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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):
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.
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
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.…
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.
…
- 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.
…
- 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.
…
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.
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.
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.
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.
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)
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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):
Compare 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. |
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
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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]:
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Nokia should introduce an Android forked smartphone for the $75-120 range in order to enhance its Asha Software Platform strategy [‘Experiencing the Cloud’, Jan 17, 2014]
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China market: Acer launches CNY599 7-inch tablet [DIGITIMES, Jan 17, 2014]
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Microsoft to open Allwinner entry into Windows RT, for the production of 900 yuan (US$149) level Windows RT tablet [‘USD 99 Allwinner’, Jan 16, 2014]
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The first wave of computational photography capabilities from Qualcomm for its new Snapdragon 805 SoCs [‘USD 99 Allwinner’, Jan 4, 2014]
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The Cortex-A53 as the Cortex-A7 replacement core is succeeding as a sweet-spot IP for various 64-bit high-volume market SoCs to be delivered from H2 CY14 on [‘Experiencing the Cloud’, Dec 23, 2013]
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MediaTek MT6592-based True Octa-core superphones are on the market to beat Qualcomm Snapdragon 800-based ones [‘Experiencing the Cloud’, Dec 22, 2013]
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The future is here: Yes, it is Microsoft Surface 2 with modern apps only! (And ARM, not x86/x64!) [‘Experiencing the Cloud’, Nov 17, 2013]
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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 [‘Experiencing the Cloud’, Nov 14, 2013]
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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]
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The first multimode Android tablets and laptops from Lenovo [‘Experiencing the Cloud’, Nov 14, 2013]
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Leading PC vendors of the past: Go enterprise or die! [‘Experiencing the Cloud’, Nov 7, 2013]
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Intel is ready to push big in smartphones next year with its winning multimode voice and data, multiband LTE modem technology capable of global LTE roaming via a single SKU [‘Experiencing the Cloud’, Nov 5, 2013]
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Leading edge Nokia phablets for both entertainment and productivity: Lumia 1320 targeting the masses at $339, and Lumia 1520 the imaging conscious business users and individuals at $749 [‘Experiencing the Cloud’, Oct 26, 2013]
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Why Intel is pressed to go as far down as to $99 with its Android tablet prices (but not with Windows 8.1)? [‘Experiencing the Cloud’, Oct 16, 2013]
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Dell’s all Intel tablets and laptops targeting the evolving mobile workforce even with their most consumer specific Android tablets [‘Experiencing the Cloud’, Oct 3, 2013]
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Amazon’s move into overall leadership: Kindle Fire HDX with Snapdragon 800, “revolutionary on-device tech support” (Mayday), enterprise and productivity capable Fire OS 3.0 forked from Android 4.2.2 etc. PLUS a significantly enhanced, new Kindle Fire HD for a much lower, $139 price [‘Experiencing the Cloud’, Sept 27, 2013]
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Multi-tasking and multi-window view used together for high performance productivity scenarios in the state-of-the-art UX environment of Microsoft Windows 8.1 – the ultimate solution not available with Apple and Android devices [‘Experiencing the Cloud’, Sept 26, 2013]
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2nd generation Microsoft Surface family of productivity tablets priced upto $2420 (when for an All-in-One configuration) [‘Experiencing the Cloud’, Sept 24, 2013]
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The long awaited Windows 8.1 breakthrough opportunity with the new Intel “Bay Trail-T”, “Bay Trail-M” and “Bay Trail-D” SoCs? [‘Experiencing the Cloud’, Sept 14, 2013]
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The new Air Command S Pen User Experience making the Samsung Galaxy Note 3 phablet, and Galaxy Note 10.1, 2014 Edition tablet next-generation devices [‘Experiencing the Cloud’, Sept 12, 2013]
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Companion Device Computing as envisaged and implemented by Pranav Mistry and his TTT team from Samsung: the case of Galaxy Gear + Galaxy Note 3 [‘Experiencing the Cloud’, Sept 12, 2013]
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Samsung Exynos 5 Octa with Heterogeneous Multi-Processing and GPU Compute is the hidden gem in the Galaxy Note 3 and GALAXY Note 10.1, 2014 Edition, launched at ‘Samsung UNPACKED 2013 Episode 2’ event [‘Experiencing the Cloud’, Sept 12, 2013]
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Xiaomi announcements: from Mi3 to Xiaomi TV [‘Experiencing the Cloud’, Sept 3, 2013]
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Assesment of the Xiaomi phenomenon before the global storm is starting on Sept 5 [‘Experiencing the Cloud’, Aug 30, 2013]
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Windows [inc. Phone] 8.x chances of becoming the alternative platform to iOS and Android: VERY SLIM as it is even more difficult for Microsoft now than any time before [‘Experiencing the Cloud’, Aug 20, 2013]
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Android to overtake the overall PC market? [‘Experiencing the Cloud’, Aug 20, 2013]
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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 [‘Experiencing the Cloud’, Aug 17, 2013]
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Google Play catchup with iOS App Store and its way of assuring compatibility across Android 1.6 to 4.3 [‘Experiencing the Cloud’, Aug 15, 2013]
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Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price [‘Experiencing the Cloud’, Aug 3, 2013]
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Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation [‘Experiencing the Cloud’, Aug 1, 2013]
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GiONEE (金立), the emerging global competitor on the smartphone market [‘Experiencing the Cloud’, July 22, 2013, 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
[‘Experiencing the Cloud’, July 22-29, 2013; 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
… 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 Ulefone U9592 – 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, |
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.”
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 True Octa-Core: Thermal Benchmark [mediateklab YouTube channel, Dec 20, 2013]
MT6592 True Octa-Core : Low Power Benchmark
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.”
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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.
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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 ???
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O2 Super K1 [RMB 2,199 – $362]
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THL W11 Monkey King II
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Uniscope XC2S
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UMI X2S ???
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Newman K18 16GB ???
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Newman K18 32GB ???
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Zopo ZP998 [internally as Zopo Black 2 for RMB 1,499 – $247]
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Alcatel One Touch Idol X+ (TCL S960T) [RMB 1,999 – $329]
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Huawei Ascend G750-T00 / Honor 3X / Glory 4
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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]
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]
Zopo Factory Tour — How Popular Zopo 990, 980 Phones Be Made [Jody Elife YouTube channel, Nov 19, 2013]
ZOPO ZP998 AnTuTu Benchmark [ZOPOMOBILE YouTube channel, Dec 17, 2013]
ZOPO zp998 Octa Core NFC Test – Zopomobileshop [ZOPOMOBILE YouTube channel, Dec 17, 2013]
Pre-order ZOPO ZP998 FIRST TRUE 1.7GHz Eight-core 2GRAM+32 ROM MTK6592T 14.0MP CAMERA (Delivery after 30days)
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)
- Meanwhile the shipment of “de facto” smartphones from Nokia (S60/Symbian, Lumia/Windows Phone and Asha Full Touch in S40 Series) increased to 14.7 million units, representing 25.6% growth sequentially (Q/Q) and 14.8% growth relative to the same period of last year (Y/Y). It is also important that the decline of Asha Full Touch after its peak of 9.3 million units sold in Q4’12 has been reversed with 5.9 million units shipped, representing a sizable 37.2% growth sequentially (Q/Q).
- The new (in Q3’13) Asha 501 became the most popular smartphone on the Indian market in the $60-80 price range (as per Flipkart, see above), successfully beating off the best competitive offerings from Samsung and the two leading local brands, Micromax and Karbonn. This is another positive sign of successfull revival of the Asha Touch platform started with Asha 501 (via the Asha Software Platform 1.0) as described in the New Nokia Asha platform for developers [‘Experiencing the Cloud’, May 9, 2013] and New Asha platform and ecosystem to deliver a breakthrough category of affordable smartphone from Nokia [‘Experiencing the Cloud’, May 9 – July 5, 2013] posts of mine. Everything is well represented by comparing the “micro reports” included into the bottom left corner of the overall chart a quarter ago and now:
- As one currently could see this Nokia (the devices part of it soon becoming the part of Microsoft*) could realise its goal of selling “100 million of the new generation Asha smartphones over the coming years, beginning with the Nokia Asha 501”. The Asha 500, Asha 502 and Asha 503 introduced in October 22 could already deliver a huge jump in shipments of “de facto smartphones” under Asha brand, helping to defend further and even improve Nokia’s market position against the sub $100 Android smartphones in Q4’13. Note also that Asha 500 was announced for $69 list price (before taxes or subsidies) which means that—depending on “race to the bottom” competition—could easily mean a street price of $60+ on the Indian market.
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* See also the previous posts of mine:
– Unique Nokia assets (from factories to global device distribution & sales, and the Asha sub $100 smartphone platform etc.) will now empower the One Microsoft devices and services strategy [‘Experiencing the Cloud’, Sept 3 – Oct 23, 2013]
– Microsoft answers to the questions about Nokia devices and services acquisition: tablets, Windows downscaling, reorg effects, Windows Phone OEMs, cost rationalization, ‘One Microsoft’ empowerment, and supporting developers for an aggressive growth in market share [‘Experiencing the Cloud’, Sept 3 – Oct 23, 2013]
– Microsoft Nokia Transaction Conference Call with slides from Microsoft Strategic Rationale inserted-ebook – 3-Sept-2013 edited by Sándor Nacsa from those two sources into an ebook format PDF
– Leading edge Nokia phablets for both entertainment and productivity: Lumia 1320 targeting the masses at $339, and Lumia 1520 the imaging conscious business users and individuals at $749 [‘Experiencing the Cloud’, Oct 26, 2013] - The Asha Touch revival was also able to stop the decline of the overall Nokia “mobile phones” category (Nokia S30, S40, Asha and Asha Full Touch phones) exactly at 55.8 million units, the same number as for the Q1’13.
- In addition there are now the Leading edge Nokia phablets for both entertainment and productivity: Lumia 1320 targeting the masses at $339, and Lumia 1520 the imaging conscious business users and individuals at $749 [‘Experiencing the Cloud’, Oct 26, 2016].
- With that Nokia established a strong niche market position on both the $130+ market (starting with Lumia 520 sold at that price in India, also the most popular one on Flipkart for the the $80-160 price range of devices) and the sub $80 market against the onslaught of Android devices. The rest will depend now only on Microsoft.
Than for the lead smartphone market, i.e. Mainland China I will include here:
- China market: Smartphone sales top 93 million units in 3Q13, says Analysys [Digitimes, Nov 12, 2013]
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.
While for the worldwide market:
- China-based smartphone vendors set to rise in 2013 rankings, says IC Insights [Digitimes, Nov 13, 2013]
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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Gartner Says Smartphone Sales Accounted for 55 Percent of Overall Mobile Phone Sales in Third Quarter of 2013 [press release, Nov 14, 2013]
– Western Europe Grew for the First Time this Year
– Lenovo Became the No. 3 Worldwide Smartphone Vendor for the First Time
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.
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.
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.
With Android and forked Android smartphones as the industry standard Nokia relegated to a niche market status while Apple should radically alter its previous premium strategy for long term
Here is the chart reflecting the performance of the market-leading mobile phones upto Q2’13:
From this the most visible things are:
- Android and Android-forked (Xiaomi etc.) smartphones are the undisputed industry standards to dominate the market in years to come
- Both the Symbian to Windows Phone and S40 to Asha Full Touch smartphone platform transition strategies from Nokia could survive the continued Android onslaught but only in a niche market status
- There is no room for Apple’s further growth, and both the platform and the company could face a gradual decline in the smartphone market
My other observations about the state of the smartphone market after Q2’13 were already presented in the following posts:
- Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price [‘Experiencing the Cloud’, Aug 3, 2013] OR Samsung is leapfrogging Apple while the Chinese local brands are coming close to Samsung but at less than 40% price. Meanwhile the superphone segment of the market becomes saturated.
- Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation [‘Experiencing the Cloud’, Aug 1, 2013]
- GiONEE (金立), the emerging global competitor on the smartphone market [‘Experiencing the Cloud’, July 22, 2013]
- Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the Cloud’, July 20-29, 2013]
- China: Entry-level dual core IPS WVGA (480×800) smartphones $65+ now, quad-core $70+ in June [‘Experiencing the Cloud’, April 29, 2013]
In essence we came to a point when the superphone market came down in price to as low as $110 and up, while the entry-level segment of good quality came down to a $65+ price level. Also the smartphone market became saturated in all segments which brings an end to Samsung’s ability to base its premium profitability ambitions on smartphones alone (almost), as it was reflected in 20 years of Samsung “New Management” as manifested by the latest, June 20th GALAXY & ATIV innovations [‘Experiencing the Cloud’, July 2-26, 2013]:
… innovations in the broadest sense of the world: technology, hardware and software engineering and design, marketing in general and branding in particular etc.
Updates: Q2 record-high operating profit + smartphone worries deepen + overall business situation + nonproportionally high capex of the semiconductor business + the #2 capex beneficiary, the Display Panel Segment
These observations also led to much greater conclusions about the upcoming changes:
- China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web [‘Experiencing the Cloud’, Aug 5, 2013]
- The Upcoming Mobile Internet Superpower [‘Experiencing the Cloud’, Aug 13, 2013]
Below I will assess the ‘Nokia Q2’13 market situation and changes’ as well as include ‘Gartner’s own assessment of the Q2’13 overall market situation and the changes’ to complete the picture.
Nokia Q2’13 market situation and changes:
Looking at the progress of Nokia Symbian to Windows Phone transformation Q2’13 was a straight continuation of the trends noted for Q1’13 in Nokia: Continued moderate progress with Lumia, urgent Asha Touch refresh and new innovations to come against the onslaught of unbranded Android and forked Android players in China and India [‘Experiencing the Cloud’, April 18, 2013] as you could also well observe from the chart included here as well:
Nokia was extensively discussing its Windows Phone transition in Nokia Corporation Interim Report for Q2 2013 and January-June 2013 [press release, July 18, 2013]:
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Lumia Q2 volumes increased 32% quarter-on-quarter to 7.4 million units, reflecting strong demand from customers for a broadened Lumia product range.
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Commenting on the second quarter results, Stephen Elop, Nokia CEO, said: “ … In our Smart Devices business unit, we continue to focus on delivering meaningful differentiation to consumers around the world. We are very proud of the recent creations by our Lumia team, from the Lumia 520 – our most affordable Windows Phone 8 product which has enjoyed a strong start in markets like China, France, India, Thailand, the UK, the US and Vietnam – to the Lumia 1020, our star imaging product which we unveiled to the world last week. Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue.”
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In the third quarter 2013, supported by the wider availability of recently announced Lumia products as well as recently announced Mobile Phones products, Nokia expects higher Devices & Services net sales, compared to the second quarter 2013.
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The year-on-year decline in our Smart Devices volumes in the second quarter 2013 continued to be driven by the strong momentum of competing smartphone platforms and our portfolio transition from Symbian products to Lumia products. The decline was primarily due to lower Symbian volumes, partially offset by higher Lumia volumes. Our Symbian volumes decreased from 6 million units in the second quarter 2012 to approximately zero in the second quarter 2013. Our Lumia volumes increased from 4.0 million in the second quarter 2012 to 7.4 million in the second quarter 2013.
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On a sequential basis, the increase in our Smart Devices volumes in the second quarter 2013 was due to higher Lumia volumes, as we started shipping the Lumia 520 and 720 in significant volumes. In the second quarter 2013, the vast majority of Smart Devices volumes were from Windows Phone 8-based Lumia products.
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The year-on-year increase in our Smart Devices ASP in the second quarter 2013 was primarily due to a positive mix shift towards sales of our Lumia products which carry a higher ASP than our Symbian products, partially offset by our pricing actions. Sequentially, the decrease in our Smart Devices ASP in the second quarter 2013 was primarily due to a negative mix shift towards sales of our lower priced Windows Phone 8-based Lumia products as well as our pricing actions.
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Nokia announced and started shipments in select markets of the Nokia Lumia 925, a new interpretation of its award-winning flagship, the Nokia Lumia 920. The Nokia Lumia 925 introduces metal for the first time to the Nokia Lumia range and includes the most advanced lens technology and next-generation imaging software to capture clearer and sharper pictures and video even in low light conditions. The Nokia Lumia 925 offers a variety of exclusive services such as Nokia Music for unlimited streaming of free playlists, integrated HERE services, and the option to add wireless charging with a snap-on wireless charging cover.
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Nokia announced the Nokia Lumia 928 smartphone, exclusive to Verizon Wireless. With a 8.7MP camera and Nokia’s PureView imaging innovation, the Nokia Lumia 928 delivers superior imaging and video performance that enables people to capture bright, blur free photos and videos, even in low light conditions. The sleek and stylish smartphone comes with the latest high-end Nokia Lumia experiences, including Nokia Music, HERE services, and built-in wireless charging.
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Nokia started shipping in volumes the Nokia Lumia 520, its most affordable Windows Phone 8 smartphone, delivering experiences normally found only in high-end smartphones, such as the same digital camera lenses found on the Nokia Lumia 920, Nokia Music for free music out of the box and even offline, and HERE services.
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Nokia’s Lumia range of smartphones continued to attract businesses, including Miele & Cie. KG, a global leader in domestic appliances and commercial machinery, which has chosen the Nokia Lumia range as the smartphone of choice for its global employees.
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The Windows Phone Store continued to strengthen in terms of the quantity and quality of applications. The Windows Phone Store today offers more than 165 000 applications and games.
The Q2’13-related improvements mentioned above and influencing the below chart were even more extensively discussed in my earlier posts:
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High-volume Nokia Lumia superphones with Windows Phone 8 extended on the top for China, and on the entry level needed for Asia and Middle-East as well UPDATE: at even lower price by 27% [‘Experiencing the Cloud’, Dec 5, 2012 – March 21, 2013] Note that the Lumia 520 W-CDMA mentioned there for ¥ 1299.00 [$209] is now (Aug 17) ¥ 899.00 [$147] while in India it is even lower priced at Rs 7,667+ [$124+]
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Nokia’s expanded, new risks and uncertainties for its Windows Phone strategy for 2013 [‘Experiencing the Cloud’, March 17, 2013]
while the Q3’13-related actions of improvements in these posts:
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Nokia Lumia 1020: an excellent case of Nokia’s contribution to Microsoft as a key innovation partner [‘Experiencing the Cloud’, July 12, 2013]
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Minutes of a high-octane but also expert evangelist CEO: Stephen Elop, Nokia [‘Experiencing the Cloud’, July 12, 2013]
Now look again at the performance chart for the reflections:
From the further decline of Asha Full Touch you could see that the Temporary Nokia setback in India [‘Experiencing the Cloud’, April 28, 2013] continued into the Q2’13 as well as the result of entry-level local brand Android smartphones being in heavy price competition with Nokia Asha Full Touch during Q2 while having superior hardware specifications. Even Samsung’s REX 70 competed in price with Asha Full Touch.
Nokia was talking in his Nokia Corporation Interim Report for Q2 2013 and January-June 2013 [press release, July 18, 2013] only about the following future-oriented actions that were introduced in Q2 in order to remedy this situation:
In Devices & Services, our Mobile Phones business unit started to demonstrate some signs of recovery in the latter part of the second quarter following a difficult start to the year. Also, towards the end of the second quarter, we started to ship the Asha 501, which brings a new design and user experience to the highly competitive sub-100 USD market. While we are very encouraged by the consumer response to our innovations in this price category, our Mobile Phones business unit is planning to take actions to focus its product offering and improve product competitiveness.
On a year-on-year basis, our Mobile Phones volumes in the second quarter 2013 were negatively affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio. Compared to the second quarter 2012, our Mobile Phones volumes declined across our portfolio, most notably for our non-full-touch devices that we sell to our customers for above EUR 30, partially offset by higher sales volumes of Asha full-touch smartphones.
Nokia started production at its new manufacturing facility in Hanoi, Vietnam. The new site has been established to produce our most affordable Asha smartphones and feature phones.
Nokia announced and started shipments of the Nokia Asha 501, the first of a new generation of smartphones to run on the new Asha platform. Retailing at a suggested price of USD 99, the Nokia Asha 501 offers users affordable smartphone design with bold color, a high-quality build and an innovative user interface. The new Asha platform also allows developers who write applications for the Nokia Asha 501 to reach all smartphones based on the new Asha platform without having to re-write code.
These things were already extensively discussed in my earlier posts:
- Nokia’s non-Windows crossroad [‘Experiencing the Cloud’, May 2, 2013]
- New Asha platform and ecosystem to deliver a breakthrough category of affordable smartphone from Nokia [‘Experiencing the Cloud’, May 9, 2013] my composite post of the all relevant launch information
- New Nokia Asha platform for developers [‘Experiencing the Cloud’, May 9, 2013] my composite post of the all relevant development platform information
- Nokia becoming the next Samsung from its new Vietnamese manufacturing base? [‘Experiencing the Cloud’, June 24, 2013]
And here is how Gartner was assessing the Q2’13 overall market situation and the changes:
Gartner Says Smartphone Sales Grew 46.5 Percent in Second Quarter of 2013 and Exceeded Feature Phone Sales for First Time [press release, Aug 14, 2013]
- Worldwide Mobile Phone Sales Grew 3.6 Percent in Second Quarter of 2013
- Microsoft Has Become the No. 3 Smartphone OS Overtaking BlackBerry
Worldwide mobile phone sales to end users totaled 435 million units in the second quarter of 2013, an increase of 3.6 percent from the same period last year, according to Gartner, Inc. Worldwide smartphone sales to end users reached 225 million units, up 46.5 percent from the second quarter of 2012. Sales of feature phones to end users totaled 210 million units and declined 21 percent year-over-year.
“Smartphones accounted for 51.8 percent of mobile phone sales in the second quarter of 2013, resulting in smartphone sales surpassing feature phone sales for the first time,” said Anshul Gupta, principal research analyst at Gartner. Asia/Pacific, Latin America and Eastern Europe exhibited the highest smartphone growth rates of 74.1 percent, 55.7 percent and 31.6 percent respectively, as smartphone sales grew in all regions.
Samsung maintained the No. 1 position in the global smartphone market, as its share of smartphone sales reached 31.7 percent, up from 29.7 percent in the second quarter of 2012 (see Table 1). Apple’s smartphone sales reached 32 million units in the second quarter of 2013, up 10.2 percent from a year ago.
Table 1
Worldwide Smartphone Sales to End Users by Vendor in 2Q13 (Thousands of Units)
Company
2Q13 Units
2Q13 Market Share (%)
2Q12 Units
2Q12 Market Share (%)
Samsung
71,380.9
31.7
45,603.8
29.7
Apple
31,899.7
14.2
28,935.0
18.8
LG Electronics
11,473.0
5.1
5,827.8
3.8
Lenovo
10,671.4
4.7
4,370.9
2.8
ZTE
9,687.6
4.3
6,331.4
4.1
Others
90,213.6
40.0
62,704.0
40.8
Total
225,326.2
100.0
153,772.9
100.0
Source: Gartner (August 2013)
In the smartphone operating system (OS) market (see Table 2), Microsoft took over BlackBerry for the first time, taking the No. 3 spot with 3.3 percent market share in the second quarter of 2013. “While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users,” said Mr. Gupta. Android continued to increase its lead, garnering 79 percent of the market in the second quarter.
Table 2
Worldwide Smartphone Sales to End Users by Operating System in 2Q13 (Thousands of Units)
Operating System
2Q13 Units
2Q13 Market Share (%)
2Q12 Units
2Q12 Market Share (%)
Android
177,898.2
79.0
98,664.0
64.2
iOS
31,899.7
14.2
28,935.0
18.8
Microsoft
7,407.6
3.3
4,039.1
2.6
BlackBerry
6,180.0
2.7
7,991.2
5.2
Bada
838.2
0.4
4,208.8
2.7
Symbian
630.8
0.3
9,071.5
5.9
Others
471.7
0.2
863.3
0.6
Total
225,326.2
100.0
153,772.9
100.0
Source: Gartner (August 2013)
Mobile Phone Vendor Perspective
Samsung: Samsung remained in the No. 1 position in the overall mobile phone market, with sales to end users growing 19 percent in the second quarter of 2013 (see Table 3). “We see demand in the premium smartphone market come mainly from the lower end of this segment in the $400-and-below ASP mark. It will be critical for Samsung to step up its game in the mid-tier and also be more aggressive in emerging markets. Innovation cannot be limited to the high end,” said Mr. Gupta.
Nokia: Slowing demand of feature phone sales across many markets worldwide, and fierce competition in the smartphone segment, affected Nokia’s mobile phone sales in the second quarter of 2013. Nokia’s mobile phone sales totaled 61 million units, down from 83 million units a year ago. Nokia’s Lumia sales grew 112.7 percent in the second quarter of 2013 thanks to its expanded Lumia portfolio, which now include Lumia 520 and Lumia 720. “With the recent announcement of the Lumia 1020, Nokia has built a wide portfolio of devices at multiple price points, which should boost Lumia sales in the second half of 2013,” said Mr. Gupta. “However, Nokia is facing tough competition from Android devices, especially from regional and Chinese manufacturers which are more aggressive in terms of price points.”
Apple: While sales continued to grow, the company faced a significant drop in the ASP of its smartphones. Despite the iPhone 5 being the most popular model, its ASP declined to the lowest figure registered by Apple since the iPhone’s launch in 2007. The ASP reduction is due to strong sales of the iPhone 4, which is sold at a strongly discounted price. “While Apple’s ASP demonstrates the need for a new flagship model, it is risky for Apple to introduce a new lower-priced model too,” said Mr. Gupta. “Although the possible new lower-priced device may be priced similarly to the iPhone 4 at $300 to $400, the potential for cannibalization will be much greater than what is seen today with the iPhone 4. Despite being seen as the less expensive sibling of the flagship product, it would represent a new device with the hype of the marketing associated with it.”
Lenovo: Lenovo’s mobile phone sales grew 60.6 percent to reach 11 million units in the second quarter of 2013. Lenovo’s quarter performance was bolstered by smartphone sales. Its smartphone sales grew 144 percent year-over-year and helped it rise to the No. 4 spot in the worldwide smartphone market for the first time. Lenovo continues to rely heavily on its home market in China, which represents more than 95 percent of its sales. It remains challenging for Lenovo to expand outside China as it has to strengthen its direct channel as well as its relationships with communications service providers.
Table 3
Worldwide Mobile Phone Sales to End Users by Vendor in 2Q13 (Thousands of Units)
Company
2Q13 Units
2Q13 Market Share (%)
2Q12 Units
2Q12 Market Share (%)
Samsung
107,526.0
24.7
90,432.1
21.5
Nokia
60,953.7
14.0
83,420.1
19.9
Apple
31,899.7
7.3
28,935.0
6.9
LG Electronics
17,016.4
3.9
14,345.4
3.4
ZTE
15,280.7
3.5
17,198.2
4.1
Huawei
11,275.1
2.6
10,894.2
2.6
Lenovo
10,954.8
2.5
6,821.7
1.6
TCL Communi-cation [Alcatel]
10,134.3
2.3
9,355.7
2.2
Sony Mobile Communications
9,504.7
2.2
7,346.8
1.7
Yulong [Coolpad]
7,911.5
1.8
4,016.2
1.0
Others
152,701.5
35.1
147,354.60
35.1
Total
435,158.4
100.0
420,120.0
100.0
Source: Gartner (August 2013)
“With second quarter of 2013 sales broadly on track, we see little need to adjust our expectations for worldwide mobile phone sales forecast to total 1.82 billion units this year. Flagship devices brought to market in time for the holidays, and the continued price reduction of smartphones will drive consumer adoption in the second half of the year,” said Mr. Gupta.
Additional information is in the Gartner report “Market Share Analysis: Mobile Phones, Worldwide, 2Q13.” The report is available on Gartner’s website at http://www.gartner.com/document/2573119.
GiONEE (金立), the emerging global competitor on the smartphone market
In the Top 10 on the Q1 CY13 Chinese smartphone market Lenovo (w/13.1%), Huawei (w/10.1%) and ZTE (w/6.9%) are well-known brands globally. The #3 Coolpad (w/10.3%) is not, neither the #7 K-Touch/Tianyu (w/4.1%), nor the #8 GiONEE (w/3.8%), nor the #10 OPPO (w/2.9%).
When I looked into these companies I got interested only in GiONEE (金立), as the one with the best chance currently to succeed in the broad global market as well. Not least there is a very strong determination by GiONEE Group President Lu Wei Bing (卢伟冰) / William Lu (see the below picture that was taken on the July 10 launch) to succeed overseas as evidenced by his latest interview with Tencent Digital.
He is absolutely convinced that after doing 10 million unit ODM sales abroad the company is ready to expand under its own brand as well. Moreover he was in 2009 with K-Touch/Tianyu as responsible for mobile GSM and overseas business unit there, so has pretty much experience in overseas efforts from China.
Update:
Elife E7 Product Video [Gionee India YouTube channel, published on Dec 30, 2013]
The New Gionee E7 [Gionee India YouTube channel, published on Jan 2, 2014]
We’re now in the new smartphone era. Meet the New Gionee.
With 100 million users and presence in 40 countries. Wherever you are, Gionee is always easily approachable!
Our motto, “Innovations and advance with the times.” The integration of hardware and software in creating the perfectly balanced ecosystem.
Gionee has the largest Intelligent Manufacturing base in Asia. Over 10 years of experience accumulation. Today, Gionee has 4 R&D Centers and over 1,500 engineers worldwide and an annual investment of USD83 Million in R&D. Over 100 patents of mobile technology.
More than 8000 employees based in the Gionee Industrial Park, built with an investment of USD 125 Million with production capacity of 40 million units/ year which can be upgraded to 80 million units / year. China’s 1st lab developed specifically for supporting product design.
We cooperate with the World’s Top Developors including Google, Qualcomm, Samsung, Sharp who have now become Gionee’s strategic partners.
Technology will continue to change and shape our future. With our world class partners, Gionee will continue to bring innovations into your work and life. We will continue to expand and provide the best user experience in a Smartphone to more users worldwide.
Connect with us:
- Facebook: https://www.facebook.com/gionee.india
- Twitter: https://twitter.com/gioneeindia
- Instagram: http://instagram.com/gioneeindia
- Pinterest: http://www.pinterest.com/gioneeindia
How the handset newbie Gionee is on the route to take on Apple, Samsung [The Economic Times of India, Jan 17, 2014] “Lu Weibing …the 38-year old … President of the $2.5 billion Gionee” about “the Gionee disruption model”:
Weibing wants the 8,000-people-strong Gionee to be among the top five global brands in the smartphone business and claims that three Chinese brands will be in that bracket in the next five years. By then, he wants to lead the pack in India taking on the likes of Samsung and Apple.
Annually, Gionee sells about 25 million handsets compared to Samsung’s 396.5 million and Apple’s 135.8 million. It may be a long road, but his role model is Apple founder Steve Jobs—”because he was a product manager and back home in China, I’m a product manager involved in every step of the product”.
- Exclusivity with distributors
…- Own manufacturing
…- Ability to work with multiple partners
…- Exit ODM, enter brand
…- Own the OS
In the future, for any brand to succeed, it must have its own operating system (OS). We started work on our OS, Amigo, two years back, and it is up and running today with its cloud service, book centre, shopping, app store, browser. The OS is obviously being customized for different geographies.
- Innovate before others
…- Straddle all price points
…
Gionee Elife E7 – specifications, features and review [Gionee India YouTube channel, published on Jan 2, 2014]
Gionee announces the launch of its flagship ELIFE E7 smartphone in India. [Gionee India YouTube channel, published on Dec 29, 2013]
ELIFE E7 powered by the Qualcomm® Snapdragon™ 800 processor is an incredible Camera Smartphone.
New Delhi – December 24, 2013: Gionee Smartphones, a global leader in mobile manufacturing, design and R&D, today announced the launch of its new flagship Smartphone ELIFE E7 in India. ELIFE E7 is powered by the Qualcomm Snapdragon 800 processor and android based operating system AMIGO 2.0. Qualcomm Snapdragon processors are a product of Qualcomm Technologies, Inc., a wholly-owned subsidiary of Qualcomm Incorporated. Gionee ELIFE E7 is designed specifically to bring the technology of professional digital cameras to smartphones with a best-in-class lens and a breakthrough image sensor.
ELIFE E7 runs on the Qualcomm Snapdragon 800 processor featuring a 2.2GHz quad Krait CPU, designed for 3D gaming, faster processing and a professional photo shooting experience. The ELIFE E7 comes in two variants that support 3G and 4G respectively. The ELIFE E7 4G will be powered by the Qualcomm Snapdragon 800 processor featuring a 2.5 GHz quad Krait CPU.
The Gionee ELIFE E7 possesses a 16 MP rear camera and a stunning 8 MP front camera. Beside its powerful sensor and stunning resolution, the ELIFE E7 has been developed and customized with a large lens based on professional Largan M8 lens solution. ELIFE E7 features a 13.9 cm (5.5 Inch) FHD (JDI) Display with 1920 x 1080 and 401 PPI for spectacular viewing quality. ELIFE E7 is equipped with the latest 3rd Generation Gorilla Glass which is 20 times more scratch resistance than regular classes and twice as durable as the second generation of Gorilla Glass. The sensitive ELIFE E7 touch screen is also responsive to gloves, wet hands, and keys to ensure photographers can take pictures in any weather and any situation.
ELIFE E7 comes with built in 12 Levels of Auto Beauty feature to ensure that the user will always look flawless in every picture. An innovative SR Auto — Intelligent Scene Recognition Function also eliminates the hassle of changing the settings every time as it automatically changes the settings to automatic, portrait, Micro, night, night portrait, backlight, backlight portrait. ELIFE E7 has a new way for wakeup screen which can be performed by a simple Double Tap. Another interesting feature is the Black Screen Gesture that simply draws the gestures on the black screen and goes directly into the customized corresponding procedures.
“Since its launch in India, Gionee’s ELIFE series has been extremely well received by consumers. ELIFE E7 is sure to create buzz and recreate benchmarks in the industry. Gionee has crafted its unique space in the Indian market in a very short time supported with unmatched quality, distribution and service. ELIFE E7 is sure to set the Indian smartphone market ablaze with its never seen before features and great hardware.” added Mr. Arvind.R.Vohra, Director Syntech Technology Pvt. Ltd.
“We designed ELIFE E7 with the best in class hardware and software that will make it stand out on any parameter. While creating the most powerful camera for ELIFE E7, the idea was to come up with a way to create the perfect combination and balance of image resolution and picture quality. A joint development with OmniVison has enabled the Elife E7 to sport a 16 megapixel sensor with 1.34 μm pixels which enables users with the ability to shoot razor sharp images without compromising the photo’s resolution or image quality”, says Mr. Lu Weibing, President of Gionee Smartphones.
Additional Features of ELIFE E7
· NFC — Share your work anywhere
Share photos, MP3, videos, and anything you want in the blink of an eye, users can define different modes.
· OTG
Interconnection and freedom to share, connecting a usb to smartphone to instantly view or save documents.
· Sound
ELIFE E7 sports three-mic noise cancellation for reduced noise and clearer conversation in every situation.
The GIONEE ELIFE E7 will be available in black, white, blue, pink, green, yellow and orange colour and will be available in India starting January 2014.
The Price of Elife E7 32 GB and 16 GB is Rs. 29,999 [US$487] and Rs. 26,999 [US$438] respectively.
Qualcomm and Snapdragon are trademarks of Qualcomm Incorporated, registered in the US and other countries. Other product and brand names may be trademarks or registered trademarks of their respective owners.
End of Update
Then GiONEE has the largest manufacturing facility of its own among those additional players, with 40 million units capacity per year, and with an expansion capability already prepared in its industrial park for another 40 million when the market opportunity will arise. Finally the company was quickly exploiting MediaTek advances towards the high-end in H1 with prompt introductions even on the Indian market (where it is directly represented only since February), and this would bring even better, “Samsung and Apple beating” offerings in H2, especially with the eight-core MT6592:
MediaTek quad-core Cortex A7 CPU (MT6589 @1.2GHz, MT6589T @1.5GHz)
+ PowerVR Series5XT GPU + Dual SIM, Dual Standby + Android OS Jelly Bean:
March 2013 |
July 23: $268+ (Rs. 15,999+) |
DREAM D1 |
1.2 GHz 1GB/4GB 4.65″ HD Super AMOLED Plus 316ppi 8MP/1MP v4.1 Android |
May 2013 |
July 23: $214+ (Rs.12,757+) | Gpad G2 |
1.2 GHz 1GB/4GB 5.3″ qHD IPS, 960*540 8MP/1MP v4.1 Android |
May 2013 |
July 23: $251+ (Rs. 14,999+) |
Elife E3 |
1.2 GHz 1GB/16GB 4.7″ IPS HD, 1280*720 8MP/2MP v4.2 Android |
July 2013 |
July 23: $335 (Rs. 19,999 list) |
Elife E5 |
1.5 GHz 1GB/16GB 4.8″ AMOLED, 1280*720 8MP/5MP v4.2 Android |
This report will be organised into the following sections:
- Current situation in China:
Consolidation among Chinese mobile phone brands and manufacturers would escalate in the following months - Considering the well known Lenovo, Huawei, ZTE and HTC situation the most interesting Chinese brand for me quickly became GiONEE. Why?
- Earlier information about GiONEE
– From the company itself
– From my trend-tracking blog, ‘Experiencing the Cloud’
– From current media reports
Sidenote #1: K-Touch/Tianyu (天语) is only trying to regain its lost fame (when sold 17 million K-Touch phones in 2007, emerging as #2 cell-phone maker in the China market, second only to Nokia). Moreover it had also a U-turn in overseas expansion last year, and now concentrating on the domestic market only. In addition it is quite picky in SoC vendor selection: with Qualcomm Snapdragon 200 MSM8225Q for a $163 4.5”-er quad-core from April, then with Broadcom for a $98 4”-er dual-core from May, finally with Qualcomm Snapdragon 400 MSM8930 for a $163 TD-LTE dual-core from August, as the latest ones. This is all independently from its original, February, 2012 Qualcomm commitment. With this it looks like that it is also trying to avoid MediaTek which made its original success possible, while for others MediaTek has become an even more important partner than Qualcomm.
Sidenote #2: OPPO has a visibly lesser effort to expand abroad, and Coolpad (as a wholly owned subsidiary of China Wireless Technologies Limited), although “has established strong and close strategic cooperation relationships with certain global telecommunications operators” according to its parent, “in the year of 2011, most of the Coolpad smartphones were shipped to the domestic telecommunications operators” according to the chairman of the parent company. For 2012 the parent stated in the Market Share of Coolpad Smartphones Ranks No. 4 in China only these facts: “the Group has started to launch 4G FDD-LTE smartphones in the United States in 2012, a further expansion into overseas markets. … Except for the existing market in India and Taiwan, the Group successfully rolled out its proprietary 4G FDD-LTE smartphone in the American market. The affordable Coolpad smartphones not only enabled more and more American users to enjoy the 4G high-speed network, but also enhanced the brand awareness of Coolpad in the United States. … Meanwhile, the Group continued to partner with the tier-one chipset suppliers to successfully roll out the 4G FDD-LTE smartphone in the United States.” With that Coolpad has a very focused geographical, and even more focused technology segment strategy abroad than GiONEE.
Complementary posts reminder:
Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung[‘Experiencing the Cloud’, July 20, 2013] from which the following excerpts I will include here as the ones directly related to the content given here as well:
… according to Zhu Shangzu (朱尚祖), MediaTek Global Smartphone General Manager in the [Part 2] MediaTek to push 8 small cores, the mystery [ESM 国际电子商情 (International Electronic Business), July 18, 2013] exclusive interview … I think the future of high-end smartphones innovation will focus on the expansion of big screen multimedia applications, and this is our direction. …
Judging from the current situation, customers of high-end flagship phones are still using the products of the competitors, but there is flagship in our quad-core case as well, and OPPO, Vivo and GiONEE and other quad-core phones are also very popular. Our next goal is to get the customers of flagship machines using our platform via helping customers to achieve stronger performance on the big screen multimedia.
Evolution of Indian Handset OEMs – History, Current State and Future Outlook [Convergence Catalyst blog, March 27, 2012]
Many Indian handset brands were started by former national and regional distributors of global OEMs (such as Nokia, Motorola, Samsung, etc). These companies partnered with Mediatek (MTK), a fabless System-on-Chip (SoC) provider and ODMs based in Taiwan and China to source white-labeled devices (with basic Indian market hygiene requirements like long battery life and high audibility)
…
The Chinese handset market has undergone a similar influx of local vendors in partnership with MTK in 2007. Tianyu (market facing brand of Chinese telecom player K-Touch) was the first Chinese vendor to launch mobile handsets based on MTK’s turnkey solution in early 2007. Tianyu’s key success factors include products with feature set that address local market needs, faster turn-around time, wide spread distribution and high channel margins to distributors. By end of 2008, a number of local vendors such as Bird, Amoi, ChangHong, Gionee, etc had entered the Chinese market using Tianyu’s business model. Increased competition among numerous vendors resulted in ASP (Average Selling Price) reduction, in turn affecting handset margins adversely.
End of complementary posts reminder
Current situation in China:
Consolidation among Chinese mobile phone brands and manufacturers would escalate in the following months
The recent message from China was blunt: Xiaomi (小米), Lenovo (联想), ZTE (中兴) and GiONEE (金立) are pushing new products – Mobile phone industry, welcome to the final competitive play (小米联想中兴金立争推新品 手机业迎来淘汰赛) [IT Business News Network (IT商业新闻网), July 13, 2013]:
From Xiaomi mobile phone, Lenovo K900, HTC devices having depth customization with operators, and then to ZTE Geek phones in recent days, in addition to Meitu Kiss [rooted in a highly popular “picture beautifying software” made in China], the GiONEE mobile phone and a number of domestic brands, there were a number of new product launches in the first half. In the second half the smart phone will probably usher in a decisive knockout.
Then the message continues with an earlier information which I would take here in a little more detail from China’s mobile phone shipment up 36.4% in June [China Knowledge, June 12, 2013]
China saw its shipment of mobile phones in the domestic market surge 36.4% year on year to 42.29 million units in June this year, according to a report released by China Academy of Telecommunication Research of MIIT.
The figure last month was 29.1% lower than the 59.08 million it realized in May 2013.
China’s shipment of domestic brand mobile phones in the country hit 34.31 million units in June, accounting for 81.1% of the total.
A detailed media report is in the 6月份全国手机出货4248.8万部下降近三成,国产机处于“小学生”阶段 [China Industry Inside Network, July 12, 2013] which contains the explanation for the May market contraction as well. I will again include an already available explanation in English: China’s mobile phone shipment dips [ZDNet, July 12, 2013]
Some smaller cellphone manufacturers in China have been cutting production on inventory and funding issues, according to a Sina news report, which cited a report by First Financial Daily. iiMedia CEO Zhang Yi told the Chinese newspaper many Chinese brands also were adjusting their pace to reduce the frequency of new product launches as they aimed for higher profit.
Zhang believed consolidation among Chinese mobile phone brands and manufacturers would escalate in the following months.
Many domestic market players are struggling to stay afloat. Faced with falling margins and profits, smaller handset makers have been forced to close and these have included veteran market players in the market who had been in business for over two decades. OEM cellphone manufacturers are competing for orders, some agreeing to lower their profit to just 1 percent in order to secure the big orders.
A cellphone manufacturer told First Financial Daily that major local telcos, including China Mobile and China Telecom, were promoting mobile handsets priced between 299 and 499 yuan (US$48.7 to US$81.3), which basically cut off sales of other lower-end cellphone brands. The market was now a “playground for [well-known] foreign and domestic cellphone brands”, he added.
As far as the market share split between the leading brands the latest information was China market: Smartphone sales over 75 million units in 1Q13, says Analysys [DIGITIMES, May 22, 2013] and 78% of the market is shared by Top 10 vendors, with Samsung and Apple joint share just 24.1% while the domestic top brands held not less than 53.9%, according to the table below:
There were 90.54 million handsets sold in the China market during first-quarter 2013, growing 23.5% sequentially and 34.8% on year, and 75.28 million units of them were smartphones, increasing 32.2% sequentially and 141.5% on year, according to Analysys International.
Analysys: Main smartphone vendors in China by sales volume, 1Q13
Samsung: 17.3% Lenovo: 13.1% Coolpad: 10.3% Huawei: 10.1% ZTE: 6.9% Apple: 6.4% K-Touch: 4.1% GiONEE: 3.8% HTC: 3.1% OPPO: 2.9%
Considering the well known Lenovo, Huawei, ZTE and HTC situation the most interesting Chinese brand for me quickly became GiONEE. Why?
With the Facebook message on September 5, 2012 of the GiONEE FB site:
If you are waiting something new, something that does not only fancy your eye but also touch your heart, wait just with patience and GiONEE is coming…
GiONEE came to the international scene. On September 27, 2012 we were told:
… here unveils the mystic 4.65 inch Android device from GiONEE: Super AMOLED Plus display with QHD resolution (960*540 pixels), 8.0 Mega pixels autofocus camera, 1.0 Mega pixels front-facing camera, dual core 1.2GHz CPU, Android OS v4.0 Ice Cream Sandwich. …
referring definitely to a previous September 25, 2012 message and related image:
… see more about the Super AMOLED Plus screen. The color contrast ratio and brightness is the best, and it is most power saving. Do you like this?
I won’t detail further steps taken by the company on the international market, as documented on its Facebook site, but jump to the latest one of July 10:
Finally we unveil the latest flagship product of Elife series– Elife E6. We hope our fans and curious folks will like it.
the 2699 yuan price equals to not less than $440. Isn’t it too steep? GiONEE’s next message of July 10 seems to target that question with:
Full spec for E6
On July 13 we further learned that:
GIONEE E6 manufactured with CNC technology and handcraft [GioneeMobile YouTube channel, July 12, 2013]
and on July 14:
ELIFE E6’s delicate hand-polished sides allow it to standup by itself in order to take handsfree photos. Never again would someone be left out of a group shot!
on July 16:
This is Gionee Elife E6 – the revolutionary smartphone with more than just a smartphone.
GIONEE ELIFE E6 Smartphone [GioneeMobile YouTube channel, July 14, 2013]
the next July 17:
ELIFE E6’s 5-inch LCD includes the latest LTPS Technology with 1080 pixels and ultra Retina Standards of 441 pixels; allowing you to view the the details of every moment
finally on July 18:
ELIFE E6’s Content Adaptive Backlight Control automatically adjusts screen brightness according to display, maximizing power consumption reduction, and allows power saving up to 30%
Next day we got reminded that:
With all the excitement surrounding Elife E6, don’t forget its 7.9mm curvy, colorful, and stylish little brother Elife E3!
Aha, that “little” device which was reported as Gionee’s Slim New Droid Totally Stole Samsung’s Thunder! [Gizmodo India, May 21, 2013]
… Just a day after Samsung flexed its muscles with a mid-range quad core dual-SIM offering – the Galaxy Grand Quattro, they’ve pretty much been left in the dust by, of all people – Gionee. The ELife E3, from the relatively unknown Chinese ODM (which entered India with its own brand earlier this year) seems to have whipped the Quattro in every department – at least on paper. Here’s the score-line of the tech-spec showdown:
ELife E3 vs Galaxy Grand Quattro: A 6-1 whipping!
1-0: 1.2GHz Quad Core A7 (Mediatek) vs 1.2GHz Quad Core A5 (Snapdragon)
2:0 16GB internal memory vs 8 GB
3:0 8MP/2MP rear/front cameras vs 5MP/VGA
4:0 Android Jelly Bean 4.2.1 vs 4.1.2
5:0 4.7″ IPS 1280×720 display vs 4.7″ 800×480
6:0 Priced at Rs. 15,000 [$252] vs Rs. 17,000 [$286]
6:1 1800 mAh battery vs 2000 mAh
Relative to all that above the original press release for E6 appeared as Gionee Launch ELIFE E6 smartphone – Simply Smart For all, the world’s first White OGS phone [Core Sector Communique, July 11, 2013] from which I will include here only those excerpts which provide additional information:
As the world’s first White OGS phone [OGS = One Glass Solution, touchscreen technology, see also the review within this], its 2.54mm narrow edge and 6.18mm thin miniature size allows it to slide comfortably into your pockets. … weighing only 128g …
Unibody Design
ELIFE E6’s innovative design features an unibody exterior in Pearl White and Stunning Black. …
The Best Display Technology across the Globe
Powered with a full HD Reality Display Resolution, 441PPI high pixel density and super bright AMOLED, ELIFE E6 automatically reduces 80% of sunlight reflection and increases the brightness of images by 20%, bringing you crispier and clearer razor sharp images. Full Lamination Technology allows 20% reduction in overall thickness and Light Transmittance increased by 10%.
Capturing Pictures Have Never Been Easier
ELIFE E6’s innovative camera technology redefines how photos are meant to be captured. Forget about dragging a camera around for high quality photos and videos. With the goal to make life better through technology, ELIFE E6’s camera sports the second generation of Backside Illumination Technology, antireflection coatings, anti-fingerprint film and finishes off with 5 layers of blue glasses, giving it its powerful 13MP rear-end camera for ease of picture taking and 1080P full HD video recording. Its 5MP front-facing camera comes with 12 levels of auto beauty effects, object tracing focus, instant facial beauty support and more; providing its user with Photoshop-polished photos with just a smile.
The GIONEE ELIFE E6 is available in black, white with matching color cases. ELIFE E6 will be available in China from Mid July 2013 with suggested retail price at CNY2699 and will be available in India, Nigeria, and Vietnam after August 2013.
About Gionee
Established in 2002, Gionee Communication Equipment Co. Ltd is a hi-tech company engaging in mobile device designing, R&D, manufacturing, sales in international markets, and mobile internet application services. Today, Gionee sells over 23 million handsets per year in China mainland alone. With innovation at the core of its R&D, in November 2011, Gionee ranked in as the No.3 brand in the 2G market and in August 2012, Gionee ranked in as the No. 2 in the GSM market. Gionee adheres to the motto “integrity, teamwork, innovation”.
Therefore I had two questions for GiONEE (I will add their answers as I get them):
GiONEE In the global press release – see it e.g. here: http://corecommunique.com/gionee-launch-elife-e6-smartphone-simply-smart-for-all-the-worlds-first-white-ogs-phone/– “White OGS” is indicated without any explanation. Even around the web I found only one explanation, as “OGS in white color”. If that is a right wording than it is still not understood. Could you explain?
Gionee India Is IPS Panel and 7.7 thickness is right for your country? As you published it with this picture: https://twitter.com/GioneeIndia/status/355217623287472128/photo/16.18mm
My problem is that in the global press release – see it e.g. here: http://corecommunique.com/gionee-launch-elife-e6-smartphone-simply-smart-for-all-the-worlds-first-white-ogs-phone/– 6.18mm thickness with OGS, super bright AMOLED and Full Lamination Technology has been stated, which is indeed possible with such things (vs. IPS).
Twitter / GioneeIndia: Gionee Elife E6 Specs compared …
…
Earlier information about GiONEE
From the company itself:
Gionee Brand Introduction Video– Who we are and what we do? [Gionee India YouTube channel, Feb 2, 2013]
From the content it becomes obvious that this company video was produced well back in 2012, presumably around August 2012 when the ‘About’ was first published as given here: Brand_GiONEE Communication Equipment Co., Ltd ShenZhen [with first content in Aug 15, 2012]
“An international fast growing brand”
Established in 2002, Gionee is a hi-tech company engaged in mobile device designing, R&D, manufacturing, and sales in international markets, and offering mobile internet application service.Gionee started the international branding firstly in China mainland in 2005 which was the gold mine for global investors and enterprises. Now Gionee sells over 23 million handsets per year in China mainland, ranking as No.3 brand in 2G market share after Samsung and Nokia in Nov 2011, and No. 2 in GSM market after Samsung in Aug 2012.
As a brand to be recognized as durable, long standby and easy to use, Gionee now is featured with new tags like fashionable, stylish, and premium user experience. Many Asian super stars have high praise for Gionee products and they are willing to tell people how nice the products are.
Asian super star Mr. Andy Lau, Korean TV play star, all young men’s dream princess, Miss. Yun Enh Huy, Taiwan movie prince Eric Ruan, the most popular music band Phoenix Legend in China mainland, etc, all have acted in Gionee product movies and the beautiful mobile phone stories once moved thousands of people.
Since 2011, Gionee moved rapidly for branding in Nigeria, Vietnam, Taiwan, Myanmar, India, Thailand,
Phillips[Philippines], and so on. And once launched one product, it soon became a best seller in the market, even in some cities and countries customers need to wait for new deliveries. Gionee is a hot word as everyone is talking about where to buy one.Gionee is working for the No.1 brand which is most welcomed by customers. The praises from Gionee customers is the only precious crown for Gionee.
Gionee Industrial Park Manufacturing Facility Video [Gionee India YouTube channel, March 4, 2013]
described in Manufacture_GiONEE Communication Equipment Co., Ltd ShenZhen [with first content in Aug 3, 2012]
With a total investment of more than 1 billion RMB and an area of 330,000 square meters, Phase 1 of Gionee Industrial Park was completed and went into production in 2006, with an annual production capacity of 40 million units. After the project is completed, the park’s annual production capacity will hit 80 million units as China’s largest and best professional mobile phone manufacturing base.
Gionee products are now selling to India, Bangladesh, Pakistan, Indonesia, Vietnam, Thailand, Philippines, Malaysia, Russia, Middle East and Africa. The export already increased to 1 Million phones per month to the overseas market.
A tight partnership with MediaTek and Qualcomm allows Gionee to offer a wide product portfolio covering both low end feature phone and high end smartphone. As all products are designed and manufactured by Gionee and as the company is only working with tier-1 suppliers, Gionee is awarded the Best Quality Mobile Phone Manufacturer in China.
Welcome to visit our industrial park!
Finally RD_GiONEE Communication Equipment Co., Ltd ShenZhen [with first content in Aug 3, 2012]
The company has over 10,000 employees, out of which 1000 belong to R&D and 8000 belong to the factory.
Technology reflects the strength of an enterprise; R&D is the key to sharpen the competitive edge of mobile phone industry chain roundly, and Gionee always insists on the strategy of independent R&D and innovation. At present, Gionee’s R&D system mainly comprises six professional R&D organs: Application R&D Institute, Smartphone R&D Institute, Overseas BU R&D Institute, CDMA R&D Institute, GOSO R&D Institute and AORA R&D Institute.
Persistence in quality is the impetus for Gionee’s sustained development. With deep R & D as core, lean manufacturing as foundation, outstanding after-sale service as guarantee and high-tech products as core competitiveness, Gionee has kept developing practical and handy products. Gionee has persisted in independent R & D by establishing professional R & D institutions in cities like Shenzhen, Shanghai and Hangzhou, thus ensuring its outstanding R & D performance.
And I will include here the following 3d party information as a very relevant one:
Gionee UX Design Training – PEOPEO [Peopeo UX Training information, Aug 9, 2012]
Introduction:
Peopeo was contracted by Gionee to give their headquarter team in Shenzhen a series of training program around user centered product design and development. Different level of teams, from management, product manager, designer, and engineers, had participated in this training course, to form a consistent acknowledgement.
Content:
Nowadays China is at a period of changing from Made in China to Designed by China, all companies have to facing such a challenge. Only through a professional user experience centered product design and development process, through in-depth research and understating on the users, the companies can save tremendous cost, can develop better product which meet users’ demands, fir users’ habits, bring users with great experience, hence win the market.
For companies like Gionee, while they compete with other big phone companies and other big companies in the internet industry, they have to establish a different competitive strategies and form a localized strategic advantage. So they have to have a clear understanding of user experience, to make UCD as the core in the product development process, which need to be implemented in the future work and to be reflected in all aspects of the company operation; they have to have a coherent, consistent user-centric and unified understanding, and put them into specific implementation, to ensure that users’ needs are met, to ensure that the users have expected user experience, and to further help the company to establish the core DNA.
Peopeo senior consultants Tingbin Tang, Sean Wee and Kelly Shi provided Gionee team this training. Courses combined with a large number of classical and forward-looking cases; together with presentations and discussions to improve every training participants’ knowledge and skills for user-centric design and development process. Including: lecture; case studies; interactive games; video playback; Q&A discussion; interactive workshops, etc.
From my trend-tracking blog, ‘Experiencing the Cloud’:
Be aware of ZTE et al. and white-box (Shanzhai) vendors: Wake up call now for Nokia, soon for Microsoft, Intel, RIM and even Apple! [‘Experiencing the Cloud’, Feb 21, 2011]
While the mainstream business model for manufacturing and distributing mobile handsets remains leveraging the OBM/ODM/OEM/EMS model, a whole new paradigm has developed within China’s domestic market, according to a new report from Digitimes Research.
The local China-based industry called “Shanzhai,” but translated as “white box,” is based on small-scale or underground factories whose products are seldom sold through regular sales channels, but the scale of the market now rivals that of global top-10 brands or major Chinese brands in the domestic China market, Digitimes Research pointed out. The “white-box” industry currently accounts for more than 100 million handset shipments, and some players in the market, such as K-Touch (Beijing Tianyu Communication Equipment) and Gionee have made the leap to become recognized brands.
…
According to MediaTek, the upcoming handset solution, codenamed as MT6252, supports serial flash memory and is cost efficient for handset makers as it uses lesser passive devices and smaller printed circuit board than existing solutions. Also, the MediaTek solution supports four-SIM, four-standby mobile phones, convincing the mainland`s home-grown handset makers including Gionee Communications Equipment, Ragentek Communication Technology Co., Ltd. and Leatek Technologies International Co., Ltd. to support it.
Boosting the MediaTek MT6575 success story with the MT6577 announcement – UPDATED with MT6588/83 coming early 2013 in Q42012 and 8-core MT6599 in 2013 [June 27, July 27, Sept 11-13, Sept 26, Oct 2, 2012]
Digitimes Research believes that market share rankings for the China smartphone market will change significantly during 2012. Samsung and Apple will take the top two places, while the big four China-based brands –Huawei, ZTE, Lenovo and Coolpad – will take third to sixth places, whileNokia will drop to seventh; these seven firms will collectively account for 85% of shipments.
In other words, the many other brands hoping to seize a share of the market will essentially be confined to competing for a potential market of just 15% of overall shipments or around 21 million handsets. Given such a situation, Digitimes Research projects that many of China’s best known smaller brandssuch as Xiaomi, TCL, Gionee, Tianyu, Oppo and BBK will see shipments of no more than a few million handsets.
…
Industry sources claim that China’s smartphone prices could drop to RMB 600 in H2 2012 due to increasing availability of low-priced smartphone chips. Smartphones featuring Taiwanese fabless semiconductor company MediaTek’s (MTK) MT6573 processor are available on B2C e-commerce sites such as Taobao and Paipai for RMB 800 and below. MediaTek’s MT6575 chipset, released in March, has already appeared in handsets from domestic handset vendors such as Lenovo (0992.HK), Gionee, ZTE (0763.HK; 000063.SZ), and Yulong (Coolpad), as well as foreign brands such as Motorola. The MT6575 is currently available for between RMB 1,000 to RMB 1,500. Taiwanese chipmaker MStar Semiconductor plans to release its first dual-core chipset solution for RMB 1,000 smartphones next week.
The low priced, Android based smartphones of China will change the global market [‘Experiencing the Cloud’, Sept 10, 2012]
Stellar growth sees China take 27% of global smart phone shipments, powered by domestic vendors [Canalys press release, Aug 2, 2012] – Android is the clear platform of choice, accounting for 81% of Chinese shipments … Local tier-one vendors have worked hard in recent quarters to greatly improve their brand resonance among consumers and to expand and enhance their relationships and influence within operators,’ said Canalys Research Director for China, Nicole Peng. ‘But the tier-two vendors — the likes of Oppo, K-Touch and Gionee — have also stamped their mark, boosting smart phone shipments into tier-three and tier-four cities, predominantly through the open channels. As feature phone vendors, they already have established partnerships and strong brand awareness. These domestic vendors are making significant progress transitioning their portfolios and customer bases to be more focused on smart phones.’
Apple Should Take The $199 Chinese Smartphone Seriously [Seeking Alpha, Sept 6, 2012] At a time when China is set to overtake the U.S. as the world’s largest smartphone market, little-known Chinese firms are prepared to battle it out for market dominance with the maker of the game-changing iPhone, Apple (AAPL). … There are a number of Chinese brands offering similar capabilities, nominally, as the iPhone at half the price, most of them using a forked version of Google’s (GOOG) Android. The names include ZTE Corp., Lenovo Group, and other small private firms like Xiaomi, Gionee, and Meizu Technology. Even cheaper smartphones are offered by Alibaba Group, Shanda Interactive, and Baidu (BIDU) for fewer than ¥1,000 (~$150 U.S.).
MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [‘Experiencing the Cloud’, Dec 12, 2012]
Currently Oppo, ZTE, Huawei, Lenovo, Gionee and even Sony have confirmed to be working on phones using the new quad-core CPU, with prices from some smaller brands expected to start at around $200.
Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the Cloud’, July 20, 2013]
[Part 2] MediaTek to push 8 small cores, the mystery [ESM 国际电子商情 (International Electronic Business), July 18, 2013] exclusive interview … [with] Zhu Shangzu (朱尚祖), MediaTek Global Smartphone General Manager … Judging from the current situation, customers of high-end flagship phones are still using the products of the competitors, but there is flagship in our quad-core case as well, and OPPO, Vivo and GiONEE and other quad-core phones are also very popular. Our next goal is to get the customers of flagship machines using our platform via helping customers to achieve stronger performance on the big screen multimedia.
From current media reports:
Gionee and Opera get more people connected [Opera press release, Jan 24, 2013]
Opera Software and Gionee, one of the TOP 3 mobile phone brand in China and famous global smartphone solution supplier, are working together to get more people connected with the Opera Mini mobile phone browser.
Opera Mini will be pre-installed in Gionee’s Android-based smartphones to give Gionee users quick access to the internet. These handsets are already available in Vietnam and Nigeria.
Gionee always highlights innovation and makes continuous efforts to bring new features to its users, and is known as a leading provider of mobile phone solutions, products and services to global market.
“The trend that smartphones are replacing feature phones requires more of our inputs in high-end mobile platforms such as Android,” said William Lu, vice president, Gionee. “With a better browser for Android, Opera Mini, in the mix, we can bring better user experience to our customers.”
Opera is one of the most used mobile browsers with 229 million users worldwide. Opera Mini is designed for fast browsing on both 2G and 3G networks.
“The best possible user experience on any device and any network is what Opera works toward,” said Lars Boilesen, CEO, Opera Software. “With Opera Mini, Gionee will provide its users with all the advantages that Opera Mini users benefit from, including its speed and ease of use.”
Gionee has also launched Opera Mini in its Java and MRE based feature phones.
Lenovo, Huawei, Coolpad, Gionee, Xiaomi: 5 Chinese ‘Underdog’ Smartphone Brands Taking Your Sales [International Business Times, Feb 25, 2013]
Apple has been at the top of the smartphone industry since it came out with the iPhone. Five iterations later, it still holds a pretty big share of the industry. But lately, Chinese brands are making a name for themselves, starting in their own country.
…
Gionee
The good
Gionee’s flagship phone, Dream D1 features a 4.65-inch display with super AMOLED, a 1.2GHz Cortex A7 Processor, Android 4.1 Jelly Bean OS, 1 GB RAM, 4 GB of Rom with microSD card, an 8-megapixel rear camera, and a 1-megapixel front camera, reports GoTechMax.
The bad
Aside from the lower-than-normal pixel count of the camera, Gionee’s Dream D1 also has an HD 720p display, so you can’t expect full HD. Otherwise, it gives a pretty solid run for a phone that’s rumored to be sold at Rs 10,000 in India (approximately $185 USD), reports Droidify.
…
Cornucopia of Choices Spurs Smartphone Market to Double by End of 2017 [IHS iSuppli press release, July 17, 2013]
…
Apple’s iPhone franchise appears to be stalling as first-quarter shipments of 37.4 million fell below expectations. With the next iPhone model not expected until the second half of the year, there is a real possibility that the full-year 2013 sales volume of the iPhone may be essentially flat at around 150 million units, compared to 134 million units in 2012.
“The possible slowing growth of the iPhone and the rapid pace of competitive smartphones releases speak to the ferocious nature of the handset business, especially now as the market continues to pivot from a market dominated by lower-end handsets known as feature phones to one that is increasingly smartphone-centric,” Lam said.
Outshipped
The trend of deeper smartphone penetration continued in the fourth quarter of 2012 and the first quarter this year, as smartphones outshipped feature phones in the overall branded cellphone market.
After a seasonally high fourth quarter, which saw total mobile handset shipments topping 400 million units for the first time, handset shipments in the first quarter of 2013 contracted by nearly 50 million units quarter-over-quarter, keeping with seasonal sales trends.
Samsung continued its strong growth in the first quarter with a sequential increase of 9 million units, while brands such as Coolpad and Gionee outshipping the likes of HTC and Motorola in the first quarter.
Chinese smartphone OEMs were able to accomplish such growth on the back of a catalog of largely affordable smartphones, while Samsung rolled out a number of low-cost variants to its high-end flagship products.
These competitive forces, as well as changing consumer demand, will place pressures not only on Apple but also on other OEMs, IHS believes, forcing players to innovate and diversify smartphone offerings in order to continue growing.
…
Gionee To Launch Series Of Smart Phones In India [EFYTimes.com portal, Feb 19, 2013]
Established in 2002, Gionee is a specialized mobile device design company from China. Gionee over the years has believed in keeping Innovation as its Core Value Proposition which has helped the company’s growth over the last decade. Research & Development is an institution with over 2000 employees. A state of the art In house Manufacturing Unit ensures Gionee products deliver more than the best to its customers, creating new benchmarks of quality each time.
Gionee currently sells over 23 million handsets per year in China mainland and has been ranked No. 2 brand in the GSM market. With an investment of over 160 Million Dollars and 8000 employees, Gionee has a current annual production capacity of 40 million units. The company is already in the process of expansion with an area of 330,000 square meters, the Gionee Industrial Park is China’s largest and best managed mobile phone manufacturing facility unit on completion will have an annual production to hit 80 million units. Gionee’s export is in access of a million units monthly catering to well established brands overseas as an ODM.
Gionee will be launching its entire range of mobile devices in India, from feature phones to smart phones with a special focus on the smart phones. Gionee promises to offer its Indian customers the best in class experience, every time and would be available with its entire range of products for Indian customers by the end of Feb 2013. Gionee has also tied up 4 leading import and distribution and import partners including based out of Chandigarh, Jaipur, Kolkata & Bangaluru.
To support the India Operations Gionee has already set up an office in New Delhi and is in the process of building the core team. The India Office will help strengthen its brand presence by providing Marketing / Sales Support / Service Support to its Indian Partners & Consumers. The office will be playing a key role in product testing / validation and customization for the India Market. The India Office has already appointed Goosebumps as their Advertising agency and Intellect Digest as its Digital Media Partner.
Gionee has always believed in an integrated business approach and has therefore based its biz on its 3 pillars of strength being Own Design/ Own Manufacturing/ Own R&D. A close association with MediaTek and Qualcomm allows Gionee to offer a wide product portfolio covering both feature and smart phones. Living up to its name Gionee Meaning “Golden Quality” the brand has always kept quality and experience at the top. Tight partnerships with key Tier 1 suppliers and an innovative Sales & Marketing Approach have developed Brand Gionee.
Gionee started international branding in 2005 from mainland China and is now in the process of setting up its Brand business globally and having a strong presence in the Middle East, Northern Africa, Vietnam, Taiwan, Myanmar, Thailand and NOW India.
Gionee Dream D1 launched in India for Rs 17,999, features a 4.65-inch screen, quad-core processor and runs on Android Jelly Bean [BGR India, March 12, 2013]
Following UMI which recently launched the X2, Gionee, another Chinese mobile maker, has launched the Dream D1 in India. This 4.65-inch smartphone will be available by the end of this month at retail stores across the country for Rs 17,999 [$302].
The Dual-SIM Dream D1 sports a 4.65-inch Super AMOLED Plus HD (1280×720 pixels) display and is powered by a 1.2GHz quad-core Cortex A7 processor, PowerVR Series5XT GPU and 1GB RAM. The phone also includes features like 8-megapixel rear camera with LED flash and support for 720p video recording, VGA front camera, 4GB of internal memory which can be expanded up to 32GB and a 2,100mAH battery. On the software side of things the Dream D1 has a built-in Digital Theatre System (DTS) Sound for enhanced audio and runs on Android 4.1 Jelly Bean.
The phone is priced at a slightly higher price than the UMI X2, LAVA Q800 and the Micromax Canvas HD that offer similar features.
Gionee Elife E6 with 5-inch 1080p display announced, coming soon to India [Fone Arena, July 10, 2013]
Gionee has finally announced the most expected Elife E6 at an event in China just now. The Elife E6 packs a 5-inch (1920 x 1080 pixels) display based on one-glass solution (OGS+) technology, powered by a 1.5 GHz quad-core Mediatek MT6589T processor and runs on Amigo ROM Android 4.2 (Jelly Bean). It packs a 13-megapixel rear camera with f2.2 wide angle lens, BSI sensor, LED flash and a 5-megapixel front-facing camera with f2.4 wide angle lens. The phone is 7.9mm thick and has just 2.54mm thin bezel around the display. It weighs just 128 grams. It has DTS surround sound technology and has dedicated Yamaha audio chip for enhanced audio experience.
The phone has CABC screen brightness regulation technology that automatically reduces screen brightness automatically and the synchronization heartbeat technology that reduces application wake up time) to save power. The phone packs a 2000 mAh battery with intelligent power meter that minimizes charging and discharging errors.
At the launch Gionee listed India in the global launch countries among several countries. So we can expect the phone to launch in India soon. Gionee launched the Elife E5 in India recently.
…
Boosting both the commodity and premium brand markets in 2013 with much more smartphones and tablets while the Windows notebook shipments will shrink by 2%
This is my conclusion after reviewing
- The ongoing trends in the commodity and premium brand ecosystems of Android devices:
– Smartphones
– Tablets
and
- The emerging new trends in the premium ecosystem of the Windows devices:
– Notebooks
– Smartphones
as reported by the most knowledgeable sources.
Updates: – ODMs see weaker profits from tablet business [DIGITIMES, March 26, 2013]
As Google and Amazon reportedly will release their next-generation 7-inch entry-level tablets in the near future, sources from the upstream supply chain have estimated that related ODMs’ profits from these tablets will be about 20% less than those from notebooks.
Since tablets have a simpler design than notebooks, the ODMs are only able to earn about US$9-10 for each tablet made, lower than US$13-20 for notebooks.
In addition, fewer components needed means that ODMs will have difficulties using their purchasing advantages to earn profits, and tablet brand vendors’ demand for specific components will also impact the makers’ profits, the sources noted.
Seeing weak growth in the notebook industry, most ODMs have turned to place their focuses on the tablet market and are competing aggressively for orders through price cuts, the sources said.
– Wintel camp mulls measures to rekindle weakening notebook industry [DIGITIMES, Feb 21, 2013]
Suppliers within the Wintel camp are mulling to launch a series of measures, including price cuts for their products, in the second quarter of 2013 to rekindle the stymied notebook industry caused by growing popularity of tablets, according to industry sources.
The launch of Windows 8 has failed to ignite replacement demand for notebooks in the end markets, resulting in a prolonged inventory adjustment process at the supply chain that has been going on since the third quarter of 2012, the sources noted.
With market reports indicating that global tablet shipments are likely to reach 200-300 million units in 2013, including 150 million units in China and other emerging markets, notebook vendors will see their market share continue to be eroded by tablets, commented the sources.
While agreeing to the consensus that price-cutting will be the only way to stimulate notebook demand, related PC chip suppliers are urging the major players in the Wintel camp, mainly Intel and Microsoft, to take the lead in action so that the entire supply chain can follow.
The Wintel camp has always chosen to start cutting their product prices in the third quarter each year, noted the sources, but it would be too late to safeguard the notebook industry as well as its supply chain if Intel and Microsoft do not take actions till the third quarter this year.
Since Intel usually will cut significantly its CPU prices prior to the launch of new models, the planned launch of Haswell platform in June may persuade the chip giant to lower the quotes for its Ivy Bridge family CPUs earlier, the sources revealed.
But it remains to be seen if price cuts by Intel alone could stir up notebook replacement demand amid the squeezing-out effect triggered by the rise of tablets, mobile phones and other mobile Internet devices, commented the sources.
End of updates
Before reading the sections of this post corresponding to the above, do not forget to read my own analytical posts which are based on the new product directions and supporting SoC trends (and as such predicting the year 2013 market even better than the external analyses quoted here which are mainly based on supply chain trends and market changes observed already in 2012):
– $48 Mogu M0 “peoplephone”, i.e. an Android smartphone for everybody to hit the Chinese market on November 15 [Nov 9, 2012]
– Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets [July 26 – Nov 9, 2012]
– The low priced, Android based smartphones of China will change the global market [Sept 10-26, 2012]
– Unique differentiators of Nokia Lumia 920/820 innovated for high-volume superphone markets of North America, Europe and elsewhere [Sept 6 – Nov 13, 2012]
– With Asha Touch starting at $83 and Lumia at $186 Nokia targeting the entry-level and low-end smartphone markets [Nov 1, 2012]
– Boosting the MediaTek MT6575 success story with the MT6577 announcement – UPDATED with MT6588/83 coming early 2013 in Q42012 and 8-core MT6599 in 2013 [June 27, July 27, Sept 11-13, Sept 26, Oct 2, 2012]
– MT6577-based JiaYu G3 with IPS Gorilla glass 2 sreen of 4.5” etc. for $154 (factory direct) in China and $183 [Sept 13, 2012]
– China’s HW engineering lead: The Rockchip RK292 series (RK2928 and RK2926) example [Oct 27, 2012]
– Nexus 7: Google wanted it in 4 months for $199/$245, ASUS delivered + Nexus Q (of Google’s own design and manufacturing) added for social streaming from Google Play to speakers and screen in home under Android device control [June 28, 2012]
– Giving up the total OEM reliance strategy: the Microsoft Surface tablet [June 19 – July 30, 2012]
– ASUS: We are the real transformers, not Microsoft [Oct 17, 2012]
– Microsoft Surface: its premium quality/price vs. even iPad3 [Oct 26, 2012]
– BUILD 2012: Notes on Day 1 and 2 Keynotes [Oct 31, 2012]
– Acer Iconia W510: Windows 8 Clover Trail (Intel Z2760) hybrid tablets from OEMs [Oct 28, 2012]
– Microsoft Surface with some questions about the performance and smoothness of the experience [Nov 12, 2012]
Update: The sections of this post are somewhat taking into the account the most dramatic disruption in the whole history of ICT, what I am calling the ‘ALLWINNER PHENOMENON’ (all ‘Allwinner et al phenomenon’ sometimes when including Allwinner’s internal mainland China competitors such as Rockchip into account as well). EVERYBODY SHOULD BE AWARE of the fact, however, that even in the latest forecasts by bigname ICT market researchers the ‘Allwinner phenomenon’ is not taken into account at all. The two very recent updates from IDC given below should therefore be read with that in mind as the ‘Allwinner phenomenon’ will add hundreds of millions to those forecasts starting as early as in 2013. Especially the numbers for the tablets will be affected. To understand more about that please read my special posts given in a newly created blog about the ‘Allwinner phenonmenon’:
– Allwinner A31 SoC is here with products and the A20 SoC is coming [Dec 10, 2012]
– Is low-cost enough for global success? [Dec 5, 2012]
– The upcoming Chinese tablet and device invasion lead by the Allwinner SoCs [Dec 4, 2012]
– $40 entry-level Allwinner tablets–now for the 220 million students Aakash project in India [Dec 4, 2012] from this alone 220 million additional tablets would have been delivered from 2013 to 2016
– USD 99 Allwinner [Nov 30, 2012]
– It’s a Strategic Inflection Point [Dec 1, 2012]
Update: HTC 1Q13 smartphone shipments to grow slower than expected, say sources [DIGITIMES, Dec 18, 2012]
Affected by the launch of iPhone 5 and rapidly declining smartphone prices in China, HTC reportedly has revamped its product roadmap for 2013 and is expected to see its smartphone shipments rise 10-15% sequentially in the first quarter of the year compared to a 20-30% growth projected previously, according to industry sources.
HTC has suspended development of a number of new models for 2013, reducing the visibility of its orders for handset components, the sources revealed.
HTC declined to comment on market speculation.
However, the industry watchers believe that HTC is heading for a bumpy road ahead, since shipments of its Windows Phone 8-based smartphones have not been as strong as expected, while Apple’s iPhone 5 and Samsung Electronics’ Galaxy III have continued to enjoy brisk sales.
In China, HTC is facing cut-throat competition from local white-box smartphone vendors and has been forced to enter the sub-CNY2,000 (US$321) segment, which runs counter to its established policy focusing mainly on the high-end sector, said the sources.
Update: Worldwide Smart Connected Device Market, Led by Samsung and Apple, Grew 27.1% in the Third Quarter, According to IDC [IDC press release, Dec 10, 2012]
The worldwide smart connected device market – a collective view of PCs, tablets, and smartphones – grew 27.1% year-over-year in the third quarter of 2012 (3Q12) reaching a record 303.6 million shipments valued at $140.4 billion dollars. Expectations for the holiday season quarter are that shipments will continue to reach record levels rising 19.2% over 3Q12 and 26.5% over the same quarter a year ago. According to the International Data Corporation (IDC) Worldwide Quarterly Smart Connected Device Tracker, 4Q12 shipments are expected to reach 362.0 million units with a market value of $169.2 billion dollars. Holiday season growth will be driven by tablets and smartphones, which are expected to grow 55.8% and 39.5% year-over-year respectfully, while PCs are expected to decline slightly from this quarter a year ago.
From a vendor perspective, Samsung maintained the top position in 3Q12 with 21.8% market share based on shipments. Apple, which ranked second overall in shipments, led all vendors in value with a total of $34.1 billion in 3Q12 and an average selling price (ASP) of $744 across all device categories. Following Samsung’s 21.8% share and Apple’s 15.1% share were Lenovo (7.0%), HP (4.6%), and Sony (3.6%). While Samsung, Apple, and Lenovo have all grown share over the past year, HP, which is virtually non-existent in the mobile space, has dropped its share from 7.4% in 3Q11 to 4.6% in 3Q12 with shipments declining -20.5% during that time.
“The battle between Samsung and Apple at the top of the smart connected device space is stronger than ever,” said Ryan Reith, program manager, Worldwide Mobile Device Trackers at IDC. “Both vendors compete at the top of the tablet and smartphone markets. However, the difference in their collective ASPs is a telling sign of different market approaches. The fact that Apple’s ASP is $310 higher than Samsung’s with just over 20 million fewer shipments in the quarter speaks volumes about the premium product line that Apple sells.”
Looking forward, IDC expects the worldwide smart connected device space will continue to surge well past the strong holiday quarter and predicts shipments to surpass 2.1 billion units in 2016 with a market value of $796.7 billion worldwide. IDC’s research clearly shows this to be a multi-device era, although market dynamics are shifting in terms of product category. In 2011, PC’s – a combination of desktop and portable PCs – accounted for 39.1% of the smart connected device market. By 2016 it is expected to drop to 19.9%. Smartphones will be the preferred product category with share growing from 53.1% in 2011 to 66.7% in 2016. Tablets will also grow significantly with share growing from 7.7% in 2011 to 13.4% in 2016. The shift in demand from the more expensive PC category to more reasonably priced smartphones and tablets will drive the collective market ASP from $534 in 2011 to $378 in 2016.
“Both consumers and business workers are finding the need for multiple ‘smart’ devices and we expect that trend to grow for several years, especially in more developed regions,” said Bob O’Donnell, program vice president, Clients and Displays. “The advent of cloud-based services is enabling people to seamlessly move from device to device, which encourages the purchase and usage of different devices for different situations.”
Top 5 Smart Connected Device Vendors, Shipments, and Market Share, Q3 2012 (shipments in millions)
Vendor
3Q12 Unit Shipments
3Q12 Market Share
3Q11 Unit Shipments
3Q11 Market Share
3Q12/3Q11 Growth
Samsung
66.1
21.8%
33.5
14.0%
97.5%
Apple
45.8
15.1%
33.1
13.9%
38.3%
Lenovo
21.1
7.0%
13.2
5.5%
60.0%
HP
14.0
4.6%
17.6
7.4%
-20.5%
Sony
11.0
3.6%
8.7
3.7%
25.4%
Other
145.6
48.0%
132.7
55.6%
9.7%
Total
303.6
100.0%
238.9
100.0%
27.1%
Source: IDC Worldwide Quarterly Smart Connected Device Tracker, December 10, 2012.
Smart Connected Device Market by Product Category, Shipments, Market Share, 2012-1016 (shipments in millions)
Product Category
2016 Unit Shipments
2016 Market Share
2012 Unit Shipments
2012 Market Share
2016/2012 Growth
Desktop PC
151.0
7.2%
149.2
12.5%
1.2%
Portable PC
268.8
12.8%
205.1
17.2%
31.1%
Smartphone
1405.3
66.7%
717.5
60.1%
95.9%
Tablet
282.7
13.4%
122.3
10.2%
131.2%
Total
2107.8
100.0%
1194.0
100.0%
76.5%
Source: IDC Worldwide Quarterly Smart Connected Device Tracker, December 10, 2012.
Update: IDC Raises Tablet Forecast for 2012 and Beyond As iOS Picks Up Steam, Android Gains Traction, and Windows Finally Enters the Market [IDC press release, Dec 5, 2012]
A strong competitive landscape—including surging Android tablet shipments and robust demand for Apple’s new iPad mini—has led International Data Corporation (IDC) to increase its 2012 forecast for the worldwide tablet market to 122.3 million, up from its previous forecast of 117.1 million units. In the latest forecast update of the Worldwide Quarterly Tablet Tracker, IDC also raised its 2013 forecast number to 172.4 million units, up from 165.9 million units. And by 2016 worldwide shipments should reach 282.7 million units, up from a previous forecast of 261.4 million units.
“Tablets continue to captivate consumers, and as the market shifts toward smaller, more mobile screen sizes and lower prices points, we expect demand to accelerate in the fourth quarter and beyond,” said Tom Mainelli, research director, Tablets at IDC. “Android tablets are gaining traction in the market thanks to solid products from Google, Amazon, Samsung, and others. And Apple’s November iPad mini launch, along with its surprise refresh of the full-sized iPad, positions the company well for a strong holiday season.”
In addition to increasing the unit totals for 2013, IDC also updated its operating system splits for the year to reflect Android’s growing strength in the tablet market. IDC now expects Android’s worldwide tablet share to increase from 39.8% in 2011 to 42.7% for the full year of 2012. During that same time Apple’s share will slip from 56.3% in 2011 to 53.8% in 2012. Long term, IDC predicts Windows-based tablets (including Windows 8 and Windows RT) will grab share from both iOS and Android, growing from 1% of the market in 2011 to 2.9% in 2012, on its way to 10.3% in 2016.
“The breadth and depth of Android has taken full effect on the tablet market as it has for the smartphone space,” said Ryan Reith, program manager for IDC’s Mobile Device Trackers. “Android tablet shipments will certainly act as the catalyst for growth in the low-cost segment in emerging markets given the platform’s low barrier to entry on manufacturing. At the same time, top-tier companies like Samsung, Lenovo, and ASUS are all launching Android tablets with comparable specs, but offered at much lower price points.”
Once again, IDC’s increase in tablet shipments comes at the expense of eReaders. IDC lowered its forecast for eReaders for 2012 and beyond. While the front-lit eReader offerings from Amazon and Barnes & Noble have captured the interest of a subset of consumers who prefer a dedicated eReader, most buyers are gravitating toward multi-use tablet products and finding a ‘good enough’ reading experience on these traditional back-lit tablets. IDC now expects 2012 eReader shipments to top out at 19.9 million units, down from the 27.7 million units that shipped in 2011.
Tablet Operating Systems, Market Share Forecast and CAGR 2012-2016
Tablet OS
2012 Market Share
2016 Market Share
CAGR 2012 – 2016 (%)
iOS
53.8%
49.7%
20.9%
Android
42.7%
39.7%
21.0%
Windows
2.9%
10.3%
69.2%
Other
0.6%
0.3%
7.7%
Grand Total
100.0%
100.0%
23.3%
Source: IDC Worldwide Quarterly Tablet Tracker, December 5, 2012
Table Notes:
- Windows shipments include Windows RT, Windows 8, and Windows 7 tablets.
- Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
The ongoing trends in the commodity
and premium brand ecosystems of Android devices
Smartphones
Motorola likely to bid farewell to Taiwan handset ODMs after Google sells plants to Flextronics [DIGITIMES, Dec 17, 2012]
The partnerships between Motorola Mobility and Taiwan-based handset ODMs such as Foxconn International Holdings (FIH) will begin to fade away, as Google, the parent company of Motorola, has signed an agreement to hand over Motorola’s manufacturing operations in Tianjin, China, and Jaguariuna, Brazil to Flextronics International, according to industry sources.
After the deal between Google and Flextronics is completed in the first half of 2013, Motorola will completely withdraw from the handset manufacturing industry, and instead will transform to a brand operator targeting mainly the mid-range to high-end smartphone segment, the sources indicated.
While the streamlining of Motorola’s operations comes as no surprise to Taiwan handset ODMs, Google’s decision to sell Motorola’s plants to Flextronics, instead of its long-tern partner FIH, has raised concerns among the industry.
Flextronics is purchasing the plants in exchange for orders from Motorola since the Singapore-based EMS giant has made little progress in gaining handset orders from Apple or major players in the Android or Windows Phone camps, the sources commented.
It is also no longer necessary for FIH to buy plants in exchange for orders, as the company has transferred from handset EMS operations to focus on smartphone ODM business, indicated the sources, adding that FIH has also managed to establish partnerships with a number of major players in the smartphone sector.
However, a deepened cooperation between Motorola and Flextronics may affect the handset component supply chain in Taiwan, the sources warned.
Digitimes Research: Android phones to account for 70% of global smartphone market in 2013 [DIGITIMES Research, Dec 6, 2012]
Android will further solidify its market leadership in the smartphone operating system race in 2013, thanks to a broad support from smartphone vendors and the rollout of a wide range of low-priced models for sale in emerging markets. Shipments of Android phones are expected to top 600 million units or over 70% of global smartphone shipments in 2013, Digitimes Research estimates.
iOS will trail Android to take the number two position in the OS ratings with a 20% share, while other smartphone platforms will share the remaining 10%.
Shipments of Windows Phones, including 7.x and 8.x models, will grow 150% on year to 52.5 million units in 2013 for a 6.1% share, followed by RIM’s BlackBerry devices with a 3.7% share, Digitimes Research estimates. Other platforms, including Tizen and Firefox, will take up a portion lower than 1%.
Digitimes Research: Global smartphone shipments to grow 30% in 2013 [DIGITIMES Research, Nov 19, 2012]
Global smartphone shipments are expected to grow 30% to 865 million units in 2013, accounting for 43.9% of total handset shipments in the year, Digitimes Research has estimated.
Factors including relationships between platform providers and hardware makers, support from telecom carriers for new models, and key developments or decisions by some vendors will affect smartphone sales in 2013, Digitimes Research believes.
Google is expected to further strengthen its control over the Android ecosystem and its production partners, which may limit the development of other platforms or variant Android models.
Microsoft’s launch of own-brand smartphones may result in a reduction in support for the Window Phone platform by hardware vendors, which should otherwise serve as a key factor to push for the growth of the Window Phone to become a third major platform in the segment.
While Amazon is likely to enter the smartphone market, 2013 may be crucial a year for Nokia and RIM (Research in Motion) to make vital decisions concerning their smartphone businesses.
Demand for high-end smartphone models in Western Europe will be affected seriously by reduced government budgets and weak consumption in the region because of the prolonged financial crisis.
However, smartphones’ growing penetration in China, Russia, India, Indonesia, South America and other emerging markets will serve as a growth driver for global smartphone shipments in 2013, Digitimes Research believes.
Google, Amazon and other vendors in China to lead pricing in low-cost smartphone segment, say sources [DIGITIMES , Nov 5, 2012]
While sales of low-cost smartphones are expected to continue growing in the next few years, Google, Amazon and other Internet service companies in China may lead price competition in the segment, according to industry sources.
Shipments of low-cost smartphones, defined as models with a selling price of less than US$150, are forecast to double every year from 2010 to 2016, increasing from 4.5 to 311 million units, according to NPD DisplaySearch.
Most of the demand (60%) is from the Asia Pacific region, where a large majority of component suppliers and manufacturing factories are located – providing both time and cost savings, said DisplaySearch.
In China, the trend for telecom carriers to continue cooperating with chipset suppliers, handset design houses and handset vendors for the launch low-priced smatphone models will continue for a while, the sources noted.
Vendors including Huawei Device, ZTE, Lenovo and Coolpad have emerged as the leading group of the smartphone suppliers in China through the offerings of low-cost models, but most of vendors has suffered losses or seen the profits of their handset business decline due to fierce price competition in the segment, the sources revealed.
Lenovo’s handset business unit is still operating in red, and Huawei and Coolpad have seen their profits decline, while ZTE and TCL have seen their handset businesses swing from profitability to loss, the sources indicated.
In order to stemming losses, or improving profitability, most branded smartphone vendors in China have been trying to expand their share in the mid- and high-end segment, while pushing their sales through local retain channels or export sales.
But other China-based smartphone vendors such as Xiaomi Technology, Internet service companies including Baidu and Shada Interactive Entertainment, as well as online retail giant 360buy, are likely to continue to adopt aggressive price strategies to pushing sales of their own models, said the sources.
In the global market, the cooperation between Google and LG Electronics for the launch of Nexus 4 at prices ranging from US$299-349 is also expected to lead to the proliferation of more low-priced Android smartphone models, the sources indicated.
Amazon, which has been aggressive in the tablet segment, is expected to release its first smartphone model in 2013 with the same price tactics, which is likely to further drive down the prices of smartphones, commented the sources.
Digitimes Research: Nexus 4 to be popular in prepaid SIM card and telecom retail channels [DIGITIMES Research, Nov 7, 2012]
Google’s Nexus 4, which comes with a 4.7-inch 720p HD display and Qualcomm quad-core Snapdragon S4 processor, is expected to become a popular model in the prepaid SIM card segment as well as in telecom retail channels for unlocked subscribers, according to Digitimes Research.
With its high hardware specifications and pricing of US$299 for the 8GB version and US$349 for the 16GB version, the Nexus 4 will cause price pressure on other comparable models rolled by rival brands.
Sales of Windows phones are expected to grow 250% in 2013 due in part to support from telecom carriers which are seeking a third platform other than Android or iOS. However, Android will continue to lead the market with a wide margin, Digitimes Research said.
Google aggressive pricing for Nexus 4 smartphone to affect sales of other brands [DIGITIMES, Oct 30, 2012]
Google’s pricing of US$299-349 for its newly released 4.7-inch, quad-core Nexus 4 smartphone is lower than market expectations, and thus could affect the sales of Android-based smartphones launched by other branded vendors, according to industry sources.
Prior to the release of the Nexus 4 in cooperation with LG Electronics, Google had cooperated with HTC and Samsung Electronics, respectively, for the launch of three generations of Nexus smartphones with prices ranging from US$500-700.
The Nexus 4 will enjoy the advantage in pricing even compared to the latest quad-core Android models rolled out by other vendors, indicated the sources, noting that Asustek Computer’s 4.7-inch Padfone 2 is available for US$600, while China-based Xiaomi Technology’s second-generation Xiaomi phone is priced at CNY1,999 (US$320).
Other Android-based smartphone vendors, including HTC, Sony Mobile Communications, Huawei Device, ZTE and even Motorola Mobility, all are likely to adjust their price strategies, since chances are high that the Nexus 4 will make a strong impact on the smartphone market, commented the sources.
China market: Nexus 4 pricing to affect sales, prices of other brands, says report [DIGITIMES, Nov 7, 2012]
The aggressive pricing strategy adopted by Google for its Nexus 4 may affect sales of Xiaomi smartphones in China and may also force other brands including Samsung Electronics, Motorola and HTC to lower the prices of their offerings in China, according to a China-based 21st Century Business Herald report.
The price of US$299 (CNY1,890) for the 8G version of the Nexus 4 is more competitive than Xiaomi’s next-generation quad-core smartphone which is available at CNY1,999, the paper noted.
Xiaomi is selling its first quad-core model below its BOM of CNY2,350 and will limit initial sales of the model to 50,000 units only, said the paper, which added that Xiaomi aims to ramp up volumes to 250,000 units to bring down the BOM when it begins to offer the second round of sales in mid-November.
Although the Nexus is not yet available in China, consumers may hesitate to pick up the quad-core Xiaomi smartphones because they have to wait for several months before Xiaomi will begin delivering the devices, said the paper.
China market: Coolpad hopes to regain mid-range, high-end smartphone share [DIGITIMES , Nov 7, 2012]
China-based handset maker Coolpad hopes to re-enter the mid-range and high-end smartphone market in China by introducing smartphone products with China Mobile that will be priced above CNY5,000/unit (US$800/unit).
In the recent years, Coolpad has been focusing on smartphones at the price range of CNY1,000/unit by cooperating with China’s three telecom service providers. Entry-level and mid-range models have accounted for 85% of Coolpad’s total shipments. The firm recently introduced a new model, Coolpad 9960 (Da Guan HD), with a 4.7-inch screen, Nvidia Tegra 3 quad-core processor, and a 13-megapixel front camera. The model will be priced above CNY5,000/unit.
Currently, China’s mid-range and high-end smartphone markets have been dominated by international brands such as Apple, HTC, Motorola, and Sony. Coolpad has been the only local brand that has a relatively strong market share.
According to industry sources, in 2012, Coolpad increased investment in R&D of high-end products by 20% on year and formed an R&D team of 800 staff to strengthen its high-end product line.
Lenovo, Huawei, ZTE faced with challenges to reach quarterly shipments of 10 million smartphones, say Taiwan makers [DIGITIMES , Nov 5, 2012]
A total of 60 million smartphones were shipped to the China market in the third quarter of 2012, and Lenovo, Huawei and ZTE shipped nine million units, 8.5 million units and 7.5 million units, respectively, with a combined market share of 41.7%, according to DRAMeXchange under consulting company TrendForce.
Except for Apple and Samsung Electronics, other international vendors including HTC, Sony Mobile Communications, LG Electronics, Nokia have not been able to attain quarterly shipments of 10 million smartphones, the sources indicated. Lenovo, Huawei and ZTE stand a chance to ship 10 million smartphones a quarter if they can strengthen their branding operations, marketing and product lines of mid-range and high-end models in overseas markets, the sources pointed out.
Lenovo has focused on entry-level smartphones priced below CNY1,500 (US$240) and relied too much on the domestic market, the sources indicated. In comparison with Lenovo, Huawei and ZTE have the advantage of cooperation with mobile telecom carriers in many countries, but their brand image is not strong enough for marketing mid-range and high-end smartphones, the sources pointed out.
PC vendors recommended to target niche smartphone market to avoid direct competition [DIGITIMES , Oct 3, 2012]
Branded PC vendors including Hewlett-Packard (HP) and Asustek Computer, which plan to reignite their smartphone businesses, are recommended to offer models with strong application platforms, sleek product design and integrated cloud computing capabilities targeting niche markets, while avoiding direct competition with smartphone vendors, according to sources at Taiwan’s handset supply chain.
Among the leading brands, HP, Dell and Asustek have not launched new handsets for some time, while Acer has made little progress in the sector although it has continued rolling out new phones, indicated the sources.
Lenovo’s performance has been exceptional, taking the second-ranked title in China’s smartphone market by optimizing an array of entry-level models priced at around CNY1,000 (US$158).
The reason major branded PC vendors are considering a comeback to the smartphone market hinges on emerging business opportunities that are anticipated to come along with the launch of Windows 8. They are hoping that sales of Windows 8-based PCs will help promote the sale of Windows Phone 8 smartphones as well.
Even so, prospects are still slim for PC brands to make a strong presence in the smartphone market, given that Apple and Samsung Electronics are currently the top-2 vendors dominating the segment, while other smartphone brands including Nokia, RIM, Sony Mobile Communications, Motorola Mobility are lagging behind with heavy losses, the sources commented.
Worldwide Mobile Phone Growth Expected to Drop to 1.4% in 2012 Despite Continued Growth Of Smartphones, According to IDC [IDC press release, Nov 1, 2012]
The worldwide mobile phone market is forecast to grow 1.4% year over year in 2012, the lowest annual growth rate in three years despite a projected record number of smartphone shipments in the high-volume holiday season. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors will ship more than 1.7 billion mobile phones this year. In 2016, IDC forecasts 2.2 billion mobile phones will be shipped to the channel.
Global smartphone volume in the fourth quarter of 2012 (4Q12) is expected to reach 224.5 million units, representing 39.5% year-over-year growth due primarily to strong consumer demand. For the year, smartphone shipments are forecast to grow 45.1% year over year to 717.5 million units. Strong smartphone growth is a result of a variety of factors, including steep device subsidies from carriers, especially in mature economic markets where carriers resell the majority of smartphones, as well as a growing array of sub-US$250 smartphones in emerging markets.
“Sluggish economic conditions worldwide have cast a pall over the mobile phone market this year,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker. “However, the fourth quarter will be relatively bright due in part to sales of high-profile smartphones, such as the iPhone 5 and Samsung’s Galaxy S3, in addition to lower-cost Android-powered smartphones shipped to China and other high-growth emerging markets.”
Smartphone Operating Systems
“Underpinning the worldwide smartphone market is a constantly shifting mobile operating system landscape,” added Ramon Llamas, research manager with IDC’s Mobile Phone team. “Android is expected to stay in front, but we also expect it to be the biggest target for competing operating systems to grab market share. At the same time, Windows Phone stands to gain the most market share as its smartphone and carrier partners have gained valuable experience in selling the differentiated experience Windows Phone has to offer. What bears close observation is how BlackBerry’s new platform, BlackBerry 10, and multiple versions of Linux will affect the market once the devices running these systems are available.”
IDC forecasts Android to be the clear leader in the smartphone mobile operating system race, thanks in large part to a broad selection of devices from a wide range of partners. Samsung is the leading Android smartphone seller though resurgent smartphone vendors LG Electronics and Sony, both of which cracked the top five smartphone vendors during 3Q12, are not to be overlooked. IDC believes the net result of this will be continued double-digit growth throughout the forecast period.
iOS will maintain its position as the clear number two platform behind Android at the end of 2012 and throughout the forecast. The popularity of the iPhone across multiple markets will drive steady replacements and additional carrier partners will help Apple grow iOS volume. However, the high price point of the iPhone relative to other smartphones will make it cost prohibitive for some users within many emerging markets. In order to maintain current growth rates, Apple will need to examine the possibility of offering less expensive models, similar to its iPod line. Until that happens, IDC forecasts iOS to ship lower volumes than Android.
The BlackBerry OS will grow slowly but largely maintain share over the coming years following the BlackBerry 10 launch next year. The new operating system and devices will be valued by some longtime BlackBerry fans, particularly those who have waited for the new OS as Research In Motion delayed its release. This will allow the company to maintain pockets of strength in higher-growth emerging markets such as Indonesia and various Latin American countries. But, as with many other new platforms, the success of BB 10 will be partly dependent upon channel advocacy, like sales associates who can effectively tell the BlackBerry story.
Windows Phone will battle with BlackBerry for the number three spot in 2013, but will gain further clarity in the years that follow. Windows Phone will build on the progress it made in 2012, with Nokia establishing its presence and HTC solidly jumping back into the race. Moreover, contributions by Samsung, ZTE, and Huawei will help grow its footprint. With more vendors releasing more devices aimed at multiple segments, sales associates will be better positioned to tell a compelling Windows Phone story and to explain the value of Windows Phone’s differentiated experience compared to market leaders Android and iOS.
Linux will trail the market leaders throughout our forecast though it is expected to be the dark horse of the forecast. K-Touch has quietly built its Linux volumes this year while Haier recently released its first Linux smartphones. In addition, multiple platforms are expected to announce and launch their Linux-based smartphones in 2013, including Samsung’s Tizen and Jolla’s SailFish. Benefiting these platforms are their ties to previous platforms from the LiMo Foundation and Nokia’s MeeGo, which could lead to greater developer interest.
Top Smartphone Operating Systems, Forecast Market Share and CAGR, 2012–2016
Smartphone OS
2012 Market Share
2016 Market Share
CAGR 2012 – 2016 (%)
Android
68.3%
63.8%
16.3%
iOS
18.8%
19.1%
18.8%
BlackBerry OS
4.7%
4.1%
14.6%
Windows Phone
2.6%
11.4%
71.3%
Linux
2.0%
1.5%
10.5%
Others
3.6%
0.1%
-100.0%
Total
100.0%
100.0%
18.3%
Source: IDC Worldwide Mobile Phone Tracker, December 3, 2012
Android Marks Fourth Anniversary Since Launch with 75.0% Market Share in Third Quarter, According to IDC [IDC press release, Nov 1, 2012]
The Android smartphone operating system was found on three out of every four smartphones shipped during the third quarter of 2012 (3Q12). According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, total Android smartphone shipments worldwide reached 136.0 million units, accounting for 75.0% of the 181.1 million smartphones shipped in 3Q12. The 91.5% year-over-year growth was nearly double the overall market growth rate of 46.4%.
“Android has been one of the primary growth engines of the smartphone market since it was launched in 2008,” said Ramon Llamas, research manager, Mobile Phones at IDC. “In every year since then, Android has effectively outpaced the market and taken market share from the competition. In addition, the combination of smartphone vendors, mobile operators, and end-users who have embraced Android has driven shipment volumes higher. Even today, more vendors are introducing their first Android-powered smartphones to market.”
“The share decline of smartphone operating systems not named iOS since Android’s introduction isn’t a coincidence,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker. “The smartphone operating system isn’t an isolated product, it’s a crucial part of a larger technology ecosystem. Google has a thriving, multi-faceted product portfolio. Many of its competitors, with weaker tie-ins to the mobile OS, do not. This factor and others have led to loss of share for competitors with few exceptions.”
Mobile Operating System Highlights
Android, having topped the 100 million unit mark last quarter, reached a new record level in a single quarter. By comparison, Android’s total volumes for the quarter were greater than the total number of smartphones shipped in 2007, the year that Android was officially announced. Samsung once again led all vendors in this space, but saw its market share decline as numerous smaller vendors increased their production.
iOS was a distant second place to Android, but was the only other mobile operating system to amass double-digit market share for the quarter. The late quarter launch of the iPhone 5 and lower prices on older models prevented total shipment volumes from slipping to 3Q11 levels. But without a splashy new OS-driven feature like Siri in 2011 and FaceTime in 2010, the iPhone 5 relied on its larger, but not wider, screen and LTE connectivity to drive growth.
BlackBerry‘s market share continued to sink, falling to just over 4% by the end of the quarter. With the launch of BlackBerry 10 yet to come in 2013, BlackBerry will continue to rely on its aging BlackBerry 7 platform, and equally aging device line-up. Still, demand for BlackBerry and its wildly popular BBM service is strong within multiple key markets worldwide, and the number of subscribers continues to increase.
Symbian posted the largest year-on-year decline of the leading operating systems. Nokia remains the largest vendor still supporting Symbian, along with Japanese vendors Fujitsu, Sharp, and Sony. Each of these vendors is in the midst of transitioning to other operating systems and IDC believes that they will cease shipping Symbian-powered smartphones in 2013. At the same time, the installed base of Symbian users will continue well after the last Symbian smartphone ships.
Windows Phone marked its second anniversary with a total of just 3.6 million units shipped worldwide, fewer than the total number of Symbian units shipped. Even with the backing of multiple smartphone market leaders, Windows Phone has yet to make a significant dent into Android’s and iOS’s collective market share. That could change in 4Q12, when multiple Windows Phone 8 smartphones will reach the market.
Linux volume declined for the third straight quarter as did its year-over-year growth. Samsung accounted for the majority of shipments once again, but like most other vendors competing with Linux-powered smartphones, most of its attention went towards Android instead. Still, that has not deterred other vendors from experimenting, or at least considering the open-source operating system, as multiple reports of Firefox, Sailfish, and Tizen plan to release new Linux-based experiences in the future.
Top Six Smartphone Mobile Operating Systems, Shipments, and Market Share, Q3 2012 (Preliminary) (Units in Millions)
Operating System
3Q12 Shipment Volumes
3Q12 Market Share
3Q11 Shipment Volumes
3Q11 Market Share
Year-Over-Year Change
Android
136.0
75.0%
71.0
57.5%
91.5%
iOS
26.9
14.9%
17.1
13.8%
57.3%
BlackBerry
7.7
4.3%
11.8
9.5%
-34.7%
Symbian
4.1
2.3%
18.1
14.6%
-77.3%
Windows Phone 7/ Windows Mobile
3.6
2.0%
1.5
1.2%
140.0%
Linux
2.8
1.5%
4.1
3.3%
-31.7%
Others
0.0
0.0%
0.1
0.1%
-100.0%
Totals
181.1
100.0%
123.7
100.0%
46.4%
Source: IDC Worldwide Mobile Phone Tracker, November 1, 2012
Note: Data are preliminary and subject to change. Vendor shipments are branded shipments and exclude OEM sales for all vendors.Android Smartphone Shipments and Market Share, 2008 – 2012 YTD (Units in Millions)
2008
2009
2010
2011
2012 YTD
Android Total Unit Shipments
0.7
7.0
71.1
243.4
333.6
Android Market Share
0.5%
4.0%
23.3%
49.2%
68.2%
Source: IDC Worldwide Mobile Phone Tracker, November 1, 2012
Note: Data are preliminary and subject to change. Vendor shipments are branded shipments and exclude OEM sales for all vendors.
Gartner Says Worldwide Sales of Mobile Phones Declined 3 Percent in Third Quarter of 2012; Smartphone Sales Increased 47 Percent [Gartner press release, Nov 14, 2012]
Samsung Extended Its Lead in the Smartphone Market Widening the Gap with Apple
Worldwide sales of mobile phones to end users reached almost 428 million units in the third quarter of 2012, a 3.1 percent decline from the third quarter of 2011, according to Gartner, Inc. Smartphone sales accounted for 39.6 percent of total mobile phone sales, as smartphone sales increased 46.9 percent from the third quarter of 2011.
While the mobile phone market declined year-on-year, Gartner analysts said there were positive signs for the industry during the third quarter.
“After two consecutive quarter of decline in mobile phone sales, demand has improved in both mature and emerging markets as sales increased sequentially,” said Anshul Gupta, principal research analyst at Gartner. “In China, sales of mobile phones grew driven by sales of smartphones, while demand of feature phones remained weak. In mature markets, we finally saw replacement sales pick up with the launch of new devices in the quarter.”
Smartphones continued to fuel sales of mobile phones worldwide with sales rising to 169.2 million units in the third quarter of 2012. The smartphone market was dominated by Apple and Samsung. “Both vendors together controlled 46.5 percent of smartphone market leaving a handful of vendors fighting over a distant third spot,” said Mr. Gupta.
Nokia slipped from No. 3 in the second quarter of 2012 to No. 7 in smartphone sales in the third quarter of 2012. RIM moved to the No. 3 spot with HTC not far behind, at No. 4. “Both HTC and RIM have seen their sales declining in past few quarters, and the challenges might prevent them from holding on to their current rankings in coming quarters,” added Mr. Gupta.
While seasonality in the fourth quarter of 2012 will help end-of-year mobile phone sales to end users, Gartner analysts said that there will be a lower-than-usual boost from the holiday season. Consumers are either cautious with their spending or finding new gadgets like tablets, as more attractive presents.
Samsung’s mobile phones sales continued to accelerate, totaling almost 98 million units in the third quarter of 2012 (see Table 1), up 18.6 percent year-on-year. Samsung saw strong demand for Galaxy smartphones across different price points, and it further widened the gap with Apple in the smartphone market, selling 55 million smartphones in the third quarter of 2012. It commanded 32.5 percent of the global smartphone market in the third quarter of 2012.
Table 1
Worldwide Mobile Device Sales to End Users by Vendor in 3Q12 (Thousands of Units)
Company
3Q12
Units
3Q12 Market Share (%)
3Q11
Units
3Q11 Market Share (%)
97,956.8
22.9
82,612.2
18.7
Nokia
82,300.6
19.2
105,353.5
23.9
Apple
23,550.3
5.5
17,295.3
3.9
ZTE
16,654.2
3.9
14,107.8
3.2
LG Electronics
13,968.8
3.3
21,014.6
4.8
Huawei Device
11,918.9
2.8
10,668.2
2.4
TCL Communication
9,326.7
2.2
9,004.7
2.0
Research in Motion
8,946.8
2.1
12,701.1
2.9
Motorola
8,562.7
2.0
11,182.7
2.5
HTC
8,428.6
2.0
12,099.9
2.7
Others
146,115.1
34.2
145,462.2
32.9
Total
427,729.5
100.0
441,502.2
100.0
Source: Gartner (November 2012)
Nokia’s mobile phone sales declined 21.9 percent in the third quarter of 2012, but overall sales at 82.3 million were better than Gartner’s early estimate, largely driven by increased sales of the Asha full touch range. Nokia had a particularly bad quarter with smartphone sales, and it tumbled to the No. 7 worldwide position with 7.2 million smartphones sold in the third quarter. The arrival of the new Lumia devices on Windows 8 should help to halt the decline in share in the fourth quarter of 2012, although it won’t be until 2013 to see a significant improvement in Nokia’s position.
Apple’s sales to end users totaled 23.6 million units in the third quarter of 2012, up 36.2 percent year-on-year. “We saw inventory built up into the channel as Apple prepared for the coming holiday season, global expansions and the launch into China in the fourth quarter of 2012,” said Mr. Gupta. With iPhone 5 launching in more territories in the fourth quarter of 2012, including China, and the upcoming holiday season Gartner analysts expect Apple will have its traditionally strongest quarter.
In the smartphone market, Android continued to increase its market share, up 19.9 percentage points in the third quarter of 2012. Although RIM lost market share, it climbed to the No. 3 position as Symbian is nearing the end of its lifecycle. There was also channel destocking in preparation of new device launches for RIM, which resulted into 8.9 million sales to end users in the third quarter of 2012. With the launch of iPhone 5, Gartner analysts expect iOS share will grow strongly in the fourth quarter of 2012 because users held on to their replacements in many markets ahead of the iPhone 5 wider roll out. Windows Phone’s share weakened quarter-on-quarter as the Windows Phone 8 launch dampened demand of Windows Phone 7 devices.
Table 2
Worldwide Mobile Device Sales to End Users by Operating System in 3Q12 (Thousands of Units)
Operating System
3Q12
Units
3Q12 Market Share (%)
3Q11
Units
3Q11 Market Share (%)
Android
122,480.0
72.4
60,490.4
52.5
iOS
23,550.3
13.9
17,295.3
15.0
Research In Motion
8,946.8
5.3
12,701.1
11.0
Bada
5,054.7
3.0
2,478.5
2.2
Symbian
4,404.9
2.6
19,500.1
16.9
Microsoft
4,058.2
2.4
1,701.9
1.5
Others
683.7
0.4
1,018.1
0.9
Total
169,178.6
100.0
115,185.4
100.0
Source: Gartner (November 2012)
Additional information can be found in the Gartner report “Market Share: Mobile Phones by Region and Country, 3Q12.” The report is available on Gartner’s website at http://www.gartner.com/resId=2236115.
Tablets
Digitimes Research: Global tablet shipments to surpass that of notebooks in 2013 [DIGITIMES Research, Nov 19, 2012]
Digitimes Research expects global tablet shipments to reach 210 million units in 2013, up 38.3% on year and surpass those of notebook for the first time, with branded tablet shipments to account for 140 million units, according to Digitimes Research senior analyst James Wang.
[Compare this to the notebook shipment forecast by Digitimes Research of 192 million units in 2012 expected to drop to 189 million units in 2013. See additional details of this forecast below in Digitimes Research: Windows 8 expected to have minimal impact on touch screen notebooks in 2013.]In 2013, Google is expected to maintain its momentum from the Nexus series products and become the second largest tablet brand vendor worldwide with shipments of 19 million units. Apple will remain the largest tablet vendor worldwide, but its share in the global branded tablet shipments will drop to only 55.6% [i.e. 78 million units], down from more than 60% in 2012, and 37.4% in total tablet shipments (including white-box models).
With surging shipment growth for white-box tablets, Android is expected to become the largest platform in the tablet market, surpassing iOS. In 2013, Digitimes Research expects Android-based tablet shipments including white-box and branded models, to reach 121 million units, up 40.2% on year. [With the global 210 millions and branded 140 millions the white-box tablet shipments are expected to grow to 70 million units in 2013 vs. 50 millions this year. Therefore the branded Android based-tablets to become 51 millions, and as the Nexus tablets are said here to become 19 millions there will be 32 millions other branded Android tablets sold in 2013 .]
Digitimes Research also expects global tablet shipments will reach 320 million units in 2015 with branded tablets to account for 220 million units and white-box models to account for 100 million units.
Digitimes Research: Global Tablet Market to Enjoy Strong Shipment Growth in 4Q12 [DIGITIMES Research, Nov 13, 2012]
Global tablet shipments from major brands worldwide are expected to reach 40.93 million units in the fourth quarter of 2012, up 72.7% sequentially and 89.7% on year, according to Digitimes Research senior analyst James Wang.
As for the tablet vendor rankings in the quarter, Apple will remain as the largest vendor worldwide, while Amazon is expected to return as the second-largest and Google will rank third with assistance from its Nexus 7 and Nexus 10. Microsoft will rank fourth, Samsung Electronics fifth, and Barnes & Noble sixth. Asustek, Lenovo and Acer will rank seventh, eighth and ninth, respectively, Wang noted.
As for the tablet processor supplier rankings, Texas Instruments (TI) will return as the second-largest with Nvidia at third. Intel will also be ranked for the first time due to Windows 8.
Taiwan makers are expected to ship 36.6 million tablets combined in the fourth quarter, up 82.3% sequentially and 86.7% on year, with the volume accounting for 89% of global tablet shipments. Foxconn Electronics (Hon Hai Precision Industry) will be the largest tablet maker, followed by Quanta Computer, Pegatron Technology, Wistron and Compal Electronics.
Digitimes Research estimates that global branded tablet shipments will reach 104 million units in 2012, up 64% on year, with iPad accounting for 63% of the volume, down 2pp on year, while both Android and Windows will see their proportions increase.
In comparison the white-box tablet shipments are up by whopping 317% in 2012 at least (50 million units shipped as a minimum vs. 12 million units in 2011) according to sources given below:
Digitimes Research: White-box tablet shipments to surpass 50 million units in 2012 [DIGITIMES Research, Nov 8, 2012]
White-box tablets are expected to see a surge in shipment growth in 2012 with volumes surpassing 50 million units, according to Digitimes Research senior analyst James Wang.
There are three major drivers that will help white-box tablets achieve strong growth in the year: a large number of potential consumers brought in by Android handsets, mature development of China-based processors, and decreasing costs o white-box tablets. With the addition of white-box tablet shipments, Android is expected to surpass iOS and become the largest mobile operating system in 2012, while 7-inch displays will also become the mainstream specification for tablets.
As the branded tablet PC market is seeing fierce competition in terms of technology, capacity, yield rates, patents and prices, the rise of white-box tablets has already made these players a new force in the tablet market, with some white-box players even seeing higher shipment volumes than first-tier vendors.
Digitimes Research believes that brand vendors should be aware of white-box tablet players’ developments in the future, since even platform designers such as Google and Microsoft have used their resources to increase price competition in the tablet market, and the situation may gradually turn to favor China-based players with expertise in lowering costs.
Source: Digitimes Research, November 2012
or from the Chinese version of the same [Nov 9, 2012]:
China Fabless: Rockchip rattled by Android tablet wars [by Junko Yoshida on EE Times, Sept 25, 2012]
…
How many tablets does China make, how big is the Chinese market?
80 percent of media tablets made in China are exported
Unit: Million of units
Source: Chinese industry estimates
For more information see also: Yoshida in China: ‘Shanzhai’ clouds tablet data [EE Times, Nov 8, 2012]
In retrospect: just 4 months ago the forecast was increased from 30 million to 40 million
Global shipments of white-box tablet PCs to reach 40 million units in 2012, say chip designers [DIGITIMES, July 25, 2012]
Forecast global shipments of white-box tablet PCs in 2012 have been upward adjusted from 30 million units originally to 40 million units due to growing demand in emerging markets including China, India, Thailand and Latin America, according to Taiwan-based design houses of ICs used in tablet PCs.
An estimated 10 million white-box tablet PCs were shipped globally in 2011, and shipments increased to 18 million units in the first half of 2012, the sources indicated.
Vendors/makers of white-box tablet PCs currently cluster in Shenzhen and Dongguan, southern China, the sources noted. A large portion originally made netbooks and have stepped into tablet PCs as chips and the Android operating systems have matured, the sources said.
White-box tablet PCs are primarily competitive in price with models launched by own-brand vendors, with retail prices standing at US$59 for 7-inch models and US$149 for 10.1-inch models, the sources indicated.
China market: Domestic chipset vendors ramping up shipments to white-box tablet PC makers [DIGITIMES, July 20, 2012]
China-based chipset solution vendors including Rockchip Electronics and Allwinner Technology have been ramping up their shipments to white-box tablet PC vendors in China, cutting out market share from Taiwan-based VIA Technologies, according to industry sources.
Shipments of white-box tablet PCs in China totaled eight million units in the first half of 2012 and are expected to reach 16-17 million units for the year, compared to 20 million projected previously, the sources indicated.
Rockchip shipped at least 1.6 million tablet chipset solutions in the first half, accounting for 20% of the white-box tablet PC segment. Rockchip’s latest ARM-based dual-core solution, the SoC RK3066, is being built using a 40nm process at Taiwan Semiconductor Manufacturing Company (TSMC), said the sources.
Allwinner has been delivering more of its A10 solutions, which are also manufactured by TSMC utilizing a 55nm process, added the sources.
then came the news that: Demand for white-box tablets keeps growing despite keen competition [DIGITIMES, Oct 15, 2012]
Demand for white-box tablets rolled out by China-based makers remains strong currently despite the launch of US$199 models by Amazon, Barnes & Noble and Google, and the dominance of Apple’s iPads, according to industry sources.
Some white-box makers in Shenzhen are shipping 200,000-300,000 tablets a month, and a number of large-scale operators are even shipping one million units a month, buoyed by their tactics of optimizing hardware specifications, while keeping device prices low, noted the sources.
Most 9.7- or 10.1-inch white-box tablets powered by a dual-core CPU are currently quoted below US$200, while those comparable models with a single-core processor are priced at US$70-120, revealed the sources.
Some 7-inch models built with China-based Allwinner’s A10 solutions can be available for US$50, the sources added.
Additionally, the FOB prices of US$150-250 for 9.7-inch white-box tablets with dual-core CPUs, high resolution displays and 3G modules are also competitive in emerging markets, the sources commented.
Some tablet exhibitors at the ongoing HKEF 2012 (Hong Kong Electronics Fair, Autumn Edition) estimate that China-based white-box makers as a whole are shipping four million tablets a month currently.
Allen Wu, president, ARM China, predicts that shipments of Android-based tablets by China makers are likely to reach 50 million units in 2012 and increase to 100 million units in 2013.
Over 5.0 million Nexus 7s to be shipped in 2012, say Taiwan makers [DIGITIMES Research, Nov 19, 2012]
At the end of the second quarter, Google expected shipments of 2.5 million Nexus 7s in 2012 but since then it has continually placed additional orders in view of booming sales, with the cumulative shipment volume in 2012 will reach 5.0 million units based on orders released, according to Taiwan-based players in the supply chain.
While international vendors usually place orders for shipments to peak in October and November to meet year-end peak demand beginning in late November, Nexus 7 shipments are expected to remain at a high level of 700,000-1,000,000 units in both November and December, the sources pointed out.
After the launch of the 16Gb Nexus 7 for sale at US$199 and a 32GB version at US$249, Google on November 13 launched a 32GB 3G-enabled Nexus 7 for sale at US$299 and Google Play and Google’s partner AT&T have sold out available stock, the sources indicated.
While the iPad mini is thought of as a major competitor for the Nexus 7, Taiwan-based iPad mini supply chain makers indicated that Apply has not adjusted order volumes since the tablet was launched and monthly shipments remain at nearly 4.0 million units currently.
Digitimes Research: Google will become more influential in tablet market [DIGITIMES Research, Nov 2, 2012]
Senior analyst James Wang of Digitimes Research believes that Google’s recently announced Nexus 10, developed in cooperation from Samsung Electronics, and upgraded storage for the Nexus 7, are aimed at starting competition with players such as Apple, Amazon, Barnes & Noble and China-based white-box tablet vendors.
Since Google has prepared a full-range of tablet products, Wang believes the company’s entry-level Nexus tablet, that has not yet been announced, will have the strongest influence on its competitors.
Google’s Nexus 7 shipments performed better than expected, and are forecast to reach 4.3 million units in 2012, accounting for about 20% of non-Apple tablet shipments (excluding white-box models), while the volume in the fourth quarter is also expected to enjoy sequential growth despite the weak global economy, Wang pointed out.
Digitimes Research estimates that Google’s Nexus series tablets will see total shipments of 19 million units in 2013
accounting for 50% of non-Apple tablet shipments. [In a later estimate Wang raised the shiments of other branded Android tablets to 32 millions, see also here in the beginning, so Google’s Nexus marketshare now is only 37% in its own category.]
But note: Nexus 7 not yet allowed to enter China market [DIGITIMES Research, Sept 11, 2012]
While the Nexus 7, the tablet co-developed by Google and Taiwan-based vendor Asustek Computer, has been witnessing booming sales in major markets around the world, it is difficult for the model to be available for sale in the China market because the China government has not yet approved its import, according to industry sources in Taiwan.
The China government’s negative attitude is interpreted as a response to Google’s announcement of withdrawing from the China market in March 2010, the sources pointed out. It is difficult for the Nexus 7 to enter the China market, even through sale of Asustek’s marketing network there, the sources indicated.
Without the Nexus 7 in the market, China-based white-box vendors of tablets are under much less competitive pressure, the sources indicated. This is because the Nexus 7 has the advantage of Google’s and Asustek’s brand image with commensurate product quality and is expected to be strongly competitive with 8GB Android 4.0 tablet models in the 7- to 9-inch range launched by China-based white-box vendors, including Ainol, Onda, Teclast and Cube, at US$149, the sources pointed out. In addition, the Nexus 7 will bring competitive pressure on tablet PC models of equal specifications offered by Samsung Electronics and China-based vendors Lenovo and Hasee Computer in the China market, the sources indicated.
Without the China market, the cumulative global sales volume of Nexus 7 will reach an estimated 3.5 million units at the end of 2012, the sources noted.
Google attitude against modified Android may lead to split in Android, say Taiwan handset makers [DIGITIMES Research, Sept 18, 2012]
Google’s opposition to Taiwan-based vendor Acer’s launch of the A800, a smartphone based on the Alibaba-developed operating system Aliyun, reflects Google’s attempt to check development of modified Android platforms, but if Google cracks down on this, developers of modified Android platforms may be forced to offer own-brand smartphones or tablets and give up on Android, resulting in an increased split in the adoption of Android, according to Taiwan-based handset supply chain makers.
Google explained that Aliyun is incompatible with the Google ecosystem and therefore unable to ensure a consistent user experience among developers, makers and consumers, the sources noted. In response, Alibaba emphasized that Aliyun, while based on open-source Linux as Google is, is not part of the Google ecosystem and therefore is not necessarily compatible with the ecosystem, the sources indicated.
Developers of modified Android platforms such as Amazon and Alibaba are not members of the Open Handset Alliance and are Google’s competitors, they need not care about Google’s attitude, the sources pointed out. However, smartphone vendors need to cooperate with Google to offer Android models and therefore have to be concerned about Google’s attitude against modified Android platforms, the sources indicated.
If Google cracks down by prohibiting smartphone vendors from adopting modified Android platforms, developers of modified Android platforms, such as Amazon, may skip vendors to directly partner with ODMs to offer their own-brand devices, with such platforms to set up their own ecosystems and thereby become more competitive with Android, the sources pointed out. For some China-based smartphone vendors which have adopted many locally developed applications, because losses arising from forgoing Android may be small, they may shift to a modified Android platforms.
Among China-based smartphone vendors, only Huawei Technologies, ZTE, Lenovo, Haier, Oppo and a few others joined the Open Handset Alliance, the sources noted. As China is the largest smartphone market around the world, Google had better pay attention to response from web service operators, smartphone vendors and consumers, the sources pointed out.
Commentary: Is it a blessing for Asustek to have Google backing? [DIGITIMES, Nov 7, 2012]
Asustek Computer has seen its brand image improve in the US and Japan recently thanks to the launch of dual-branded Nexus 7 in cooperation with Google. Asustek is proud of its product design with regard to the Nexus 7, and also aims to capture the top-vendor ranking in the Android tablet segment. But it remains to be seen whether Asustek will be able to continue to expand its brand image based on the charm of the Nexus 7, since Google has announced its Nexus 10 in conjunction with Samsung Electronics.
Google has been backing Asustek in the development of the Nexus 7, offering the Taiwan-based hardware vendor the priority to design-in its latest Android OS and to penetrate into the US tablet market jointly.
Due to aggressive pricing set for the Nexus 7, industry watchers have wondered whether the Google-Asustek cooperation would generate profits for Asustek before the production of the 7-inch tablet reaches economies of scale. But for Asustek, the dual-brand marketing was not aiming at generating profits initially but rather improving its brand image, particularly in North America.
Optimizing Asustek’s design capability and Quanta Computer’s manufacturing muscle, the Google-Asustek team is able to set the price of the Nexus 7 lower. The low-priced tactics is working as sales of the Nexus 7 have been better than expected, while Asustek’s notebook sales in the US are also improving.
Some industry watchers now estimate that total shipments of the Nexus 7 are likely to reach 4-4.2 million units by year-end 2012, while Asustek will also be able to sell more of its own brand notebooks in the US.
But the skepticism about the merits of the Google-Asustek tie-up still remains, since Google has showed its intention to control the development of the Android market, optimizing the production of the 7-inch Nexus 7 at Asustek and the 10-inch model at Samsung. Furthermore, the latest market rumors also indicate that Google may also team up with Lenovo for penetrating into the China market.
Does Google treat Asustek as a brand partner or an OEM supplier? John Lagerling, director of business development for Android, seems to have an answer to the question.
When approached by the New York Times during a recent interview seeking a confirmation of Asustek’s remarks that current shipments of the Nexus 7 have reached as many as one million units a month, Lagerling replied, “We haven’t announced numbers. We typically don’t allow our partners to announce numbers.”
The message clearly indicates that Google treats Asustek as an OEM partner, but not a dual-brand partner.
In the worst-case scenario, Google may tie up with other vendors such as HTC and Lenovo to develop its next-generation Nexus tablets, which will place Asustek under fire from rivals vying for the Android tablet market.
Asustek has estimated its tablet shipments to reach 6.3 million units in 2012, of which the Nexus 7 will account for over four million. In other words, shipments of Asustek’s own brand Transformer and Padfone tablets are limited.
Asustek’s competitive advantage will wane further if it fails to win the design-in priority for the next-generation Nexus tablets.
The emerging new trends
in the premium ecosystem of the Windows devices
[Windows] Notebooks
Third-generation ultrabooks may be able to achieve 40% of notebook shipments, say players [DIGITIMES, Dec 11, 2012]
As Intel failed to achieve its goal of having ultrabooks account for 40% of total notebook shipments with its Ivy Bridge platform, and the proportion only reached about 10%, sources from notebook players believe the goal may be achievable with the upcoming Haswell platform, which is set to launch at the end of second-quarter, 2013.
The sources pointed out that compared to Ivy Bridge, Haswell’s stronger performance and cheaper price, plus the expectation that Windows 8 should become more standardized by then, should mean ultrabooks have a chance to account for 40% of total notebook shipments by the end of 2013.
Although vendors have released ultra-like notebooks with prices around US$699-899 as alternatives, since these devices lack attractiveness in terms of design and weight, while ultrabook models with specifications similar to the MacBook Air have prices a lot higher than the MacBook Air, most consumers have turned to purchase Apple’s product instead, the sources noted.
Digitimes Research: Surface tablet to mainly devour notebook demand in the short term [DIGITIMES Research, Oct 30, 2012]
Microsoft’s recently launched own-brand Surface tablets have raised the question of whether Surface will devour consumer demand for tablets or notebooks, or maybe even both. In terms of hardware, Surface is capable of satisfying consumer demand for notebooks, but to replace other tablets, it still requires a more complete app software ecosystem, according to Digitimes Research senior analyst James Wang.
Currently, the major difficulty Surface faces in gaining a competitive edge in the tablet market is the lack of a complete app software ecosystem, which means that if Surface can achieve growth in the short term, it will mainly be at the expense of demand for notebook products.
To let Surface to become a tablet killer instead of a notebook killer, Microsoft must expand shipments of Windows RT devices to attract application designers to join and establish an ecosystem. However, due to Android’s existence in the market, most notebook vendors are hesitant about joining the Windows RT market.
Although IBM, Microsoft and Intel were able to defeat Apple previously with an open platform strategy, due to Android’s existence, Microsoft will be unable to compete against Google in terms of business model and will be forced to head to the same business direction as Apple of having a closed platform with integrated software and hardware, making it even more difficult for Microsoft to build a complimentary ecosystem built on the Windows RT platform.
The most popular strategy for platform competition is to offer a free or low-price product or service to attract users and establish an ecosystem to strengthen consumer loyalty, and then seek methods to gain profit. Apple, Google and Amazon’s strategies are all similar – by abandoning profit from some segments including hardware, operating system, software, digital content or advertising, they are able to increase their profits from the remaining segments; however, for Microsoft, since all the above segments belong to different business units, internal struggles and external industry fluctuations will all affect Microsoft’s performance in the future.
Digitimes Research: Windows 8 expected to have minimal impact on touch screen notebooks in 2013 [DIGITIMES Research, Nov 13, 2012]
Shipment growth for touch screens used in notebooks throughout the fourth quarter of 2012 and most of 2013 will at large not be affected by the release of Windows 8, according to Digitimes Research.
Research indicates that consumers are more likely to purchase tablets throughout the time period because of the wide variety of tablet products available, and because of the difference in pricing between tablets and notebooks.
The notebook shipment forecast is expected to drop by 192 million units in 2012 to 189 million units in 2013 as a result, as well as due to a lack of recovery in the global economy.
However, Digitimes Research pointed out that the expected drop in notebook shipments will also be due to notebook makers increasing the mainstream sizes of their products to 14- and 15-inch, which will thus decrease the amount of panels available for producing notebook products.
Despite the shipment drop, the usage rate for touch panels used in notebooks is expected to increase to 10% in 2013, added Digitimes Research.
Digitimes Research: Asustek to compete with Acer for top-3 worldwide notebook vendor spot in 2013 [DIGITIMES Research, Nov 15, 2012]
Weak Global notebook demand is expected to reshuffle the top-10 notebook brand rankings in 2013, with Lenovo expected to successfully take over Hewlett-Packard’s (HP) leading position. Meanwhile, Asustek Computer, which will rank as the fourth-largest brand vendor worldwide in 2012, will compete against Acer to become the third-largest vendor in 2013.
Toshiba, the sixth-largest notebook brand worldwide in 2012 is expected to be surpassed by Apple in 2013.
With top brand vendors starting to lose their edge, the four new stars in the notebook brand market – Lenovo, Asustek, Apple and Samsung – are expected to see their combined market share rise from 40.9% in 2012, to 43.2% in 2013.
As for upstream ODMs, their contributions to global notebook shipments is expected to grow from around 70% in 2011 to 75% in 2013, while electronic manufacturing service (EMS) providers will step out of the design business and turn to focus mainly on manufacturing.
In 2013, Pegatron Technology and Wistron are expected to have the best performance among the top-five makers as the former will benefit from increased orders from Lenovo and Fujitsu, while the later will benefit from its enlarged cooperation with Asustek.
Source: Digitimes Research, November 2012
HP, Lenovo aim to ship 40 million notebooks each in 2013, say Taiwan makers [DIGITIMES, Nov 19, 2012]
Despite a stagnant global notebook market in 2012, Hewlett-Packard (HP) and Lenovo aim to ship 40 million notebooks each in 2013, respectively increasing by 25% and 33.3-37.9% from 2012, according to Taiwan-based supply chain makers.
As there have been no signals to indicate an economic rebound in the US and Europe, and demand for Windows 8 notebooks will not take off in the near future because consumers will take time to get accustomed to the new operating system, HP and Lenovo may be too optimistic about their notebooks sales in 2013, the sources analyzed.
Among other vendors, Samsung Electronics aims to ship 17 million notebooks and 40 million tablets in 2013, hiking from 2012 by 21.4% and 300% respectively, while Toshiba and Acer have set respective goals of shipping 20 million units, growing from 2012 by 25%, and 28 million units which will rise by 7.7%, the sources noted.
Lenovo 3Q12 global PC market share rises to 15.6% [DIGITIMES, Nov 9, 2012]
Lenovo saw its total global sales volume of notebooks, desktops and tablets during the third quarter of 2012 increase by 10.3% on year, with corresponding global market share rising to 15.6%, according to the company’s fiscal second-quarter 2012 (July-September) report released on November 8.
Lenovo posted sales revenues of US$8.7 billion, gross margin of 12.1%, net operating profit of US$206 million, pre-tax profit of US$204 million, and net profit of US$162 million for the third quarter of 2012.
Lenovo reached the largest PC market shares in China, Japan, India, Russia and Germany in the third quarter, and is likely to do so soon in Brazil, the company pointed out.
Lenovo shipped 8.5 million handsets in the third quarter, of which seven million were smartphones, the company indicated.
Notebook vendors headhunt R&D talent from ODM partners [DIGITIMES, Nov 19, 2012]
As notebook brand vendors grow more interested in-house R&D and manufacturing to promote their brand image, sources from the upstream supply chain have seen some notebook vendors starting to headhunt talent from their ODM partners.
Sources from notebook ODMs also pointed out that vendors have changed their outsourcing strategies and will check with their chassis and hinge suppliers for component materials and prices, and have their in-house R&D teams complete industrial design before handing the work to ODMs.
The sources pointed out that the new strategy is expected to expand in the notebook industry in 2013 and should benefit notebook brand vendors in terms of gaining more control over component costs as well as keeping their product designs confidential.
Acer and Hewlett-Packard (HP) have already started adopting the strategy.
Acer recently pointed out that the company will increase its R&D investment by 20% each year for the next three years. The company currently has about 1,000 R&D engineers. Lenovo will also continue strengthening its R&D and manufacturing abilities and is set to achieve an in-house production rate of 20% in 2013. Samsung’s in-house production rate is expected to maintain at 85-90% in 2013.
Notebook ODMs offer extra services to attract tablet orders [DIGITIMES, Nov 19, 2012]
With notebook shipments estimated to only have a single-digit percentage growth on year in 2013, notebook ODMs including Quanta Computer, Compal Electronics and Wistron, are aggressively trying to land tablet orders by offering extra services, according to sources in the upstream supply chain.
In addition to offering preferences over price, product specifications and shipment conditions, Compal and Wistron also offer their exclusive touchscreen solutions from related subsidiaries to attract downstream brand vendors to place orders.
Meanwhile, Quanta is offering services through its cloud computing expertise and the company reportedly has assisted brand vendors such as Amazon, to build data centers and successfully acquired their tablet orders.
In 2013, Compal estimates it will ship 6-8 million tablets, up from two million units in 2012, while Wistron expects its tablet shipments to reach six million units, up from 2.5 million units in 2012, and Quanta with shipments of 14-15 million units, up from 10 million units in 2012.
11.6-inch becomes niche-market size for notebooks, say Taiwan makers [DIGITIMES, Nov 15, 2012]
As global sales of netbooks have been decreasing due to competition from tablets, 11.6-inch has become niche-market size, according to Taiwan-based notebook supply chain makers.
Among notebook screen sizes, 11.6- and 13.3-inch have accounted for a relatively small proportion of total shipments, the sources indicated. However, as Samsung Electronics and Acer have launched inexpensive 11.6-inch Chromebooks and Asustek Computer has launched a 11.6-inch VivoBook touch-control notebook, an increasing number of 11.6-inch notebooks are available for sale, the sources commented.
Despite shrinking sales, demand for netbooks still exists, especially in emerging markets, the sources indicated. As most netbooks are have screen sizes of 10-inch, and 10.1-inch is so far the upper limit for typical tablet screen sizes, 11.6-inch notebooks are likely to see considerable demand in the global market, the sources pointed out.
Windows 8 may not start a PC replacement trend for enterprises until after 2014 [DIGITIMES, Nov 19, 2012]
Demand for Microsoft’s Windows 8 is unlikely to start emerging until 2013 for the consumer market, while for the enterprise market, demand is expected to come at an even later time and may not appear until 2014, according to sources from the PC industry.
Although Microsoft is trying to present its latest innovations in Windows 8 to response to consumers’ fluctuating demand, it turns out that consumers need more time to understand the new advantages that the product provides and relatively delay acceptance for the new operating system.
Although notebook brand vendors have a high expectation for the year-end holidays this year, their order placement to the upstream supply chain still shows they are cautious about the shipment performance during the traditional peak season.
To prompt enterprises to adopt Windows 8, Microsoft has recently noted that the company will stop providing support to Windows XP in April, 2014 with most of the enterprises expected to turn to Windows 7 and some to Windows 8 as stability and necessity are the major considerations for enterprises to make a purchase.
Component makers concerned Windows 8 demand may not emerge until 1Q13 [DIGITIMES, Nov 19, 2012]
Some upstream component makers have recently started to be concerned that the PC replacement trend expected to be brought on by Windows 8 may not occur in the fourth quarter of 2012 as originally estimated, but will take off in the first quarter of 2013, according to sources from upstream supply chain.
Since an operating system usually needs to have serious debugging after launch, the sources believe consumers may hold back their new PC purchases until some time later and their actions would impact demand for Windows 8-based systems in the fourth quarter.
However, the component makers are still placing high hopes on the new operating system to bring growth.
Notebook ODMs facing uncertainty as brand vendors take over R&D [DIGITIMES, Nov 7, 2012]
Acer plans to release a new notebook that is designed and developed in-house, creating an alert among notebook ODMs that brand vendors are trying to become more involved in R&D and the component purchasing of their notebook products which could impact ODMs’ profitability, according to sources from the upstream supply chain.
The sources pointed out that Acer’s in-house developed notebook features Windows 8 and a touchscreen display and will be showcased at Consumer Electronics Show (CES) in 2013, at the earliest. Related R&D has already been completed and Acer is currently seeking a partner to conduct assembly.
So far, the device is the only in-house developed project that Acer plans to release in the short term and shipments will be limited, indicating that the project is a test for Acer to try out its R&D capabilities, the sources noted.
With Lenovo also planning to expand its in-house production by establishing its own plants, if Acer also decides to conduct R&D in house, it could seriously impact the values of ODMs for their clients.
However, some ODMs pointed out that they are not concerned about the moves and believe the possibility of the new business model emerging is low since the brand vendors have already outsourced their R&D to ODMs for a long time, and rebooting their R&D capabilities will require a long period of learning.
Since Wintel is no longer dominating the PC market, brand vendors will also need to spend R&D resources on ARM and Android, which would seriously increase their burden.
At its Windows 8 product launch conference, Acer also revealed that the company will focus more on product R&D and will increase its R&D resources by at least 20% every year.
Commentary: Notebook ODMs face uncertainties in tablet market [DIGITIMES, Nov 7, 2012]
The rise of tablets and smartphones, plus the economic downturn in the US and Europe, have been causing PC brands such as HP, Dell and Acer to report unsatisfactory sales results. This has been affecting the performance of notebook ODM firms such as Quanta Computer, Compal Electronics and Wistron.
ODM firms have been hoping that Windows 8 can stimulate a new wave of demand as consumers switch to new PC models with the Microsoft operating system in 2013. Also, ODM firms have been aggressively fighting over tablet orders as demand in 2013 is likely to reach 200 million units.
Quanta Computers targets revenues from non-notebook business to increase to 30% of total revenues in 2012. Compal is looking to ship 6-8 million tablets in 2013, while Wistron aims to achieve its tablet shipment target of 6 million units in 2013.
Compal’s and Wistron’s targets of shipping 6-8 million tablets to a market whose total shipments are expected to reach 200 million in 2013 show how difficult it has been for notebook ODMs to obtain tablet orders.
One of the reasons is that most of the market has been dominated by Apple while other tablet vendors such as Amazon and Google have yet to see strong sales. Manufacturing orders have been over-concentrated, causing tough competition among firms. As a result, both Quanta and Compal have trimmed their tablet divisions.
The ODM firms have been facing uncertainties regarding tablet orders, such as multiple platforms, unstable orders, and different device sizes.
Apple’s iOS and Google’s Android platforms continue to dominate the market while Microsoft’s Windows comes in third. Samsung is planning to develop its own platform and HP’s webOS may also become one of the major players. The multiple platforms mean firms need to bet on the right one to maintain orders.
As for orders, clients may place large volumes expecting strong sales in the end market. But when sales turn out worse than expected, inventory will build up and orders will be cut. That is the case with Amazon’s Kindle Fire earlier this year. For the tablet segment, manufacturing partners are under much higher pressure from inventory management.
Another uncertainty comes from the size of the devices. There are currently products that are 7-, 8.9-, 9.7-, 10.1-, and 11.6-inch. A small difference in size can mean significant differences in revenues.
In addition, profits have been unstable. Some tablet brands want to increase market share by resorting to low price and sacrificing their gross margin. This directly affects the profit margin of ODM firms.
Taiwan component makers worried about Lenovo plans to hike in-house notebook production [DIGITIMES, Oct 8, 2012]
As China-based vendor Lenovo plans to increase in-house production of own-brand notebooks and will therefore procure components instead of letting ODMs release orders, as a result Taiwan-based component makers have felt pressure of losing orders, according to Taiwan-based notebook supply chain makers.
In-house production currently accounts for 20-30% of Lenovo’s shipments of notebooks, desktops and other types of PCs, the sources indicated.
Lenovo will have LCFC (Hofei) Electronics Technology, its joint venture with Taiwan-based ODM Compal Electronics in Hofei, northern China, start volume production at the end of 2012 or the beginning of 2013, to increase in-house production of notebooks, the sources pointed out. In addition, Lenovo is setting up PC production lines in the US and will do so in Brazil in 2013, with volume production to begin in 2013, the sources noted.
In addition to increasing in-house production, Lenovo may set up a supply chain consisting of China-based component makers, the sources pointed out.
Compal/Lenovo joint venture expected to output 3-5 million notebooks in 2013 [DIGITIMES, Sept 4, 2012]
The notebook manufacturing joint venture of Compal Electronics and Lenovo in Hefei, China was reported by local media to enjoy more than 10 million units of notebook production volume in 2013, but sources from notebook players estimate that the plants may only be able to output around 3-5 million units next year as their yield rates still need improvement, while the related process of shifting orders from other ODMs to the joint venture may also affect the total output volume from the joint venture.
The sources pointed out that Compal and Lenovo’s cooperation will create benefits for both firms as Lenovo will be able to directly control the quality of its products, understand the ODM manufacturing process and reduce its cost, while Compal will be able to tighten its relationship with Lenovo and benefit from Lenovo’s orders.
The joint venture will start pilot production in October and start mass production in the fourth quarter of 2012 with monthly capacity at around 300,000 units. Initially, the plants will focus on notebook production, but will later add production for all-in-one PC. The local media has reported that the plants will manufacture about one million notebooks in 2012, 13 million units in 2013 and 20 million units in 2014.
Currently, Lenovo has 51% stakes in the joint venture with Compal holding the remaining 49% and some market watchers are concerned that Lenovo may shift all its Compal orders to the joint venture, affecting Compal’s own orders and profitability since Compal will need to share its profit with Lenovo for any order received by the joint venture.
Commenting on the concerns, Compal president Ray Chen has noted that the two firms have already signed a contract to avoid from this type of situation, but he refused to reveal further details of the contract.
In 2013, sources from the supply chain pointed out that Lenovo will still maintain about 30% of notebook shipments being in-house manufactured and will outsource the remaining 70% with the orders to the joint venture considered as outsourcing.
Compal Electronics lays off tablet R&D, testing personnel [DIGITIMES, Oct 23, 2012]
Taiwan-based notebook and tablet ODM Compal Electronics has laid off more than 100 employees responsible for tablet R&D and testing.
Compal confirmed the layoffs, explaining that the company recruited staff members to meet growing orders for tablets in 2011 but orders received have been far short of expectations and therefore it is necessary to adjust manpower. Although Compal stressed that only one wave of layoffs is planned, internal sources indicated that there may be more.
Compal’s staff cuts signal that tablet vendors have encountered difficulties and notebook supply chains are under pressure, industry sources pointed out. For tablet vendors, the iPad has dominated the high-end segment while competition in among entry-level models, which includes the Amazon Kindle Fire series and Google Nexus 7, is already intensive, the sources analyzed. In addition, tablet vendors originally rested their hopes on Windows 8 models, but Microsoft’s launch of the Windows RT Surface at US$499, and Apple’s planned launch of the iPad mini will cut into their competitive advantages, the sources said.
Compal’s tablet clients are mainly Acer and Lenovo, the sources indicated.
In September 2011, Quanta Computer laid off over 1,000 production line workers due to a large decrease in orders for tablets from RIM, and in October 2011 Inventec laid off 432 employees because Hewlett-Packard reduced its tablet orders.
Lenovo to launch a table-shaped all-in-one PC [DIGITIMES, Nov 5, 2012]
Lenovo plans to launch a Windows 8-based all-in-one PC that features
asimilar industrial design asMicrosoft’s Surface[on June 18, 2012, a Microsoft tablet of the same name was unveiled, the original Microsoft Surface was rebranded as Microsoft PixelSense, see the About Microsoft PixelSense [Microsoft PixelSense press page, June 18, 2012]], a table-shaped PC. The machine features four legs and when the display is laid flat, it becomes like a table and can be used by multiple users simultaneously, according to sources from the upstream supply chain.The all-in-one PC features a 27-inch display with initial shipments of 20,000 units.
In addition to Lenovo, Acer, Asustek Computer and Hewlett-Packard (HP) all plan to launch new all-in-one PCs with some models will appear as soon as the end of 2012.
At Computex 2012, Asustek chairman Jonney Shih demonstrated an all-in-one PC product under its Transformer series and the all-in-one PC can be detached and become an 18.4-inch tablet, supporting both Windows 8 and Android; however, the product, so far, still has not yet been mass produced.
Meanwhile, Acer has also launched two Windows 8-based all-in-one PCs with special designed hinge and Lenovo also displayed its IdeaCentre A720 with a function to lay out flat.
In 2012, all-in-one PC shipments are expected to reach 16.4 million units, up 20% from 13.7 million units in 2011, according to figures from IHS iSuppli, while IDC also forecast that the all-in-one PC shipments will reach 17 million units in 2013.
[Windows] Smartphones
FIH reportedly lands handset orders from Microsoft and Amazon [DIGITIMES, Nov 26, 2012]
Foxconn International Holding (FIH) has reportedly landed handset orders from Microsoft and Amazon and is set to launch the devices in mid-2013, according to sources from the upstream supply chain. However, both the parent company Foxconn Electronics (Hon Hai Precision Industry) and FIH declined to comment about clients or orders.
Foxconn is the major manufacturer of Apple’s iPhone products, while its subsidiary FIH has clients including Nokia, Sony, Lenovo, Huawei and ZTE.
Microsoft’s own-brand handset will adopt its Windows Phone 8 operating system, the sources noted.
The sources pointed out that Microsoft and Amazon’s own-brand handsets will only have a limited shipment volume initially and may become a new business model for the manufacturers in the future.
In addition to provide manufacturing services to first-tier brand vendors, FIH also supplies white-box handsets to regional vendors in China, Europe and the US.
Taiwan IC design houses to benefit from Samsung aggressive product roadmaps in 2013 [DIGITIMES, Dec 7, 2012]
… the Korea-based vendor is reportedly set to adopt a more aggressive ‘shotgun’ strategy wherein many models will be created in the smartphone, tablet, notebook, LCD TV and DSC sectors that cover a wide range of market segments in 2013, according to industry sources.
In the smartphone sector, Samsung will move into the Windows Phone platform and roll out models targeting the entry-level, mid-range and high-end segments simultaneously, in an attempt to duplicate its success in the Android space, the sources revealed.
Digitimes Research: Android phones to account for 70% of global smartphone market in 2013 [DIGITIMES Research, Dec 6, 2012]
Shipments of Windows Phones, including 7.x and 8.x models, will grow 150% on year to 52.5 million units in 2013 for a 6.1% share
Worldwide Mobile Phone Growth Expected to Drop to 1.4% in 2012 Despite Continued Growth Of Smartphones, According to IDC [IDC press release, Nov 1, 2012]
For the year, smartphone shipments are forecast to grow 45.1% year over year to 717.5 million units.
…
Windows Phone will battle with BlackBerry for the number three spot in 2013, but will gain further clarity in the years that follow. Windows Phone will build on the progress it made in 2012, with Nokia establishing its presence and HTC solidly jumping back into the race. Moreover, contributions by Samsung, ZTE, and Huawei will help grow its footprint. With more vendors releasing more devices aimed at multiple segments, sales associates will be better positioned to tell a compelling Windows Phone story and to explain the value of Windows Phone’s differentiated experience compared to market leaders Android and iOS.
…
Top Smartphone Operating Systems, Forecast Market Share and CAGR, 2012–2016
Smartphone OS
2012 Market Share
2016 Market Share
CAGR 2012 – 2016 (%)
…
…
…
…
Windows Phone
2.6%
11.4%
71.3%
…
…
…
…
Total
100.0%
100.0%
18.3%
Source: IDC Worldwide Mobile Phone Tracker, December 3, 2012
The previous forecasts taken together mean:
– IDC: 18.7 million Window Phones in 2012 (calculated as 2.6% of 717.5 million units)
– IDC: 161 million Window Phones in 2016 (with 71.3% CAGR of that 18.7 million)
– DIGITIMES Research + IDC: 46.6 million Window Phones in 2013 (150% growth predidicted for WP in 2013 by DIGITIMES Research over 18.7 million given by IDC for 2012)
which makes DIGITIMES Research’s forecast of 52.5 million Window Phones in 2013 quite feasible for me, at least for three reasons:
-
Samsung aggressive move into the Windows Phone platform as noted above by DIGITIMES.
-
The kind of breakthrough for the WP8 Lumias, and WP8 in general, especially against iPhone 5, as described by my recent blog entries ragarding:
High-end smartphones state-of-the-art:
– Lumia 920 vs. iPhone 5 (and vs. Android, Galaxy S3, HTC One X+) [Dec 7, 2012]
– Windows Phone 8 vs. Android 4.1 and 4.2 [Dec 6, 2012] -
The additional, not yet recognized end-user and business partner advantages as described in all detail in my:
– Lead post: Marko Ahtisaari from Nokia and Steven Guggenheimer from Microsoft on the Internet of Things day of LeWeb Paris’12 [Nov 6, 2012]
Uncertain Windows 8 future may relatively affect Windows Phone 8 [DIGITIMES, Nov 5, 2012]
Although Microsoft has been aggressive promoting its new Windows 8 operating system (OS), a weak global economy has the notebook supply chain remaining conservative about the OS’ contribution to their performance in the fourth quarter and the OS’ uncertain future may relatively affect the software giant’s plan for its Windows Phone 8 platform, according to sources from the upstream supply chain.
Microsoft’s aggressive promotion of Windows 8 touchscreen functions is meant to blur the boundaries between smartphone, tablet, notebook and desktop through a similar usage experience, while expanding its advantages in the IT industry through a unified OS platform structure and gain some benefits from the smartphone market, where the company is currently still behind.
Microsoft originally hoped to strengthen its Windows Phone 8 penetration through a PC replacement trend brought by Windows 8, but since the OS may not trigger a replacement trend as expected, while Microsoft’s smartphone partners such as High Tech Computer (HTC) and Nokia are also conservative about their Windows Phone 8-based product shipments, the sources believe Microsoft’s plans for its operating systems will be further delayed.
Microsoft’s launch of own-brand smartphones in 2013?
It is based on rumors that Microsoft Is Reportedly Testing Its Own Smartphone [TechCrunch, Nov 2, 2012]
First it built the Surface, and now Microsoft is said to be working on another new hardware product, this time a smartphone. That’s according to a new report from the Wall Street Journal, which says Microsoft is currently working with Asian component suppliers on its own handset design, though it isn’t yet clear whether or not the device will ever go into mass production.
Details about what a Microsoft smartphone would look like are scarce, but the report does say that the version being currently tested has a screen between four and five inches, which is in keeping with recent designs from Apple and Android handset OEMs. It’s also probably pretty reasonable to assume that any device Microsoft puts out now will have more in common with the flagship phones from its hardware partners for Windows Phone 8, which include Nokia and HTC, than with its previous Kin smartphones. The teen-focused Kin carried Microsoft’s branding, but was made by Sharp, and lasted only 48 days on the market.
Microsoft had made a more dedicated approach to creating its own hardware with the Surface, albeit to mixed reviews. And as the WSJ reports, it’s also been more aggressive about enforcing hardware standards with its partners in recent years, both in terms of the look and makeup of Windows-certified PCs and in minimum specs for partner mobile handsets. That Microsoft could be considering an approach like Apple’s, wherein it would sell both hardware and software and control all aspects of the ecosystem, definitely seems more plausible than it has in the past.
Also, rumors have been building that Microsoft is working on a smartphone since back in June, thanks to Nomura analyst Rick Sherlund, who said that Microsoft was already working with a “contract manufacturer” to create their own Windows Phone 8 mobile device. Then at the beginning of October, Boy Genius Report received a tip that Microsoft was indeed working on its own smartphone, that would sell alongside and compete with partner OEM devices like the HTC 8X and Nokia Lumia 920. The company has shown it’s willing to go there with the Surface, and Nokia CEO Stephen Elop even said on a conference call two weeks ago that a Microsoft-made device would be a boost to the entire Windows Phone 8 device sales ecosystem.
Even if it didn’t become a top seller in and of itself, a Microsoft-branded smartphone could offer Windows Phone what the Nexus line provides Android: a place to show off the latest and greatest software, experiment and build hype around the platform. I think the biggest risk would be in potentially alienating hardware partners, but so far the Surface doesn’t seem to have dampened the enthusiasm of Windows PC OEMs all that much, and Elop has already declared his support. If nothing else, a Microsoft-made Windows Phone 8 smartphone would be interesting, and generating interest is maybe the key ingredient to Microsoft’s future mobile success.
Why Microsoft believes latest-gen Windows Phones are ‘killer hardware’ [TechRadar, Nov 18, 2012]
INTERVIEW We talk to the head of Windows Phone: Terry Myerson
For the last year, Nokia has been the poster child for Windows Phone but recently HTC and Samsung have seemed more in favour.
Samsung announced their Windows Phone 8 handsets first and the HTC 8x was handed out to enthusiasts at the Windows Phone 8 launch.
We asked corporate vice president of the Windows Phone Division Terry Myerson to explain how Microsoft juggles partnerships with rival phone makers and how much influence manufacturers have on the design of Windows Phone.
“We work in different ways with each of them on the engineering and on the marketing,” Myerson told TechRadar.
Nokia gets priority when it comes to development because of the commitment it’s made to Windows Phone; “Nokia is exclusive to Windows Phone and we definitely, on the engineering side, prioritise platform work to support their differentiation coming through.”
Despite the restrictions it puts on handset specs, Microsoft doesn’t want to see the same handset from every phone maker. “Our goal is that Windows Phone is a platform that our partner differentiation can shine through on.
We do spend time planning with HTC and Samsung, sitting down with them and collaborating on what a product is where their differentiation elegantly coexists with Windows Phone and what we bring. There are different cultures to each of these companies and they all have their own plans for how they want to bring their technologies to market.”
“The best devices”
He’s predictably enthusiastic about the handsets that come out of the collaboration with all three partners. “I think the result is the most fantastic killer hardware we’ve ever had, not only for the windows ecosystem – I think these devices are better than any device – well, I they’re the best devices. They’re colourful, they’re beautiful, they’re thin, amazing cameras…”
Some of what you see in Windows Phone 8 handsets is Microsoft’s idea, some comes from the OEMs. “In the case of wireless charging, that was definitely Nokia’s initiative to say they wanted that; they had technologies inside their labs, they took the initiative to put forward a number of engineering designs. There were definitely platform modifications we made to support their innovation but Nokia led on that. All the credit goes to them.”
“The Wallet feature is a place where the Windows Phone team thought about how to use NFC. Roaming content though SkyDrive, encryption; these are all features coming from Microsoft. But the wide angle camera that HTC did with Skype in mind, Nokia’s wireless charging – those are innovations coming from our hardware partners.”
Although app developers get far more access to the platform in Windows Phone 8, Microsoft is still keeping some control and treading a fine line between the free for all of Android that Google is increasingly trying to rein in and the central control of the Apple ecosystem.
“We like to think of it as the structured ecosystem that allows the differentiation of partners to shine though on our platform, at the same time providing consumers the confidence that we will protect their privacy, keep malware off the platform, provide a consistently familiar user experience, and providing developers confidence they can write apps once and target our platforms. So there is more structure and structure at times can feel constraining but also there are benefits to it. It’s helpful that everyone drives on the same side of the road, for example…”
Why was the SDK so hard to get?
Myerson is unapologetic about not making the Windows Phone 8 SDK widely available before the launch (when most developers didn’t have phones to work with) and concentrating instead of key developers to get big-name apps; 46 of the top-selling 50 apps from other phones will be on Windows Phone 8 (and yes, he knows who the missing four are and is working on changing their minds).
The sheer number of apps in the Store is far from the most important thing. “It’s a balance; definitely there is magic that occurs in that long tail of apps, [you get some] delightful things… but it is also true that working with these incredibly popular mobile apps is important as well.”
Windows Phone 8 is the future and it’s getting all the marketing love at the moment, but Windows Phone 7 is far from dead. Myerson assured us. “We’re going to have more to say about 7.8 in the coming weeks,” he promised.
“I would expect both platforms to exist for quite some time, from a global point of view. Windows Phone 7.8 devices will span much lower price points than Windows Phone 8 devices, initially, and given the application compatibility across the platforms, it makes the ecosystem stronger to have more device and more price points. We value every 7 and 7.8 customer we have; we’ll continue to work for them as well but it is true that Windows Phone 8 is our future platform.”
Of course that only matters if Microsoft can finally start selling Windows Phone devices in significant numbers. Just as Steve Ballmer promised you wouldn’t be able to escape Windows 8 ads, Myerson promises what sounds like an advertising blitz, focussing on Windows Phone rather than on the handset makers.
“This holiday it’s very important to us to get out there and tell the Windows Phone story: how we do have this amazingly unique point of view, the smartphone that can be so personal and reflect your interests and the people in your life. Telling that in the most pure sense without confusing them which brands we’re talking about is important. We need consumers to understand and love Windows Phone.”
More advertising money
Certainly Microsoft has promised to advertise Windows Phone better before, without much to show for it, and Myerson seems happy to admit it.
“We weren’t out there with same experience as Windows, even we though shared the same brand; we didn’t have all the right teamwork in place with our partners on the go to market, and we were not advertising the product. We were not out there telling the story to consumers – and that changes now. We will start telling our story. We are going to go out there and advertise the product and tell people.”
What’s different now? In a word, Windows 8 – but also more operator support. “It’s a special time. We have a great product that expresses this unique differentiated point of view, that we are the most personal smartphone, we’ve got killer hardware from partners and we have a great partnership with the mobile operators.
“The fact that they’ve ranged so many phones at such great price points is fantastic. And of course having Windows out there at the same time is exciting; making the experience familiar to users and being the best phone for Windows; if you’re a Windows user, this is the phone for you.”