Home » Posts tagged 'India'

Tag Archives: India

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

Aug 13, 2015Additional videos from XiaomiHK YouTube channel:

Xiaomi – MIUI Introduction (with English subtitles)

Xiaomi – MIUI V7 Endurance

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

Xiaomi – MIUI V7 Performance

Xiaomi – RedmiNote2″>Xiaomi – RedmiNote2

Xiaomi – RedmiNote2 Camera

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

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

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

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

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

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

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

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

Other videos from Bloomberg Business YouTube channel:

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

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

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

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

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

Other videos from the CCTV America YouTube channel:

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

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

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

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

 



Micromax is in a strategic alliance with operator Aircel and SoC vendor MediaTek for delivery of bundled complete solution offers almost equivalent to cost of the device and providing innovative user experience

Micromax, the No. 1 among local smartphone brands in India, has announced its partnership with MediaTek and Aircel, India’s fifth largest operator, aimed to come up with best mobile experience for the Indian users. The offers initially will be available across 4 Micromax devices – MMX 377G data card, Funbook Mini 410i Android tablet, A090 and X070 smartphones. The smartphones will be available across the retail outlets across India from April, 2014.

This strategic alliance is also aimed at the development of a local version of MediaTek’s new “super-mid market” approach as descibed in my earlier MediaTek is repositioning itself with the new MT6732 and MT6752 SoCs for the “super-mid market” just being born, plus new wearable technologies for wPANs and IoT are added for the new premium MT6595 SoC [‘Experiencing the Cloud’, March 4, 2014] post. Here is the illustration of what is the envisaged future state-of-the-market:

versus the current one:

With more than $1 billion of revenue for its latest fiscal year ending March 31 and almost 8 million smartphones delivered in 2013 (18% of the market) Micromax is the company to watch how MediaTek’s new approach will work on this fast growing smartphone market. Look at the following chart to grasp the immense growth potential:

As per IDC producing the above chart:

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.

As per another 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]:

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.

Details:

Micromax somewhat underperformed on its home market last year according to this chart:

image

image

A detailed analysis of that situation could be found in 2013 Review: Micromax loses market share in Q2 and Q3 [daily.bhaskar.com, March 20, 2014] from which the most important details are:

In 2012 Micromax launched the Canvas 2 A110. This was a hot-seller when the young generation around colleges, in buses and in metros were actually talking about the handset. The Canvas HD A116 followed in early 2013 with 9000 pieces in the initial phase. Less than 24 hours and this Rs. 13990 [$229] phone was gone! Though Micromax was criticized for getting less number of pieces into the market and keeping customers wait, we have to admit this was a best-seller. People did wait for 2 months to get their piece of Canvas HD.

After this Micromax went ahead with costly flagships. It launched Canvas 4 and Canvas Turbo last year apart from other budget launches (that silently made way to stores) throughout the year. It took to premium smartphones with prices like Rs. 17999 [$296] and Rs. 19999 $327. Though these handsets got good reviews but they could not create the craze like the earlier Canvas 2 and Canvas HD. We definitely missed the ‘dus hazaar mein aur kya chahiye yaar?’  last year. (What more do you want in a Rs. 10000 [$167] phone about the Canvas 2?) We have seen people talking about Micromax Canvas 2 or HD outside phone stores being out of stock and in demand. Too bad on our part, but that’s the recall value associated with these two phones.

Competitors has their best budget phones launching during the year 2013. In the first part of the year 2013 Samsung launched Galaxy Grand series of large display screen phones, Sony and HTC went down for launch of budget phones and so did Nokia with its new Lumia phones. Competition was no doubt increased by the end of 2013.

… The market shares dropped from 22% in Q2 2013 to 17.1% in Q3, 2013. This was the time when Samsung gained from 26% in Q2 2013 to 32.9% in Q3 2013. The launch of Galaxy Grand Quattro and Galaxy Mega happened in May at a price of Rs. 16990. The Canvas HD that was launched in mid of February in 2013 was getting delivered till June in the year after its on-and-off appearance in stores.

Note that Canvas HD launched in Q1 2013 started shipping and available in stores by the Q2 2013. The low cost Canvas Viva 5-incher also saw a launch in Q2 2013 and was popular. There were more than two dozen of budget launches from the company in 2013. See 12 top Micromax launches in 2013.

This analysis has even found that Micromax’s Q1’14 move went wrong:

Micromax has just launched its new phone in the market, the Canvas Knight with cutting edge specs and a beautiful body that can compete with the most premium handsets in the market. The new Canvas knight A350 has been placed at a higher price point of Rs. 20K (Precisely Rs. 19999 [$327]).

According to the ex-regular and (most of the time) an authentic leakster Micromax got only 830 pieces for sale initially. The handset was expected to be a best-seller for Micromax and ideally should go out of the stock very soon (we expected it to be out of stock in less than 12 hours). But this did not happen with the Canvas Knight. Even after 24 hours of Day 1 of launch the phone was still in stock. On Day 3 morning when we checked the status it finally showed a waiting period of at least 7-10 days. That is some 40-48 hours to sell 830 number of phones.

so this analysis concludes:

The trend has been towards…

According to the research firm IDC, markets like China and India are quickly moving toward a point where sub-$150 smartphones are the majority of shipments, bringing a solid computing experience to the hands of many.

Competitors tried to fit themselves in less than Rs. 15000 [$245.5] price bracket. Nokia, Sony. HTC, now Blackberry are planning their smart moves in this direction. Check out our other speculations for the year – Top 10 trends for Indian smartphone market for year 2014

For 2014 the competition will be more tough with Nokia X series, low-cost Moto phones and other budget smartphones. Micromax probably needs to launch low-cost flagship (as one of its flagship phones in a year) that can make it a talk of streets again! We are waiting for Q1 2014 results to know if the Canvas Knight could become the next Canvas HD for the company?

Instead of such expectation Micromax decided to innovate via another route in Q2’13 by providing bundled Aircel offers, i.e. operator based offerings, to which it invited MediaTek innovation in the user experience space, all aimed at a range of complete solution offers for the consumers which will be almost equivalent to cost of the device when sold unbundled:

Micromax to hit $1 billion revenue this fiscal
[PTI [Press Trust of India] via The Economic TimesBGR India, March 20, 2014]

Helped by growing sales of its affordable and entry-level smartphones, homegrown handset maker Micromax expects to hit $1 billion (over Rs 6,100 crore) in revenues this fiscal, ending March 31.

The New Delhi-headquartered company’s revenues were Rs 3,168 crore [$518 million] for the financial year 2012-13.

Micromax, which is the second largest smartphone player in India, held about 16 percent market share in Q4 2013. Some of the top selling models were the entry level smartphones like A35 Bolt and A67, IDC data showed.

The Canvas range of devices has also done well in terms of volume contribution owing to the marketing campaigns launched around them.

“We have seen huge growth in business, especially in the smartphone category (mid and entry-level). We expect to close this fiscal will a billion in revenues,” Micromax co-founder Vikas Jain told PTI.

The firm will continue to launch innovative and affordable products for the market across platforms, he added.

“We will introduce a product based on Android Kitkat with in the next 60 days,” Jain said.

Asked if the company would introduce a device with Windows Phone OS, he said the company is in discussions with Microsoft on bringing out “products relevant to the Indian market”.

Micromax today announced a strategic partnership with chipset maker MediaTek and telecom services provider Aircel.

“This is aimed at offering the best out-of-the-box experiences for the Indian users and the partnership will see a unique amalgamation of the expertise of the three companies,” Jain said.

While, Aircel will offer one stop solutions to address the increasing data demands, MediaTek along-with Micromax’s expertise in product design and performance will redefine the user experience creating a win-win ecosystem for the Indian users, he added.

Under this alliance, Aircel will team up with Micromax to introduce a range of offers for the consumers which will be almost equivalent to cost of the device.

Powered by MediaTek chipsets, the devices promise to deliver a seamless and a powerful user experience, while the bundled Aircel offers will drive data growth in the country.

The offers initially will be available across 4 Micromax devices – MMX 377G, Funbook Mini 410i, A090 and X070 – to be available next month.

The co-developed smart devices by the three pioneers will deliver seamless experience for consumers, driving enhanced performance and data experience for customers across the country.

Micromax, MediaTek & Aircel Partner For The Best Mobile Experience For The Indian Consumers On The Go! [joint press release via … GizbotEFYTimes …, March 20, 2014]

In pursuit to strengthen the mobile eco-system in India, Micromax, India’s 2nd largest smartphone manufacturer, today announced a strategic partnership with MediaTek, one of the leading chipset manufacturers and Aircel. Aimed at offering the best out of the box experiences for the Indian users, the partnership will see a unique amalgamation of the expertise of the three companies. While Aircel will offer one stop solutions to address the increasing data demands, MediaTek along-with Micromax’s expertise in product design and performance will redefine the user experience creating a win-win ecosystem for the Indian users.

Under this alliance, Aircel will team up with Micromax to introduce a range of offers for the consumers which will be almost equivalent to cost of the device. Powered by MediaTek chipsets, the devices promise to deliver a seamless and a powerful user experience, while the bundled Aircel offers will drive data growth in the country. The offers initially will be available across 4 Micromax devices – MMX 377G, Funbook Mini 410i, A090 and X070. The co-developed smart devices by the three pioneers will deliver seamless experience for the consumers, driving enhanced performance and data experience for customers across the country.

The products will be available across the retail outlets across the country from April, 2014. Aircel has launched bundled offers with Micromax devices which will give customers exciting benefits worth more than Rs. 10,000 [$164]:

Device

Benefits

Micromax Dongle – MMX 377G

(Benefits for 6 months)

Aircel customers can get exciting data benefits for 6 months at Rs. 141 [$2.31]

For the first 3 months, customers will get 2GB/month data

For the next 3 months – customers will get double data value for every recharge

Smartphones and Tablets (Benefits for 3 months)

1GB data per month

1.2P/2 sec Local Calling

1.2P/ sec STD Calling

WAP content worth Rs. 10,000 [$164]

Popkorn TV App Free

Data Enabled Feature Phones (Benefits for 3 months)

500MB data per month

1.2P/2 sec Local Calling

Local. 1.2P/sec STD Calling

WAP content worth Rs. 10,000 [$164]

Commenting on the partnership, Vikas Jain, Co-founder, Micromax, said, “At Micromax, we have constantly strived to democratize technologies for the masses by bringing alive unique and customized products and offerings for our consumers. Entering a new phase, our focus is now to provide seamless solutions to the consumers using their smart devices, thereby concentrating a large chunk of our efforts on coming up with products and services which act as solutions to the needs of the fast-evolving consumers. This partnership exemplifies the same endeavor, and we are very delighted to pioneer with MediaTek and Aircel, two pioneers in their own respective domains. While MediaTek supports us with the hardware, Aircel offers customized offerings for consumers to get a complete, affordable and seamless data experience across the country

My insert here Exclusive: Micromax will Launch its Hexa Core smartphone in April 2014 in India  [GadgetsToUse.Com, March 20, 2014]

In an Interview with GadgetsToUse.Com, Micromax Co-founder Vikas Jain confirmed that Micromax has completed internal testing of its up-coming Hexa Core smartphone based on MT6591 chipset and this new phone will be launched by the end of April 2014. Micromax also confirmed that its LapTab will indeed launch and that to in the same time frame.

Interview with Micromax, Co Founder Vikas Jain About Laptop India Launch, Hexa Core Phone [GadgetsToUse YouTube channel, March 20, 2014]

[ As per Micromax Canvas LapTab confirmed to arrive in April 2014 in India [GadgetsToUse.Com, March 20, 2014] LapTab is an 1.46GHz Intel Celeron processor based device, with a 10.1 inch IPS LCD display, 2 GB RAM and 32 GB storage. Despite of the fact that neither Microsoft nor Google are keen on supporting dual boot devices, the LapTab enjoy the productivity of Windows 8.1 Platform and richness of Android 4.2 jelly bean on a single device, but the transition won’t be seamless. You will have to reboot the device to switch between two operating systems. It is expected to be priced between Rs. 25,000 [$409] and Rs. 30,000 [$490] . ]

Sharing his thoughts on the partnership, Anupam Vasudev, Chief Marketing Officer, Aircel, said, “Aircel has positioned itself well as a data leader by constantly innovating products and services aimed at redefining user experience, which essentially is the youth. While there are many factors driving internet adoption in India; one key factor is the evolution of devices such as smart phones and tablets. Today’s youth are well informed on the data consumption patterns and therefore smart devices becomes an integrated tool to propel consumption of videos, social TV, HD gaming, content on demand etc. Keeping in line with consumer’s needs and demands, Aircel is bullish on device tie ups. We are delighted to continue our successful partnership with Micromax to offer exciting bundled benefits of their newly launched smart devices.” He further added, “According to a study, the number of telecom subscribers in India accessing the internet through mobile devices is increasing and will reach 350 million by 2015. This clearly indicates that mobile devices and data connectivity is undoubtedly the future of mobile telephony.”

Speaking at the occasion, Dr. Finbarr Moynihan, General Manager – Business Development at MediaTek, said, “For the first time, this unique tri-partnership between MediaTek, Micromax and Aircel provides the end-consumers both unparalleled benefits as well as unparalleled choice. Buyers do not only get benefits equivalent to the value of device they buy, but also a seamless and bundled value-add for data, voice and messaging across the entire product segmentation that includes dual-core smart phones, feature phones, 3G Tablets and 3G data card dongles. Hailing the beginning of the post-PC era, our MT6572, MT6260, MT8377 and MT6280 chipsets offer harmonized platforms to empower fast, powerful, smart and inclusive devices that cater to the emerging ‘super-mid’ market.”

Interview with Mediatek, General Manager Dr Finbarr About 4G Chipset, India Prices, Hexa MT6591, … [GadgetsToUse YouTube channel, March 20, 2014]

Visit http://www.gadgetstouse.com – to read more detailed reviews, hands on and overview of smartphones

Further details about MediaTek’s new “super-mid market” approach you can find in my earlier MediaTek is repositioning itself with the new MT6732 and MT6752 SoCs for the “super-mid market” just being born, plus new wearable technologies for wPANs and IoT are added for the new premium MT6595 SoC [‘Experiencing the Cloud’, March 4, 2014] post.

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):

image

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.

image

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

image

image

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.               

image

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.

image

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.

image

  • 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.       

image

  • 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.

image

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.

image

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.

image

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.

image

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

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

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

Top Five Smartphone Vendor Highlights

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

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

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

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

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

image

IDC India Forecast:

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

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

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

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

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

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

Nokia X family of smartphones, leading local brand partners for Windows Phone and the potential of all that on the Indian market

For some observers in the Western media the Nokia X family is a kind of challenge to Microsoft unlike my earlier post describing it as Nokia’s “best of everything” X range smartphones to conquer the smartphone market between the Asha and Lumia devices [‘Experiencing the Cloud’, Feb 24, 2014]. In Will Satya Nadella and Microsoft Pick Up The Challenge Laid Down By The Android-Powered Nokia X? Forbes contributor, Ewan Spence simply concludes that:

If Nadella is looking to move Microsoft towards a future with more focus on easily accessible services rather than hardware lock-in, then the Nokia X should continue to receive some love and affection, along with continued support in the media and from the press teams in Redmond. It may even be made available for other manufacturers looking for an Android base to build on with some preferential patent licensing bundled along with the deal.

Other journalists accustomed to the U.S. market, where you don’t buy your smartphone but getting it as part of your paid subscription “for free”, even critisizing the Nokia X performance (see two critics on the right) unlike the head of UX Design, an American (see his view on the left) in charge of the team in Beijing, China “with global scope and BRIICA (Brazil, India, Indonesia, China, Africa) focus”:

Doug Walston, Head of MP [Mobile Phones] UX Design, Nokia – Beijing*:

“With the X family,” says Doug, “we were really focused on the needs of new people using smartphones, especially those in emerging markets. We wanted to create a beautifully simple device that gives access to a wealth of apps.”

“Apps don’t need to be rewritten to tap into Fastlane. We’ve used some special sauce (and native platform hooks) so it all just works.”

“If there’s an element of the interface of which I’m particularly proud, it’s the home screen. It’s so distinctive, bold and direct. It’s a break from the confusion that you see elsewhere in phones at this price.”

“The simplicity of the interface also means that it has a very low overhead on performance. Typically for a phone with all these features, you would expect a horrid battery life and a laggy interface in this segment, but that isn’t true of the X family at all. The performance is surprisingly good.”

From Not just a pretty face – the UI of the X family [Nokia Conversations blog, Feb 26, 2014]
*” The entire MP UX Design team is in Beijing now with global scope and BRIICA (Brazil, India, Indonesia, China, Africa) focus and encompasses accountability for the UX Design of the entire MP devices portfolio (15 + devices annually, with an expected volume of around 300 million devices sold annually).” This is a rephrased text corresponding to the job announcement of the Head of Mobile Phones Industrial Design [ID] on LinkedIn. Walston took this role on May 9, 2013 when he came from Motorola Mobility to take over the MP UX Design part of Peter Skillman’s job leaving him with the role of heading the HERE Design group based in Berlin and Cambridge. Before that Skillman was heading the UI and services design for the successful Asha range for two years.

Jane McEntegart, Writer/Editor at Tom’s Hardware:

Nokia X 1.0 is not slow or sluggish, but in the brief time we played with it, it wasn’t blazing fast either. The tile-interface also didn’t feel quite as sleek as it does in Windows Phone 8.

From Hands On with Nokia’s Windows Phone-flavored Android OS [Tom’s Hardware, Feb 24, 2014]

Tom Warren, Senior Reporter for The Verge, the resident Microsoft expert:

If you put the Nokia X side-by-side with the company’s Lumia 520 handset it might be hard to tell them apart.

Using the X software can be quite frustrating, however, as the entire interface is prone to slow response and a lot of lag. Closing or switching between apps on the X takes far longer than other, even entry-level, smartphones, and browsing the web will quickly test your patience. The third-party apps we saw on the X, such as Facebook, looked as they do on other Android smartphones, but they too suffered from poor performance. Nokia’s choice to combine the functions of home and back into the single back button is confusing, and it’s difficult to predict exactly where in the interface the button will take you when you press it. Part of the reason for the laggy interface and apps … is more likely related to the Android version in use on these devices.

Nokia appears to be positioning the X as a method to draw people to Microsoft’s cloud services.

From This is Nokia X: Android and Windows Phone collide [The Verge, Feb 24, 2014]

Is the head of MP UX design is right or such a harsh critic as Tom Warren? You could decide it for yourself by watching the video below. Draw special attention to the Fastlane performance difference between the Nokia X with 512MB of RAM and Nokia X+/XL with 768MB ([3:46-4:30] vs. [5:53-6:26]). It is also not an accident that “Resizeable tiles” are demonstrated on the 768MB version. My impression is, that if you are buying the 768MB versions (Nokia X+ or Nokia XL) you won’t feel the problems Tom Warren outlined above, won’t feel at all:

Nokia Launches Nokia X At Mobile World Congress In Barcelona [Red Robot – Intelligent Distribution YouTube channel, Feb 24, 2014]

Today at the Mobile World Congress, Nokia introduced the Nokia X family, affordable smartphones that offer access to a world of Android apps. The new devices feature the best of Nokia design and quality, signature Nokia experiences such as HERE Maps and Mix Radio, and popular Microsoft services such as Skype, OneDrive and Outlook.com.
[0:06] Press conference
>> [0:50] Elop’s 1st introduction: the new Nokia 220
>> [1:20] 2nd introduction: the new Nokia Asha 230
>> [1:32] 3d introduction: the new Nokia X and Nokia X+
>> [2:07] Preloaded great applications on the Nokia X family, hundreds of thousands of Android apps, Nokia signature experiences (HERE Maps, Nokia Mix Radio)
>> [2:42] Fastlane as a fantastic element of Nokia X experience
>> [2:57] 4th introduction: the Nokia XL
[3:40] B-roll (i.e. alternative) footages (with no sound):
> [3:42] Nokia X: Runs Android Apps, 4″ display, Fastlane, 3MP camera, 1GHz Dual Core Processor, Dual SIM
>> [3:46] Nokia X: Fastlane
>> [4:30] Nokia X: Skype
>> [5:08] Nokia X: Nokia Store
>> [5:33] Nokia X: Third Party App Stores
> [5:49] Nokia X+: Runs Android Apps, 4″ display, Fastlane, 3MP camera, 1GHz Dual Core Processor, 768MB RAM, Dual SIM
>> [5:53] Nokia X+: Swipe
>> [6:26] Nokia X+: Resizeable tiles
>> [7:15] Nokia X+: Nokia Mix Radio
>> [8:02] Nokia X+: Demo App: Plants VS Zombies 2
> [8:40] Nokia XL: Runs Android Apps, 5″ display, Fastlane, 5MP camera with flash, 2MP fron-facing camera, 1GHz Dual Core Processor, 768MB RAM, Dual SIM
>> [8:45] Nokia XL: Swipe
>> [9:26] Nokia XL: Camera: 5MP with autofocus and flash

Even more, as the rest of my post goes through the below details (i.e. sections 1. to 4.), you will find (along with with me) that from the point of view of focusing on the BRIICA (Brazil, India, Indonesia, China, Africa) markets (which was the task of the development team in Beijing China) this is an excellent product with no problems mentioned by some media people in the West. There is even no conflict with Microsoft at all (another critical speculation typical to the Western Media) as the Nokia X family is also preparing the ground for the upcoming super low-cost (higher levels as well) Windows Phone devices from local and regional brands like the #3 Karbonn and the #4 Lava (Xolo) in India, as well as Gionee which is a large local brand in China with strong recognition in India as well, not to speak of those who will supplied from Foxconn, the biggest white-label phone manufacturer in China.

  1. Why does this post concentrate on the Indian market?
  2. Nokia X family has been well positioned for the highest growth Indian market
  3. The feature phone and smartphone markets in India according to CyberMedia Research India and IDC
  4. New low-cost Windows Phone partnering strategy by Microsoft especially aimed at the Indian market


1. Why does this post concentrate on the Indian market?

Answer #1: The Indian smartphone market is expected to double and touch 80 million by the end of current fiscal, a top Samsung India official said today.

“We are expecting smartphone sales in the country to touch 80 million mark by the end of current fiscal [Samsung’s fiscal years are the same as the calendar years], while total sales were around 40 million in 2012-13,” Samsung Mobile and IT India Head Vineet Taneja said.

From Indian smartphone market to double to 80 million by fiscal end: Samsung [The Economic Times (of India), Feb 18, 2014]

Answer #2:Now is the right time because there is a rapidly growing low-price affordable smartphone segment that’s really taking off in a number of growth economies. We’re seeing that in countries like Indonesia, Russia, Vietnam and a number of others,” [Stephen] Elop [former Nokia CEO and soon-to-be Microsoft executive vice president] says in the interview, shot at Mobile World Congress in Barcelona.

While Nokia X is based on Android, the user interface “is remarkably similar to the Windows Phone interface,” he says.

That means these customers, many of whom have never owned a smartphone before, will learn to navigate in Microsoft’s world first, with the potential over time to buy higher end Nokia Lumia phones that run Windows Phone as Lumia prices drop.

“And so we’ve gone for that and we’ll take advantage of that to keep people in the Lumia family but using Nokia X as a feeder system into our Windows Phone strategy,” Elop says.

The strategy isn’t meant for the U.S. where cellular carriers widely and generously subsidize the price of high-end phones in order to lock customers in to long-term contracts, he says.

The above excerpts are from the Nokia’s Stephen Elop Talks Android video interview:

Nokia’s Stephen Elop talks about the move by the company to embrace Android at this time.

From Nokia chief: Nokia X Android smartphone is a gateway drug to Windows Phone [Network World, Feb 25, 2014]

Answer #3: is in another post of mine: Nokia’s “best of everything” X range smartphones to conquer the smartphone market between the Asha and Lumia devices [‘Experiencing the Cloud’ Feb 24, 2014] but before reading that here is Nokia X/ Nokia X Plus Hands On (Dual SIM) [WPXBOX YouTube channel, Feb 24, 2014] video from which you can easily understand why is it “best of everything” instead of a stock Android smartphone:

Detailed Hands on of Nokia X and Nokia X+ which only differ by memory of 256 MB Ram. They both come with 4GB memory card which can be expanded to 32GB.

Answer #4: in section 2 of this post I will show you that these smartphones will quite probably have a competitive on line pricing starting at most from:
Rs 7400 ($119) for Nokia X vs. the list price of EUR 89 [$122]* (Rs 7582)
Rs 8000 ($129) for Nokia X+ vs. the list price of EUR 99 [$136]* (Rs 8434)
Rs 8600 ($139) for Nokia XL vs. the list price of EUR 109 [$150]* (Rs 9284)
* Although these prices are before local taxes.

Answer #5: 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.
From 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]

Answer #6: In addition to existing partnersNokia, Samsung, HTC and Huawei — Microsoft has announced it is now working with Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE to develop on the Windows Phone platform. … Customers can expect to see an even broader array of devices, from iconic to lower-cost options, coming to market. … The expanded Windows Phone ecosystem will also provide mobile operators and retail partners with additional opportunities to offer white-label Windows Phone devices under their own brands.
From Microsoft adds nine new Windows Phone hardware partners [press release, Feb 23, 2014] where Karbonn is the #3 and Lava (Xolo) the #4 brands (after #1 Samsung and #2 Micromax), while Gionee is a local brand in China with strong recognition in India as well, and Longcheer as a local Chinese brand that has long been in India as well (albeit with top recognition already lost). Finally Foxconn is the biggest white-label phone manufacturer in China whose production has already influenced the Indian market very much.

We are adding support for Qualcomm Snapdragon 200 and 400 series chipsets, with options that support all major cellular technologies, including LTE (TDD/FDD), HSPA+, EVDO and TD-SCMA. We will also support soft keys and dual SIM where our partners want it for their devices. One nice benefit of these additions is that many hardware vendors will be able to use the same hardware for both Android and Windows Phone devices [obviously if they are using the Qualcomm SoCs]. From Joe Belfiore, corporate vice president of Microsoft Windows Phone in Scaling Windows Phone, evolving Windows 8 [Windows Phone Blog, Feb 23, 2014]

Q. Many of your recent partnerships and announcements have focused on emerging markets. Is that a major priority?
A. It’s not our only focus, but it’s a very big one. The purpose of low-cost phones in emerging markets is to drive volume. From Joe Belfiore, corporate vice president of Microsoft Windows Phone in Q.&A. With Joe Belfiore on the Future of Windows Phone [Bits blog of The New York Times, Feb 23, 2014] That is the Nokia X family will not only prepare the ground for its own Lumias but for these upcoming low-cost Windows Phone devices as well (also why IMHO Microsoft will not kill the Nokia X family after Nokia devices and services becomes part of it)


2. Nokia X family has been well positioned for the highest growth Indian market

X marks the sweet spot [Nokia Conversations, Feb 25, 2014]

We asked Jussi Nevanlinna, VP for Mobile Phone marketing, some of your questions about the new Nokia X family, why it’s important for Nokia and why customers will be delighted with the phones.

First of all, why now? Why is the timing now right for an Android-based smartphone from Nokia?

There are a couple of answers to that question.

To launch the Nokia X family, we needed to be able to create a product that was true to Nokia’s heritage in design and build quality. But we also needed to make it very affordable. Lots of different components had to come into place for us to create something that’s clear and easy to use, but also high quality and within people’s financial reach.

The other answer is that the market itself is moving. We’re the number one manufacturer in growth markets in the ‘entry-level’ and ‘feature phone’ categories. But a lot of those people are now aspiring to smartphone products. There are a significant number of users worldwide who are about to experience the Internet through a mobile device. As you can imagine, we want to be ready for them.

image

The Nokia X family is based on the Android Open Source Platform (AOSP). Does that put the future of the family at the mercy of Google?

To fully explain, this is a Nokia smartphone that runs Android apps. At its heart, we have AOSP on top of which we have added Nokia design and usability expertise to create the user interface that people see. Then we have added Nokia experiences like HERE Maps and Nokia MixRadio, and Microsoft services like Skype, Outlook.com and OneDrive. What we don’t have is Google services: this was deliberate. Instead, we have implemented Nokia and Microsoft services to create something truly differentiated.

So who is the target audience for the Nokia X family?

These are global products, which will be available pretty much everywhere except North America, Korea and Japan. We have a particular focus on growth markets – for example, India and China, Thailand and Indonesia then over to Egypt, Kenya and Nigeria, and South America, especially countries like Brazil, and Mexico. They are all places where we’re seeing this big shift from feature phones to affordable smartphones.

Our Nokia X family customers are young, social, very aspirational and are fans of Nokia. They love our brand and our product design. And they also love Android apps: the quantity and choice is very appealing to them.

So we’re offering them the best of three worlds:

  • Nokia design and build quality;
  • Microsoft cloud services; and
  • Android apps.

image

Does the X family compete with the Lumia family and maybe mean lost sales for Lumia?

Our approach to compete in the affordable smartphone market is twofold. While Lumia remains our primary smartphone platform and we continue to push the prices down, Nokia X addresses price points that are generally lower than those reached by Lumia, and we’ll keep pushing the Nokia X prices down even further.

In fact we see Nokia X as a stepping-stone to Lumia. With Nokia X we are bringing people the best of Nokia and Microsoft services and experiences, making a future switch to Lumia natural.

Some might see creating an Android-based device as strange considering that the plan is for Nokia’s devices and services business to join Microsoft soon?

I can’t speak on Microsoft’s behalf; what I can say is our strategy with Mobile Phones has been, and remains, connecting the next billion. Microsoft is equally focussed on ‘mobile first; cloud first. As I have explained, getting people exposed to and loving Microsoft and Nokia services in the affordable segment creates a natural pathway to Lumia, which is designed to be the pinnacle smartphone experience.

image

Technology becomes cheaper all the time. When it becomes possible to create a Lumia for $100, will the X family be retired?

I think the key word is ‘family’. We will be announcing more products in the family over the course of the next year, and the price range it covers will change to suit the markets. We will be taking Nokia X into even more affordable price points.

What do app developers need to do to make their Android apps available for the Nokia X family?

The short answer is: nothing. In the vast majority of cases, Android apps will run very well on the Nokia X family, out of the box.

Furthermore, we’re working with developers to make it very easy to submit apps into the Nokia Store. In most cases, they simply republish their apps to Nokia Store .

Where apps depend on functionality that isn’t on the Nokia X family devices, like Google Maps, we’ve created API plugins for the Android SDK to allow developers to simply tick the box to use HERE Maps instead.

image

And what advantages can developers and customers gain by using Nokia Store?

Android developers stand to make big gains by supporting the Nokia X family. We have heard many times that they find it hard to monetise their apps. One reason for that is, in emerging markets, people are a lot less likely to have credit cards. The Nokia Store offers in-app payments through operator billing, and we have the largest network of operators signed up for that. It’s been shown through experience that when operator billing is available, then revenues increase by up to five times.

That’s one reason the Nokia Store offers a better alternative. The other is from the user’s side. The Nokia Store is curated. The apps are screened and scanned so you won’t bump up against malware or inappropriate content. So they can shop in our store with confidence and security.

And worldwide, people are very comfortable with using third-party app stores that aren’t owned by Google. In Russia, the Yandex Store dominates the Android marketplace. In China, Google Play isn’t available, so all app purchases are through third parties. So you see, non-Google stores are already the norm for most Android owners.

Nokia X is a phone made for India [India Today, Feb 24, 2014]

The Finnish handset maker has finally unveiled its much talked of Android phone, the Nokia X, at the ongoing Mobile World Congress 2014.

Nokia has launched a family Android phones with three variants–Nokia X, X+ and XL–at affordable prices. All three Nokia X variants are going to be low-cost phones with the Nokia XL expected to be priced around Rs.9,000 [$145]. For now, the prices that have been revealed are: Nokia X for 89 euros, the X+ 99 euros and the larger LX carries a price tag of 109 euros.

Specs-wise, these are basic level phones. All three devices are powered by a Qualcomm Snapdragon Dual Core processor and are dual SIM. The Nokia X comes with 4-inch display, the X+ has a bit of more storage options and the XL variant comes with 5-inch LCD screen and and 5-megapixel rear and 2-megapixel front cameras.

The Nokia X phones do not come with pre-installed Google Play Services. As a result the Play Store isn’t available on the Nokia X or Nokia X+. Though, Android apps can be downloaded through Yandex Store.

Once, Nokia was the leader of Indian mobile industry. Nokia feature phones used to be first choice of the Indian consumers. But it could not keep pace with the emergence of smartphones. Its competitors like Samsung, Sony and Micromax took away the markets from the Finnish handsets maker with innovative smartphones at affordable prices.

With affordable Android phones, the world’s largest smartphone maker, Samsung, is dominating the Indian market. Even, the home grown tech company Micromax made a market for itself with range of affordable Android phones having great features.

With its budget prices and widely used Android OS, the Nokia X series of smartphones will target the consumers looking to upgrade themselves from feature to smartphones. As the smartphone market is growing in India, given its brand reputation in the country, Nokia phones are going to give its competitors a run for their money in the sub Rs.10,000 [$161]segment. An Android phone from the Nokia at affordable price will be a good deal.

Well aware of its advantageous positing in the price-sensitive Indian market, Nokia has listed the X series devices on its India website as coming soon just after unveiling the devices at the ongoing Mobile World Congress 2014 in Barcelona.

Nokia Lumia 525 – First Impressions [Digit YouTube channel, Jan 7, 2014]

After the major success tasted by the entry level Lumia 520, Nokia has introduced the updated Lumia 525 for those wanting just a little more, at the same price

The current (Feb 25, 2014) lowest online price for Lumia 525 (in India) is on Snapdeal.com:

image
Rs 11499 [$186]
(list price) –> Rs 9519 [$154] Black/White –> Rs 9712 [$158 ] Yellow

Competing with the following models of the marketing leading brands (Samsung, Micromax, Karbonn):

image
Rs 11230 [$181] Rs 9244 [$149] … Rs 12100 [$195] Rs 9379 [$151] … Rs 12990 [$207] Rs 9997 [$161]
image

For comparison the preceding the Lumia 520 on the same site:

image
Rs 10499 [$169] (list price) –> Rs 7976 [$128] Black –> Rs 7995 [$129] White
–> Rs 8169 [$132 ] Yellow

Then some leading competitors for the Nokia X range (also from Snapdeal.com):

image
All list prices: Rs 9999 [$161] Rs 8949 [$144] … Rs 7225 [$117] … Rs 7895 [$127]

image

13767
6878
10957
7440
7623
Broadcom BCM23550
Broadcom BCM21654G
MediaTek MT6572
Qualcomm MSM8225
Qualcomm MSM8225

Which means a competitive on line pricing starting at most from:
Rs 7400 ($119) for Nokia X vs. the list price of EUR 89 [$122]* (Rs 7582)
Rs 8000 ($129) for Nokia X+ vs. the list price of EUR 99 [$136]* (Rs 8434)
Rs 8600 ($139) for Nokia XL vs. the list price of EUR 109 [$150]* (Rs 9284)
* Although these prices are before local taxes.

For  comparison the top of the Asha Touch range, the Asha 503 on the same site (currently):

image
Rs 7399 [$119] (list price) –> Rs 6549 [$106] Black/White –> Rs 6894 [$111] Yellow
–> Rs 6939 [$112] Red

Which means that the price of Asha devices could be lowered after the Nokia X devices appear on the market. This is especially true with the introduction of Asha 230 using the same SoC:

image

As the Asha 230 was announced for EUR 45 [$62]* (Rs 3823) you got an immediate price indication for such a decrease. In fact this new model is an effective replacement for the current Asha 500 as the entry level Nokia Asha Software Platform 1.1 device which has:

  • 2 MP rear camera instead of a 1.3 MP one on Asha 230
  • standby time up to 840 h (2G), talk time up to 14 h (2G) because of an 1200 mAh battery instead of the 1020 mAh one on Asha 230

but has the best online price of Rs 3999 ($66), actually from Nokia India against the list price of USD69 before taxes or subsidies.


3. The feature phone and smartphone markets in India according to CyberMedia Research India and IDC

From CMR announces top Telecom trends for 2014 in India [CyberMedia Research India press release, Dec 31, 2013]

CMR today released its MarketVision 2014 for Telecommunications in India.  Below are the key trends identified for 2014 for some priority segments.

Mobile Handsets

2013 witnessed the first time decline in growth of feature phones in India and this trend is going to further sharpen in 2014 as the primary focus of the industry as well as consumers would remain around the smartphones.

CMR identifies the following trends for 2014 in Smartphones

  • LTE enabled smartphone releases to be among priority areas of the vendors.
  • Chinese ODM’s have started taken a direct OEM route towards India Smartphone market.  CMR expect around 10 Chinese ODMs entering into India Mobile market in 2014.
  • ‘Made in India’ smartphones amount to 47% of the total sales.  With such tremendous growth and success witnessed by these brands in the local market, 2014 will be the time to look at newer geographies including MENA, Latin America and the SAARC [South Asian Association for Regional Cooperation] region for the home grown vendors.  CMR expects 3-4 such brands looking for new geographic markets.
  • With the increasing confidence and reliance of Indian consumers on the online retailing, particularly after the emergence of successful platforms like flipkart, CMR expects the role of ‘etailing’ becoming important for emerging brands who for various reasons cannot establish their physical distribution network across the country, particularly the non-metro cities and towns.
  • While the ecosystem partners like ODMs and app developers will be exploring Windows as a platform for mobility, CMR identifies Tizen, Firefox, Ubuntu and Sailfish among the new open source OSs emerging in 2014 in the India market.
  • CMR expects vernacular apps to start getting focus in 2014 from the developer community in the country.  Since national elections are going to be among the predominant themes for 2014, we expect a lot of apps being developed around this space which could be owned by a political party or being promoted by a neutral app developer.

62.9 million mobile handsets shipped in India during July-Sept 2013, a Y-o-Y growth of 10.9%; September registers, 19.5 million handset shipments; Nokia retains overall leadership [CyberMedia Research India press release, Nov 19, 2013]

  • Smartphone shipments cross 11.1 million units; Samsung still the market leader in smartphones category with Micromax and Karbonn at #2 and #3, respectively. Top 3 vendors make up nearly 63.1% of the total smartphone shipments.
  • Featurephone segment witnesses the first ever negative growth in shipments in the India Mobile handsets market.

According to CMR’s India Mobile Handsets Market Review, 3Q 2013, November 2013 release,India registered 62.9 million mobile handset shipments for the period July-September (3Q) 2013. During the same period, 11.1 million smartphones were shipped in the country.

image

Commenting on the results, Faisal Kawoosa, Lead Analyst, CMR Telecoms Practice said, “We have been saying that the way forward is smartphones. JAS 2013 is the first quarter to actually report this trend in numbers. This means vendors can expect to see large opportunities in the upgrades market where many featurephone users will upgrade to a smartphone. It may also so happen that new smartphone purchases register lower volumes vis-à-vis upgrades. But this phenomenon may be a few quarters away.”

“So there is going to be a huge opportunity as well as competition in the entry- to mid-level smartphone segments, which is where the volumes would remain for a while,” Faisal further added.

image

India Smartphones Market

The India smartphones market during July-September 2013 saw a rise in shipments by 152.3% over and above the July-September 2012 number, taking the contribution of smartphones to 17.6% of total mobile handset shipments during the period July-September 2013.

image

Commenting on these results, Tarun Pathak, Analyst, CMR Telecoms Practice said, “The India smartphones market continues to be a competitive space with close to brands vying with each other. Going forward, we expect this segment to be even more competitive as we expect some of the China-based ODM partners entering directly into the India market during 1H 2014. It will be interesting to see what impact this will have on the market share of existing smartphone players.”

“Another interesting observation is that local handset brands have now close to 47% market share in the India smartphones market and this momentum has been a source of confidence to a couple of players to enter new geographies outside India where the smartphone market is on the rise. Going forward 3G smartphone shipments will continue to rise and we can expect to see a few smartphone vendors introduce 4G-enabled devices by the end of 2013,” Tarun concluded.

Notes for Editors
    1. This release is a part of the CyberMedia Research (CMR) Smart Mobility Market Programme.
    2. CyberMedia Research (CMR) uses the term “shipments” to describe the number of handsets leaving the factory premises for OEM sales or stocking by distributors and retailers. For the convenience of media, the term shipments has been replaced by ‘sales’ in the press release, but this reflects the market size in terms of units of mobile handsets and not their absolute value. In the case of handsets imported into the country it represents the number leaving the first warehouse to OEMs, distributors and retailers. CyberMedia Research does not track the number of handsets brought on their person by individual passengers landing on Indian soil from overseas destinations or ‘grey market’ handsets. These are, therefore, not part of the CyberMedia Research numbers reported here.
    3. CyberMedia Research (CMR) tracks shipments of mobile handsets on a monthly basis. However, as per convention, the market size is reported on a calendar quarter basis where appropriate to the context; in all such cases this refers to an aggregated number for the three calendar months in the quarter to which the press release refers.
    About CyberMedia Research
    A part of CyberMedia, South Asia’s largest specialty publisher, CyberMedia Research (CMR) has been a front runner in market research, consulting and advisory services since 1986. CMR offers research and consulting services – insights, market intelligence, market sizing, ecosystem mapping and go-to-market services – covering the Information Technology, ITeS, Semiconductor & Electronics, Telecommunications, Government, SMB & Entrepreneurship, Smart Infrastructure, Energy & Utilities and Healthcare & Life Sciences verticals.
    Cyber Media Research Ltd., an ISO 9001: 2008 company, is a member of the Market Research Society of India (www.mrsi.in) and enrolled with ESOMAR (www.esomar.org) CMR’s forthcoming studies include stakeholder satisfaction surveys, mega spender assessments and market mapping studies for these domains.
    For more details, please visit http://www.cybermediaresearch.co.in or http://www.cmrindia.com/

    Explosive Smartphone Growth Driven by Lower-Priced Models, Cannibalises Feature Phone Sales in Indian Mobile Market, Says IDC [press release, Dec 2, 2013]

    The India smartphone market grew by 229% year over year (YoY) in the third quarter of 2013 (3Q13).  According to International Data Corporation’s (IDC) APEJ Quarterly Mobile Phone Tracker, vendors shipped a total of 12.8 million smartphones in 3Q13 compared to 3.8 million units in the same period of 2012. 3Q13 grew by close to 28% over the units shipped in the second quarter of 2013 (2Q13).

    The 5.0 inch-6.99 inch screen size smartphones (phablets) continued to show sustained growth in 3Q2013 as well – the phablet category contributed to 23% in the overall market in terms of volume.

    The overall mobile phone market (Feature Phones and Smartphones) had a 12% growth YoY and a 7% growth quarter over quarter (QoQ) with the share of feature phones sliding further to make 81% of the total market in 3Q13 despite the feature phone market growing at 3% in 3Q2013 over 2Q2013.

    imageimage

    Source: IDC Asia Pacific Quarterly Mobile Phone Tracker, 3Q 2013

    The third quarter of 2013 witnessed a slowdown in the numbers for top local vendors such as Micromax and Karbonn – while international vendors like Samsung and Nokia powered by their new product launches made up for close to 30% of the overall market in 3Q2013.

    “The growth in the smartphone market continues to drive the overall growth numbers for the phone market – given that there’s still a huge potential for smartphone penetration in India, this trend is expected to continue in the coming quarters”, said Manasi Yadav, Senior Market Analyst with IDC India.

    “The change agents for this rapid shift of consumer preference towards Smartphones have been the narrowing price gap between Feature phones and Smartphones. The Smartphone market is expected to maintain these elevated levels of growth in the near future” comments Kiran Kumar, Research Manager with IDC India.

    Top Five Smartphone Vendor Highlights

    Samsung: Samsung maintained its leadership spot with about 33% in terms of market share. Its smartphone shipments grew by close to 36% from 2Q 2013 to 3Q2013. The third quarter saw quite a few new launches across price points by Samsung – however the low-mid tier phones such as Galaxy S

    Duos and Galaxy Star continued to drive their volumes.

    Micromax: Micromax held on to its second spot with about 17% in terms of market share in 3Q2013. Some of the top selling models were A27 and A26 in terms of volumes – we have seen a dedicated marketing and advertising push from the brand with continued investments to up the brand recall.

    These efforts are expected to bear fruit in the coming quarters in time for their upcoming launches.

    image

    Karbonn: The market share for Karbonn in 3Q2013 was close to 11%, some of the top selling models for this brand were A6 and A50. There has been a significant pick-up for the Titanium range of phones especially S5 and S2 specifically.

    Nokia: The Lumia range of devices continued to show a growth trajectory in 3Q2013 and garnered close to 5% market share – the trend is expected to continue with greater support from Microsoft in the coming quarters. The third quarter of 2013 saw a few notable launches like the Lumia 625 and Lumia 925 which have been able to generate positive interest from consumers and developers alike.

    Lava : Lava made it to the top 5 for the first time in 3Q2013 owing to huge shipments coming in from its XOLO and IRIS range of competitively priced devices. Some of the top selling models for the brand are IRIS 349 and IRIS 402. Keeping in mind the shifting consumer preferences, there has been a conscious shift from feature phones to smartphones, which is expected to continue in the upcoming quarters too.

    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 yearsChina 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 [better known outside as Foxconn], 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.

    image

    image

    The China Smartphone Market Hiccups as Growth Streak Ends with First Sequential Decline in 2013 Q4, Says IDC [press release, Fev 13, 2014]

    Singapore and Hong Kong, February 13, 2014 – After 9 consecutive quarters of explosive growth, which propelled China into the top smartphone market in the world, the China smartphone market experience its first slowdown in 2013 Q4.

    According to the International Data Corporation (IDC) Asia/Pacific Quarterly Mobile Phone Tracker, shipped 90.8 million units compared to 94.8 million in 2013 Q3, declining by 4.3% quarter on quarter (see Figure 1). Several factors drove this stumble – for one, China Mobile’s 4G TD-LTE network went live on December 18, translating into supplies of 4G handsets not able to reach the market fully until 2014 Q1. The increasing popularity of phablets and channel inventory also played a role, whereby operators cut phone subsidies on phones with smaller screens, triggering distribution channels looking to clear out those stocks.

    “The world has increasingly looked to China as the powerhouse to propel the world’s smartphone growth and this is the first hiccup we’ve seen in an otherwise stellar growth path,” says Melissa Chau, Senior Research Manager with IDC Asia/Pacific’s Client Devices team.

    “There will certainly be future drivers to unlock further smartphone growth in China, as Apple demonstrated with its China Mobile tie-up in January, and the massive device migration to come of phones only supporting 2G and 3G networks to devices supporting 4G networks. However, we are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year’s model”

    Looking ahead at the prospects for the Asia/Pacific (excluding Japan) region, with mature Asia/Pacific markets like already having hit market saturation and China growth facing more moderate increases, two trends will become more prominent.

    First, growth will increasingly shift to ever-more emerging markets. While India volumes significantly lag China, India has taken the number three ranking of largest smartphone markets in the world in 2013, surpassing Japan, the United Kingdom, South Korea, Germany and France, which were all ranked higher in 2012.

    Second, Chinese phone players which have previously been content to make their mark on the China market itself, are looking to expand their ambitions overseas. While this trend has started already through 2013, IDC expects it to become more common in 2014.

    Chinese players are getting hungrier to turn themselves into international rather than China-only brands. Nowhere is this more clear than Lenovo’s acquisition of Motorola’s handset business, and even smaller players, some unknown to much of the world, like Oppo, BBK, Gionee and of course Xiaomi are ramping up on international expansion.”

    Figure 1.
    Asia/Pacific (Excluding Japan) Smartphone Shipments by Sub-Region, 2011Q1-2013Q4

    image

    Notes:

    • Mature markets include Australia, Hong Kong, New Zealand, Singapore and Taiwan
    • SEA markets include Indonesia, Malaysia, Philippines, Thailand and Vietnam

    Source: Asia/Pacific Quarterly Mobile Phone Tracker, February 2014


    4. New low-cost Windows Phone partnering strategy by Microsoft especially aimed at the Indian market

    Mobile World Congress, Microsoft and Nokia [The Official Microsoft Blog, Feb 24, 2014]

    The following post is from Frank X. Shaw, Corporate Vice President of Communications at Microsoft.


    Mobile World Congress is in full swing in Barcelona this week, one of the biggest events of the year for the mobile industry. I love Barcelona, and am sad to miss MWC this year. There is something about the combination of the history and tradition of Barcelona past and the energy and innovation of Barcelona present, with all the attendees of MWC a punctuation mark. And there is always something new, companies with something to say.

    Microsoft is no exception. On Sunday afternoon, we hosted a press conference where we reinforced the momentum we’re seeing for Windows Phone – the fastest growing mobile OS with 91 percent year-over-year growth. We announced we’re working with nine new Windows Phone hardware partners , including Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE as well as a collaboration with Qualcomm to help more manufacturers build Windows Phones faster. You can read Joe Belfiore’s blog post [see also below] from yesterday for more details.

    Nokia held its press conference earlier Monday. They announced a number of new devices from their Mobile Phone division including Nokia X, which will compete with Android devices in the affordable smartphone category and introduce the Microsoft cloud to a new set of customers in growth markets.

    There’s been lots of speculation about what this announcement means for Microsoft and about our pending acquisition of Nokia’s Devices and Services business. Here are a couple of points to put things into context.

    First, our transaction with Nokia has not yet closed. Today, we operate as two independent companies as required by antitrust law, and we will until the acquisition is complete. The anticipated close timeframe for the acquisition remains end of the first quarter of 2014.

    Second, we’re pleased to see Microsoft services like Skype, OneDrive and Outlook.com being introduced on these devices. This provides the opportunity to bring millions of people, particularly in growth markets, into the Microsoft family. The Skype team on Monday announced an offer in select markets for the first customers who purchase a Nokia X, one month of Skype’s Unlimited World Subscription. Read the Skype blog for more details.

    Finally, our primary smartphone strategy remains Windows Phone, and our core device platform for developers is the Windows platform.

    It is a fascinating time in the industry today. The rate of improvements in devices, the breadth of services offered, the way consumers and businesses are using devices of all shapes and sizes to do more – it is a reminder to all of us that what is considered status quo in Barcelona this year has the potential to look very different in the rear view mirror a year from now.

    We’d have it no other way. 🙂

    Microsoft adds nine new Windows Phone hardware partners [press release, Feb 23, 2014]

    New hardware partners and tools will accelerate global scale.

    Microsoft Corp. on Sunday announced nine new hardware partners for Windows Phone and direct access to tools that will broaden the portfolio of devices for consumers and introduce new price points to accelerate growth in key markets. In addition to existing partnersNokia, Samsung, HTC and Huawei — Microsoft has announced it is now working with Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE to develop on the Windows Phone platform.

    With this latest news, Microsoft is now working with seven of the top 10 smartphone manufacturers in the world in addition to leading brands in China, India and Taiwan, representing more than 56 percent of the addressable market globally (IDC Worldwide Mobile Phone Tracker, 2013). Customers can expect to see an even broader array of devices, from iconic to lower-cost options, coming to market.

    “We are pleased to add these new partners to our expanding Windows Phone ecosystem. They will be key contributors to continued growth across price points and geographies for Windows Phone,” said Nick Parker, corporate vice president of the OEM Division at Microsoft.

    Windows Phone is the fastest-growing smartphone operating system, according to IDC, and posted the largest increase for 2013 (90.9 percent), more than doubling the growth of the overall market during the year.

    Microsoft also unveiled expanded hardware support that provides more flexibility so Windows Phone partners can build devices to meet the unique needs of their region or customer segments. Microsoft is adding support for Qualcomm Snapdragon™ 200 and 400 processors by Qualcomm Technologies Inc. with options that support various major cellular technologies, including LTE (TDD/FDD), HSPA+, EVDO and TD-SCMA. Windows Phone will also support soft keys and dual SIM, critical requirements particularly in Asian markets. These changes allow for manufacturing partners to easily leverage existing design investments to diversify their portfolio to include Windows Phone devices, including larger screen phablets.

    On Sunday, Microsoft launched the Windows Hardware Partner Portal, which is designed to speed up device commercialization while minimizing development costs. Speed and economies are especially important for manufacturers needing to compete and win in the dynamic high-volume smartphone segment. The Windows Hardware Partner Portal is now open to all smartphone device manufacturers to learn about and begin the process to develop on the Windows Phone platform. Windows Phone device manufacturers will also be able to leverage the great services Microsoft has to offer in that market, which could include Office Mobile, Skype, Xbox and Bing; a growing app catalog; and features like Live Tiles and People Hub, which make Windows Phone so uniquely personal.

    To further help enable smartphone device manufacturers to quickly and easily broaden their portfolio to include Windows Phone devices, Microsoft and Qualcomm Technologies are collaborating to give OEMs and ODMs that are working with the various Qualcomm Reference Designs for Snapdragon 200 and 400 processors direct access to Microsoft tools, content and adaptation kits to build devices on the Windows Phone platform. With Microsoft and Qualcomm Technologies, through its Qualcomm Reference Design program, delivering the building blocks to help design and build Windows Phones, Microsoft hardware partners will be able to focus on differentiating their offering based on apps and services. Device manufacturers will now be able to choose from hundreds of ways to customize their Windows Phone devices while keeping the consistently high-quality experience that the Windows Phone platform provides.

    “We are making it easier, faster and more affordable for partners to develop a Windows Phone,” Parker said.

    The well-established Qualcomm Reference Design program offers Qualcomm Technologies’ leading technical innovation, differentiated hardware and software, easy customization options that save engineering costs, access to an ecosystem of hardware providers, and testing and acceptance readiness for regional and leading operator requirements.

    The expanded Windows Phone ecosystem will also provide mobile operators and retail partners with additional opportunities to offer white-label Windows Phone devices under their own brands. Mobile operators will also have more options to build custom apps and services for their Windows Phone devices that increase customer satisfaction, retention rates and revenue streams.

    Scaling Windows Phone, evolving Windows 8 [Windows Phone Blog, Feb 23, 2014]

    The following post is from Joe Belfiore, Corporate Vice President of corporate vice president of Windows Phone and Windows Program Management & Design at Microsoft.


    A lot of you folks know me as “the Windows Phone guy.” Over the past five years I’ve been co-managing the Windows Phone product team on a mission to make Windows Phone a delightful and successful platform. Recently my job changed to focus not just on Windows Phone but also on the user experience of Windows 8 and future versions of Windows. Today Nick Parker and I had a chance to talk to media and analysts from around the world attending Mobile World Congress in Barcelona—we shared some updates about Windows and Windows Phone, and we announced a new phase in our plan to continue growing and scaling Windows Phone globally.

    Let’s start with Windows Phone.

    We’ve experienced steady growth in recent years due to our “highly personal” approach to the smartphone experience and the amazing devices we’ve seen from our hardware partners HTC, Huawei, Nokia and Samsung. Together we’ve solidified our spot among the top three operating systems and celebrated some impressive milestones:

    • Recognized as the fastest growing OS with 91% year-over-year growth in 2013 (IDC, February 2014)
    • More than 10% share across Europe—which is more than double compared with last year. (Kantar Worldpanel ComTech, January 2014)
    • Most important to me, we’ve seen high customer satisfaction data—a fact that even our competitors have acknowledged!
    • Reached critical mass in the Windows Phone Store (now over 240,000 apps) and are still growing – fast – with an average of 500 apps added each day. We’ve had key additions such as Instagram, Vine, Waze and Mint—and today, we announced Facebook Messenger will be available in the coming weeks.

    This past year was especially busy as we delivered three updates to the Windows Phone platform—we continued building the platform out for scale (via new chipsets, new carrier/country support, and more screen sizes) and we enabled some great scenarios for customers (e.g. the Nokia Lumia 41 MP camera and advanced camera features).

    New Windows Phone Hardware Partners

    Broadly speaking, our partners overall are the engine of growth for Windows. In addition to our great partners HTC, Huawei, Nokia and Samsung, today in Barcelona we announced we’re now working with nine new Windows Phone partners, including: Foxconn, Gionee, JSR, Karbonn, Lava (Xolo), Lenovo, LG, Longcheer and ZTE. Collectively, Windows Phone partners make up an impressive 56 percent of the global smartphone market, according to IDC.

    This is exciting news for phone buyers around the world. With seven of the top 10 global OEMs—in addition to some of the leading brands in China, India and Taiwan— now collaborating with Windows Phone, you can expect to see an incredible new range of devices across screen sizes and price points. And of course we’re committed to delivering this device diversity without compromising the consistent, designed-around-you Windows Phone experience our users have grown to love.

    Some of these partners are names that might not be familiar to you, but they’re leading the global expansion in the smartphone category. They bring competitive products to market because of their knowledge of the local markets, channels and consumers. They are important partners that will help broaden availability of Windows Phones to new and emerging markets.

    New Windows Phone Hardware Support

    Getting a wider range of device builders to create Windows Phones required us to enable even more hardware flexibility and to make the engineering process of building a Windows Phone even easier. Thus we also announced:

    • We are adding support for Qualcomm Snapdragon 200 and 400 series chipsets, with options that support all major cellular technologies, including LTE (TDD/FDD), HSPA+, EVDO and TD-SCMA. We will also support soft keys and dual SIM where our partners want it for their devices. One nice benefit of these additions is that many hardware vendors will be able to use the same hardware for both Android and Windows Phone devices.
    • To streamline the process of building a Windows Phone device, today we launched the Windows Hardware Partner Portal so that all our hardware partners will have direct access to the tools and content needed to build and market their Windows Phone devices efficiently and cost-effectively.

    We also are working closely with Qualcomm Technologies, Inc. to help manufacturers anywhere in the world quickly and easily broaden their portfolio by building Windows Phone devices through the well-established Qualcomm Reference Design (QRD) program. Making it easier for manufacturers to take advantage of reference design options is an important step for Windows Phone. ABI Research notes a major smartphone industry shift towards reference designs since they speed time to market, and estimates that more than 400 million reference design smartphones will be shipped in 2014.

    Evolving Windows 8

    As part of my “new job,” I talked as well about Windows on tablets and PCs, and what to expect from us in the near future.

    We are committed to making Windows the best place for our partners to build great devices. Today that means different screen sizes, input methods, connectivity needs, and usage scenarios. Above all, we want that experience to feel natural for our customers. We want it to be familiar and tailored to the device. We want your stuff to be there no matter where you are, ready for whatever you need, and we want it to run beautifully on hardware made by partners around the world.

    With Windows 8, there’s no doubt that we made a big bet and took a first step toward that future. We bet on touch and on mobility in a big way, and included a fresh take on what a touch-based interface could be for customers. We believe deeply in this direction and the future will continue to build on Windows 8.

    We shipped Windows 8.1 in under a year in response to customer and partner feedback, and we’ll continue to refine and improve Windows to deliver a productive and delightful experience for all users on all devices. And, you’ll see us continue on a more rapid release cadence where we deliver ongoing value to all your Windows devices.

    Over the next few months, we’ll continue to deliver innovation and progression with an update to Windows 8.1, coming this spring. We’re especially excited about several things I want to preview with you here.

    • We’ll enable our partners to build lower cost hardware for a great Windows experience at highly competitive price points.
    • We are making improvements to the user interface that will naturally bridge touch and desktop, especially for our mouse and keyboard users. We have a number of targeted UI improvements that keep our highly satisfying touch experience intact, but that make the UI more familiar and more convenient for users with mouse/keyboard. Don’t worry, we still LOVE and BELIEVE IN touch… but you’ll like how much more smooth and convenient these changes make mouse and keyboard use!
    • We are enhancing support for enterprise customers via a few tweaks, particularly including features that greatly improve IE8 compatibility in Internet Explorer 11, which is especially critical for web-based line of business applications. Additionally, we’re extending mobile device management capabilities and making deployment easier.

    More news still to come

    Speaking of our enterprise customers, we are also hard at work on delivering a compelling new update for Windows Phone that will add key features for consumers, as well as a big investment in enterprise customer capabilities, including VPN, S/MIME support, enterprise Wi-Fi, extended mobile device management and certificate management. Along with a host of great developer and consumer value, we expect to deliver this to customers this spring with new phones following as we move into summer.

    2013 was an exciting and busy year chock full of big changes in our industry and at Microsoft. I’m really excited about seeing what the new and hot technologies are as Mobile World Congress opens tomorrow, and even more excited about the work we’ll be able to deliver for customers, partners and developers over the next several months. Stay tuned!

    Q.&A. With Joe Belfiore on the Future of Windows Phone [Bits blog of The New York Times, Feb 23, 2014]

    Joe Belfiore is the corporate vice president of Microsoft Windows Phone, and he oversees the software that powers handsets using the company’s operating system. Microsoft is expected to close its $7.2 billion deal to buy the handset and services division of Nokia by the end of March. The acquisition will give Microsoft control of both mobile software and hardware, as it looks to expand its 4 percent market share in global smartphone sales. Mr. Belfiore will play a crucial role in Microsoft’s efforts to take on Apple and the cellphone makers that use Google’s Android operating system.

    On Sunday, Mr. Belfiore declined to comment on rumors that Nokia would unveil an Android-based phone on Monday at the Mobile World Congress conference in Barcelona. But during a news conference earlier in the day, he said, “What they do as an independent company is up to them. There are some things they do that we are excited about. There are other things that we are not so excited about.”

    The following is an edited interview with Mr. Belfiore on other questions facing Microsoft and Windows Mobile.

    Q. You have talked about 2013 being a year that Windows Phone had to eat its vegetables. What do you mean by that?

    A. We faced a massive problem. It would have been very difficult to create a range of devices for every operator at every price that included every app in the world. We decided to focus on building something at a limited set of price points in a small, limited number of countries. That’s what we did this year. We had to get that right. Now that we’ve done that, we want to get Windows Phone at more price levels and in more countries.

    Q. It’s difficult to attract users if you can’t offer them the apps that they want. But to get the apps, you need users. How do you solve that problem?

    A. There’s no magic solution. We have to grow phone volume where we can. To increase our market share, we have to be available where customers are at low-cost and high-end price points. The stage is now set. Given our hardware partners, and Microsoft and Nokia coming together, we are in a good position to kick-start our market share.

    Q. The Microsoft-Nokia acquisition is expected to close this quarter. What excites you about the deal?

    A. There are some straightforward benefits. We can build on our existing healthy engineering relationship between software and hardware. And when one company takes products to market, it can tell the story with one voice. That will be a benefit. The biggest problem we face is how to get the word out about what we do. Those marketing activities, the storytelling around our products, are underestimated.

    Q. When Microsoft closes the deal with Nokia, it will compete directly with other handset makers that also use the Windows Phone operating system. What is your response to that?

    A. We can help build the market for Windows Phones. When there’s a healthy ecosystem, there’s a sales opportunity for all our partners. There are some markets and some countries where Nokia already competes with other manufacturers. But there’s a large opportunity out there. There are niches that are partners will be able to fill.

    Q. Many of your recent partnerships and announcements have focused on emerging markets. Is that a major priority?

    A. It’s not our only focus, but it’s a very big one. The purpose of low-cost phones in emerging markets is to drive volume. But doing high-end products like the Lumia 1520 and Lumia 1020 also gives an aspirational view of the way the product line will go.

    Q. In a year’s time, where would you like the Windows Phone experience to be?

    A. A year from now, I would like to have widespread consumer knowledge of the type of value proposition that is available with Windows Phone. People who use the phones have a favorable experience with them. But we need to get the word out there.

    Q. Smartphones that use either Android or Apple’s iOS have almost 95 of the global market share. What is your response to analysts who say that Microsoft should give up on Windows Phone?

    A. We benefit from investing in mobile innovation. And we think we have a lot to offer our partners and customers. The mobile market will continue to grow, the opportunities will continue to grow. We are not going anywhere.

    Q. Microsoft has just appointed a new chief executive. How does Windows Phone fit into his vision?

    A. The way we’ve built our team and how we have approached innovation is massively focused on mobile first, cloud first. That’s very much aligned with the vision that he has outlined.

    Nokia should introduce an Android forked smartphone for the $75-120 range in order to enhance its Asha Software Platform strategy

    In order to increase its presence in the sub $120 market (see Lumia 520 for Rs. 8850, i.e. US$ 144 in India, and US$121.5 in China) it is obvious that Nokia should take the next step in its Asha Software Platform Strategy with its recent stance being the following one:

    image
    More information: 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]

    That is a definite gap exists in Nokia offerings between US$75 and US$120. Also this gap could only be filled with an Android forked offering only. Therefore we should (first time during the whole existence of this trend-tracking blog) take seriously the ongoing rumors about such an offering, the so called Nokia Normandy project., despite all uncertainties of not only the Microsoft takeover of the Nokia device business, but also the uncertainties about the next CEO of Microsoft and the company strategy in smartphones which will come as the result of that selection.

    I should include here the latest summary about that from Wikipedia as it “is being considered for deletion in accordance with Wikipedia’s deletion policy”:
    Nokia Normandy [Wikipedia excerpt, Jan 17, 2014]

    The Normandy, previously known as ‘Project N’, the ‘Asha on Linux project’ and “MView”, is a low-end Android device under development by Nokia.

    Described as a potential “game changer”,[1] the project has garnered substantial interest from the media, including coverage from New York Times,[2] Engadget,[3]Stuff,[4] Forbes,[5] Gizmodo,[6] The Verge,[7] CNET[8] and The Times of India.[9]

    Background

    Despite choosing the Windows Phone operating system for its smartphones (The Lumia series), Nokia had experimented with the Android platform in the past. Images of a Nokia N9 running Android 2.3 were leaked in 2011. They were believed to be likely genuine, as Steven Elop had mentioned Nokia had considered Android in the past.[10]

    On 13 September 2013, the New York Times writer Nick Wingfield revealed that Nokia had been testing the Android operating system on its Lumia hardware, and a second project, known as ‘Asha on Linux’ used a forked version of Android without Google services.[2]

    The Chinese technology site CTechnology revealed that, despite the announced merger of Nokia’s handset division with Microsoft, development of the project was continuing until November and 10,000 prototype units had been manufactured by Foxconn containing a Qualcomm Snapdragon 200 8225Q chip.[11]

    However, a new report by Tom Warren from The Verge on 11 December 2013 showed the Asha-like device, codenamed ‘Normandy’ for the first time, stating that despite the finalisation of the acquisition, development of the device is continuing.[7] AllThingsD suggested that Microsoft may not actually axe development on the device.[12]

    A further report by CTechnology on the 14th December claims that the device development had been halted, along with an Android-based 7-inch Snapdragon 400 tablet. The two projects were, it was claimed, to have been created by Nokia’s CTO division which is not being acquired by Microsoft, with Peter Skillman, the head of UX Design, at the helm of the UI design. The report claims wearable devices are the new focus of the CTO division.[13][14][15]

    A further leak by @evleaks showed a press image with several colour options for the phone.[16]

    According to NokiaPowerUser, the device is dual-sim with a 4-inch display, stating that the model number is RM-980, and has a 640×360 resolution.[17] In a second report, they suggest the device may be a member of the Asha range as team was headed by Egil Kvaleberg (from Smarterphone) and UI lead by Peter Skillman (who worked on the Asha Platform‘s Swipe UI).[18]

    A tweet by @evleaks on 31 December 2013 stated that “The reports of Normandy’s death have been greatly exaggerated“.[19]

    A leak on the ITHome technology website showed a blurred image of the phone, and the app drawer of its’ UI in operation, confirming it is a dual sim device. However, no Nokia logos were found on the device.[20]

    @evleaks later posted screenshots of the UI, showing the lock screen and Skype in action.[21]

    The device later showed up on the AnTuTu benchmark software as Nokia A110, with KitKat 4.4.1, a 5MP camera and an 854 x 480 display.[22]

    Two new photos of the Engineering prototype were once again leaked, and the device is widely expected to be released at MWC 2014.[23] One shows a different app launcher to one in a previous leak, suggesting it is a placeholder.[24]

    On 13 January 2014, a press photo showing the tile-like UI of the home screen was leaked,[25] and was accompanied by a screenshot of the Asha platform‘s Fastlane-style notification centre the next day.[26]

    According to Eldar Murtazin, Microsoft is not keen on the idea, mentioning there are “too many politics” around the project. He claims, if it is released at all, it will have to be in February, before Nokia’s devices acquisition is finalised.[27]

    Another source, speaking to TechnoBuffalo, in contrast, suggested Microsoft may use the device as a trojan horse to increase Windows Phone adoption.[27]

    References

    1. Nokia Normandy surfaces online: A game changer in Android domain&#63
    2. http://bits.blogs.nytimes.com/2013/09/13/behind-microsoft-deal-the-specter-of-a-nokia-android-phone/?_r=0
    3. Rumored Nokia Normandy prototype surfaces on Twitter, reveals little
    4. Nokia Normandy – an Android phone with Lumia DNA | Stuff
    5. Microsoft Should Embrace Nokia’s Android Project – Forbes
    6. Nokia’s Alleged Normandy Android Phone Leaks | Gizmodo UK
    7. Staff, Verge (2013-12-10). “This is Nokia’s Android phone”. The Verge. Retrieved 2014-01-08.
    8. Nokia’s version of Android looks sleek in leaked pics | CNET UK
    9. Nokia Android phone Normandy’s photo leaked – The Times of India
    10. Savov, Vlad. (24 June 2011) Nokia’s Android flirtations revealed. Engadget.com. Retrieved on 2013-07-14.
    11. Nokia still working on Android phone, won’t cancel until November. Foxconn already made 10K prototypes. Unwired View (2013-09-19). Retrieved on 2013-11-27.
    12. “Why Microsoft Might Not Kill Nokia’s Android Phone – Ina Fried – Mobile”. AllThingsD. 2013-12-11. Retrieved 2014-01-08.
    13. “Nokia abandons Peter Skillman led Android adaptation plans, refocuses on wearables, smart glasses for 2015”. Unwired View. 2013-12-16. Retrieved 2014-01-08.
    14. Swanner, Nate (2013-12-16). “Nokia Android phone, along with other projects, might be shelved”. Android Community. Retrieved 2014-01-08.
    15. ^ CTECH (2013-12-14). “诺基亚已放弃 Android 手机/平板计划,未来将力推穿戴式设备 | C科技”. Ctechcn.com. Retrieved 2014-01-08.
    16. “New Nokia Normandy leak shows the Android device in several colors”. PhoneDog. 2013-12-23. Retrieved 2014-01-08.
    17. “Dual-Sim RM-980 may be Nokia Normandy with 4-inch display | NPU”. Nokiapoweruser.com. 2013-12-11. Retrieved 2014-01-08.
    18. “More details about Nokia’s “Project N”. Why Android, the Team & missed oppurtunity. | NPU”. Nokiapoweruser.com. 2013-12-24. Retrieved 2014-01-08.
    19. “Twitter / evleaks: The reports of Normandy’s death”. Twitter.com. Retrieved 2014-01-08.
    20. “Nokia Normandy Android smartphone reportedly shown in new leak”. BGR. 2014-01-02. Retrieved 2014-01-08.
    21. “Latest Nokia Normandy leak includes screenshots of custom Android software”. PhoneDog. Retrieved 2014-01-08.
    22. “Nokia Normandy shows up on AnTuTu. 5 MP Cam, 854 x 480 display, running Android KitKat 4.4.1. | NPU”. Nokiapoweruser.com. Retrieved 2014-01-08.
    23. “Engineering prototype of Nokia Normandy leaks in a live photo – GSMArena.com news”. Gsmarena.com. Retrieved 2014-01-12.
    24. Image of Nokia’s Android phone prototype Normandy leaked [Update with Android skin UI] – Neowin
    25. Nokia ‘Normandy’ budget Android phone purportedly leaked in multiple images – NDTV Gadgets
    26. Richard Goodwin (2014-01-13). “What is Nokia’s Normandy Project? It’s Android, Jim. But not as we know it…”. Know Your Mobile. Retrieved 2014-01-17.
    27. “Nokia Normandy Android Phone Ready, If Politics Don’t Get in the Way, Sources Say”. TechnoBuffalo. Retrieved 2014-01-17.

    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)

    image

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

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

    image

    While for the worldwide market:

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

    image

    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.

    image

    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.

    image

    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.

    image

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

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

    From this the most visible things are:

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

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

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

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

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

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

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


    Nokia Q2’13 market situation and changes:

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

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

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

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

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

    Now look again at the performance chart for the reflections:

    image

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

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

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

    These things were already extensively discussed in my earlier posts:


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

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

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

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

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

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

    Table 1

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

    Company

    2Q13 Units

    2Q13 Market Share (%)

    2Q12 Units

    2Q12 Market Share (%)

    Samsung

    71,380.9

    31.7

    45,603.8

    29.7

    Apple

    31,899.7

    14.2

    28,935.0

    18.8

    LG Electronics

    11,473.0

    5.1

    5,827.8

    3.8

    Lenovo

    10,671.4

    4.7

    4,370.9

    2.8

    ZTE

    9,687.6

    4.3

    6,331.4

    4.1

    Others

    90,213.6

    40.0

    62,704.0

    40.8

    Total

    225,326.2

    100.0

    153,772.9

    100.0

    Source: Gartner (August 2013)

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

    Table 2

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

    Operating System

    2Q13 Units

    2Q13 Market Share (%)

    2Q12  Units

    2Q12 Market Share (%)

    Android

    177,898.2

    79.0

    98,664.0

    64.2

    iOS

    31,899.7

    14.2

    28,935.0

    18.8

    Microsoft

    7,407.6

    3.3

    4,039.1

    2.6

    BlackBerry

    6,180.0

    2.7

    7,991.2

    5.2

    Bada

    838.2

    0.4

    4,208.8

    2.7

    Symbian

    630.8

    0.3

    9,071.5

    5.9

    Others

    471.7

    0.2

    863.3

    0.6

    Total

    225,326.2

    100.0

    153,772.9

    100.0

    Source: Gartner (August 2013)

    Mobile Phone Vendor Perspective

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

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

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

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

    Table 3

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

    Company

    2Q13 Units

    2Q13 Market Share (%)

    2Q12 Units

    2Q12 Market Share (%)

    Samsung

    107,526.0

    24.7

    90,432.1

    21.5

    Nokia

    60,953.7

    14.0

    83,420.1

    19.9

    Apple

    31,899.7

    7.3

    28,935.0

    6.9

    LG Electronics

    17,016.4

    3.9

    14,345.4

    3.4

    ZTE

    15,280.7

    3.5

    17,198.2

    4.1

    Huawei

    11,275.1

    2.6

    10,894.2

    2.6

    Lenovo

    10,954.8

    2.5

    6,821.7

    1.6

    TCL Communi-cation [Alcatel]

    10,134.3

    2.3

    9,355.7

    2.2

    Sony Mobile Communications

    9,504.7

    2.2

    7,346.8

    1.7

    Yulong [Coolpad]

    7,911.5

    1.8

    4,016.2

    1.0

    Others

    152,701.5

    35.1

    147,354.60

    35.1

    Total

    435,158.4

    100.0

    420,120.0

    100.0

    Source: Gartner (August 2013)

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

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