
The parameters of RK292 series chips
The series RK292 chips are upgrade products of the RK29 series, mainly for the low-end market, changing the Cortex-A8 architecture by turning to the popular Cortex A9 architecture. This has been done in such a way that while the performance is increased significantly, however the power consumption has been reduced compared to the previous generation. As such it can be described as a single core Terminator. It is understood that products equipped with the Rockchip single core solutions, aimed primarily for the European and developing countries markets, will become the lowest cost offerings among the industry’s single-core tablet solutions [said to be here and here aimed at $40 and up tablet price, ?probably in quantities of at least 1000?].
Tablet equipped with the RK2928 chip [shown at HKTDC]
Tablet equipped with the RK2926 chip [shown at HKTDC]
…
The RK2928 parameters in English from here:
Cheap Killer Strikes – Rockchip launched RK2926, RK2928 for Android Tablet PC [TabletPCPhones.com blog, Oct 17, 2012]
… RK2926/RK2928 is updated from RK2918, and they are changed in the old architecture of previous generation products, using the new Cortex-A9 architecture, support DDR3 and DDR3L [from the above parameter sheets it looks like that DDR3L is just for RK2928], and built-in Audio CODEC, LVDS have DVFS-power adjustment, you can support MLC NAND / E-MMC and i-NAND flash memory. RK2926 and RK2928 chips are slightly different in terms of functionality, the latter has integrated support of the HDMI 1.4a Controller and GPS baseband. In addition, both packages are different, the RK2926 chip uses LQP176 package, while the RK2928 chip using the BGA313 package. …
Currently Rockchip, located in the exhibition area 1CON, has shown the prototype Tablet PC of RK2926/RK2928, but because of IP licensing confidentiality, clocked graphics core specific configuration can’t be disclosed, but also no detailed performance test. Just from the point of view of the experience to get started, compared to the previous RK2918 Tablet PC operation, the fluency has improved, casual game can smooth run in prototype at the same time, and you would not feel a significant fever situation, the overall experience is still good for entry-level tablet PC market, this performance should be considered good. …
About the Rockchip company and especially about the immediately preceding generation RK9218 SoC, as well as their current flagship RK3066, you can find plenty of information in MWC 2012: Fuzhou Rockchip Electronics [this same blog, March 13, 2012]
Now a mid-size video about Rockchip RK2928 and RK2926 launched at the HKTDC Electronics Fair [Charbax YouTube channel, Oct 13, 2012] with the Marketing Vice-President of Rockchip, Chen Feng:
– RK2928 is [0:16] “so far the best performance single core product” [0:20]
– RK2928/26: [0:50] “next year tens of millions of these chip’s products” [0:55]
– for the RK3066 and above market [1:14] “soon we will have the 28nm chip [version] coming out, lower the cost, higher performance, lower power. And at the end of the year we will have four-core 28nm product coming out.” [1:30]
– the GPU in RK2928/RK2926 [2:18] “is a mystery … but there is a good GPU here” [2:24]
– regarding the smartphone market [9:10] “We have a very long view for that market. So we are also doing baseband but it’s … We’re always working on it. But when it will be our main business we will carefully seek. [9:29]
– [10:52] “We want to get into the notebook [too], so … Once the software environment getting mature, that the Android and more mobile people write applications on the platform. So sooner or later the software won’t be an issue, but [the issue becomes] how you can make the best [notebook] product. … There are rumors on the market Microsoft might port Office to Android, right? [11:44]
PCB Design House: Rockchip RK3066/RK2926 at Shenzhen Inpad Digital Technology [Charbax YouTube channel, Oct 21, 2012]
– When did you get RK2926 in house? [2:30] “We got it 1st of October. … Made PCB in 2 weeks only. [2:49]
– [5:02] How can you as company optimize the price [making] low, and power [too]? How can the team to do that, how you do this? [6:39] “Basically they [a separate team] communicate with the customer to understand their requirements, and based on that requirement they will choose the right component or do the right design for the customer. And also to simplify the design and process, so they can cut off the cost. [7:00]
– [10:03] So how many people work here? [10:06] “About 40 people. … About 30 engineers, 10 sales and our working staff.” [10:27]
– [10:26] So you are a PCB Design House. You get the CPU from Rockchip, you put that into PCB, and then work with the SMT, OEM, manufacturer? [10:37] “Yes” Different companies? [10:39] “Yes” So you work together? [10:41] “Yes”
– [10:44] How many PCBs are made with your design every year? [11:04] “More than one million.” Different manufacturers, not only one? [11:10] “Different” All in Shezhen? [11:15] “No … Some customers are in other provinces.” [11:24]
China Fabless: Rockchip rattled by Android tablet wars [Junko Yoshida at EE Times, Sept 25, 2012]
Just nine months ago, Fuzhou Rockchip Electronics, a developer of apps processor for tablets, looked almost invincible. …
… since then, the Android-based media tablet market has gotten far more competitive. By volume, the Android tablet sector has grown to an estimated 80 million units, outpacing the 75 million iPads sold by Apple thus far, according to estimates by Rockchip [marketing] vice president Feng Chen.
…
At the beginning of 2012, the target price of a 7-inch capacitive screen media tablet featuring Cortex-A8 was $99. That price has since dropped to around $65, due largely to Allwinner, a red-hot Chinese fabless company that has flooded the tablet market with its own turnkey system. … Rockchip’s situation vividly illustrates the challenges most Chinese fabless chip companies now face.
Notes regarding Allwinner:
#1 After checking a number of SoCs for a Linux and FLOSS related, it was found [on Dec 14, 2011] by a UK based platform initiative that Allwinner A10 – ARM Cortex A8 SoC “… has been developed in, and is sold in, the People’s Republic of China. Its mass-volume price is around $7, yet it is a 400-pin highly feature-rich 1.2ghz ARM Cortex A8 with a MALI400 GPU. It has the distinction of having the highest bang-per-buck ratio of any SoC available at the time of writing, by quite a margin. Its price and features is causing massive disruption of the tablet market in China (a minor recession was caused by widespread cancellation of prior committments to other SoCs!), as every factory in Shenzen scrambles to compete with hundreds of other factories for the same end-user market: tablets and PVRs.
For comparison: TI has brought out a new $5 ARM Cortex A8, but it is limited to 500mhz and it is extra cost for the version with a PowerVR 3D GPU. Ingenic’s jz4770 is about $7 in mass-volume but it is a 1ghz MIPS with a Vivante GC600 3D GPU. Details are harder to get hold of regarding the jz4770, but its interfaces are known not as feature-rich as the Allwinner (no HDMI output for example). AMLogic’s Cortex A9 is $13 in mass-volume, but is limited to 800mhz and a maximum of 512mb of RAM. …”
#2 At the end of February it was reported from China that: “Based on high cost performance, Allwinner A10 has good sales after the Spring Festival. The chips with high cost performance are welcome. … RockChip chips became cheaper and cheaper since Allwinner released A10. As the first chip of Allwinner, A10 is released with cheap price, which makes it has good sales. Allwinner is a famous company in MP3 times so that Allwinner has a strong customer base. In addition, A10 has few bugs since it is released. The performance of other chips is not stable in the beginning, such as RK2808 and VIA8505.
The agents who have ordered VIA chips go to order Allwinner A10. VIA will release VIA8850 next month [but mass production just started in June, see later] which is based on A9 core. The performance is not different from A10. It means that it does not have any advantage. VIA8850 will be cheaper than Allwinner A10. Allwinner will release A13 to compete with VIA8850 so that VIA will get in a difficult position. [Was more expensive than the [$5 priced] A13 when mass production started in June]”
During a recent interview with EE Times here, Rockchip’s Chen said, “This is a new world war we’re fighting.” … Indeed, nearly every apps processor [sic, SoC] vendor here is in a rough spot because “the time-to-market requirement has gotten much shorter,” he noted. “Worse, catching the market rhythm or cycle — at the right time – has become much harder.”
…
“… now, as end-product cycles get shorter, we do everything from designing a chip to developing a board and software that goes around the hardware — literally within a couple of months,” he explained. In March, for example, Rockchip
started to design itsdelivered samples of RK3066, a dual-core Cortex A9 chip with a quad-core Mali-400 GPU. By April [15], it hustled to showcase sample tablets based on the chip at the Hong Kong Electronics Fair. By May, the company began shipping the new apps processor to its customers.…
Note regarding the timing of RK3066 SoC development:
– The initial version of RK3066 datasheet brief is dated Oct 30, 2011. the 1.0 version of it February 15, 2012.
– The RK30xx platform was announced on Feb 27, 2012 with information that “Dual-core ARM Cortex-A9 processor with up to 1.4GHz speed, implemented with Artisan Processor Optimization Pack (POP)” and that “Samples of the Rockchip RK30xx platform will be available in March 2012.”
…
Unlike other startups here, Rockchip has been profitable from the start. But as the tablet battle heats up, it also needs to find a way to move to the next level. “We are fighting a world war. We need the world’s top talent.”
The company also needs access to capital. Without it, Rockchip can’t even think about mergers or acquisitions. Organic growth alone won’t get it to the next level, Chen acknowledge, saying he expects consolidation in the Chinese fabless sector but “no Chinese companies want to give up.”
Lastly, Chen said, “We need to be clear on the market” so that Rockchip can choose its battles.
Factory Tour: Allwinner A10 PCB SMT line at the Jia Chuang Bo factory [Charbax YouTube channel, Oct 20, 2012]
SMT = Surface-mount technology
Factory Tour: $61 [in quantity of 1000] Allwinner A13 9″ Tablet being assembled at Jia Chuang Bo [Charbax YouTube channel, Oct 19, 2012]
Factory Tour: 9.7″ IPS 3G Allwinner A10 Tablet for $152 being assembled by Jia Chuang Bo [Charbax YouTube channel, Oct 19, 2012]
Jia Chuang Bo future products [Charbax YouTube channel, Oct 19, 2012]
SHENZHEN JCB TECHNOLOGY CO.LTD [March 14, 2011]
HAICHUANG TECHNOLOGY (HK)CO., LIMITED registered in HONGKONG, which is the head office of SHENZHEN JIA CHUANG BO Technology CO.LTD.
SHENZHEN JIA CHUANG BO TECHNOLOGY CO., LTD , founded in 2001, which is a professional factory in designing, researching, manufacturing and marketing computer peripherals. We focus mainly on MID/Tablet PC and Media players. Now we have a workshop of 3,000 square meters and employ more than 300 staffs.
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Attaching great importance to quality, our company applies ISO9001:2000 standards in purchase of material, R&D, production, inspection and sales. Environmental testing and reliability testing are also part of our standard procedure. Professional R&D team and efficient production team provide a solid foundation for our high-quality products. Quality has always been our first priority. All of our products have passed CE, FCC related certifications. all employees recognize that quality is the life of enterprises and the core of competitiveness. Before all the products entering your market, all the finished products must undergo ten-minute pass vibration test and eight-hour aging test.
We also offer OEM/ODM products and we pride ourselves on the ability to stay up-to-date in the rapidly changing market. OEM orders are welcome. We offer OEM/ODM services. Our R&D engineers can develop one new item in one week as your requirements. We have an innovative R&D team that is dedicated to meeting your requirements specifically.
Because of the good reputation and perfect pre-sale/in-sale and after-sales services, we have established the long-term and stable strategic partnership with many famous suppliers at home and abroad.
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China: 20,000 TD-LTE base stations in 13 cities by the end of 2012 and about 200,000 base stations in 100 cities launched in 2013 with the 2.6GHz TDD spectrum planning just started—SoftBank with TD-LTE strategy in Japan getting into global play with Sprint (also the 49% owner of US TD-LTE champion, Clearwire) acquisition
China Mobile TD-LTE tender results … [Communications World Network (CWW), Oct 16, 2012]
According to informed sources, China Mobile has informed all the equipment manufacturers of the TD-LTE expanded large scale trial network tender about the results of the tender. There were nine manufacturers involved in the tender of the construction of TD-LTE network in 13 cities, concrete results are as follows:
Huawei (Shenzhen, Hangzhou, Shanghai, Beijing, Chengdu) and ZTE (Guangzhou, Shenzhen, Beijing, Shenyang, Tianjin) are the front winners, as each won five city contractor qualifications; Datang got 4 cities (Hangzhou, Fuzhou, Ningbo, Nanjing); Alcatel-Lucent (Shanghai, Qingdao, Nanjing) and Ericsson (Guangzhou, Shenyang, Qingdao) each received three cities, NSN is involved in Xiamen and Fuzhou, i.e. two cities; …
Note: Cities in bold have only one vendor while the underlined ones (Shenzhen, Hangzhou and Guangzhou) “will conduct in-depth testing and offer pre-commercial 4G services to the public” as per China Mobile.
Alcatel-Lucent Wins TD-LTE Contract to China Mobile [Cynthia Chow YouTube channel, Oct 16, 2012]
ZTE Wins 13,000- Carrier Frequency TD-LTE Contract to Become China Mobile’s Largest LTE Device Supplier [ZTE press release, Oct 15, 2012]
ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code: 000063.SZ), a publicly-listed global provider of telecommunications equipment, network solutions and mobile devices, today announced it has won China Mobile’s TD- LTE contract. According to the contract, ZTE will construct China Mobile’s TD-LTE networks in five Chinese cities, namely Beijing, Tianjin, Guangzhou, Shenzhen and Shenyang, with more than 13,000 carrier frequencies.
In China Mobile’s earlier TD-LTE project in Hong Kong, ZTE was assigned 50% of the construction work. ZTE has become the largest LTE device supplier for all such projects initiated by China Mobile.
China Mobile launched the TD-LTE bidding in August 2012. The tender included contracts for some 20,000 base stations and 52,000 carrier sectors, and theTD-LTE devices purchased by China Mobile will be deployed in an expanded trial TD-LTE network in 13 Chinese cities, namely Beijing, Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen, Xiamen, Qingdao, Tianjin, Shenyang, Ningbo, Chengdu and Fuzhou. Ten major telecom firms including ZTE, Huawei, Ericsson and Nokia Siemens bid for the tender.
Wang Shouchen, ZTE’s Vice President, said, “We thank China Mobile for choosing ZTE for the construction of the TD-LTE networks in the five cities. ZTE has been highly committed to TD-LTE as a strategic product. As a leader in LTE, our company is both capable of and confident in bringing excellent results to China Mobile.”
By August 2012, ZTE has constructed various trial LD-LTE networks and 9 commercial networks for 38 operators in 26 countries of Europe, CIS, Asia Pacific, Southeast Asia and North America.
ITU Telecom World 2012—TD-LTE/ TD-SCDMA Solutions: Leading TD Development [Datang News, Oct 15, 2012]
TD-LTE-Advanced technology has been determined by ITU to be accorded the official designation of IMT-Advanced (4G mobile technology), to which Datang Telecom Group is an important contributor. Datang’s strong R&D capacity secures its leading position in telecommunication industry. TD-LTE is gaining momentum among global carriers.
In TD-LTE/TD-SCDMA area, visitors can experience services based on TD-LTE technology. Living Meeting, combined the features of cloud computing, TD-LTE’s high bandwidth and low latency, and providing mobile HD VOD conferencing services for users. In addition, SeeingEye intelligent identification system, supported HD picture and receiving terminals anywhere, users can view monitoring images and analyze results at anytime and anywhere.
Datang Mobile, a subsidiary of Datang Telecom Group, is chosen to construct TD-LTE scale trial network in Nanjing and TD-LTE demo network in Beijing. TD-LTE products and solutions developed by Datang have been adopted around the globe, driving TD-LTE speed.
China Launched 2.6GHz TDD Spectrum Planning [Global TD-LTE Initiative – GTI, Oct 16, 2012]
The TD-LTE Technology and Spectrum Workshop at ITU Telecom World 2012 took place in Dubai on October 14th, 2012. This workshop was jointly hosted by ITU, China Mobile, Global TD-LTE Initiative (GTI) and the TD Industry Alliance (TDIA), aiming to convene industry players to discuss the development trend of TD-LTE and spectrum-related issues and share experience on the commercialization of TD-LTE. Mr. Zhao Houlin, Deputy Secretary of ITU, Mr. Liu Lihua, Deputy Secretary of the Ministry of Industry and Information Technology of China (MIIT), Mr. Zhao Jibin, Vice President of China Mobile, leaders from national telecom authorities, as well as senior managements from China Mobile, SoftBank, Clearwire, UK Broadband attended this workshop.
The government of China officially announced its 2.6GHz TDD spectrum planning at the workshop. Mr. Liu Lihua stated, “The government of China attaches great importance to the research and development as well as the commercialization of the new-generation broadband mobile communication technology, and has provided active support for industrial initiatives, such as technological tests, to advance the industry development. As one of the mainstream evolution standards, TD-LTE has great edge in spectrum utilization, and receives widespread recognition from global operators and device manufacturers.” Mr. Xie Cun, Deputy Director of Radio Regulatory Bureau, MIIT introduced the planning and progress of the frequency resources of China’s new-generation mobile broadband technology. According to him, China has decided to allocate 2.6GHz frequency band ranging from 2500-2690Hz and the entire band of 190MHz for the deployment and application of TD-LTE technology.
Such an announcement at the most authoritative meeting offered great confidence in the development of TD-LTE to the global industry and market, and helped point out the way for other nations that were going to plan and allocate frequency resources of mobile broadband in the near future.
Mr. Zhao Jibin, Vice President of China Mobile, pointed out at his speech, “China Mobile has always been committed to advancing the integration of LTE TDD/FDD. Joining forces with GTI, global operators and industry players, China Mobile has promoted the maturity and commercialization of TD-LTE. China Mobile has accomplished the TD-LTE large-scale trial this year and initiated the expanded large-scale trial across 13 cities in China. 20,000 TD-LTE base stations will be built up by the end of 2012. Equipment purchase and network construction across 100 cities in China, covering about 200,000 base stations, will be launched in 2013. Besides, China Mobile Hong Kong will roll out a commercial TD-LTE network to provide users with high-efficiency mobile broadband service based on the integration of LTE TDD/FDD.”
Representatives from GTI and TDIA gave keynote speeches on the global deployment of TD-LTE, as well as the development of the TDD industry in the mobile broadband era. As the representative from GTI mentioned, “GTI achieved rapid growth over the past year, having not only set up an important international cooperation platform composed of 50 operators and 37 industrial partners in the world, but also implemented dozen of GTI task forces under the categories of network, terminal, business and service working groups. These helped with the resolution of key problems in the commercialization to a very large extent and accelerated the maturity of TD-LTE. In the future, China Mobile will join force with GTI operators and industrial partners to advance the global deployment and development of TD-LTE. GTI will adopt more efficient strategic tactics to promote the development of highly-integrated, multi-mode multi-band terminals (such as Multi-Mode Multi-Band MiFi), help expand TD-LTE devices into consumer electronics, set up new pattern of global data roaming, and advance the convergence of LTE TDD/FDD. These measures will help address the requirements of the global mobile Internet market.
In addition, globally leading TDD operators, including SoftBank, ClearWire, UK Broadband and P1, shared their experiences in the large-scale deployment and commercialization of TD-LTE and gave suggestions on spectrum planning and allocation at the workshop.
Under the promotion and support of GTI, totally 12 commercial TD-LTE networks have been launched globally; 24 global operators have signed contracts for 31 devices, and more than 29 global operators have announced their TD-LTE commercialization plans.
China to modify building codes to promote fiber to the home [Xinhua, Sept 10, 2012]
Minister of the Ministry of Industry and Information Technology Miao Wei … also said [in an interview on 10th] for sure, that 4G license in China will be issued in about a year’s time, led by the country’s 4G technology TD-LTE and this will be a great deal of good news.
The World’s First Mobile Hotspot Prototypes Supporting Five Modes and Eleven Bands Debut at the 5th GTI Workshop in Dubai, UAE [China Mobile press release via PR Newswire, Oct 17, 2012]
The 5th GTI Workshop jointly hosted by China Mobile (NYSE: CHL; HKEx: 941) and Global TD-LTE Initiative (GTI) took place in Dubai, the United Arab Emirates from October 15th to 16th, 2012. More than 100 representatives from international operators, international industrial organizations, system vendors and terminal/chip/test instrument OEMs attended this workshop, discussing key issues for commercialization of TD-LTE including R&D of highly-integrated Multi-Mode Multi-Band smart phones, convergence of LTE TDD/FDD, LTE roaming framework, VoLTE, as well as the application of TD-LTE in consumer electronics and the Things of Internet.
The workshop was highlighted by the release and demonstration of work outcomes of GTI’s Terminal Working Group. In the beginning of 2012, GTI has set its target to promote the industry to facilitate highly-integrated Multi-Mode Multi-Band terminal products. So far, GTI has preliminarily clarified the demands for Multi-Mode Multi-Band operation, finishing the draft of GTI White Paper on Multi-Mode Multi-Band Terminal Requirements & Realization Structure, GTI LTE Terminal General Technical Requirements, and GTI Multi-Mode Multi-Band Mobile Hotspot Terminal Technical Requirements. In addition, GTI has set up a team composed of core operators, such as China Mobile, Clearwire, SoftBank and KT, in an effort to assist chip OEMs partners including Qualcomm and Huawei Hisilcon and radio frequency front end OEMs, such as Avago, RFMD and Skyworks in developing highly-integrated Multi-Mode Multi-Band terminal products.
In particular, the world’s first global roaming enabled Multi-Mode Multi-Band mobile hotspot prototypes supporting five modes (LTE TDD/LTE FDD/TD-SCDMA/WCDMA/GSM) and eleven bands (Band 38/39/40/41/3/7/34/1/2/5/8) developed by Quanta and Gemtek were exhibited at the workshop. Later, GTI will perform a testing on the commercialization of the products.
Under GTI’s effective promotion in the technical field, substantial progresses have been made in the commercialization of Multi-Mode Multi-Band TD-LTE terminals, global roaming and convergence of LTE TDD/LTE FDD. The launch of the global roaming enabled highly-integrated Multi-Mode Multi-Band data terminal products is considered as a key milestone toward the globalization of TD-LTE, laying a solid foundation for the global deployment and application of TD-LTE and realization of global roaming.
Japanese Company Buys Sprint [BizAsiaAmerica YouTube channel, Oct 16, 2012]
Report: Sprint has no plans to acquire Clearwire, for now (FierceWireless, Oct 16, 2012)
Following Softbank’s announcement that it plans to purchase 70 percent of Sprint Nextel (NYSE:S) for $20.1 billion, speculation started to rapidly swirl about whether Sprint would buy partner Clearwire (NASDAQ:CLWR). According to a Bloomberg report citing unnamed sources, Sprint has no immediate plans to do so.
The report said that Softbank and Sprint’s priority at this point is getting their multi-stage deal finalized and approved, which is expected to happen by mid-2013. The report also said that until the deal is completed, Softbank and Sprint cannot take part in “extraordinary activities” such as further mergers or acquisitions.
Sprint and Clearwire declined to comment, according to Bloomberg.
Despite assurances that the transaction does not require Sprint to take any actions involving Clearwire “other than those set forth in agreements Sprint has previously entered into with Clearwire and certain of its shareholders,” analysts and investors immediately began positing when–not if–Sprint would take control of Clearwire, in which it holds a 48 percent stake. Shares of Clearwire stock shot up 15.5 percent in midafternoon trading Monday at $2.68 before dropping back down to $2.35 per share Tuesday morning.
“I think the probability is very high that Clearwire won’t be a standalone company a year from now,” D.A. Davidson analyst Donna Jaegers told Dow Jones Newswires. Jaegers said Clearwire shareholders will need to determine what might be a “fair price” for a Sprint takeover.
Many industry analysts believe Softbank may be looking to boost the 2.5/2.6 GHz TD-LTE ecosystem. Clearwire is using that spectrum and technology for its LTE buildout, and plans to launch LTE service next year. Sprint has said its LTE devices will be able to run on its FDD-LTE network as well as Clearwire’s TD-LTE network, and Sprint will offload excess traffic onto Clearwire’s network. Clearwire has around 120 MHz of spectrum in many markets across the United States and Clearwire plans to use carrier aggregation technology in its forthcoming TD-LTE network to meld together it spectrum holdings into 40 MHz-wide channels.
“We believe that Clearwire will play a critical role in Softbank’s plans to aggressively compete with AT&T and Verizon in the United States,” wrote BTIG analyst Walter Piecyk. “Clearwire’s depth of spectrum paired with Sprint’s network and customer scale and Softbank’s cheap capital will enable the companies to offer faster speeds and more capacity than their rivals. Sprint would be wise to take control of Clearwire as soon as possible in order to protect that differentiation but in recent history Sprint has been slow to act, allowing their peers to poach opportunities.”
Piecyk noted that an acquisition of Clearwire would be difficult for Sprint given the complicated nature of Clearwire’s 2008 shareholder agreement, but he also said it would be tough for any of Sprint’s competitors given Sprint’s 48 percent stake. “Nevertheless, Sprint might regret leaving any risk that a competitor could poach Clearwire at a later date, especially if the later interest is a result of Sprint’s success in executing a more aggressive differentiated strategy with the 2.5 GHz spectrum while Softbank and China Mobile further legitimize the 2.5 GHz ecosystem in Japan and China, respectively,” he wrote. “Of course, this would not be the first time that Sprint made a strategic decision that we did not fully understand.”
Meanwhile, more details continued to emerge about the deal. According to Reuters, Sprint or Softbank would need to pay up to $600 million in termination fees if either party backs out of the deal. Sprint is also on the hook for up to $75 million if its shareholders do not approve the deal.
For more:
– see this Bloomberg article
– see this NYT article
– see this Dow Jones Newswires article
– see this BTIG blog post (reg. req.)
– see this separate Bloomberg article
– see this Reuters articleSpecial Report: Softbank to take control of Sprint: Complete coverage
Related Article
Analysts: Softbank’s deal with Sprint benefits U.S. wireless market
Softbank to buy 70% of Sprint for $20.1B
Analysis: A Softbank buyout would give Sprint cash, improve TD-LTE ecosystem
Can Japan’s Softbank reinvigorate Sprint?
Sprint confirms Softbank in talks to take control
NHK – Softbank wants to become major global carrier [NHKReloaded YouTube channel, Oct 16, 2012]
NHK World News —- Nippon Hōsō Kyōkai
Description — Softbank’s maverick chief Masayoshi Son says he wants to turn his telecom company into a major global mobile phone business. His comment came after the company announced that it would takeover the 3rd largest US carrier, Sprint Nextel.
In an exclusive interview with NHK on Monday, Son said that both Softbank and Sprint sell Apple iPhones and are moving to build a high-speed LTE wireless network. He said this was behind Softbank’s buyout decision.
He said he intends to implement Softbank’s know-how on smartphone sales and network improvement in the US market.
Son said he will move to the next step after fully completing business consolidation with Sprint and eAccess, Japan’s 4th-largest mobile carrier. Softbank announced the purchase of eAccess on October 1st.
Son also said he will accelerate capital spending to reinvigorate his company’s fight for market share. He said he wants to do this by increasing procurement of telecom equipment, taking advantage of economies of scale.
Last Wednesday, when the negotiations with Sprint were in the final stage, Son asked rhetorically over twitter whether his business goals weren’t too low, and whether he shouldn’t be satisfied with an ordinary life.
Son said he was simply expressing his thoughts during the negotiations with the US mobile carrier. He said he tweeted to encourage himself because he wanted to achieve his goals despite his worries.
Softbank will spend about 20 billion dollars to buy a 70 percent stake in Sprint. The strong yen worked to push the deal.
The purchase will create a global telecommunications giant with more than 96 million subscribers. Sprint has 56 million subscribers in the United States, the third largest number behind AT&T and Verizon.
Oct. 16, 2012 – Updated 02:29 UTC (11:29 JST)
Sprint’s $20 Billion Deal Could Mean Lower Rates for All [Wired.com, Oct 15, 2012]
The takeover of Sprint (S) by Japanese mobile phone company Softbank has Wall Street chattering about the history-making size of the $20 billion deal. But for most of us regular consumers, the relevant question is: What can $20 billion do for me?
Possibly a lot, even if you’re not a Sprint customer.
For years, the U.S. mobile marketplace has been dominated by two heavyweights engaged in a Republican-versus-Democrat-style two-party contest for dominance. As with many elections, consumers often end up feeling like they have to pick between the lesser of two evils rather than what they really want. But as with voting for third-party candidates, you can feel left out of the national conversation (literally) when you choose a company other than AT&T or Verizon.
But independent mobile industry analyst Chetan Sharma says SoftBank and its cash could give Sprint the heft it needs to become a relevant rival. The capital infusion lets Sprint build out its LTE network, creating a viable third high-speed option. And by combining forces for greater purchasing power, Sharma says Sprint and SoftBank together gain serious leverage when negotiating with handset makers for access to the best new phones.
With better phones and a better network, Sharma believes Sprint could at a minimum expect to claim at least one-quarter of the U.S. mobile subscribers, up from less than one-fifth. With a critical mass of customers, he says Verizon and AT&T will have to pay attention when Sprint offers lower prices. In the end, this could mean lower prices for everyone. “It puts pressure on the top two. The market can fluctuate,” Sharma says.
In the short term, he says SoftBank’s cash will also let Sprint continue to offer its unlimited plans while angling for a possible T-Mobile takeover, which would solidify Sprint’s status as the default third choice.
SoftBank could also help Sprint compete by taking the lead in bringing innovations popular in Japan into the U.S. market, such as advances in mobile payments and mobile health care. But Sprint customers could also find themselves affected if the Japanese market takes a bad turn and SoftBank is forced to focus attention and money on its business at home.
Barring such overseas crises, however, Sprint could find itself moving up from write-in candidate toward the stature of Ross Perot of the 1992 presidential race. The company might not have a chance of winning, and not everyone will take it seriously, but Sprint could finally get the chance to take part in the debate.
China Mobile Invites Tender for 34,700 TD-LTE Terminals [ChinaScope Financial, Sept 25, 2012]
Source: Sina
- China Mobile (CHL: NYSE; 0941: HKG) announced today that it will soon open the bid for 34,700 TD-LTE device supply contract for trial in 13 cities.
- The trial projects will test multiple forms of dual-mode TD-LTE devices, including data card, MiFi, MiFi for international roaming, CPE, multi-mode and dual-SIM card smartphones, and tablet computers.
China Mobile Hong Kong selects Ericsson to build TD-LTE network [Ericsson press release, July 19, 2012]
- China Mobile Hong Kong (CMHK) selects Ericsson to add TDD technology to its commercial LTE network
- Ericsson and CMHK will together build a converged LTE FDD/TDD network based on 3GPP in Hong Kong, increasing end user experience and capacity
- Ericsson will upgrade, expand and perform systems integration of the operator’s Evolved Packet Core network (EPC)
China Mobile Hong Kong, subsidiary of the world’s largest mobile operator China Mobile Limited, has selected Ericsson (NASDAQ: ERIC) to expand their commercial LTE network with TD-LTE (LTE TDD) in Hong Kong. Ericsson is already the sole supplier for China Mobile Hong Kong’s LTE FDD network. Together the companies will now build a converged LTE FDD/TDD network.
Leveraging on the advantage of the LTE FDD installed base, Ericsson will also upgrade the operator’s existing Evolved Packet Core (EPC) network.
China Mobile Hong Kong launched LTE FDD mobile data services in April this year. Now it plans to launch a TD-LTE network according to 3GPP standards, complementing its existing LTE FDD network. The converged LTE FDD/TDD network will be launched as early as the fourth quarter, when devices that support both modes become available in larger volumes.
“We chose Ericsson, a global leader in the LTE space, as our TD-LTE network partner,” said Sean Lee, Director and CEO of China Mobile Hong Kong. “By partnering with Ericsson and maximizing our spectrum asset, we will build a converged LTE FDD/TDD network that gives our customers an even better 4G experience.”
“This contract marks another significant milestone for Ericsson and further consolidates our network leadership in the region,” said Mats H Olsson, President of Ericsson China & North East Asia. “With our continued innovation in technology, services and design, we are committed to further enhance China Mobile’s mobile services in Hong Kong and extend our long-standing relationship with the operator.”
Under the agreement, Ericsson will deliver the TD-LTE radio access network, network management using Ericsson OSS-RC, Evolved Packet Core network expansion and upgrade, consulting and systems integration services as well related design, training and support services.
Ericsson has now signed 67 LTE/EPC contracts in 30 countries on five continents. We have a well proven LTE solution, outperforming competition, and according to measurements end of 2011, we have a 60% market share measured in LTE volumes.
ZTE launches TD-LTE commercial network in HK [China Daily, Sept 24, 2012]
ZTE Corp, the world’s fifth largest telecom equipment vendor by revenue, began deployment ofa TD-LTE commercial network in Hong Kong this month that will be put into operation by year-end.
On July 19 this year, China Mobile Hong Kong Ltd selected ZTE and Ericsson to build a TD-LTE network that operates in the 2.3GHz frequency band. Before that, China Mobile had already launched commercial FDD LTE network services in April.
When the project is completed, China Mobile will run a dual mode 4G LTE network in HongKong.
The network will be the first commercial TD-LTE network operated by China Mobile since the world’s biggest telecom operator started to promote the Chinese homegrown 4G technology in 2009. Currently, China Mobile conducts large-scale trials on TD-LTE technology in 13 Chinesemainland cities.
In a statement to China Daily, ZTE said it had signed nine TD-LTE commercial network contracts around the world by August.
Secretary General of Global TD-LTE Initiative (GTI) from the 7th Annual LTE Asia [LTEWorldSeries YouTube channel, Sept 26, 2012]
– What is the GTI organisation?
– Why will TD-LTE be important?
– What have been your impressions of this event?
– What has been your most valuable experience here?
TD-LTE Expanded Trial Officially Approved in China [GTI TD-LTE Industry Briefing August 2012, pp.5, Aug 10, 2012]
China TD-LTE Expanded Trial Officially Approved by Chinese Government
On July 18 2012,MIIT officially approved the deployment plan of TD‐LTE expanded trial in china.
Before the end of 2012, China Mobile will deploy 20,000 TD‐LTE base stations in 10 cities, including Beijing, Tianjin, Shenyang, Shanghai, Nanjing, Hangzhou, Guangzhou, Xiamen, Qingdao and Shenzhen. 1.9GHz (Band 39) and 2.6GHz (Band 38) will be utilized for outdoor coverage and 2.3GHz (Band 40) for indoor coverage. The number of cities, network scale and frequency bands are much larger compared with the TD‐LTE large‐scale trial that finished during May 2012. At this phase, the trial will focus on the pre‐commercial deployment, network operation and friendly user test. Other 3 cities are currently under preparation, which are Chengdu, Fuzhou and Ningbo.
The approval of TD‐LTE expanded trial plan states that China is currently trying hard to boost up the commercial deployment of TD‐LTE network.
Chen Shanzhi delivered a speech on “ICT China 2012 High Level Forum” [Datang News, Sept 19, 2012]
On September 18th, Chen Shanzhi, Vice President and CTO of Datang, delivered a speech, “TD-LTE Industry Development and Technology Evolution” on “ICT China 2012 High Level Forum”.
In the speech, Mr. Chen pointed out that with the quick development of global LTE industry, TD-LTE attracted more big operators to join. By July 2012, 80 LTE networks in 38 countries had been in use; 16 operators had announced plans for TD-LTE commercial use. There were 9 commercial networks and 38 trial networks.
China launched expanded large-scale trial in 13 cities in 2012, realizing continuous wireless coverage in urban areas, and interconnection with TD-SCDMA and multi-mode application. Now 11 system suppliers and 9 chip manufacturer have participated in the trial, and 4 multi-mode terminals based on multi-mode chips, 3 of which have passed scale trial.
According to Chen Shanzhi, Datang, as the major contributor for TD-SCDMA and TD-LTE-A development and standardization, is committed to the development of TDD technology. Datang will promote LTE-Hi development with TDD macro cover technology as its basis. This will dramatically increase capacity and provide wider band and better experience. Datang actively deploys TD-LTE industry chain, and goes ahead in base stations, terminals, chips, test instruments and networking planning tools. Datang is one of the first enterprises which entered TD-LTE scale trials. Meanwhile, Nanjing TD-LTE trial network includes the only highway test scenario in scale trials.
As to the international market, Datang has started to construct TD-LTE trial networks in Asia, Africa, South America, and Europe.
At the end of his speech, Chen Shanzhi said Datang would strive to promote development of TD technology and innovative application, based on Datang’s strength in TD system equipment, TD handset chips, TD terminals and application areas.
China Mobile to expand 4G network [China Daily, June 21, 2012]
The rollout of China’s homegrown fourth-generation wireless networks will take off andexpand at a rapid pace if mature 4G terminalsare ready, according to Xi Guohua, chairman of China Mobile Ltd.
Xi, speaking at the GSMA Mobile Asia Expo in Shanghai on Wednesday, said the developmentof China’s TD-LTE 4G technology is proceeding smoothly both at home and abroad.
China Mobile is conducting its Phase 2 scale-trial in 10 cities and aims to construct more than 20,000 base stations through new builds and upgrades this year, Xi said.
The company revealed in March that it hoped to have a total of more than 200,000 TD-LTE base stations by 2013.
“China Mobile has the ability to build as many 4G base stations as it wants in a short period oftime,” said Xi, a former vice-minister of industry and information technology, who succeeded Wang Jianzhou in March to become China Mobile’s chairman.
The target of building 200,000 TD-LTE base stations is realizable, since the company can directly upgrade its 3G stations to advanced 4G ones. According to China Mobile’s annual report, the number of 3G TD-SCDMA base stations reached around 220,000 last year.
However, the lack of TD-LTE devices could hamper the company’s 4G rollout, Xi continued.
Though a dozen mobile phone manufacturers have expressed interest in developing TD-LTEhandsets, a mature device has yet to emerge, said Cao Shumin, president of the China Academy of Telecommunication Research of the Ministry of Industry and InformationTechnology.
“Several TD-LTE handsets are being tested, but their capabilities do not meet the standardsfor everyday use,” Cao said.
The other LTE 4G technology, FDD-LTE, has around 64 smartphone models.
…
China Mobile started building the world’s largest TD-LTE trial network in the Chinese mainland in January 2011, when the Phase 1 scale-trial began. Among the 10 pilot cities, Hangzhou, Shenzhen and Guangzhou will conduct in-depth testing and offer pre-commercial 4G services to the public.
The company realized two-way roaming between the FDD-LTE network in Hong Kong and theTD-LTE network in Hangzhou on Monday.
…
Reports have circulated that China Mobile would get a fixed-line network license from Chineseregulators to complement its wireless business. Xi said it was up to the ministry to decidewhether China Mobile should get the permit.
But China Mobile will not enter fixed-line networks on a large scale, or start any price wars, Xisaid. “If we get the license, we will do business selectively. China Mobile is a listed company, and we will invest considering returns.”
China Mobile and SoftBank note TD-LTE progress [Mobile World Live of GSMA, June 20, 2012]
LIVE FROM GSMA MOBILE ASIA EXPO 2012: Executives from China Mobile and SoftBank today highlighted the success of their initial efforts with TD-LTE technology, although it was also noted that there are hurdles to be overcome – with devices a particular sticking point.
Speaking at the GTI Asia Conference, Xi Guohua, chairman of China Mobile, said that the company’s pilots have proved that “TD-LTE is capable of supporting big networks, with a large flow of data.” He said that the operator intends to “make further investments and further efforts to speed-up the implementation of TD-LTE,” with the intention to grow both its network size and its user base – although “that will depend on the maturity of the whole industry, especially the maturity of the terminals.”
With services currently only available using data devices, it was said that China Mobile will work with partners to launch smartphones “in the latter part of this year or next year.”
Ted Matsumoto, chief strategic advisor to the board of SoftBank, said that the Japanese number three now has more than 100,000 users for its services, following a commercial launch earlier this year.
Currently, SoftBank only offers one wireless hotspot device, with the intention to offer two more of these in the next quarter. In addition, in Q4 it is set to launch its first smartphone supporting TD-LTE, manufactured by Huawei, with the operator intending to move to the point where “most” of its smartphone range supports the connectivity.
Both executives also supported the need to support roaming, in order for LTE to become the enabler of international data services for travellers. China Mobile said it is looking for “more active exploration” of the options for data roaming.
And Matusmoto observed: “we are rather lonely. We would like to have more operators supporting TD-LTE through the world, so users can roam.”
SoftBank details ambitious TD-LTE plans [Mobile World Live of GSMA, Nov 15, 2011]
LIVE FROM GSMA MOBILE ASIA CONGRESS 2011: Tetsuzo Matsumoto, chief strategic advisor to the CEO and member of the board of Japanese operator SoftBank, today disclosed an aggressive strategy for the rollout of TD-LTE services in Japan, with the intention of commercially launching propositions under the SoftBank 4G banner in March 2012.
Speaking this morning, Matsumoto (pictured) said that the company is looking to deploy around 12,000 base stations covering 92 percent of the population of Japan next year. “So it is real,” he observed.
Initially, the company will offer services using data cards and wireless hotspots. However, by the “summer or autumn” the intention is to offer a smartphone with TD-LTE support – which will also offer FDD LTE and HSPA connectivity.
SoftBank has already soft-launched a TD-LTE compatible network, through its Wireless City Planning affiliate. While this is using technology branded AXGP, Matsumoto said that this is “basically exactly the same as TD-LTE.” It is compatible with the global TD-LTE ecosystem, and is “100 percent conforming” to the 3GPP TD-LTE standard, he said.
The pilot has so far been a low-profile affair, he noted, but “eventually we will start making it more visible.”
According to Matsumoto, while SoftBank owns around one third of Wireless City Planning, the other investors are passive partners – it is “100 percent responsible for the operations.”
The executive also talked up SoftBank’s position in the mobile broadband market, as well as highlighting the potential for further industry collaborations. “Unlike other operators, Softbank’s background is internet. Our belief is that the world is moving from the mobile phone, to the mobile internet, and SoftBank is right to take the lead of this convergence throughout the world.”
The company is working with multiple partners to construct its network, including Huawei, ZTE, Ericsson and Alcatel-Lucent.
Mr. Tetsuzo Matsumoto, Member of the Board, Chief Strategy, Adviser to CEO, SOFTBANK MOBILE Corp. [June 5, 2012]
Tetsuzo (Ted) Matsumoto is a member of the Board and Chief Strategy Advisor to the CEO of SOFTBANK MOBILE Corp. He is also a Board member of GSMA and various other international organizations related to the mobile communication industry
On September 1, 2006, Mr. Matsumoto joined Vodafone KK in Japan, which had been already acquired by Softbank group, as an Executive Vice President and Chief Strategy Officer, and became a member of the Board and Senior Executive Vice President of the company after its name was officially changed to SOFTBANK MOBILE Corp. Since then, until June 30, 2011, he had been active mainly in the area of the company’s technology strategy, government relations and international operations. Now, he is free from the company’s day-to-day operations, and focusing on the long-term strategic issues.
Prior to joining the Softbank group, Mr. Matsumoto was with Qualcomm for over 10 years, commencing as a consultant, and, subsequently, serving as President/Chairman of Qualcomm Japan, as well as a Senior Vice President at its Head Quarters in San Diego. While at Qualcomm, he was instrumental to introduce CDMA technology to Japan, and responsible for its Japan, Southeast Asia and Pacific operations.
Mr. Matsumoto began his career with Itochu Corporation, a Japanese conglomerate, where he worked for 34 years and held a variety of positions, including Senior Vice President of the Electronics Division of Itochu (America) Corp., General Manager of its Communication/Multimedia Business, and Group Vice President of the Aerospace and Information Division at the company’s Tokyo Headquarters. During his last five years with Itochu, he held the Director positions of the Boards of more than 10 Telecommunications, Media and IT Services companies in Japan.
Mr. Matsumoto received a Bachelor of Law degree from Kyoto University in 1962.
The Chinese actually are so proud of the progress of their “own” 4G standard that they put the below advertisement on the p. 4 of China Daily June 18, 2012 issue:
LTE TDD Goes Mainstream
Mobile ecosystem puts support behind the standard
Author: Daryl Schoolar, Principal Analyst, Infrastructure
(Report excerpt)
Huawei the “misterious”
While tracking the trends related to experiencing the cloud one inevitably had to deal here with a recent giant in the mobile Internet technologies, Huawei of the mainland China:
– ICT Top-100 in Mainland China and the #1 Huawei [June 4, 2011]
– Huawei’s IDEOS U8150 smartphone for US$86 in Kenya: 350,000 units sold in 8 months [Aug 17, 2011] (note that this activity stemmed from the first non-infrastructure business of the company, and now it is part of the Huawei Consumer business group)
and
– Huawei Enterprise after its 1st year and the 2012 strategy [March 26, 2012] (note that Huawei Enterprise is a new business group of the company)
While the company’s internal business structure is quite well know by this time–see this:
from the recent Corporate Governance [Huawei webpage, Apr 23, 2012], the ownership structure is unclear, even when checking the bigger scheme representing “employee shareholding” on the same governance page of the company.
Fortunately for us the recent thorough US investigation of Huawei from the point of view of “security threat to U.S.” is providing ample material to describe here both the ownership structure, and –more importantly— the real strategic decision making structure of the company, which –you will find below– is a structure into which the Communist Party of China and the Chinese government are highly weaved into through a still uncovered web of the party organisations down to the company’s own party organisation, as well as different government organisations, including even the defense and intelligence related parts of the Chinese capitalist state. It becomes obvious from findings of the US investigation that the very much state controlled financial sector of China is also part of this complex strategic decision making structure which is behind the Huawei company.
Certainly this post has nothing to do with the security question which is just mentined in the first to video reports given below.
I. Background: the “security threat” investigation in the U.S.
All the rest is devoted to three aspects:
II. Overall findings
III. Findings regarding the relationships with the Chinese government and the Chinese Communist Party
IV. Findings regarding the founding and financing of Huawei
My goal with that was to complement my two earlier posts on:
– SOEs and state coexistence in China [June 19, 2011 – Feb 24, 2012]
and
– Entrepreneurial global brand building by the founder of the Chinese aigo [爱国者] company: a desparate attempt to avoid the death march of ruthless competition at home [Oct 11, 2012]
since Huawei is definitely not a SOE (State Owned Enterprise), but essentially driven by the state and party even more efficiently than the most of SOEs. At the same time aigo is a totally grass-roots, entrepreneurial company through the story of which one can understand the insanely wild world of true private companies now forming an equally important backbone of the Chinese economy, overall dominated by the Chinese capitalist state and the party behind. So I have now a complete picture without which one cannot understand even the Chinese high-tech sector developments which more and more are determining the future of the global ICT as clearly demonstrated by a number of trend tracking posts on this blog, such as:
– 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! [Feb 21, 2011 – Aug 10, 2012]
– ASUS, China Mobile and Marvell join hands in the OPhone ecosystem effort for “Blue Ocean” dominance [March 8, 2011
– China Mobile repositioning for TD-LTE with full content and application aggregation services, 3G [HSPA level] is to create momentum for that [June 18, 2011]
– New high-tech and direct investment relationships between the US and China? [Aug 19, 2011]
– China becoming the lead market for mobile Internet in 2012/13 [Dec 1, 2011 – Jan 16, 2012]
– OPhone 2.5 and beyond from Borqs for China Mobile [Dec 5, 2011]
– World’s lowest cost, US$40-50 Android smartphones — sub-$100 retail — are enabled by Spreadtrum [Dec 11, 2011 – Feb 27, 2012]
– The ZTE way of capitalizing on the LTE opportunity [Dec 20, 2011 – Feb 10, 2012]
– The new, high-volume market in China is ready to define the 2012 smartphone war [Jan 6 – July 13, 2012]
– China TD-SCDMA and W-CDMA 3G subscribers by the end of 2011: China Mobile lost its original growth momentum [Jan 21, 2012]
– China-based second-tier and white-boxed handset makers targeting the emerging markets[Feb 13 – Apr 17, 2012]
– MWC 2012: Fuzhou Rockchip Electronics [March 13, 2012]
– Core post: 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]
– Core post: Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets [July 26, 2012]
– Core post: MediaTek’s ‘smart-feature phone’ effort with likely Nokia tie-up [Aug 15, 2012]
– Core post: The low priced, Android based smartphones of China will change the global market [Sept 10-26, 2012]
– Take note: MT6577-based JiaYu G3 with IPS Gorilla glass 2 sreen of 4.5” etc. for $154 (factory direct) in China and $183 [Sept 13, 2012]
I. Background: the “security threat” investigation in the U.S.
Opposing Views on Congress’ Claims Huawei Technologies [PBSNewsHour YouTube channel, Oct 9, 2012]
And here is a 3d party assesment – Opinion: Is Huawei Really a Security Threat? [WSJDigitalNetwork YouTube channel, Oct 11, 2012]
II. Overall findings
from Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE [A report by Chairman Mike Rogers and Ranking Member C.A. Dutch Ruppersberger of the Permanent Select Committee on
Intelligence, U.S. House of Representatives, 112th Congress, October 8, 2012]
pp. 13-14
Huawei markets itself as a “leading global ICT [“Information Communications Technology”] solution provider,” that is “committed to providing reliable and secure networks.”38 Throughout the investigation, Huawei consistently denied having any links to the Chinese government and maintains that it is a private, employee-owned company.39 Many industry analysts, however, have suggested otherwise; many believe, for example, that the founder of Huawei, Ren Zhengfei, was a director of the People’s Liberation Army (PLA) Information Engineering Academy, an organization that they believe is associated with 3PLA, China’s signals intelligence division, and that his connections to the military continue.40 Further, many analysts suggest that the Chinese government and military proclaim that Huawei is a “national champion” and provide Huawei marketdistorting financial support.41
… For years, analysts have struggled to understand how Huawei’s purported employee-ownership model works in practice, and how that ownership translates into corporate leadership and decision-making.43 Huawei repeatedly asserts that it is a private, employee-owned and controlled company that is not influenced by the Chinese government or Chinese Communist Party.44 Executives also asserted that the unique shareholder and compensation arrangement is the foundation of the company’s rise and success.
Available information does not align with Huawei’s description of this structure, and many analysts believe that Huawei is not actually controlled by its common shareholders, but actually controlled by an elite subset of its management.45 The Committee thus requested further information on the structure of the company’s ownership. For example, the Committee requested that Huawei list the ten largest shareholders of the company. Huawei refused to answer.46 At the hearing on September 13, 2012, Huawei admits that its shareholder agreement gives veto power to Ren Zhengfei, the founder and president of the company.47 Other public statements by the company undermine the suggestion that the 60,000 supposed shareholders of Huawei control the company’s decisions. For example, in the company’s 2011 report, Mr. Ren highlighted that Huawei’s Board of Directors:
will not make maximizing the interests of stakeholders (including employees, governments, and suppliers) its goal. Rather, it holds on to the core corporate values that are centered on customer interests and encourage employee dedication.48
pp. 15-16
Huawei officials explained that Chinese law forbids foreigners from holding shares in Chinese companies absent a special waiver.49 Current and former Huawei employees confirm that only Chinese nationals working at Huawei in the United States participate in the shareholding plan. The inability of non-Chinese employees of Huawei to hold shares of the company further erodes its claim that it is truly an employee-run organization as an entire group of employees are not only disadvantaged, but automatically excluded from any chance to participate in the process.
…
Huawei also provided staff access to shareholder ballots for shareholder
representatives and the Board of Directors. These too did not appear to be facially fraudulent, but they were impossible to authenticate, especially as investigators were not allowed to remove the documents from Huawei’s facilities for third-party validation. The documents appeared to highlight that shareholders have a write-in option for union representatives, but there is no such option for the Board of Directors. Rather, Huawei officials stated that the nominees for the Board are chosen prior to the vote by the previous Board. It was unclear how the original Board was established, and Huawei has consistently failed to provide any answers about who was previously on its Board of Directors.Huawei further explained that in 1994, the first Company Law of China was
officially published, regulating the establishment and operations of limited liability companies.51 Under this law, the maximum number of shareholders was 50 individuals. Thus, in 1997, Huawei claims to have changed its legal structure to a limited liability company, and started the employee stock ownership program through the union. Similarly, Huawei asserted that in 1997, the City of Shenzhen issued policies regarding employee shareholdings. According to Huawei, it designed its shareholder program to conform to the the Company Law of China, and the laws and policies of the City of Shenzhen.52
According to Huawei, the union, known as Union of Huawei Investment and Holding Co., Ltd., facilitates ESOP implementation. The Union is a lawfully registered association of China. Huawei officials stated that “Huawei’s success can be directly linked to the company’s unique compensation structure.”53 Currently, Huawei claims that the Union holds 98.7% of the ESOP shares, and Mr. Ren holds 1.3%. At the Huawei explained that as of December 31, 2011, ESOP has 65,596 participants, which it alleges are all Huawei employees (current and retired), it claims that there are no third parties, including government institutions, holding any ownership-stake in the company.
p. 17
- Each year, the company determines the numbers of shares an employee can purchase based on job performance. Eligible employees must sign the Confirmation Letter and the Letter of Undertakings and make payments for the shares.
- An employee’s stocks can be held only by the employee him/herself, and cannot be transferred or disposed by the employee. When an employee leaves the company (except for those who meet the retirement requirements with minimal eight years of tenure and 45 years old), stocks will be purchased back by the company.
- The current stock price is the net asset value of the stock from the previous year. When an employee purchases more shares or the Union takes shares back, it is based on the current stock price. The dividend amount of each year is based on the performance of the company.
p. 20
(3) Acquisition of Restricted Phantom Shares [see the Wikipedia desciption of phantom stock for clarity]
- The restricted phantom shares of the Union shall be issued to those key employees of the Company who have displayed excellent work performance.
- The Restricted Phantom Share Management Committee shall decide annually whether to issue shares, and the number of shares to be issued, based on the comprehensive evaluation of the work performance of such employee and in accordance with the evaluation rules of the restricted phantom shares. Retired or restructuring beneficiaries are not allowed to purchase new shares
then there is
pp. 17-18
The Commission is composed of 51 Representatives and nine alternates, elected by the Active Beneficiaries as organized by the Union with a term of five years.
– Active beneficiary is defined as an active employee who works at Shenzhen Huawei Investment and Holding Co, Ltd or any of its equity affiliates and participates in the Plan of the Union.
– In the event there is a vacancy, the Alternate shall take up the vacancy in sequence. The Alternates can attend, but not vote at, all meetings.The Commission
reviews and approves restricted phantom share issuance proposals;
reviews and approves dividend distribution proposals;
reviews and approves reports of the board of shareholding employees;
elects and replaces any member of the board;
elects and replaces any member of Supervisory Board; reviews and approves procedures forelecting representatives;
approves amendments of these articles;
reviews and approves the use of the reserve fund;
reviews and approves other material matters with respect to restricted phantom share;
perform functions as the shareholders of the company, exercises the rights of the shareholder, and develops resolutions regarding material matters such as capital increase, profit distribution, and selection of Directors and Supervisors.
The Board is responsible for regular management authority and shall be responsible to the Commission.
The main functions of the Board are to:
prepare restricted phantom share issuance proposal;
preparation of the dividends distribution proposal;
formulation, approval, and amendment of the detailed rules, processes, and implementation methods with respect to the restricted phantom shares;
preparation of the amendments to articles;
determination on the detailed proposal as to the use of the Reserve Fund;
execution of the resolutions of the Commission;
exercise of the specific rights and powers of a shareholder of the Investee Company except for the matters on which a resolution from Commission is required;
determination of other matters that shall be determined by the Board.
The Board consists of 13 directors selected by the Commission; each serves for five years
p. 19
The Supervisory Board is the organization responsible for supervising the implementation of the shareholder plan with its main functions and powers as follows:
supervising the implementation of the resolutions by the Board;
making recommendations or inquiries in event of any violation of any law, regulation or these Articles by the Board;
making work reports to the Commission; and
other regular functions and powers.
Supervisors may attend Board meetings as non-voting delegate. The Supervisory Board shall consist of five Supervisors who shall be elected by the Commission to five year terms; no Director can serve concurrently as a Supervisor.
p. 20
-
Before 31 December 2018, Mr. Ren shall have a right to veto the decisions regarding restricted phantom shares and Huawei’s material matters (resolutions of the Board, Commission, and Shareholder’s Meeting of the Company).
-
Starting from 1 January 2013, the confirmed Active Beneficiaries who represent a minimum of 15% of the restricted phantom shares (excluding the restricted phantom shares held by the Restructuring Beneficiaries and the Retained Restricted Phantom Shares) shall have a right to veto the decisions regarding restricted phantom shares and Huawei’s material matters (including resolutions of the Board, the Commission, and the Shareholders’ Meeting of the Company).
-
The relevant resolutions shall take effect in the event that the owner(s) of the right of veto does (do) not exercise the right of veto against the aforementioned resolutions.
III. Findings regarding the relationships with the Chinese government and the Chinese Communist Party
from Investigative Report
p. 21
The nature of the modern Chinese economy is relevant for understanding
Huawei’s connection to the Chinese state. The Chinese government often provides financial backing to industries and companies of strategic importance. Indeed, analysts of the Chinese political economy state that:Huawei operates in what Beijing explicitly refers to as one of seven “strategic sectors.” Strategic sectors are those considered as core to the national and security interests of the state. In these sectors, the CCP [Chinese Communist Party] ensures that “national champions” dominate through a combination of market protectionism, cheap loans, tax and subsidy programs, and diplomatic support in the case of offshore markets. Indeed, it is not possible to thrive in one of China’s strategic sectors without regime largesse and approval.56
Similarly, the U.S.-China Commission has explained, with Chinese companies, “the government’s role is not always straightforward or disclosed.” Despite some reforms, “much of the Chinese economy remains under the ownership or control of various parts of the Chinese government.”57 The U.S. China-Commission lists Huawei as a form of enterprise in China that exists in a relatively new market and receives generous government policies to support its development and impose difficulties for foreign competition.58
p. 22
In its written submission in response to the Committee’s questions, Huawei
simply asserted that it “maintains normal commercial communication and interaction with relevant government supervisory agencies, including the Ministry of Industry and Information Technology and the Ministry of Commerce.”62 Huawei’s failure to provide further detailed information explaining how it is formally regulated, controlled, or otherwise managed by the Chinese government undermines the company’s repeated assertions that it is not inappropriately influenced by the Chinese government. Huawei appears simply unwilling to provide greater details that would explain its relationships with the Chinese government in a way that would alleviate security concerns.Similarly, Huawei officials did not provide detailed answers about the
backgrounds of previous Board Members. Rather, the Committee simply received the same biographies as previously disclosed of current members of the Board of Directors and Supervisory Board.63 Previous Board Members may have significant ties to the Party, military, or government. And since the previous Board is responsible for nominating the current Board members, this information is important to understanding the historical progression of the company. Because the biographies of the previous members would highlight possible connections to military or intelligence elements of the Chinese government, Huawei’s consistent failure to provide this information is alerting.
p. 23
In response to the numerous opportunities to answer questions about its
connection to the Party, Huawei stated that the company has no relevant connections. For example, in response to the Committee’s written questions about the role of the Party in the company’s affairs, Huawei merely stated that it “has no relationship with the Chinese Communist Party in its business activities.”65Huawei admits, however, that an internal Party Committee exists within Huawei. Huawei simply states that party committees are required by Chinese law to exist in all companies in China.66 The existence of these Committees is, however, of particular relevance. Huawei states in its defense that all economic institutions in China are required to have a state Party apparatus inside the company. This is not, however, a compelling defense for companies seeking to build critical infrastructure in the United States. Indeed, experts in Chinese political economy agree that it is through these Committees that the Party exerts influence, pressure, and monitoring of corporate activities. In essence, these Committees provide a shadow source of power and influence directing, even in subtle ways, the direction and movement of economic resources in China.67 It is therefore suspicious that Huawei refuses to discuss or describe that Party Committee’s membership. Huawei similarly refuses to explain what decisions of the company are reviewed by the Party Committee, and how individuals are chosen to serve on the Party Committee.
IV. Findings regarding the founding and financing of Huawei
from Investigative Report
In the corresponding parts of the ivestigative report you can find a five times reference
to Mr. Ding = Charles Ding.
Regarding his previous public appearances I found on the web only one page having a photo of him embedded. As it is the only public appearance giving not only a direct visibility outside his regular job as president of Huawei in US/NA, but also some clue about what kind of strategic role he could play in various influential circles of the western world, I am copying here the whole page content as it appears now:
Georgetown Leadership Seminar 2011 [The Jewish Diplomatic Corps, March 15, 2011]
Set in one of the world’s leading academic and research institutions, Georgetown University, JDCorps’ Yariv Nornberg of Better Place [founded by Shai Agassi], attended the Georgetown Leadership Seminar in March 2011.
(From L to R) JDCorps Member Yariv Nornberg, former Sec. of State Madeline Albright, Charles Ding Huawei NA President
This seminar is a annual, prestigious event dealing with many topics of interest for World Jewry. Yariv’s attendance was the first of its kind in a decade, whereby an Swedish-Israeli Jew attended the seminar. Organized by the School of Foreign Service at Georgetown University and led by former US senior officials, each year the seminar invites some 35 emerging leaders to Washington D.C. to discuss major foreign policy issues.
And now information from the investigative report:
p. 23
In his official biography, Mr. Ren admits that he was asked to be a
member of the 12th National Congress of the Communist Party of China in 1982. The National Congress is the once-in-a-decade forum through which the next leaders of the Chinese state are chosen. The Party members asked to play a role in China’s leadership transition are considered key players in the state apparatus.68 Mr. Ren proudly admits that he was invited to that Congress, but he will not describe his duties. Shortly after being given such a prestigious role, Mr. Ren successfully founded Huawei, though he asserts he did so without any government or Party assistance.69 Huawei likewise refuses to answer whether Mr. Ren has been invited to subsequent National Congresses or has played any role in Party functions since that time.70
pp. 24-25
According to Huawei officials, Mr. Ren was a member of the Chinese military’s engineering corps as a soldier tasked to establish the Liao Yang Chemical Fiber Factory and was promoted as a Deputy Director, which was a professional role equivalent to a Deputy Regimental Chief, but without military rank.71 Mr. Ren then retired from the army in 1983 after the engineering corps disbanded, and next worked for a State Owned Enterprise (SOE) following his retirement. According to this account, Mr. Ren was “dissatisfied” with his low salary and career path at the SOE, so in 1987, he established Huawei. Huawei officials did not explain how he was able to leave his employment with a SOE or whether he got agreement of the state to do so. Huawei officials denied that Mr. Ren was a senior member of the military.72 The Committee’s requests for more information about Mr. Ren’s military and professional background were unanswered. Huawei refused to describe Mr. Ren’s full military background. Huawei refused to state to whom he reported when he was in the military. Huawei refused to answer questions about how he was invited to join the 12th National Congress, what duties he performed for the Party, and whether he has been asked to similar state-party matters.
Huawei similarly denied allegations that Ms. Sun Yafang, Chairwoman of
Huawei, was previously affiliated with the Ministry of State Security. Mr. Ding responded to Committee questions after the hearing that, to his knowledge, reports about Ms. Yafang in Chinese publications, such as those in Xinjing Bao, are erroneous.73 Mr. Ding did not respond to questions asking about how such publications received such information, or whether Ms. Yafang’s previous biography on the Huawei website was erroneous as well. Rather, Mr. Ding simply provided again Ms. Yafang’s corporate biography from the Huawei Annual Report 2011.74With respect to Huawei’s founders, Huawei cited a Chinese legal equirement that new companies in the economic development zone must have a minimum of five shareholders and 20,000 RMB registered capital. During meetings with the Committee, Huawei officials claimed that in 1987, Mr. Ren raised 21,000 RMB with personal savings and five other private investors. To the best of the officials’ knowledge, none of the five investors had worked with Mr. Ren prior to start-up and one individual has previous affiliation with the government.75 According to Huawei officials, the five investors never actually worked for Huawei and withdrew their investments several years later.76
The Committee struggled to get answers from Huawei on the details of this
founding, including how Mr. Ren came to know the initial individual investors, whether his connections to the military were important to the eventual development of the firm, and whether his role in the Party remains a factor in his and his company’s success.
pp. 27-28
During the Committee’s hearing, Mr. Ding suggested he did not understand and had no knowledge of the term “national champion,” which is often used to describe favored Chinese companies throughout the economic literature on China.91 The Committee finds that Mr. Ding’s suggestion that he does not understand the term is not credible. Huawei itself provided Capitol Hill offices a slide presentation in November 2011, which used the term “national champion” several times.92 In response to the Committee’s questions about use of the term in that document, Huawei did not deny that it used the document and provided the document containing the term.93 Rather, Huawei stated that the particular slide in the larger document was created by a third party and thus not Huawei’s responsibility.94 The Committee finds that Huawei’s knowing use of the document in its discussions with United States elected representatives is sufficient evidence to prove that Huawei does in fact have an understanding of the term. Mr. Ding’s consistent refusal to answer questions about which firms are considered national champions in the Chinese telecommunications sector was obstructionist. In fact, his response to the Committee’s question that “Huawei has not paid attention to the meaning of ‘national champion’ before,” is obviously untrue given the company’s use of the term in its presentations previously.95 Moreover, his answers suggest that he did not want to explain how it was that Huawei, the number one telecommunications provider in China, is not a company of strategic importance in China, as recognized by others around the world.
Huawei officials also deny that they have received any special financial incentives or support from the Chinese government.96 Huawei claimed that the company simply takes advantage of general Chinese banking opportunities, but does not seek to influence or coordinate with banks such as the Chinese Development Bank and the Export-Import Bank, which are both state owned. In previous presentations, Huawei had suggested that it served as an “intermediary and bridge” between the state-backed financial institutions and Huawei customers.97 Huawei refused, however, to provide more detail about precisely how those lines of credit developed. Huawei also refused to answer specifics about its formal relationships with the Chinese banks, opting to simply answer that it maintains “normal business relations” with the Export-Import Bank of China.98
…
p. 29
In sum, Huawei admits that its customers receive billions of dollars in support from Chinese state-owned banks and that it has received favorable loans from Chinese banks for years. Huawei refuses to provide answers to direct questions about how this support was secured, nor does it provide internal documentation or auditable financial records to evaluate its claims that the terms of these agreements comply with standard practice and international trade agreements. The Committee is equally concerned with statements by company leaders that undermine the Committee’s confidence in the financial information the company has provided. For example, in a June 2007 speech to Huawei employees in the United Kingdom, Mr. Ren stated that he appreciated the subsidiary’s attempt to create financial statements, “whether the data is accurate or not.”105 Based on available information, the Committee finds that Huawei receives substantial support from the Chinese government and Chinese state-owned banks, which is at least partially responsible for its position in the global marketplace.
p. 34
The Committee also received internal Huawei documentation from former
Huawei employees showing that Huawei provides special network services to an entity the employee believes to be an elite cyber-warfare unit within the PLA.131 The documents appear authentic and official Huawei material, and the former employee stated that he received the material as a Huawei employee.132 These documents suggest once again that Huawei officials may not have been forthcoming when describing the company’s R&D or other activities on behalf of the PLA.
Supplementary materials
Why Do Private Companies in China Have Party Committees? [ChinaForbiddenNews YouTube channel, Sept 30, 2012]
Note that the New Tang Dynasty Television (NTDTV or lately NTD) which is behind ChinaForbiddenNews (see the logo in the upper right corner of the screen) said to be founded in affiliation with Falung Gong, and one of the hallmarks of this television is strong criticism of the CPC.
If you don’t like to follow the captions of the video then here the captions in an entire text form:
In mid September, two major suppliers of communication equipment , Huawei and ZTE Corporation, attended a hearing of the U.S. House of Representatives and answered questions regarding the threat to U.S. national security. This is the first time Chinese enterprises participated in such hearings in the U.S. Congress.
In addition to being suspected of Internet spying, U.S. lawmakers asked in the hearing why Huawei and ZTE should have party organizations.
Since February 2011, the U.S. Congress began to investigate Huawei and ZTE. On September 13, the two sides finally met. At the hearing, members of the U.S. Congress pinned harsh questions on both companies in regards to their “espionage” activity.
Committee Chairman Mike Rogers pointed out that the two companies sell espionage equipment. There are vulnerabilities hidden in the back door of
their products. It is a deliberate design which provides help for Chinese
intelligence agencies to attach network in the United States and become a serious threat to network security.The hearing lasted three hours. Huawei and ZTE executives also defended the allegations.
In addition to the network security issue, party organizations in Huawei and ZTE had also become the focus of the questioning. U.S. Lawmakers questioned why a private enterprise would have a party organization.
how many members are in the party and whether they participate in company decision-making.Ding Shaohua, senior Vice President of Huawei and President of North American companies, argued that a party committee is established under the PRC company law, and even Wal-Mart, a foreign-funded enterprise, has party organizations. But he declared that party organization members do not participate in enterprise management and decision-making.
Prof. Xie Tian, from the University of South Carolina’s Aiken Business School, once published an article entitled “Foreign Companies Set Up Party Branches in the New Era” which provided in-depth analysis of why the Chinese authorities force foreign companies to set up party organizations.
Xie Tian pointed out that the establishment of party organizations is in order to implement political control needs. A party branch in a private enterprise precisely displays the fact that guidance and management comes from senior party committee on the location.Prof. Zhang Tianliang of George Mason University believes that under the Chinese Communist Party(CCP), the party’s power is always higher than administrative power. Those enterprises in Mainland China cannot survive without official support.
Prof. Zhang Tianliang: “The entire CCP system penetrates into each cell of society, including enterprises. You may not know the functions of a party committee and what it can do. It is linked with the superior party committee, the city’s party committee, and the district party committee, for it is an entire system.”
Xie Tian’s article quoted the Secretary of the Party Committee of Beijing Hyundai Motor, who said let foreign companies realize that in order to business in China, you need to connect with the political resources – party organizations. This reveals the CCP’s secret and coincides with Professor Zhang’s analysis.
Professor Zhang said that he had previously worked in a Sino-German joint venture in Mainland. Its party committee role was to supervise employees and to report to their superiors.
Prof. Zhang: “Usually this party committee engages in some activities.
After the persecution of Falun Gong began, the Party committee would act according to the CCP’s requirement to discern which employees were practicing Falun Gong. They would have a talk with him/her and fulfill the function of thought-control. It is not a problem if you don’t see eye to eye
with the committee. They will report it to their superiors and you will
be dealt with later.”In actuality, Huawei and ZTE is experiencing long term pain in the U.S. market when they plan the international territorial.
Why have these companies not broken into the U.S. market?
A Wall Street Journal article from June 13 may provide the outside world with an answer. It wrote, “Huawei, one of the world’s largest telecommunications equipment manufacturer, seems to have found what hampers its ambitions in the US, precisely because of its official relations with the CCP.“
Huawei-ZTE Congressional Hearing September 13, 2012 [Roza Kazan on behalf of CCTV, Oct 9, 2012]
Note that “CCTV NEWS is the English language news channel of China Central Television (CCTV), the nation’s largest national broadcasting network.” according to its own description.
Huawei, ZTE Criticized by US Congress Committee [BizAsiaAmerica YouTube channel, Oct 9, 2012]
Note that “Biz Asia America is a daily global business news hour which aims to combine reporting of economic and financial issues in North and South America with those from China and the Asian region. For full shows go to the Beijing website http://www.cctv-america.com” according to its own description.
Impact of US criticism of Huawei, ZTE [BizAsiaAmerica YouTube channel, Oct 9, 2012]
Some articles for further reading:
– Analysis: Who really owns Huawei? [iTnews, May 28, 2010]
– Staff Churn Stirs Huawei’s Management Circle [Caixin, Nov 12, 2010]
– Corporate Governance [Huawei webpage, Apr 23, 2012]
– Huawei: Inside the lair of the not-so-hidden dragon [The Register, Sept 30, 2012]
Qualcomm decided to compete with the existing Cortex-A5/Krait-based offerings till the end of 2012
Update: Nvidia Tegra 3 under strong pressure from S4 Pro, say Taiwan makers [DIGITIMES, Dec 7, 2012]
Snapdragon S4 Pro series processors developed by Qualcomm have brought increasing competitive pressure on Nvidia’s Tegra 3 because of its superior overall performance-cost ratio, according to Taiwan-based handset supply chain makers.
Although Nvidia successfully landed orders for Google’s Nexus 7 and Microsoft’s Surface RT in 2012, with Microsoft reportedly planning to adopt Qualcomm’s platform for its next-generation Surface RT, while Tegra-based smartphones have only had average sales performance, Nvidia may find it difficult to continue achieving strong growth in 2013 like in 2012.
In 2012, Nvidia received Tegra orders for smartphones including the HTC One X, LG Electronics Optimus 4X H, ZTE Era, K-Touch Treasure V8 and Fujitsu’s devices.
Qualcomm is expected to start fierce competition against MediaTek and China-based handset chipmakers in China’s mid-range to entry-level smartphone market in the first quarter of 2013, challenging Nvidia’s plans of releasing a solution for CNY1,000 smartphones (US$160), while Qualcomm’s aggressiveness over striving orders from tablet players with its reference design, which is set to release in the first half of 2013, also places strong pressure on Nvidia, the sources noted.
With the new Snapdragon S4 class additions announced three days ago we can make the conclusion that:
– Snapdragon Cortex-A5 based S4 Play smartphones will get quadcore capability only in the first quarter of 2013, so the current S1 and further dual core S4 Play smartphones are to compete till the end of the year.
– Snapdragon Krait-based S4 Plus smartphones will have mid-range LTE (in so called World Mode form) “high-volume“ versions only in the first quarter of 2013, so the current S4 Plus smartphones and similar upcoming ones are to compete till the end of the year.
– No decision was taken for the Cortex-A5 based S4 Play TD-SCDMA smartphone market thus letting Spreadtrum and its competitors to capture the corresponding China Mobile entry market even more.
What does it mean?
For the last, Spreadtrum et al observation it means that Qualcomm cannot do anything yet but stand still as according to my Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets [July 26 – Aug 16, 2012] post (here on this blog) the entry level TD-SCDMA smartphone market is moving from sub $150 to sub $100 in the H2 2012.
For the other two observations we should first understand what has been delivered so far with Cortex-A5 and Krait based SoCs by the smartphone vendors.
The current Cortex-A5 based Snapdragon S1 UMTS and Krait based S4 Plus UMTS and World Mode SoCs from Qualcomm were adopted by global brands so far as follows:
Source: smartphones in PDAdb.net counted for corresponding SoCs as of Sept 28, 2012
Smartphones based on the new Cortex-A5 SoCs detailed above were introduced
as shown on the chart below:
while the introduction of the new Krait-based smartphones is shown on the above chart
and it was for the UMTS & World mode S4 class Plus tier SoCs detailed below as follows
(i.e. the CDMA/UMTS S4 class Plus tier SoCs were not reflected in the above chart): 
So there were no Adreno 305 based S4 class Plus tier smartphones introduced to the market yet except a single one from HTC for November timeframe, actually with Windows Phone 8. This single fact means, however, that in October and November more such smartphones could be introduced as the HTC case shows the Adreno 305 related SoCs availability for Q4 2012. So powerful by today’s market standards yet sold at mass market prices MSM8x27 based Windows Phone 8 and Android smartphones could be available on the market from November at the latest.
Similarly we can expect mid-tier WP8 and Android smartphones based on MSM8x30 SoCs to become available in October or November at prices which are between the latest premium smartphones like Samsung Galaxy S III or HTC One XL, and the new mass market yet “powerful” ones introduced at the same time. As you could see via the number of new premium models introduced so far (not less than 43 if you will add up the numbers attached to each type of new premium SoCs in the table above), the new premium category is well established already both in price and functionality.
Now the global brands could safely establish the new “mid-range” and “mass-market yet powerful” segments of the smartphone market with Qualcomm capable of delivering the new Krait and UMTS—CDMA/UMTS—World Mode technologies in greater volumes than before. With the decision of postponing the availability of the new higher end LTE (World Mode) mid-range category to the Q1 2013 Qualcomm and its global brand partners are in fact letting the market to sort out in November-December the acceptable pricing below whatever MSM8930 could bring in addition to that in Q1 2013.
Somewhat more interesting and remarkable is the case of entry level smartphones which is covered in Qualcomm’s new segmentation strategy by the S1 class Play tier (see the table above). With the decision of leaving the active formation of the new entry-level segment to competitors like MediaTek and Spreadtrum till the end of the year Qualcomm shows not only the company’s unpreparedness to compete fully in TD-SCDMA market (as was already indicated in the beginning of this post), but also a more general unpreparedness to compete with a broader China based phenomenon currently most visible via MediaTek as it was shown in my earlier:
Core post: 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, 2012]. Quoting from that:
… MediaTek 28 nanometer quad-core A7 smartphone chip MTK6588 launch time is expected to advance to the fourth quarter of this year from the first quarter of next year! Because the price is very competitive, only 18 to 20 dollars, not only quadcore smartphone prices in mainland China will immediately fell to less than 150 dollars following that, the company will also have the opportunity to break into [the market of ] first-tier [i.e. global brand] manufacturers such as Samsung. …
Mediatek’s biggest “backer” [in terms of stock market performance] is expected to be the launch of MT6588 (quad-core A7 [with] TD-SCDMA/WCDMA) and MT6599 (8 core of the ARM [with] LTE/TD-SCDMA/WCDMA) smartphone chips in 4th quarter [of this year] and in the next year, respectively.
… we will see in the near future more dual-core 1.7Ghz Krait-based MSM8960A [on one hand], and MSM8974 [on the other], which is same but with quad-core, rather than next to the launch of 8225Q. …
… the fastest possible production of MediaTek quad-core mobile processor chip MTK6588 will start in October this year a small amount, quantity should not be a lot, may be available only to large client proofing purposes. Rumored MediaTek MTK6588 manufacturing cost is even less than dual-core MTK6577. …
MT6588 has a 4-core CPU [Cortex-A7 (!), see on the second slide below] clocked at 1GHz [1.XGHz rather, see the included slides below], supports dual-channel at maximum 1066Mbps, has an integrated multimode modem for WCDMA [+ it is delivering HSPA+ WCDMA performance (!) vs just HSPA with MT6577/75, see the first slide below] and TD (!), that is it can support both Unicom [latest upgrade to HSPA+ service, see the news in the original post materials much below] and China Mobile 3G network, supports an up to 13 MP camera and 1080P video playback. It finally has a GPU upgrade with SGX544, doubles the resolution to 1280×800 HD level, and has 32KB L1 cache and 1MB L2 secondary cache.
Along the MT6588 there is a 28nm dual-core version, MT6583 on the MediaTek 2012 product roadmap. From the chipset parameters it is evident that MT6583 is a scaled down version of MT6588. It has 2 cores less, the camera support is 8MP, the video decoder is of 720P level, and the resolution is down to 854×480.
It is understood that MT6588 and MT6583 will be in production in the first quarter of 2013, early next year the fastest.
Qualcomm’s problems are already immense as follows from another core post of mine stating not less than The low priced, Android based smartphones of China will change the global market [Sept 10-17, 2012], from I will just include this quote:
The best smartphone based on the MediaTek MT6577 both technically and in terms of price is the MT6577-based JiaYu G3 with IPS Gorilla glass 2 sreen of 4.5” etc. for $154 (factory direct) in China and $183 [Sept 13, 2012], which is also the best example of the low priced, Android based smartphones of China will change the global market.
This SoC competitor is also “deadly serious” as MediaTek plans for quad-core chips in budget smartphones by early 2013 [Engadget from China Times (translated) sources, Sept 26, 2012].
Considering also the fact that Spreadtrum’s TD-SCDMA effort will meantime drive the entry level TD-SCDMA smartphone market from sub $150 to sub $100 level in the H2 2012 Qualcomm has to completely redefine its original plans for the upcoming S1 class Play tier by Q1 2013. Especially because its crucial global brand partners are embracing the new Chinese phenomenon as evidenced by the quite new Huawei Ascend G306T (Huawei T8808D) [Sept 14, 2012] example currently sold in China for $183 (Yuan 1,148). Note that here is IPS screen etc. so this is higher than the very entry level.
Note as well that Qualcomm is heavily restricted by the shortage of 28nm foundry capacity which will be lifted only by the end of the year as described in my earlier:
Core post: Qualcomm’s critical reliance on supply constrained 28nm foundry capacity [July 27, 2012]
So for Q1 2013 the company will have plenty of room for effective actions in the competitive space quite unlike this time. It will be interesting to see what happens next!
Related announcements and videos by Qualcomm:
Before the new announcement Qualcomm issued the following “image” video:
How Snapdragon processors stack up against the competition [QUALCOMMVlog YouTube channel, Sept 20, 2012]
Qualcomm Announces New Snapdragon S4 Play MSM8x25Q Processors with Quad-Core CPUs and Reference Design Counterpart for High-Volume Smartphones [Qualcomm press release, Sept 27, 2012]
— Snapdragon S4 Plus MSM8x30 Platform to Support LTE -TDD/TD-SCDMA and All Three China Operators
BEIJING – September 27, 2012 – Qualcomm Incorporated (NASDAQ: QCOM) today announced the addition of two new Snapdragon™ S4 mobile processors: the MSM8225Q and MSM8625Q. Both are members of the Snapdragon S4 Play processor tier, optimized specifically for a broad range of smartphone users seeking faster applications and better user experiences. Snapdragon S4 Play processors will now offer OEMs both dual-core and quad-core CPUs and performance for entry-level smartphones, with the more advanced version featuring higher bus bandwidth, larger screen resolution support, HD video and enhanced user experiences. Both processors will be ready for customer sampling by end of 2012 and are expected to be shipping in commercial devices in the first quarter of 2013.
The MSM8225Q and MSM8625Q processors incorporate quad-core CPUs and are the upgraded software compatible variants of the highly successful Snapdragon S4 Play MSM8225 and MSM8625 processors, which both feature dual-core CPUs and dual SIM support. The quad-core variants will support LPDDR2 memory, increasing the bus bandwidth for improved features such as 720p display and 720p video encode and decode. Snapdragon S4 Play MSM8625Q features Qualcomm’s integrated multimode UMTS/CDMA modem, and the MSM8225Q has an integrated UMTS modem. Both processors enable Wi-Fi, Bluetooth 4.0 and FM connectivity using the Qualcomm Atheros AR6005 and WCN2243 chips.
In addition, Qualcomm also announced a single platform, the Snapdragon S4 Plus MSM8930, that supports all China operators with UMTS, CDMA and TD-SCDMA. Furthermore, this single platform will support LTE -TDD and TD-SCDMA, targeting mid-tier smartphones for use in China. Announced in February 2011, this processor features dual-core CPUs and as the world’s first single-chip solution with an integrated LTE modem, it is designed to take LTE to high-volume smartphones. Snapdragon S4 Plus MSM8930 with LTE-TDD and TD-SCDMA support will be ready for customer sampling by the end of 2012 and is expected to be shipping in commercial devices by the first quarter of 2013.
Qualcomm will also be releasing Qualcomm Reference Design (QRD) versions of all three processors. The QRD program includes comprehensive handset development platforms and an ecosystem program providing access to third-party providers of tested and verified hardware and software components so customers can rapidly deliver differentiated smartphones to budget conscious consumers. The Wi-Fi, Bluetooth and FM connectivity technologies have been pre-validated and tested with the QRD platform to provide reduced time-to-market. There have been more than 50 public QRD-based product launches to date in collaboration with more than 40 OEMs, and there are 100 designs in progress, including QRD-based smartphones enabled by these new Snapdragon S4 Play and Plus processors, which are also expected to be available by the first quarter of 2013.
“Our broad portfolio of Snapdragon S4 mobile processors delivers the optimal balance of features and performance for the high-volume smartphone segment,” said Cristiano Amon, senior vice president and co-president of mobile and computing products. “By offering both dual-core and quad-core CPU versions of the Snapdragon S4 Play processor, we are providing our OEM and operating partners a competitive and differentiated platform.”
The new Snapdragon S4 Play and Plus processors are designed specifically for high-volume smartphones, and they provide device manufacturers the ability to migrate their existing Snapdragon S1-based designs to S4 dual- and quad-core CPU-based designs. This capability is particularly useful for device manufacturers looking to efficiently expand their smartphone product lines with more advanced 3G/LTE smartphone products.
This announcement coincided with a new Graphics Benchmarking [QUALCOMMVlog YouTube channel, Sept 26, 2012] published for Qualcomm’s highest Adreno 320 GPU which is also in the MSM8960 SoC of the Pro tier of the S4 class for which no smartphones were introduced yet (probably in Q1 2013 we will see them):
Along with the first “image” video the company also issued another “giving assurance” type video: Vellamo™ Mobile Benchmark Suite: Setting new standards for system-level mobile benchmarking [QUALCOMMVlog YouTube channel, Sept 20, 2012]
Here is worth to remind you about my last year’s post that Qualcomm is very close to getting the HTML5 web apps performance and feature set to rival that of native OS apps [Oct 11, 2011]. Reading that one will understand this whole Velamo effort from both technical and marketing point of view.
Now the latest Qualcomm video about the envisaged market segmentation of its offerings:
Snapdragon Overview [QUALCOMMVlog YouTube channel, Aug 30, 2012]
Qualcomm Launches Tiers for Snapdragon S4 platform [Qualcomm’s OnQ blog, June 6, 2012]
Today, Qualcomm launched distinct tiers for its Snapdragon processor platform, starting with the S4 series. The Snapdragon S4 portfolio of processors now includes four distinct tiers – Prime, Pro, Plus and Play—that will better explain the capabilities of the many chipsets within the S4 class, as well future Snapdragon processors.
You probably became acquainted with the Snapdragon processor brand through smartphones and tablets, but the road ahead for these powerful processors will scale beyond such devices. With the launch of the highly-capable Snapdragon S4, our processors are now destined to appear in new platforms like Windows 8 PCs, SmartTVs and set top boxes. The number of device form factors that can potentially benefit from Snapdragon processors’ balance of power and battery efficiency is endless. Our new system of tiers should make it easier for Qualcomm’s customers and consumers to identify the right processor and its features.
Below is a description of each tier:
Snapdragon S4 Prime designed to bring high performance applications, web browsing and connectivity to TVs and set top boxes. Processors in the S4 Prime tier include: MPQ8064.
Snapdragon S4 Pro designed to bring computing-class processors to PCs, tablets and high-end smartphones. Processors in the S4 Pro tier include: APQ8064 and MSM8960T.
Snapdragon S4 Plus covers a broad range of powerful smartphone and tabletprocessors. Processors in the S4 Plus tier include: MSM8960, APQ8060A, MSM8660A, MSM8260A, APQ8030, MSM8930, MSM8630, MSM8230, MSM8627, and MSM8227.
Snapdragon S4 Play consists of processors for high-volume smartphones. Processors in the S4 Play tier include: MSM8625 and MSM8225.
When you look at the broad range of things that Snapdragon S4 processors can do, you’re more likely than ever to be using one.
Qualcomm Brings Snapdragon S4 Processors to High Volume Smartphones and Expands Qualcomm Reference Design Development Platform and Ecosystem Program [Qualcomm press release, Dec 8, 2011]
Addition of Two New Snapdragon S4 Mobile Processors Compatible with QRD Development Platforms Brings Dual-Core Processing and Integrated 3G Connectivity to High Volume Smartphones
SAN DIEGO – December 08, 2011 – Qualcomm Incorporated (NASDAQ: QCOM) today announced two additions to its Snapdragon® S4 class of mobile processors: the MSM8625 and the MSM8225 chipsets. Both chipsets provide dual core CPUs operating up to 1 GHz, Qualcomm’s Adreno® 203 GPU and an integrated 3G modem. The MSM8625 and MSM8225 chipsets are designed to be hardware and software compatible with the MSM7x27A and MSM7x25A family of chipsets, giving device manufacturers the ability to seamlessly migrate their existing Snapdragon S1-based designs to S4 dual core-based designs. This capability is particularly useful for device manufacturers to efficiently expand their smartphone product lines with more advanced and more capable 3G smartphone products.
To further simplify and improve time-to-launch of cost effective 3G solutions for device manufacturers, Qualcomm also announced the third-generation of its Qualcomm Reference Design (QRD) ecosystem program to enable third party device manufacturers to develop differentiated high volume smartphones with lower development costs and faster time to market. The QRD ecosystem program includes a comprehensive set of software and hardware components that allows third party hardware and software vendors to have their products pre-tested and optimized for the QRD development platform. A pre-tested and optimized platform gives device manufacturers a development platform with the hardware components (memory, sensors, touch panels, cameras, displays, RF, etc.) and software applications and features (browsers, map/navigation, mail, music, instant messaging, fonts and languages, etc.) needed for basic smartphone functionality already in place. This allows device manufacturers to focus their engineering resources on developing value-added features that will help make their high-volume smartphone stand out from the competition. The QRD ecosystem program is designed to help device manufacturers developing products for regions whose networks are evolving from 2G to 3G and high volume smartphones are becoming increasingly popular.
The MSM8625 and MSM8225 chipsets will be available on Qualcomm’s third generation QRD development platform in the first half of 2012, in addition to being available as standalone chipsets. QRD development platforms based on both the MSM7x27A and MSM7x25A chipsets are currently available. Qualcomm has shipped over 100 million MSM7225 and MSM7227 chipsets, and smartphones based on these chipsets are operating on multiple carrier networks worldwide.
“Smartphones present a large business opportunity for many of our customers, which is why we have created the QRD ecosystem program to assist them with developing compelling product designs with competitive differentiation,” said Cristiano Amon, senior vice president of product management at Qualcomm. “The program combines all the elements our customers need to get a new smartphone design to launch quickly and cost effectively, from carrier-ready hardware and software to local technical support resources.”
“As Snapdragon processors power many of today’s most popular smartphones, we are working to port a variety of our core applications to the various QRD platforms,” said Chengmin Liu, senior executive vice president of Tencent, China’s largest integrated internet services provider. “This will offer our customers a strong processing solution to power our applications for future smartphone designs.”
Qualcomm Unveils New Snapdragon Mobile Processors Across All Tiers of Smartphones and Tablets [Qualcomm press release, Nov 16, 2011]
Qualcomm Incorporated (NASDAQ: QCOM) announced today the expansion of its Snapdragon S4 class of next-generation mobile processors and the enhancement of its Snapdragon S1 solutions for entry-level smartphones.
The addition of new Snapdragon S4 processors, which are aimed at lowering design, engineering and inventory costs while bringing leading-edge 3G and 4G Internet connection speeds, will allow OEMs to introduce S4-based devices with next-generation mobile architecture throughout their respective device roadmaps—from basic smartphones to high-end smartphones and tablets. The enhanced S4 processors are also optimized for use with a suite of software solutions available from Qualcomm that help enable OEMs to deliver industry-leading feature sets for multimedia, connectivity, camera, display, security, power management, browsing and natural user interface design.
The Krait CPU is the next generation of Qualcomm’s micro architecture and is purpose-built from the ground up for significant mobile performance and power management advantages leading to enhanced user experience and better battery life. The Krait CPU is an essential part of the Snapdragon S4 class of processors. Today, Qualcomm announced several new S4 chipsets, including the MSM8660A, MSM8260A, MSM8630, MSM8230, MSM8627,MSM8227, APQ8060A and APQ8030. These are additional chipsets to the previously announced MSM8960, MSM8930 and APQ8064. Snapdragon S4 MSM processors include Qualcomm’s leading-edge wireless modem technologies, including EV-DO, HSPA+, TD-SCDMA, LTE FDD, LTE TDD andWi-Fi® standards. Devices based on Snapdragon S4 processors are expected to appear in early 2012.
The Snapdragon S1 product line is driving smartphone growth in all regions, and it offers a significant opportunity for market expansion and migration to 3G. To further this trend, Qualcomm is also announcing an upgrade to four of its existing Snapdragon S1 mobile processors. The MSM7225A, MSM7625A, MSM7227A and MSM7627A have been upgraded to deliver better performance and will enable new mobile experiences for entry-level smartphone users, particularly those transitioning from 2G to 3G.
Qualcomm Announces a Bunch of Krait Based Snapdragon S4 SoCs [Anandtech, Nov 16, 2011]
…
If you want an 8960 without integrated LTE, Qualcomm has an SoC for you: the MSM8x60A. The CPU specs are the same as the 8960, just without LTE support.
Below the 8960 is the MSM8930, a dual-core Krait (up to 1.2GHz) offering with only a single LPDDR2 memory channel (up to 1066MHz data rate). The 8930 will actually use a faster GPU than the 8960, the Adreno 305, although it’ll be more memory bandwidth limited. The 8930 will also debut later than the 8960 partially due to its new GPU.
The 8930 features LTE support, but if you want a version without it there’s the new MSM8x30. Similarly, if you want a version without an integrated baseband altogether there’s the APQ8030. The ISP in the xx30 series supports 1080p video decode and up to a 13.5MP camera (down from 20MP in the xx60 SoCs).
There’s an even even more affordable S4 in the lineup: the MSM8x27. Here you get two Krait cores running at up to 1GHz, a single channel LPDDR2 interface (800MHz max data rate). Video decode is limited to 720p in the 8×27.
[* the numbering change is: MSM8270 –> MSM8x60A]…
MT6577-based JiaYu G3 with IPS Gorilla glass 2 sreen of 4.5” etc. for $154 (factory direct) in China and $183 internationally (via LightTake)
This is the most competitive offering from the wave of Boosting the MediaTek MT6575 success story with the MT6577 announcement – UPDATED with MT6588/83 coming early 2013 [June 27, July 27, Sept 11, 2012] and now is the key manifestation of a much broader and very significant trend of The low priced, Android based smartphones of China will change the global market [Sept 10-17, 2012]. The details are therefore worth to examine:
(Pre-order) JiaYu-G3 4.5″ MTK6577 Dual-core 1GHz Dual SIM Android4.0 1GB+4GB IPS(1280*720) Screen 3G WIFI Smartphone – Black [LightTake, Sept 9, 2012]
[availability for shipment on eBay from Sept 12, LightTake press release on availability]
by Cell Phones – Android OS phone
(1 customer Discussion)
Our Price: $183.32
…
JiaYu-G3 Basic Information:
Model JY-G3 Network Frequency 2G:GSM850/900/1800/1900MHZ
3G:WCDMA850/900/1900/2100MHzSIM Card Dual Sim Cards Style Bar Phone Color Black
JiaYu-G3 Hot Spots:
OS Android 4.0.3 CPU MediaTek MTK 6577 1GHz
Cortex-A9 Dual-coreRAM 1GB ROM 4GB Card Extend Support TF Card 64GB MAX (Not included) Screen 4.5inch Capacitive Touch Screen,
IPS Resolution:1280*720G-Sensor Support More Information Flashlight,Maps,Latitude,Gallery,
Navigation,Play Store,Gmail,
Wireless Keyboard
JiaYu-G3 Features:
GPS Built in GPS Wireless Transmission WiFi/ Bluetooth 2.0 Bluetooth Yes Photo Format JEPG Camera Dual Cameras, Front:2.0 MP,
Rear:8.0 MP, with flashlightsJiaYu-G3 General:
Media Player MP3 & MP4 player
(support MP4/3GP format)Sound Recorder FM Radio Earphone Interface 3.5 mm standard audio output jack Tools Calendar,Calculator,Alarm,World Clock Package:
Product Size 135*65*10.8mm Weight(w/box） 500.0g Battery Lithium Batteries:2750mAh Standard Accessories 1*Batteries,1*Charger adapter(US plug, if you need other contry’s standard plug, please tell us.),
1*USB cable,1*Enlish manual
JiaYu G3 [gfscorner YouTube channel, Sept 5, 2012]
Jiayu G3 720P Video Playing Review [July 30, 2012]
JiaYu G3 Unboxing [Gizchina YouTube channel, Sept 6, 2012]
JiaYu G3 used to smash walnuts MT6577 phone with Gorilla glass [Gizchina YouTube channel, Sept 6, 2012]
Jiayu G3 MTK6577 Dual-Core 4,5″ 720p 1280×720 Test Gorilla Glass [chiribe YouTube channel, Aug 13, 2012]
First announcement on July 9, 2012 as translated by Bing:
Through the efforts of Golden people, Golden G3 Design work has now been completed, entering the testing phase, in order to meet the concerns of her friends, Super G3 configuration information as follows, welcome to continue to focus on supporting good domains! …
Second announcement on September 5, 2012 as translated by Bing:
Golden G3 put on sale the first approach … The so-called registration, meaning that user orders, eligibility for Golden G3 to buy, but do not make immediate payment. Golden while waiting for a cell phone network card duly issued, payment orders and then notifies the user. NET label officially reaches Golden factory, beginning the actual shipping. …
JiaYu G3 Preorders: Did You Get One? [Gizchina.com, Sept 5, 2012]
The JiaYu G3 marks the first time (which I know of) that a Chinese phone has managed to go viral in both China and across the globe and it’s easy to see why with such a great looking design and high specification at a low price of just 899 Yuan ($140 in China).
If you have managed to completely miss the JiaYu G3 for the past few months (is that even possible?) let me quickly fill you in;
The G3 is JiaYu’s all new Androidsmartphone set to replace the JiaYu G2 as JiaYu’s flagship model, but unlike most phone manufacturers, JiaYu have managed to give their top of the range phone all the bells and whistles at an extremely low price without any (notable) corner cutting price lowering measures.
For example the G3 has a 1280 x 720 4.5 inch IPS display which boasts a Gorilla Glass screen to ward of knocks and scratches! This in itself would be worth the $140 price tag, but JiaYu have also loaded the G3 with a dual-core MTK MT6577 CPU, 1GB RAM, 4GB ROM and high quality 8 mega-pixel rear camera!
Even the battery is a great size and should last a good while as it is a 2750mAh unit!
So what are the catches? There has to be at least one! And yes there are!
- The first catch is that the $140 price tag in China IS in fact only for the phone (I know this as my wife is online ordering a G3 for me now as I type), but for just $12 extra you can get the battery, charger, screen protector and protective case!
- Secondly is the fact that although we can order our JiaYu G3 phones today, we don’t actually know when we will be getting them as JiaYu is still waiting on the network licences, but that’s ok as JiaYu aren’t asking for full payment yet (although 3rd party resellers are!)
G3 [JiaYu product page, Aug 20, 2012] as translated by Google
[Yuan 899, i.e. US$142, see the full product page transcription on SlideShare [Sept 12, 2012] ]
CPU The MT6577 1G dual-core Memory RAM1G + ROM4G Screen Size 4.5-inch Screen material IPS Resolution 720 × 1280 Touch screen Second-generation multi-touch with Corning Gorilla Glass Camera 2,000,000 8,000,000 physical pixel back-illuminated CMOS AF Operating system Android 4.0.4 Battery capacity 2750 mA Sensor Light, distance, gravity, magnetic sensor, gyro External storage Support maximum 64G expansion card Network GSM \ WCDMA dual network dual standby WCDMA frequency 2100MHz GSM frequencies 850/900/1800/1900MHz Body parameters Of 135x65x10.8 mm weight 154 g Factory standard A mobile phone, battery, charger, data cable, manual, warranty card
?Good domain / Golden? [Baidu encyclopedia, Dec 20, 2011] as translated by Google/Bing:
?Good domain / Golden? from Shenzhen City, Guangdong Province (now moved to Baoji City, Shaanxi Province) the ?good domain / Golden? Yutong Electronic Science and Technology Co., Ltd. produces smartphones, the company was founded in April 2009, the headquarters is located in Baoji City. The company has a strong R & D capability. Always carry out the marketing strategy of “quality affordable” Android smartphone to create a leading level in the domestic market. Has launched two smart models the good domain G1 , best domain G2 . The upcoming good domain G3 ?good domain / Golden? G series phones using the Android 4.0 operating system, to configure powerful but affordable, so the company is known as a “smartphone civilians practitioner”.
Chinese name: ?Good domain / Golden?
Foreign name: JIAYU [JiaYu]
Company Name: The ?good domain / Golden? Yutong Electronic Technology Co., Ltd.
Chairman: Zhang Guojun
Corporate Headquarters: Baoji City
Products: Jia domain G1, good domain G2
Company Profile [JiaYu website page, July 9, 2009] as translated by Bing:
Shenzhen Golden Yutong electronic technology limited company was established in April 2009, is a professional dedicated to mobile communication product research and manufacturing, sales and service in one of the high-tech enterprises. Since its establishment the company has been adhere to people-oriented policy, talent is the largest corporate wealth is fundamental to the development of enterprises. Company has a staff of more than 800 people, including developers, more than 30 people, engineers and technicians more than 40 people. And has been cultivating and absorbing talents. Now company to design for mobile communication terminals, Terminal product research and development as well as sales and service-oriented, continuously enrich their research and development, in the context of talent, we have established the domestic first-class research and development team. Employees of one mind, adhere to the quality is life, for consumers of all staff to provide the best quality products for the mission, to create first-class products.Companies now have 10 complete product lines, two laboratories, a variety of advanced testing equipment, equipment! Company is willing to work with customers at home and abroad hand in hand, create brilliant!
Reception
Factory
Workshop II
Assembling workshop
Assembling Workshop II
Class 100,000 Cleanroom SMT
Silk steel net detection
Silk screen printing machine
Plant and equipment
The low priced, Android based smartphones of China will change the global market
During the 12 months or so China took over the overall leading market role for smartphones from the key markets considered to be in the lead: US, Australia, Brazil, Great Britain (GB), Germany, France, Italy and Spain.
An even more dramatic change was that while on the old, combined lead market of the above countries high/moderate margin products were the dominating ones, on the new lead market of China average retail prices went down in the second quarter of 2012 to 1560 yuan (i.e. US$246) for the #1 Android with a whopping 82.8% market share, and to 1320 yuan (i.e. US$208) for the #2 Symbian now having only 6% share of the market.
It is notable as well that in China Apple had only a 6% market share vs. 23.7% in the combined old lead markets. According to a recent Reuters video report from Hong Kong we are witnessing (you can also watch this report in this post, as embedded well below in the following elaboration of details):
… commoditization of smartphones … hardware specifications for the handsets have already peaked…
A race to the bottom therefore will present a major challenge for Apple and Samsung who put together have dominated the industry in the last couple of years. If the China trends spread globally the shift to cheaper handsets will mean tighter margins and slower growth for this industry powerhouses and new opportunities for little known upstarts like Xiaomi.
Given my previous trend tracking posts the change will even be more dramatic as:
- The best smartphone based on the MediaTek MT6577 both technically and in terms of price is the MT6577-based JiaYu G3 with IPS Gorilla glass 2 sreen of 4.5” etc. for $154 (factory direct) in China and $183 [Sept 13, 2012], which is also the best example of the low priced, Android based smartphones of China will change the global market.
- – Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets [July 26 – Aug 16, 2012]
– Boosting the MediaTek MT6575 success story with the MT6577 announcement – UPDATED with MT6588/83 comingearly 2013in Q42012 and 8-core MT6599 in 2013 [June 27, July 27, Sept 11-13, Sept 26, Oct 2, 2012]
– Smartphone-like Asha Touch from Nokia: targeting the next billion users with superior UX created for ultra low-cost and full touch S40 devices [July 20 – Aug 12, 2012]
– MediaTek’s ‘smart-feature phone’ effort with likely Nokia tie-up[Aug 15-31, 2012] - Update: China to ship 300 mil. smartphones in ’13: MediaTek head [The China Post, Sept 26, 2012]: … overall shipments in China may reach 200 million in 2012. …
- Update: China market: Dual-core CPUs, 4-inch displays become standards for entry-level smartphones [DIGITIMES, Sept 17, 2012]:
Local brands in China have made upgrades to the specifications of their entry-level smartphones for the CNY1,000-1,500 (US$158-237) segment making dual-core 1GHz processors and 4-inch displays the industry standards, according to industry sources.
Prices of the previous mainstream models with single-core CPUs and displays below 4-inch sizes for the CNY1,000 segment in the first half of 2012 are now expected to drop to CNY500-800, the sources added.
China Unicom has led the purchase of the upgraded dual-core, 4-inch display smartphones recently, and its suppliers are all China-based vendors including Huawei Technologies, ZTE, Lenovo, Coolpad, TCL, Hisense, K-Touch and Wanlida, the sources revealed, adding that those makers will source chipset solutions from Qualcomm or MediaTek.
First-tier international players did not participate in China Unicom’s procurement on concerns of pricing and hardware specifications, the source asserted.
However, the pace of hardware upgrading may start slowing down as telecom companies in China are mulling reducing their subsidies to smartphone subscribers, while smartphone makers are also trying to maintain their profit margins, commented the sources.
The next round of competition will shift from hardware to software including product design, user’s interface and also smart audio recognition, the sources noted.
Neither Apple nor Samsung reacted to these challenges yet. Nokia was also playing safe with its recent announcement:
– Unique differentiators of Nokia Lumia 920/820 innovated for high-volume superphone markets of North America, Europe and elsewhere [Sept 6, 2012]
We may expect a fundamental reorganisation of the market in the next two quarters.
Meanwhile read through the details included below and make your own, hopefully more fine-tuned conclusions and predictions:
See: Kantar: Windows Phone has overtaken RIM Market Share in USA, “Key 8 Countries”
[WMPoweruser, Sept 3, 2012]
Note that in terms of mobile data traffic the market share is quite different. For North America (U.S. and Canada) Chitika Insights, the independent research arm of online ad network Chitika, released the following web usage market share report [Sept 5, 2012]:
Remark: iPads and other tablets are included here as well!
Relative to all that China is a quite different story:
3G phones months shipments reach 21.64 million, domestic mobile share over 70% – 3G手机月出货量达2164万部 国产手机份额超七成 [Sohu IT – 搜狐IT, Sept 10, 2012]
According to data published by the Telecommunications Research Institute of the Ministry of Industry and Information Technology …
根据工业和信息化部电信研究院公布的数据 …[the data in the translated Chinese text I’ve compiled into the below table:]
China sees soaring smartphone market in Q2 [Xinhua, Sept 3, 2012]
Beijing: China’s smartphone market saw its sales volume soar to 38.19 million units in the second quarter, according to a report released Monday by market researcher Analysys International.
The figure represented a 22.5-per cent increase compared with that of the previous quarter and a sharp rise of 127.1 per cent over the corresponding period in 2011, said the report.
Nearly 67 million mobile phones were sold in China in the second quarter, the report said, representing a 1-per cent decrease from the previous quarter and a 2-per cent decrease from the corresponding period in 2011.
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
Shanghai, Palo Alto, Singapore and Reading – Canalys published its final Q2 2012 country-level shipment estimates to clients yesterday. Results show that China saw phenomenal growth of 199% year-on-year and 32% over the previous quarter. In total, more than 42 million smart phones were shipped into the channel in China in Q2 2012, representing the second consecutive quarter of record breaking volumes in a single country market. China accounted for 27% of the 158 million global smart phone shipments, compared to 16% for the United States.
Notably, growth in China was heavily driven by domestic vendors, while international vendors struggled to keep pace.
While Samsung maintained its overall leadership position in China with a 17% market share, this reduced sequentially as volumes were flat and as several local vendors closed the gap. ZTE, Lenovo and Huawei were the second-, third- and fourth-placed vendors, ahead of Apple, making up a third of the market. They achieved growth of 171%, 2,665% and 252% year-on-year respectively. Collectively, domestic Chinese vendors shipped 25.6 million units, representing a growth of 518% and 60% of the market. By comparison, international vendors grew by a more modest 67% to 16.7 million units. Apple fell to fifth place in China. While its shipments were up 102% year-on-year, they were down 37% compared to Q1 2012.
‘The rise of the domestic tier-one brands has been aided by a number of factors. Their reactiveness to market demands and deep understanding of local consumer behavior and preferences have been key in helping them surpass international peers in the fast-evolving Chinese market. 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.’
Nokia and Motorola both lost significant ground in China, with Nokia’s volumes down 47% on Q2 2011. ‘Among the international vendors, only HTC managed an outstanding performance in mainland China. Its shipments grew 389% year-on-year to reach 1.8 million units for the quarter,’ said Jessica Kwee, Canalys Research Analyst. ‘Its success this quarter is heavily based on the strong performance of Desire V series devices, designed with the local China market in mind, underscoring the importance of tailoring propositions to local consumer preferences.’
Android has become a major growth driver in China, running on 81% of the smart phones shipped in China in Q2 2012.
On a global basis, Android continued to grow in significance, surpassing 100 million quarterly smart phone shipments for the first time and reaching two-thirds share of the market. ‘Growth in Android volumes of 110% far outpaced growth in the overall market of 47% year-on-year, heavily driven by Samsung, which saw Android volumes of over 45 million, contributed to by a full and broad portfolio of products, from its high-end flagship Galaxy S III down to its aggressively priced Galaxy Y and Galaxy Mini. Its sponsorship of the London Olympics and subsequent product placements are sure to attract new customers to ensure that Q3 delivers a strong performance,’ commented Pete Cunningham, Canalys Principal Analyst.
Samsung retained its gold medal position in the global smart phone market with a 31% share, followed by Apple and Nokia once again. Huawei and ZTE were unable to push in on the global top five with shipments of their own branded devices. HTC moved up to fourth place, though, just ahead of RIM, which shipped 8.5 million units in the calendar quarter.
Analyst contacts
To speak with any analyst quoted in this release, please contact the appropriate Canalys office: Nicole Peng, Jessica Kwee (Canalys APAC), Pete Cunningham (Canalys EMEA). Alternatively, you can speak with other members of Canalys’ global team of mobile analysts: Chris Jones (Canalys Americas), Rachel Lashford (Canalys APAC), Tim Shepherd (Canalys EMEA).
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.
Smart phone and pad forecasts show varying OS fortunes [Canalys press release, Sept 10, 2012] – China and Android influence smart phone landscape, the US and Apple dominate pads
Shanghai, Palo Alto, Singapore and Reading – The latest product announcements by leading smart phone and pad vendors will help drive consumer demand to new heights, according to Canalys. It forecasts that in 2016, global annual smart phone shipments will be around 1.2 billion units, meaning a CAGR (Compound Annual Growth Rate) of 19.5%. It predicts pad shipments in the same year will hit 207 million – a CAGR of 26.8%.
Apple’s latest unveiling is attracting extraordinary interest and competitors have also made several major announcements in the past week, including Windows 8 devices from Nokia and Samsung; new Android smart phones from Sony, Motorola and Samsung; and Amazon’s enhanced Kindle Fire pads. With these big vendors attracting the headlines, Canalys has issued a timely reminder that the trends across pads and smart phones in various countries will be markedly different.
In smart phones, Canalys expects Asia Pacific to remain the largest region by volume, with annual shipments reaching 594 million by 2016. China will account for almost half of all shipments in the region and nearly a quarter of the world’s smart phones in 2016. This equates to only 10 million less than is forecast to ship in the whole of the Americas in that year.
Canalys managing director for Mobile and APAC, Rachel Lashford, said, ‘The latest, in-depth research for our dedicated Smart Phone Analysis China service reveals there will be a substantial increase in the number of first-time smart phone users in China over the next 12 months, while feature phone shipments will continue to decline. Smart phone sales will move beyond tier-one and tier-two cities.’
China’s domestic feature phone vendors are rapidly moving their businesses to smart phones, supported by low-cost solutions from chipset providers, such as MediaTek, Spreadtrum and Qualcomm’s QRD.
‘We anticipate strong demand from local Chinese vendors selling in both operator and open channels,’ said Nicole Peng, Canalys Research Director for China. ‘Chipset vendors are reporting growing momentum in 2.5G (EDGE) smart phone solutions. For less developed areas where 3G coverage is limited, 2.5G smart phones have advantages in cost and battery life. They are becoming popular with consumers, especially where prices are already close to those of feature phones (around RMB500, US$78). The tier-three and tier-four cities are feature phone vendors’ traditional strongholds. Local vendors will use their long-standing relationships with open channels and their established infrastructure to distribute smart phones, with or without operator subsidies, over the next few years.’
In terms of percentage growth, Canalys expects Latin America to move fastest, with a CAGR to 2016 of 27.3%. It forecasts good double-digit growth in all countries, but Brazil and Mexico will account for more than half of all shipments in the region.
Globally, Canalys expects Android to remain dominant, with 57% of the smart phones shipped in 2016 running the OS (up from 49% in 2011). It expects Apple’s share of this much larger market to remain similar to today, at around 18%. Microsoft is expected to make inroads over the coming years.
In the pad market, however, the OS picture will be quite different. Canalys expects Apple to take a little under half of the market in 2016. The plethora of Windows 8 pads that will be introduced over the next few years are predicted to bring Microsoft’s share to around 17%. Competitively priced Android pads, such as Google’s Nexus 7 and Amazon’s Kindle Fire models will have an impact in terms of volumes, but Android’s share is forecast to remain relatively stable at 35%, unless vendors make radical improvements to the overall user experience. In contrast to smart phone market trends, the US is expected to dominate pad shipments, with the volume more than doubling to 88 million units in 2016. China is expected to be the second largest country market, with shipments of around 20 million.
‘Pads are the fastest growing consumer electronics products in history and are forecast to represent 29% of total PC shipments in 2016. But the market remains dominated by a single vendor. Other PC and smart phone vendors are currently finding it hard to weaken Apple’s position,’ said Canalys Analyst Tim Coulling. ‘The only product that most would consider a big hit is the Kindle Fire, brought to market by Amazon – an Internet retailer. Tight integration of hardware, software and services is a prerequisite for competing in the pad market, even at low price points, and fragmentation among other pad vendors’ offers helps Apple maintain its position.’
Analyst contacts
To speak with any analyst quoted in this release, please contact the appropriate Canalys office: Rachel Lashford, Nicole Peng (Canalys APAC), Tim Coulling (Canalys EMEA). Or contact another member of Canalys’ global analyst team: Chris Jones (Canalys Americas), Jessica Kwee, Pin-Chen Tang (Canalys APAC), Pete Cunningham, Tim Shepherd, Tom Evans (Canalys EMEA).
Analysys data: 2012Q2 China Android Smartphone market 82.8% [Analysys International release, Sept 5, 2012] as translated by Bing:
Easy views network hearing” easy views international: according to EnfoDesk easy views intellectual library industry database recently publishing of 2012 2nd quarter China phone terminal market monitoring report under displayed, 2 quarter, China smart phone terminal (does not containing parallel and cottage machine) market in the, Android Department sales accounted for than from Shang last quarter of 76.7% upgrade to this quarter of 82.8%, net 6.1%. While the Symbian sales percentage has continued to free fall to the ground from the parent 11.8% to 6%. In addition, iOS small callback to 6%.
2012Q2 OS smartphone market penetration in China (not including parallel and cottage)
2 quarter pick-up systems from Smartphone ( encyclopedia of Analysys : smartphones ) [average smartphone] price changes, Android from 1670 [yuan i.e. US$263] last quarter, continuing down to the quarter of 1560 [yuan i.e. US$246]; 1320 [yuan i.e. US$208] of Symbian from last quarter down to 1170 dollars [yuan i.e. US$185] this quarter.
2012Q2 China Android and Symbian Smartphone price
(not including parallel and cottage)Information about the mobile Internet more relevant data, please visit
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Or call the customer service-4006-515.
Analysys data: 2012Q1 China Android Smartphone market share increased from 76.7% [Analysys International release, June 6, 2012] as translated by Bing:
“Analysys Web video” Analysys: at present, according to EnfoDesk Analysys think-tank on traditional retail markets of mobile phones (of the last quarter of 2012 quarterly monitoring mobile terminal market) data monitor display: Chinese smartphone market, Android system’s market share in handset sales rising 5 consecutive quarters.
Vulnerability analysis:
In the last quarter of 2012 China Mobile end-markets quarterly monitoring data show end of 2012 Q1, carrying Android in the Smartphone market system’s market share in the Smartphone Terminal 76.7%, 10% average quarterly market share gain. At the same time, as the Smartphone market continues to mature, carrying Android system average Smartphone prices are also way down to 1670 [yuan i.e. US$263 from 2300 yuan i.e. US$363 a year earlier].
Combined with traditional mobile phone sales channels under the line status, EnfoDesk Analysys Research think-tank believes that mobile phone sales market share of Android system continue to enhance, benefit from its open source nature attract numerous manufacturers to participate in, and China in the past two years in the Smartphone market and 3G business increment. Through the performance of manufacturers on the market today as well as the impact of EnfoDesk Analysys think tank study says
1. Is now dominated by application of the formation of eco-systems, as well as the Android open source, attracting new industry participants, such as Internet companies to enter product prices are depressed, make the increasingly intense market competition environment, product prices are driven down, threats to traditional enterprise bargaining power in the channel.
2012Q1 China smartphone sales share
2. Fragmentation trends exacerbate the Android system. Traditional manufacturing enterprises to overcome the effects of homogenization of products of intelligent systems, secondary development on the Android system, causes the application to version adjusted accordingly, application developer development costs gradually increased.
Smartphone price quarterly changes of 2011Q1-2012Q1 Android system
3. Sales in this period dominated by domestic brands in the low-end products, intelligent products of these enterprises continue to 3G input costs on the production line. But at the same time, while veteran international brand market share continues to decline, it would shorten the product line, focusing its research and development production 4G products research and development. With the advent of 4G era, will reshuffle the mobile terminal market. (Analysys International)
Information about the mobile Internet more relevant data, please visit http://data.eguan.CN/dianzishangwu
For more content, please visit Enfodesk Analysys Thinktank
http://www.enfodesk.com/SMinisite/maininfo/regapply-cf-17.html
Or call the customer service-4006-515.Related reading:
2011Q2 China’s massive increase in Android share Symbian tumble
Is sun setting on smartphone profit miracle? [ReutersVideo YouTube channel, Aug 16, 2012]
… in 2 years the low-end has blown up …
China smartphone sales by price tier Q1 – 2010 Q1 – 2012 <1,500 yuan [<US$ 237] 17.7% 60% 1,500-3,000 yuan [US$ 237-473] 51.5% 24% >3,000 yuan [>US$ 473] 30.8% 16% Source: Jefferies Research
Cynthia Meng, China/HK TMT Equity Research, Jefferies Hong Kong:
[00:49] Next year it’s going to be about who is going to provide the best value for my money from a consumer point of view, from a telco point of view, because we think that hardware specifications for the handsets have already peaked. [01:03]Narrator, xxx Gordon in Hong Kong:
In other words the oversized screen and quadcore processors of your precious Samsung [Galaxy] S III will soon be standard and achieved in handsets in China. [01:13]… commoditization of smartphones …
[02:11] A race to the bottom will present a major challenge for Apple and Samsung who put together have dominated the industry in the last couple of years. [02:19] If the China trends spread globally the shift to cheaper handsets will mean tighter margins and slower growth for this industry powerhouses and new opportunities for little known upstarts like Xiaomi. [02:26]
The Chinese View: VIDEO: STUDIO INTERVIEW: CHINA’S SMARTPHONE MARKET [CCTV News – CNTV English, Sept 3, 2012]
iPhone Ranked Seventh in China’s Smartphone Market — Watch Out, ZTE [AllThingsD.com, Aug 24, 2012]
Apple’s iPhone has been gaining a lot of traction in China recently. As Apple CEO Tim Cook said during the company’s third-quarter earnings call, greater China accounted for two-thirds of Apple’s revenue in the Asia-Pacific region during the period.
“In terms of iPhones in general in mainland China, we were incredibly pleased with our results,” Cook said. “We were up over 100 percent, year over year.”
That’s an impressive achievement. But Apple still has a lot of work to do in China before the iPhone claims the same levels of market penetration it enjoys in the U.S. In China, the iPhone has captured about 7.5 percent of the smartphone market, compared to rival Samsung, which has claimed more than 20 percent, according to IHS iSuppli. Despite its popularity in the country, the iPhone is still ranked seventh in the Chinese smartphone market.
Why? Two reasons. First, Apple doesn’t yet offer a truly low-end smartphone that appeals to price-conscious Chinese consumers. (To be clear, China Telecom is offering the iPhone fully subsidized, but it requires subscribers to sign a contract that ties them to a two-year $62 per month plan.) Second, and more importantly, the iPhone doesn’t yet support Time Division Synchronous Code Division Multiple Access (TD-SCDMA), China’s homegrown wireless standard. And until it does, China Mobile, the world’s largest wireless carrier, can’t offer it to its 688 million or so subscribers.
“Among all the international smartphone brands competing in China, Apple is the only one not offering a product that complies with the domestic TD-SCDMA air standard,” IHS iSuppli’s Kevin Wang said in a statement. “For Apple, this is a huge disadvantage, as TD-SCDMA represents the fastest-growing major air standard for smartphones in China, with shipments of compliant phones expected to rise by a factor of 10 from 2011 to 2016.”
In other words, if Apple wants access to the massive addressable market that China Mobile has to offer, it’s going to have to offer a lower-end iPhone variant designed specifically for TD-SCDMA, something it has been loath to do in the past, and hasn’t given any indication that it’s willing to do in the future. As Cook said during Apple’s last earnings call, the company feels that its business is strongest when it focuses on making the best products it can, not the most inexpensive ones.
“I firmly believe that people in the emerging markets want great products, like they do in developed markets,” Cook said. “And so we’re going to stick to our knitting and make the best products. And we think that if we do that, we’ve got a very, very good business ahead of us. So that’s what we are doing.”
Breakingviews: Apple v. Samsung [ReutersVideo YouTube channel, Aug 27, 2012]
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). As per the predictions of IDC and Gartner, China’s smartphone shipments could hit 140 million this year, exceeding those in the United States.
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.).
Xiaomi Technology, founded just two years ago, has emerged as a serious potential threat to the likes of Apple and Samsung in smartphone arena. According to its CEO, the company sold more than 3 million phones with revenues close to $1 billion for the first half of 2012. Its latest offering, a successor to its popular MiOne (MI) smartphone, the MI2, costs less than half the price of iPhone 4S, but exceeds its specifications. Xiaomi not only tries to mimic the iPhone’s specifications, but has also been able to charge fans ¥199 (~$31) to attend the Beijing launch of the phone, the same way as Apple followers would pay to see Steve Jobs showcasing new products. The Xiaomi conference was attended by more than 1,000 people, with the proceeds going to charity. The MI2, which is expected to hit the markets in October, will have quad-core Qualcomm (QCOM) S4 Pro SoC, an 8 mega-pixel camera, and a voice-assistant similar to Apple’s Siri, and is priced at ¥1,999 ($310). This is no cheap knock-off, but rather a serious piece of hardware packed with the latest technology.
The fascinating part of Android’s rise here is that Microsoft (MSFT) will likely see more profit from many of these phones than Google will due to the licensing agreements many of them have made to avoid patent issues with Redmond. Reports are spotty, but Microsoft collects anywhere from $5 to $15 per Android license and has deals with at least half of the phones sold. Moreover, it is very possible it makes more money than Google does.
In the coming years it is expected that Apple’s market share may flatten out or even dip, as it has this year, but market share is not Apple’s goal; it has always been about margins — selling a premium product at extremely high margins to those with the resources to not care about the upfront cost. Estimates from IDC place the sub-$200 smartphone at 40% of the shipments, while devices costing more than $700 made up 11% of the market, which is where Apple plays and why it still controls most of the profits generated by the industry. China and India make up 40% of new smartphone activations.
This huge difference in shipments is mainly due to the limited purchasing power of an average Chinese person, which is around ¥800-¥1,500 ($130-$240). By contrast, the iPhone comes with a price tag of around $800, the equivalent of two months of earnings of an urban Chinese person (in an area that has around 670 million people).
According to a report from Gartner, Apple’s market share by volume has been sliding and iOS‘ share of the mobile operating system space is expected to slip to third place by 2016 below Android and Windows Phone. The Gartner report is, however, very controversial as Windows Phone has not proven anything to this point, although Nokia’s (NOK) sales of its Lumia 610 and Asha line of proto-smartphones are keeping its brand alive while it searches for the killer phone. Even in its second-largest market, iPhone sales slipped for the April-June quarter due to inventory adjustments after the huge launch of the iPhone 4S.
Apart from these estimates, Apple also suffers on various fronts in China. The iPhone is backed by China Telecom and China Unicom, but the country’s and the world’s leading telco China Mobile (with about 655 million subscribers) has still not supported it. Apple and China Mobile are still working on the details of China Mobile’s implementation of CDMA, which requires Apple to build a specific phone for its network.
Responding to the competition and the difference between the iPhone and the local offerings, Apple recently slashed the price of the iPhone 3GS below $200. While an entry-level Apple phone is something that the market will absorb, part of Apple’s appeal is the status it confers and a 3GS simply not a strong enough status symbol to drive sales. Mix in that with Chinese preferences for buying from Chinese companies and this market becomes a whole lot harder for Apple to maintain not its sales per se — it can manipulate prices to maintain sales — but its extreme margins. The latest earnings call highlighted this as it sold a lot of lower-end iPads and iPhones in Asia, which pushed its results and future guidance under 40% net margins.
Companies like Lenovo, ZTE, and Huawei are gaining because they are Chinese and are providing good products at reasonable prices. Lenovo, in particular, is pushing its smartphone and PC strategy both up and down the value chain, similar to Samsung’s approach. It is working very well for Lenovo, whose revenues were up 40% in the second quarter when everyone else was complaining of softening business.
Apple’s problems are the standard problems for a company on top of the world; everyone will nibble away at it in various little ways. How it responds to this is key.
The recent lawsuit victory over Samsung and its pressing of the legal attack smacks of a company that is frightened. Why should it fear Samsung? And if it doesn’t, why did it go after Samsung and restrict consumer choice, a clear breach of its branding compact with its fans? Is it trying to push Samsung into Windows 8 Phone’s arms? All of these things point to further margin erosion for Apple and a slowing of its titanic growth without a new market to push into. As things stand now, staking a new position in Apple requires believing none of these issues matter.
It points to Apple becoming a value trap at some point in the future. Not every country, especially China, will grant Apple an injunction against knockoff competition; quite the opposite is true. Many investors are sitting on capital gains so large they can’t sell, and the dividend will pay them well enough to stay in even if the price goes nowhere. But new investors should be very careful in light of the market dynamics.
Microsoft adding staff, R&D in China mobile push [Associated Press, Sept 6, 2012]
BEIJING (AP) — Microsoft Corp. will hire more than 1,000 additional employees in China this year and boost research and development spending by 15 percent as it tries to catch up with Apple and Google in the fast-growing mobile Internet market, executives said Thursday.
The announcement adds to intensifying competition in wireless Internet in China, where nearly 400 million people surf the Web using mobile phones and other devices. Microsoft is promoting its Windows 8 mobile operating system but came late to the market and trails Apple Inc. and Google Inc., whose Android system is widely used in China.
“We respect that we have two players in the market which have a strong role, and we feel ready to attack and have different offers to basically change the game plan on that one,” said Microsoft’s CEO for China, Ralph Haupter, at a news conference.
The new employees will be in addition to Microsoft’s workforce of 4,500 in China and will be spread across research and development, marketing and customer service, Haupter said.
Research spending in China will rise by 15 percent over last year’s $500 million, according to another executive, Ya-Qin Zhang, Microsoft’s Asia-Pacific chairman for research and development. He said the current research staff of 3,000 would be expanded by about 15 percent.
Global technology companies and local rivals are spending heavily to gain a foothold in mobile Internet in the world’s most populous online market as Chinese users shift quickly to the new technology.
This week, Chinese search engine Baidu Inc. released its own new mobile browser to compete with Google and Apple and announced it will open a cloud computing center.
China had 538 million people online at the end of July, up 11 percent from a year earlier, according to the China Internet Network Information Center, an industry group. The share that uses wireless devices grew twice as fast, rising 22 percent to 388 million, or 70 percent of the total.
Android dominates the Chinese smartphone market, used on 76.7 percent of phones in the
secondfirst quarter of this year, according to Analysys International, a research firm. Apple’s iPhone dominates the higher end of the market.Microsoft plans to recruit more local partners to develop mobile applications specifically for China, said Haupter. He said the company believes it has an advantage in doing that because developers can draw on their experience working on other Microsoft products.
Zhang said Microsoft’s six development centers in China that now spend about 80 percent of their time working on products for global markets will focus more on creating offerings tailored to Chinese customers.
Microsoft also plans to expand its cloud computing business in China, the executives said. Zhang said about 100,000 commercial customers now use its private cloud computing service and a service for use by the public is being developed.
Microsoft Names New Leaders in Key International Markets [Microsoft press release, April 13, 2012]
… Ralph Haupter, currently serving as area vice president (AVP) for Microsoft Germany, has been promoted to corporate vice president and named CEO for Microsoft GCR. Haupter is replacing Simon Leung who has decided to leave Microsoft for personal and family reasons. Gordon Frazer, currently serving as managing director (MD) for Microsoft U.K., has been named chief operating officer (COO) for Microsoft GCR. He is replacing Michel van der Bel, who will assume the role of MD for Microsoft U.K. Haupter and van der Bel will report to Jean-Philippe Courtois, president of Microsoft International, and Frazer will report to Haupter. …
…
Haupter is a seven-year veteran of Microsoft, having delivered excellent and sustainable results in growth and profitability and repeatedly proving his ability to build and grow high-performing, diverse organizations. He previously served as head of the partner division for Europe, Middle East and Africa and general manager (GM) of Microsoft’s Small and Midmarket Solutions & Partners Group for Western Europe, both based in Paris, and served as COO for Microsoft Germany before becoming the German AVP. Before that, he worked for IBM both in Germany and internationally.
Frazer is a 16-year veteran of Microsoft, having served as the GM for Microsoft South Africa for four years and most recently as the Microsoft U.K. MD for the past six years. He brings a tremendous amount of operational expertise to the Microsoft GCR team from his various roles across both developed and emerging markets. His leadership in managing the full breadth and depth of Microsoft’s business in the U.K. will serve as a strong asset in helping take Microsoft China’s operations to the next level of efficiency and growth.
…
Leading the New Era, Winning the Future—Microsoft Announces Development Strategy in China [Microsoft China press release, Sept 6, 2012]
Partnering for an Innovative, Competitive, and Talented China
New leadership team in Greater China
(third from left is the COO Gordon Frazer and the fourth is the CEO Ralph Haupter)September 6, 2012, Beijing– Microsoft China today announced its new strategy and commitment to partnering with the country for an innovative, competitive and talented China by further enhancing and accelerating investments. In the new fiscal year, Microsoft will recruit more than 1,000 staff in China, 50% of which will be college graduates. Microsoft’s annual R&D investment will exceed $500 million, and the company will explore local markets in more provinces and deepen its engagement in industrial informatization.
Over two decades of growth, Microsoft China has continued to penetrate deeply into increasingly important local markets. Ralph Haupter, Corporate Vice President, Chairman & CEO Microsoft Greater China Region, said: “Since entering China 20 years ago, Microsoft has grown steadily in China and acquired a deeper understanding of the Chinese market. Our new strategy reflects our perception, emphasis and commitment to the China market. In this new era, China and the entire Greater China Region will become the source of global innovations. Through comprehensive devices and services combined with cloud computing, Microsoft is working closely with the Chinese government, partners, customers and the academic world, entering this new era by leveraging our advantages.”
Haupter stressed that this year is a big year for Microsoft, with the introduction of many new products and technologies, and also a year where Microsoft China is making a great effort to further develop the market. “Our new leadership team in Greater China has helped develop a new strategy for customers and partners, deepening cooperation with governments of all levels to strengthen innovation in China. The team will popularize new technologies and explore new markets,” Haupter said.
Through continuous investment of innovation resources and improving the scale of partnerships in China over the years, Microsoft Asia-Pacific R&D Group has become Microsoft’s largest R&D base outside of the United States, with the most complete functions and innovation chain covering basic research, technology incubation, product R&D and industry cooperation. Chinese R&D teams have made great contributions to Microsoft products launched this year, such as Windows Server2012, Windows 8, New Office, SQL Server 2012 and Surface. Ya-Qin Zhang, Corporate Vice President and Chairman of Microsoft Asia-Pacific R&D Group, said: “We are lucky to be in an era where globalization is deepening, the IT revolution is emerging and China is rising. Microsoft’s continuous exploration in natural human-machine interfaces, mobile Internet and cloud computing will help us win the future and contribute to China’s sustainable development.”
Samuel Shen, COO of Microsoft Asia-Pacific R&D Group, said Microsoft’s software outsourcing business was now worth more than $200 million per year. In the future, Microsoft will continue to work closely with local communities through programs such as the Internet of Things, Big Data, cloud computing, cloud-based smart cities and the Microsoft Accelerator for Cloud Computing, accelerating the vision of “Innovation in China, Innovation for the World”
According to Microsoft’s new strategy in China, Microsoft is committed to cooperating with the Chinese government and industry, aligning with China’s priorities and partnering for an Innovative, Competitive, and Talented China. Gordon Frazer, Vice President and COO of Microsoft Greater China Region, said that over the next five years, Microsoft China will expand its footprint in China, deepen cooperation with governments of all levels and partners, improve customer support and foster talents on a broad scale:
Expand Microsoft’s footprint in local markets: Over the next five years, Microsoft will expand its presence in over 20 cities across 15 provinces by expanding local teams, enhancing local management, working closely with local governments, making contributions to local informatization, building cloud-based smart cities, and providing cloud-based solutions for e-government, city management and citizen services.
Accelerate local partner ecosystems and expand service coverage: Microsoft will deepen customer services, deliver joint services and solutions with partners, and engage in further convergence of informatization and industry upgrading to improve the core competency of Chinese enterprises. By the end of this year, Microsoft will set up its second technical support center in China to enhance support for Chinese customers and partners, share best practices and knowledge of supporting global customers to help them accelerate the adoption of new technologies and share with them the experience of providing cloud services to customers in Asia. Microsoft will also drive partners’ development through many forms: system-grade innovation support for OEMs, software engineering assistance for software outsourcing companies and innovative design references for hardware manufacturers.
Foster talents in a large scale: Over the next five years, Microsoft will hire more talent in China to better serve and support its partners in China, foster talents for the Chinese software industry and improve the skills of Chinese youths.
China to Overtake United States in Smartphone Shipments in 2012, According to IDC [IDC press release, Aug 30, 2012]
Top Five Smartphone Markets and Market Share for 2011, 2012, and 2016 (based on shipments)
Country 2011 Market Share 2012 Market Share 2016 Market Share 2011 – 2016 CAGR PRC 18.3% 26.5% 23.0% 26.2% USA 21.3% 17.8% 14.5% 11.6% India 2.2% 2.5% 8.5% 57.5% Brazil 1.8% 2.3% 4.4% 44.0% United Kingdom 5.3% 4.5% 3.6% 11.5% Rest of World 51.1% 46.4% 46.0% 18.1% Total 100.0% 100.0% 100.0% 20.5% Source: IDC Worldwide Mobile Phone Tracker, 2012 Q2 Forecast Release, August 30 2012
Strong end-user demand and an appetite for lower-priced smartphones will make China (PRC) the largest market for smartphones this year, overtaking the United States as the global leader in smartphone shipments. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, China will account for 26.5% of all smartphone shipments in 2012, compared to 17.8% for the United States.
“Looking ahead, the PRC smartphone market will continue to be lifted by the sub-US$200 Android segment,” said Wong Teck-Zhung, senior market analyst, Client Devices, IDC Asia/Pacific. “Near-term prices in the low-end segment will come down to US$100 and below as competition for market share intensifies among smartphone vendors. Carrier-subsidized and customized handsets from domestic vendors will further support the migration to smartphones and boost shipments. Looking ahead to the later years in the forecast, the move to 4G networks will be another growth catalyst.”
“Regionally, we expect smartphone demand to flow down to lower-tier cities,” added James Yan, senior market analyst for Computing Systems Research at IDC China. “After going through a period of sustained high growth, top-tier cities are likely to see decelerating smartphone growth rates. In contrast, secondary cities are expected to experience accelerated smartphone growth, with strong demand for low-cost models as well as high-end models, which are desired as status symbols.”
“The fact that China will overtake the United States in smartphone shipments does not mean that the U.S. smartphone market is grinding to a halt,” said Ramon Llamas, senior research analyst with IDC’s Mobile Phone Technology and Trends program. “Now that smartphones represent the majority of mobile phone shipments, growth is expected to continue, but at a slower pace. There is still a market for first-time users as well as thriving upgrade opportunities.”
“In addition to China and the United States, several other countries will emerge as key markets for smartphone shipment volume over the next five years,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Mobile Phone Tracker program. “High-growth countries such as Brazil and Russia will become some of the most hotly contested markets as vendors seek to capture new customers and market share.”
Top Five Markets for Smartphone Shipments
As it becomes the leading country for smartphone shipments this year, the PRC smartphone market will continue to grow, primarily on demand for lower-cost handsets. While this bodes well from a volume perspective, it also means lower average sales values (ASVs), thinner margins, and increased competition from all players. Over the course of the forecast, China’s share of the global smartphone market will decline somewhat as smartphone adoption accelerates in other emerging markets.
Smartphone shipments into the United States will increase as users upgrade their devices and feature-phone users switch over to smartphones. Furthermore, a combination of lower-priced models, expansion of 4G networks, and the proliferation of shared data plans will encourage continued smartphone adoption. Smartphones are already the device of choice at the major carriers, and regional and prepaid carriers are following suit and competing with alternative service plans.
With smartphone penetration in India currently among the lowest in Asia/Pacific, the market has tremendous untapped growth potential. Low-end smartphones offering dual-SIM capability and local apps and priced around US$100 will rapidly bring this market to life. Although 3G data plans are currently too expensive for the majority of consumers in India, IDC expects the popularization of 3G, and in later years 4G, to drive smartphone uptake as operators roll out more affordable data plans and generous subsidies while expanding offerings to tier 2 and tier 3 cities. The affordability of service plans will be another important key to smartphone adoption in India.
Smartphone growth in Brazil will be bolstered by strategic investments by mobile operators, smartphone vendors, and regulators. Operators’ focus on increasing ARPU will drive greater demand for smartphones while smartphone vendors will look to reap greater profitability from offering such devices. The Brazilian government, meanwhile, will offer tax exemptions for smartphones and protect local manufacturing against foreign vendors. These factors, combined with solid end-user demand, will drive smartphone volumes in the coming years.
The United Kingdom has been one of the fastest growing smartphone markets in Western Europe, driven by the high operator subsidies and long-term post-paid contracts. Over the forecast period, smartphone shipments will continue to increase due to the introduction of LTE and a new range of services that will appeal to heavy smartphone users. In addition, price erosion on HSPA devices will also attract feature phones users. Growth rates will slow in the later years of the forecast as penetration plateaus and operators seek out alternative subsidy models.
Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets
And this is not a speculation but already a reality as the new Lenovo A288t came to market this month for ¥ 569 in retail [US$ 89] and as low as ¥ 479 in wholesale [US$ 75]. Such a breakthrough was enabled by Spreadtrum’s SC8810 SoC and Lenovo Mobile’s ability to exploit such an opportunity in only 5 months. Lenovo Mobile BTW became #2 behind Samsung on China’s smartphone market in June (just thanks to an earlier Mediatek based opportunity), aiming to become #1 in one or two years. So it is safe to say that with a number of other 1st tier vendors and even a kind of revitalised whitebox ecosystem soon joining the Spreadtrum (展讯处在) SoC opportunity, the H2’12 market in China will radically be redefined, with “earthquake-like” consequences for the global smartphone market as a whole. In this way the process indicated earlier in China becoming the lead market for mobile Internet in 2012/13 [this Experiencing the Cloud blog, Dec 1, 2011] will become even more dramatic.
SIGNIFICANT NEW UPDATE: Yes, indeed the revitalised whitebox ecosystem is doing the job, and in the most wonderful way, see $48 Mogu M0 “peoplephone”, i.e. an Android smartphone for everybody to hit the Chinese market on November 15 [Nov 9, 2012], which is the first “lead post” on my trend tracking blog because of such enormous significance.
Updates: Haier Adopts Spreadtrum’s Smartphone Platform [Spreadtrum press release, Aug 16, 2012]
Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today announced that Haier, one of the global leaders in home appliances, has adopted Spreadtrum’s 1GHz TD-SCDMA Android platform, the SC8810. The Haier HT-I617, a smartphone designed to address the needs of the mass-market consumer, has completed China Mobile’s certification testing, paving the way for commercial launch through China Mobile channels.
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Spreadtrum’s SC8810 integrates a 1GHz Cortex A5 processor, 3D/2D Mali graphics accelerator, a 5 megapixel camera sub-system and supports resolution up to WVGA and wireless connectivity including Bluetooth, WiFi and GPS. The SC8810 delivers low power multimode TD-SCDMA/EDGE/GPRS/GSM operations with dual-mode automatic switching and supports TD-HSDPA at 2.8Mbps and TD-HSUPA at 2.2 Mbps. The SC8810 is delivered with turnkey Android and systems software.
Counterfeiters rebrand themselves in China’s smartphone market [Want China Times, Aug 5, 2012]
THL, the new face of a man who once sold counterfeit Samsung phones and decided to starting producing his own brand of smart phone.
After experiencing a major drop-off in sales, the makers of counterfeit cell phones in China, known commonly as “shanzhai” phones, are now breaking back into the market under their own brand names.
Previously reliant on co-opting the names of top leading to sell their bootleg products, the new generation of cell phone manufacturers are focusing on producing budget smartphones under their own brand names.
Stores for these new brands are proliferating in Huaqiangbei, a well-known consumer electronics market in Shenzhen. These new “shanzhai” smartphone producers mostly rely on supplies of chips from MediaTek in Taiwan.
After some initial mishaps, MediaTek belatedly rolled out its first-generation smartphone chip 6513T in the second half of 2011. The move has prompted many shanzhai phone manufacturers to switch to the production of smartphones, some with their own brands.
Shanzhai smartphone makers target mainly the lower and middle end of the market for products priced at around 1,000 yuan (US$156). Huang Jixian, a shanzhai cell phone producer in Shenzhen, opened 210 stores for his new “THL” smartphones throughout China in the first four months of this year. Huang plans to increase the number of his stores to over 300 to bolster the brand image of his products.
In addition to directly owned and franchise stores, Huang has also opened online franchise stores on the platforms Taobao and 360buy. Wang Xuekai, sales manager for THL, says that the different stores play a critical role in the company’s operations, since the shopping and user experience is essential in attracting business. Online sales channels play a supplementary role, Wang said.
Spreadtrum Communications’ CEO Discusses Q2 2012 Results – Earnings Call Transcript [Seeking Alpha, Aug 10, 2012]
Leo Li – Chairman and CEO
In the second quarter of 2012, we achieved revenue of $173.1 million, which is in line with the guidance we gave previously and 7.5% increase over the first quarter. I am very pleased to update you on the progress we have made with our smartphone products.
This quarter we achieved a strong volume ramp-up of our 1 Ghz TD-SCDMA Edge smartphone chipset, shipping more than 1 million units as expected. Customers such as Huawei, Lenovo, [Pryor], Hisense and others have completed China Mobile’s certification test, launched low-cost smartphones based on our products. Many are targeting a new [ratio] price in the range of RMB500 to RMB700 [US$ 79 – US$ 110], which is making TD-SCDMA smartphone even more affordable and attractive for mass market consumers.
We are seeing very strong demand for our smartphone products and are raising our shipment focus. We now expect to ship more than 10 million smartphone chipsets in the third quarter alone. In the high end of TD-SCDMA market, we expanded our business with the first-tier OEMs, growing shipment of our best-in-class TD-SCDMA-based modems. In our customers, our customers use these modems in very high-end smartphone designs.
Our baseband and RF transceivers are shipping in flagship handsets, that is recently launched, including Samsung’s Galaxy S3, HTC One XT and the other devices from first-tier China OEMs.
With the continuing growth in our smartphone chipsets and modem business, we have firmly established our leadership position in TD-SCDMA smartphone market. Our best-in-class modems are designed into top-of-line handsets and our smartphone chipsets are in neighboring 1 Ghz devices at a price of as we low as RMB500 [US$ 79].
…
Recently, China Mobile has taken steps to speed up TD-SCDMA handset sales in the second half of this year. At a recent conference, China Mobile discussed a plan or plans to increase their investment in TD-SCDMA. In addition, they also encouraged handset makers to sell their TD-SCDMA product through open market with China Mobile providing support with the quality monitoring.
With the China Mobile’s handset replacement market now approaching 100 million units per year, this shift in distribution model will make the TD-SCDMA devices even more broadly available and help speed up the 3G adoption in China.
…
Looking ahead to the remainder of 2012, we have some exciting product introduction on that. We will be introducing our 1.2 Ghz single-core and dual-core smartphone platforms, our new WCDMA and connectivity products. These products will increase our total addressable market in China and overseas regions and position us for continuing business expansion in 2013.
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Randy Abrams – Credit Suisse
Okay. My second question is on your outlook for TD-SCDMA. I think, one, from just a market perspective, volume, maybe what you expect smartphone and feature phones, and how you expect your market share. And I think you did well on recent tenders, maybe how you expect your product positioning. [Marvel] has been talking about a new platform for early next year and with MediaTek and MStar, how you see your market churn positioning and then overall market.
Leo Li – Chairman and CEO
I feel very confident that the TD overall volume for this year, I think what I said before in the last earnings call, is around 80 million to 90 million total units, both including the so-called central procurement, which you mentioned, and open market, which is the non-mentioned. I think the open market in particular next year, I can see a stronger and stronger demand for TD-SCDMA market in China.
So I certainly know for sure or I think next will be well above 100 million units for the total TD demand. So we at the moment, I think we’re about more than 55% market share in TD-SCDMA business. We hope with the technology leadership and also with the business model and then the quality of the products and everything else, we hope that we’ll maintain the leadership position in the future.
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Mike Walkley – Canaccord Genuity
Okay, thanks. One question for Leo. Leo, with the MobilePeak hitting the milestone, can you just update us on your WCDMA progress and how you see the competitive landscape as you’re coming to market with that product later in the year?
Leo Li – Chairman and CEO
Sure. Yeah, they’re making nice progress there. I think it’s mostly [inaudible] type of the milestones for their WCDMA. I think also combine the 40nm technology and some other 2.5G product rolls, EDGE, GPRS and GSM, I think we’re making the progress for both modem and smartphone products towards the end of the year. So I think at this moment all the development are on track, so I’m pretty happy.
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Jack Lu – RBS
Yeah, hi, Leo. One question for you. Can you talk about your 2012 smartphone full-year target? Because I think last call you mentioned a figure of 15 million to 20 million. Now, given that you are shipping more than 10 million alone in Q3, what’s your thought on that number for this year?
Leo Li – Chairman and CEO
This is a kind of — yeah, we usually only predict for the next quarter, which I did, right, around more than 10 million unit smartphones. If you really put me in a corner, so if I have to say anything to that question, I would like to say at least 25 million units for the whole year. So, yeah, it’s up number from 10 million to 15 million, what I said in early Q2.
…
Jack Lu – RBS
Okay. One last question if I may, can you talk about expectations for ASPs going to Q3 for both TD feature phones and smartphone products?
Leo Li – Chairman and CEO
Yeah, feature phones, unfortunately the volume dropped sharply. I mean this is unexpected a little bit. The switching from feature phone to smartphone is so quick. It’s quicker than most people expected. But as the pricing there stabilizes, the volume drops very sharply. And at this moment actually for the ASP for smartphones, it’s there quite nicely. We — actually it’s not the pricing pressure issue, rather it’s a whole [inaudible]. There’s a huge demand there. It’s just so strong that it really surprised many of us.
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Andrew Lu – BarCap Research
Thank you. Earlier you also mentioned WCDMA smartphone solution will be introduced next year. Did you say Q1 next year?
Leo Li – Chairman and CEO
Actually we will try to introduce production small customers first. You know that, right? With big customers, takes longer time. So, Q1, maybe it could be the right time, and then Q2, something, yes.
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Donald Lu – Goldman Sachs
Good morning. Leo, can you give us more color on how can China Mobile help the open market? By open market, I mean mobile probably is not going to subsidize, but can mobile help with distribution or marketing or anything like that?
Leo Li – Chairman and CEO
Sure. Recently there are high-level executives went to Shenzhen, the headquarter [inaudible] right, several times. And then recent one is a very high level China executive went there, had meetings with — we don’t call them free market or [inaudible] anymore, we call them a small brand, right? And actually the meeting, the result is very encouraging, because down the road, you know that year over year subsidies will be reduced and reduced, not increased and increased. So the China Mobile very much encouraging the vendors and the makers of the handsets to engage with open market. Like I said, someone asked me the question, and then, some of my customers already shipping their products in open market without any subsidies. So this is encouraging.
But I think the reason it has been now, not only encouraged by China Mobile, also because the quality of the products and the price of the smartphones, more importantly, we are facing the major trend that the smartphone is replacing the features phones in big way, in such a big way in China that we very much encourage open market people to engage.
Donald Lu – Goldman Sachs
I mean, how — I man, can China Mobile really help? Because China Mobile really is the biggest carrier in China, but can — I mean, let’s say, China Unicom and China Mobile all are encouraging open market. I mean —
Leo Li – Chairman and CEO
Remember, China Mobile was not very encouraging, remember. I mean, like last year, it was totally you had to go through, any product go through the central procurement program, passing quality acceptance test and with the subsidies and this and that, and then whatever type of handset has been determined selected by China Mobile. And now actually I think with the leadership change and then with the new kind of a thinking, I think it’s really helpful that China Mobile has this open market engagement. So they are encouraging this to — okay. And also they say that TD-SCDMA over WCDMA, very much over 2.75G for that matter actually is making a lot of sense because, one, it’s cheaper than WCDMA; two, you don’t need to pay the royalties to the WCDMA. I like that, obviously many folks, right? So they are cheaper price, high quality, and the networks are much improved, and the products much more varieties and more attractive, and the pricing obviously much more affordable.
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Leo Li – Chairman and CEO
… EDGE type of smartphone is important for emerging markets. What you said is true. However, for their shipments of other company, I think the majority unfortunately is still in China, not in emerging markets. For the emerging markets, take India and Africa for example, I think at this moment the huge majority is still the low-end feature phone, not even middle-end feature phones.
So that I agree with the statement that EDGE smartphones are very much needed for emerging market, and even Qualcomm come up with the so-called platform, that means the rest of the [inaudible]. However, the volume ramp-up may not be as high as people expected. Only in China that the smartphone demand is so strong. There are other countries, I’m talking about emerging countries, there’s a demand but not as strong as this. Still majority — even the economic situation in some of the emerging countries, they’re actually deteriorating, it’s not improving. In that regard, actually putting pressure to reduce the high-end handsets actually going towards the low end. And then the demand for smartphones is there but not as strong. And then I think it will be — need maybe a couple of years to see the stronger demand, yeah.
Hao Guo – CICC
Okay, thank you. So if I may, follow up two questions. I heard from the industry that Qualcomm going to launch very low-end 3.5G solution in Q3, maybe Q4. Maybe it’s targeting for MTK and for low-end competition. So do you heard about — something about this? And can you comment on this? …
Leo Li – Chairman and CEO
The first one, I don’t comment on other people’s the product introduction. But the thing is I heard a similar type of thing and that means this EDGE smartphone is kind of important. And then as I said, I think most of that type of things being shipped in China, not necessarily shipped in overseas markets. So I think — but also I said in my opening statement and then in my Q&A that in China I think with the TD-SCDMA, to compete with the 2.5G, 2.75G type of smartphones, at least the TD-SCDMA offers some kind of [inaudible] still offer some kind of better connectivity than 2.75G, compared with WCDMA, yes, it’s cheaper and without paying the royalty, right?
End of updates
Note: MediaTek has definitely something going against Spreadtrum in this newly opening space. See: this very online (www.veryol.com) article of July 17, 2012:
– Cottage “big change in the situation (translation by Google)
– 山寨”大变局 (Chinese original)
For Cheng Rainbow Mobile general manager Wang Zhongcheng, really hard over the past 12 months. As one of the hundreds of small and medium-sized mobile phone manufacturer in Shenzhen, Wang Zhongcheng these eight characters of the “dire straits, lean” to describe his current situation.
…
Wang Zhongcheng company an area of about seventy to eighty square meters, about 10 young people in this office, mostly for sales staff. … Sitting in the office of Wang Zhongcheng, he showed reporters the company’s newly developed intelligent machines. These new MediaTek 6513T chip, more than 800 frequency, 3.5-inch capacitive screen, Android 2.3.5 operating system, ex-factory price of 400 yuan [US$ 63]. The target consumer groups positioned second and third tier cities in the country. …
Spreadtrum strengthening cooperation with Samsung, threatening MediaTek market position [DIGITIMES, July 23, 2012]
China-based handset solution vendor Spreatrum Communications has stepped up its cooperation with Samsung Electronics and may double its shipments by the fourth quarter of 2012, threatening MediaTek’s leading market position in China, according to industry sources.
Spreadtrum, through the cooperation with Samsung, won a number of TD-SCDMA solution orders from China Mobile in the first half of 2012, while MediaTek secured only one order, the sources revealed.
Spreadtrum has expanded its cooperation with Samsung to include 2.5G/2.75G/3G solutions, and Samsung’s handset shipments to China in the fourth quarter of 2012 will nearly all adopt chipset solutions from Spreadtrum, the sources indicated.
Samsung is expected to ship 70 million handsets to China in 2012, the sources estimated.
Meanwhile, Spreadtrum’s development and trial production of quad-core and 4G solutions is also ahead of MediaTek’s by over six months, indicating Spreadtrum’s improving capability, the sources added.
Note that this Spreadtrum’s cooperation with now world #1 Samsung may have an even bigger impact on Windows Phone. According to a latest report Windows Phone shipments in June were just less than 200,000 units in China which accounting for only 1.6% share of the smartphone market there.
See this it.sohu.com article of July 24, 2012:
– Acclimatized! Microsoft Windows Phone Chinese Long Way (translation by Google)
– 微软Windows Phone中国路漫漫 (Chinese original)
Spreadtrum Smartphone Chipset Undercuts MTK by USD 1 [Marbridge Daily, July 5, 2012]
Adopted from National Business Daily article of June 29, 2012:
– Cost of smart phones “counter-attack” the chip manufacturers to bring down program costs to ¥ 300 (translation by Google)
– 智能手机成本“逆袭” 芯片厂商拉低方案成本至300元 (Chinese original)
Chinese baseband chipset vendor Spreadtrum (Nasdaq: SPRD) has announced that its 8810 chipset is priced at USD 7-8, approximately USD 1 less than MediaTek’s 6573 solution, lowering the price of a 3.5-inch smartphone chipset solution to RMB 450-500 [US$ 70-78]. Spreadtrum currently supplies the 8810 to several major brands, including Samsung, HTC, Lenovo (0992.HK), ZTE, Huawei, and Tianyu (K-Touch). Spreadtrum estimates that its smartphone chipset shipments will exceed 20 mln in 2012.
Taiwanese chipmaker MediaTek received orders from major brands such as Huawei and ZTE (0763.HK; 000063.SZ) in early 2012. MediaTek aims to capture 50% of mainland China’s smartphone chipset market, and expects 60% of business to come from brand clients, while independent handset design firms will account for the remaining 40%.
Qualcomm senior VP Jeff Lorbeck disclosed that many handset vendors, including Lenovo, TCL, and Longcheer, have begun offering 3.5-inch HVGA smartphones using the Qualcomm Reference Design platform priced at USD 50.
MediaTek and Qualcomm have signed an agreement to offer chipsets at market prices, not below cost, according to an industry source. China’s three major domestic chipmakers produce solutions for entry-level smartphones costing under RMB 300 [US$ 50] to produce and sold at a retail price of RMB 600 [US$ 94].
Indeed a week ago came official information on SC8810-based Lenovo A288t becoming available through online channels and retail stores at 599 RMB [US$ 94] list price:
Lenovo Smartphone Based on Spreadtrum’s 1GHz TD-SCDMA Android Platform Completes China Mobile Certification Testing [Spreadtrum press release, July 19, 2012]
Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today announced that the Lenovo A288t, which is a Lenovo TD-SCDMA smartphone based on Spreadtrum’s 1GHz Android smartphone platform, the SC8810, has completed China Mobile’s certification testing and is expected to achieve sales of more than one million units in the third quarter.
China Mobile’s certification test is a required step and important milestone in the operator’s procurement process and is used to confirm the maturity and stability of TD-SCDMA mobile terminal products. Lenovo’s completion of China Mobile’s certification process with its Lenovo A288tsmartphone validates Spreadtrum’s 1GHz low-cost smartphone platform as fully compliant with China Mobile’s commercial requirements.
“China Mobile’s certification testing is a key milestone for manufacturers and a prerequisite for mobile phone purchasing by its provincial offices,” said Dr. Leo Li, Spreadtrum’s president and CEO. “The certification of the Lenovo A288t demonstrates its commercial readiness by China Mobile. China Mobile will kick off the purchase of TD-SCDMA phones after completing its certification testing, and this will build the confidence of handset manufacturers in the open market to design the Spreadtrum SC8810 platform into more low-cost smartphones.”
“Lenovo is committed to promoting China’s 3G terminal development.” said Feng Xing, vice president of Lenovo. “We recently completed China Mobile’s certification testing with the Lenovo A288t, which is based on Spreadtrum’s SC8810, and expect to achieve sales of more than one million units of this model in the third quarter, underscoring the popularity of low-cost smartphone devices. This is a milestone in our strategy of vigorously promoting 3G uptake in China by bringing Chinese consumers cost-effective mobiles that are comparable to the world’s top smartphones. The Lenovo A288t is commercially available to consumers now through online channels and retail stores at 599 RMB [US$ 94].”
Spreadtrum’s SC8810 integrates a 1GHz Cortex A5 processor, 3D/2D Mali graphics accelerator, 5 megapixel camera sub-system and supports resolution up to WVGA and wireless connectivity including Bluetooth, WiFi and GPS. The SC8810 delivers low power multimode TD-SCDMA/EDGE/GPRS/GSM operations with dual-mode automatic switching and supports TD-HSDPA at 2.8Mbps and TD-HSUPA at 2.2 Mbps. The SC8810 is delivered with turnkey Android and systems software that reduces the design time and resources required to deliver new handsets to market.
Currently Lenovo A288t is sold for ¥ 569 in retail [US$ 89/94] and as low as ¥ 479 in wholesale [US$ 75]. It has quite impressive parameters:
- Network type: Mobile TD-SCDMA, GSM
- Designs: straight
- Screen Size: 3.5 inches
- Resolution: (HVGA) 320 x 480 pixels
- Touch ways: capacitive screen (multi-touch)
- Pixels: 3.2 million pixels
- Operating System: Android the OS 2.3
- Memory: 256MB RAM
- Body[?ROM?] size: 512MB
- Type: Lithium battery, 1500mAh
- Weight: 105.0g
- GPS Module: Built-in GPS support A-GPS
Such aggressive exploitation of the SC8810 opportunity is no surprise as today came the report that China market: Lenovo takes up No. 2 in smartphone ranking, says Sino [DIGITIMES, July 26, 2012]:
Lenovo outperformed Huawei, ZTE, and Coolpad to capture the second-rank title in China’s smartphone phone market in June with a 13% share, trailing after only Samsung Electronics which took up a 15-16%share, according data compiled by Sino Market Research.
The launch of low-priced Android-based smartphones and cooperation with the top-three China-based telecom carriers contributed to Lenovo’s success in the smartphone segment, according to industry sources.
Lenovo’s capability to roll out a wide range of smartphone models targeting different price segments is also credited for its prevailing smartphone business, said the sources, adding that Lenovo plans to launch as many as 40 models of its Lephone lineup in 2012.
Following the steps of Lenovo, Acer has recently teamed up with China Mobile and China Unicom to promote its smartphones in China.
Note that Lenovo was probably the most successful vendor to adopt Mediatek’s MT6575 SoC that was leading the H1’12 smartphone market, see the Lenovo A60 related information in Boosting the MediaTek MT6575 success story with the MT6577 announcement [this Experiencing the Cloud blog, June 27, 2012] such as “China Unicom’s top selling handset in the sub-RMB 1000 [sub-US$ 157] smartphone category”. Today’s it.sohu.com article (of July 26, 2012) is providing further interesting details on that:
– Lenovo mobile phone whether a flash in the pan? Liu [Jun] said that sustainable success (translation by Google)
– 联想手机第二是否昙花一现？刘军称可持续成功 (Chinese original)
In 2010, the company launched the “Music Fund”, support for native application development business growth. “Music Fund” first phase of investment of 100 million yuan, managed by Legend Holdings, the company’s professional investment team operations. “Music Fund”, as the angel investors will focus on the development of start-up and early business support in the mobile Internet applications and services.
Liu [Jun, senior vice president of Lenovo Group, MIDH (Lenovo Mobile Internet and Digital Home Business Group) president] said in the dialogue with the Sohu IT, app store has more than 70,000 applications, nearly ten million monthly downloads, the latest data is Lenovo music application store has been downloaded more than 100 million times. Referring to the strategy to build a music store, Liu stressed, Lenovo insisted Android+ strategy on top of the native system in Android, plus Lenovo’s own software.
…
Liu predicted that Lenovo Mobile [climb up to the market] will be completed within a year or two beyond, to become the leader of the domestic market share. “Speed has become the core competitiveness of Lenovo Mobile, one of R & D speed. First, the speed of the supply chain.” Said Liu Jun, “smart phones than traditional mobile phones more like PCs, therefore, the product delivery time became particularly important, who first to enter the market who will have a head start. “
… Introduced, according to Liu Jun, Lenovo’s first best-selling models A60 color using MTK solution, from design to development to market in just five months, in accordance with the normal process, the same configuration of intelligent models often require 9-12 months of preparation time, Lenovo ahead of competitors in three or four months, in order to grab the opportunity, and accounted for the thousand Yuan machine market.
… Liu said Lenovo Mobile is already considering international expansion, and has taken a number of footsteps, such as Lenovo launched a smart phone in the Russian market. Accordance with the planning of the Lenovo Group, Lenovo will take the first emerging markets, after mature market strategy, the focus of this year, Russia, India, Indonesia and Vietnam.
At the end of the interview, Liu stressed that our primary task is to do the domestic market into the international market, Lenovo does not rule out in the interview a mergers and acquisitions strategy.
Previously, Lenovo executives repeatedly claimed that M & A has become the core competitiveness of the Lenovo Group. Look at the history of mergers and acquisitions from Lenovo, Lenovo has successfully completed and the integration of the United States IBM, NEC of Japan and Germany, Medion. Of course, the above integration is built around the PC expanded.
In the First Quarter 2012 Results Presentation[May 4, 2012] from Spreadtrum we could find the following slide:
and in the Q1 2012 Spreadtrum Communications, Inc Earnings Conference Call Transcript [May 4, 2012] (available via) the following remarks by Dr Leo Li – Spreadtrum Communications, Inc – Chairman and CEO: [in]
I just came back from meeting yesterday from China Mobile. … Actually I was told by the Chairman of China Mobile that more than 60 million [will be] centrally procured — actually that’s a minimum number. The actual number will be much higher. So I am very confident my take from China Mobile for recent meetings, executives, yes they are expanded the activities into TD-SCDMA and then they will resume the phase five or phase six type of development, further invested into infrastructure of TD-SCDMA, they will ramp up a much, much higher volume.
Actually next year they — I was told by both China Mobile and other experts in the industry that there will be more than 100 million units expected for TD-SCDMA. This year 80 million to 90 million. So this volume is — I think it’s real and I am very confident that the China Mobile — I was told by China Mobile people, by the way. It’s not that I just say that. It is — TD — it’s here to stay and it will grow very fast.
…
I think for open channel [i.e. whitebox vendors] will be 20 million-ish or 30 million-ish, will be actually more than 50% of smartphones and for centrally procured — according to China Mobile — I mean, today there is 50-50. So smartphones actually is at or more than 50% of the total TD shipment.
…
The reason open market [i.e. whitebox vendors] wants TD-SCDMA, you will understand why they want EDGE but TD is very interesting because remember China Mobile has more than 600 million subscribers and then the TD market actually — if you want to use the smartphones obviously you want to have some kind of connectivity, Internet communication and then you have only two choices.
One is W, the other is TD and then the W[CDMA] is more expensive, TD is cheaper. So that’s why — and also TD has this clear advantage over W[CDMA], is that you do not need to change the SIM card. You only change your hand set. You keep your same 2.5G SIM card and then purchase a TD smartphone or TD feature phone. You can enjoy, utilize TD, the wideband or faster data service.
…
To some extent, even I was told that in the Shenzhen market, maybe it’s kind of like revitalized by the TD-SCDMA or EDGE smartphone type of product, maybe help them to regain so-called strength to engage with the domestic market. Remember in the second half of last year it very rapidly went down — collapsing of (inaudible) market, right. I think I we’ve been asked by many of our Shenzhen customers, asking for both TD products and EDGE smartphone products.
…
I think [in] the second half the ramp up will be very robust. … both through the carriers … and open channels in the second half of the year, in particular third or fourth quarter, maybe more towards fourth quarter for the open market because people are preparing for the design right now.
…
… the 8810 and the 6820, those are our so–called single core. I think by the end of Q3 or early Q4 we will offer the dual core 1.2 GHz type of product and then by the end of this year or early next year we will offer quad core, again 1.5 GHz products both of which will be based on 40–nanometers product.
Also it was mentioned in the previous, Q4 2011 Spreadtrum Communications, Inc Earnings Conference Call Transcript [Feb 29, 2012] (available via) that:
… from what we’ve seen, that the open market segment starts growing in volumes or demand is obviously there. I’ll give you examples. There was the WCDMA type of smartphones, right, in China. However, when we go into detail for the WCDMA users, smartphone users, we’ve found that 70% of them are actually China Mobile users, meaning they actually cannot even use the 3G features, WCDMA features for those smartphones.
So obviously there is a natural demand for TD-SCDMA type of low-end smartphones, because for the same China Mobile users they can enable the 3G high-speed data type of applications. So both for feature phones and for smartphones, we’ve seen — from our customer we’ve seen a demand for TD-SCDMA type of products.
…
… we launched the — I think [in] Q4 of the — excuse me, 600 megahertz type of Android [see: World’s lowest cost, US$40-50 Android smartphones — sub-$100 retail — are enabled by Spreadtrum [in this Experiencing the Cloud blog, Dec 11, 2011 – Feb 27, 2012]]. One thing we didn’t anticipate was the market really don’t — they want the higher frequency one. I think we’ve seen an unusually fast market shift. I can tell you this. November, even October/November last year, even October, right, 600 megahertz type of Android smartphone was selling like hotcake. However, by November and then early December, all of a sudden the market demand for 1 gigahertz type of thing, because you want to have some kind of user experience with smartphones.
…
TD smartphones hasve become very attractive to general consumers and users of the TD type of — the TD market. For our TD-SCDMA 1 gigahertz Android, either Android 2.3 or later 4.0 type of things, ours are highly — maybe the highest level of integration. And like I said, maybe we are lowest cost structure in this segment.
That is Spreadtrum was able readjust its December 2011 strategy for the quickly changed market demand as is clearly visible from the following press releases as well:
Spreadtrum Introduces 1GHz Low-Cost Smartphone Platform For TD-SCDMA & EDGE/WiFi[Spreadtrum press release, Jan 4, 2012]
Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G and 3G wireless communications standards, today introduced a 1GHz Android smartphone platform for TD-SCDMA (SC8810) and EDGE/WiFi (SC6820) and announced that both products are now samplingwith customers. With these two new solutions, Spreadtrum is redefining the performance standard for low-cost smartphones, enabling OEMs to deliver 1GHz performance at US$100 retail prices.
“Our 1GHz Android platform sets a new bar for low-cost smartphone performance,” said Dr. Leo Li, Spreadtrum’s president and CEO. “The graphics and web browsing performance of the SC8810 and SC6820 compares favorably to one of the most popular smartphone models globally, delivering a high performance applications and gaming experience for consumers. This type of experience has previously been available only in mid- to high-end handset models and can now be delivered by OEMs in US$100 smartphone models. This will reshape the definition of and consumer expectations for a low-cost handset.”
Spreadtrum’s 1GHz platform is the most highly integrated, lowest power smartphone platform for the TD-SCDMA market. The solution delivers the lowest chip count with a multimode single-chip RF transceiver supporting TD-SCDMA, EDGE, GPRS and GSM and integrates power management. The platform’s Cortex A5 processor architecture delivers more than 40% lower power consumption compared to ARM11-based products and more than 70% lower power consumption than Cortex A9 products, delivering differentiated standby and talk time performance relative to other smartphone models.
Designed with 40nm CMOS silicon technology, the SC8810 and SC6820 baseband platforms are powered by a Cortex A5 1GHz processor and incorporate an advanced multimedia subsystem which includes a Mali GPU with 3D/2D graphics acceleration and supports high definition video playback, a 5 megapixel camera, a WVGA [800×480] touch panel and connectivity features including Bluetooth, WiFi and GPS. The SC8810 supports TD-SCDMA with HSDPA at 2.8Mbps, HSUPA at 2.2Mbps as well as quad-band GSM/GPRS/EDGE with dual-mode auto handover, while the SC6820 supports quad-band EDGE/GPRS/GSM. Both products combine silicon hardware with turnkey Android software that reduce both the design time and design resources required to deliver new handsets to market.
Spreadtrum’s expansion of its smartphone platform coincides with rapidly increasing demand in China for smartphone products. Industry analysts expect the smartphone market in China to exceed 100 million units in 2012, leading global demand for smartphone products.
Spreadtrum Announces Commercial Availability of its 1GHz TD-SCDMA and EDGE Android 2.3/4.0 Platforms [Spreadtrum press release, April 26, 2012]
More than 200 Smartphone Design Wins Lay Foundation for Second Quarter Volume Shipment
SHANGHAI, April 26, 2012 — Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today announced the commercial availability of the SC8810, Spreadtrum’s 1GHz TD-SCDMA Android platform, and the SC6820, Spreadtrum’s 1GHz EDGE/Wifi Android platform. Both the SC8810 and the SC6820 support Android 2.3 and Android 4.0 designs.
“We have now secured more than 200 design wins for our 1GHz TD-SCDMA and EDGE/WiFi Android platforms, and we are expecting to see volume shipments of more than one million units during the second quarter,” said Dr. Leo Li, president and CEO of Spreadtrum Communications. “With these designs, our customers are targeting a $50-100 retailsegment, unsubsidized.”
The SC8810 and SC6820 have been adopted by China and global OEMs on large scale to address the growing demand for low-cost smartphones in China and emerging markets. Both products support both Android 2.3 and Android 4.0 platforms, deliver best-in-class power consumption and demonstrate graphics/web performance on par with globally popular premium smartphone models, while supporting sub-$100 unsubsidized retail price points. The solutions are designed into handsets that are expected to launch commercially starting in May.
The company was also quick to rearrange its 2.5 offering for the feature phone market as there were quick changes as well:
Spreadtrum launches industry’s first 40nm 2.5G baseband [April 26, 2012]
SHANGHAI, CHINA: Spreadtrum Communications Inc. announced commercial availability of the SC6530, the industry’s first 2.5G baseband designed in 40nm CMOS silicon.
“The SC6530 is an industry first for the 2.5G market,” said Dr. Leo Li, president and CEO of Spreadtrum. “By leveraging the most advanced process node in the 2.5G segment, we are able to achieve higher performance at lower cost relative to competitive alternatives.”
The SC6530, in addition to its 40nm design, is the first 2.5G product from Spreadtrum to integrate its leading-edge baseband and RF transceiver technology into a single-chip, simplifying design and reducing overall solution footprint. The chip incorporates an ARM9 processor for high performance on a low-cost platform, and supports quad-band GSM/GPRS, triple-SIM function, HVGA display, H.264 decode and integrates an audio PA. The SC6530 couples its advances in performance, cost and integration with Spreadtrum’s mature, proven turnkey software.
The SC6530 is commercially available now. Spreadtrum expects to achieve volume shipments in May.
Spreadtrum’s three leading SoCs for the second half of 2012 products have the following parameters:
Source: the following Spreadtrum product pages
– SC8810 TD-HSPA/TD-SCDMA/EDGE/GPRS/GSM 1GHz Low-Cost Smartphone Platform
– SC6820 EDGE/GPRS/GSM 1GHz Low-Cost Smartphone Platform
– SC6530 GSM/GPRS Single-Chip Baseband/RF Transceiver for Multimedia Feature Phones
Notes:
1. WiFi and location technologies for SC8810 and SC6820 are according to Spreadtrum selects CSR connectivity and Location for Smartphone reference designs [CSR press release, Feb 27, 2012]. This is particularly relevant for SC6820-based EDGE/WiFi smartphones.
2. The ARM Cortex-A5 core has 1.57 DMIPS/MHz performance, while the ARM9EJ-S core 1.1 DMIPS/MHz performance. The former can be used in multicore SoCs as well with upto 4 Cortex-A5 cores (which Spreadtrum will exploit in its upcoming SoCs as well).
3. Dual-SIM Dual Standby solution became available as an option on Spreadtrum’s SC88xx series of TD-SCDMA basebands as well as future products, beginning in 4Q11. See: Spreadtrum Introduces First TD-Dual-SIM Dual-Standby Solution for TD-SCDMA [Spreadtrum press release, Oct 11, 2011]
Just this week came also the announcement of the – probably – highest end smartphone built on SC8810: Spreadtrum Powers Dual-SIM Dual-active TD-SCDMA Smartphone from Huawei [Spreadtrum press release, July 23, 2012]
Huawei T8808D completes China Mobile certification testing
Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today announced that Spreadtrum’s SC8810 1GHz TD-SCDMA smartphone platform is powering the Huawei T8808D, a dual-SIM dual-active smartphone for China Mobile consumers.
Huawei’s dual-SIM dual-activefeature provides consumers with maximum flexibility in how they manage operator service fees. The dual-SIM function allows consumers to choose the SIM that offers the lowest rate or the best network coverage given their location to make or receive calls, send text messages, or use data. Dual-active capability allows both SIMs to be used at the same time, enabling users to switch back and forth between two calls and use voice and data functions simultaneously.
Mr. Wang Weijun, Huawei Device’s president of its Chinese division, said, “T8808D, as Huawei’s first dual-SIM dual-active mobile phone, delivers experience innovation to China’s 3G TD-SCDMA market. In collaboration with Spreadtrum, Huawei will continue to promote popularization and development of smartphones to meet the diverse needs of Chinese consumers with a variety of high quality terminal products.”
“Spreadtrum is driving technology innovation with 2.5G/3G single-chip dual-card dual-standby technology,” said Dr. Leo Li, Spreadtrum’s president and CEO. “In cooperation with Huawei, we have enabled the first TD-SCDMA device based on Spreadtrum’s SC8810 smartphone platform with dual-SIM dual-active capability. This feature will enable consumers to select attractive 3G services while maintaining their original operator service packages. We believe that this flexibility provided to the consumer will help further promote the rapid development of China’s TD-SCDMA market.”
Note that Spreadtrum’s early December 2011 flagship SoCs were clearly inferior to its current flagships:
Additional source: the following Spreadtrum product pages
– SC8805G TD-HSPA/TD-SCDMA/EDGE/GPRS/GSM 600MHz Entry-Level Smartphone Platform
– SC6810 EDGE/GPRS/GSM 600MHz Entry-Level Smartphone Platform
Spreadtrum is also investigating alternative software platforms as shown by:
Spreadtrum Low-Cost Smartphone with HTML5 Operating System Demonstrated at Mobile Asia Congress 2012 [Spreadtrum press release, July 16, 2012]
Mozilla showcases Spreadtrum smartphone running Firefox OS, highlighting potential of HTML5 on low-cost smartphones
Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today announced that Spreadtrum’s SC8810 smartphone platform was selected by Mozilla to showcase its HTML5 operating system, Firefox OS, running on low-cost smartphone devices. Mozilla demonstrated the handset, based on Spreadtrum’s 1GHz SC8810 smartphone chip and running Mozilla’s Firefox OS, at its booth during Mobile Asia Congress 2012 held last month in Shanghai, China.
Firefox OS for mobile devices is built on Mozilla’s “Boot to Gecko project” which allows HTML5 applications to access the underlying capabilities of a phone, previously only available to native applications. “Firefox OS is another major step at Mozilla to bring its core values — openness, innovation and opportunity on the web — to users and developers on smartphone platforms,” said Dr. Li Gong, CEO of Mozilla Online Ltd and Mozilla Taiwan. “Our collaboration with Spreadtrum will help enable the power of this truly-open operating system to reach the billions of consumers in emerging markets who will be coming online as first-time smartphone users as well as existing smartphone users who are looking for greater value at lower cost.”
“We have been closely tracking the progress of the “Boot to Gecko project” since its inception and are very excited about Firefox OS as a concrete realization,” said Mr. Yi Kang, vice president of marketing at Spreadtrum Communications. “This type of solution has generated a lot of interest from operators, as the open-source HTML5 platform can provide them with complete control over the handset experience. We expect that the appeal of this platform to our customers will grow as the HTML5 application ecosystem expands.”
This is leading to speculations like: The Feature phone rises (again?) [EE Times, July 24, 2012]
…
Is it plausible? You bet. I already see signs that make such plots believable.
First is the emergence of Firefox OS. While the jury’s still out on yet another new mobile OS, this HTML5-based mobile operating system may have enough power to stir the debate.
$40 smartphone
Second, there is mounting market pressure (from handset vendors and operators alike) for low, low-cost smartphones. In an interview with EE Times in early June, Spreadtrum’s CEO Leo Li was on the record by saying that “our customers are ready to roll out $40 ‘real’ smartphones this year.”Every chip company and handset vendor is in the market for a solution that makes all levels of smartphones possible at low cost.Third, operators are hatching a plot to retain full control of the billing relationship with subscribers. “Currently, operator billing is available for Android for only a handful of operators, all in developed countries,” according to Daniel Gleeson, an analyst on Mobile at IHS Screen Digest. “Otherwise payments for apps, games etc. go through credit card companies. Obviously operators would prefer that this goes through them as they would get a small slice of that pie as well.”
Fourth, as legal wrangling escalates on Apple iOS vs. Google’s Android IP front, handset vendors are surreptitiously looking for an alternative system – possibly something available for free.
Fifth, let’s not forget about a huge global market — beyond the United States and Europe — that hasn’t embraced smartphones yet. This creates big openings for developers of new technologies and new players on the mobile market.
Above all, I’m convinced that feature phones (OK, “entry-level smartphones”) are not going away, largely because the definition of smartphones vs. feature phones, in my opinion, is fundamentally phony. At best, it’s based on a self-serving marketing pitch by smartphone proponents.
…
Boosting the MediaTek MT6575 success story with the MT6577 announcement — UPDATED with MT6588/83 coming in Q4 2012 and 8-core MT6599 in 2013
Follow-up: MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [Dec 12, 2012]
The MT6588 was recently renamed MT6589.
Update: Sold 70 million in the first three quarters, MediaTek smart chip dominates China [The Liberty Times, Taiwan, Oct 2, 2012] translated by Google/Bing with additional manual edits of my own 6588
Qualcomm (Qualcomm) last week launched a lower-priced smart phone chip against rival MediaTek (2,454), but according to the the recent shipment situation MediaTek shipped in China more than 70 million smartphone chips in the first three quarters, 10 million more than Qualcomm there, and become a smart-phone chip superpower in China. Merrill Lynch is bullish on MediaTek outlook because for Qualcomm’s “MSM8225Q” to shake up MediaTek’s leadership still will not be easy.
…
Barclays Capital analyst Lu Hang increased MediaTek smartphone chip shipments in the next two years to 180 million and 290 million, respectively.
…
Chinese mobile phone distributors circle recently the hottest topic number the high pass last week, low-cost quad-core mobile phone chip “MSM8225Q/MSM8625Q “, estimated price falls to $ 25, the market worry renewed price war, the impact MediaTek Maori. However, the latest released Merrill Lynch research report pointed out that the dual-core MediaTek chips and the two Qualcomm quad-core chips compared to each other competitively, plus “8225Q” mass production may be in March next year, by about one quarter behind the MediaTek quad-core chip “MT6589″ (formerly known as MT 6588), the cost of which is expected to be cheaper than the dual-core version, meaning MediaTek is still dominant.
…
Update: Taiwan chip designer MediaTek downgraded amid competitive pressure [WantChinaTimes.com, Oct 2, 2012]
… In a report dated Sept. 27, [independent financial services group] CLSA [Asia-Pacific Markets] said the market was optimistic about MediaTek’s gross margin in the second half of 2012 and in 2013 after the company forecasted a gross margin expansion for the third quarter of this year, ending 11 consecutive quarters of contraction.
However, MediaTek’s management told the press on Sept. 25 that the company’s quarterly gross margin growth is likely to remain flat in the fourth quarter of this year and will not expand until the second half of 2013, the report said. …
… One of the reasons investors were optimistic about MediaTek’s 2013 margin was that they thought its new quad-core MT6588 chip had no competition, as Qualcomm made only very high-end quad-core ICs, [CK] Cheng [a Taipei-based analyst at CLSA] said.
But the launch of the MSM8225Q will change that perception, Cheng said, noting that Qualcomm is aiming to release the chip for customer sampling by the end of 2012 and ship in volume in the first quarter of 2013.
Although the Qualcomm chip is scheduled to be launched a month or two later than MediaTek’s, Qualcomm’s price is likely to be 5% cheaper because of lower specifications, he said.
While MediaTek is believed to have superior products and better low-end smartphone ICs than Qualcomm, price does matter to Chinese handset makers, Cheng added.
“This is the main reason why MediaTek has been struggling to lift its average selling price and improve its margin since the third quarter of 2011, although it continues to offer faster processors and multi-core solutions,” he said.
“We don’t think MediaTek’s quad-core solution can reverse this trend,” Cheng said.
As for Chinese competitors, the increased production of RDA Microelectronics’s connectivity combo chip and Spreadtrum Communications’ 2G smartphone ICs will also weigh further on MediaTek’s margins and average selling price, Cheng said.
CLSA raised its forecast for MediaTek’s earnings per share by 3% for 2012 and by 8% for 2013, factoring in the company’s acquisition of its smaller rival MStar Semiconductor, but the brokerage maintained its target price of NT$250 (US$8.53) on the stock.
As of 10:26am Monday, MediaTek shares had dropped 4.62% to NT$310 (US$10.59) in Taipei.
Regarding actual Cortex-A5 and Krait-related information see on this blog the actual:
Core post: Qualcomm decided to compete with the existing Cortex-A5/Krait-based offerings till the end of 2012 [Sept 30, 2012]
Update: Mediatek [联发科] target price by Barclays is [NT$] 395 [Taiwan’s Commercial Times News, Sept 26, 2012] as translated by Google/Bing with additional manual edits of my own
Lu Hang [陆行] [principal analyst of semiconductors for Asia-Pacific at] Barclays Capital Securities [巴克莱资本证券 Taiwan Limited, 11F, 106 Xin-Yi Road, Sec. 5, Taipei, Taiwan, R.O.C. << from] yesterday (25) revealed, that MediaTek 28 nanometer quad-core A7 smartphone chip MTK6588 launch time is expected to advance to the fourth quarter of this year from the first quarter of next year! Because the price is very competitive, only 18 to 20 dollars, not only quadcore smartphone prices in mainland China will immediately fell to less than 150 dollars following that, the company will also have the opportunity to break into [the market of ] first-tier [i.e. global brand] manufacturers such as Samsung.
…
Lu Hang said that Mediatek’s biggest “backer” [in terms of stock market performance] is expected to be the launch of MT6588 (quad-core A7 [with] TD-SCDMA/WCDMA) and MT6599 (8 core of the ARM [with] LTE/TD-SCDMA/WCDMA) smartphone chips in 4th quarter [of this year] and in the next year, respectively.
Lu Hang believes that there are 5 items which will affect the profits of the overall market with MediaTek MT6588:
– First, the quad-core smartphone prices in mainland China can immediately be reduced from the current US$ 320 to US$ 150.
– Second, we will see in the near future more dual-core 1.7Ghz Krait-based MSM8960A [on one hand], and MSM8974 [on the other], which is same but with quad-core, rather than next to the launch of 8225Q.
– Third, in the fourth quarter of next year the estimated proportion of MT6583/MT6588 [shipments] within the total smartphone chip shipments will reach 50%, even the year after the fourth quarter launched MT6599 will also have 50% level, thus raised its shipment forecast value.
– Fourth, MT6588 will help to maintain the overall ASP at a level of more than $ 10, and customers can be [serviced via a] unified system design.
– Fifth, with the help of 13 million pixels CMOS the sensing power amplifier manufacturers will focus on mainland China and other emerging markets.
Important remark from Barclays Hires New Taiwan Investment Banking Head [The Wall Street Journal, Aug 19, 2012]:
Barclays … is … an advisor to chip design firm MediaTek Inc. on its proposed acquisition of a minority stake in MStar Semiconductor Inc. worth around $3.8 billion, announced in June, according to Dealogic.
Update: MediaTek will produce small amounts of MTK6588 in October [MTK mobile phone network, Sept 10, 2012] as translated by Google/Bing
Recently MediaTek message there are two who are more concerned about one thing, according to Taiwan media reports, the fastest possible production of MediaTek quad-core mobile processor chip MTK6588 will start in October this year a small amount, quantity should not be a lot, may be available only to large client proofing purposes. Rumored MediaTek MTK6588 manufacturing cost is even less than dual-core MTK6577. Quad-core MTK6588 is using 28 nm technology process to support tens of millions of pixels of camera, support for TD/WCDMA dual-mode network, support 1080P playback and recording, and is equipped with a PowerVR SGX 544 graphics processor.
According to show learned about MTK6588 before, Quad MT6588 or will before the end of trial production, mass production quantities listed in the first quarter of next year.
Update: Lenovo Selects MediaTek to Power New LePad Android Tablet [MediaTek press release, Sept 13, 2012], note: “The MT6577 is pin-to-pin compatible with the previously released MT6575” source: the MT6577 launch release
MediaTek Inc., a leading fabless semiconductor company for wireless communications and digital multimedia solutions, today announced that Lenovo has selected its highly integrated Android mobile platform for the new LePad A2107, dual-SIM 3G/HSPA tablet, which is shipping to customers globally.
The LePad A2107 provides high-speed cellular data and wireless connectivity and is designed for tablet users who want to be “connected always”. The A2107 uses MediaTek’s proven Android mobile platform consisting of the MT6575 and the MT6620 SoCs. The MediaTek MT6575 incorporates a 1GHz ARM® CortexTM A9 processor, a PowerVR™ Series5 SGX GPU (graphics processing unit) from Imagination Technologies, a 3G/HSPA modem and built‐in support for 3D displays and DTV‐grade multimedia capabilities by leveraging the company’s world‐leading DTV platform technologies. The MT6620 4-in-1 connectivity combo integrates an 802.11n Wi-Fi, Bluetooth 4.0+HS, GPS, and FM transmitter/receiver into a single chip with the world’s smallest footprint and leading low-power consumption. The MediaTek mobile platform is ideally suited to enable mobile device manufacturers like Lenovo, helping them to address the mid and entry‐level tablet market that demands global connectivity for today and tomorrow.
“Consumers are increasingly using tablets as a companion device to the PC and mobile phone to access media and information. We forecast that the tablet market will increase from 119 million in 2012 to 494 million by 2016(*),” said Mr. Mark Hung, Research Director at Gartner. “A company that has capabilities and technologies across different multi-screen platforms, from smartphones to DTV, should be well positioned to benefit from participating in the growing tablet market.”
*Source: Forecast: Media Tablets by Operating System, Worldwide, 2010-2016, 2Q12 Update, 4 July 2012, by Gartner
Update: the best smartphone based on the MediaTek MT6577 both technically and in terms of price is the MT6577-based JiaYu G3 with IPS Gorilla glass 2 sreen of 4.5” etc. for $154 (factory direct) in China and $183 [Sept 13, 2012], which is also the best example of The low priced, Android based smartphones of China will change the global market [this same ‘Experiencing the Cloud blog, Sept 10, 2012]
Update: MediaTek MT6577 Performance Review [mediateklab YouTube channel, Sept 3, 2012]
Update: New MediaTek chip efficiency: catching up with iPhone4s [MTK mobile phone network, Sept 6, 2012]
2012 International Semiconductor exhibition yesterday (5) days in Taipei debut, over the years, the first IC design Forum yesterday morning talk show, presenter mediatek Vice President Lu Guohong home 3G smart mobile phone chip specification level, noted that MediaTek MT6577 of the latest dual-core Smartphone chip efficiency, comparable with iPhone4s. By the show’s brief is not difficult to see, MediaTek, engaged global Smartphone chip leader Qualcomm momentum is high.
IPhone4s core processor for Apple A5, the design was based on Cortex-A9 dual core 1GHZ frequency of ARM architecture processors, Lu Guohong comparison list noted that mediatek MT6577 newest 3G Smartphone dual-core chips are used by An Mou with iPhone4s A9 dual core architecture, AP mobile core chips, baseband chip, RF chips and GPU architecture level par with iPhone4s.
Update: MediaTek Launches “Cool 3D”: A Comprehensive Suite of 3D Solutions for Smartphone Platforms [MediaTek press release, Sept 11, 2012]
MediaTek Inc., a leading fabless semiconductor company for wireless communications and digital multimedia solutions announced today the availability of “Cool 3D”, the world’s most complete 3D suite of solutions, for its smartphone platforms. Consumers continue to look for new features in smartphones, such as 3D capabilities, and a report by Global Industry Analysts, Inc, predicts that the global market for 3D enabled smartphones is projected to register 994 million units in annual shipments by the year 2018. Demand for this innovation will be driven by the increased availability of 3D content, such as games, videos and full length movies.
The “Cool 3D” suite for MediaTek smartphone platforms includes support for stereo 3D cameras and displays, real-time 2D-to-3D conversion and an optimal 3D user interface that is designed to provide consumers with a stunning 3D experience. Two distinguishing features are “3D Cool Shot” and “3D Cool Show”. MediaTek’s “3D Cool Shot” solution supports a cost-effective 5 MP, dual-lens camera, which achieves 1080P, 24 FPS 3D images, giving users a high-definition visual experience. The MediaTek smartphone platforms are the first of their kind in the industry to integrate the functionality of the dual-lens bridge devices into the main smartphone platform, reducing system cost and saving precious board area. The “3D Cool Show” technology substantially improves the stereo 3D effect with anti-fatigue capabilities, and real-time transformation between 2D/3D modes, allowing for convenient switching between the 2D and 3D displays. These solutions, which leverage MediaTek’s established 3D technologies from the DTV and Digital Home markets, are aimed at creating an optimal stereo 3D display with a custom-tailored 3D interface.
“One consequence of the rapid developments in the smartphone market is product homogenization or the ‘all smartphones look alike’ phenomena. Creating product differentiation has become one of the biggest challenges for the mobile phone industry “said Ching-Jiang Hsieh, President of MediaTek. “From Dual-SIM to 3D capabilities, MediaTek has always pushed technological innovation in our platforms, enabling rich and compelling devices and solutions. By working together with our customers, we hope our industry-leading, ”Cool 3D” suite of solutions can lead the wave of 3D smartphone popularity, allowing even more consumers to enjoy an extraordinary 3D experience.”
The “Cool 3D” suite of capabilities is already enabled on MediaTek’s shipping MT6575 single-core and MT6577 dual-core platforms. All future launches of MediaTek smartphone solutions will support these 3D capabilities.
Updates: Shares of MediaTek jump on positive shipment target revision [Focus Taiwan, Aug 1, 2012]
… As of 11:15 a.m., shares of MediaTek had added 6.67 percent to NT$272.00 (US$9.07), off an early high of NT$272.50, with 23.82 million shares changing hands. … MediaTek announced Tuesday at an investor conference that it had raised its target for smartphone chip shipments to 95 million units, from a previous estimate of 75 million units, mainly because of strong demand from China.
In the second quarter, the IC designer shipped 21 million smartphone chips, higher than the 18 million to 20 million previously forecast. The company said it would ship at least 30 million smartphone chips in the third quarter.
… MediaTek said it expects its gross margin will improve to 41-43 percent for the third quarter from 40.8 percent in the second quarter. …
MediaTek hikes 2012 target smartphone chip shipments [DIGITIMES, Aug 1, 2012]
… The company expects its MT6575 and MT6577 chips to account for 60% of total smartphone chips sales in the third quarter and 80% in the fourth. …
MediaTek eyes Q3 double-digit revenue growth [Taipei Times, Aug 1, 2012]
MediaTek Inc (聯發科), the nation’s largest handset chip designer, said yesterday revenue in the third quarter of this year is projected to grow between 13 percent and 18 percent from the second quarter, following the launch of new products and strong demand for smartphone chips.
That would mean a quarterly revenue of between NT$26.50 billion (US$883.33 million) and NT$27.70 billion, compared with NT$23.44 billion in the second quarter.
…
MediaTek said second-quarter revenue rose 19.5 percent sequentially and 11.7 percent from the same period last year, primarily driven by the fast-growing smartphone demand in China.
However, gross margin for the quarter was 40.8 percent, down 1.3 percent and 5.1 percentage points from the previous quarter and the same period of last year respectively. The company attributed that fall to fierce price competition in the market.
…
Total smartphone chip shipments are likely to reach 95 million units this year, of which between 50 percent and 60 percent will be 3G chips and the remainder 2G chips …
MediaTek a product roadmap leaked: Quad-core code-named MT6588 [MTK Smartphones Network (MTK手机网), July 27, 2012]
From a recently obtained electronic forum information abroad we see that the MT6585 code communicated earlier for the quad-core MediaTek smartphone chipset is wrong. The true model code is MT6588. It is built on the 28nm process in order achieve higher performance level than the dual-core MT6577 technology.
MT6588 has a 4-core CPU [Cortex-A7 (!), see on the second slide below] clocked at 1GHz [1.XGHz rather, see the included slides below], supports dual-channel at maximum 1066Mbps, has an integrated multimode modem for WCDMA [+ it is delivering HSPA+ WCDMA performance (!) vs just HSPA with MT6577/75, see the first slide below] and TD (!), that is it can support both Unicom [latest upgrade to HSPA+ service, see the news in the original post materials much below] and China Mobile 3G network, supports an up to 13 MP camera and 1080P video playback. It finally has a GPU upgrade with SGX544, doubles the resolution to 1280×800 HD level, and has 32KB L1 cache and 1MB L2 secondary cache.
Along the MT6588 there is a 28nm dual-core version, MT6583 on the MediaTek 2012 product roadmap. From the chipset parameters it is evident that MT6583 is a scaled down version of MT6588. It has 2 cores less, the camera support is 8MP, the video decoder is of 720P level, and the resolution is down to 854×480.
It is understood that MT6588 and MT6583 will be in production in the first quarter of 2013, early next year the fastest.
Note: No search reveals the source for the above information.
MediaTek to launch quad-core smartphone solutions in 1Q13, says paper [DIGITIMES, Aug 6, 2012]
MediaTek is expected to launch its first quad-core smartphone solution, the MT6588, in the first quarter of 2013, according to a Chinese-language Liberty Times report. The MT6588 features a quad-core 1.5GHz or 1.7GHzCortex-A7 CPU, supporting WCDMA and TD-SCDMA technologies.
The MT6588, which features a 13-megapixel camera, also supports 1080p video playback and a display resolution of 1280 by 800 pixels. The chip will be built using a 28nm process, the paper said.
Additionally, MediaTek will also roll out a 28nm dual-core solution, the MT6583, during the same quarter. While the dual-core CPU of the MT6853 will also run at 1.5GHz or 1.7GHz, the chip will support a resolution of 854 by 480 pixels targeting a segment different from that of the MT6588, the paper indicated.
End of updates
The original content:
- About the just four months old MT6575-based market
- MediaTek provided general MT6575 information
- Some history leading to MT6575
- Turmoil on the H1CY12 market in China:
International and local brands, as well as white-box vendors are repositioning for the most lucrative CNY500 (US$79) to CNY1,000 (US$157) smartphone market of H2CY12 and on
Note: the PowerVR SGX Series 5 GPU used for MT6577 is said to be by 3d parties SGX531, See: SoC list on Imagineers blog, or Lenovo (indirect).
Greater China mobile solutions – From silicon to software [DIGITIMES Research, June 8, 2012]
Abstract
The China mobile market has developed rapidly, with smartphone shipments reaching 69 million units in 2011 and tablet shipments soaring from around one million in 2010 to some 10 million in 2011, and potentially exceeding 20 million units in 2012. As consumer spending power increases, local vendors are focusing on more market tiers and makers have begun to make a play for the high-end market.
Updates: China market: Nearly 195 million handsets shipped in 1H12 [DIGITIMES, July 10, 2012]
There were 194.913 million handsets shipped in the China market during the first half of 2012, consisting of 106.874 million (54.83%) 3G handsets in 801 models and 88.039 million (45.17%) 2G handsets in 1,298 models, according to statistics published by the China Academy of Telecommunication Research (CATR) under the Ministry of Industry and Information Technology (MIIT).
Of the shipment volume, 94.855 million or 48.67% were smartphones in 822 models of which 801 models or 97.44% were based on Android. China-based vendors accounted for 75.16% of the half-year shipment volume, and international vendors 24.84%.
The monthly shipment volume of smartphones exceeded that of feature phones for the first time in April 2012, with the corresponding proportion increasing to 56.9% in June.
China market: Breakdown of total handset shipment volume, 1H12 Generation Technology standard
Number of models
Shipment volume (m handsets)
3G WCDMA (China Unicom)
476
53.099
CDMA2000 (China Telecom)
174
28.197
TD-SCDMA (China Mobile)
151
25.578
2G GSM
1,272
81.915
CDMA1x
26
6.076
Source: CATR under MIIT, compiled by Digitimes, July 2012
– China smartphone market 2012: Trends and analysis [DIGITIMES Research, July 3, 2012]
Abstract
The China handset market has exhibited strong growth, with the total number of mobile users in the country reaching 980 million people according to figures from the Ministry of Industry and Information Technology (MIIT), an increase of 130 million over the 2010 figure. Digitimes Research estimates that mobile user numbers could top 1.13 billion in 2012.
Digitimes Research estimates that the China handset market reached some 390 million units in 2011, representing 16% growth on 2010; the market is likely to grow to 430 million units in 2012, representing further growth of 9%. Thanks to the expansion of 3G service coverage and further falls in budget smartphone prices, the share of the handset market accounted for by smartphones is likely to reach 32% or around 143 million units, 70% of which will be Android handsets.
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, while Nokia 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 brands such as Xiaomi, TCL, Gionee, Tianyu, Oppo and BBK will see shipments of no more than a few million handsets.
End of updates
China-based white-box vendors expected to ship 200 million smartphones [DIGITIMES, April 17, 2012]
China-based white-box vendors, mainly due to the availability of inexpensive new chip solutions, have been increasing the production of smartphones, with the total shipment volume expected to reach 200 million units in 2012, according to industry sources in Taiwan.
Taiwan-based MediaTek is offering the makers its MT6575 a chip solution for use in entry-level smartphones in the first quarter of 2012 and will offer the MT6577, a solution for high-level smartphones, in the middle of the third quarter of 2012, the sources indicated. MediaTek will ship 50-70 million chips to China-based white-box vendors to account for nearly 30% of smartphones to be shipped by these vendors in 2012.
In addition, Qualcomm has strengthened its marketing in the China market by offering turn-key solutions to white-box vendors, with prices for a chips lowered to US$6, the sources cited eMedia Asia as indicating.
China-based white-box vendors sell more than 60% of their smartphone output to overseas markets, including 2.5G models for markets where deployment of 3G networks is not mature yet, the sources indicated. White-box vendors are expected to see larger market demand if their production costs for entry-, medium- and high-level smartphones drop to US$60, US$85 and US$130 respectively, the sources pointed out.
Huawei adopts MediaTek dual-core chip for smartphones, says report [DIGITIMES, June 27, 2011]
MediaTek’s new MT6577, which uses a dual-core 1.2GHz Cortex A9 CPU, has been adopted by China-based Huawei for as many as four of its upcoming smartphone devices, according to a Chinese-languageCommercial Timesreport.
The new MediaTek MT6577 solution is scheduled to enter volume production starting July, the Chinese-language Economic Daily News (EDN)reported last week (June 22). The chip is built using 40nm process technology.
MediaTek previously upward revised the prediction for its total smartphone-IC shipments in 2012. The firm now expects to ship about 75 million smartphone chips this year, compared to the 50 million estimated initially.
From:
MediaTek Launches Dual-Core MT6577 Smartphone Platform [MediaTek press release, June 27, 2012]
MediaTek Inc., a leading fabless semiconductor company for wireless communications and digital multimedia solutions, today announced the availability of the MT6577, a dual-core platform developed specifically for sub-$200 smartphones, the fastest growing segment of the global smartphone market. The MediaTek MT6577 features a dual 1GHz Cortex™-A9 application processor from ARM, a PowerVR™ Series5 SGX GPU (graphics processing unit) from Imagination Technologies, MediaTek’s proven 3G/HSPA modem, and runs the latest Android 4.0 “Ice Cream Sandwich” operating system. By integrating a dual-core application processor architecture widely deployed in the majority of today’s premium smartphones, the MT6577 boosts application and browser performance by up to 40% compared to single-core platforms, bringing unprecedented levels of user experience to mid- and entry-level smartphones.
“MediaTek’s existing HSPA smartphone platforms – the MT6573 and MT6575 – have been extremely well-received by customers and consumers worldwide, and are currently shipping with major international brands such as Lenovo, TCL/Alcatel, and other top tier Chinese OEMs,”said Ching-Jiang Hsieh, President of MediaTek. “The MT6577 adds the next level of performance and enhanced user experience to the MediaTek smartphone family, delivering enhanced user interactivity, mobile connectivity and rich multi-media experience previously only available on high-end devices. Consumers everywhere will now benefit from the affordable, high-performance devices enabled by the MT6577. MediaTek is proud to be in the vanguard of companies enabling the democratization of smartphones.”
“Dual-core processors account for over 20% of current smartphone processor shipments, with these devices being mostly in the premium segment and addressed by standalone application processors. MediaTek’s new MT6577, with integrated dual-core processors and 3G/HSPA modem is well suited to bringing similar user experiences to the fast-growing mid and entry smartphone segment which is forecast to grow from under 200 Mu in 2012 to over 500 Mu in 2016” said Stuart Robinson, Director, Handset Component Technologies service at Strategy Analytics.
The MT6577 is designed to deliver rich multimedia experiences, with an 8MP camera, support for up-to high-definition 1080p video playback and the ability to support high-resolution displays up to HD720 (1280×720) resolution. The platform also pre-integrates MediaTek’s leading 4-in-1 connectivity combo that provides support for dual-band 802.11n Wi-Fi, BT4.0, GPS and FM. The MT6577 is pin-to-pin compatible with the previously released MT6575, allowing handset manufacturers to easily produce multiple tiers of devices leveraging a single PCBA hardware development effort.
The MT6577 dual-core platform is currently being incorporated into smartphone devices by MediaTek’s leading global customers, and the first smartphone models based on this new chipset are expected to ship commercially in Q3 2012.
MediaTek MT6577 [MediaTek100 YouTube channel, July 19, 2012]
MediaTek expects increase in smartphone chip sales [Taipei Times, June 14, 2012]
MediaTek Inc (聯發科) chairman Tsai Ming-kai (蔡明介) said yesterday that he still expects an increase in demand for smartphone chips in the second half of this year, despite a slowing global economy.
…
Last year, faced with competition that was fiercer than ever, MediaTek posted NT$13.62 billion (US$454 million) in net profit, or NT$12.35 earnings per share (EPS), down sharply from the NT$30.94 billion in net profit, or NT$28.44 EPS recorded in 2010.
Tsai said the worst phase was almost over for the IC designer and the company was gearing up to broaden its product portfolio and win orders to strengthen its profitability.
On the back of robust demand for smartphones, MediaTek has forecast smartphone chip shipments in the second quarter would range between 18 million and 20 million units, up sharply from the 10 million recorded in the first quarter.
For all of this year, the IC designer anticipates smartphone chip shipments to touch 75 million units from rising demand from China and other emerging markets.
MediaTek president Hsieh Ching-jiang (謝清江) said at the shareholders’ meeting that the company would not focus just on the Chinese market, but also target global demand, while operating a total of 23 offices worldwide.
About the just four months old MT6575-based market
ZOPO ZP200 3D Movie Playing [AndroidSale YouTube channel, March 22, 2012]
Source: MTK6575 Cpu Andorid >> on fastcardtech.com
Note that even for global wholesale there are much more products of the above kind, as you could see from the table below (the ones which are also on the above diagram are highlighted in yellow). Click here for a PDF version in case you want to click on the links:
There are a couple of recent Chinese startups capitalising on the MT6575 opportunity. The most successfull among them is probably ZOPO Mobile Communications-equipment Ltd. in Shenzhen, China, introducing itself as:
ZOPO Company is founded in 2012, which engages in research, development, produce, marketing and service of mobile intelligent terminal products. The ZOPO ZP200 model as” The China‘s first Glasses-Free 3D dual sim smart mobile phone ” has been a hot Star in China mainland.
Zopo ZP100 MT6575 4.3″ qHD $174 street price [ARMdevices.net YouTube channel, April 9, 2012]
I’m back in Shenzhen! Here getting ICS installed on my Zopo ZP100 MT6575 [ARMdevices.net YouTube channel, April 9, 2012]
The author of the above videos (Nicolas Charbonnier, aka Charbax, see also a recent interview with him about his videoblogging) went through quite a tour about the new MT6575-based entries in the first half of April:
– $158 5″ WVGA MT6575 Cortex-A9 Smartphone presented by www.yooe.com.cn
– Zhenai A900 waterproof MT6575 smartphone
– $79 3.5″ MT6575 Orient Smart Development Ltd
– MT6575 phone shown by Quality Industrial Co Ltd
– $142 Galaxy Nexus clone, runs ICS on MT6575, with 4.65″ LCD
– Hyundai Brilliant H950, 5.2″ MT6575 phone runs Ice Cream Sandwich at the HKTDC Electronics Fair
– $140 5.2″ MT6575 Android phone by Daza Electronics at the HKTDC Electronics Fair
– ICS on 5″ MediaTek MT6575 Dolphin A80 phone [from Yooe] (note that this is represented on both the above diagram and the table)
– Shenzhen Factory Entrance (note that this is also where Yooe is manufacturing, quite likely)
– The Shenzhen Speakers Factory (the same factory was manufacturing speakers during the visit)
Then he returned in the end of May with these video reports:
– Yooe MT6575 phone now selling
– MT6575 Cutepad 5″ phone
He was showing off some of the latest gadgets that he found in Shenzhen in this video as well: Interview with Nicolas Charbonnier at Linaro Connect, Hong Kong [jasonderose YouTube channel, June 4, 2012]
MediaTek provided general MT6575 information
MT6575 [MediaTek product page, March 29, 2012]
Dual-SIM smartphone platform for the mainstream mid and entry level market
MT6575 is MediaTek’s new dual-SIM smartphone platform for the mainstream mid- and entry-level smartphone markets. Enabling browsing, gaming and multimedia features that will delight consumers, support the latest Android releases and the industry’s best dual-SIM performance for voice and data calls, the MT6575 is MediaTek’s most advanced and competitive smartphone platform to date.The MT6575 combines a software and hardware reference design solution to enable dramatically faster time to market at a highly competitive price point. The MT6575 is set to redefine the performance of mainstream smartphones.
Features
- 1GHz ARM CortexTM-A9 CPU allows for outstanding web browsing and application performance
- High-performance 3D gaming and UIfeatures enabled by PowerVRTM SGX Series5 GPU
- High-definition 720p videoplayback and record
- Per-packet Rx antenna diversity
- 8 MP camerawith enhanced image processing capabilities
- Up to high-resolution qHD (960×540) displays
- Supports both portrait and landscape display modes by built-in dedicated HW
- Features stereo 3D video playback and advanced 2D-to-3D image/video conversion
- No lost calls on either SIM – even with active data transmission on either SIM
- Better Power Efficiency – Up to 500 hours of standby and over 8 hours of talk-time on 3G, 45 hours of audio playback and 6 hours of 3D gaming.
MediaTek – MT6575 [a featured product page, July 5, 2012]
Redefining performance of mid/entry smartphones in 2012
Overview
MT6575 is MediaTek’s new dual-SIM smartphone platform for the mainstream mid- and entry-level smartphone markets. Enabling browsing, gaming and multimedia features that will delight consumers, support the latest Android releases and the industry’s best dual-SIM performance for voice and data calls, MT6575 is MediaTek’s most advanced and competitive smartphone platform to date.
Key Features
The MT6575 platform offers a 1GHz ARM® CortexTM-A9 processer for outstanding web browsing and application performance, a proven 3G/HSPA modem and runs the latest “Ice-Cream Sandwich” Android 4.0 release. Other key features include:
♦ Superior CPU, GPU, and System Performance
– High-performance 3D gaming and UI features enabled by PowerVRTM SGX Series5 GPU♦ Richest Multimedia Features
– High-definition 720p video playback and record
– 8 MP camera with enhanced image processing capabilities♦ World-First Integration Of Stereo 3D Display Controller And 3D Video Processing
– Features stereo 3D video playback and advanced 2D-to-3D image/video conversion♦ Best Display Picture Quality
– Brings the same level of LCD-TV picture quality to mobile devices♦ Leading Dual-SIM Features and Performance
– No lost calls on either SIM♦ Lowest BOM costs
– Highly integrated platform includes the world’s smallest 4-in-1 connectivity combo (MT6620) that allows for small size and lower BOM costs♦ Better Power Efficiency
– Up to 500 hours of standby and over 8 hours of talk-time on 3G
– Up to 45 hours of audio playback and 6 hours of 3D gamingThe MT6575 is currently being incorporated into the latest smartphone offerings by many of MediaTek’s leading customers and the first smartphone models based on this new platform have already hit the market in the first quarter of 2012.
MediaTek – MT6620 [a featured product page, Sept 21, 2011]
Highly Integrated 4-in-1 WLAN/Bluetooth/GPS/FM Combo Solution
Overview
MediaTek MT6620 integrates WLAN, Bluetooth, GNSS and FM, to provide the best performance and most convenient single chip. MT6620 implements advanced and sophisticated Radio Coexistence algorithms and hardware mechanisms. MT6620 also supports a single shared antenna (2.4 GHz antenna for Bluetooth and WLAN, 5 GHz for WLAN and 1.575 GHz for GPS).
Enhanced overall quality for simultaneous voice, data and audio/video transmission on mobile phone and tablet PC can be achieved. The small size with low power consumption reduces PCB layout area. The software package “Symphony” comes with many advanced features.
Key Features
Low power, small size and high performance
WLAN/Bluetooth/GPS/FM solution WLAN 802.11 a/b/g/n dual band single stream (20/40MHz) with dual band LNA and 2.4GHz PA integration
Bluetooth 3.0+HS and V4.0 Low Energy support with LNA and PA integration
Support GPS/Galileo/QZSS/SBAS with -165dBm tracking sensitivity FM Tx/Rx with RDS/RBDS support
Support Wi-Fi Direct and WAPI hardware encryption
Support FM over Bluetooth
PLC (Packet Loss Concealment) technology for superior audio quality
Advanced AlwaysLocateTM location awareness technology with ultra low power consumption
Flexible host interfaces support include single SDIO interface for all wireless functions
MediaTek Launches MT6575 Android Platform [MediaTek press release, Feb 13, 2012]
MediaTek Inc., a leading fabless semiconductor company for wireless communications and digital multimedia solutions, today announced the availability of the MT6575, its 3rd generation platform for mid and entry‐level Android smartphones. The MT6575 platform offers a 1GHz ARM® CortexTM‐A9 processer, a proven 3G/HSPA modem and runs the latest “Ice‐Cream Sandwich” Android 4.0 release.
“We expect significant growth in entry and mid‐level smartphones, with wholesale prices under US$190, over the coming years. We forecast that this segment will almost triple in size from 191 million shipments in 2012 to 551 million by 2016. At that time, we also expect approximately 75% of those entry and mid‐level smartphones to ship to emerging markets” said Neil Mawston, Executive Director, Global Wireless Practice, at Strategy Analytics. The MediaTek MT6575 platform is ideally suited to cater to a wide range of smartphone devices that target this growing segment in multiple markets around the world.
“Leveraging the energy‐efficient, high‐performance Cortex‐A9 processor in Android smartphone applications is an extremely compelling proposition and a great proof point for the scalability of the ARM architecture. During 2011 the Cortex‐A9 processor has powered many of the most up‐to‐date and highest performance smartphones. The proliferation of Cortex‐A Series processors into lower cost, mainstream mobile devices will deliver a significant uplift in the user experience,” said Laurence Bryant, Director of Mobile, ARM.
For mid‐range smartphones, the MT6575 platform supports 720p high‐definition video playback and recording with an 8MP camera and qHD (960×540) high‐resolution displays via a PowerVRTM SGX Series5 GPU (graphics processing unit) from Imagination Technologies. In industry‐standard benchmark testing, the MT6575 offered over 35% improvement for browser applications and over 20% improvement in graphics capabilities for gaming when compared to competitors’ best offerings in these segments.
Additionally, the MT6575 platform provides built‐in support for advanced features such as integrated capabilities to drive 3D displays and proprietary algorithms for mobile display picture processing. In sum, the MT6575 provides DTV‐grade picture quality on a smartphone by leveraging MediaTek’s proven technology as a world‐leading DTV platform provider.
The MT6575 platform also supports entry‐level smartphones with smaller display sizes, lower resolution, less memory and reduced multimedia requirements. In addition, the MT6575 boasts the world’s lowest power consumption and most comprehensive integration of hot swap dual‐SIM capability compatible with the Android platform. With the MT6575 dual‐SIM solution, consumers will no longer have to worry about dropped calls while active data transfer is happening on either SIM card, and will experience automatic resumption of data exchange once calls on the other SIM card have ended, in addition, with the hot swap feature enabled, the SIM card can be inserted without switching off the mobile.
The 3G/HSPA modem integrated in the MT6575 platform has been qualified at major 3G operators world‐wide.
The MT6575, delivered in 40nm CMOS technology, builds on the proven track record of the 2nd generation MT6573 platform – i.e., the platform that powers the Lenovo A60, China Unicom’s top selling handset in the sub‐RMB 1000 (approx. $160 USD) smartphone category.
“We are very excited by the prospects of the MT6575 platform. It combines MediaTek’s innovative chipset technology with our proven reference design and complete software solution model. We believe this platform is ideally suited to enable our customers to address mid and entry‐level smartphone cost and performance needs on a global basis – today and tomorrow,” said Ching‐Jiang Hsieh, President of MediaTek.
The MT6575 is currently being incorporated into the latest smartphone offerings by many of MediaTek’s leading customers and the first smartphone models based on this new platform will hit the market in the first quarter of 2012.
MediaTek’s Full Line of 3G Platforms Aims to Address Mid to Entry-Level Smartphone Market [MediaTek press release, Feb 27, 2012]
MediaTek Inc., a leading fabless semiconductor company for wireless communications and digital multimedia solutions today announced the availability of the MT6515, its next generation TD smartphone solution for China sub-RMB 1000 (approx. $160 USD) smartphone market. The MT6515 TD smartphone platform solution integrates a powerful 1GHz ARM CortexTM-A9 processor, 3D hardware, and runs the latest “Ice-Cream Sandwich” Android 4.0 release. MediaTek’s latest foray into the 3G smartphone market enables high system performance with low power consumption and high cost-performance ratio that raises the bar for what consumers will come to expect from a TD-SCDMA smartphone experience.
According to a recent report released by the market research firm, Strategy Analytics, in the 3rd quarter of 2011, China overtook the US as the world’s biggest smartphone market. Sub-RMB 1000 smartphones were one the fastest growing segments of this market, due in large part to multiple purchases of these models by China’s three major operators in response to consumer needs. As a result, China has seen a sharp rise in smartphone sales starting in the beginning of 2011. MediaTek, with its years of experience serving the industry, attention to continuous innovation, and recent investments in the arena of 3G technologies, has been perfectly poised to meet the growing needs of this new market. With its cost effective, yet high performance smartphone platforms, MediaTek, along with industry partners (i.e. mobile device manufactures and operators), has emerged as a leader in the recent explosion of popularity of mid and entry-level smartphones.
As a member of China’s TD Industry Alliance (TDiA), MediaTek has invested heavily in the R&D of TD chipsets following the initial release of the TD-SCDMA standard. MediaTek’s signature high integration, yet low power consumption platforms have been introduced into TD operators’ handset customization strategies, and MediaTek currently offers a TD mobile device platform series uniquely customized to meet the needs of the Chinese market. As such, it is little surprise that among the mobile devices included in China Mobile’s multiple terminal procurement lists, one finds a variety of end user products that run on MediaTek-driven TD platforms.
Today, MediaTek announced the availability of the MT6515, its next generation TD smartphone platform for the sub-RMB 1000 smartphone market. The platform offers a powerful 1GHz ARM CortexTM-A9 processor, 3D hardware, and runs the latest “Ice-Cream Sandwich” Android 4.0 release. Multi-media applications and Internet speed have also been optimized. Additionally, the MT6515 TD-SCDMA offers a complete China Mobile 3G package, thus helping increase the speed in which manufacturers can get their products to end-users.
In the field of WCDMA and 3rd generation wireless standards, MediaTek has continued to build upon its proven track record of offering complete mobile device solutions. Worthy of note is the MT6573, MediaTek’s 3.75G smartphone platform released last year. This platform powered the Lenovo A60, China Unicom’s top selling handset in the sub-RMB 1000 smartphone category, and an important factor in the uptick of popularity in phones within this market segment.
Building on the success of the MT6573, MediaTek has released the MT6575, which is designed to run on the latest Android driven platforms. The MT6575 offers a 1GHz ARM® CortexTM-A9 processor and runs the latest “Ice-Cream Sandwich” Android 4.0 release. The platform supports dual-SIM solutions, and its web performance, power consumption rates, and multimedia features all meet or exceed industry-leading benchmarks, thus guaranteeing that the MT6575 will deliver a significant uplift in the smoothness of user experience. The MT6575 is currently being incorporated into the latest smartphone offerings by many of MediaTek’s leading customers and the first smartphone models based on this new platform will hit the market at the end of this month.
“Using innovative products to help our customers accurately reflect the needs of the market has always been one of MediaTek’s greatest strengths, and we have continued with this tradition of excellence as we expand into the growing smartphone market. MediaTek’s innovative chipset technology, with our proven reference design and complete software solution models, will ensure that our customers find a place in the growing mid and entry-level smartphone market of tomorrow where, along with power and functionality, cost effectiveness has become a must-have feature,” said Ching-Jiang Hsieh, President of MediaTek.
MediaTek Announces World’s Smallest 4-in-1 Combo Chip Wi-Fi/Bluetooth/GPS/FM Solution [press release, July 21, 2011]
MediaTek Inc., a leading fabless semiconductor company for wireless communications and digital multimedia solutions, today announced its most advanced wireless combo chip designed to enrich multimedia experience with small footprint and long battery life for smartphones, tablets and portable devices. The MediaTek MT6620 integrates 802.11n Wi-Fi, Bluetooth 4.0+HS, GPS, and FM transmitter/receiver on a single chip with superior size and power benefits, making it the best solution for smartphones, tablets, and portable devices.
Bringing connectivity features to mainstream products such as smartphones, tablets, portable media players (PMPs), gaming devices, and personal navigation devices (PNDs), the MediaTek MT6620 integrates Wi-Fi, Bluetooth, GPS, and FM, to provide superior performance and rich features. The MT6620 implements advanced and sophisticated radio coexistence algorithms and hardware mechanisms to enhanced overall quality for simultaneous voice, data, and audio/video transmissions. Its small size significantly reduces PCB layout area and simplifies design efforts. In addition, the MediaTek Symphony™ software package supports all advanced wireless features on the Android operation system. BlueAngel™ Bluetooth software currently can support up to 15 profiles to fulfill most user scenario and bring customer product differentiation.
The MT6620 supports all the leading standards: dual band 2.4GHz and 5GHz 802.11n Wi-Fi with WiFi Direct and Hotspot, Bluetooth 4.0+HS for simultaneous dual mode Bluetooth BR/EDR/HS and Bluetooth Low Energy (BLE) operations, GPS with Galileo/SBAS/QZSS and patent pending AlwaysLocate™ technology, FM radio with both transmitter and receiver, making the MT6620 ideal solution for portable devices that require superior performance and long battery life. The MT6620 passes 802.11n WiFi certificate including WPS2.0, WAPI and Bluetooth 4.0+HS on both the controller and MediaTek BlueAngle™ host software.
SR Tsai, General Manager of the Wireless Connectivity Business Unit at MediaTek said, “MediaTek is one of few in the industry to offer 4-in-1 SoC solution for a wide range of mobile applications. As a result of this attention to mobile device manufacturers’ needs, the MT6620 was designed to meet strict requirements, such as low power modes to conserve battery life, a reduced footprint to fit into small, sleek handset designs, and low cost to enable mass market mobile Wi-Fi enabled handsets. We believe that the MT6620 is optimized for mobile devices at the hardware, firmware, and driver levels to speed time to market of innovative designs.”
The MT6620 has entered mass production and is shipping to lead customers in sizable quantities now.
MT6620 Product Highlights:
– Low power, small size and high performance Wi-Fi/Bluetooth/GPS/FM solution
– Wi-Fi 802.11 a/b/g/n dual band single stream (20/40MHz) with dual band LNA and 2.4GHz PA integration
– Bluetooth 4.0+HS support with PA integration
– Supports GPS/Galileo/QZSS/SBAS with -165dBm tracking sensitivity
– FM Tx/Rx with RDS/RBDS support
– Supports Wi-Fi Direct and WAPI hardware encryption
– Supports FM over Bluetooth
– PLC (Packet Loss Concealment) technology for superior audio quality
– Advanced AlwaysLocateTM location awareness technology with ultra-low power consumption
– Flexible host interfaces including single SDIO for all wireless functions
Some history leading to MT6575
Stephen Elop’s (Nokia CEO) “Burning Platform” memo leaked by Engadget [Feb 8, 2011]:
In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.
White-box handset makers gearing up smartphone and 3G handset production, MediaTek to benefit [DIGITIMES, Dec 3, 2010]:
White-box handset makers in China are gearing up their production of in-house designed smartphones and 3G handsets, a trend which will benefit Taiwan-based IC design house MediaTek. China’s white-box handset industry in 2010, has begun to place more emphasis on upgrading specifications and added value to enter the high-end segment, and has allocated more resources on development of intellectual property.
Even the China government has voiced its support for the white-box industry. Yang Xueshan, Deputy Minister of the Ministry of Industry and Information Technology (MIIT), recently said that the government will support the white-box business model as long as there is no infringement of IP.
Yang pointed out that from imitation to innovation is a process white-box handset makers have to go through, citing China-based telecom equipment maker Huawei Technologies as a success story. Huawei’s foray into the handset sector began with low-cost products and the company now has research and development capability, he said.
Supporting the white-box business model, given that no patents are infringed, is a good way to protect intellectual property rights as well as provide the most cost-effective products to consumers, Yang added.
More information: MediaTek as the catalyst of the white-board ecosystem
section within 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]
Look at the MTK History :MTK6575 Heading Toward 1Ghz smartphone for below $200? [Lady Panda, April 14, 2012]
…
Let’s look at the MTK History:
They first created chipsets for general phone such as MT6225, MT6235 based on their own MTK RTOS. MTK RTOS is known for fast, features rich and very customizable interface with most features support such as Dual SIM Dual Standby, Dual Camera(Front/Rear), ,MicroSD-HC up to 16-32GB, WiFi, Bluetooth (A2DP/Stereo and most other profiles), Very good J2ME support, Analog/digital DVB, FM Radio. A lot of features rich and very affordable handsets become to appear on marketfor prices below $100.
Then they were one of the first to create a dual SIM WCDMA chipset MT6268 which had even better J2ME support and also 3g features such as WCDMA data and 3G Video calls support. A lot of Dual SIM 3G handsets started to appear for about $150. They all were fully unlocked by default and without any contracts. It provided handsets with a lot of features for a very low price.
Then back in 2009 they have decided to enter the smartphones market with the new MT6516 chipset which provided a solution for fully featured yet low price Windows Mobile 6.5 and Android 2.2. handset with a price tag of below $150 while maintaing the popular Dual SIM Dual Standby Quad Band GSM feature, TV, FM, Bluetooth,GPS/AGPS, HQ Youtube playback, Capacitive Multi-touch screen, Dual Camera with flashlight,Android Market, Voice Search. This chipset was not a high performance gaming chipset, But it’s performancewas surprisingly well and exceeded even a lot of high end expensive chipsets.
Then in 2011 they have released the new MT6573 chipset. Now the MT6573 Android 2.3.4 phone cost $150-$210 and they still maintain the Dual SIM Dual Standby with Quad Band GSM and WCDMA/HSPA support. This chipset, Which main ArmV6 core is clocked at 600-650Mhz, integrate the PowerVR Series 5 GPU so it can run fluently games like Angry Birds, Fruit Ninja, Asphalt 5 and many more games. Most of them have 5-8MP back camera with HD video shoting and flashlight supported, HD Videos decoding. Still maintain the analog tv, Capacitive Multi-touch screen, FM Radio, 32GB MicroSD Slot,Bluetooth, GPS/AGPS, WiFi, Voice search and a lot of other advanced smartphonefeatures. The performance is very impressive for such a low price.
…
Turmoil on the H1CY12 market in China:
International and local brands, as well as white-box vendors are repositioning for the most lucrative CNY500 (US$79) to CNY1,000 (US$157) smartphone market of H2CY12 and on
Digitimes Research: Huawei, ZTE, Lenovo and Coolpad to take 40% of China smartphone market in 2012 [June 27, 2012]
The development of China’s smartphone market has drawn much attention, particularly in 2012, during which the local brands Huawei Device and ZTE will make it to the global top-10 smartphone vendor list. Digitimes Research expects two other brands, Lenovo and China Wireless Technologies (Coolpad), to see their smartphone shipments surpass the 10 million mark in 2012.
In the domestic market, Huawei and ZTE both have been trying to expand their share in the mid-range to high-end segments, resulting in a decline in shipments of low-priced models. While smartphone shipments by Huawei and ZTE will continue increasing in 2012, the two vendors are expected to see the ratios of their shipments to total smartphone shipments in China decline to 12% and 9%, respectively in 2012 from 16% and 11% of a year earlier.
Lenovo, which has been maintaining a close relation with chipset solution vendor MediaTek and has been focusing on the entry-level segment, is expected to ship 12 million smartphones in 2012, Digitimes Research estimates.
Coolpad is migrating to the smartphone sector rapidly and is likely to ship 11.1 million smartphones this year, accounting for 70% of its total handset shipments.
Digitimes Research predicts that shipments of smartphones in China will top 140 million units in 2012, with Samsung and Apple accounting for a combined 40% share. Huawei, ZTE, Lenovo and Coolpad are expected to together take up another 40%, limiting the development potential of other brands.
Taiwan IC designers looking to orders from China-based white-box smartphone vendors [DIGITIMES, June 20, 2012]
Taiwan-based IC design houses have rekindled their hope that they can cooperate once again with China-based white-box handset makers to make a strong presence in China’s smartphone market thanks to the offering of inexpensive chipset solutions from MediaTek and MStar Semiconductor and the rising popularity of smartphone models priced at around CNY1,000 (US$158), according to industry sources.
The availability of the mature and inexpensive chipset solutions and reference designs has lowered the barriers for white-box makers to also jump into the smartphone segment, the sources indicated.
Taiwan-based IC design houses which made a fortune previously by supplying related 2.5G ICs to the white-box manufacturing sector, have begun building up their inventory to meet anticipated demand from China-based white-box makers, noted the sources.
Given that international handset brands have a tendency to cooperate with a limited number of IC vendors, shipments to white-box handset makers in China will serve as a growth driverfor Taiwan-based IC vendors in the second half of 2012, said the sources.
Taiwan-based LCD driver IC vendors Novatek Microelectronics, ILi Techonology (Ilitek), Sitronix Technology, Orise Technology, and controller IC vendors Elan Microelectronics, Egalax-empia Technology (EETI), as well as analog IC makers Richtek Technology, Global Mixed-code Technology and Anpec Electronics will bebenfit from the re-rise of white-box handset makers, commented the sources.
China market: Small-scale makers and retail channels to stage comeback in smartphone segment [DIGITIMES, June 15, 2012]
Small-scale handset makers as well as retail handset channels in China may stage a comeback in the smartphone segment optimizing the availability of low-priced models, according to industry sources.
Under the aggressive marketing strategy and heavy subsidies launched by telecom carriers, sales of smartphones have been strong in the replacement market, said the sources, but added that the top carriers have been dominating the market with their customized models, affecting sales in retail channels, said the sources.
However, the availability of reference designs for the production of smartphones has enabled a large number of small- and medium-size handset makers in China to also jump into the segment, triggering a sharp decline in prices of smartphones, noted the sources.
Prices of unlocked smartphones are expected to drop to below CNY500 (US$79) soon, making it affordable for consumers to pick up smartphones at retail shops without signing subscription contracts with carriers, the sources commented.
China market: Qualcomm pushing sales of 3G solutions to small- to medium-sized handset makers [DIGITIMES, June 12, 2012]
Qualcomm has geared up efforts to push sales of its smartphone solutions to small- to medium-sized handset makers in China, attracting a number of vendors shifting away from the comparable solutions offered by Taiwan-based MediaTek, according to industry sources.
To counter Qualcomm’s strategy, MediaTek has also stepped up sales of its 3G solutions to first-tier handset makers in Chinainstead of its previous focus on small- and medium-sized vendors, the sources indicated.
In addition to Qualcomm and MediaTek, other chipset vendors including ST-Ericsson, Intel, Spreadtrum Communications and MStar Semiconductor, are exerting all-out efforts to grab the handset solution market in China, said the sources, adding that competition between Qualcomm and MediaTek is the fiercest.
But a large number of branded and white-box handset makers in China still prefer Android- and 3.5G-enabled solutions as well as dual-core solutions from MediaTek, since they have established mature business relationships with MediaTek, the sources commented.
Digitimes Research: Smartphones to take 32% of China handset market in 2012 [June 8, 2012]
Digitimes Research estimates that China handset shipments will grow to 430 million units in 2012, with smartphones likely to take 32% of the market, equivalent to 143 million handsets. Given that China already accounted for 22% of global handset shipments in 2011 and the country’s mobile user base is projected to hit 1.13 billion people in 2012, the potential of the country’s smartphone market is staggering.
The boom in China’s smartphone market that began in 2011 was sparked by the expansion of 3G service coverage and falling budget smartphone prices. Carriers have driven this change in an attempt to bolster flagging ARPUs, which stood at just CNY37 (US$6) per month for 2G users of China Unicom in 2011; the ARPU for the carrier’s 3G subscribers was a much more respectable CNY110, according to an upcoming Digitimes Research Special Report on China’s smartphone market.
Carriers have been able to entice China’s price-conscious consumers to make the 3G switch chiefly by offering extremely cheap smartphones priced at around CNY1,000, a figure which could yet fall as low as CNY599 in 2012. This concentration in the low end of the market is a major contributing factor to the dominance of Android in China.
However, consumers in this sector are not willing to spend heavily on profitable 3G services and ARPU for 3G users is already falling steeply. At the current rate of decline, the 3G ARPU will fall to an estimated CNY82 during 2013. China’s smartphone switchover may therefore not prove to be quite as lucrative as the country’s carriers had hoped.
Android 4.0 in entry-level to mid-range smartphones to rise in 2H12 [DIGITIMES, June 7, 2012]
While Android 2.x versions take up about 90% of Android-based smartphones, Qualcomm and MediaTek have begun to offer Android 4.0 common chip solutionsfor smartphone vendors and therefore version 4.0 is expected to be widely adopted for entry-level to mid-range smartphones in the second half of 2012, according to industry sources.
Because Samsung Electronics, HTC, LG Electronics and other vendors have launched Android 4.0 smartphones, and have offered upgrades for older models in the second quarter of 2012, the penetration rate of Android 4.0 has risen from 2.9% in April to 7.1% currently, the sources indicated.
China market: Entry-level smartphones to feature dual-core CPUs in 2H12 [DIGITIMES, June 5, 2012]
Smartphones featuring dual-core CPUs are expected to begin penetrating into the CNY1,000 (US$157) smartphone segment in China in the second half of 2012 thanks to dual-core reference designs offered by MediaTek and Qualcomm, according to industry sources.
Other chipset solution vendors such as ST-Ericsson are also expected to enter the dual-core segment soon, indicated the sources.
Dual-core smartphones may even become the mainstream white-box models in the second half which will squeeze market share from single-core models, and hence triggering a price war, the sources said.
In addition to pushing the clock speeds of CPUs from 1GHz to 1.2GHz, China-based handset makers will also adopt 4.3-inch displays for mainstream entry-level and mid-range modelsinstead of the prevailing 4-inch screens, added the sources.
Prices of single-core smartphones in China are likely to fall below CNY500 in the second half, which may result in a dumping of entry-level and mid-range smartphones by China-based handset makers in the global market, the source commented.
Qualcomm scores points in promoting QRD in China [DIGITIMES, June 4, 2012]
Qualcomm began to offer Qualcomm Reference Design (QRD), a platform for developing smartphone components including memory, sensors, touch screens, cameras and RD devices as well as application software, for vendors and makers in China two years ago and has made significant achievements in boosting inexpensive smartphones by helping its China-based partners, according to company senior vice president and Greater China president, Wang Xiang.
QRD aims to reduce input of resources in development and time to market for China-based smartphone vendors and makers, Wang said. 28 models of smartphones have been launched by 17 vendors under QRD, and more than 100 models are being developed for launch in 2012, Wang indicated.
Qualcomm has set up four China branches in Beijing, Shanghai, Shenzhen and Xi’an and two R&D centers in Beijing and Shanghai, according to company senior vice president and QRD director, Jeff Lorbeck.
Qualcomm will focus promotion of QRD in China to reduce component costs in 2012 and plans to help China-based partners tap emerging markets in India, Latin America and Southeast Asia through providing technical support in 2013, Wang said.
Lenovo aims to triple smartphone shipments in 2012 [DIGITIMES, June 4, 2012]
Lenovo plans to launch as many as 40 new models of smartphones in 2012, aiming to ramp up its smartphone shipments to 18 million unitsin the year compared to six million units shipped in 2011, according to the company.
Lenovo aims to roll out a lineup of smartphones with different price tags to meet demand from all segments of customers, the company said. Smartphone models priced below CNY1,000 (US$157) currently account for 30% of smartphones sold in China, models priced at CNY1,000-1,499 take another 30%, and those priced above CNY1,500 make up the remaining 40%, Lenovo indicated.
Lenovo saw its smartphone shipments in China grow 21-fold on year in the first quarter of 2012, enabling the company to take up a 10% share in the quarter compared to just 1% a year earlier. The vendor also captured the fourth-rank position in the smartphone segment in China in Aprilwith a 10.21% share, said China-based Sino Marketing Research.
WCDMA models account for 49% of all smartphones sold by Lenovo currently, followed by CDMA EV-DO models at 26% and TD-SCDMA models at 18%, the company noted.
Lenovo also plans to roll out dual-core models in the second half of 2012, using MediaTek’s MT6577 solutions and Qualcomm’s QRD 8×25 and 8×26 solutions, according to industry sources.
Lenovo’s handset OEM partners, including Foxconn International Holdings (FIH), Compal Communications and Wistron NeWeb, are expected to benefit from increasing shipments by Lenovo, the sources indicated.
China market: China Unicom gearing up for sub-CNY800 WCDMA smartphones [DIGITIMES, June 4, 2012]
China United Network Communications (China Unicom), the only WCDMA mobile telecom carrier in China, will promote sale of WCDMA smartphone models priced at below CNY800 (US$127) to attract 2G subscribers to shift to WCDMAin the China market, according to the company.
Of handsets sold at CNY599 or below in the China market in April 2012, TD-SCDMA models took up 24%, CDMA2000 EV-DO models 15% and WCDMA models 1%, according to China-based Sino Market Research. Of handsets sold at CNY600-799, TD-SCDMA, CDMA2000 EV-DO and WCDMA accounted for 20%, 10% and 6% respectively, Sino indicated.
The demand for smartphones in the China market in 2012 is forecast at 200 million units and 44% of which, that is, 88 million units, will be sold at below CNY800, meaning big opportunities for China Unicom, the company said.
In addition to inexpensive smartphones, China Unicom has cooperated with international vendors including LG Electronics, Nokia, HTC, Motorola Mobility as well as China-based vendors K-Touch and Xiaomi Technology to launch mid- to high-level models in the China market for market segmentation, the company noted.
China Unicom has been upgrading HSPA+ service and has deployed 21Mbps HSPA+ networks in 56 cities in China, the company said. While there have been 245 models of HSPA+-enabled terminal devices around the world, China Unicom plans to launch price-competitive models of such devices, the company indicated.
China market: First-tier local brands shifting focus to CNY1,000-1,500 smartphones [DIGITIMES, June 1, 2012]
First-tier local brand handset vendors in China have begun adjusting their strategy to focus on marketing mid-range smartphoneswith prices ranging CNY1,000-1,500 (US$157-236) instead of the previous focus on sub-CNY1,000 models, according to industry sources.
The launch of sub-CNY1,000 smartphones by the top-3 telecom carriers as well as the roll-out of CNY500 models by second-tier handset makersin China has induced top-tier vendors to shift their focus, said the sources.
The second-tier handset makers have been engaged in cut-throat competitionin order to win open bids released by the top-3 telecom service companies, noted the sources, adding that China Mobile has even launched a sub-CNY200 model.
Top-tier vendors, including Coolpad, ZTE, Huawei and Lenovo, are expected to reduce the number of their the sub-CNY1,000 smartphones and will be more active to participate in bidding for CNY1,000-1,500 models, said the sources.
The move by China-based top smartphone brands to the mid-range segment will see them take on some international players including Samsung Electronics, HTC, Nokia, Motorola Mobility which have ventured into the CNY1,000-2,000 segment, the sources commented.
Rumor: China’s Smartphone Prices to Drop to RMB 600 [Marbridge Daily]
Southern Daily, 5/31/12
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.
According to a source within Lenovo Mobile, ST-Ericsson released its U8500 dual-core chipset platform in Q1 2012, and handset models using the platform are available from overseas brands at prices no higher than RMB 2,000. Domestic brand handset models featuring the chipset are expected to reach the market in Q2 and Q3 priced at approximately RMB 1,500. Chinese internet company Shanda Interactive will soon release its own branded smartphone using the U8500 priced at RMB 1,199. In addition, Qualcomm will launch its MSM7x27A and MSM7x25A low-priced chipset platforms this year, which will feature in a number of RMB 1,000 smartphones from domestic handset manufacturers.
China-based smartphone vendors to compete with big players with ultra-thin models [DIGITIMES, May 29, 2012]
China-based handset vendors have ventured into the production of ultra-thin smartphones, enhancing their strength to compete with international brands in the global market, according to industry sources.
China-based vendor Oppohas highlighted this manufacturing trend in China by releasing the Finder recently. The Android 4.0-based Finder has a thickness of only 6.65mm.
The Finder also features a 1.5GHz dual-core processor, 1GB RAM, 16GB ROM, a 4.3-inch Super AMOLED Plus screen, an 8-megapixel rear camera and a 1.3-megapixel front camera, for a suggested retail price of about CNY3,500 (US$555)in China.
Oppo, one of the top-10 local brandsin China, focuses on the production of smartphones priced above CNY2,000 instead of the prevailing sub-CNY1,000 models, the sources noted.
Thickness of ultra-thin models by brands
Vendor
Model
Thickness
OS
Oppo
Finder
6.65mm
Android 4.0
Huawei
Ascend P1 S
6.68mm
Android 4.0
Motorola
Razr XT910
7.1mm
Android 2.3
HTC
HTC One S
7.95mm
Android 4.0
LG Electronics
Prada 3.0
8.5mm
Android 2.3
Samsung
Galaxy S III
8.6mm
Android 4.0
Apple
iPhone 4S
9.3mm
iOS5
ST-Ericsson seeking cooperation with China-based low-cost smartphone vendors, says paper [DIGITIMES, May 28, 2012]
ST-Ericsson has won adoption of its U8500 chip solution by China-based Shanda which will launch a smartphone for sale at about CNY1,000 (US$158) in the China market on June 6, according to China-based 21st Century Business Herald.
ST-Ericsson is seeking adoption of its chip solutions by more China-based vendors looking to launch smartphones priced at CNY1,000-2,000, the paper indicated. Smartphones for sale at CNY1,000-2,000 accounted for about 50% of all smartphones sold in the China market in 2010 and 2011, with ZTE, Huawei, and Coolpad the leading vendors, the paper said.
China market: 4 local vendors amid top-5 in 3G smartphone market in April [DIGITIMES, May 25, 2012]
In the China market, Samsung Electronics recorded the largest market share of 22.75% for 3G smartphones in April 2012, followed by four China-based vendors — Coolpad with 11.17%, Huawei with 10.92%, Lenovo with 10.21% and ZTE with 9.28%, China Economic Netcited China-based Sino Market Research as indicating.
Other international vendors’ market shares were 8.52% for Apple, 4.14% for Motorola Mobility, 3.95% for Nokia and 2.82% for HTC, the report indicated.
The increased market occupation by China-based vendors was mainly due to selling of their entry- to mid-level 3G smartphone models through contract-bundled sales by China Mobile, China Telecom and China Unicom, the report said.
MediaTek lands 2.5G handset solution orders from Nokia, say sources [DIGITIMES, May 21, 2012]
MediaTek reportedly has landed orders for 2.5G handset solutions from Nokia with shipments to begin in the third quarter of 2012, according to industry sources. MediaTek declined to comment.
Given that global demand for 2.5G handset solutions still reaches one billion units a year, there is room for MediaTek to further expand sales in the segment although the company’s sales of 2.5G solutions have been turning weak recently, indicated the sources. MediaTek shipped 550 million 2.5G solutions in 2011.
With a revised goal of shipping 75 million 3G solutions in 2012, mostly to first-tier handset makers in China, MediaTek is expected to post strong revenue growth in the second half of the year, the sources noted.
Smartphone vendors considering other chip sources due to short supply of Qualcomm Snapdragon S4 [May 15, 2012]
Qualcomm has seen supply of its Snapdragon S4 processors fall short of increasing demand and the situation has pushed international smartphone vendors, including Samsung Electronics, LG Electronics, HTC and Sony Mobile Communications, to consider other suppliers, according to Taiwan-based handset supply chain makers.
The short supply of Snapdragon S4 is because Taiwan Semiconductor Manufacturing Company’s 28nm foundry capacity is not sufficient and/or the yield rate of the process is not high enough, the sources pointed out.
MediaTek looks to ship 75 million 3G solutions in 2012 [DIGITIMES, May 9, 2012]
MediaTek is expected to ship 75 million 3G handset solutions in 2012, a 50% increase from 50 million units it projected earlier, according to industry sources.
Insufficient capacity of the 28nm process at Qualcomm has forced China-based Huawei Device and ZTE, in addition to existing client Lenovo, to source 3G solutions from MediaTek, contributing to a sharp increase in orders for the IC design house, indicated the sources.
Huawei’s and ZTE’s 3G smartphones built based on MediaTek’s MT6575 solutions are expected to hit the market at the end of the second quarter or early in the third quarter of 2012, said the sources, adding that the new M6575 models from Huawei and ZTE will directly take on Lenovo’s comparable model, the A750, in the China market.
Meanwhile, MediaTek has reported consolidated revenues of NT$7.942 billion (US$269 million) for April, decreasing 3.48% on month but increasing 4.19% on year. For the January-April period of 2012, consolidated revenues amounted to NT$27.557 billion, up 0.25% on year, said MediaTek.
China-based white-box vendors expected to ship 200 million smartphones [DIGITIMES, April 17, 2012]
China-based white-box vendors, mainly due to the availability of inexpensive new chip solutions, have been increasing the production of smartphones, with the total shipment volume expected to reach 200 million units in 2012, according to industry sources in Taiwan.
Taiwan-based MediaTek is offering the makers its MT6575 a chip solution for use in entry-level smartphones in the first quarter of 2012 and will offer the MT6577, a solution for high-level smartphones, in the middle of the third quarter of 2012, the sources indicated. MediaTek will ship 50-70 million chips to China-based white-box vendorsto account for nearly 30% of smartphones to be shipped by these vendors in 2012.
In addition, Qualcomm has strengthened its marketing in the China market by offering turn-key solutions to white-box vendors, with prices for a chips lowered to US$6, the sources cited eMedia Asia as indicating.
China-based white-box vendors sell more than 60% of their smartphone output to overseas markets, including 2.5G models for markets where deployment of 3G networks is not mature yet, the sources indicated. White-box vendors are expected to see larger market demand if their production costs for entry-, medium– and high-level smartphones drop to US$60, US$85 and US$130 respectively, the sources pointed out.
China market: Motorola moving into CNY1,000 smartphone segment, says paper [DIGITIMES, April 13, 2012]
Motorola Mobility has ventured into the CNY1,000 (US$159) smartphone segment in China with the launch of its XT390 smartphone in cooperation with China Unicom, according to a Chinese-language Commercial Timesreport.
The XT390 is also the first Android-enabled smartphone rolled out by Motorola using MediaTek’s 6575 chipset solution, indicated the paper.
Motorola has outsourced the production of the XT390 to Arima Communications and may place orders for up to one million smartphones with the Taiwan-based handset ODM in the second quarter of 2012, said the paper.
China market: Top-4 local vendors to keep entry-level smartphone prices around CNY1,000 in 2012 [DIGITIMES, March 30, 2012]
The top-4 China-based branded handset vendors – Huawei Device, ZTE, Lenovo and Coolpad – will continue to develop the CYN1,000 (US$159) smartphone segment in China in 2012 and will prevent their channel operators from engaging in price-cutting competition with white-box vendors, according to industry sources.
More newcomers have entered the smartphone sector in China, propelled by the launch of related reference designs for smartphones by MediaTek, MStar Semiconductor, Qualcomm and Spreadtrum Communications, raising the possibility that prices of the entry-level smartphones may drill downward to a range of CNY400-700 compared to the prevailing prices of around CNY1,000, the sources noted.
Despite increasing pricing competition from white-box handset makers as well as international brands including Nokia and Samsung Electronics, the top-4 local brand vendors are unlikely to lower their prices further until makers in the handset component supply chain are able to reduce their quotes substantially, said the sources.
To maintain competitiveness and brand images, the top-4 vendors are expected to roll out models with higher hardware specifications for the CNY1,000 segment, the sources commented.
Shipments of smartphones in China are expected to grow 40-60% on year in 2012, the sources estimated.
China-based white-box handset players may face bankruptcy [DIGITIMES, March 29, 2012]
China-based white-box handset players are suffering as larger local players ZTE, Lenovo and Huawei are aggressively entering the CNY1,000 (US$159) smartphone segment, while first-tier smartphone brands such as Samsung Electronics and Nokia are also reducing their prices. White-box players are expected to see a 30% drop in their overall sales in 2012 with several hundred expected to go bankrupt, reshuffling China’s handset industry, according to sources from smartphone players.
As consumers in China have increasing demand for Internet connectivity, while their recognition of brand names is also rising, the white-box handset market in China, which is mainly focused on low price and design flexibility, is shrinking rapidly.
Since China-based telecom carriers are aggressively providing subsidies to ZTE, Huawei and Lenovo to allow these players to lower their smartphone prices, while white-box players are losing their advantages in price as they are unable to acquire cheap components due to their shipment scale, it has helped larger smartphone players to narrow the price gap with white-box handsets.
With more brand vendors pushing into the mid-range and entry-level smartphone market, the average price of entry-level smartphones is expected to reach CNY700 (US$100), a level almost the same as cost. In addition, white-box players’ advantages in design flexibility is also no longer attracting consumers as the size of the touch screen has already become the major criteria for consumers.
China market: Chip vendor competition heating up for 1GHz processors used in inexpensive smartphones [DIGITIMES, Jan 17, 2012]
As China Mobile, China Telecom and China United Network Communications will procure large volumes of inexpensive smartphones equipped with 1GHz processors, there is increasing competition among handset chip vendors Qualcomm, Taiwan-based MedaTek, Broadcom and China-based Spreadtrum Communications, according to Taiwan-based handset makers.
While the four vendors and others have offered 1GHz chip solutions supporting 3.5G, Android, multimedia and dual-mode functions, the Qualcomm-developed MSM7227A [Cortex-A5 based @ upto 1GHz]solution has gained the upper hand, followed by MediaTek-developed MT6575, the sources indicated. In contrast, Spreadtrum and Broadcom are competing for orders by virtue of differentiation in function, with the former focusing on TD-SCDMA, a China-developed 3G standard, solutions and the latter’s solutions featuring integration of NFC (near field communication), Bluetooth 4.0, 802.11n and GNSS (global navigation satellite system) functions, the sources pointed out.
In the China market, Nokia, Samsung Electronics, Motorola Mobility, Sony, HTC as well as China-based vendors Huawei Device, ZTE, Lenovo, TCL, Haier and Hisense will launch inexpensive entry-level smartphones equipped with 1GHz processor in 2012, the sources noted. China-based vendors are expected to release ODM or EMS orders to Taiwan-based makers, the sources indicated.
Tech investment banking expertise to strengthen the unique value focus of growing the HTC brand and to achieve high growth again
Updates #2:
– HTC sees revenues down sharply on-year in July [DIGITIMES, Aug 7, 2012]
HTC saw its revenues dip 16.7% on month and 44.5% on year to a five-month low of NT$25 billion (US$834.45 million) in July. For the first seven months of 2012, revenues amounted to NT$183.9 billion, decreasing 32.8% from a year earlier, according to company filing with the Taiwan Stock Exchange (TSE).
… With HTC estimating its revenues to reach only NT$70-80 billion in the third quarter [US$2.3-2.7 billion], it is unlikely to see HTC’s revenues rebound to NT$30 billion in August and September, the Chinese-language Commercial Times said on August 7 report.
– HTC sees fall in 3Q12 sales with lower margin [DIGITIMES, Aug 3, 2012] [US$3.5 billion]
HTC reported second-quarter consolidated revenues of NT$91.04 billion (US$3.04 billion), in line with its targeted NT$91 billion, which had been cut from its original target of NT$105 billion [US$3.5 billion]. Gross margin and operating margin for the second quarter came to 27.01% and 9%, respectively.
Second-quarter sales represented a 34.3% increase, but were 26.8% lower than those posted in the second quarter a year ago. Meanwhile, gross margin and operating margin showed improvement from the prior quarter, but decreases compared to the same period of 2011.
HTC generated net profits of NT$7.4 billion, or NT$8.90 a share, in the second quarter of 2012. Profits declined more than 50% from a year earlier, but rose over 60% on quarter.
– HTC adjusts workforce [DIGITIMES, July 25, 2012]
HTC has been adjusting human resources in its production, R&D, and sales teams. Industry sources believe corporate restructuring is necessary as HTC’s sales have been declining.
Sales of the HTC One series have not been picking up due to tough competition in Europe and North America. HTC has been adjusting its global workforce by shutting down the R&D team in North Carolina, US, and offices in Brazil. Some members of the R&D team have been laid-off and there will be no renewals of contracts for 600 workers. The adjustments have impacted close to 1,000 staff.
– Nokia, RIM and HTC to see smartphone shipments continue sliding in 2H12, say sources [DIGITIMES, July 9, 2012]
Nokia, RIM and HTC are expected to see their smartphone shipments, as well as market share, continue declining in the third and fourth quarters of 2012 due to a lag in migration to new platforms and weakening competitiveness of their products, according to industry sources.
Despite efforts initiated by Nokia, RIM and HTC to fend off competition from Apple and Samsung Electronics, RIM and HTC have reported lower than expected shipments for the second quarter of 2012, while Nokia is expected to see its second-quarter smartphone shipments drop below 10 million units, said the sources.
Although HTC managed to post a sequential gain in shipments in the second quarter, its second-quarter smartphone shipments barely reached nine million units, pointed out the sources.
HTC is expected to see its shipments stay flat or drop to eight million units in the third quarter and slip further to seven million in the fourth quarter, according to a Chinese-language Commercial Times report.
End of updates #2
Preliminary reading: HTC: the most promising ICT brand in Taiwan [Oct 18, 2010 – July 5, 2011; then with major updates on Feb 7, 2012
Source: HTC, Investor Relations
Updates #1: The MWC introduced HTC One series unveiled (for the first time) a proprietary HTC ImageChip image signal processor (thus not relying on ISPs coming with the Tegra 3 and Qualcomm S4 SoCs) in order to be able to take a shot “in just 0.7 seconds” and to have “a new superfast 0.2-seconds autofocus, continue to take nearly unlimited continuous shots“, as well as “capture a photo and shoot video at the same time” and be “also able to capture a photo frame from a previously recorded video.” (See also a detailed description of that inside of the so called HTC ImageSense feature set.) Such a hardware based differentiation approach will even be greater with HTC’s upcoming products according to the following news:
– HTC plans to develop customized processors [DIGITIMES, April 24, 2012]
In order to have significant product differentiation, HTC plans to cooperate with Qualcomm, Nvidia and ST-Ericsson to develop and produce customized processors with specific functions for its smartphones, according to Taiwan-based handset chip designers.
HTC may develop specific functions for its smartphones and secure supply of customized processors, but it may run the risk of inventories because such processors are unlikely to be adopted by other vendors, the sources commented.
– HTC plans to develop its own processor [China Times, April 23, 2012] with Google translation of the original in Chinese , or the same with Bing translation.The essential content of that was first reported by Unwired as: HTC is developing its own CPU for lower end smartphones with ST-Ericsson
HTC is following in the footsteps of Apple and Samsung, and is now working on its own dedicated applications processor. According to China Times, the Taiwanese smartphone maker has already signed memorandum of cooperation with ST-Ericsson to co-develop the chip.
Contrary to high performance Samsung and Apple CPUs which power their flagships, the new HTC processor will run the lower end smartphones. The devices with new chip will start shipping in volume sometime in 2013.
It seems that HTC is getting increasingly unhappy with Qualcomm, which powered most of HTC devices until this year. They have signaled their unhappiness in early February, and may even consider Qualcomm one of the reasons for the sales problems of the last few months. HTC has already added NVIDIA to its application processor supplier list –quad core Tegra 3 is powering non U.S. version of the new One X flagship. But it has yet to diversify on the lower end.
Turning to ST-Ericsson and co-developing its own, cheaper CPU, may also be a way for HTC to start moving down market with lower priced devices. Up until now – HTC was mostly focused on a premium high-end smartphones, pretty much ignoring the low-end of the market. But as component prices get cheaper, and ever better quality Android devices are released at ever lower price points by Samsung, ZTE and Huawei – Taiwanese vendor has to find a way to respond.
And this move may be one of the responses.
– HTC, Facebook jointly developing smartphone, say sources [DIGITIMES, April 25, 2012]
Given that Google is expected to continue to cooperate with Samsung Electronics for the development of the next-generation Nexus smartphone, HTC reportedly has decided to move forward in its own way and is currently developing a customized smartphone in cooperation with Facebook slated to be launched in the third quarter of 2012 at the earliest, according to industry sources.
HTC had previously joined forces with Google to launch Google’s first own-brand smartphone, the Nexus One. However, Google then shifted to cooperating with Samsung as its primary production partner for the launch of its second and third own-brand smartphones.
Since Samsung has become the top vendor of Android smartphones, Google will continue to have Samsung develop its next-generation Nexus models, leveraging Samsung’s innovation ability with regard to the Android platform, and its ability to control the supply of key components, said sources.
The new Android smartphone being developed by HTC will have a platform exclusive to Facebook to enable and integrate all functions available on the social networking site, the sources indicated. Previously, HTC launched two Facebook-enabled smartphones, the Salsa and Chacha.
Facebook is expected to further expand its investments and sources of income after becoming a public company, and the launch of own-brand smartphones will be part of its development strategy, the sources commented.
End of updates #1
HTC personnel change indicates new value focus: Goldman Sachs [Focus Taiwan, Taiwan’s national news agency, April 17, 2012]
… The 45-year-old Chang, an investment banker and partner at Goldman Sachs before joining HTC, will be responsible for corporate finance and accounting, strategic acquisitions and investment, and investor relations.
“We believe the change in CFO may indicate HTC’s more aggressive attitude toward its finance department in terms of creating value other than just accounting integrity,” Goldman Sachs analyst Robert Yen wrote in a research note.
For example, he said, added value could mean enhancing “the uniqueness and competitiveness of HTC’s smartphone products and services.”
Given HTC’s many acquisitions and strategic investments in content and mobile services in the past and its decent cash position, it could be creating a different value by choosing a CFO with industry and banking background, Yen said. …
HTC Desire V for China Unicom (WCDMA)
Comparison [PDAdb.net]: HTC Desire VC T328d vs. HTC Desire V T328w vs. HTC Desire VT T328t [3]
Note: According to the detailed specifications given above these phones all have SLCD screens (see: Super LCD, Explained [DisplayBlog, Nov 24, 2011]), as on quite a number of higher end HTC smartphones in the last 2 years (since HTC Desire A8181 / HTC Bravo). Otherwise they have been using “transflective TFT LCD” mostly and in very few cases Super AMOLED.
HTC eyes cheaper smartphone market in China [Focus Taiwan, Taiwan’s national news agency, April 17, 2012]
Taiwan’s HTC Corp. launched several smartphones in China priced as low as 1,999 Chinese yuan (US$317) Tuesday in a bid to tap into the emerging mobile market.
The HTC launch in Beijing includes three smartphones in its customized New Desire series, which will go on sale from mid-April through three major Chinese telecom operators, according to a company statement.
The New Desire V, running on China Unicom’s 3G WCDMA network, will start from 1,999 Chinese yuan before subsidies, while the New Desire VC will support China Telecom’s CDMA 2000 frequency, for the same price tag.
Pricing for the New Desire VT, which will run on the country’s home-grown TD-SCDMA network provided by China Mobile, was not disclosed.
“The China market has always been a critical part of HTC’s global strategy. In addition to the HTC One series, we are introducing the New Desire series targeting Chinese consumers,” said Ray Yam, president of HTC’s China division.
“We believe HTC’s future is closely connected with China and that HTC will continue to bring the best experience and the most innovative smartphones to the country as soon as possible,” he added.
All the models in the New Desire series are equipped with a 4-inch display, a 1 GHz processor and a 5-megapixel camera, according to the company.
Separately, HTC said its new “One” family will also hit store shelves in China this month, with price tags ranging from 2,688 to 5,688 yuan.
The Taoyuan-based manufacturer is hoping that the streamlined models and an increased retail presence will help it boost its market share in China, which stood at only about 2 percent last year, according to analysts at Morgan Stanley.
…
HTC Desire VC for China Telecom (CDMA2000)
China market: HTC launches One, new Desire lineups [DIGITIMES, April 18, 2012]
… HTC currently accounts for a 10% share of smartphones sold with a price tag over CNY2,000 in China, but has not entered the mainstream sub-CNY1,000 segment, indicated the sources. …
HTC Prepares to Launch Lower-end “Kewang” Smartphones for China [IDG News, April 17, 2012]
… The HTC Kewang V, or Desire in English, will launch on April 23 through mobile operator China Unicom. … HTC’s goal with the Kewang series is to provide smartphones at a low price, but also with high-performance and strong features, said Ethan Qian, an HTC spokesman. The Kewang line is being released only in China, he added. …
HTC Desire VT for China Mobile (TD-SCDMA)
Dual card dual standby for only 1999 yuan HTC desire V officially released [China Tech News, April 17, 2012]
On the afternoon of April 16, China Unicom and HTC jointly held “China Unicom fertile 3G HTC new Desire V listed” conference, officially released the HTC new Desire V. It is customized by China Unicom, has 9.3mm ultra-thin body, support dual card dual standby, using clocked at 1GHz Qualcomm MSM 7227A processor [with Cortex-A5 single core, having 1.57 DMIPS/MHz performance, while Cortex-A8 has 2.0 DMIPS/MHz], 4 inches [Super LCD] screen with a resolution of 480×800 (WVGA). The phone will be powered by the Android 4.0 system, using the HTC Sense 4.0 UI, 5 megapixel camera with auto-focus, [512MB RAM] 4GB ROM, integrated Beats audio audio technology, the battery capacity of 1650 mA. Bare metal price of 1999 yuan is also a bright spot.
Super LCD vs Super AMOLED displays (HD) [TheTechTonicdotCom YouTube channel, Dec 11, 2011]
Note: Nokia has a superior technology for better brightness, contrast and outdoor visibility with a significant enhancement of both In-Plane Switching (IPS) type TFT and AMOLED display panels typically used. See: The leading ClearBlack display technology from Nokia [Dec 18, 2011 – Feb 2, 2012], especially for comparison with Super LCD of HTC Mozart (as well as with the Super AMOLED of Samsung Galaxy S II).
Commentary: HTC appoints new CFO, but challenges remain [DIGITIMES, April 17, 2012]
HTC has reshuffled its management team again by appointing former Goldman Sachs Group partner Chia-Lin Chang as its chief financial officer, which is part of the company’s strategy for global deployment.
The new appointment, which took effect on April 16, came after HTC announced earlier a 70% on-year decline in net profits for the first-quarter of 2012.
Perhaps, the new CFO could help the Taiwan-based smartphone vendor secure more acquisitions to strengthen its global deployment, but it remains to be seen whether HTC is able to regain its growth momentum in 2012 as it faces more challenges in integration of its corporate culture as well as increasing competition.
HTC has created or added a number of high-level positions since the second half of 2010, including the appointments of Ron Loukes as chief strategy officer and Kouji Kodera as chief product officer in July 2010, and Matthew Costello as COO in December 2010. HTC also appointed Jason Mackenzie as its president of global sales and marketing in July 2011.
HTC has also brought in Scott Croyle of One & Company and Shashi Fernando of Saffron Digital responsible for design and content, respectively, through acquisitions of the two companies.
It is also the second time in less than two years HTC has changed its CFO. The newly appointed CFO Chia-Lin Chang replaced Winston Yung, who took the post in January 2011.
If the latest management team is unable to bring back the growth momentum in 2012 that HTC enjoyed during the period from 2010-2011, HTC will no longer be able to compete with Samsung Electronics, Apple and even Huawei Device in terms of economies of scale in production.
While the hiring of talent with management and marketing expertise from abroad, and the acquisition of certain companies overseas are indeed necessary for HTC in its thrust to become a global brand, the impact resulting from the integration of corporate culture on HTC is expected to intensify along with such processes.
Given that nearly all top-rank positions with the exception of the CFO post at HTC have been filled with foreign executives, the promotion of local talent will likely become a major issue of concern in the future.
The Quietly Brilliant Story of HTC [HTC YouTube channel, Nov 23, 2011]
HTC replaces CFO after just one year [15 1/2 months] on the job (update) [The Verge, April 17, 2012]
HTC has issued a statement on the transition:
On Monday, HTC announced the appointment of Chia-Lin Chang as Chief Financial Officer with Winston Yung, his predecessor, transitioning to a corporate development role.
“Media speculation that ties this announcement to HTC’s partnership and investment in Beats By Dre is categorically inaccurate,” said Peter Chou, CEO of HTC Corporation. “HTC and Beats have made impressive progress in innovation and brand awareness and the integration of the Beats brand and technology in the new HTC One series is a clear indication of our commitment to this partnership.”
Amazing camera, authentic sound, iconic design. HTC One has them all. [HTC YouTube channel, Feb 27, 2012]
HTC One series unveiled [from the 2012 HTC press releases or directly on the Canadian site]:
BARCELONA, SPAIN – Mobile World Congress – February 26, 2012 – HTC, a global designer of smartphones, today unveiled its new HTC One series of smartphones that represent its most premium mobile experience with a new level of iconic design and amazing camera and authentic sound experience. …
…
With HTC’s most premium experience, the HTC One series integrates Android 4.0 (ICS) with HTC Sense™ 4, the new version of HTC’s branded user experience that is introducing HTC ImageSense™, a new suite of camera and imaging features that set HTC One apart from other phones. HTC Sense 4 also includes broad enhancements to audio quality and simplifies how people listen to music on their phone.
Amazing Camera
With ImageSense HTC One rivals traditional digital cameras with improvements to every part of the camera, including the lens, the sensor, the software, and even integrating a new custom HTC ImageChip. These enhancements combine to deliver our fastest image capture, best image quality under adverse conditions and easiest interface that enables quick access to capturing stills and videos with side-by-side photo and video capture buttons.
- Superfast Capture – HTC One dramatically reduces the time it takes to capture those key moments. In just 0.7 seconds you’re able to take a shot, and with a new superfast 0.2-seconds autofocus, continue to take nearly unlimited continuous shots simply by holding the shutter button.
- Good photos in adverse conditions – HTC One delivers dramatic enhancements in image capture quality even in adverse conditions such as low light, no light or with bright backlighting. The f/2.0 lens on the HTC One X and HTC One S offers best-in-class performance, capturing 40 percent more light than the f/2.4 lenses available on other high-end phones. HTC One also includes HDR, a market-leading technology, for taking great photos even when there are varying levels of brightness.
- Video Pic (Concurrent Video/Still Capture) – With Video Pic you capture a photo and shoot video at the same time. Now, while you’re shooting HD video, all you have to do is tap the shutter button and it snaps a high-resolution still photo while the video continues to shoot. You are also able to capture a photo frame from a previously recorded video.
… Authentic Sound
With HTC One, Beats By Dr. Dre Audio™ integration is enabled for the first time across the entire experience for richer, more authentic sound whether you’re listening to your favorite music, watching a YouTube™ video or playing a game. … All this makes HTC One the one place to enjoy all your music, wherever you are, with the power of Beats By Dr. Dre Audio and HTC Car.HTC One X
… HTC One X is blazing fast with the new NVIDIA® Tegra 3 Mobile Processor for clear graphics, faster applications and longer battery life. It includes a 1.5GHz Super 4-PLUS-1™ quad-core with an integrated fifth Battery Saver Core and a high-performance 12-Core NVIDIA® GPU. The HTC One X also has an amazing 4.7-inch, 720p HD screen crafted from contoured Corning™ Gorilla Glass. HTC One X will also be available in select 4G LTE markets with a LTE-enabled Qualcomm Snapdragon S4™ processor with up to 1.5GHz dual-core CPU’s.HTC One S
The HTC One S is for people who want a high-end smartphone in a more compact size. It is powered by a Qualcomm Snapdragon S4 processor with up to 1.5GHz dual-core CPU’s. It also includes a 4.3-inch screen crafted from contoured Corning™ Gorilla Glass. …HTC One V
Utilizing the classic, award-winning design of the HTC Legend, the HTC One V brings top-end design to a smartphone with broad appeal and a premium experience that delivers an amazing camera and authentic sound. It features a simple, iconic aluminum unibody design that exudes craftsmanship and quality.Global Availability
With unprecedented excitement, the HTC One series will begin shipping in April with broad global availability available beginning in April through more than 140 mobile operators and distributors globally. For more information and to pre-register for HTC One visit www.htc.com.
HTC Rezound™, the only phone with the Beats Audio™ built in [HTC YouTube channel, Nov 3, 2011]
HTC And Beats By Dr. Dre Set To Introduce New Era In Mobile Audio [from the 2011 HTC press releases]:
Strategic HTC investment to result in Beats integrated HTC phones this Fall.
Taoyuan, Taiwan & Santa Monica, CA – August 11, 2011– HTC Corporation, a global designer of mobile devices, today announced a strategic partnership and investment with Beats™ Electronics LLC, the company redefining the audio market with its iconic Beats by Dr. Dre™ audio experience. The two fast-growing brands will focus on bringing high performance sound to HTC phones. …
… “Beats has found a unique way to harness popular culture in a manner that is unlike any other brand today,” said Peter Chou, CEO of HTC Corporation. “It’s an exciting brand that has been built around providing something very special, and we believe our strategic partnership will provide customers with unbeatable sound on HTC phones. We obsess over every detail of a consumer’s mobile experience and audio is a critical part of that experience.”
… Established in 2006, Beats Electronics is the brainchild of legendary artist and producer Dr. Dre and Chairman of Interscope Geffen A&M Records Jimmy Iovine, who set out to develop a new type of headphone with the capability to reproduce the full spectrum of sound that musical artists and producers hear in professional recording studios. For more information, please visithttp://beatsbydre.com.
The history of last HTC CFOs:
HTC Appoints Hui-Ming Cheng as CFO [HTC press release, Aug 23, 2006]
… he has served as CFO and Spokesperson for the Fubon Financial Holding Co. in Taipei. From October 2003 to February 2006, Mr. Cheng was VP and CFO of Taiwan Mobile and received the honor of being named as Taiwan’s best CFO by Institutional Investor Magazine in 2003. Prior to his appointment with Taiwan Mobile, Mr. Cheng held various senior-level positions with the Finance Center, Winbond Electronics Corp., China Development Industrial Bank, Chase Manhattan Bank, and the Asia Partner Fund.
Mr. Cheng received a BS in Chemical Engineering from National Taiwan University and an MBA from the Kelly School of Business at Indiana University.
HTC Announces Winston K. S. Yung as Chief Financial Officer [HTC press release, Dec 23, 2010]
… Prior to joining HTC, Yung was the Chief Financial Officer for Shin Kong Financial Holding in Taiwan where he played a key role in the company’s success, and also held key positions at McKinsey & Co in Hong Kong. Yung received a bachelor’s degree in social sciences with an economics major from University of Hong Kong and a MBA from the University of Pennsylvania’s Wharton Business School.
… HM Cheng, HTC’s current chief financial officer will retire from the company and move into an advisory role to HTC’s board of directors. Cheng joined HTC in September 2006 and successfully established a complete financial system and was a key contributor to HTC’s corporate governance system and HTC’s overall financial success
HTC names Chia-Lin Chang Chief Financial Officer [from the Latest HTC press releases]
Taoyuan, Taiwan – April 16, 2012 – HTC, a global leader in mobile innovation and design, today announced the appointment of Chia-Lin Chang as Chief Financial Officer and spokesperson effective April 16, 2012.
Chia-Lin Chang’s predecessor, Winston Yung, joined HTC in January 2011. Winston will focus on corporate development, helping HTC maintain its competitive edge by strengthening the organization and corporate talent.
Chia-Lin, previously an investment banker and partner at Goldman Sachs, will be responsible for corporate finance and accounting, strategic acquisition and investment, and investor relations. Chang earned a Ph.D. in Electrical Engineering from Princeton University and an M.B.A. from the Wharton School at University of Pennsylvania. After receiving his Ph.D. degree, Chang served as an engineer at Motorola in the US.
GOLDMAN SACHS ANNOUNCES NEW MANAGING DIRECTORS [Goldmann Sachs press release, Oct 24, 2007] “… it has invited 299 individuals to become Managing Directors as of December 1, 2007, the start of the firm’s fiscal year. … Chia-Lin Chang …”
From: Latest HTC press releases:
HTC releases unaudited results for 1Q 2012
Taoyuan, Taiwan – April 6, 2012 –HTC corporation (TWSE: 2498), a global leader in mobile innovation and design, today announces unaudited consolidated results for 1Q 2012. For the first quarter of 2012, total revenues reached NT$67,790 million, a decrease of 34.92% year-on-year. Unaudited operating income was NT$5,099 million, net income before tax was NT$5,551 million, net income after tax was NT$4,464 million, and unaudited earnings per share after tax were NT$5.35 based on 834,256 thousand weighted average number of shares.
2012 First Quarter Unaudited Consolidated Financial Results
(Unit: NT$ million, Except Earnings Per Share)
*Calculation of the after-tax EPS for first quarter 2011 was based on 807,867 thousand weighted average number of shares.
HTC Reports Fourth-quarter And Annual 2011 Results
Taoyuan, Taiwan, February 6, 2012– HTC Corporation (“HTC”, or the “Company”, TWSE: 2498), a global leader in mobile innovation and design, today announced consolidated results of the Company and its subsidiaries for the fourth quarter of 2011 and for the year.
4Q Highlights
• After-tax profit was NT$10.94bn, EPS was NT$13.06
• Total revenues were NT$101.42bn
• Gross profit margin and operating margin were 27.12% and 12.71%, respectively
2011 Highlights
• After-tax profit was NT$61.98bn, up 56.77% year-on-year; EPS was NT$73.32
• Total revenue was NT$465.79bn, up 67.09% year-on-year
• Gross profit margin and operating margin was 28.30% and 14.77%, respectively
• ROE was 70.37% compared to 56.33% in 2010
“In 2011 we saw growth in the global strength of our brand, as well as earnings and revenue growth,” said Peter Chou, CEO of HTC. “While short term performance may not meet the results as expected, we have gained further experience and advancement in the areas of brand management and product innovation. These fundamental strengths and the groundwork we have laid will take us into 2012 with a renewed focus and determination.”
4Q 2011 Results
HTC’s fourth quarter revenue came in-line at NT$101.42bn, resulting in after-tax earnings of NT$10.94bn and EPS of NT$13.06. Gross profit and operating margins came in at 27.12% and 12.71%, respectively. The decline in gross profit margin was mainly a result of product transition.
2011 Results
2011 annual revenue was NT$465.79bn, a 67.09% increase over 2010 annual revenues (NT$278.76bn), resulting in after-tax earnings of NT$61.98bn. Overall gross profits and operating margins were 28.30% and 14.77%, respectively.
In 2011, in addition to solid growth in revenues and profits, HTC’s brand gained significant momentum in the global landscape, being named one of Interbrand’s 100 Best Global Brands.
2012 Outlook
In 2012, HTC will focus on: growing the Company’s brand value; continuing to create competitive advantages through innovation; enhancing the efficiency of marketing campaigns; and further driving down operating costs.
To expand its brand preference and value, HTC will work at a global level to build emotional connections with consumers, putting more of its marketing resources behind fewer products and driving value in those product brands. By building a globalized marketing campaign, HTC aims to optimize its go-to-market strategy with operators, retail distributors, and end-users, and improve the efficiency of its marketing spend. In emerging markets, such as China, HTC will continue to extend its reach to customers by expanding distribution channels.
Despite temporary weakness resulting from product cycle transition, HTC believes it has the ability to create a new wave of momentum through the upcoming product cycle. It will also continue its attention on mass market consumers by driving product differentiation through design and innovation.
1Q Outlook
The Company’s outlook for the first quarter of 2012 is as follows:
• 1Q revenue expected to be around NT$65-70bn
• Gross margin expected to be around 25%
• Operating margin expected to be around 7.5%
These margins are a temporary phenomenon and will normalized when product cycle transition is over.
