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Smartphone market outlook and the MediaTek Helio X10 based Xiaomi Redmi Note 2/Prime launched for $125, $140 and $156

Let’s start with an extremely good presentation video by Mrwhosetheboss:

And an actual experience video from Chinese sources (finished by comparing to iPhone 6):

Aug 16, 2015, Xiaomi Today: Xiaomi sold 800,000 Redmi Note 2 phones in 12 hours

Note that Xiaomi has already been the top Chinese company tracked here:
Dec 12, 2012UPDATE Aug’13: Xiaomi $130 Hongmi superphone END MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery
Aug 1, 2013Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation
Aug 30, 2013Assesment of the Xiaomi phenomenon before the global storm is starting on Sept 5
Sept 5, 2013Xiaomi announcements: from Mi3 to Xiaomi TV
June 12, 2014Xiaomi’s global offensive with Hugo Barra in charge is threatening Apple—with 10.4 million smartphones sold in China it had already outsold Apple in Q1’14, having “just” 9 million iPhones sold there from which we must at least understand the market situation in China upto  Q1 2014 as the reference for the Xiaomi’s progress presented here:

With the Q3 2015 Redmi Note 2/Prime advancement Xiaomi will kill the much hoped (by some stock market analysts) incremental opportunities for the $199 Apple iPhone 6 and $299 iPhone 6 Plus in China and throughout the world. And recall that those were announced 11 months ago as “The Biggest Advancements in iPhone History

China smartphone market Q2 2015 by IHS Technology -- 23-July-2015

This report is similar to later Canalys findings: Xiaomi 15.9%, Huawei 15.7%, and Apple #3. But for the rest: #4 Samsung, #5 vivo. Globally Xiaomi became the #2 Chinese smartphone brand in Q2 2015 according to TrendForce with 5.9% market share, the #1 Huawei having 7.6%, but first time surpassing Lenovo, as well as continuing to distance itself from TCL (Alcatel) and OPPO. Similar to data from Counterpoint Research. See Chinese OEMs Rule. Considering Huawei’s aggressive push since 2011, when Xiaomi devices started in China, Xiaomi’s global achievement is a very remarkable feat.  

Why? Because being in the smartphone device business for just 4 years Xiaomi has already been on or around the top in China for the last 12 months, as well as has launched an impressive global march.

That global sales campaign has been going on in Asia, Russia and Turkey so far, but it is now expanding to Latin America with new model launching in Brazil [CCTV America YouTube channel, July 14, 2015]: “The world’s third largest smartphone maker is taking a different approach in its plans for global domination. Instead of looking to expand in the obvious markets like the U.S. and Europe, Xiaomi is looking to South America. CCTV’s Paulo Cabral filed this report from Sao Paulo.”

And it is not difficult to foresee a huge global success for the company as in India Xiaomi became “the 5th biggest seller of phones in the country, a feat accomplished in only 8 months“: Smartphone company Xiaomi expanding to India and beyond [CCTV America YouTube channel, March 20, 2015]
And now 
China’s Xiaomi Begins Making Smartphones in India [Voice of America, Aug 14, 2015]: “Xiaomi’s Redmi2 Prime smartphone [NOT the Note 2 one], priced at about $110, began rolling out from a factory in Sri City in southern Andhra Pradesh state this week. … entered the Indian market just a year ago, but since then price conscious consumers have snapped up 3 million phones.

Also this all happened after “The Chinese smartphone maker, Xiaomi, held a second flash sale of its new 4.7″ Redmi 1S [at $110/699 RMB almost of the same price level as this year’s $125/799 RMB Redmi Note 2on Tuesday [Sept 9, 2014], after selling out in just four seconds a week ago.“: Chinese smartphone Xiaomi competes with Apple [CCTV America YouTube channel, Sept 9, 2014]

from which I will include the following Q2 CY2014 market share slide for China here:
Xiaomi - Q2 CY2014 smartphone market share for China by Canalys -- 9-Sept-2014
as this position of being “on the top or around it” has been kept by Xiaomi ever since. 

Then we should not forget what only 8 months ago was introduced as Xiaomi launches MiNote, a new iPhone competitor [CCTV America YouTube channel, Jan 15, 2015]: “The tech world is abuzz about Chinese tech company Xiaomi’s bid to compete with Apple and Samsung. Xiaomi CEO Lei Jun unveiled the MiNote and MiNote Pro [at $313/1999 RMB and $391/2499 RMB a kind of twice as expensive predecessors to the new Redmi Note 2/Prime] on Thursday, both are cheaper than similar iPhone models. CCTV’s Xia Cheng reported this story from Beijing.

Finally we should look at the new specification comparisons by GSMinsider: Xiaomi - Redmi Note 2 vs iPhone 6 vs iPhone 6 Plus – Specs Comparison -- 14-Aug-2015

With that Xiaomi will kill Samsung high-end opportunities as well.

Let’s look first at the quite drastic decline of the Samsung smartphone business for the last year and a half (data from Strategy Analytics as it’s been represented in the Apple and Huawei move on Samsung article of July 30, 2015 from Telecom.com, with the vendor rankings in the table according to the latest quarter, i.e. Q2 2015): Strategy Analytics - Global Smartphone Share -- Q1 2014 - Q2 2015
Note that Coolpad (Yulong) and ZTE are also globally represented Chinese brands, not mentioned so far in this article.

Which unit-wise looks like as follows (in millions):Strategy Analytics - Global Smartphone Shipments -- Q1 2014 - Q2 2015

Then I can again refer to Samsung-related high-end specification comparisons produced by GSMinsider: Xiaomi - Redmi Note 2 vs Samsung Galaxy Note 4 vs Samsung Galaxy S5 – Specs Comparison -- 14-Aug-2015
And don’t be fooled with the Qualcomm Snadragon 805 and 801 SoCs used by Samsung in these 2014 vintage devices as Samsung itself abandoned Qualcomm as an SoC supplier for its 2015 devices:Xiaomi - Redmi Note 2 vs Samsung Galaxy S6 vs Samsung Galaxy S6 Edge – Specs Comparison -- 14-Aug-2015

CINNO Research - Q1 2015 China Smartphone Rear Camera Pixel Share -- 12-April-2015Note: Such Samsung move of abandoning the Qualcomm Snadragon 805 and 801 SoCs in its latest high-end products is not an accident but a hard-pressed necessity. The octa-core Qualcomm Snadragon 810 replacing the 805/801 had serious thermal throttling problems, and the Chinese brands were starting to use other octa-cores, among them the quite competitive MediaTek Helio X10. See the following Q1 2015 technology landscape presentation composed of the graphical views from the April 12 and April 24 reports by CINNO Research (in addition to the camera related view on the right):CINNO Research - Q1 2015 China Smartphone Display and CPU Technologies -- 12-24-April-2015

And software-wise Xaomi is already 5 years in the smartphone business with a lot of quite enthusiastic supporters for its Android based Mi User Interface throughout the world. The MIUI 5th Anniversary: Greetings From MIUI Fans From All Over The World testimonial video from the MIUI ROM YouTube channel dated August 12, 2015 is stating that: “MIUI is one of the most popular Android ROMs in the world. It is based on Android, featuring a rich user experience and user customizable themes. MIUI is updated every Friday based on feedback from its users. Now with over 100 million users and 34 MIUI fan sites worldwide, MIUI is the choice of many Android users globally.

What kind of “much hoped incremental opportunities (by some stock market analysts) for Apple” I was talking about?

From India Will Overtake US to Become World’s Second Largest Smartphone Market by 2017 [July 1, 2015] by Strategy Analytics the following chart has been produced for Dazeinfo’s Global Smartphone Sales 2015 – 2017: India Will Surpass The US [July 1, 2015] report: Strategy Analytics - Dazinfo - Global Smartphone Sales Forecast 2015 - 2017 -- 1-July-2015That chart has been used by  in his Why Apple’s Growth-Related Fears Are Overblown [Aug 12, 2015] article on Seeking Alpha for its final argument that:

the market sees China as imperative to Apple’s future growth outlook and while true at the moment, there’s a catalyst forming that should lessen the company’s reliance on China and lead to many millions of new iPhone sales.

China is not that “forming catalyst” that I mentioned earlier. Instead, Apple has a prime opportunity to grow in India over the next year or two, a market that’s growing rapidly with middle class consumers and is the world’s second largest economy by population behind only China.


… with India’s help, which includes the growth in middle class consumers through 2020, India might very well one day become just as important as China to Apple.

Before coming to such final argument Nichols is talking about the current market situation in China via a chart from Above Avalon’s China Mobile Is a Game Changer for Apple [April 29, 2015] research note and with the following comments around that:

Above Avalon - Total Customers for Largest Chinese and U.S. Mobile Carriers -- 28-April-2015

I expect Apple to find additional growth in China next year, regardless of what has transpired from a macro perspective over the last few months. The reason is simple: Improved network coverage. Fact of the matter is that most Chinese consumers are still using 2G or 3G networks, which are hardly compatible with the iPhone 6. At the end of the first quarter, China Mobile (NYSE:CHL) had 153 million 4G customers, up from 90 million in December of 2014 and just 1.3 million in February of 2014. However, China Mobile had 815 million total customers. So that means the majority of its subscribers are still on 2G or 3G networks. Given the rate at which China Mobile has added 4G customers during the last 16 months, investors can rest assured that its network and 4G customers will be far larger by this time next year. Notably, most of those 4G customers will need smartphones, and Apple has quickly become the most popular choice in China.

As for China’s second and third largest wireless carriers, China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA), they have nearly 500 million customers collectively. And believe it or not, China Unicom and China Telecom’s 4G network is even more underdeveloped than China Mobile’s network. However, both China Unicom and China Telecom are working just as fast to build their respective 4G networks. Once more, this increases Apple’s market opportunity in China, and is the key reason why I think Apple’s growth in China will continue through next year, probably at a very high double-digit rate.

So these are the speculations which IMHO do not take into account the new product waves from major Apple and Samsung competitors, especially Xiaomi.

Xiaomi’s new 5.5″  Redmi Note 2 launched in China just this week for $125/799 RMB (16GB version supporting TDD-LTE for a China specific 4G version of LTE as well as TD-SCDMA, the China specific 3.5G — targeted at China Mobile subscribers) and $140/899 RMB (16GB version supporting both TDD-LTE and FDD-LTE, i.e. both 4G versions — for the subscribers of any mobile operators, and especially of China Unicom and China Telecom) is the actual case in this regard. Watch the Xiaomi Redmi Note 2 Prime first look miui 7 pre-order video direct from the launch (the QR code at the start and the end has been positioned out of my embedded view): 

Announced: August 13 2015
Network Technology:
GSM / HSPA / LTE
Expected release:
August 16, 2015
Body Dimensions:
152 x 76 x 8.3 mm
Weight: 160 g
SIM: Dual SIM
Display
Type: IPS LCD capacitive touchscreen, 16M colors
Size: 5.5 inches (~72.2% screen-to-body ratio)
Resolution: 1080 x 1920 pixels (~401 ppi pixel density)
Multitouch: Yes
MIUI 7.0
Platform OS: Android OS, v5.0 (Lollipop)
Chipset: Mediatek MT6795
CPU:
– Octa-core 2.0 GHz Cortex-A53
– Octa-core 2.2 GHz Cortex-A53
GPU: PowerVR G6200
Memory Card slot: No
Internal Memory:
– 16 GB, 2 GB RAM – 2 GHz model
– 32 GB, 2 GB RAM – 2.2 GHz model
Camera:
Primary: 13 MP, 4128 x 3096 pixels, phase detection autofocus, LED flash
Features: Geo-tagging, touch focus, face/smile detection, HDR, panorama
Video: 1080p@30fps
Secondary: 5 MP, 720p
Sound Alert Types:
Vibration; MP3, WAV ringtones
Loudspeaker: Yes
3.5mm jack: Yes
Comms:
WLAN Wi-Fi 802.11 a/b/g/n/ac, dual-band, WiFi Direct, hotspot
Bluetooth: v4.0, A2DP, LE
GPS: Yes,
with A-GPS, GLONASS, Beidou
Infrared port: Yes
Radio: FM radio
USB: microUSB v2.0
Features Sensors:
Accelerometer, gyro, proximity, compass
Messaging:
SMS(threaded view), MMS, Email, Push Mail, IM
Browser: HTML5
Java: No
– Fast battery charging: 60% in 30 min (Quick Charge 2.0)
– Active noise cancellation with dedicated mic
– MP4/H.264 player
– MP3/WAV/eAAC+ player
– Photo/video editor
– Document viewer
Battery: Li-Po 3060 mAh battery
Stand-by: Up to 144 h (3G)
Talk time: Up to 11 h 30 min (3G)
Music play: Up to 46 h
Misc Colors:
White, blue, yellow, pink, mint green

The 2.2 GHz Redmi Note 2 Prime version with 32GB storage and support of  TDD-LTE + FDD-LTE will sell at $156 (999 RMB).

More information:
Aug 13, 2015All About Redmi Note 2/Prime: Specifications, Price, Hands-on Pictures! review by Xiaomi MIUI Official Forum
– Aug 13, 2015Xiaomi New Product Launch: MIUI 7(China), Redmi Note 2(Prime), Mi Wi-Fi nano full launch information (not only the Redmi Note 2/Prime)  by Xiaomi MIUI Official Forum, from which the major Redmi Note 2 and 2 Pro Android competition (Huawei P8 and P8max with Hisilicon Kirin 930 and 935 SoCs, and Meizu MX5 (with the same MediaTek Helio X10 @2.2 GHz) on the Chinese market is described as:
Redmi Note 2 and 2 Pro Android competition on the Chinese market -- 13-Aug-2015
Note: regarding the benchmarked performance of each SoC I will recommend the results made available in the Exynos 7420 vs Snapdragon 810 vs MediaTek Helio X10 Turbo MT6795T vs Hisilicon Kirin 935: Benchmark Scores [July 3, 2015] GSMinsider article
For a much broader competitive comparison I will recommend the Redmi Note 2’s comparisons by GSMinsider  which currently contains comparisons (spec-wise):

vs Asus Zenfone 2 vs Asus Zenfone Zoom
vs HTC One M9 vs HTC One M9+
vs Huawei Honor 7 vs Huawei Honor 6 Plus
vs Huawei Ascend Mate 7 vs Huawei Honor 6 Plus
vs Huawei P8 vs Huawei P8 Max
vs iPhone 6 vs iPhone 6 Plus
vs Lenovo Vibe Shot vs Lenovo Vibe Z2 Pro
vs Lenovo ZUK Z1
vs LG G Flex 2
vs LG G4 vs LG G3
vs Meizu M2 Note vs Meizu M1 Note
vs Meizu MX5 vs Meizu MX4 Pro
vs Motorola Moto X Style vs Moto X Play
vs Nexus 6 vs Motorola Moto Maxx
vs OnePlus 2 vs OnePlus One
vs Oppo Find 7 vs Oppo Find 7A
vs Oppo N3
vs Redmi Note
vs Samsung Galaxy Note 4 vs Samsung Galaxy S5
vs Samsung Galaxy S6 vs Samsung Galaxy S6 Edge
vs Vivo X5 Pro vs Vivo X5 Max
vs Xiaomi Mi Note vs Xiaomi Mi Note Pro
vs Xiaomi Mi4
vs ZTE Axon Pro vs ZTE Axon Lux
vs ZTE Nubia Z9 Max vs Nubia Z9 Mini
vs ZTE Nubia Z9

Aug 13, 2015Additional videos from XiaomiHK YouTube channel:

Xiaomi – MIUI Introduction (with English subtitles)

Xiaomi – MIUI V7 Endurance

i.e. MIU 7 on [Xiaomi’s] Mi 4, Huawei Honor 6, Meizu MX4 and Samsung Galaxy S5

Xiaomi – MIUI V7 Performance

Xiaomi – RedmiNote2″>Xiaomi – RedmiNote2

Xiaomi – RedmiNote2 Camera

Important videos available on the Bloomberg Business website only, with 3 most important videos added to them from the CCTV America YouTube channel:

June 5, 2014: Here’s Why Hugo Barra Left Google to Be Xiaomi VP: Xiaomi Early Investor Robin Chan discusses Xiaomi’s hiring of Google’s Hugo Barra on Bloomberg Television’s “Bloomberg West.” Former Xiaomi Board Member Hans Tung also speaks.

July 17, 2015Xiaomi’s Hugo Barra: Studio 1.0 (Full Show 7/16): This week on Studio 1.0: Emily Chang sits down with Hugo Barra, vice president of global operations at Xiaomi. (Source: Bloomberg) 21 minutes from which I will include here the only slide displayed Xiaomi - Global ambition -- 17-July-2015

Plus a lot of other unique information is available in that interview: like the 2015 vintage business model of Xiaomi (investments into non-platform startups to build business partnerships, a whole ecosystem around Xiaomi etc.).

I will add to that the product shown in the Bloomberg interview as an example of such ecosystem generation. This has been documented in Xiaomi launches $13 fitness band [CCTV America YouTube channel, Aug 18, 2014] as: “Chinese Smartphone maker Xiao-mi has started selling an interactive wristband called the Mi Band. The device can measure one’s heart rate and monitor sleep patterns. It’s not the first such device to hit the market, but so far, it’s the cheapest.

I will also add the Xiaomi Buying Spree Gives Apple, Samsung Reason to Worry [Bloomberg Business YouTube channel, Jan 8, 2015] video stating that: “Xiaomi zoomed past Apple Inc. and Samsung in China smartphone sales just three years after releasing its first model. Founder Lei Jun is now on a buying spree to take that momentum beyond handsets. Bloomberg’s Edmond Lococo has more on “On The Move Asia.” (Source: Bloomberg)

Then remember the already known facts mentioned in the second video on the Bloomberg website like: “Xiaomi is not Apple“, “Xiami is an Internet company” (“an Internet platform and services brand” heard in another interview), “services are inherent part of Xiaomi“, “Xiaomi is one of the biggest e-commerce sites in China“, “the Xiaomi platform products are enhanced in functionality on requests from its users by around 50%” etc.

As the latest proof-point of such an Internet platform and service strategy of the company watch the Chinese mobile co. Xiaomi launches wallet app [CCTV America YouTube channel, March 26, 2015] video:

Other videos from Bloomberg Business YouTube channel:

Jan 15, 2015Xiaomi’s Rapid Rise to $45B Valuation Topping Uber: Xiaomi is Apple and Samsung’s rapidly growing threat. Now the world’s third-largest smartphone maker, Xiaomi is releasing its next phone on Thursday at an event in Beijing. Bloomberg’s Cory Johnson looks at how just fast this company is growing. (Source: Bloomberg)

June 5, 2014Meet the Billionaire ‘Steve Jobs of China’ Lei Jun:  Xiaomi co-founder and chief executive officer Lei Jun is known as the Steve Jobs of China, complete with a wardrobe of black shirts and a cult following. But what did he do before starting Xiaomi, and how has his personality helped drive Xiaomi’s success? Bloomberg West’s Emily Chang gives us an overview of this rock star CEO.

Jan 5, 2015Xiaomi Doubles Revenue to $12B as Phone Sales TripleXiaomi, whose investors include billionaire Yuri Milner, more than doubled its revenue in 2014, according to a blog posting by CEO Lei Jun.

Feb 13, 2015Xiaomi’s Barra: U.S. Market Is Important in Many Ways:  Xiaomi’s Hugo Barra discusses the company’s global expansion plans with Bloomberg’s Brad Stone on “Bloomberg West.”

June 4, 2015Xiaomi Grows Wearable Device Market ShareXiaomi is looking to elbow its way into the wearable device market. New figures suggest it took a quarter slice of global sales the first three months of the year. Bloomberg Intelligence’s Jitendra Waral discusses the sales figures on “Trending Business.”

Other videos from the CCTV America YouTube channel:

July 22, 2014Hugo Barra on latest Xiaomi products: Chinese tech firm Xiaomi showed off some of its latest products on Tuesday. The Beijing-based company unveiled its new Mi smartphone and billed it as a challenger to Apple’s iPhone. Analysts say the Mi 4 will be a make or break product for Xiaomi after sales of the older model proved disappointing.The company is also aggressively expanding overseas. Hugo Barra, Xiaomi’s Vice President for overseas business spoke with CCTV’s Xia Cheng.

July 14, 2015Eric Schiffer on Xiaomi’s global strategy: For more on Xiaomi’s global strategy, CCTV’s Michelle Makori spoke to Eric Schiffer, CEO of Patriarch Equity.

Dec 22, 2014
Tech company Xiaomi flourishes in China, India despite patent disputes: China’s Xiaomi tech company is often compared to Apple. Founded in 2010, Xiaomi has quickly surpassed Samsung to become the top smartphone in China and third in the world. Xiaomi phones are currently only sold online and in China and India.

Dec 22, 2014
Ari Zoldan of Quantum Networks discusses Chinese companies, patent troubles: CCTV America’s Sean Callebs interviewed tech industry expert and CEO of Quantum Networks Ari Zoldan about the rise of Xiaomi and it’s legal battles.

 



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The lost U.S. grip on the mobile computing market, including not only the device business, but software development and patterns of use in general

This is my conclusion after the two sections of analysis presented below:

I. China-based white-box tablet and smartphone vendors were shaping the 2013 global device market which will even more so in 2014

II. Asia is following different patterns of mobile use than the United States – the case of China and South Korea

The single, most forceful evidence for all of the above is the extraordinary presentation of Hugo Barra, Vice President, Xiaomi Global & Loic Le Meur, LeWeb Founders- LeWeb’13 Paris – [LeWebYouTube channel, Dec 11, 2013]

Hugo is a good friend of LeWeb, having joined us several times during his time at Google. This year he updates us on his new role at Xiaomi, running their product portfolio and operations in all markets outside Mainland China. He shares his views on the tech sector in China and where it is headed.


I. China-based white-box tablet vendors and smartphone vendors were shaping the 2013 global device market which will even more so in 2014

My analysis of the smartphone market in general was first presented in the Device businesses should have a China-based independent headquarter at least for Asia/Pacific if they want to succeed [‘Experiencing the Cloud’, Jan 28, 2014] and then it was already updated by the recent Chinese smartphone brands to conquer the global market? [‘Experiencing the Cloud’, March 18, 2014] post of mine.

As a Q4’13 update to The tablet market in Q1-Q3’13: It was mainly shaped by white-box vendors while Samsung was quite successfully attacking both Apple and the white-box vendors with triple digit growth both worldwide and in Mainland China [‘Experiencing the Cloud’, Nov 14, 2013] post of mine I should first add here the following analysis:

image
Note that the white-box tablet shipments from China were estimated by company data and Credit Suisse estimates as 7% and 10% higher: 2012: 58M (vs. 54.4M here), 2013: 98M (vs. 89.1M here) (as per the “Figure 30” chart in this blog below). As you see here and later on the conclusion of the Q1-Q3’13 analysis for the tablet market, represented by the title of the previous post will hold for the whole CY2013 as well. The only remarkable change is the sudden jump in Apple iPad sales in Q4, both worldwide and in China. This is, however, only attributed to Q4 introduction of the new iPad Air which was much anticipated for months, thus postponement of new purchases and the peak when it was available. So, for the whole year, my conclusion still holds true,

imageNote that the 2013 tablet market in China was 17.2M as per the above data, while the 2013 worldwide tablet market was 219.5M per IDC, and 255M according to company data and Credit Suisse estimates (as per the “Figure 30” chart in this blog below). So China was just 7.8% or 6.4% of the worldwide tablet market, while China shipped significantly more, 38.4% of the worldwide tablet market by the Chinese white-box vendors only (the last one according to company data and Credit Suisse estimates). This is 5.5% higher than the share of China-based smartphone vendors in the global 2013 smartphone shipments (32.9%, according to DIGITIMES Research—see well below), although in tablet space only Lenovo was a significant player, while in smartphones Huawei, ZTE, Coolpad and TCL were also signicant ones (being actually in the global Top 10). In addition a much higher portion of that was shipped internally:  about 50% according to company data and Credit Suisse estimates (as per the “Figure 25” chart in this blog below), while for tablets 3M local brand tablets were shipped (as per Analysys International, see the above chart) against 98M of white-box tablets only (as per company data and Credit Suisse estimates), i.e. around 3%. Even taking the DIGITIMES Research’ 54.4M white-box tablet shipment data as the basis, this number will only climb to around 5.5%.

image

image

image

image


Then I need to add here some external analysis as well, for both the smartphone and tablet markets:

From Taiwan Display IC Sector [Credit Suisse Equity research, March 12, 2014]

[p. 10] … We are … seeing entry level tablet shifting from 7″ to 8″ with higher resolutions given the competition from large size smartphone (Phablet). Tablet brands also plan to introduce over 10″ models for more commercial applications. …

China smartphone will continue to proliferate

Credit Suisse Global Research team estimates global smartphone shipment growth of 18% CAGR in 2013-2016E, while China build smartphone shipment (domestic and export) will see 29% CAGR in 2013-16E. For 2014, we forecast total China smartphone DDI [Display Driver IC] demand of 650-700mn units, up 33-36% YoY, and panel resolution to see faster migration on aggressive pricing and less capacity constraint …

image

image

[p. 10] Tablet unit demand still solid in 2014 post strong 2013

Tablet set shipment growth is expected to slow down in 2014 (34% YoY) after a strong 57% YoY growth in 2013 and 107% YoY growth in 2012. However, we believe Chinese tablet makers (brand and whitebox) … will outgrow the industry thanks to further cost reduction …

image

[p. 11] We estimate there will be limited growth for high-end or branded tablets in 2014, with the exception of Samsung (60% YoY growth). We believe the overall tablet demand will be driven by the Chinese, such as Lenovo and whitebox makers.

image
[2011: 73M*, 2012: 163M, 2013: 255M, 2014E: 342M]
* Samsung’s own data: 2010: 1.5M, 2011: 5.8M, 2012: 16.6M
** Note that the white-box tablet shipments were estimated by DIGITIMES Research as lower: 2012: 54.4M (vs. 58M here), 2013: 89.1M (vs. 98M here)
(as per the 1st chart in this blog above)


2014 China smartphone market and industry – Forecast and analysis [DIGITIMES Research, March 24, 2014]

imageDigitimes Research expects demand in the domestic China market to reach 422 million smartphones in 2014, with 278 million units contributed by China-based smartphone vendors. The continued expansion by international vendors Samsung and Apple will push up their sales to almost 144 million units, accounting for nearly 4% growth from 2013. As competition in the local market heats up, China-based vendors are turning to overseas markets in order to maintain their shipment volumes, especially taking an aggressive approach to penetrating emerging markets, which hold higher barriers for overseas vendors to enter.

The outlook for the 2014 China domestic smartphone market is that fewer local brands will remain to compete in the market. With the general enhancement of software-hardware specifications in 2013, brand-building and channel management have become the key to sustainability. Vendors without the advantage of substantial product differentiation will face the challenge of being eliminated in the short term. On the other hand, local vendors need to deal with inventories with discretion to counter the vigorous attacks initiated by international vendors in the domestic market.

In terms of the China smartphone industry, Digitimes Research expects global shipments of China-based smartphone vendors to reach 412 million units in 2014, a 30.7% increase from 2013. Overseas shipments will account for about 126 million units. While shipments to mature markets are expected to grow on a small scale, shipments to emerging markets are expected to expand at strong rates, mainly due to the low base they are starting from.

In the forecast for shipments from different vendors in 2014, Lenovo and Huawei are expected to reach 50 million units. Huawei has been engaged in overseas markets for a long time so its export portion outweighs Lenovo’s. ZTE’s and CoolPad‘s shipments are expected to reach 35.5 million units. TCL [Alcatel] has shown a significant growth in exports with shipments expected to exceed 26 million units in 2014, ranking No. 5 on the list. Second-tier vendors Gionee and Xiaomi are expected to ship 20 million units.

Digitimes Research: China smartphone shipments to decline slightly in 1Q14 [DIGITIMES Research, Feb 7, 2014]

China-based handset companies are expected to see their shipments of smartphones decline lightly in the first quarter of 2014, after combined shipments posted a 13% sequential growth in the previous quarter, according to Digitimes Research.

Efforts by brand vendors to clear out entry-level models in previous quarters and increased overseas shipments by Huawei, ZTE and TCL contributed to shipment gains the fourth quarter of 2013.

Additionally, first- and second-tier vendors also launched a number of new models in the fourth quarter to meet demand during the year-end buying season, ramping up total shipments in the quarter.

For all of 2013, China-based handset makers shipped a total of 314 million smartphones, increasing 62.4% from a year earlier, Digitimes Research said.

Second-tier vendors, including Xiaomi Technology, TCL, Oppo Mobile and Gionee managed to ship over 15 million smartphones in 2013.

Digitimes Research: Global smartphone shipments to top 1.24 billion units in 2014 [DIGITIMES Research, Jan 14, 2014]

Global smartphone shipments are expected to top 1.24 billion units in 2014, with Samsung Electronics, Apple, LG Electronics, Sony Mobile Communications, Lenovo, Huawei, Microsoft, ZTE, Coolpad and TCL serving as top-10 vendors, according to Digitimes Research.

Apple may see its shipments double in 2014 largely due to increased shipments to China and Japan as it will benefit from its cooperation with the largest telecom operators in the two countries, said Digitimes Research.

The growth rate for Samsung will be limited in 2014 as its sales in the US, China and Japan will be depressed by growing popularity of iPhones.

China-based Lenovo, Huawei and Coolpad are expected to step up their efforts to boost sales in overseas markets after being enlisted among the top-10 vendors due to higher shipment volumes in the home market in China.

However, TCL and ZTE will continue to ship smartphones to overseas markets mainly, but will also strengthen sales in China, with domestic sales to account for less than 50% of their total shipments in 2014, commented Digitimes Research.

2014 global smartphone market forecast [DIGITIMES Research, Jan 7, 2014]

imageIn 2014, smartphones are expected to continue penetrating rapidly into emerging markets such as Russia, India, Indonesia and Latin America, while China’s smartphone shipments will see weakened on-year growth in the year, but still enormous volume. This report will provide in-depth analyses to forecast whether global smartphone shipments in 2014 will maintain a growth similar to that of 2013 and what the global shipment scale will reach in 2014.

Within the top-10 smartphone vendors in 2013, four of them are from China and in 2014 more China-based vendors are expected to enter the top 10. This report will also analyze which China-based vendors will have the best chance to become parts of the top-tier players.

How Microsoft’s acquisition of Nokia’s handset business will affect Windows Phone products’ shipment growth in 2014 and shake Android and iOS’ domination in the smartphone market, as well as the possibility of Amazon and Facebook joining the smartphone competition in 2014 and their potential influence to the market will also be analyzed within the report.

Digitimes Research: Global smartphone shipments to reach 1.24 billion in 2014 [DIGITIMES Research, Nov 25, 2013]

Global smartphone shipments are expected to reach about 1.24 billion in 2014, up 30% on year [i.e. 954M in 2013], according to Digitimes Research.

The increase in growth is expected to be driven by demand in Russia, India, Indonesia and Latin America countries.

Digitimes Research believes that Samsung Electronics will lead the way in shipments followed by Apple, LG Electronics, Sony, Lenovo, Huawei Device, Microsoft, ZTE, Coolpad and TCL [Alcatel].

Android and IOS operating systems are expected to be used in about 93% of the devices shipped in 2014, added Digitimes Research.


Global tablet market – 4Q 2013 [DIGITIMES Research, March 24, 2014]

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Global tablet shipments grew 25% sequentially and 29.8% on year to reach 78.45 million units in the fourth quarter of 2013 benefiting mainly by economic recoveries of Europe and North America, which relatively boosted demand during the year-end holidays.

Digitimes Research: Global tablet shipments in 1Q14 to drop over 20% sequentially [DIGITIMES Research, Jan 27, 2014]

An estimated 62.14 million tablets will ship globally in the first quarter of 2014, decreasing 20.8% on quarter but increasing 10.9% on year, according to Digitimes Research.

iPads will account for 29% of shipments, brand models launched by vendors other than Apple for 36.7%, and models launched by white-box vendors for 34.3%, Digitimes Research indicated.

Of brand tablet shipments in particular, Android-based models will take up 50.5%, iOS-based 44.1% and Windows-based 5.4%. 7.9-inch models will account for 24.8% of the shipments, followed by 7-inch models with 20.2%, 9-inch models with 19.6%, 10-inch models with 18.3% and 8-inch models with 15.3%. In terms of touch solutions, GFF will account for 47.8% of shipments, GF2 for 42.9%, OGS for 5.3%, GG for 2.7% and G1F for 1.3%.

Among vendors, Apple will have the largest global market share at 29%, followed by Samsung Electronics with 23.1%, Lenovo 4.7%, Asustek Computer 2.7%, Amazon 1%, Acer 1%, Microsoft 0.9%, Dell 0.8%, Google 0.5% and Hewlett-Packard 0.5%.

Taiwan-based ODMs/OEMs will ship 22.5 million tablets in the quarter, taking up 55.1% of total brand model shipments. Foxconn Electronics will account for 51.7% of shipments, Pegatron 34.8%, Compal Electronics 5.1%, Wistron 4.3% and Quanta Computer 4.1%.

Digitimes Research: Global tablet shipments in 4Q13 estimated at 78.45 million units [DIGITIMES Research, Jan 24, 2014]

There were an estimated 78.45 million tablets shipped globally in the fourth quarter of 2013, increasing 25% on quarter and by 29.8% on year, according to Digitimes Research.

iPads accounted for 29.7% of shipments, brand models launched by vendors other than Apple for 36.6%, and models launched by white-box vendors for 33.8%, Digitimes Research indicated. Android-based models took up 51.2% of the shipments, iOS-based 44.9% and Windows-based 3.9%. 7-inch models accounted for 31% of the shipments, followed by 9-inch models with 25.4%, 7.9-inch models with 19.7%, 10-inch models with 15.8% and 8-inch models with 7.6%. In terms of touch solutions, GF2 accounted for 41.5% of shipments, GFF for 38.6%, OGS for 9.8% and GG for 9.5%.

Among vendors, Apple had the largest global market share at 29.7%, followed by Samsung Electronics with 17.4%, Amazon 5.4%, Lenovo 4.2%, Asustek Computer 2.8%, Google 1.4%, Acer 1%, Dell 0.8% and Hewlett-Packard 0.5%.

Taiwan-based ODMs/OEMs shipped 32.8 million tablets in the fourth quarter, with Foxconn Electronics accounting for 52.7%, Pegatron 24.4%, Compal Electronics 12%, Quanta Computer 6.6% and Wistron 4.2%.


II. Asia is following different patterns of mobile use than the United States – the case of China and South Korea

The Post-PC Era: Is the U.S. losing its grip on the software industry? [Flurry Blog, Aug 29, 2013]

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Just five years ago, PCs reigned supreme and so did the US software industry. In 2008, U.S. companies produced an estimated 65% of all PC software units sold on a worldwide basis.

In only half a decade, smartphones, tablets, and perhaps most importantly, apps, have changed the nature of the software industry. In this post we look at where apps are being developed and used and discuss the implications of that for the Post-PC Era software industry.

More Apps Are Now Being Created Outside The U.S. Than Inside The U.S.

… By June of this year only 36% of the apps we measure were made in the U.S.A. …

U.S. Made Apps Still Dominate App Engagement, But Their Share Is Slipping

imageOf course, some apps enjoy much greater use than others, so we next considered how the picture changes if apps are weighted by total time, which takes into account both user numbers and engagement. Once time is taken into account, things look considerably better for the U.S., suggesting that, on average, user numbers or engagement are greater for apps made in the U.S. than for apps created elsewhere. That makes sense given the size of the U.S. population, the fact that it was an app pioneer country, and the number of English speakers in other countries who might be able to use U.S.-made apps without any localization. Nonetheless, even the weighted percentage of apps made in the U.S.A. has dropped in the past year.

Use of Local Apps Is Strong In China

This should not lull U.S. app developers into a false sense of security however. That becomes evident from examining where the apps used by people in particular countries are made. That’s what the chart below does, starting with the United States. Nearly sixty percent (59%) of the time U.S. users spend in apps is spent in apps developed domestically, meaning that more than 40% of the app time of U.S. consumers is already spent in apps developed in other countries.

And while U.S. made apps are used elsewhere, unsurprisingly, people in many other countries spend a significant amount of their app time in apps developed in their home countries. For example, 13% of the time spent in apps in the UK is spent in apps made in the UK and 8% of the time spent in apps in Brazil is spent in apps made in Brazil. But as is so often the case, it’s China where things get really interesting. Nearly two-thirds of the time spent in apps in China is spent in apps made in China. U.S. made apps only account for 16% of total time spent in apps in China. The size and growth rate of the Chinese app market imply that the worldwide share of time spent in apps that are produced in the U.S. can be expected to contract further.


China Report: Device and App Trends in the #1 Mobile Market [Flurry Blog, July 23, 2013]

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In June of this year Flurry Analytics measured 261,333,271 active smartphones and tablets in China. That represented a whopping 24% of the entire worldwide connected device installed base measured by Flurry.
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Smartphones and tablets are not just about fun and games in China. Compared to iOS device owners elsewhere, the average time Chinese owners spend using Books, Newsstand, Utility, and Productivity apps is greater than the rest of the world (1.8x, 1.7x, 2.3x, and 2.1x respectively). On average Chinese owners of Android devices spend more than seven times as much time in Finance apps (7.4x) than Android owners elsewhere spend in Finance apps, but they also spend more time in Entertainment apps (1.7x).

The South Korea Report: Device and App Trends in The First Saturated Device Market [Flurry Blog, Oct 14, 2013]

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In August of this year Flurry Analytics measured 33,527,534 active smartphones and tablets in South Korea. While that was only 2.8% of the entire worldwide connected device installed base Flurry measures, South Korea is an important market for connected devices for several reasons. First, it is the first connected device market in the world to approach saturation. Second, it is Samsung’s home market, and largely as a consequence of that, more of the devices in use there are manufactured by domestic firms than is the case for any other country. Finally, it is home to more phablet fans than anywhere else.

imageSocial networking accounts for a significant share of app activity in South Korea, as it does in many other countries. Tool apps are used heavily by South Korean Android users, and entertainment apps capture a lot of time spent in iOS apps.

Compared to app users elsewhere, South Koreans over-index on Entertainment apps on iOS and several Android app categories (Media / Video, Photography, Lifestyle, Shopping, and Tools).

Given that South Korea’s rapid period of connected device growth was ushered in by the phablet, it is perhaps not surprising that it continues to surpass the rest of the world in its preference for that form factor. As shown below, in a worldwide sample of 97,963 iOS and Android devices, only 7% were phablets, but for South Korea that percentage was 41%. The appeal of phablets in South Korea appears to suppress the tablet market there. Worldwide, 19% of the devices in our sample were tablets compared to only 5% in South Korea.

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Worldwide:

Size Matters for Connected Devices. Phablets Don’t. [Flurry Blog, April 1, 2013]

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… For this study, we focused on the top 200 device models, as measured by active users in Flurry’s system, which represent more than 80% of all usage. Doing so, five groups emerged based on screen size:

1. Small phones (e.g., most Blackberries), 3.5” or under screens
2. Medium phones (e.g., iPhone), between 3.5” – 4.9” screens
3. Phablets (e.g., Galaxy Note), 5.0” – 6.9” screens
4. Small Tablets (e.g., Kindle Fire), 7.0” – 8.4” screens
5. Full-size tablets (e.g., the iPad), 8.5” or greater screens

The ‘Is it a phone or is it a tablet’ devices otherwise known as phablets have attracted interest, but currently command a relatively small share (2%) of the device installed base, and their share of active users and sessions is also relatively small.

Android owns the phablet market and also has the greatest proportion of devices using small tablets. iOS has the greatest share of active devices using large tablets.

… notice that nearly a third of time spent playing games take places on larger devices, namely full-sized tablet, small tablets and phablets. And while they command consumer time spent, they represented only 15% of device models in use in February and 21% of individual connected devices. These differences are statistically significant.

Studying books and videos, it’s somewhat surprising that tablets, which possess larger screens, do not see a larger proportion of time spent. An explanation for the high concentration in time spent in smartphones could be that consumers watch videos from their smartphones on-the-go (e.g., commuting to work on public transit), whereas they opt for a bigger screen to watch video (e.g., computer or TV) when at work or home. We expect that tablets may represent a greater share of time spent in book and video apps in the future as tablet ownership expands and tablet owners branch out into more types of apps.

From our study, consumers most prefer and use apps on medium-sized smartphones such as the Samsung Galaxy smartphones and full-sized tablets like the iPad.  In particular, smaller smartphones under-index in terms of app usage compared to the proportion of the installed base they represent, and would suggest they are not worth developers’ support.

Mobile Use Grows 115% in 2013, Propelled by Messaging Apps [Flurry Blog, Jan 13, 2014]

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… the segment that showed the most dramatic growth [worldwide] in 2013 was Messaging (Social and Photo sharing included). The growth in that segment should not come as a surprise to many, given the attention that messaging apps such as WhatsApp, WeChat, KakaoTalk, LINE, Facebook Messenger and SnapChat have received in the press. What is surprising, however, is that the rate of growth (tripling usage year-over-year) dramatically outpaced other popular categories. This type of growth could explain the high valuation Facebook has allegedly put on SnapChat, or Facebook’s rush to add direct messaging in Instagram, an app frequented by teens.

Another explosive growth year in mobile has passed. On December 31st, 2013 at 11:59 pm, Flurry Analytics tracked a record 4.7 Billion app sessions in a single day, for a total of 1.126 Trillion sessions for the whole year. Those are some very, very big numbers. …

The Truth About Cats and Dogs: Smartphone vs Tablet Usage Differences [Flurry Blog, Oct 29, 2012]

… Taking a snapshot in September 2012 from Flurry Analytics, that totaled more than 6 billion application sessions across approximately 500 million smart devices, Flurry provides a comprehensive comparison between smartphones and tablets, spanning age, gender, time of day usage, category usage and engagement metrics.  For age and gender comparisons, Flurry leverages a panel of more than 30 million consumers who have opted-in to share demographic data. …

The chart below compares the time spent across app categories between smartphones and tablets.   At a high level, consumers spend more time using tablets for media and entertainment, including Games (67%), Entertainment (9%) and News (2%) categories which account for nearly four-fifths of consumption on tabletsSmartphones claim a higher proportion of communication and task-oriented activities with Social Networking (24%), Utilities (17%), Health & Fitness (3%) and Lifestyle (3%) commanding nearly half of all usage on smartphones.  Games are the most popular category on both form factors with 67% of time spent using games on tablets and 39% of time spent using games on smartphones.  Further reinforcing that tablets are “media machines” is the fact that consumers spend 71% more of their time using games on tablets than they spend doing so on smartphones.

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Indie Game Makers Dominate iOS and Android [Flurry Blog, March 6, 2012]

imageFor the first two months of 2012, Flurry Analytics measured that more than half of all end user sessions were spent in games. Across January and February, Flurry observed sessions across a sample of more than 64 billion applications sessions across more than 500 million iOS and Android devices.


United States
:

Apps Solidify Leadership Six Years into the Mobile Revolution [Flurry Blog, April 1, 2014]

imageLast year, on the eve of the fifth anniversary of the mobile revolution, Flurry issued its five-year report on the mobile industry. In that report we analyzed time-spent on mobile devices by the average US consumer. We have run the same analysis, using data collected between January and March of 2014, and found some interesting shifts that we are sharing in this report

imageThe chart below on the left takes a closer look at app categories. Comparing  them to last year, gaming apps maintained their leadership position at 32% of time spent. Social and messaging applications, including Facebook, increased share from 24% to 28%. Entertainement (including YouTube) and Utility applications maintained their positions at 8% each, while productivity apps saw their share double from 2% to 4% of the overall time spent.

Flurry Five-Year Report: It’s an App World. The Web Just Lives in It
[Flurry Blog, April 3, 2013]

… On the five-year anniversary of launching Flurry Analytics, we took some time to reflect on the industry and share some insights. First, we studied the time U.S. consumers spend between mobile apps and mobile browsers, as well as within mobile app categories. Let’s take a look. …

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Mobile App Usage [in U.S.] Further Dominates Web, Spurred by Facebook [Flurry Blog, Jan 9, 2012]

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The chart compares how daily interactive consumption has changed over the last 18 months between the web (both desktop and mobile web) and mobile native apps.  For the web, shown in green, we built a model using publicly available data from comScore and Alexa.  For mobile application usage, shown in blue, we used Flurry Analytics data, which tracks anonymous sessions across more than 140,000 applications.  We estimate this accounts for approximately one third of all mobile application activity, which we scaled-up accordingly for this analysis.

With mobile app usage soaring, Flurry additionally studied which categories most occupy consumers’ time.  The results are shown in the pie chart below.

imageFurther considering that Flurry does not track Facebook usage, the Social Networking category is actually larger.  Combined, from just what Flurry can see, these two categories control a whopping 79% of consumers’ total app time.  This breakdown in usage reveals Facebook’s inherent popularity as the leading social network, as well as how important controlling the game category is for all platform providers.  As we drill down into the category data, consumers use these two categories more frequently, and for longer average session lengths, compared to other categories.

Chinese smartphone brands to conquer the global market?

The smartphone market in China became saturated between Q3’12 and Q4’13 as per the below chart from Analysys International (EnfoDesk):

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Note that this chart corresponds to Chinese writing traditions, i.e. in Q2’11 16.81 million smartphones and 51.01 million feature phones were sold, while in Q4’13 97.63 million smartphones and 9.2 million feature phones. Source: 易观分析:2013年第4季度中国手机销量增速放缓,智能手机市场呈现饱和态势 (Analysys analysis: China mobile phone sales growth slowed in the fourth quarter of 2013, the smart phone market is saturated) [EnfoDesk, March 11, 2014]

Chinese Handset Vendors Will Account for Over 50% of Mobile Handset Sales in 2015 [ABI Research press release, March 10, 2014]

ABI Research reports that Chinese handset vendors will account for over 50% of mobile handsets in 2015. Chinese vendors already accounted for 38% of mobile handset shipments in 2013 and the ongoing shift in growth to low cost handsets, especially smartphones, will increase their market share.

Greater China has long dominated the mobile handset manufacturing supply chain, but now its OEMs are beginning to dominate sales at the expense of the traditional handset OEMs, including even Samsung.

Many of the Chinese OEMs have focused almost exclusively on the huge Chinese market, with little activity beyond its borders, but this is set to change. Huawei (6th in worldwide market share for 2013) and ZTE (5th) have already made an impact on the world stage, but other Chinese handset OEMs like Lenovo—the Motorola acquisition is a clear statement of intent—and Xiaomi are set to join them.

Chinese vendors already take up five of the top ten places in terms of worldwide market share, despite three of them only really shipping into China. The Chinese vendors highlight the changing shape of the mobile handset market, as the Chinese manufacturing ecosystem, specifically reference designs, enable the next wave of smartphone growth in low cost emerging markets and amongst price conscious consumers everywhere,” said Nick Spencer, senior practice director, mobile devices.

“South East Asia has already experienced this trend, but ABI Research expects to see the impact of these Chinese vendors increasing in all emerging markets and even advanced markets, especially on prepay,” added Spencer.

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The New Phone Giants: Indian And Chinese Manufacturers’ Fast Rise To Threaten Apple And Samsung [Business Insider India, March 15, 2014]

The top Indian and Chinese smartphone manufacturers are classically disruptive. They produce products that are “good enough,” at a fraction of the cost of comparable models from premium brands. These ultra low-cost devices are the key to nudging consumers in massively untapped markets like India and Indonesia onto smartphones.

And these companies are starting to aim higher – producing 4G LTE smartphones that have the same processing power as Samsung and Apple premium devices.

They’re also far more innovative than they’re given credit for in terms of their strategy, supply chain management, and hardware.

In a new report from BI Intelligence, we explain why global consumer Internet and mobile companies will increasingly need to work with companies like Xiaomi and Micromax – not to mention Lenovo, Huawei, ZTE, Coolpad, Karbonn, and others – if they don’t want to miss out on mobile’s next growth phase in emerging markets

  • Major local manufacturers now account for two-fifths of China’s smartphone market, and one-fourth of India’s. Xiaomi already sells four of the top 10 best-selling Android devices in China, and operates one of the top five app stores.
  • Combined, the top five manufacturers in China and the top two in India – the “Local 7” in the chart above – are now shipping about 65 million smartphones every quarter, more than Apple, and coming close to drawing even with Samsung.
  • These local manufacturers wield influence in various ways. They run their own successful app stores, mobile operating systems, and mobile services. They also hold the keys to which apps are preloaded on their phones. When BlackBerry wanted to take its BBM messaging service for Android into India, it signed a deal with Micromax.
  • The local manufacturers are not provincial outfits producing knock-offs, as some might be inclined to assume. But their main competitive tool, for now, remains price. Local manufacturers in China and India match the features of more expensive devices and manage to produce comparable hardware at a fraction of the price. A Micromax handset comparable to Apple’s iPhone 5C costs less than one-fourth as much.
  • Xiaomi has used a four-point strategy in its three-year rise to produce four of the most popular phone models in China. We discuss all four aspects, including tight inventory management and crowdsourcing product development feedback.
  • These manufacturers will continue to expand overseas, in search of new growth opportunities. Micromax is in Nepal, Bangladesh, and Sri Lanka. Xiaomi has its eyes on Malaysia and Brazil. Huawei is already in the U.S. For example, it sells a 4G LTE handset on MetroPCS.

Smartphone Prices Race to the Bottom as Emerging Markets Outside of China Come into the Spotlight for Future Growth, According to IDC [press release, Feb 24, 2014]

Singapore and London, February 24, 2014 – Emerging markets have become the center of attention when talking about present and future smartphone growth. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, in 2013 the worldwide smartphone market surpassed 1 billion units shipped, up from 752 million in 2012. This boom has been mainly powered by the China market, which has tripled in size over the last three years. China accounted for one out of every three smartphones shipped around the world in 2013, equaling 351 million units.

Recently the surge in growth has started to slow as smartphones already account for over 80% of China’s total phone sales. The next half billion new smartphone customers will increasingly come mainly from poorer emerging markets, notably India and in Africa.

“The China boom is now slowing,” said Melissa Chau, Senior Research Manager for mobile devices at IDC Asia/Pacific. “China is becoming like more mature markets in North America and Western Europe, where smartphone sales growth is slackening off.”

Emerging markets in Asia/Pacific outside of China, together with the Middle East and Africa, Central and Eastern Europe, and Latin America, account for four fifths of the global feature phone market, according to IDC data. “This is a very big market opportunity,” said Simon Baker, Program Manager for mobile phones at IDC CEMA. “Some 660 million feature phones were shipped last year, which could add two thirds to the size of the current global smartphone market.”

India will be key to future smartphone growth as it represents more than a quarter of the global feature phone market. “Growth in the India market doesn’t rely on high-end devices like the iPhone, but in low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than US$120,” said Kiranjeet Kaur, Senior Market Analyst for mobile phones at IDC Asia/Pacific.

“Converting feature phone sales to smartphone sales implies a relentless push towards low cost,” added Baker. IDC research shows nearly half the mobile handsets sold across the world have retail prices of less than US$100 without sales tax. Two thirds of those have prices of less than US$50.

“The opportunity gets larger the lower the price falls,” continued Baker. “If you take retail prices without sales tax, in 2013 nearly three quarters of the US$100-125 price tier was already accounted for by smartphones. Within US$75-100 the proportion was down to just over half, and between $50-75 it was not much more than a third.”

Many smartphone vendors have begun gearing up for this next wave of cost pressure. Samsung is increasingly switching production to Vietnam, where manufacturing costs currently undercut mainland China. Even Hon Hai, one of the largest contract manufacturers for handsets in China, has announced plans for a plant in Indonesia to furnish a lower production cost base.

In addition to the table below, an interactive graphic showing worldwide sub-$100 feature phone shipments by region is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

Worldwide Sub-$100 Feature Phone Shipments by Region, 2013

Region

Shipments (M Units)

India

212.3

Middle East & Africa

150.0

Asia/Pacific (excluding Japan, China, and India)

140.7

Latin America

76.4

PRC

68.1

Central & Eastern Europe

43.6

Western Europe

39.8

North America

13.9

Total

744.9

Source: IDC Worldwide Mobile Phone Tracker, February 24, 2014

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Analysys International: Xiaomi Ranked Among Top Five in Q4, 2013 [March 11, 2014]

The statistics from EnfoDesk, the Survey of China Mobile Terminals Market in Q4, 2013, newly released by Analysys International, shows that the market share of Samsung, Lenovo, Huawei, Coolpad and Xiaomi ranked the top five of China smartphone in Q4, 2013. The market share of Samsung shrink slightly over the previous quarter, but it still accounted for 15.07 percent of smartphone market and maintain the leading position.

The release of Apple‘s new product has brought efficiency in Q4, and its market share slightly rebounded. Owning to the release of MI3 (Xiaomi), the market share of Xiaomi up 3.85 percentage points compared to the previous quarter. MI3 still should be bought from booking and the booking is relatively frequent. Meanwhile, the purchase restriction of MI2(Xiaomi) and Red MI(Xiaomi) has been relaxed, coupled with the strategic cooperation between Xiaomi and mobile operators, making it easier to buy custom models as well as contributing to the  enlargement of Xiaomi’s market share. It can be expected that Xiaomi will put more energy into the complement of its retail capabilities and continue to increase their market share.

From: UMENG Insight Report – China Mobile Internet 2013 Overview [UMENG, March 12, 2014]

– The number of active smart devices in China exceeded 700 Million by the end of 2013.
– The five fastest growing mobile apps categories (excluding games) are : news, health & fitness, social networking, business, and navigation. These areas will bring new opportunities for developers in 2014.
– Socializing your apps is the key to success for developers. Currently among the top 1,000 apps (apps and games) in the Chinese market, 55% of them provide links to Chinese social networking services (e.g. Sina Weibo, Wechat, QQ, Renren) The amount of app content sharing to social network platforms per mobile Internet user per day has tripled in the last 6 months.
– Social network sharing in game has become incredibly popular on all social networking platforms, 48% of in app sharing traffic to social networks are from games.
– High-end devices (pricing above 500US$) have a significant market share in China, contributing 27% of total devices. These users have dynamic needs on mobile apps . The users of below 150US$ phones prefer casual games for their entertainment requirements.
– The year of 2013 became known as the first year Chinese developers took IP seriously with many developers licensing IP from rights holders. By the end of 2013, among the Top 100 games, 20% license 3rd party IP.
– Over the course of 2013 the percentage of iOS jailbroken devices in the Chinese Mainland fell by 17% to 13% of all devices. Domestic users are becoming more hesitant to jailbreak their devices.

700 Million active smart devices in China

  • By the end of 2013, the number of active smart devices in China had exceeded 700,000,000, including smart phones and tablets.       
  • In the 4th quarter 59% of new devices were bought by smartphone users upgrading their existing hardware. The remaining new devices where bought by users buying their first smartphone. As smartphone use becomes more commonplace in China new sales are increasingly driven by existing users upgrading, rather than from users purchasing their first smartphone.               

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The market for budget Android phones is strong in China with 57% of devices under 330 USD price range. However over a quarter of users are using high-end smart phones costing over 500USD, 80% of these are iPhones.

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Fragmented Android device market

  • In the 4th quarter of 2013, Samsung and XiaoMi (a local brand) prove to be the most popular Android brands as between them they manufacture all of the top 10 active Android devices.
  • However the Android market is still highly fragmented with hundreds of different handsets on the market. Samsung who manufacture many devices in all price ranges control 24% of the device market, while the domestic manufactures are battling it out with the international brands to extend their market share.

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  • In 2013, changes to device connectivity saw a large growth in WiFi connectivity, from 38% at the beginning of  the year to 52% at year end. Mobile Internet infrastructure has become better in China. However Chinese users are still price sensitive to mobile data tariff.       

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  • Glossary:   
    Active Device: active device refers to device which has activated at least one app covered by Umeng platform in the stipulated time frame. All  the “devices” in the report refers to “active devices”, not the actual shipment.

  • Data Source:   
    Analysis data in the report is based on over 210,000 Android and iOS apps from the Umeng platform. All data was collected from January to December 2013.

From: More than 247 million mobile handsets shipped in India during CY 2013, a Y-o-Y growth of 11.6%; over 70 million mobile handsets shipped in 4Q 2013 alone [CyberMedia Research press release, Feb 26, 2014]

According to CMR’s India Monthly Mobile Handsets Market Review, CY 2013, February 2014 release, India recorded 247.2 million mobile handset shipments for CY (January-December) 2013. During the same period, 41.1 million smartphones were shipped in the country.

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India Smartphones Market

The India smartphones market during 2H 2013 saw a rise in shipments by 60.3% over 1H 2013, taking the overall contribution of smartphones to 16.6% for the full year. Further, 65.8% of the total smartphones shipped in the country were 3G smartphones during CY 2013.

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Commenting on these results, Tarun Pathak, Lead Analyst, Devices, CMR Telecoms Practicesaid, “CY 2013 was primarily the year of smartphones for the India market, particularly for local handset vendors. A first for the India market was a marginal decline in featurephone shipments on a year-on-year basis. This trend is likely to continue with more vendors focusing on entry level smartphone offerings aimed at the consumer segment.”

“Nearly 70 vendors operated in the highly competitive India smartphones market in CY 2013, with ‘Tier One’ brands like Apple, Samsung, Nokia, Sony, HTC, LG and Blackberry capturing close to 53% of the total smartphones market, followed by India brands capturing close to 43% of total smartphone shipments. The remaining market of roughly 4% smartphone shipments was captured by China OEM brands, where we expect a few more players to enter the India market directly, instead of continuing as ODM partners to Indian brands”, Tarun added.

Rapid Growth In Smartphones Offset The Slump Witnessed In Feature Phone Sales In 4Q13, Says IDC [press release, Feb 26, 2014]

India was one of the fastest growing countries worldwide in terms of smartphone adoption in 2013. According to the International Data Corporation (IDC) in 2013 the smartphone market surpassed 44 million units shipped, up from 16.2 million in 2012.  This surge has been mainly powered by home grown vendors which have shown a tremendous and consistent growth over the past 4 quarters of 2013.

The overall phone market stood at close to 257 million units in CY 2013 – an 18% increase from 218 million units in CY2012.

CY2013 also witnessed a remarkable migration of the user base from feature phones to smartphones primarily due to the narrowing price gaps between these product categories.

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Q413 Perspective:

The India smartphone market grew by 181% year over year (YoY) in the fourth quarter of 2013 (4Q13).  According to International Data Corporation’s (IDC) APEJ Quarterly Mobile Phone Tracker, vendors shipped a total of 15.06 million smartphones in 4Q13 compared to 5.35 million units in the same period of 2012. 4Q13 grew by almost 18% Quarter-on-Quarter.

The shipment contribution of 5.0inch-6.99inch screen size smartphones (phablets) in 4Q2013 was noted to be around 20% in the overall market. The category grew by 6% in 4Q13 in terms of sheer volume over 3Q13.

The overall mobile phone market (Feature Phones and Smartphones) stood at 67.83 million units, a 16% growth YoY and a meager 2% growth quarter over quarter (QoQ).The share of feature phones slid further to make 78% of the total market in 4Q13, with the market showing a decline of 2% in 4Q13 over 3Q13.

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The fourth quarter of 2013 witnessed a spike in the smartphone shipments by smaller homegrown vendors like LAVA, Intex which have shown tremendous growth in the past couple of quarters.

“The growth in the smartphone market is being propelled by the launch of low-end, cost competitive devices by international and local vendors which are further narrowing the price gaps that exist between feature phones and smartphones”, said Manasi Yadav, Senior Market Analyst with IDC India.

“The international vendors have understood the importance of creating a diverse portfolio of devices at varied price points and are striving to launch cost competitive devices that cater to every segment in the target audience ” comments Kiran Kumar, Research Manager with IDC India.

Top Five Smartphone Vendor Highlights

Samsung: Samsung maintained its leadership spot with about 38% in terms of market share. Its smartphone shipments grew by close to 37% from 3Q 2013 to 4Q2013. The fourth quarter saw quite a few new launches across price points by Samsung – however the low-end Galaxy portfolio in smartphones contribute to 50% in terms of shipment volumes

Micromax: Micromax held on to its second spot with about 16% in terms of market share in 4Q2013. Some of the top selling models were the entry level smartphones like A35 Bolt and A67. The Canvas range of devices has also done well in terms of volume contribution owing to the marketing campaigns launched around them.

Karbonn: The market share for Karbonn in 4Q2013 was close to 10%, some of the top selling models for this brand were A1+ and A51.

Sony: Sony managed to make a comeback in the top-5 smartphone vendor list in 4Q13 and garnered a market share of 5%. The top selling models included Xperia M Dual and Xperia C handsets, which are targeted at mid-tier price range.

Lava : Lava managed to hold onto the number 5 spot in the top-5 smartphone vendor list. The continued traction around the XOLO and IRIS range of devices helped the vendor garner a market share of 4.7% in 4Q13. Some of the top selling models include the newly launched XOLO A500 S and the existing models like IRIS 402 and IRIS 349.

image

IDC India Forecast:

IDC anticipates the growth in Smartphone segment to outpace the overall handset market growth for the foreseeable future. The end-user shift towards mid-to-high screen size products will be amplified by the declining prices and availability of feature-rich localized product offerings. Vendors who are able to differentiate their offerings at affordable prices will maintain a competitive edge and secure a strong position in the mobile phone market in CY 2014.

From: Gartner Says Annual Smartphone Sales Surpassed Sales of Feature Phones for the First Time in 2013 [press release, Feb 13, 2014]

Worldwide Smartphone Sales to End Users by Vendor in 2013 (Thousands of Units)

Company
2013
Units
2013 Market Share (%)
2012
Units
2012 Market Share (%)
Samsung
299,794.9
31.0
205,767.1
30.3
Apple
150,785.9
15.6
130,133.2
19.1
Huawei
46,609.4
4.8
27,168.7
4.0
LG Electronics
46,431.8
4.8
25,814.1
3.8
Lenovo
43,904.5
4.5
21,698.5
3.2
Others
380,249.3
39.3
269,526.6
39.6
Total
967,775.8
100.0
680,108.2
100.0
Source: Gartner (February 2014)
Worldwide Smartphone Sales to End Users by Vendor in 4Q13 (Thousands of Units)

Company
4Q13
Units
4Q13 Market Share (%)
4Q12
Units
4Q12 Market Share (%)
Samsung
83,317.2
29.5
64,496.3
31.1
Apple
50,224.4
17.8
43,457.4
20.9
Huawei
16,057.1
5.7
8,666.4
4.2
Lenovo
12,892.2
4.6
7,904.2
3.8
LG Electronics
12,822.9
4.5
8,038.8
3.9
Others
106,937.9
37.9
75,099.3
36.2
Total
282,251.7
100.0
207,662.4
100.0
Source: Gartner (February 2014)
Top Smartphone Vendor Analysis
Samsung: While Samsung’s smartphone share was up in 2013 it slightly fell by 1.6 percentage points in the fourth quarter of 2013. This was mainly due to a saturated high-end smartphone market in developed regions. It remains critical for Samsung to continue to build on its technology leadership at the high end. Samsung will also need to build a clearer value proposition around its midrange smartphones, defining simpler user interfaces, pushing the right features as well as seizing the opportunity of bringing innovations to stand out beyond price in this growing segment.
Apple: Strong sales of the iPhone 5s and continued strong demand for the 4s in emerging markets helped Apple see record sales of 50.2 million smartphones in the fourth quarter of 2013.
“However, Apple’s share in smartphone declined both in the fourth quarter of 2013 and in 2013, but growth in sales helped to raise share in the overall mobile phone market,” said Mr. Gupta. “With Apple adding NTT DOCOMO in Japan for the first time in September 2013 and signing a deal with China Mobile during the quarter, we are already seeing an increased growth in the Japanese market and we should see the impact of the last deal in the first quarter of 2014.”
Huawei: Huawei smartphone sales grew 85.3 percent in the fourth quarter of 2013 to maintain the No. 3 spot year over year. Huawei has moved quickly to align its organization to focus on the global market. Huawei’s overseas expansion delivered strong results in the fourth quarter of 2013, with growth in the Middle East and Africa, Asia/Pacific, Latin America and Europe.
Lenovo: Lenovo saw smartphone sales in 2013 increase by 102.3 percent and by 63.1 percent in the fourth quarter of 2013. Lenovo’s Motorola acquisition from Google will give Lenovo an opportunity to expand within the Americas.
“The acquisition will also provide Lenovo with patent protection and allow it to expand rapidly across the global market,” said Mr. Gupta. “We believe this deal is not just about entering into the U.S., but more about stepping out of China.” 
Gartner expects smartphones to continue to drive overall sales in 2014 and an increasing number of manufacturers will realign their portfolios to focus on the low-cost smartphone sector. Sales of high-end smartphones will slow as increasing sales of low- and mid-price smartphones in high-growth emerging markets will shift the product mix to lower-end devices. This will lead to a decline in average selling price and a slowdown in revenue growth.
In the smartphone OS market, Android’s share grew 12 percentage points to reach 78.4 percent in 2013 (see below). The Android platform will continue to benefit from this, with sales of Android phones in 2014 approaching the billion mark.
Worldwide Smartphone Sales to End Users by Operating System in 2013 (Thousands of Units)

Operating System
2013 Units
2013 Market Share (%)
2012 Units
2012 Market Share (%)
Android
758,719.9
78.4
451,621.0
66.4
iOS
150,785.9
15.6
130,133.2
19.1
Microsoft
30,842.9
3.2
16,940.7
2.5
BlackBerry
18,605.9
1.9
34,210.3
5.0
Other OS
8,821.2
0.9
47,203.0
6.9
Total
967,775.8
100.0
680,108.2
100.0
Source: Gartner (February 2014)

2014 will be the last year of making sufficient changes for Microsoft’s smartphone and tablet strategies, and those changes should be radical if the company wants to succeed with its devices and services strategy

For the company’s most recent “ONE Microsoft” strategy see:
Microsoft reorg for delivering/supporting high-value experiences/activities [‘Experiencing the Cloud’, July 11, 2013]
How the device play will unfold in the new Microsoft organization? [‘Experiencing the Cloud’, July 14, 2013]
Update: There are extremely worrying signs on the horizon as per Jan 27, 2014:
MediaTek MT6592-based True Octa-core superphones are on the market to beat Qualcomm Snapdragon 800-based ones UPDATE: from $147+ in Q1 and $132+ in Q2
End of the Nokia “magic” hurting European and Asian consumers while mobile carriers are uncertain about the future under the Microsoft brand
End of Update
As 2014 will be the last year of “free ride” in the smartphone and tablet spaces for ARM-based competitors of Intel – at least what Intel is insisting again [‘Experiencing the Cloud’, Jan 17, 2014] it is time to summarize the ARM-based opportunities for 2014 (note that Intel’s goal in the tablet space is only 40 million units, both Android and Windows):

imageCompare everything to 2014 global notebook demand forecast [DIGITIMES Research, Dec 5, 2013] which estimates that global notebook shipments in 2014 will reach around 160 million units, down from a peak of over 200 million in 2011, but the drop in 2014 will be lower than the on-year drop in 2013, with new market developments, new product opportunities, and changes in the major players’ strategies all playing critical roles in the IT industry’s future trends.

Digitimes Research: Global smartphone shipments to top 1.24 billion units in 2014 [Jan 14, 2014]
Global smartphone shipments are expected to top 1.24 billion units in 2014, with Samsung Electronics, Apple, LG Electronics, Sony Mobile Communications, Lenovo, Huawei [according to the company: 52 million units in 2013 vs 60 million target] , Microsoft, ZTE, Coolpad and TCL serving as top-10 vendors, according to Digitimes Research.
Apple may see its shipments double in 2014 largely due to increased shipments to China and Japan as it will benefit from its cooperation with the largest telecom operators in the two countries, said Digitimes Research.
The growth rate for Samsung will be limited in 2014 as its sales in the US, China and Japan will be depressed by growing popularity of iPhones.
China-based Lenovo, Huawei and Coolpad are expected to step up their efforts to boost sales in overseas markets after being enlisted among the top-10 vendors due to higher shipment volumes in the home market in China.
However, TCL and ZTE will continue to ship smartphones to overseas markets mainly, but will also strengthen sales in China, with domestic sales to account for less than 50% of their total shipments in 2014, commented Digitimes Research.
This article is an excerpt from a Digitimes Research Special Report (2014 global smartphone market forecast).
Digitimes Research: China smartphone-use application processor shipments edge up 2.4% in 4Q13 [Jan 15, 2014]
Shipments of application processors for smartphone applications to China grew 2.4% sequentially and 20.8% on year in the fourth quarter of 2013, according to data compiled by Digitimes Research.
MediaTek saw its AP shipments decline 3.9% sequentially in the fourth quarter due to inventory checks at clients and a high growth recorded in the previous quarter.
However, it was a 20% sequential shipment decline suffered by Qualcomm the fourth quarter that weakened the growth momentum of the application processor sector, said Digitimes Research.
Meanwhile, MediaTek has been shifting its focus to the high-margin segment, instead of seeking high shipment growth. China-based Spreadtrum Communications was hit with high inventory of TD-SCDMA chips and slow sales of its dual- and quad-core solutions, Digitimes Research indicated.
Qualcomm also saw its performance weaken in the fourth quarter as its QRD (Qualcomm reference design) chips were less competitive than those offered by rivals in terms of product features.
This article is an excerpt from a Chinese-language Digitimes Research report. Click here if you are interested in receiving more information about the content and price of a translated version of the full report.
Digitimes Research estimates that in 2014 global tablet shipments will reach 289 million units [Dec 31, 2013]
China white-box makers add extra value to tablets as cost reduction is no longer possible [DIGITIMES Research, Jan 16, 2014]
China white-box players have not been able to lower their Wi-Fi-based tablets’ prices since the third quarter of 2013 because there is no room for further reductions in their BOM costs.
The average BOM cost for a white-box tablet – most of which adopted a dual-core processors – stood at about US$25 as of the fourth quarter of 2013. Dual-core processor pricing could not drop any further, as their average prices came to about US$4, only less than US$1 higher than that of a single-core one.
Memory and 7-inch TN LCD panels are the two key components that account for major shares of white-box tablet BOM costs. However, most panel suppliers have been only willing to upgrade specifications instead of dropping their quotes, and therefore, white-box players have been left with upgrading their devices with better panels without an option of reducing the panel cost.
While cost reduction is no longer a feasible way to attract consumers, many white-box players have turned to push tablets with phone functions to increase their devices’ functionalities and value. The devices also provide higher gross margins for vendors.
Digitimes Research estimates that currently, 80% of white-box tablets are available in countries other than China, because white-box tablets with phone functions have seen rising demand in Russia and other markets in Eastern Europe and Southeast Asia since the second half of 2013.
China white-box players’ partnerships with regional brand vendors in emerging markets have also helped raise local consumers’ demand for tablets with phone functions.
In the first half of 2013, most white-box tablets with phone functions adopted China-based Allwinner Technology’s solution which combined an entry-level single-core processor with a discrete baseband module. However, many white-box device makers have turned to MediaTek solutions for their tablets since the second half of 2013 after the Taiwan-based chipmaker also integrated a baseband chip into its tablet processor solution.
MediaTek’s solution is more expensive, but its support for product development and hardware design has given it an upper hand over competitions. Meanwhile, independent design houses (IDHs), which provide white-box players with product design services, also started to design tablets using MediaTek’s smartphone processors in the second half of 2013, which prompted white-box players to adopt MediaTek’s solutions.
Digitimes Research estimates that tablets with phone functions will account for 40% of 7-inch white-box tablet shipments in 2014, up from 20% in 2013.
image

In 2014, smartphones are expected to continue penetrating rapidly into emerging markets such as Russia, India, Indonesia and Latin America, while China’s smartphone shipments will see weakened on-year growth in the year, but still enormous volume. Within the top-10 smartphone vendors in 2013, four of them are from China and in 2014 more China-based vendors are expected to enter the top 10.
Three China-based handset vendors increase component deliveries [DIGITIMES, Dec 11, 2014]
China-based handset vendors Xiaomi Technology, Gionee and Hisense have been taking increasing deliveries of panels and touch panels from suppliers in preparation for launching new models during the peak period before the 2014 Lunar New Year at the end of January, according to Taiwan-based supply chain makers.
Other China-based vendors including Lenovo, Huawei Device and Oppo have begun to follow suit, the sources indicated.
Xiaomi has seen success in marketing its high-end Xiaomi 3, mid-range Xiaomi 2S and entry-level Hong-mi (Red Rice), the sources noted.
Gionee focuses on marketing high-end smartphones priced above CNY2,000 (US$328) through general retail chains without cooperation with China’s three mobile telecom carriers, the sources indicated. Gionee has shipped more than two million smartphones a quarter so far in 2013.
Hisense is among several licensed vendors of 4G smartphones and has launched the 5-inch X6T, its first 4G smartphone featuring TD-LTE, LTE-FDD, TD-SCDMA, WCDMA and GSM, on 12 frequency bands, the sources noted. Hisense has taken delivery of components for use in more than one million handsets to be launched before the 2014 Lunar New Year, the sources noted.
China market: Xiaomi lowers price for Hongmi smartphone [DIGITIMES, Jan 7, 2014]
China-based vendor Xiaomi Technology has reduced the retail price for its budget TD-SCDMA smartphone, the Hongmi, launched in August 2013, from CNY799 (US$132) to CNY699, heralding upcoming competition in the Android smartphone segment in China, according to industry watchers.
Rival vendor Huawei is likely to counteract by slashing the prices of its Honor-branded budget smartphones, while other local brands in China are also expected to follow suit soon, said the observers.
Optimizing its policy of offering smartphones with high hardware specifications and yet at low prices, Xiaomi has managed to ramp up its shipments to over three million units a month and is expected to ship over 40 million smartphones in 2014, the sources estimated. [According to Xiaomi: “7.2 million devices … in 2012 and 18.7 million …bought in 2013. … for 2014 – the CEO expects forty million Xiamoi smartphones to be bought”]
Asustek expected to ship 2014 target of 5 million smartphones [DIGITIMES, Jan 7, 2014]
Asustek Computer unveiled three ZenFone-series smartphones for the opening of CES 2013. Viewing that ZenFone models have comparatively high price-performance ratios, Asustek will be able to hit its target shipments of five million smartphones for 2014, and is likely to ship 8-10 million units, according to market analysts.
The three ZenFone models will initially launch in the Taiwan, China and Southeast Asia markets in March at contract-free retail prices of US$99 for the 4-inch model, US$149 for the 5-inch, and US$199 for the 6-inch.
All three models are equipped with Intel Atom processors and Asustek will launch 3-4 models also with Atom processors in the second half of 2014, the sources indicated.
Since Intel has offered incentives to attract PC vendors to adopt its platforms for smartphones, Asustek is expected to procure Atom processors at discount prices and receive subsidies from Intel for marketing the devices, the sources said.
Asustek likely to release smartphone orders to China ODMs in 2H14, says paper [DIGITIMES, Jan 15, 2014]
Asustek Computer does not rule out the possibility of tying up with handset ODMs in China for the production of smartphones in the second half of 2014, the Chinese-language Economic Daily News (EDN) has quoted company CEO Jerry Shen as saying.
After unveiling five new models at the recently concluded CES 2014, Asustek plans to launch another five smartphones in the second half of the year, and therefore it needs more ODMs to support production, Shen was quoted as indicating.
The three ZenFone-series smartphones out of the five models unveiled by Asustek at CES 2014, with displays sized in 4-, 5-, and 6-inch, will be available for US$99, US$149 and US$199 unlocked, respectively, and are designed to take on China-based rivals in the entry-level smartphone segment.
The possible switch of orders to China-based ODMs may affect its current production partners in Taiwan, including Wistron and Pegatron, said the paper.
Digitimes Research: Asustek ZenFone smartphones have lower price-performance ratios than comparable models from China [Jan 17, 2014]
Asustek Computer unveiled three ZenFone-series smartphones at CES 2014 and will initially launch the models in the Taiwan, China and Southeast Asia markets in March with prices comparable to low-cost models offered by China-based Xiaomi Technology and Huawei. But the price-performance ratios of the ZenFones will be still lower than rival models from China-based vendors due to the use of different marketing channels, according to Digitimes Research.
China-based vendors such as Huawei and Coolpad have been duplicating the business model initiated by Xiaomi by introducing entry-level models with higher hardware specifications and marketing the gadgets mainly through the Internet.
Leveraging subsidies offered by telecom operators, Asustek has been able to lower prices for its ZenFone models to levels comparable to those offered by Xiaomi, Huawei and Coolpad, but the price-performance ratios are lower than of the Hongmi smartphone from Xiaomi, the Honor 3C from Huawei and the Great God F1 from Coolpad, due to markup costs added by channel operators in China selling the ZenFones.
Due to the lower price-performance ratios, Asustek’s goal of shipping over five million smartphones in 2014 through a low-pricing model remains hard to achieve, commented Digitimes Research.
This article is an excerpt from a Chinese-language Digitimes Research report. Click here if you are interested in receiving more information about the content and price of a translated version of the full report.
Total: ~289+ million
Apple: 80-90 million
Non-Apple brand vendors: ~105+ million
– Samsung: 60-70 million
Whitebox vendors: ~104 million image
Apple, Samsung expected to ship 80-90 million, 60-70 million tablets in 2014, say sources [DIGITIMES, Jan 17, 2014]
Apple and Samsung Electronics will remain as the global top-two tablet vendors in 2014 with expected shipments of 80-90 million and 60-70 million units, respectively, according to Taiwan-based supply chain makers.
Samsung’s recent launch of its 12.2-inch model is expected to propel Apple to accelerate development of large-size iPads. Market sources indicated that Apple is likely to release a 12.9-inch model by the end of the third quarter at the earliest.
The two vendors are also expected to continue rolling out new versions of their existing models.
Samsung is also likely to launch more Galaxy Lite models, with prices going down as low as US$129, the sources indicated, adding that Samsung’s tablet shipments in 2014 are expected to reach 60-70 million units compared to 40 million shipped in 2013.
Meanwhile, Apple reportedly has asked its production partners and component suppliers to develop new models of 7.9- and 9.7-inch tablets, added the sources.
Foxconn expected to ship 55-60 million tablets in 2014, say Taiwan makers [DIGITIMES, Jan 16, 2014]
Foxconn Electronics (Hon Hai Precision Industry) shipped 50 million tablets to become the largest Taiwan-based ODM in 2013 and is expected to ship 55-60 million units to maintain the leading status in 2014, according to supply chain makers.
Foxconn is the main OEM for iPads and has undertaken ODM production of Amazon tablets, the sources noted.
Pegatron, with orders for iPad, Surface and tablets launched by Asustek Computer, shipped 25 million units in 2013 and is expected to remain as the second-largest ODM with shipments of 25-28 million units in 2014, the sources indicated.
With Lenovo and Acer being major clients, Compal Electronics shipped seven million tablets in 2013. With potential OEM orders for iPad mini with Retina display and additional ODM orders from Amazon, Compal is likely to ship 14 million tablets in 2014, the sources estimated.
Quanta Computer shipped 15-16 million tablets in 2013, of which a large portion were Nexus models for Google, the sources noted. Although Quanta may obtain OEM orders for a 12.9-inch iPad, shipments in 2014 will be low volume, the sources indicated. Therefore, Quanta’s 2014 tablet shipments are expected to remain at 15-16 million units.
Digitimes Research: Non-Apple brand vendors to ship 105 million tablets in 2014 [Nov 19, 2013]
Global tablet shipments are expected to reach 289 million units in 2014, up 23.6% on year. The growth, however, will be weaker than that for smartphones due to the fact that the tablet market has already entered the maturity stage, according to Digitimes Research’s latest figures.
In 2014, non-Apple first-tier brand vendors’ products are expected to have more room for price cuts, making their products even more competitive in China than their white-box competitors. The lower pricing means retailers will be more eager to promote their products. The gap in terms of functionality between Google’s official Android operating system and Android Open Source Project (used mostly by China white-box vendors) are also expected to be widen. As a result, the non-Apple first-tier vendors’ combined shipments are expected to grow dramatically to 105 million units in 2014, slightly surpassing China white-box vendors’ combined shipments of 104 million units, according to estimates by Digitimes Research.
Although the fifth-generation iPad (Air) is expected to attract consumers and stimulate replacement demand, the device’s high pricing are expected to limit iPad series products’ shipment growth in 2014 with the volume to reach only 80 million units.
As for brand vendors’ rankings, Apple and Samsung Electronics will remain in the top two in 2014. Since Samsung will adopt more aggressive marketing and pricing strategies in 2014, its shipments will reach 52.5 million units, reducing its gap with the market leader Apple. Lenovo, as the largest PC vendor worldwide and with advantages in its home market of China, is expected to ship 9.5 million units in 2014 to take third place in the tablet market.
Having failed to obtain orders for the next-generation Google Nexus tablets, Asustek Computer is expected to step up promoting its own-brand tablets, and it will ship nine million units in 2014, becoming the fourth largest vendor.
Acer will have a strong presence in entry-level segment, shipping 6.7 million tablets in 2014 to take sixth place, while Google will be the fifth largest vendor. Amazon‘s [5.45 million units in 2013 #5 with that in 2013] and Microsoft‘s shipments [max ~2-3 million of Surface Pro and ??? of Surface] will stay flat or grow only slightly on year.
Digitimes Research expects 7-inch models to remain as the mainstream size for branded tablets in 2014 with shipments set to reach 89.1 million units. But the segment’s share of total tablet shipments will drop below 50%. Brand vendors are expected to place more emphasis on 8-inch models as they look to avoid fierce competition in the 7-inch segment, which is crowded with low-price and white-box products. Shipments to the 8-inch segment are expected to reach 30 million units in 2014, triple the volume in 2013 and surpassing 10-inch models’ 25.4 million units.
As for Taiwan ODMs, their shipments will hit 117 million units in 2014, accounting only for 63% of the global total, down 5.2pp on year. The share will decline because Samsung and Lenovo, the second and the third largest vendors, are making most of their tablets internally.
To seek lower manufacturing quotes and to diversify risks, brand vendors are expected to further divide their tablet orders among ODMs. Foxconn Electronics (Hon Hai Precision Industry) and Pegatron Technology will remain as the top two ODMs for tablets in 2014. With more orders coming from Apple and Asustek, Pegatron will see significant tablet shipment growth in 2014, narrowing its gap with Foxconn. Compal Electronics is expected to surpass Quanta Computer to become the third-largest table ODM, thanks to orders from Apple and its acquisition of Compal Communication.
This article is an excerpt from a Digitimes Research Special Report (2014 global tablet demand forecast). Visit our latest Special reports.

More information (going back to end of July 2013) which is directly related to the possible changes on the 2014 markets in terms of 2014 will be the last year of “free ride” in the smartphone and tablet spaces for ARM-based competitors of Intel – at least what Intel is insisting again [‘Experiencing the Cloud’, Jan 17, 2014]:

MediaTek MT6592-based True Octa-core superphones are on the market to beat Qualcomm Snapdragon 800-based ones UPDATE: from $147+ in Q1 and $132+ in Q2

… prices are starting as low as $247 in China (ZOPO Black 2, sold outside as ZP998)
UPDATE: China market: Prices of octa-core smartphones drifting below CNY1,000 [US$165] [DIGITIMES, Jan 27, 2014]

The battle for the entry-level smartphone segment in China is intensifying, and Coolpad with releasing an octa-core model priced below CNY1,000 (US$165), according to industry sources.

The Coolpad Great God F1, one of two 8-core smartphones released by Coolpad recently, comes with a MediaTek 1.7GHz 8-core MT5692 processor, 5-inch display with 720p resolution and 13-megapixel camera, and a price tag of only CNY888 (US$147).

China-based vendors including ZTE, Huawei, Lenovo, TCL and Gionee have launched 8-core smartphones with prices ranging from CNY1,699-1,999 (US$280-330).

My own insert here: Currently the cheapest one on the market outside China is the Ulefone U9592 : http://www.fastcardtech.com/Ulefone-U9592
image

Ulefone U9592
The cheapest MTK6592 Smart Phone so far With IPS screen & 8.0M camera

Ulefone is the cheapest MTK6592 smart phone so far, but it has the best performance on the hardware as you can see in the review. The quality of the display is really good, even better then 720P. 5.0inch capacitive touch screen 854×480 MTK6592 Cortex A7 Octa core CPU,1.7GHz 2GB RAM +16GB ROM Dual camera:2.0MP front camera and 8.0MP back camera with flashlight Dual SIM Card Dual Standby

This video is from another vendor,
GeekBuying selling it for $200 (with free shipping).

Coolpad’s aggressive pricing will force other vendors to slash their prices soon, commented the sources.

Xiaomi Technology also plans to launch an 8-core model in the second quarter of 2014, and market sources believe that Xiaomi is likely to tag the price of its 8-core model at CNY799 (US$132).

The keen competition in the 8-core segment could also affect pricing for the 4G LTE smartphone market, said the sources, adding that prices of mainstream LTE models will fall to around CNY1,500 (US$248) in the first half of 2014 and drop to below CNY1,000 (US$165) in the second half of the year.

Demand for low-cost entry-level LTE smartphones from China Mobile, and fierce competition among LTE chipset suppliers including Qualcomm, Marvell Technology, MediaTek and Spreadtrum Communications will also accelerate price erosion of LTE smartphones, added the sources.

And here is the case of a global brand: Alcatel One Touch Idol X+ 5″ 1080p with MT6592 Octa Core [Charbax YouTube channel, Jan 17, 2014], list price indication given to PCMag was: “Alcatel projected a ballpark price point of below $300.”

Based on the newest fastest yet Mediatek MT6592 Octa core ARM Cortex-A7, with a 5″ Full HD IPS LCD display, thin and light form factor, this is the highest yet performance from MediaTek, Alcatel One Touch is a very rapidly growing Smartphone brand.

END OF UPDATE

Detailed MT6592 SoC information is in Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the Cloud’, July 20-29, 2013]. See also MediaTek True Octa-core [MediaTek technology page, July 22, 2013].

MT6592 True Octa-core : Performance Benchmark [mediateklab YouTube channel, Dec 20, 2013], its Chinese version was made available on Youku Nov 23, 2013, the  competitor’s quad-core at 2.3GHz is obviously the Snapdragon 800

MT6592 delivers a perfect balance of performance and power consumption. See how the performance of the eight-core MT6592 (2GHz) compares to a quad-core (2.3GHz) smartphone over a period of time in benchmark test.

MT6592 True Octa-Core: Thermal Benchmark [mediateklab YouTube channel, Dec 20, 2013]

See how the temperature of the eight-core MT6592 compares to a leading quad-core smartphone in our high-tech ” hot chocolate” test.

MT6592 True Octa-Core : Low Power Benchmark

With its combination of performance-driven and energy-efficient cores, MT6592 makes much more effective use of battery power.

MediaTek Launches MT6592 True Octa-Core Mobile Platform [MediaTek press release, Nov 20, 2013]

The MT6592 is the world’s first heterogeneous computing SOC with scalable eight-core processing for superior multi-tasking, industry-leading multimedia and excellent performance-per-watt.
TAIWAN, Hsinchu – 20 November, 2013 – MediaTek Incorporated (2454:TT) today unveiled the MT6592, the world’s first true octa-core mobile platform. The MediaTek MT6592 System on a Chip (SOC) combines an advanced eight-core application processor with industry-leading multimedia capabilities and mobile connectivity for a perfect balance of performance and power consumption.
The greater computational capabilities of the MediaTek MT6592 deliver premium gaming performance, advanced multi-tasking and enhanced web browsing for high-end smartphones and tablets. The MT6592 builds on the success of existing MediaTek quad-core mobile platforms, which have revolutionized price-performance efficiency for mobile devices, and is expected to be available in devices running Android ‘Jelly Bean’ by the end of 2013. MT6592 enabled mobile devices running Android ‘Kit-Kat’ are expected in early 2014.
Building on the advanced 28nm HPM high-performance process, the MT6592 has eight CPU cores, each capable of clock speeds up to 2GHz. The true octa-core architecture is fully scalable, and the MT6592 runs both low-power and more demanding tasks equally effectively by harnessing the full capabilities of all eight cores in any combination. An advanced MediaTek scheduling algorithm also monitors temperature and power consumption to ensure optimum performance at all times.
The MT6592 features a world-class multimedia subsystem with a quad-core graphics engine, an advanced video playback system supporting Ultra-HD 4Kx2K H.264 video playback and support for new video codecs such as H.265 and VP9, a 16-megapixel camera and a Full HD display. The SOC also features MediaTek ClearMotion™ technology for automatic frame-rate conversion of standard 24/30fps video to high-quality 60fps video for significantly smoother playback.
Enhancing mobile performance still further, the MT6592 incorporates the MediaTek advanced multi-mode cellular modem and a full connectivity capability for dual-band 801.11n Wi-Fi, Miracast screen-sharing as well as Bluetooth, GPS and an FM tuner.
In addition to MediaTek’s leadership in Heterogeneous Multi-Processing (HMP) in CPU, all of its mobile SOC’s including the MT6592 have been using a Heterogeneous Computing (HC) architecture, distributing the workload to different kinds of processors and other specialized computing engines to optimize performance.  These HC building blocks include the CPU, GPU, DSP, multiple connectivity engines, multiple multimedia engines, camera engines, display engines, navigation, and sensor cores. MediaTek is committed to apply the best-in-class technologies to each of these building blocks.
“We are thrilled to offer the new MT6592 to our customers as part of our ongoing commitment to providing inclusive mobile technology,” said Jeffrey Ju, MediaTek General Manager, Smartphone Business Unit. ”The MT6592 delivers longer battery life, low-latency response times and the best possible mobile multimedia experience. Being the first to market with this advanced eight-core SOC is testament to the industry-leading position of MediaTek.”
” MediaTek has taken a pioneering position with the MT6592 by being the first to use the power-efficient ARM® Cortex®-A7 processor in an octa-core configuration with the ARM Mali™ GPU,” said Noel Hurley, ARM Vice President of Strategy and Marketing, Processor Division. “We are delighted that our partnership with MediaTek continues to deliver new and innovative mobile consumer products, extending our low-power and high-performance leadership in mobile devices.”
                                                                                               ###
About MediaTek Inc.
MediaTek Inc. is a leading fabless semiconductor company for wireless communications and digital multimedia solutions. The company is a market leader and pioneer in cutting-edge SOC system solutions for wireless communications, high-definition TV, optical storage, and DVD and Blu-ray products. Founded in 1997 and listed on Taiwan Stock Exchange under the “2454” code, MediaTek is headquartered in Taiwan and has sales or research subsidiaries in Mainland China, Singapore, India, United States, Japan, Korea, Denmark, England, Sweden and Dubai. For more information, visit MediaTek’s website at www.mediatek.com.

Gameloft Modern Combat 5 True Octa Core vs Quad Core Comparison [techand trickz YouTube channel, Nov 26, 2013]

Gameloft teams up with MediaTek to unleash stunning graphical gameplay for Modern Combat 5 [MediaTek press release, Nov 18, 2013]

Gameloft to use latest True Octa-Core MT6592 to bring mobile gaming to the next level
Paris – November 18, 2013 – Gameloft, a leading global publisher of digital and social games, and MediaTek, a leading fabless semiconductor company specializing in wireless communications and digital multimedia solutions, announce that the hotly anticipated Modern Combat 5 will be optimized on the new MT6592 octa-core smartphone chip, for Android smartphones.The MT6592, MediaTek’s latest innovation, is the first true octa-core processor in the world, and Gameloft’s next title, Modern Combat 5, will be the first game optimized for the new chip. As mobile gaming moves forward highly detailed and realistic gameplay, the need for higher performance chipset is required. Specific features of the new Modern Combat 5 include definition levels not seen before, especially in the technically difficult mediums of water distortion effects, reflections and shadowing.
Modern Combat 5 is a fast-moving, visually exciting action game played across various terrains and conditions. MT6592 allows for continuous scrolling in high definition with attention to detail from soft particle display to enhanced depth of field to create a more immersive experience.
“We’re thrilled to expand our collaboration with MediaTek,” said Ludovic Blondel, Vice President OEM at Gameloft. “This new octa-core system on a chip is focused on high performance and is one of the best mobile technologies on today’s market. We are delighted to showcase this innovative, high-end technology in Modern Combat 5, one of our most awaited games of 2014.”
“With the rapid development of mobile Internet applications and services, mobile gaming has become one of the leading value-added services for our customers and the best medium to experience the power of True Octa-Core with our MT6592 chip,” said Jeffrey Ju, General Manager of MediaTek Smartphone Business Unit. “Our partnership with Gameloft on Modern Combat 5 is a major breakthrough for the industry and gaming community, as we empower the ultimate gaming experience that can be enjoyed anywhere, anytime.”
Modern Combat 5 will be available on all smartphone models equipped with the MT6592 chip, and will be available for download from the Google Play Store in early 2014.
                                                                                                 ###
About Gameloft
A leading global publisher of digital and social games, Gameloft® has established itself as one of the top innovators in its field since 2000. Gameloft creates games for all digital platforms, including mobile phones, smartphones and tablets (including Apple® iOS and Android® devices), set-top boxes and connected TVs. Gameloft operates its own established franchises such as Asphalt®, Order & Chaos, Modern Combat, and Dungeon Hunter, and also partners with major rights holders including Universal®, Illumination Entertainment®, Disney®, Marvel®, Hasbro®, FOX®, Mattel® and Ferrari®. Gameloft is present on all continents, distributes its games in over 100 countries and employs over 5,000 developers. Gameloft is listed on NYSE Euronext Paris (NYSE Euronext: GFT.PA, Bloomberg: GFT FP, Reuters: GLFT.PA). Gameloft’s sponsored Level 1 ADR (ticker: GLOFY) is traded OTC in the US.

Current (Dec 22, 2013) MT6592-based smartphones in PDAdb.net:

Coolpad 9976A ???

  • Release Date: November, 2013
  • OS: Google Android 4.2.1 Chinese
  • CPU: 32bit MediaTek MT6592, 1638MHz
  • Memory: 2048MiB RAM, 7629MiB ROM
  • Display: 7″ 1200×1920 pixel
  • Cellular Phone: dual cellular operation (Dual standby)
  • Physical Attributes: 104.5 x 185 x 7.6 mm, 263 g

O2 Super K1  [RMB 2,199 – $362]

  • Release Date: November, 2013
  • OS: Google Android 4.3
  • CPU: 32bit MediaTek MT6592, 1700MHz
  • Memory: 2048MiB RAM, 30518MiB ROM
  • Display: 5.7″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Dual standby)
  • Physical Attributes: 79.5 x 155 x 8.2 mm, 175 g

THL W11 Monkey King II
[RMB 1,899 – $318]

  • Release Date: November, 2013
  • OS: Google Android 4.3
  • CPU: 32bit MediaTek MT6592, 2000MHz
  • Memory: 2048MiB RAM, 30518MiB ROM
  • Display: 5″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Single standby)
  • Physical Attributes: 71.2 x 144 x 8.6 mm, 155 g

Uniscope XC2S 
[RMB 1,699 – $280]

  • Release Date: December, 2013
  • OS: Google Android 4.2.2 Aliyun OS
  • CPU: 32bit MediaTek MT6592, 1664MHz
  • Memory: 2048MiB RAM, 30517MiB ROM
  • Display: 5″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Single standby)
  • Physical Attributes: 68.5 x 139.5 x 8.44 mm

THL T100s Ironman ???

  • Release Date: December, 2013
  • OS: Google Android 4.2.2
  • CPU: 32bit MediaTek MT6592, 1700MHz
  • Memory: 2048MiB RAM, 30518MiB ROM
  • Display: 5″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Dual standby)
  • Physical Attributes: 70.4 x 144.2 x 8.8 mm, 144 g

UMI X2S  ???

  • Release Date: December, 2013
  • OS: Google Android 4.2.2
  • CPU: 32bit MediaTek MT6592, 1664MHz
  • Memory: 2048MiB RAM, 30518MiB ROM
  • Display: 5″ 1080×1920 pixel
  • Cellular Phone: dual cellular operation (Dual standby)

Newman K18 16GB ???

  • Release Date: December, 2013
  • OS: Google Android 4.2.2
  • CPU: 32bit MediaTek MT6592, 1700MHz
  • Memory: 2048MiB RAM, 15259MiB ROM
  • Display: 5″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Dual standby)
  • Physical Attributes: 69.9 x 144 x 6.1 mm, 120 g

Newman K18 32GB  ???

  • Release Date: December, 2013
  • OS: Google Android 4.2.2
  • CPU: 32bit MediaTek MT6592, 1664MHz
  • Memory: 2048MiB RAM, 30518MiB ROM
  • Display: 5″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Dual standby)
  • Physical Attributes: 69.9 x 144 x 6.1 mm, 120 g

GiONEE Elife E7 mini 16GB ???

  • Release Date: December, 2013
  • OS: Google Android 4.3
  • CPU: 32bit MediaTek MT6592, 1700MHz
  • Memory: 1024MiB RAM, 15259MiB ROM
  • Display: 4.7″ 720×1280 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Dual standby)
  • Physical Attributes: 66 x 139.8 x 8.6 mm

Zopo ZP998  [internally as Zopo Black 2 for RMB 1,499 – $247]

  • Release Date: January, 2014
  • OS: Google Android 4.2.2
  • CPU: 32bit MediaTek MT6592, 1664MHz
  • Memory: 2048MiB RAM, 30518MiB ROM
  • Display: 5.5″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Dual standby)

Alcatel One Touch Idol X+ (TCL S960T)  [RMB 1,999 – $329]

  • Release Date: January, 2014
  • OS: Google Android 4.2.2
  • CPU: 32bit MediaTek MT6592, 2000MHz
  • Memory: 2048MiB RAM, MiB ROM
  • Display: 5″ 1080×1920 pixel color IPS TFT
  • Cellular Phone: GSM850, GSM900, GSM1800,..
  • Physical Attributes: 69.1 x 140.4 x 7.9 mm, 125 g

Huawei Ascend G750-T00 / Honor 3X / Glory 4 
[RMB 1,698$280]

  • Release Date: January, 2014
  • OS: Google Android 4.2.2 Chinese
  • CPU: 32bit MediaTek MT6592, 1664MHz
  • Memory: 2048MiB RAM, 7630MiB ROM
  • Display: 5.5″ 720×1280 pixel color IPS TFT
  • Cellular Phone: dual cellular operation (Dual standby)

The case of the most ambitious newcomer, ZOPO:

Next Step of ZOPO-Return Banquet of Partners of ZOPO Draws to a Successful Conclusion [ZOPOMOBILE YouTube channel, Aug 31, 2013]

Speech from Kevin Xu, CEO of ZOPO at 2013 ZOPO-Return Banquet of Partners of ZOPO Draws to a Successful Conclusion Edited by official authorized zopomobileshop.com http://www.zopomobileshop.com
From: At August 30, 2013, Return Banquet of Partners(global Market) of Shenzhen ZOPO Communications-equipment Co., Ltd. was held at the The Pavilion Hotel, Shenzhen, China. More than 50 people attended this return banquet activity, including Mr. Kevin Xu, President of ZOPO Communications-equipment Co., Ltd., Mr. Allen Cao, senior manager, Mr Shawn Sun, executive director of zopomobileshop.com, and representatives of various reseller, such as dx.com, efox-shop.com, lightinthebox.com and other retail business.
The return banquet at afternoon started with Mr. Allen Cao, senior manager of international market, delivered his thanksgiving remarks to the guests on behalf of the ZOPO Communications-equipment Co., Ltd, thanking the partners of the various fields for their constant trust and support to ZOPO Communications-equipment Co., Ltd. He introduced to partners achievements of the accelerated development the ZOPO mobile phone business on global market in 2012 and 2013. ZOPO already have 4 official distributors in European: French, Germany, Italy, Spain. ZOPO also have built up strategic partnership with more then 10 E- business, such as zopomobileshop.com, pandawill.com, ebay, paypal, AliExpress and so on. Mr.Cao show special thanks to zopomobileshop.com team, appreciate Ms. Jessica Tang and Zopomobileshop team provide global customers a channel to understand ZOPO and the reliable service. Afterwards,Mr. Kevin Xu,President of the company introduced its direction for future development in becoming “ a reliable and professional smart phone supplier by providing users phone with the latest tech”. He confirms that ZOPO will be the first factory to release smart phone with 8 cores. Further more, the ZP980 and C2, will have a update to a 2rd generation version and a version with batter price come out soon. Then Mr. Jay Wang, CEO of Pandawill.com has a speech as partners representative.
Return banquet of partners of ZOPO communications-equipment CO.,Ltd. has been end of a dinner. Mr. Kevin Xu, President of ZOPO Communications-equipment Co., Ltd., Mr. Allen Cao, senior manager, drank with all guests, praying together for a bright and beautiful future. The party thus drew to its successful conclusion and happy wishes.

Zopo – Factory Testing of Zopo C2 Mobile Phone [Digital Playworld YouTube channel, July 31, 2013]

http://www.digitalplayworld.co.uk A short video showing some of the quality testing that the Zopo factory put their mobile phones through. To order yours in the UK visit http://www.digitalplayworld.co.uk

Zopo Factory Tour — How Popular Zopo 990, 980 Phones Be Made [Jody Elife YouTube channel, Nov 19, 2013]

Recently, Antelife team are so honored to get invitation from Zopo company, to visit Zopo factory, reveal each detail you wanna know, and show you how Zopo phones be made. More Zopo phones here: http://www.antelife.com/catalogsearch/result/?q=zopo

ZOPO ZP998 AnTuTu Benchmark [ZOPOMOBILE YouTube channel, Dec 17, 2013]

ZOPO zp998 Octa Core NFC Test – Zopomobileshop [ZOPOMOBILE YouTube channel, Dec 17, 2013]

From: http://www.zoposhop.com/officialZOPO-ZP998-XiaoHei-II-MTK6592-Octa-Core-1-7GHz-5-5-inch-FHD-Screen-14-0M-Camera-Smart-Phone-With-OTG-NFC-5G-WIFI-Air

Pre-order ZOPO ZP998 FIRST TRUE 1.7GHz Eight-core 2GRAM+32 ROM MTK6592T 14.0MP CAMERA (Delivery after 30days)

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Q3’13 smartphone and overall mobile phone markets: Android smartphones surpassed 80% of the market, with Samsung increasing its share to 32.1% against Apple’s 12.1% only; while Nokia achieved a strong niche market position both in “proper” (Lumia) and “de facto” (Asha Touch) smartphones

Details about Samsung’s strengths you can find inside the Samsung has unbeatable supply chain management, it is incredibly good in everything which is consumer hardware, but vulnerability remains in software and M&A [‘Experiencing the Cloud’, Nov 11, 2013] post of mine.

My findings supporting the above title:

  • 205 million Android smartphones were delivered in Q3’13, representing 15.2% growth sequentially (Q/Q) and 67.3% growth relative to the same period of last year (Y/Y)
  • Meanwhile the number of Apple iPhones shipped increased only to 33.8 million, growing by 8.3% sequentially (Q/Q), but still representing a 25.65% growth relative to the same period of last year (Y/Y)
  • The shipment of “proper” smartphones from Nokia (S60/Symbian and Lumia/Windows Phone) increased to 8.8 million units, representing 18.9% growth sequentially (Q/Q) and 39.7% growth relative to the same period of last year (Y/Y)

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Than for the lead smartphone market, i.e. Mainland China I will include here:

There were 102.66 million handsets sold in the China market during the third quarter of 2013, growing 13.6% on quarter and 54.5% on year, of which 93.08 million units were smartphones, increasing 20.7% on quarter and 89.3% on year, according to China-based consulting company Analysys International.

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While for the worldwide market:

Lenovo, ZTE, Huawei and Yulong/Coolpad have taken advantage of the surging low-end smartphone market. According to IC Insights, the four major China-based handset companies are forecast to ship 168 million smartphones in 2013 and together hold a 17% share of the worldwide smartphone market.
Lenovo, ZTE, Huawei and Yulong/Coolpad shipped a combined 98 million smartphones in 2012, a more than 300% surge from the 29 million units shipped in 2011, IC Insights disclosed. It should be noted that the China-based suppliers of smartphones are primarily serving the China and Asia-Pacific marketplace, and offer low-end models that typically sell for less than US$200.
Low-end smartphones are expected to represent just under one-third (310 million) of the total 975 million smartphones shipped in 2013. IC Insights forecast that by 2017, low-end smartphone shipments will represent 46% of the total smartphone market with China and the Asia-Pacific region to remain the primary markets for these low-end models.
Samsung Electronics and Apple are set to continue dominating the total smartphone market in 2013. The two vendors are forecast to ship 457 million units and together hold a 47% share of the total smartphone market in 2013, IC Insights said. In 2012, Samsung and Apple shipped 354 million smartphones and took a combined 50% share of the total smartphone market.
Nokia was third-largest supplier of smartphones behind Samsung and Apple in 2011, but has seen its share of the smartphone market fall. Nokia’s smartphone shipments are forecast to decline by another 4% and grab an only 3% share of the total smartphone market in 2013, IC Insights indicated.
Other smartphone producers that have fallen on hard times include RIM and HTC. While each of these companies had about a 10% share of the smartphone market in 2011, IC Insights estimated they will have only about 2% shares of the 2013 smartphone market.

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Worldwide mobile phone sales to end users totaled 455.6 million units in the third quarter of 2013, an increase of 5.7 percent from the same period last year, according to Gartner, Inc. Sales of smartphones accounted for 55 percent of overall mobile phone sales in the third quarter of 2013, and reached their highest share to date.

Worldwide smartphone sales to end users reached 250.2 million units, up 45.8 percent from the third quarter of 2012. Asia/Pacific led the growth in both markets – the smartphone segment with 77.3 percent increase and the mobile phone segment with 11.9 percent growth. The other regions to show an increase in the overall mobile phone market were Western Europe, which returned to growth for the first time this year, and the Americas.

“Sales of feature phones continued to decline and the decrease was more pronounced in markets where the average selling price (ASP) for feature phones was much closer to the ASP affordable smartphones,” said Anshul Gupta, principal research analyst at Gartner. “In markets such as China and Latin America, demand for feature phones fell significantly as users rushed to replace their old models with smartphones.”

Gartner analysts said global mobile phone sales are on pace to reach 1.81 billion units in 2013, a 3.4 percent increase from 2012. “We will see several new tablets enter the market for the holiday season, and we expect consumers in mature markets will favor the purchase of smaller-sized tablets over the replacement of their older smartphones” said Mr. Gupta.

While Samsung’s share was flat in the third quarter of 2013, Samsung increased its lead over Apple in the global smartphone market (see Table 1). The launch of the Samsung Note 3 helped reaffirm Samsung as the clear leader in the large display smartphone market, which it pioneered.
Lenovo’s sales of smartphones grew to 12.9 million units, up 84.5 percent year-on-year. It constantly raised share in the Chinese smartphone market.
Apple’s smartphone sales reached 30.3 million units in the third quarter of 2013, up 23.2 percent from a year ago. “While the arrival of the new iPhones 5s and 5c had a positive impact on overall sales, such impact could have been greater had they not started shipping late in the quarter. While we saw some inventory built up for the iPhone 5c, there was good demand for iPhone 5s with stock out in many markets,” said Mr. Gupta.

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In the smartphone operating system (OS) market (see Table 2), Android surpassed 80 percent market share in the third quarter of 2013, which helped extend its leading position. “However, the winner of this quarter is Microsoft which grew 123 percent. Microsoft announced the intent to acquire Nokia’s devices and services business, which we believe will unify effort and help drive appeal of Windows ecosystem,” said Mr. Gupta. Forty-one per cent of all Android sales were in mainland China, compared to 34 percent a year ago. Samsung is the only non-Chinese vendor in the top 10 Android players ranking in China. Whitebox Yulong [Coolpad] is the third largest Android vendor in China with a 9.7 percent market share in the third quarter of 2013. Xiaomi represented 4.3 percent of Android sales in the third quarter of 2013, up from 1.4 percent a year ago.

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Mobile Phone Vendor Perspective

Samsung: Samsung extended its lead in the overall mobile phone market, as its market share totaled 25.7 percent in the third quarter of 2013 (see Table 3). “While Samsung has started to address its user experience, better design is another area where Samsung needs to focus,” said Mr. Gupta. “Samsung’s recent joint venture with carbon fiber company SGL Group could bring improvements in this area in future products.”
Nokia: Nokia did better than anticipated in the third quarter of 2013, reaching 63 million mobile phones, thanks to sales of both Lumia and Asha series devices. Increased smartphone sales supported by an expanded Lumia portfolio, helped Nokia move up to the No. 8 spot in the global smartphone market. But regional and Chinese Android device manufacturers continued to beat market demand, taking larger share and creating a tough competitive environment for Lumia devices.
Apple:  Gartner believes the price difference between the iPhone 5c and 5s is not enough in mature markets, where prices are skewed by operator subsidies, to drive users away from the top of the line model. In emerging markets, the iPhone 4S will continue to be the volume driver at the low end as the lack of subsidy in most markets leaves the iPhone 5c too highly priced to help drive further penetration.
Lenovo: Lenovo moved to the No. 7 spot in the global mobile phone market, with sales reaching approximately 13 million units in the third quarter of 2013. “Lenovo continues to rely heavily on its home market, which represents more than 95 per cent of its overall mobile phone sales. This could limit its growth after 2014, when the Chinese market is expected to decelerate,” said Mr. Gupta.

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With Android and forked Android smartphones as the industry standard Nokia relegated to a niche market status while Apple should radically alter its previous premium strategy for long term

Here is the chart reflecting the performance of the market-leading mobile phones upto Q2’13:

From this the most visible things are:

  • Android and Android-forked (Xiaomi etc.) smartphones are the undisputed industry standards to dominate the market in years to come
  • Both the Symbian to Windows Phone and S40 to Asha Full Touch smartphone platform transition strategies from Nokia could survive the continued Android onslaught but only in a niche market status
  • There is no room for Apple’s further growth, and both the platform and the company could face a gradual decline in the smartphone market

My other observations about the state of the smartphone market after Q2’13 were already presented in the following posts:

In essence we came to a point when the superphone market came down in price to as low as $110 and up, while the entry-level segment of good quality came down to a $65+ price level. Also the smartphone market became saturated in all segments which brings an end to Samsung’s ability to base its premium profitability ambitions on smartphones alone (almost), as it was reflected in 20 years of Samsung “New Management” as manifested by the latest, June 20th GALAXY & ATIV innovations [‘Experiencing the Cloud’, July 2-26, 2013]:

… innovations in the broadest sense of the world: technology, hardware and software engineering and design, marketing in general and branding in particular etc.

Updates: Q2 record-high operating profit + smartphone worries deepen + overall business situation + nonproportionally high capex of the semiconductor business +  the #2 capex beneficiary, the Display Panel Segment

These observations also led to much greater conclusions about the upcoming changes:

Below I will assess the ‘Nokia Q2’13 market situation and changes’ as well as include ‘Gartner’s own assessment of the Q2’13 overall market situation and the changes’ to complete the picture.


Nokia Q2’13 market situation and changes:

Looking at the progress of Nokia Symbian to Windows Phone transformation Q2’13 was a straight continuation of the trends noted for Q1’13 in Nokia: Continued moderate progress with Lumia, urgent Asha Touch refresh and new innovations to come against the onslaught of unbranded Android and forked Android players in China and India [‘Experiencing the Cloud’, April 18, 2013] as you could also well observe from the chart included here as well:

Nokia was extensively discussing its Windows Phone transition in Nokia Corporation Interim Report for Q2 2013 and January-June 2013 [press release, July 18, 2013]:

    • Lumia Q2 volumes increased 32% quarter-on-quarter to 7.4 million units, reflecting strong demand from customers for a broadened Lumia product range.
    • Commenting on the second quarter results, Stephen Elop, Nokia CEO, said: “ … In our Smart Devices business unit, we continue to focus on delivering meaningful differentiation to consumers around the world. We are very proud of the recent creations by our Lumia team, from the Lumia 520 – our most affordable Windows Phone 8 product which has enjoyed a strong start in markets like China, France, India, Thailand, the UK, the US and Vietnam – to the Lumia 1020, our star imaging product which we unveiled to the world last week. Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue.”
    • In the third quarter 2013, supported by the wider availability of recently announced Lumia products as well as recently announced Mobile Phones products, Nokia expects higher Devices & Services net sales, compared to the second quarter 2013.
    • The year-on-year decline in our Smart Devices volumes in the second quarter 2013 continued to be driven by the strong momentum of competing smartphone platforms and our portfolio transition from Symbian products to Lumia products. The decline was primarily due to lower Symbian volumes, partially offset by higher Lumia volumes. Our Symbian volumes decreased from 6 million units in the second quarter 2012 to approximately zero in the second quarter 2013. Our Lumia volumes increased from 4.0 million in the second quarter 2012 to 7.4 million in the second quarter 2013.
    • On a sequential basis, the increase in our Smart Devices volumes in the second quarter 2013 was due to higher Lumia volumes, as we started shipping the Lumia 520 and 720 in significant volumes. In the second quarter 2013, the vast majority of Smart Devices volumes were from Windows Phone 8-based Lumia products.
    • The year-on-year increase in our Smart Devices ASP in the second quarter 2013 was primarily due to a positive mix shift towards sales of our Lumia products which carry a higher ASP than our Symbian products, partially offset by our pricing actions. Sequentially, the decrease in our Smart Devices ASP in the second quarter 2013 was primarily due to a negative mix shift towards sales of our lower priced Windows Phone 8-based Lumia products as well as our pricing actions.
    • Nokia announced and started shipments in select markets of the Nokia Lumia 925, a new interpretation of its award-winning flagship, the Nokia Lumia 920. The Nokia Lumia 925 introduces metal for the first time to the Nokia Lumia range and includes the most advanced lens technology and next-generation imaging software to capture clearer and sharper pictures and video even in low light conditions. The Nokia Lumia 925 offers a variety of exclusive services such as Nokia Music for unlimited streaming of free playlists, integrated HERE services, and the option to add wireless charging with a snap-on wireless charging cover.
    • Nokia announced the Nokia Lumia 928 smartphone, exclusive to Verizon Wireless. With a 8.7MP camera and Nokia’s PureView imaging innovation, the Nokia Lumia 928 delivers superior imaging and video performance that enables people to capture bright, blur free photos and videos, even in low light conditions. The sleek and stylish smartphone comes with the latest high-end Nokia Lumia experiences, including Nokia Music, HERE services, and built-in wireless charging.
    • Nokia started shipping in volumes the Nokia Lumia 520, its most affordable Windows Phone 8 smartphone, delivering experiences normally found only in high-end smartphones, such as the same digital camera lenses found on the Nokia Lumia 920, Nokia Music for free music out of the box and even offline, and HERE services.
    • Nokia’s Lumia range of smartphones continued to attract businesses, including Miele & Cie. KG, a global leader in domestic appliances and commercial machinery, which has chosen the Nokia Lumia range as the smartphone of choice for its global employees.
    • The Windows Phone Store continued to strengthen in terms of the quantity and quality of applications. The Windows Phone Store today offers more than 165 000 applications and games.

The Q2’13-related improvements mentioned above and influencing the below chart were even more extensively discussed in my earlier posts:

while the Q3’13-related actions of improvements in these posts:

Now look again at the performance chart for the reflections:

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From the further decline of Asha Full Touch you could see that the Temporary Nokia setback in India [‘Experiencing the Cloud’, April 28, 2013] continued into the Q2’13 as well as the result of entry-level local brand Android smartphones being in heavy price competition with Nokia Asha Full Touch during Q2 while having superior hardware specifications. Even Samsung’s REX 70 competed in price with Asha Full Touch.

Nokia was talking in his Nokia Corporation Interim Report for Q2 2013 and January-June 2013 [press release, July 18, 2013] only about the following future-oriented actions that were introduced in Q2 in order to remedy this situation:

  • In Devices & Services, our Mobile Phones business unit started to demonstrate some signs of recovery in the latter part of the second quarter following a difficult start to the year. Also, towards the end of the second quarter, we started to ship the Asha 501, which brings a new design and user experience to the highly competitive sub-100 USD market. While we are very encouraged by the consumer response to our innovations in this price category, our Mobile Phones business unit is planning to take actions to focus its product offering and improve product competitiveness.
  • On a year-on-year basis, our Mobile Phones volumes in the second quarter 2013 were negatively affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio. Compared to the second quarter 2012, our Mobile Phones volumes declined across our portfolio, most notably for our non-full-touch devices that we sell to our customers for above EUR 30, partially offset by higher sales volumes of Asha full-touch smartphones.
  • Nokia started production at its new manufacturing facility in Hanoi, Vietnam. The new site has been established to produce our most affordable Asha smartphones and feature phones.
  • Nokia announced and started shipments of the Nokia Asha 501, the first of a new generation of smartphones to run on the new Asha platform. Retailing at a suggested price of USD 99, the Nokia Asha 501 offers users affordable smartphone design with bold color, a high-quality build and an innovative user interface. The new Asha platform also allows developers who write applications for the Nokia Asha 501 to reach all smartphones based on the new Asha platform without having to re-write code.

These things were already extensively discussed in my earlier posts:


And here is how Gartner was assessing the Q2’13 overall market situation and the changes:

Gartner Says Smartphone Sales Grew 46.5 Percent in Second Quarter of 2013 and Exceeded Feature Phone Sales for First Time [press release, Aug 14, 2013]

  • Worldwide Mobile Phone Sales Grew 3.6 Percent in Second Quarter of 2013
  • Microsoft Has Become the No. 3 Smartphone OS Overtaking BlackBerry

Worldwide mobile phone sales to end users totaled 435 million units in the second quarter of 2013, an increase of 3.6 percent from the same period last year, according to Gartner, Inc. Worldwide smartphone sales to end users reached 225 million units, up 46.5 percent from the second quarter of 2012. Sales of feature phones to end users totaled 210 million units and declined 21 percent year-over-year. 

“Smartphones accounted for 51.8 percent of mobile phone sales in the second quarter of 2013, resulting in smartphone sales surpassing feature phone sales for the first time,” said Anshul Gupta, principal research analyst at Gartner. Asia/Pacific, Latin America and Eastern Europe exhibited the highest smartphone growth rates of 74.1 percent, 55.7 percent and 31.6 percent respectively, as smartphone sales grew in all regions.

Samsung maintained the No. 1 position in the global smartphone market, as its share of smartphone sales reached 31.7 percent, up from 29.7 percent in the second quarter of 2012 (see Table 1). Apple’s smartphone sales reached 32 million units in the second quarter of 2013, up 10.2 percent from a year ago. 

Table 1

Worldwide Smartphone Sales to End Users by Vendor in 2Q13 (Thousands of Units)

Company

2Q13 Units

2Q13 Market Share (%)

2Q12 Units

2Q12 Market Share (%)

Samsung

71,380.9

31.7

45,603.8

29.7

Apple

31,899.7

14.2

28,935.0

18.8

LG Electronics

11,473.0

5.1

5,827.8

3.8

Lenovo

10,671.4

4.7

4,370.9

2.8

ZTE

9,687.6

4.3

6,331.4

4.1

Others

90,213.6

40.0

62,704.0

40.8

Total

225,326.2

100.0

153,772.9

100.0

Source: Gartner (August 2013)

In the smartphone operating system (OS) market (see Table 2), Microsoft took over BlackBerry for the first time, taking the No. 3 spot with 3.3 percent market share in the second quarter of 2013. “While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users,” said Mr. Gupta. Android continued to increase its lead, garnering 79 percent of the market in the second quarter. 

Table 2

Worldwide Smartphone Sales to End Users by Operating System in 2Q13 (Thousands of Units)

Operating System

2Q13 Units

2Q13 Market Share (%)

2Q12  Units

2Q12 Market Share (%)

Android

177,898.2

79.0

98,664.0

64.2

iOS

31,899.7

14.2

28,935.0

18.8

Microsoft

7,407.6

3.3

4,039.1

2.6

BlackBerry

6,180.0

2.7

7,991.2

5.2

Bada

838.2

0.4

4,208.8

2.7

Symbian

630.8

0.3

9,071.5

5.9

Others

471.7

0.2

863.3

0.6

Total

225,326.2

100.0

153,772.9

100.0

Source: Gartner (August 2013)

Mobile Phone Vendor Perspective

Samsung: Samsung remained in the No. 1 position in the overall mobile phone market, with sales to end users growing 19 percent in the second quarter of 2013 (see Table 3). “We see demand in the premium smartphone market come mainly from the lower end of this segment in the $400-and-below ASP mark. It will be critical for Samsung to step up its game in the mid-tier and also be more aggressive in emerging markets. Innovation cannot be limited to the high end,” said Mr. Gupta. 

Nokia: Slowing demand of feature phone sales across many markets worldwide, and fierce competition in the smartphone segment, affected Nokia’s mobile phone sales in the second quarter of 2013. Nokia’s mobile phone sales totaled 61 million units, down from 83 million units a year ago. Nokia’s Lumia sales grew 112.7 percent in the second quarter of 2013 thanks to its expanded Lumia portfolio, which now include Lumia 520 and Lumia 720. “With the recent announcement of the Lumia 1020, Nokia has built a wide portfolio of devices at multiple price points, which should boost Lumia sales in the second half of 2013,” said Mr. Gupta. “However, Nokia is facing tough competition from Android devices, especially from regional and Chinese manufacturers which are more aggressive in terms of price points.” 

Apple: While sales continued to grow, the company faced a significant drop in the ASP of its smartphones. Despite the iPhone 5 being the most popular model, its ASP declined to the lowest figure registered by Apple since the iPhone’s launch in 2007. The ASP reduction is due to strong sales of the iPhone 4, which is sold at a strongly discounted price. “While Apple’s ASP demonstrates the need for a new flagship model, it is risky for Apple to introduce a new lower-priced model too,” said Mr. Gupta. “Although the possible new lower-priced device may be priced similarly to the iPhone 4 at $300 to $400, the potential for cannibalization will be much greater than what is seen today with the iPhone 4. Despite being seen as the less expensive sibling of the flagship product, it would represent a new device with the hype of the marketing associated with it.” 

Lenovo: Lenovo’s mobile phone sales grew 60.6 percent to reach 11 million units in the second quarter of 2013. Lenovo’s quarter performance was bolstered by smartphone sales. Its smartphone sales grew 144 percent year-over-year and helped it rise to the No. 4 spot in the worldwide smartphone market for the first time. Lenovo continues to rely heavily on its home market in China, which represents more than 95 percent of its sales. It remains challenging for Lenovo to expand outside China as it has to strengthen its direct channel as well as its relationships with communications service providers. 

Table 3

Worldwide Mobile Phone Sales to End Users by Vendor in 2Q13 (Thousands of Units)

Company

2Q13 Units

2Q13 Market Share (%)

2Q12 Units

2Q12 Market Share (%)

Samsung

107,526.0

24.7

90,432.1

21.5

Nokia

60,953.7

14.0

83,420.1

19.9

Apple

31,899.7

7.3

28,935.0

6.9

LG Electronics

17,016.4

3.9

14,345.4

3.4

ZTE

15,280.7

3.5

17,198.2

4.1

Huawei

11,275.1

2.6

10,894.2

2.6

Lenovo

10,954.8

2.5

6,821.7

1.6

TCL Communi-cation [Alcatel]

10,134.3

2.3

9,355.7

2.2

Sony Mobile Communications

9,504.7

2.2

7,346.8

1.7

Yulong [Coolpad]

7,911.5

1.8

4,016.2

1.0

Others

152,701.5

35.1

147,354.60

35.1

Total

435,158.4

100.0

420,120.0

100.0

Source: Gartner (August 2013)

“With second quarter of 2013 sales broadly on track, we see little need to adjust our expectations for worldwide mobile phone sales forecast to total 1.82 billion units this year. Flagship devices brought to market in time for the holidays, and the continued price reduction of smartphones will drive consumer adoption in the second half of the year,” said Mr. Gupta. 

Additional information is in the Gartner report “Market Share Analysis: Mobile Phones, Worldwide, 2Q13.” The report is available on Gartner’s website at http://www.gartner.com/document/2573119.