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An upcoming new era: personalised, pro-active search and discovery experiences for Office 365 (Oslo)
A great companion to the incredible Power BI experiences! Now it is already part of the Office 365 pre-release TAP (Technology Adoption Program) program, for general public will be available by the end of this year:
Code-Name Oslo – Next Generation Discovery and Search [OfficeGarageSeries YouTube channel, March 10, 2014]
More information: Introducing codename Oslo and the Office Graph [Office Blogs from Microsoft, March 11, 2014] by Ashok Kuppusamy is a group program manager in the FAST engineering team based in Norway.
The goal for Oslo was not just to reimagine search, but to help people get their work done in a quicker, more The goal for Oslo was not just to reimagine search, but to help people get their work done in a quicker, more informed, and even delightful manner. After all, your job isn’t just to “search.” You use search as a tool to get your actual job done. This more ambitious goal drove us to ask how we could remove the information silos that exist across applications, better support information discovery, and enable teams to work together as a network. The result is not just a search solution, but a new way of working – proactive, transformational, and delightful. Oslo is the first in a new breed of intelligent and social work experiences.
Rather than list an exhaustive set of features, let’s see how Oslo transforms the world of work.
…With Oslo, you can find anything you need by just remembering a person. It’s way easier for us humans to remember names of people than document names or keywords. This change, connecting to content through people, hints at something truly transformative: a new way to staying “in the know” about what’s around you. It’s the difference between working in an office with a closed door that gives you little exposure to what is going on around you, and working in an open office where you are exposed to information dynamically.
This transformation happens even in small teams. Here at Microsoft, when a team is “on Oslo,” we see fewer meetings. We send fewer status reports. We cut down “talking about the work.” Instead we all just do our work and see the latest work from each other through Oslo. We can reuse information from across our organization more effectively. We provide feedback on the work right away instead of waiting for meetings. The pace of work speeds up, yet we still feel “in the know.” It’s like our entire team is sitting in an open-space room where we’re aware of what’s going on but not being constantly interrupted. We call it “working like a network” because Oslo makes connecting with others, building relationships, and sharing information easier than ever before. Oslo is also founded on the openness and transparency that drives new levels of productivity.
…
Enterprise Social: Work like a network. [YammerInc YouTube channel, March 3, 2014]
Work like a network! Enterprise social and the future of work [Office Blogs from Microsoft, March 3, 2014]
Jared Spataro is the General Manager of Enterprise Social at Microsoft.
My insert here: Jared Spataro speaks at SharePoint Conference 2014 #SPC14 [ToolboxY2K YouTube channel, published on March 10, 2010]
As customers gather this week for the SharePoint Conference in Las Vegas and Convergence in Atlanta, I want to update you on our enterprise social vision and road map—including several new announcements.
The world has become a giant network
Over the last few years, the world has become a giant network, and social media has rewired the way we connect with people and information. Today we build relationships with family and friends on Facebook, get breaking news from the other side of the world on Twitter, and find our next big break on LinkedIn. Indeed, the old saying still holds: It’s not just what you know but also who you know that matters. And in 2014, technology makes connecting with others, building relationships, and sharing information easier than ever before.
But the great apps and services that have changed our personal lives haven’t yet found their way into the office (at least, not in a consistent way). So we’re excited to introduce an integrated set of social, collaboration, and communication technologies that enable companies to work like a network—using the concepts that have changed our personal lives to transform the way we work. By tapping into the human networks that make a business tick, companies can listen to the conversations that matter most, adapt to an increasingly volatile market, and grow in ways never before possible.
Today, more than 400,000 companies worldwide are already using Yammer to work in this way, and in the remainder of this post I’ll explain how we’re extending this network effect to users of Office 365, Microsoft Dynamics, and virtually any other app, service, or line-of-business applications that matter to your company.
Laying the foundation
We’ve always believed that enterprise social should be woven into the way people already work, so that the power of human networks (from inside and outside a company) is available to help people get their jobs done—anywhere and on any device. Over the past two years, we’ve been busy laying the foundation for this approach with a number of strategic investments:
- In February 2013, we integrated Yammer into Microsoft Dynamics CRM, allowing users to participate in social conversations, share important data, and follow updates without ever leaving the CRM application. In the spring 2014 release of Microsoft Dynamics CRM, we’ll further enhance our customer-facing enterprise social capabilities by delivering a comprehensive set of new social listening, marketing, and service desk capabilities.
- In November 2013, we announced the inclusion of Yammer Enterprise with all Office 365 Enterprise plans. This spring, Yammer Enterprise will also be included with the Office 365 Academic and Office 365 Midsize Business plans.
- Last month, we released simplified login to Yammer from Office 365, in which Office 365 users are mapped to Yammer accounts. Now, when you click on Yammer from your Office 365 global navigation bar, there is no need to re-authenticate. This summer, we’ll surface the Office 365 navigation bar in Yammer, enabling unified navigation across Office 365.
- Last week, we released SharePoint 2013 Service Pack 1 (SP1), which makes it easy to connect an on-premises SharePoint deployment with an in-the-cloud Yammer network.
Enterprise social and the future of work
But a foundation is good only if you build something interesting on top of it. And today we’re announcing three new social experiences designed to help companies work like a network.
Creating the Office Graph. First, we’re extending Yammer’s concept of the Enterprise Graph across Office 365 to create something we’re calling the Office Graph. When we acquired Yammer, one of the things we loved about the technology was how it mapped the relationships between people and information by simply recording likes, posts, replies, shares, and uploads. In what I think is a game-changing move, we’re extending this idea to Office broadly, using signals from email, social conversations, documents, sites, instant messages, meetings, and more to map the relationships between the people and things that make your business go. Just as consumer social networks connect you to people and information you’d otherwise never be able to keep up with, the Office Graph will plug you into the very fabric that makes your organization work.
The Office Graph maps the relationships among people and information.Oslo (the codename for a brand new app) is the first application to help people put the Office Graph to work, delivering personalized insights and connecting the dots to help people get their jobs done. By tapping into the Office Graph, Oslo provides a natural way for users to navigate, discover, and search people and information across an organization.
Office Graph insights surface through Oslo.
Learn more about your colleagues and their content.Extending the Groups Experience. Next, we’re extending one of Yammer’s most powerful user experiences to the rest of Office 365. Broad posts are a fine way to make announcements or solicit feedback from across your company, but over the years Yammer found that the value of enterprise social goes up exponentially when people organize themselves into smaller groups focused on a specific process or deliverable. This simple Groups Experience is so powerful, in fact, that we’re making it a cross-Office 365 concept that will unify people, profiles, conversations, email, calendars, and files across the entire set of Office 365 applications. Creating a group anywhere in Office 365 will automatically provision a corresponding inbox, social feed, calendar, and document library that group members can use to get the job done. The group’s Yammer feed and inbox will both display the same conversation, so users who are more comfortable in Yammer can participate in the group through the feed, and users who prefer email can participate in the group through the inbox. And, just like in Yammer, groups are open by default to enhance discoverability and sharing. But to be clear, groups can be made private as necessary. Transparency and openness can be incredibly powerful, but we recognize that privacy and access control haven’t entirely gone out of style.
Group social feed in Yammer
Group inbox in Outlook Web App
Group calendar (green) viewed alongside personal calendar
Group document libraryCreating Inline Social Experiences. Finally, we’re weaving social into the apps that matter most by creating Inline Social Experiences in Office 365, Microsoft Dynamics, and any other app, service, or line-of-business system that is important to your business. We’re adding Yammer conversations to documents in SharePoint Online and OneDrive for Business; we’re making it easy to post updates, documents, and emails to Yammer from SharePoint Online and Outlook; and we’re continuing to enhance the integrated social capabilities in Microsoft Dynamics CRM. In the future, we’ll integrate Yammer with Lync and Skype to enable a full spectrum of social interactions, from asynchronous posts to audio and video. We’re committed to helping you put your networks to work naturally—with integrated experiences that put people and information at your fingertips, anywhere and on any device.
You can now see Yammer conversations side by side with PowerPoint Online presentations and other documents.So, what should I do now?
Over the last 18 months, I’ve had a chance to talk with a lot of customers and partners about our enterprise social strategy, and my discussions have generally focused on two big action-oriented questions: (1) What about SharePoint social? and (2) What should I do now? So to close out this post, I want to respond to both questions and tie our announcements today to next steps.
What about SharePoint social? We shipped basic social features with SharePoint Server 2013, and over the last year and a half I’ve had many people ask me whether they should implement SharePoint social or Yammer. My guidance has been clear and consistent: Go Yammer! While we’re committed to another on-premises release of SharePoint Server—and we’ll maintain its social capabilities—we don’t plan on adding new social features. Our investments in social will be focused on Yammer and Office 365, so that we can innovate quickly and take advantage of the viral user adoption that is so important to the natural network effect that makes social so powerful. We recognize that many of our SharePoint customers will continue to have large on-premises deployments for many years, but we’re investing to help customers easily manage hybrid environments so that they can connect their on-premises farms to their in-the-cloud social network.
What should I do now? A lot of people have assumed that our enterprise social strategy was simply to “add Yammer feeds to SharePoint” or “unify identity and profiles for Yammer and SharePoint.” While we’re absolutely doing these things (and many more like them), I’m pleased that our enterprise social strategy—as articulated above—is much more than just a collection of the obvious. We have lofty ambitions and are aiming to literally change the way people get things done at work. And to do that, we’ve taken a step back and tried to capture the essence of how social has rewired the world—how it has reshaped the way we connect with the people and information that make the world go ‘round. These new innovations—the Office Graph, Office 365 Groups, and Inline Social Experiences—are important steps in realizing our vision. So what should you do now? That’s easy! Start working like a network today by joining Yammer—and then add additional social capabilities, from Office 365 and Microsoft Dynamics, as they become available throughout 2014 and as you and your organization solidify your own enterprise social strategy.
So there you have it. The world has become a giant network. And now is the time for you and your company to start working like one. Looking forward to the journey together!
–Jared Spataro, #worklikeanetwork
SharePoint Social And Other Platforms [Michael Gannotti YouTube channel, March 14, 2014]
Microsoft Office showcases future of work [press release, March 3, 2014]
From all-new Office 365 social and personalized experiences to new opportunities for developers, Microsoft emphasizes cloud scenarios that change the way people get things done.
LAS VEGAS — March 3, 2014 — Microsoft Corp. kicked off its SharePoint Conference 2014, highlighting new ways Microsoft Office 365 will enable people to accomplish more with new experiences for users, developers and IT pros. In a keynote speech to approximately 10,000 customers and partners, Microsoft Corporate Vice President Jeff Teper showcased innovation that brings together the power of the cloud, enterprise social, big data, machine learning and mobile capabilities into an experience made personal for every Office 365 user. These new technologies will enable a networked way of working together in teams, in groups and across organizations that can result in better customer responsiveness, collaboration, information sharing, discoverability and more.
“Today, the world has become a giant network where connections make information more relevant and people more productive. Most companies, however, are not working like a network, which we believe is vital for their ability to improve collaboration and respond to customers, competition and market changes,” Teper said. “The new Office 365 experiences powered by cloud, social, mobile and big data technologies enable people and teams to find the right connections and most relevant insights to get more done.”
Delivering on this vision, Microsoft showcased new innovations for end users, developers and IT pros coming to Office 365 in the near future, with an emphasis on the trusted platform fundamentals of security, privacy and industry compliance.
For end users, Microsoft demonstrated new personalized experiences that integrate social capabilities throughout Office 365, to help people spend less time trying to find information or looking for people working on similar projects and more time getting things done. Powering these new user experiences is the Office Graph, a new Office 365 intelligence fabric that remains unseen to the user but is constantly analyzing content, interactions and activity streams and mapping the relationships using machine learning to intelligently connect and surface the most relevant content to each user. These new experiences include the following:
“Oslo” (code name). A new application powered by the Office Graph and code-named “Oslo” was previewed onstage. It uses personal interactions and machine learning to surface a view of the most relevant, timely information for each individual using Office 365 across SharePoint, Exchange, Lync, Yammer and Office.
Groups. Groups is a new feature unifying people, conversations, calendars, emails and files across the Office 365 suite, enabling a seamless collaboration experience across applications. Creating a Group anywhere in Office 365 will automatically provision a corresponding Yammer conversation feed, calendar, document library and inbox where members can collaborate and work as a team. Just like in Yammer, Groups are open by default but can be made private if necessary, enhancing discoverability and sharing.
Inline Social. Microsoft is bringing the power of social collaboration and conversations to everyone by offering Inline Social experiences throughout Office 365. The first experience planned for introduction is the ability to have social conversations inside documents stored in SharePoint Online and OneDrive for Business.
Office 365 Video Portal. Today, Microsoft previewed the new Office 365 Video Portal to support upload, storage and discovery of videos in a secure manner. Businesses will be able to categorize videos into channels for specific business needs and stream them on mobile devices, with all of the video compression, optimization and rendering work done by Office 365.
“Many organizations struggle with bringing together their content creation, collaboration and core business applications,” said Alan Lepofsky, vice president and principal analyst, Constellation Research. “Today’s Office Graph and ‘Oslo’ announcements describe an integrated future that could greatly improve the way Microsoft Office 365 users will get their work done, with easily discoverable insights about important activity across their organizations that personally affect or may be interesting to them.”
With more than 3.4 million Office and SharePoint developers and counting, Microsoft also announced investments that open more doors for customers and partners to build contextual productivity solutions across browsers, PCs and mobile devices. On the Office 365 platform, developers can build integrated solutions and mobile apps to reach today’s leading businesses.
Exciting mobile possibilities. Today, the release of Office 365 SDKs for Windows 8 and Android will help developers build mobile productivity solutions powered by Office 365. Windows and Android developers can now connect to Office 365 data and services, including files, calendars, contacts, tasks and email.
Seamless Office 365 integration. Enhancements to Office 365 APIs for PowerPoint and Outlook give developers the control to build new, sophisticated solutions. PowerPoint presentations can be extended to surface poll or survey data directly within a deck, and Outlook Compose apps offer helpful insight alongside an email as it is written.
Robust APIs. In a continuation of Office 365 API growth, new APIs for files, people, email, calendar and tasks bring new light to the service with an intuitive, open- standards approach. The APIs also feature popularly requested enhancements, including self-service site provisioning and support for OneDrive for Business file actions.
Sharing power. Office 365 documents that include app information can now be more seamlessly activated by recipients. PowerPoint apps travel into the PowerPoint Online experience, allowing customers to share their favorite apps in a more viral way. Later this year, Office Online will bring similar capabilities to Excel.
For IT pros, Microsoft announced new capabilities that enhance Office 365 security and privacy, giving IT pros the tools they need to help protect their organizations. In addition, with the Office 2013 and SharePoint Server 2013 Service Pack 1 release, it is now easier than ever for organizations to take advantage of Office 365, whether that means making a comprehensive move to the cloud, adopting a hybrid deployment, or making a gradual transition through easy on-ramps such as OneDrive for Business and Yammer.
Data-loss prevention. Microsoft demonstrated new data-loss prevention capabilities for Office content, enabling organizations to manage, track and audit content, while not getting in the way of user productivity.
OneDrive for Business. In April, businesses can purchase OneDrive for Business (formerly SkyDrive Pro) as a stand-alone SKU providing secured file, sync and share in the cloud with all the benefits of integration with Office. Also, with SharePoint Server 2013 Service Pack 1, Microsoft introduced new admin controls to “turn on” OneDrive for Business in the cloud directly from the SharePoint Server 2013 admin console. This enables customers to keep their on-premises infrastructure intact, while still getting the benefit of cloud-based file storage and sharing.
Easy SharePoint social transition to Yammer. In Service Pack 1 Microsoft is making it easy for IT pros to replace the out-of-the-box SharePoint Server 2013 social experience with Yammer. Through simple controls in SharePoint Server 2013 central administration, IT can choose to activate Yammer, redirecting users to the organization’s Yammer network.
More information about today’s news can be found on the Microsoft Office blog.
The SharePoint Conference 2014 is the largest Microsoft SharePoint event in the world, offering developers, IT professionals and executives a range of presentations, workshops, Q&A sessions and networking events. More information on the news at the event can be found at the Microsoft Office virtual pressroom.
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.
Read More: Office 365, Developers, SharePoint Online, SharePoint Server, Cloud Computing, Office 365 Customers, Developers, Lync, Yammer, Outlook, Jeff Teper, Enterprise Social
- Microsoft expands cloud services for mobile scenarios March 27, 2014
- Microsoft takes a stand on student privacy with best-in-class education solutions March 12, 2014
- Microsoft, Intel and the Kenya Private School Alliance announce 4Afrika Youth Device Program March 03, 2014
- Los Angeles Unified School District selects Office 365 for faculty and staff Feb. 27, 2014
Dux Quax at SharePoint Conference 2014: Jared Spataro and Adam Pisoni [avepointjc YouTube channel, March 5, 2014]
Technology is enabling new ways of working [Office Blogs from Microsoft, March 3, 2014]
Jeff Teper is the Corporate Vice President of Office Service and Servers group.
It’s an exhilarating time for our industry, our company, and for Office. At the last SharePoint Conference we talked about technology megatrends that are changing the way people work: cloud, social, mobile, and big data. These trends are still alive and well today, and they are active change agents in markets, industries, and companies across the world.
But this year, we want to do more than just talk about technology trends. This year, we want to show you what we’re doing with them and how we’re harnessing these powerful forces to transform work. The innovation you’ll see from us here today—and in fact over the next few years—is based on four core beliefs:
- First, we believe the future of work is all about working like a network. It’s about how we build relationships, share information, and respond to ever-changing conditions. And it’s founded on an openness and transparency that will drive a new level of productivity.
- Second, we believe personalized and proactive insights are required to cut through the noise. As humans, we have an incredible ability to achieve—but only if we can focus. And we need technology to help us, so that we can focus our energies on accomplishing big things.
- Third, we believe in the power of an open development platform and a robust ecosystem. We recognize that one size doesn’t fit all, and that companies need customized solutions that can be developed in weeks, not years.
- And finally, we believe that enabling this future of work is possible only if people are empowered to work anywhere and on any device, and if businesses have the tools they need to responsibly manage security and compliance.
We couldn’t be more excited to partner with you to transform work and dramatically change the way people get things done.
Empowering people and organizations
Today, the world is a giant network with people hyper-connected to information and each other. We talk to our friends and family using Facebook, brands can be made or broken with a simple Tweet, and we find our next job through contacts in LinkedIn. Information and knowledge move faster, and we’re able to accomplish more together because we are so connected. Meanwhile, many organizations continue to work the way they always have: they operate in hierarchies, with information coming from the top down or held up in unconnected systems and broken communication channels.
To be more responsive, we need to evolve. We need to flatten the information flow so that we can work better together and serve customers better, using a network of highly informed and highly connected people.
Today we’re showing examples of innovation in the cloud that I’m really excited about, that serve unmet needs in most organizations today, and that allow organizations to work more like a network. By leveraging insights from Office 365 and mapping the relationships between people, groups, files and conversations through machine learning, we can intelligently connect and surface the most relevant content using the Office Graph. This is the power of social, cloud, big data, and machine learning coming together. Office Graph will power many new personalized and contextual experiences for people using Office 365. One of the first experiences to leverage the Office Graph is code-named Oslo. Oslo serves up in a single user interface personalized insights based on meetings, people, conversations, documents and more. The Oslo application surfaces what might be most relevant for each individual based on what they’re already doing in Exchange, Outlook, SharePoint, Office, Lync, and Yammer. We believe this is the start of something game-changing—building digital memory across applications to create a highly personalized experience that helps people get more done. You can learn more about Office Graph and Oslo here.
By helping people work more openly, we believe organizations will work more like a network and become more responsive (and successful). We’ve spent a lot of time studying trends, talking with customers, and thinking about how we can connect experiences in Yammer, Lync, Outlook, and Exchange with a social fabric that permeates Office, is intuitive, and helps organizations gain the benefits of network effects—just by people doing their natural work in Office. To that end, today we’re also showing Groups—building on the loved concept of Groups in Yammer—which will apply to all Office 365 applications. Groups will unify people, email, conversations, calendars and files together across Office 365 services in a common construct to ensure that people can collaborate similarly in the experience they love most. This makes the overall experience of Office 365 social and connected. You can read more about Groups here.
We know that not everything is best expressed in documents or conversations. Many organizations have created dynamic portals, web sites, and mobile apps to surface what matters most to employees. Here we’re also working on some bold new approaches. We believe next-generation portals should be simple to create and customize in the cloud, have high engagement via social interactions, deliver more relevant information, leverage multi-media, and—most importantly—be accessible anywhere and on any device. We have of lot of work going on in this area that will show up this year, but today we’re showing a new social video portal built on SharePoint, Yammer, the Office Graph in Office 365, and Azure Media Services, as a ready-made solution.
Office 365 for developers
There are already more than 3.4 million developers—nearly half of whom are SharePoint developers—building on the Office platform and Office 365, our fastest-growing product in history. We have two objectives in our development platform. First, we want to give customers maximum agility to adapt our products to specific business needs, whether you build or buy these solutions. Second, we want to bring partners a great opportunity to grow their business. You can find more information about today’s announcements for developers here. It’s been very exciting in the last few weeks to have partners ranging from GoDaddy to DocuSign building solutions and services around Office 365 that will help them grow, and that will also help our customers see more value by having direct access within Office 365 to the things they want to do every day. We see more of this great opportunity ahead for our developer partners.
A trusted platform
Beyond base reliability, we know security, privacy, and compliance are paramount, and we’re committed to delivering best-in-class enterprise cloud services. We’re doing this through a massive investment in physical data centers and application-level security, lights-out operations, architecting for zero customer data access, intelligent monitoring, and more. With the Microsoft Cloud and Office 365, you own and control your data. We don’t see or use your data for anything other than delivering the service to you. We know independent certifications for all of this are critical, and we’ve published our processes and met industry standards and regulations such as ISO, EU Model Clauses, HIPAA, FISMA, and CJIS for the largest and most demanding customers, such as the states of California and Texas. You can find out more about our trusted platform at the Office 365 Trust Center.
Partnering with you
We’re making adoption of Office 365 faster and easier than ever with our FastTrack deployment approach. But we understand that not every customer is ready to move their investments to the cloud all at once and so we’re committed to working closely with all of you and lower the friction for you to get started. And, we will ship new server releases of SharePoint and Exchange in 2015. We’ll also continue to support hybrid deployments spanning both cloud and on premises technologies including expanded search and line-of business access. Our server releases will include some, but not all, of the experience you saw today due to the computational power and integrated aspects that only come with Office 365.
I want to be very clear — we know we can deliver more value to you via the cloud – as you saw today in these great new experiences. I also want to be clear that we’re committed to helping you get there in the configuration and pace that works for you.
To help you make the transition at your own pace, we’ve made it easier to get started in the cloud with Social and Files. With SharePoint Server 2013 Service Pack 1, you can connect your on-premises SharePoint 2013 servers to the cloud and to turn on OneDrive for Business or Yammer as the first workloads in the cloud and run those alongside existing SharePoint investments.
But we wanted to go one step farther. So today, we are introducing a new very attractive priced OneDrive for Business Standalone offer. If you aren’t already using OneDrive for Business – now is the time to take your first step to embracing the cloud.
Technology is transforming the world and we’re using it to transform Office to help your organization be more responsive and agile—all while protecting your valuable information. This is just the start!
–Jeff Teper
Chinese smartphone brands to conquer the global market?
The smartphone market in China became saturated between Q3’12 and Q4’13 as per the below chart from Analysys International (EnfoDesk):
Note that this chart corresponds to Chinese writing traditions, i.e. in Q2’11 16.81 million smartphones and 51.01 million feature phones were sold, while in Q4’13 97.63 million smartphones and 9.2 million feature phones. Source: 易观分析：2013年第4季度中国手机销量增速放缓，智能手机市场呈现饱和态势 (Analysys analysis: China mobile phone sales growth slowed in the fourth quarter of 2013, the smart phone market is saturated) [EnfoDesk, March 11, 2014]
Chinese Handset Vendors Will Account for Over 50% of Mobile Handset Sales in 2015 [ABI Research press release, March 10, 2014]
ABI Research reports that Chinese handset vendors will account for over 50% of mobile handsets in 2015. Chinese vendors already accounted for 38% of mobile handset shipments in 2013 and the ongoing shift in growth to low cost handsets, especially smartphones, will increase their market share.
Greater China has long dominated the mobile handset manufacturing supply chain, but now its OEMs are beginning to dominate sales at the expense of the traditional handset OEMs, including even Samsung.
Many of the Chinese OEMs have focused almost exclusively on the huge Chinese market, with little activity beyond its borders, but this is set to change. Huawei (6th in worldwide market share for 2013) and ZTE (5th) have already made an impact on the world stage, but other Chinese handset OEMs like Lenovo—the Motorola acquisition is a clear statement of intent—and Xiaomi are set to join them.
“Chinese vendors already take up five of the top ten places in terms of worldwide market share, despite three of them only really shipping into China. The Chinese vendors highlight the changing shape of the mobile handset market, as the Chinese manufacturing ecosystem, specifically reference designs, enable the next wave of smartphone growth in low cost emerging markets and amongst price conscious consumers everywhere,” said Nick Spencer, senior practice director, mobile devices.
“South East Asia has already experienced this trend, but ABI Research expects to see the impact of these Chinese vendors increasing in all emerging markets and even advanced markets, especially on prepay,” added Spencer.
The New Phone Giants: Indian And Chinese Manufacturers’ Fast Rise To Threaten Apple And Samsung [Business Insider India, March 15, 2014]
The top Indian and Chinese smartphone manufacturers are classically disruptive. They produce products that are “good enough,” at a fraction of the cost of comparable models from premium brands. These ultra low-cost devices are the key to nudging consumers in massively untapped markets like India and Indonesia onto smartphones.
And these companies are starting to aim higher – producing 4G LTE smartphones that have the same processing power as Samsung and Apple premium devices.
They’re also far more innovative than they’re given credit for in terms of their strategy, supply chain management, and hardware.
In a new report from BI Intelligence, we explain why global consumer Internet and mobile companies will increasingly need to work with companies like Xiaomi and Micromax – not to mention Lenovo, Huawei, ZTE, Coolpad, Karbonn, and others – if they don’t want to miss out on mobile’s next growth phase in emerging markets
- Major local manufacturers now account for two-fifths of China’s smartphone market, and one-fourth of India’s. Xiaomi already sells four of the top 10 best-selling Android devices in China, and operates one of the top five app stores.
- Combined, the top five manufacturers in China and the top two in India – the “Local 7” in the chart above – are now shipping about 65 million smartphones every quarter, more than Apple, and coming close to drawing even with Samsung.
- These local manufacturers wield influence in various ways. They run their own successful app stores, mobile operating systems, and mobile services. They also hold the keys to which apps are preloaded on their phones. When BlackBerry wanted to take its BBM messaging service for Android into India, it signed a deal with Micromax.
- The local manufacturers are not provincial outfits producing knock-offs, as some might be inclined to assume. But their main competitive tool, for now, remains price. Local manufacturers in China and India match the features of more expensive devices and manage to produce comparable hardware at a fraction of the price. A Micromax handset comparable to Apple’s iPhone 5C costs less than one-fourth as much.
- Xiaomi has used a four-point strategy in its three-year rise to produce four of the most popular phone models in China. We discuss all four aspects, including tight inventory management and crowdsourcing product development feedback.
- These manufacturers will continue to expand overseas, in search of new growth opportunities. Micromax is in Nepal, Bangladesh, and Sri Lanka. Xiaomi has its eyes on Malaysia and Brazil. Huawei is already in the U.S. For example, it sells a 4G LTE handset on MetroPCS.
Smartphone Prices Race to the Bottom as Emerging Markets Outside of China Come into the Spotlight for Future Growth, According to IDC [press release, Feb 24, 2014]
Singapore and London, February 24, 2014 – Emerging markets have become the center of attention when talking about present and future smartphone growth. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, in 2013 the worldwide smartphone market surpassed 1 billion units shipped, up from 752 million in 2012. This boom has been mainly powered by the China market, which has tripled in size over the last three years. China accounted for one out of every three smartphones shipped around the world in 2013, equaling 351 million units.
Recently the surge in growth has started to slow as smartphones already account for over 80% of China’s total phone sales. The next half billion new smartphone customers will increasingly come mainly from poorer emerging markets, notably India and in Africa.
“The China boom is now slowing,” said Melissa Chau, Senior Research Manager for mobile devices at IDC Asia/Pacific. “China is becoming like more mature markets in North America and Western Europe, where smartphone sales growth is slackening off.”
Emerging markets in Asia/Pacific outside of China, together with the Middle East and Africa, Central and Eastern Europe, and Latin America, account for four fifths of the global feature phone market, according to IDC data. “This is a very big market opportunity,” said Simon Baker, Program Manager for mobile phones at IDC CEMA. “Some 660 million feature phones were shipped last year, which could add two thirds to the size of the current global smartphone market.”
India will be key to future smartphone growth as it represents more than a quarter of the global feature phone market. “Growth in the India market doesn’t rely on high-end devices like the iPhone, but in low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than US$120,” said Kiranjeet Kaur, Senior Market Analyst for mobile phones at IDC Asia/Pacific.
“Converting feature phone sales to smartphone sales implies a relentless push towards low cost,” added Baker. IDC research shows nearly half the mobile handsets sold across the world have retail prices of less than US$100 without sales tax. Two thirds of those have prices of less than US$50.
“The opportunity gets larger the lower the price falls,” continued Baker. “If you take retail prices without sales tax, in 2013 nearly three quarters of the US$100-125 price tier was already accounted for by smartphones. Within US$75-100 the proportion was down to just over half, and between $50-75 it was not much more than a third.”
Many smartphone vendors have begun gearing up for this next wave of cost pressure. Samsung is increasingly switching production to Vietnam, where manufacturing costs currently undercut mainland China. Even Hon Hai, one of the largest contract manufacturers for handsets in China, has announced plans for a plant in Indonesia to furnish a lower production cost base.
In addition to the table below, an interactive graphic showing worldwide sub-$100 feature phone shipments by region is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.
Worldwide Sub-$100 Feature Phone Shipments by Region, 2013
Region
Shipments (M Units)
India
212.3
Middle East & Africa
150.0
Asia/Pacific (excluding Japan, China, and India)
140.7
Latin America
76.4
PRC
68.1
Central & Eastern Europe
43.6
Western Europe
39.8
North America
13.9
Total
744.9
Source: IDC Worldwide Mobile Phone Tracker, February 24, 2014
Analysys International: Xiaomi Ranked Among Top Five in Q4, 2013 [March 11, 2014]
The statistics from EnfoDesk, the Survey of China Mobile Terminals Market in Q4, 2013, newly released by Analysys International, shows that the market share of Samsung, Lenovo, Huawei, Coolpad and Xiaomi ranked the top five of China smartphone in Q4, 2013. The market share of Samsung shrink slightly over the previous quarter, but it still accounted for 15.07 percent of smartphone market and maintain the leading position.
The release of Apple‘s new product has brought efficiency in Q4, and its market share slightly rebounded. Owning to the release of MI3 (Xiaomi), the market share of Xiaomi up 3.85 percentage points compared to the previous quarter. MI3 still should be bought from booking and the booking is relatively frequent. Meanwhile, the purchase restriction of MI2(Xiaomi) and Red MI(Xiaomi) has been relaxed, coupled with the strategic cooperation between Xiaomi and mobile operators, making it easier to buy custom models as well as contributing to the enlargement of Xiaomi’s market share. It can be expected that Xiaomi will put more energy into the complement of its retail capabilities and continue to increase their market share.
From: UMENG Insight Report – China Mobile Internet 2013 Overview [UMENG, March 12, 2014]
– The number of active smart devices in China exceeded 700 Million by the end of 2013.
– The five fastest growing mobile apps categories (excluding games) are : news, health & fitness, social networking, business, and navigation. These areas will bring new opportunities for developers in 2014.
– Socializing your apps is the key to success for developers. Currently among the top 1,000 apps (apps and games) in the Chinese market, 55% of them provide links to Chinese social networking services (e.g. Sina Weibo, Wechat, QQ, Renren) The amount of app content sharing to social network platforms per mobile Internet user per day has tripled in the last 6 months.
– Social network sharing in game has become incredibly popular on all social networking platforms, 48% of in app sharing traffic to social networks are from games.
– High-end devices (pricing above 500US$) have a significant market share in China, contributing 27% of total devices. These users have dynamic needs on mobile apps . The users of below 150US$ phones prefer casual games for their entertainment requirements.
– The year of 2013 became known as the first year Chinese developers took IP seriously with many developers licensing IP from rights holders. By the end of 2013, among the Top 100 games, 20% license 3rd party IP.
– Over the course of 2013 the percentage of iOS jailbroken devices in the Chinese Mainland fell by 17% to 13% of all devices. Domestic users are becoming more hesitant to jailbreak their devices.
…
700 Million active smart devices in China
…
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.
…
Fragmented Android device market
- In the 4th quarter of 2013, Samsung and XiaoMi (a local brand) prove to be the most popular Android brands as between them they manufacture all of the top 10 active Android devices.
- However the Android market is still highly fragmented with hundreds of different handsets on the market. Samsung who manufacture many devices in all price ranges control 24% of the device market, while the domestic manufactures are battling it out with the international brands to extend their market share.
…
- In 2013, changes to device connectivity saw a large growth in WiFi connectivity, from 38% at the beginning of the year to 52% at year end. Mobile Internet infrastructure has become better in China. However Chinese users are still price sensitive to mobile data tariff.
…
- Glossary:
Active Device: active device refers to device which has activated at least one app covered by Umeng platform in the stipulated time frame. All the “devices” in the report refers to “active devices”, not the actual shipment.…
- Data Source:
Analysis data in the report is based on over 210,000 Android and iOS apps from the Umeng platform. All data was collected from January to December 2013.
From: More than 247 million mobile handsets shipped in India during CY 2013, a Y-o-Y growth of 11.6%; over 70 million mobile handsets shipped in 4Q 2013 alone [CyberMedia Research press release, Feb 26, 2014]
According to CMR’s India Monthly Mobile Handsets Market Review, CY 2013, February 2014 release, India recorded 247.2 million mobile handset shipments for CY (January-December) 2013. During the same period, 41.1 million smartphones were shipped in the country.
…
India Smartphones Market
The India smartphones market during 2H 2013 saw a rise in shipments by 60.3% over 1H 2013, taking the overall contribution of smartphones to 16.6% for the full year. Further, 65.8% of the total smartphones shipped in the country were 3G smartphones during CY 2013.
Commenting on these results, Tarun Pathak, Lead Analyst, Devices, CMR Telecoms Practicesaid, “CY 2013 was primarily the year of smartphones for the India market, particularly for local handset vendors. A first for the India market was a marginal decline in featurephone shipments on a year-on-year basis. This trend is likely to continue with more vendors focusing on entry level smartphone offerings aimed at the consumer segment.”
“Nearly 70 vendors operated in the highly competitive India smartphones market in CY 2013, with ‘Tier One’ brands like Apple, Samsung, Nokia, Sony, HTC, LG and Blackberry capturing close to 53% of the total smartphones market, followed by India brands capturing close to 43% of total smartphone shipments. The remaining market of roughly 4% smartphone shipments was captured by China OEM brands, where we expect a few more players to enter the India market directly, instead of continuing as ODM partners to Indian brands”, Tarun added.
Rapid Growth In Smartphones Offset The Slump Witnessed In Feature Phone Sales In 4Q13, Says IDC [press release, Feb 26, 2014]
India was one of the fastest growing countries worldwide in terms of smartphone adoption in 2013. According to the International Data Corporation (IDC) in 2013 the smartphone market surpassed 44 million units shipped, up from 16.2 million in 2012. This surge has been mainly powered by home grown vendors which have shown a tremendous and consistent growth over the past 4 quarters of 2013.
The overall phone market stood at close to 257 million units in CY 2013 – an 18% increase from 218 million units in CY2012.
CY2013 also witnessed a remarkable migration of the user base from feature phones to smartphones primarily due to the narrowing price gaps between these product categories.
Q413 Perspective:
The India smartphone market grew by 181% year over year (YoY) in the fourth quarter of 2013 (4Q13). According to International Data Corporation’s (IDC) APEJ Quarterly Mobile Phone Tracker, vendors shipped a total of 15.06 million smartphones in 4Q13 compared to 5.35 million units in the same period of 2012. 4Q13 grew by almost 18% Quarter-on-Quarter.
The shipment contribution of 5.0inch-6.99inch screen size smartphones (phablets) in 4Q2013 was noted to be around 20% in the overall market. The category grew by 6% in 4Q13 in terms of sheer volume over 3Q13.
The overall mobile phone market (Feature Phones and Smartphones) stood at 67.83 million units, a 16% growth YoY and a meager 2% growth quarter over quarter (QoQ).The share of feature phones slid further to make 78% of the total market in 4Q13, with the market showing a decline of 2% in 4Q13 over 3Q13.
The fourth quarter of 2013 witnessed a spike in the smartphone shipments by smaller homegrown vendors like LAVA, Intex which have shown tremendous growth in the past couple of quarters.
“The growth in the smartphone market is being propelled by the launch of low-end, cost competitive devices by international and local vendors which are further narrowing the price gaps that exist between feature phones and smartphones”, said Manasi Yadav, Senior Market Analyst with IDC India.
“The international vendors have understood the importance of creating a diverse portfolio of devices at varied price points and are striving to launch cost competitive devices that cater to every segment in the target audience ” comments Kiran Kumar, Research Manager with IDC India.
Top Five Smartphone Vendor Highlights
Samsung: Samsung maintained its leadership spot with about 38% in terms of market share. Its smartphone shipments grew by close to 37% from 3Q 2013 to 4Q2013. The fourth quarter saw quite a few new launches across price points by Samsung – however the low-end Galaxy portfolio in smartphones contribute to 50% in terms of shipment volumes
Micromax: Micromax held on to its second spot with about 16% in terms of market share in 4Q2013. Some of the top selling models were the entry level smartphones like A35 Bolt and A67. The Canvas range of devices has also done well in terms of volume contribution owing to the marketing campaigns launched around them.
Karbonn: The market share for Karbonn in 4Q2013 was close to 10%, some of the top selling models for this brand were A1+ and A51.
Sony: Sony managed to make a comeback in the top-5 smartphone vendor list in 4Q13 and garnered a market share of 5%. The top selling models included Xperia M Dual and Xperia C handsets, which are targeted at mid-tier price range.
Lava : Lava managed to hold onto the number 5 spot in the top-5 smartphone vendor list. The continued traction around the XOLO and IRIS range of devices helped the vendor garner a market share of 4.7% in 4Q13. Some of the top selling models include the newly launched XOLO A500 S and the existing models like IRIS 402 and IRIS 349.
IDC India Forecast:
IDC anticipates the growth in Smartphone segment to outpace the overall handset market growth for the foreseeable future. The end-user shift towards mid-to-high screen size products will be amplified by the declining prices and availability of feature-rich localized product offerings. Vendors who are able to differentiate their offerings at affordable prices will maintain a competitive edge and secure a strong position in the mobile phone market in CY 2014.
From: Gartner Says Annual Smartphone Sales Surpassed Sales of Feature Phones for the First Time in 2013 [press release, Feb 13, 2014]
…
Worldwide Smartphone Sales to End Users by Vendor in 2013 (Thousands of Units)
Company
2013
Units
2013 Market Share (%)
2012
Units
2012 Market Share (%)
Samsung
299,794.9
31.0
205,767.1
30.3
Apple
150,785.9
15.6
130,133.2
19.1
Huawei
46,609.4
4.8
27,168.7
4.0
LG Electronics
46,431.8
4.8
25,814.1
3.8
Lenovo
43,904.5
4.5
21,698.5
3.2
Others
380,249.3
39.3
269,526.6
39.6
Total
967,775.8
100.0
680,108.2
100.0
Source: Gartner (February 2014)
Worldwide Smartphone Sales to End Users by Vendor in 4Q13 (Thousands of Units)
Company
4Q13
Units
4Q13 Market Share (%)
4Q12
Units
4Q12 Market Share (%)
Samsung
83,317.2
29.5
64,496.3
31.1
Apple
50,224.4
17.8
43,457.4
20.9
Huawei
16,057.1
5.7
8,666.4
4.2
Lenovo
12,892.2
4.6
7,904.2
3.8
LG Electronics
12,822.9
4.5
8,038.8
3.9
Others
106,937.9
37.9
75,099.3
36.2
Total
282,251.7
100.0
207,662.4
100.0
Source: Gartner (February 2014)
Top Smartphone Vendor Analysis
Samsung: While Samsung’s smartphone share was up in 2013 it slightly fell by 1.6 percentage points in the fourth quarter of 2013. This was mainly due to a saturated high-end smartphone market in developed regions. It remains critical for Samsung to continue to build on its technology leadership at the high end. Samsung will also need to build a clearer value proposition around its midrange smartphones, defining simpler user interfaces, pushing the right features as well as seizing the opportunity of bringing innovations to stand out beyond price in this growing segment.
Apple: Strong sales of the iPhone 5s and continued strong demand for the 4s in emerging markets helped Apple see record sales of 50.2 million smartphones in the fourth quarter of 2013.
“However, Apple’s share in smartphone declined both in the fourth quarter of 2013 and in 2013, but growth in sales helped to raise share in the overall mobile phone market,” said Mr. Gupta. “With Apple adding NTT DOCOMO in Japan for the first time in September 2013 and signing a deal with China Mobile during the quarter, we are already seeing an increased growth in the Japanese market and we should see the impact of the last deal in the first quarter of 2014.”
Huawei: Huawei smartphone sales grew 85.3 percent in the fourth quarter of 2013 to maintain the No. 3 spot year over year. Huawei has moved quickly to align its organization to focus on the global market. Huawei’s overseas expansion delivered strong results in the fourth quarter of 2013, with growth in the Middle East and Africa, Asia/Pacific, Latin America and Europe.
Lenovo: Lenovo saw smartphone sales in 2013 increase by 102.3 percent and by 63.1 percent in the fourth quarter of 2013. Lenovo’s Motorola acquisition from Google will give Lenovo an opportunity to expand within the Americas.
“The acquisition will also provide Lenovo with patent protection and allow it to expand rapidly across the global market,” said Mr. Gupta. “We believe this deal is not just about entering into the U.S., but more about stepping out of China.”
Gartner expects smartphones to continue to drive overall sales in 2014 and an increasing number of manufacturers will realign their portfolios to focus on the low-cost smartphone sector. Sales of high-end smartphones will slow as increasing sales of low- and mid-price smartphones in high-growth emerging markets will shift the product mix to lower-end devices. This will lead to a decline in average selling price and a slowdown in revenue growth.
In the smartphone OS market, Android’s share grew 12 percentage points to reach 78.4 percent in 2013 (see below). The Android platform will continue to benefit from this, with sales of Android phones in 2014 approaching the billion mark.
Worldwide Smartphone Sales to End Users by Operating System in 2013 (Thousands of Units)
Operating System
2013 Units
2013 Market Share (%)
2012 Units
2012 Market Share (%)
Android
758,719.9
78.4
451,621.0
66.4
iOS
150,785.9
15.6
130,133.2
19.1
Microsoft
30,842.9
3.2
16,940.7
2.5
BlackBerry
18,605.9
1.9
34,210.3
5.0
Other OS
8,821.2
0.9
47,203.0
6.9
Total
967,775.8
100.0
680,108.2
100.0
Source: Gartner (February 2014)
…
Multiplatform value proposition for developers from Nokia, with potential of Microsoft joining the fray
After understanding what does the new Nokia X platform mean in preceding posts mine:
– Nokia’s “best of everything” X range smartphones to conquer the smartphone market between the Asha and Lumia devices [Feb 24, 2013] and
– Nokia X family of smartphones, leading local brand partners for Windows Phone and the potential of all that on the Indian market [Feb 27, 2014]
it is time to consider the Nokia X announcement from developers’ point of view.
Nokia Developer Day at MWC 2014 [nokiadevforum YouTube channel, Feb 27, 2014]
The Nokia provided content included here (later on): Lunagames success story—Nokia Developer Day Keynote—Nokia X: where Android apps will thrive—HERE Maps on Nokia X Family—Nokia Imaging SDK 1.1—Nokia X Porting Bus—bring apps to the Nokia Store for the Nokia X family—Five reasons: Android App to Nokia Store—Nokia’s Developer Day at MWC
But first take note of Nokia X Get Started Portathons [Nokia Developer, Feb 24, 2014]
The Nokia X Porting Bus is going to be driving all over Europe. If you’re nearby, please drop by with your Android app. We’ll show you just how easy it is to port to Nokia X. …
as well the Developer Offers for Nokia X.
And why there is a definite potential of Microsoft joining it? The proof-points for that were already included in a recent post of mine here:
- “Consumers are now calling the shots <—> consumerization of IT”, i.e. enterprise computing is not ruling ICT alone any more, and as a result of BYOD the private, consumer devices are even dictating.
- “Sales are not simple for developers anymore” Instead of the earlier uniform way of selling developers should use the most sophisticated approaches—think of the fremium, or advertisement based models as examples—in order to earn their revenue.
- …
- “The times of single platforms are gone, as developers own several platforms now”
…
I met “cloud first” last summer with regards to Microsoft at TechEd, primarily through the words of Satya Nadella, who is the CEO now (see “Cloud first” from Microsoft is ready to change enterprise computing in all of its facets [‘Experiencing the Cloud’, June 4, 2013]). … Tim … was elaborating that Microsoft was much more considering the cloud interfaces (APIs) in the development of their software in this regard.
From View from Redmond via Tim O’Brien, GM, Platform Strategy at Microsoft [‘Experiencing the Cloud’, Feb 21, 2014]
As the biggest news of this new developers’ value proposition is that of the new Nokia X:
We’ve maintained maximum possible compatibility with AOSP [Android Open Source Project]. We’ve made a few changes. And that’s mostly in the services layer. So we’ve taken away some of the Google services and replaced them with some of our own or some of the Microsoft services.
There are 3 services which we’ve changed:
– In-App Payment [Nokia In-App Payment], and I’ve already explained that it’s an advantage for developers
– Location [HERE Maps], and
– Notification [Nokia Notifications]
and for these APIs [Nokia APIs] some changes are needed. Otherwise your Android apps just work.
From [46:56 and on] of the keynote video (embedded later on) by Amit Patel, VP of Developer Relations
from [45:12] of the keynote video continued into the following feedback from partners:
Lunagames: A Nokia Asha success story [nokiadevforum YouTube channel, Nov 28, 2013]
Regarding the position of the upcoming owner of Nokia Devices & Services Business an actual report stated that Microsoft: ‘no surprises’ regarding Nokia X, knew about Android work, okay with it [Windows Phone Central, Feb 25, 2014]:
If there was any question today about what Microsoft thinks about the Nokia X and its Android phone, their public line is that they’re fine with it. During Nokia Developer Day, John Shewchuk [see Deep technical evangelism and development team inside the DPE (Developer and Platform Evangelism) unit of Microsoft [May 17, 2013]], a Microsoft technical fellow responsible for “strategy for cloud platform services”, took to the stage to demonstrate Microsoft services running on the Nokia X, noting that they’re a ‘devices and services company’ first and don’t consider Nokia’s choice to be against their interests.
Before the session even officially kicked off, Shewchuk chose to address the elephant in the room by talking about Nokia X and Microsoft. Their stance, at least overtly, was that they knew about Nokia’s Android work going into the deal (to acquire Nokia’s hardware division) and that there were “no surprises” here this week. Instead, Microsoft’s focus on services, specifically OneDrive, Outlook.com and Skype, were considered to be just as important business for Microsoft as Windows Phone.
The session then focused on the benefits of developing services on Nokia X and Lumia phones, with Microsoft’s services being front and center. Nokia then later returned to the stage to discuss their imaging SDKs and development work.
We spoke with Shewchuk briefly after the session regarding his statement. He was forthright in stating that Windows Phone, as a developer platform, is still superior for many companies out there whom are making apps. The idea here is yes, Android is popular, but Windows Phone has momentum now and things like the web developer tools offer a great alternative.
Microsoft clearly has two business here to consider. More, actually. It’s not about just Windows Phone, but about Skype, OneDrive, Bing and even Azure. While to Windows Phone users, prioritizing that OS seems very obvious, Microsoft is taking a different approach. At least in this regard, publicly, they are on board with Nokia X and do it see it as an opportunity to grow Microsoft’s services in emerging markets.
Will Nokia X remain after the sale? We’re leaning towards yes, that this is a long term strategy by Microsoft. We’ll just have to wait and see. But for now, Nokia and Microsoft are acting like everything is business as usual.
Nokia Developer Day Keynote @ Mobile World Congress 2014 [nokiadevforum YouTube channel, Feb 27, 2014]
Nokia X: where Android apps will thrive [Nokia Conversations, Feb 26, 2014]
The developer world for our devices is changing. With the Nokia X software platform opening up rich opportunities for Android devs to expand the reach for their apps, what does this mean for the developer community and consumers?
We spoke to Amit Patel, Vice President of Developer Relations, Nokia to get his take on this brave, innovative world.
NC: How do you see the Nokia X software platform as an attractive proposition for developers?
AP: Developers are interested in reaching more consumers. With the Nokia X family of device, we are able to reach new consumers in the affordable smartphone segment. This part of the smartphone (sub €100) is growing four times faster than any other part of the smartphone market and we are in the best possible shape to capture our share.
The majority of the growth is coming from the emerging markets – Indonesia, Thailand, India, etc. – where we are already significantly present, especially with Nokia Asha. There’s already brand preference and brand loyalty for Nokia.
In essence, we’re going to be able to deliver a large amount of consumers to developers very easily.
NC: What if developers already have Android apps. How can they get them onto Nokia X?
AP: Those developers are our primary target audience. And, for them, we have made it really easy to bring their apps to Nokia Store. We provide an online tool called Nokia X Analyser where you can drag and drop your app to see whether you’re 100% compatible, or whether you need to make some changes. In most cases, the majority of apps just work. If that’s the case, just publish your app into the Nokia Store and you’re done.
NC: And if you don’t reach the magic 100% compatibility rating?
AP: There are three APIs that make them non-compatible; HERE Maps, notification and in-app payment. For any apps that are using these APIs, the developer would need to be some modifications. In many cases the changes are relatively small and can be completed in a matter of hours. Once done, just package your app and put it into the Nokia Store.
NC: Ok, so from a consumer’s point of view – how will they see an ‘Android’ app?
AP: Consumers can find apps in Nokia Store and from third-party stores. In Nokia store, modified and unmodified apps will be shown side-by-side, there is no difference. From a consumers’ point of view, the only thing that changes is the ever increasing amount of apps on offer.
NC: How do in-app purchases work on Nokia X?
AP: We’ve had in-app payments on Nokia Asha for a while now, and it’s the same mechanism that’s being used on Nokia X. All a developer needs to do is change the in-app purchase API ‘call’ from Google Play to Nokia.
However, one of the big worries that developers have is fragmentation – where they need to service all types of app stores. What we’ve done is to develop the platform, tools and APIs in such a way that we’re promising developers that they can maintain a single ; if you need to support the Nokia APIs, you can make the edits in the same code as your Google code.
The benefit of this for the developers is that he has much lower costs to maintain his app. This is just one of the things we’ve done to make things easy for developers.
NC: Is there anything else you’ve done to make the process easier for devs?
AP: Absolutely. One key area is in-app payments linked to operator billing. Taking India as an example, there are 1.2 billion people, around 350-million phones and 24-million credit cards. It’s clear that most people aren’t using credit cards for their in-app purchases. People are paying with operator billing. And we have ‘more than one’ operator billing deal in India.
Not many of our competitors have that.
So, publishing in the Nokia Store using our in-app payment method, means you’ve instantly got 350 million people at your disposal to buy your app, or an in-game sword!
NC: Are there any upcoming Nokia X apps that you’re excited about?
AP: We already have many of the top apps preloaded on the Nokia X devices including apps like Plants vs. Zombies, BBM, Skype, Facebook and many more. And we have others like OneDrive, Outlook.com, Angry Birds and hotels.com in the Nokia Store. We are continuously adding new apps and I am looking forward to apps like Facebook Messenger, Spotify and Temple Run 2, which should be amongst the many apps coming soon.
NC: Do you think there’s a good enough range of apps on Nokia X to give, what might be some peoples first foray into phone apps, a great experience?
AP: Right now, for the Nokia X family, we’ve got hundreds of thousands of apps available in the Nokia Store and in third-party stores. The Android ecosystem being what it is, there are lots of places for consumer to get all the apps they want.
NC: What do you think of people side-loading apps onto Nokia X?
AP: Side-loading happens predominantly in markets where consumers are reluctant to spend money on data. Often the mobile data costs in these markets make downloading large apps prohibitive. Obviously we encourage people to download over wi-fi, but we also realise that it’s convenient for people to side-load apps, often in bulk, to their devices.
Our focus is to give developers the chance to reach millions of consumers. Side-loading helps us to achieve that. With our in-app payment solution and our leading operator billing network, we are also uniquely position to maximize the revenue potential for developers regardless of how the apps are distributed.
None of our major competitors have the same operator billing coverage and device market share in growth markets.
Are you a developer? We’ve love to know what you think of the porting system. Let us know in the comments, below.
HERE Maps shows the way on Nokia X Family [Nokia Conversations, Feb 27, 2014]
The new Nokia X family bring together popular Microsoft services like Skype, OneDrive and Outlook as well as the best of Nokia experiences – HERE Maps included.
We sat down with the HERE team to learn more about the HERE Maps experience on the Nokia X and how it all came to be.
Nokia’s HERE business was charged with creating the new location and navigation app for the Nokia X family, working from scratch and in a time-frame of less than twelve months.
Nonetheless, says Niko van Eeghen, HERE Maps for Nokia X product manager:
“We’ve managed to pull off a hell of a release. We’d say that, though it says it’s version 1.0, it’s more like a version 2.0 release in terms of functionality and polish.”
The team had high ambitions. Niko’s colleague Jens Klaus explains:
“For Nokia X we have brought the HERE Maps experience, with regular search, nearby search, and points of interest. We also have routing functionality for cars, pedestrians and transit. And there’s the in-car experience with voice-guided turn-by-turn navigation.”
Niko adds that the app offers online and offline functionality, with maps available for nearly 200 countries, and navigation available for 98 countries.
The experience is very smooth and Lumia-like. “Customers will be really surprised at the performance of HERE Maps on the Nokia X family,” says Niko with a smile.
“Compared to mapping and navigation solutions that draw their maps from online, it’s amazingly fast, because we store our maps offline.”
While the app is installed out of the box, the team decided not to preload the local country maps. “This way, we give customers the choice of which map, what regions and cities to install, and whether to install the map in the main storage memory or on a MicroSD card,” explains Jens.
The HERE Maps app also integrates with the device’s Fastlane feature. The HERE Maps shows up on Fastlane together with other apps you’ve recently launched. This way you can easily go back to your most recent locations and also get notifications for when updates are available to be downloaded for your offline maps. You can perform direct searches for locations on HERE Maps for Nokia X using the device’s global search. The app also integrates with contacts in the address book. If you’ve stored your friend’s address, you can click through to show a map and get directions.
But the HERE Maps application was not the only job for Niko’s team. They also had to power location services on other apps, creating API’s to allow developers to tap into HERE services for their own functionality. “When you share your location in WeChat, for example,” Niko explains, “the app uses our APIs to establish your location and our maps are shown when you share that location.” Developers can tap into the HERE API by downloading an SDK plug-in that makes it simple to switch from competing mapping services.
“It’s our ambition to provide a great experience for all mobile phone users,” Niko concludes.
More on this story on HERE Three Sixty.
New Nokia Imaging SDK 1.1 available [Developer News | Nokia Developer, Feb 24, 2014]
Today we’re announcing the latest release of the Nokia Imaging SDK. This powerful library of exciting image manipulation tools makes it quicker and easier to create imaging apps for Windows Phone 8, and now also Windows 8.1 – desktop and RT.
With the Lumia 2520 tablet (running Windows 8.1 RT) now part of the Nokia family; the shared API allows developers to reuse a lot of the code across Windows Phone and Windows 8.1
The new 1.1 release also includes a number of new effects:
- Interactive Foreground Segmenter: this filter API picks the foreground/background from an image and makes it easier for you to create an interactive UI where users tap, swipe or point at the object boundaries and the API will figure out which objects belong to foreground and vice versa. This is often used to e.g. swap backgrounds or for blurring effects.
- Lens Blur, also known as Bokeh: this is used in professional photography for creating photorealistic image effects. The Nokia Imaging SDK makes applying the new Lens Blur effect or blending with mask quick and easy.
- Single Image HDR: this effect can be applied to an image to create stunning and vibrant photorealistic color effects similar to HDR, or with more conservative settings, auto enhance the image colors.
We have also made some improvements under the hood, with fixes and memory optimisations.
Bottom line, the Nokia Imaging SDK is now even more powerful than before.
Documentation and sample code have been updated to help you get started and you can now also sign up for next week’s Lumia App Lab webinar, where Windows Phone MVP Michael Samarin will walk through everything that’s new in this release.
More than 1,500 developers have already created great imaging experiences for consumers using the SDK 1.0. Will you create the next outstanding imaging app using 1.1? If you think you’ve got what it takes, make sure you enter our new Imagin8 Mission competition: your creation you could win you an expenses-paid trip for 2 to experience zero gravity! Check out the Nokia Imaging SDK 1.1 today!
More information: Get creative with Nokia Imaging SDK 1.1 [Nokia Conversations, Feb 25, 2014]
Get on the Nokia X Porting Bus [Developer News | Nokia Developer, Feb 27, 2014]
A lot of enthusiastic developers came over to meet us this week at Mobile World Congress. Now it’s time for us to return the favour: we’re going to come to you. The Nokia X Porting Bus has been parked in Hall 8 in Barcelona all week and inside its comfort we’ve helped developers port hundreds of apps to Nokia X. (To be honest, not much help’s required; most ports are simple.)
Now it’s time to hit the open road. Over the next month we’re driving across Europe with a crew of experts, a pile of Nokia X devices and DVLUP XP that we’ll trade for ported apps. When we stop in your area we’d love it if you pop in. No registration, no reservations. Just bring your laptop, your Android apps, and an appetite. We’ll get you started with Nokia Store and you just might walk away with some DVLUP points you can redeem for rewards.
Nokia and Handster, an Opera Software company, bring apps to the Nokia Store for the Nokia X family [Developer News | Nokia Developer, Feb 27, 2014]
Working together, Nokia and Handster, an Opera Software company, have brought apps submitted via the Opera Mobile Store’s publisher portal and published them in Nokia Store for use with the Nokia X family of devices.
Announced this week at Mobile World Congress in Barcelona, Nokia X family offers access to the world of apps via Android Open Source Project (AOSP), coupled with Nokia signature experiences and the most popular Microsoft services. For Android app developers, it’s an easy, risk-free way to expand the reach of their applications to a new user base while still using the existing code base.
Based on Handster’s existing agreements with its developers, they have granted distribution rights to Nokia for these free Android apps which have been published in the Nokia Store.
How Handster developers can join the Nokia Store and reach new users
Developers with apps distributed by Handster can quickly join the Nokia Store and reach new users with their apps.
If you are ready to start the registration process, click here. Nokia will then contact you to get your consent and to explain the process for creating your Nokia Store account.
Also, if you already have a Nokia Store account, you will not need to do anything else. Your compatible Android apps will automatically be added to your account. Log in to Nokia Publish to check your apps.
Want to learn more about Nokia X?
Check out the five reasons why you should publish your Android app to Nokia Store.
Five reasons to publish your Android App to Nokia Store [Developer News | Nokia Developer, Feb 24, 2014]
- Nokia X opens new markets to your existing apps
Nokia’s sales leadership and brand strength in the fastest growing smartphoneand mobile app markets provide the launchpad for your apps’ success. With Nokia X, you can reach an untapped pool of savvy – and app-hungry — new smartphone users around the world.
Learn more …- Nokia X’s monetization tools create additional revenue streams for your apps
Monetization tools like Nokia In-App Payment, combined with Nokia’s extensive operator billing network, provide your existing apps with new monetization mechanisms in emerging markets. Consumers in many high growth markets do not have international credit cards, making revenue collection a challenge. Nokia X leverages Nokia’s wide operator billing coverage, which extends to over 3 billion mobile subscribers, with over 160 operators in more than 60 markets. Operator billing has been shown to deliver up to a 5x increase in revenues and a 10x increase in purchases over credit-card billing in the Nokia X targeted markets, meaning more revenues opportunities for your apps.
Learn more …- Android app compatibility
Nokia has tested over 100.000 Android apps and approximately 75% are directly compatible and ready to be published to Nokia Store. If your app uses Google services for maps, push notifications or in-app payments, you will need to replace these APIs with Nokia specific APIs that have been built to work almost identically to those they replace.Nokia services have been designed to minimize porting effort from apps using corresponding Google services and allow developers develop and distribute a single app package targeting both ecosystems.
Learn more …- Develop apps for Nokia X using your existing Android SDK, toolkit and skillset
If you already develop Android apps, you can continue to use your existing tool chain. Nokia provides a plugin package to the Android SDK, including the services APIs and the Nokia X emulator.You’ve already got the other tools and skills you need.
Learn more …- Nokia Developer programs provide the marketing and technical support you need
Through programs like DVLUP, Nokia Developer Offers and local outreach, Nokia offers you opportunities to promote your apps to new users and potential customers, while our online training, events and support tools make sure you’re putting your best app forward.
Learn more …
A success! Nokia’s Developer Day at MWC [Nokia Conversations, Feb 27, 2014]
Porting, tech sessions, space selfies, a bus and games. This year’s event had it all!
The figures are incredible; more than 102-billion app downloads and $26 billion in revenue. That’s what the app economy looks like today. In the next three years, the takings are expected to grow to $77 billion.
It’s no wonder then, that hundreds flocked to this year’s Nokia Developer Day at MWC 2014 to see how they could be part of one of technology’s biggest growth areas, summed up by Nokia’s Seppo Aaltonen, VP Mobile Phones Business Management who said: “Our affordable smartphones are about connecting the next billion.”
Seppo Aaltonen telling it how it is…
Welcomed by an excited and upbeat crowd, Stephen Elop kicked off the event with a keynote where he recapped Nokia’s product announcements and how the Nokia X software platform opens up new opportunities for existing and new developers. He also emphasized that Windows Phone is the fastest growing ecosystem today and that between Nokia X and Lumia families, Nokia is further increasing the market opportunity for developers.
Stephen Elop working up a dev frenzy
Timo Toikkanen, EVP Mobile Phones, cemented the news: “The Nokia X is the ultimate affordable smartphone in growth markets. Now that we’ve re-mapped the software platforms as well as the hardware. It will introduce new apps to millions of new people.”
Many of our partners agree. Richard Hazenberg, CEO Lunagames, told the crowd that he is excited about the market potential Nokia X has to offer his company as it combines high volume, ease of porting and seamless billing. He announced “Our game HighWay Hei$t, is now available in the Nokia Store and we are going all in and shipping 20 more games for Nokia X platform”.
Bryan Biniak, VP & GM of Developer Experience, Amit Patel, VP of Developer Relations, Neil Broadley, Director of Product Marketing for Nokia X, Sam Browne, Managing Partner from Carat, and David Proulx, from Blackberry, also took the stage.
Besides Nokia X, developers also heard more details about some of the other news of this week, including, the availability of the Blackberry messaging service BBM on Nokia X and Lumia, as well as the latest release of the Nokia Imaging SDK and the Imagin8 Mission competition for Windows Phone.
A packed developers’ hall
The agenda was packed, with technical sessions about Nokia X and Windows Phone, as well as a number of fun activities for developers to engage and learn about Nokia Developer offerings.
Hundreds of Android apps were ported to Nokia X on the spot, with all participants walking home with a brand new Nokia X. Porting continues at the Nokia X bus, which is parked in Hall 8, so if you are a developer make sure you stop by.
Hop on, plug in, port out!
Attendees also went to space. Really.
They experienced the capabilities of the Nokia Imaging SDK at a special photo booth where they took a very cool #spaceselfie, and learned about the Imagin8 Mission, the new imaging contest which will earn the winner a trip to experience zero gravity.
#1 Conversations’ Editor in space
#2 Conversations’ Editor in space
The day ended with a cocktail reception where the winners of Nokia Create, who flew in from all over the world, were congratulated and received their prizes from Patrick Stanton, Director of Lumia Developer Offering.
The day was a huge success, inspiring hundreds of developers to learn, do and have fun.
View from Redmond via Tim O’Brien, GM, Platform Strategy at Microsoft
Tim is currently touring Europe as part of preparations for the upcoming Build 2014 conference. He had an opportunity to meet some people in Hungary as well which allows me now to summarize how they see the current sitution from Redmond:
- “Consumers are now calling the shots <—> consumerization of IT”, i.e. enterprise computing is not ruling ICT alone any more, and as a result of BYOD the private, consumer devices are even dictating.
- “Sales are not simple for developers anymore” Instead of the earlier uniform way of selling developers should use the most sophisticated approaches—think of the fremium, or advertisement based models as examples—in order to earn their revenue.
- “No matter how much things like ‘identity’ are alien to developers without these things they are not credible partners to the enterprises”
- “The times of single platforms are gone, as developers own several platforms now”
- “Instead of traditional big IT companies thinking in terms of commercial software, like IBM and HP, those Silicon Valley startups which are well capitalised via VCs and turning at full steam towards the enterprise market (e.g. Dropbox) are more and more significant for Microsoft”. For more information I was looking for a current background: Dropbox Makes a Move Into the Enterprise [Businessweek, Nov 13, 2013].
This is what was left in my head after the meeting from the current situation point of view, as the most important elements of the actual view of the world from Redmond.
Tim O’Brien arranged his introductory speech around three topics: mobile first, cloud first and openness. In this regard I had two questions for him:
- As far as cloud first and openness are concerned he didn’t mention the OpenStack initiative. This is, nevertheless, has a growing significance as IBM, Dell, and especially HP—all crucial for the enterprise business of Microsoft—are building their own cloud business on OpenStack. How Microsoft is looking at that, what is his position? The essence of Tim’s answer was that on one hand these companies are the ones who are thinking in terms “commercial software”, as it was mentioned before, and that their own public cloud offerings are not so much developed yet, on the other. OpenStack has not made big difference for them yet.
- The basic line of thought was built on “mobile first” and “cloud first”. I met “cloud first” last summer with regards to Microsoft at TechEd, primarily through the words of Satya Nadella, who is the CEO now (see “Cloud first” from Microsoft is ready to change enterprise computing in all of its facets [‘Experiencing the Cloud’, June 4, 2013]). Since then, however, I’ve seen such interpretation of this by the media, that from now on Microsoft will develop its software for the cloud and that’s it. What does he think about that? Tim was rejecting this simplification, and then, at somewhat greater length, was elaborating that Microsoft was much more considering the cloud interfaces (APIs) in the development of their software in this regard. He even illustrated that with the fact that async was introduced into the latest .NET 4.5.1.
Since regarding “cloud first” Tim even mentioned that this is a quite common concept, I browsed the web back at my office to find out the actual case. By doing so it came out that in the U.S. it is indeed the case but only in the realm of so called federal computing. As Microsoft interpreted that concept after Satya Nadella overtook the “cloud & enterprise” business in 2011, and then started to use that with the external preview readiness of the corresponding developments at the TechEd last summer, even that carried a wider meaning. Overall, the interpretation of the “cloud first” concept cannot be considered common at all, especially outside U.S. Who are interested in my web-based study could read my “Cloud first”: the origins and the current meaning [‘Experiencing the Cloud’, Feb 18, 2014] post on this blog.
With this result on hand I got interested in finding out what is the case with “mobile first”. The similar “Mobile first”: the origins and the current meaning [‘Experiencing the Cloud’, Feb 18, 2014] post is not only giving the denial of commonality of this second basic concept from Microsoft, but even makes one to realize how much emphasis IBM put on MobileFirst (not a typo) in its platform strategy, already one year publicly, in which almost immediately achieved spectacular results. This magic quadrant from Gartner is the proof of that (works as a teaser as well):
After this it came to my mind what was missing from this whole view of world from Redmond. That which was detailed in my earlier Device businesses should have a China-based independent headquarter at least for Asia/Pacific if they want to succeed [‘Experiencing the Cloud’, Jan 28, 2014] post. Tim was just mentioning in his introduction that 2 years ago nobody would have thought with Samsung overtaking Apple. … My reaction to that would be that you in Redmond are not even considering the “non-Samsung, non Apple” part of the below chart:
as well as with these charts:
not speaking of this video:
Hugo Barra, Vice President, Xiaomi Global & Loic Le Meur, LeWeb Founders- LeWeb’13 Paris – [LeWebYouTube channel, Dec 11, 2013]
WILL SOMEBODY ENLIGHTEN THEM PLEASE?
P.S. 
This post was first made in Hungarian: Kilátás Redmondból Tim O’Brien tolmácsolásában (‘Szoftver aktualitások’, 2014. február 19.). I asked Gabor Fari (Director, Business Development and Strategy, Health & Life Sciences at Microsoft, Greater New York City Area), as my closest acquaintance to corporate Microsoft today, to do something regarding this mobile computing issue within Microsoft.
To my shocking suprise I got a completely unfounded barrage of accusations from him instead. I put a screenshot of the Facebook exchange in which the blunt accusation part was as follows (since the exchange was in Hungarian):
The arrogant tone of your articles I can’t understand either. You dissed Chris Capossela. Now you’ve done the same to Tim O’Brien. Both of them I know and respect, and I believe that they are on top of their professions. From the tone of your articles my conclusion is that you believe MS is managed by incompetent gimps.
One thing I asked Gabor Fari regarding these blunt accusations, is to prove them, i.e. give concrete examples what text from the above post (since here is an English version of the original one in Hungarian) is proving “The arrogant tone of your articles”, “You dissed Chris Capossela”, “Now you’ve done the same to Tim O’Brien”, “From the tone of your articles my conclusion is that you believe MS is managed by incompetent gimps.”
As I didn’t get any reply, and quite probably won’t get in the future either, I am getting really worried. Not because of such unfounded judgement of my post, but because I am a Microsoft shareholder as well. I am extremely worried for my extremely tiny part of the whole $313.35 billion market capitalisation Microsoft is worth currently.
So through a response to this post I will offer Gabor Fari the last chance to respond to my appeal to prove his unfounded judgements via concrete examples from the above post. If he will not do so than nothing is left as to turn to the board of directors of Microsoft with a warning that corporate complacency is much more inside Microsoft than one might have thought before, and this will definitely make things worse than one could have thought before.
P.S. in the P.S. As Gabor Fari was declaring that “You dissed Chris Capossela” I searched through all my postings about Chris Capossela, and found only the following one, which I couldn’t understand either, how on the Earth that might be considered a “dissing of Chris Capossela”?
Here is the traslation of that (later a screen-shot containing the Facebook discussion in Hungarian):
Microsoft in the direction of the market failure? Chris Capossela was shining (literally) for half an hour today expounding “devices and services” and “enterprise and consumer”, as the directions Microsoft is taking in both regards. That is the the fact that every other company COULD realise just a part of that.
WHY, THEN, IN THE DIRECTION OF THE MARKET FAILURE? Because it is not only the case that Capossela could not be found on the net with such an exposition, but NO ONE ELSE!!! PUT IT SIMPLY THE MARKETING (WITH BEST MEANING of the word) is not working in Microsoft.
The best what I’ve found: http://www.youtube.com/watch?v=o9g-0XMwqvs
This is not marketing [as it is from Microsoft Research]
And found also this: http://www.youtube.com/watch?v=XefFb8DbpCg
[comments other people put here I am not translating]
In addition Capossela is the leader of the Consumer Channel Group, and when he won this position in 2011, he won that of Chief Marketing Officer position as well … IMHO totally deserved. Since Tami Reller got the top marketeer position he has been ranked back so much that in connection with the purchase of Nokia Ballmer wrote about him as “Regarding the sales team, we plan to keep the Nokia field team, led by Chris Weber, intact and as the nexus of the devices sales effort, so that we can continue to build sales momentum. After the deal closes, Chris and his team will be placed under Kevin Turner. We will develop a single integrated team that is selling to operators, and there may be other integration opportunities that we can pursue. Kevin will work with Chris Weber and Chris Capossela to make those plans.” See: http://www.microsoft.com/…/2013/sep13/09-02email.aspx
despite of the fact that even from the interview made with him one could see his extraordinary stance [in marketing]: The New Windows Store Only at Best Buy (by Brandon LeBlanc)
[comments other people put here I am not translating]
The Facebook discussion in Hungarian:
Follow up:
https://www.facebook.com/groups/vnext.hu/permalink/737178256301701
https://www.facebook.com/groups/vnext.hu/permalink/737178256301701/
Will, with disappearing old guard, Satya Nadella break up the Microsoft behemoth soon enough, if any?
IMHO that was the most intriguing question raised after Satya Nadella’s appointment as the new CEO of Microsoft. This was also the only question mark hanging over this decision from the future of Microsoft point of view. In other regards there was just only one serious warning (IMHO again): Kedrosky [Bloomberg] to Microsoft: Stop Killing Partners (see embedded below). Otherwise the unanonimous opinion was that Satya Nadella as CEO and John Thompson as chair, with Bill Gates now going to be involved at the product level and Steve Ballmer just taking a seat on the board (both even compensated by an upcoming in March new director on the board, G. Mason Morfit from ValueAct Capital, representing the activist shareholders advocating break-up/spin-off moves), as the new top-level setup is indeed not only the best but the only possible thing for the huge and complacent software company (note that Nadella is not referring to Ballmer’s “devices and services” mantra, it’s gone).
Inherent to this companion post: John W. Thompson, Chairman of the Board of Microsoft: the least recognized person in the radical two-men shakeup of the uppermost leadership [‘Experiencing the Cloud’, Feb 6, 2014]. Without reading that misunderstandings like Nadella, Gates: Right Team For Microsoft? [InformationWeek, Feb 6, 2014] will be rampant, despite the reality that everybody should talk about the Nadella-Thompson combo as the uppermost leadership. Keep in mind also that out of the current 10 directors on the board (with Morfit 11) of Microsoft 8 (with Morfit 9) are independent directors (i.e. representing the vast majority independent shareholders), and only Gates and Ballmer are remaining as non-independent ones, representing their joint, somewhat more than 8% stake in Microsoft plus that of existing and the still loyal ex-softies (if any). So both of them could quite easily be outvoted … etc.
The upcoming new director, Morfit will specifically (“actively”) advocate the reduction of focus on Windows and the acceleration of efforts to unchain products and services from the operating system. In fact he had an agreement for regular meetings with “selected directors and management to discuss a range of significant business issues” back in August 30, 2013. Note also that he will join the board in March which is actually the time when the next fiscal year plan is presented and approved by the board. This is within the full fiscal year planning process, mainly consisting of the so called MYR (MidYear Review), PRISM (PRIority Setting Meeting), and WWSMM (WorldWide Sales & Marketing Memo) phases. Note as well that for the new CEO appointment this date was the very last one, as the PRISM, preceding the board approval, should be headed by the next fiscal year CEO.
Key words and phrases describing the essence of this post:
| Microsoft complacency | Satya Nadella as CEO | John Thompson as chair |
| Bill Gates as technical advisor | Microsoft break-up | Microsoft spin-offs |
| Stop Killing Partners | consumer and business computing | Microsoft enterprise business |
| Microsoft consumer business | Microsoft as “mobile-first, cloud-first” company | the notion of the modern enterprise |
| removing obstacles to innovate | Gates as a product person | new activist director on the board of Microsoft |
| thriving in a mobile and cloud-first world | zero in on unique contributions | set of high-value activities |
| empowering users and organizations to “do more” as Microsoft’s core value | product innovation not compartementalized by consumer and business |
Satya Nadella: His first [pre-recorded by MS] interview as CEO of Microsoft [Microsoft Feb 4, 2014]
Just a fragment of that interview:
[2:26] STEVE CLAYTON: And as you step into this role, what do you see as your primary focus? What are you going to be really focused on?
SATYA NADELLA: I would say first thing I want to do and focus on is ruthlessly removing any obstacles that allow us to innovate, every individual in our organization to innovate, and then focus all of that innovation on things that Microsoft can uniquely do. We are the company that enables people to do more, to play, have more fun, to create more. So in some sense we refer to ourselves as the do more company, and I want us to be able to take that focus and innovation forward.
And lastly, I want every one of us to find more meaning at work. We spend far too much time at work for it not to have deep meaning.
STEVE CLAYTON: You talked about this focus on innovation. Where do you see the opportunities lie for Microsoft?
SATYA NADELLA: Going forward it’s a mobile first, cloud first world. In other words, everything is becoming digital and software-driven. And so I think of the opportunities being unbounded. And we need to be able to pick the unique contribution that we want to bring.
And that’s where our heritage of being the productivity company to now being the do-more company where we get every individual at every organization to get more out of every moment of their life is what we want to get focused on. [4:06]
Watch also:
– Highly recommended Susan Hauser [CVP, EPG Group of Microsoft] interviews Microsoft CEO Satya Nadella [Microsoft, Feb 4, 2014; published on Microsoft Youtube channel, Feb 5, 2014]: [Microsoft, Feb 4, 2014: “Satya Nadella is a strong advocate for customers and partners, and a proven leader with strong technical and engineering expertise. Nadella addressed customers and partners for the first time as CEO during a Customer and Partner Webcast event.”]
[Contributor Profile: Susan Hauser, Corporate Vice President,
Enterprise and Partner Group, Microsoft]
As a teaser Q: [6:43] How do you think about consumer and business, and how do you see them benefiting each other?
A: You know, one of the things that when we think about our product innovation, we necessarily don’t compartementalize by consumer and business, we think about the user. In many of these cases, what needs to happen is experiences. That’s for sure have to have a strong notion of identity and security, so I.T. control, where it’s needed, still matters a lot, and that’s something that, again, we will uniquely bring to market. But it starts with the user. The user obviously is going to have a life at home and a life at work. So how do we bridge that as there more and more of what they do is digitally mediated? I want to be able to connect with my friends and family. I also want to be able to participate in the social network at work, and I don’t want the two things to be confused, but I don’t want to pick three different tools for doing the one thing I want to do seamlessly across my work and life. That’s what we are centered on. When we think about what we are doing in communications, what we are doing in productivity or social communications, those are all the places where we really want to bridge the consumer and business market, because that’s how we believe end-users actually work. [8:01]
Read also:
– Microsoft Names Nadella CEO: New Era or New Error? [BARRON’S, Feb 4, 2014]
– Facebook or Microsoft: Whose Dominance [i.e. Monopoly] Will Last Longer? [The New Yorker, Feb 4, 2014]
– Microsoft breakup talk starts [IOL, Feb 4, 2014]: “Jettisoning units such as Xbox video-game consoles and the Bing search engine … should go further by also splitting off Windows and smartphones to focus on providing services to business customers … Eighty percent of the value of Microsoft is on the enterprise side and it’s not being valued that way today. The consumer side of the business gets a disproportionate amount of attention. … Shareholders may find an insider advocate in Mason Morfit, the president of activist investing firm ValueAct Holdings LP. Morfit, who’s set to join Microsoft’s board in March, wants the company to reduce its focus on Windows and accelerate efforts to unchain products and services from the operating system”
– Top 5 items on new Microsoft chief’s to-do list [Associated Press, Feb 5, 2014]: “ … some of the most pressing items on Nadella’s to-do list as he reshapes Microsoft into a “mobile-first, cloud-first” company: Integrate Nokia’s mobile device business … Fix Windows and unite the company’s various operating systems … Set a hardware strategy … Pick a management team … Work with the board, including Bill Gates …”
– Microsoft’s new CEO gets handsome pay package [USA TODAY, Feb 4, 2014]: “Overall, he could receive about $18 million as a first-year CEO, more than double what he received as head of the Microsoft’s cloud computing operation in 2013.”
Highly recommended follow-up: Nadella’s Speaks as CEO: Bloomberg West (02/04 video) [Bloomberg TV, Feb 4, 2014] (only the first [18:10] long out of total [41:55] )
Feb. 4 (Bloomberg) –- Full episode of “Bloomberg West.” Guests include Habit Design’s Michael Kim [former Microsoft], Kilbourne Group’s Doug Burgum [former Microsoft], Department of Health and Human Services’ Kurt Delbene [former Microsoft], FCC’s Jessica Rosenworcel, Kapor Center’s Nicole Sanchez, Code2040’s Laura Weidman Powers, Bloomberg Contributing Editor Paul Kedrosky and Bloomberg’s Megan Hughes. (Source: Bloomberg)
Next the details are coming in the following sections:
- ICT industry reports
- Reuters reports
- Bloomberg reports
- Microsoft video text messages for the world and its employees
1. ICT industry reports
:
- Microsoft names Satya Nadella CEO [Computerworld [of IDG] YouTube channel, Feb 4, 2014]
- Short Take: Satya Nadella’s cloud priorities for Microsoft [Network World Videos [of IDG] YouTube channel, Feb 4, 2014]
- CNET News: Microsoft names Satya Nadella as CEO [CBS News via CNET YouTube channel, Feb 4, 2014]
- Inside Scoop: Why Microsoft named Satya Nadella CEO [CNET YouTube channel, Feb 4, 2014]
- Analysis: Satya Nadella is Microsoft’s new CEO [GeekWire [of Seattle, WA] YouTube channel, Feb 4, 2014]
- A tribute to Microsoft’s Steve Ballmer [The Verge YouTube channel, Feb 4, 2014]
- 10 Ways CEO Satya Nadella Should Change Microsoft, Business, Culture [eWeek, Feb 4, 2014]
| Limit Gates’ Influence | Stop Pretending Windows 8 Works | Become More Hardware-Centric |
| Fix Xbox One Flaws | Spend More Time in the Clouds | Strongly Question the Nokia Play |
| Get Away From Bing | Become Smaller, More Agile | Announce Windows 9 Sooner Rather Than Later |
| Prove It’s a New Microsoft |
- Nadella seen as best choice for Microsoft’s new CEO… except in one crucial area [BGR, Feb 4, 2014]
- Satya Nadella brings technical skill and enterprise strength, but what’s the consumer story? [Ars Technica, Feb 4, 2014]
…
The late 2000s were characterized by Microsoft dropping the consumer ball. The company didn’t notice that the iPhone had made the smartphone a mass-market, consumer device, and the company did not appear to anticipate that the smartphone’s success in the consumer space would in turn lead to success in the enterprise space—even though this kind of cross-pollination is a large part of what made Microsoft the behemoth it is. The same story was repeated with the release of the iPad and the consumer-oriented tablet.There is pressure from Wall Street for Microsoft to abandon the consumer market. Sell off Xbox [regarding that see also Phil Spencer: Microsoft’s New CEO Supports Xbox One [Cinema Blend, Feb 4, 2014]], Nokia, Bing, and retreat to the cozy confines of the enterprise market and become another IBM. I would argue that this is a mistake. Should Microsoft abandon the consumer market, the next generation of school-leavers will be raised on Google Apps, iPads, Chromebooks, and OS X.
This won’t merely disrupt Windows on the desktop. It will damage the long-term viability of Office, and beyond that, of Windows on the server as a development platform. This is not to say that these businesses will evaporate entirely, but they’ll be greatly diminished.
Importantly, Nadella appears to recognize this. At the company’s 2013 Financial Analyst Meeting, Nadella said, “This notion that this is an enterprise product and this is a consumer product I think is not the way we will approach things. We’ll think about these products as sort of meeting end user needs and enterprise IT needs, and how to balance that.”
But recognizing the duality is one thing. Responding appropriately to it is another. Making sure that Microsoft doesn’t make the same mistakes, and that it actually leads the consumer space rather than belatedly following others, will require strong, consumer-focused voices and leadership within the company. It’s not surprising that Microsoft’s new CEO does not cover all these bases. It’s unlikely anyone could, such is the diversity of what Microsoft does.
With Nadella’s promotion, it’s not entirely clear where this consumer focus and understanding will come from. Microsoft may be pinning its hopes on a new more active role for Bill Gates. Gates has stepped down as chairman (replaced by John Thompson, formerly of Symantec) but will now spend up to one-third of his time working with product groups and defining the “next round of products.”
But whether Gates can provide this guidance isn’t so clear. In broad strokes, Gates’ Microsoft was an early pioneer of both tablets and smartphones (and even smart watches). In each case, however, the company failed to adapt those early visions to accommodate new technology and new consumer preferences. Admittedly, Gates wasn’t involved in the day-to-day running of the company when these oversights were made, but even as chairman, one would think that he could have pointed out that Microsoft was missing a trick—assuming he recognized it.
Satya Nadella is a good choice for Microsoft CEO, and while it’s day one on the job, he’s so far saying the right things: recognizing the importance of the consumer space, promoting a “mobile first, cloud first” view where devices are important and where hardware, including Nokia, is part of Microsoft’s future. Wretched cliché as it may be, only time will tell if Nadella has what it takes to move the company forward.
- The biggest Microsoft question: What about Bill? [Gigaom, Feb 4, 2014]: “… Make no mistake, Nadella is a great choice as CEO. I’m just not sure he needs the company co-founder and former CEO as a shadow.”
- Satya Nadella at the Accel Partners Symposium [SiliconANGLE YouTube channel, Feb 2, 2014]
Microsoft today announced Satya Nadella as the new CEO of Microsoft. We had reported on Friday last week that Sundar Pichai from Google was another top consideration thanks to his firsthand knowledge of the increasingly influential consumer web, but it was Nadella that won out in the end.. Nadella is known for his experience in the enterprise, helping to rework much of Microsoft’s infrastructure for long-reaching products including Bing and Xbox. But is Nadella too safe of a choice for Microsoft? Would an outsider like Pichai have been better suited to lead Microsoft into the new consumer web?
Microsoft, like its peers and rivals in the industry, is betting big on the modern data center, but with Nadella at the helm, is the Redmond company landing on the wrong side of the cloud? Is this too much of an analog play and not enough of a shake-up play?
In conjunction with the announcement, Microsoft founder Bill Gates will step down from his position as Chairman of the Board and be replaced by our own SiliconANGLE theCUBE alum John Thompson. Gates is allocating a third of his time to mentor Nadella. The duo has much to discuss, reshaping Microsoft for the data center of the future. Cloud services remains at the center of an industry-wide revolution, and Nadella’s already shared his thoughts on the subject.
Just this past summer we had Nadella on theCUBE at the Accel Partners Symposium, live from Stanford University. Nadella discussed with theCUBE host Jeff Kelly the notion of the modern enterprise: a re-imagination of what infrastructure means and what applications mean inside of the enterprise. According to the new chief, there is a tectonic shift happening in the enterprise, and Microsoft is a part of that shift. From a business perspective, a key to infrastructure is being in touch with the applications.
“We’re building a new operating system for the modern enterprise to be able to deploy these modern applications. That is how I conceptualize it,” Nadella stated.
The four mega trends constitute the future of a modern enterprise infrastructure. But that can make for an awfully complex public, private and/or service provider cloud. So how does Microsoft and Nedella approach that problem of complexity?
Nadella says to start with the design point — public, private and service provider cloud. He believes it’s the true fruition of distributed computing.
“So these four things, identity, management, virtualization and application platform I think is the co-investment you’ve got to make to help enterprises truly adopt the cloud while its complex but you have to tame the complexity,” Nadella explained.
So what does that mean for Microsoft? Is Nadella the man to lead them into the consumer web and the Internet of Things? It feels like a bit of a safe bet for Microsoft. How can that be for a Fortune 50 company who just reported a killer? As our Editor-in-Chief John Furrier reported last Friday in his Breaking Analysis segment, it’s about getting the data right.
Buried in the news of Nadella being named CEO is the news we mentioned above that John Thompson will be the new Chairman of the Board. Interesting tidbit, when on theCUBE in 2011 Furrier asked Thompson about the “middle fat part” developing within the market as it relates to real-time data. Given this consumer-driven market powered by the Internet of Things, Thompson hints at his own vision for Microsoft, one that rings true nearly three years later as he works closely with Nadella on Microsoft’s board:
“Our focus is on the global 2000. They have one thing in common, performance and uptime sensitive. We think this market is about a $1.7-$1.8 billion market. We have literally barely scrapped the surface on that. This is a phenomenon that we think will only catch more wind in its sails,” said Thompson.
2. Reuters reports
:
- From: Microsoft names India-born Nadella as next CEO, Gates to advise on technology [Reuters edition in India, Feb 4, 2014]
Microsoft Corp named 22-year company veteran Satya Nadella as its next chief executive officer on Tuesday (February 4), and said co-founder Bill Gates would step down as chairman and advise the new CEO on technology, marking an epochal change of control at the company that drove the PC revolution.
Nadella, a 46-year old born in India who led the creation of Microsoft’s Internet-based, or “cloud” computing services, is only Microsoft’s third CEO in 39 years, taking over from Steve Ballmer, who inherited the job from Gates in 2000.
The move ends a five-month search process at the Redmond, Washington-based company, triggered by the August announcement of Ballmer’s decision to retire. That was longer than many investors had expected.
Gates said Nadella’s experience in cloud computing made him the right man to lead Microsoft, as the company struggles to find its feet in the new arena of mobile computing. As he relinquishes the chairman’s title, Gates will stay on the board and assume a new role as technology adviser to Nadella.
Shares of the world’s largest software maker were up 0.2 percent at $36.54 on the Nasdaq on Tuesday morning.
Nadella, who describes himself as a cricket and poetry lover, called the appointment “humbling” in an email to the company’s employees. In a videotaped statement he said he would focus on “ruthlessly” removing any obstacles to innovation at the company.
- Nadella named Microsoft CEO, Gates nearby [Reuters YouTube channel, Feb 4, 2014]
Transcript:
Satya Nadella’s new job is a big one- as only the third CEO in Microsoft’s almost four decade history- he takes over at a critical time- and he himself makes it clear in this Microsoft video- he won’t put up with anything that gets in his way:
SOUNDBITE: SATYA NADELLA, CEO, MICROSOFT (ENGLISH) SAYING: “The first thing I want to do and focus on is ruthlessly remove any obstacles that allow us to innovate.” One obstacle, some say, was Bill Gates in his role as Chairman. He’s stepping down – but says he will now spend one third of his time advising Nadella on technology.
A good move all around says analyst Patrick Moorhead. SOUNDBITE: PATRICK MOORHEAD, PRESIDENT AND PRINCIPAL ANALYST, MOOR INSIGHT AND ANALYSIS (ENGLISH) SAYING:
“He’ll have a less powerful role in terms of managing the business of the board but he is narrowing the scope in on something I don’t think anybody can argue with, in that he is going to give insights to products and at its core, Gates is a product person.”That’s good because products are a big problem. For example, the company is still struggling to find its feet as mobile computing evolves.
SOUNDBITE: PATRICK MOORHEAD, PRESIDENT AND PRINCIPAL ANALYST, MOOR INSIGHT AND ANALYSIS (ENGLISH) SAYING:
“You have Apple, Samsung and Google who are gaining a ton of share and a ton of mindshare for the future and I think Nadella needs to take a hard look in the mirror and really evaluate whether Microsoft can win there.”
See more opinion from him in Gates will have a less powerful role – Patrick Moorhead (6:10) video They also missed the boat on social media– says Bruno Del Ama– who runs the Global X social media Index fund:
SOUNDBITE: BRUNE DEL AMA, CEO, GLOBAL X FUNDS (ENGLISH) SAYING: “Tremendous amount of growth. Very difficult to do organically and so if they want to do something there in a meaningful way they probably have to acquire.”Microsoft has also been facing a slow erosion of its PC-centric Windows and Office franchises.
Investors have been clamoring for a big move– and a break up makes sense says Chris Baggini of Turner Investments.
SOUNDBITE: CHRIS BAGGINI, SENIOR PORTFOLIO MANAGER, TURNER INVESTMENTS (ENGLISH) SAYING:
“I think he has to split the company up. It’s really a mishmash of very mature businesses and some growthier businesses and unfortunately we’ve seen this before where the more mature businesses languish with very low growth rates and the growthier businesses really don’t get valued the way they should. So they have a data center business which is very strong, they can break out their consumer business and separate that out and leave an enterprise business which is a very strong cash flow business.” Shares were slightly higher on the official announcement- the stock had rallied when rumors of Nadella’s promotion leaked last week.
- Satya Nadella: Microsoft still “very relevant” [Reuters YouTube channel, Feb 4, 2014]
- Breakingviews: Microsoft’s disappearing old guard [Reuters TV YouTube channel, Feb 4, 2014]
At the end of the discussion they are asking:
Will Satya Nadella finally break up Microsoft?
Tweet us your thoughts @Breakingviews
- Microsoft founders recede into middle distance [by Robert Cryan on the Breakingwiews blog of Reuters, Feb 4, 2014]
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Microsoft’s founding fathers are finally receding into the middle distance. Satya Nadella’s experience makes him a solid choice to succeed longtime Chief Executive Steven Ballmer. Better still, he will have greater room to maneuver as Bill Gates steps down as chairman. Nadella will need to grapple with his predecessors’ bad decisions, like the Nokia deal, and he’s unlikely to pursue a breakup. But he can focus on what the company does best.While many candidates entered the frame, it was always going to be a difficult post to fill. Microsoft spans everything from its omnipresent operating system to enterprise software to consumer hardware. It’s also threatened by upstarts and a shift in technology away from PCs. Finding a manager that understands technology, all these markets and has skills in revitalizing a mature behemoth was close to impossible.
Worse, the decision to buy Nokia’s handsets arm for $7.2 billion in the midst of the search showed that Microsoft’s board was wedded to the sprawl built by GATES AND BALLMER. Few credible outsiders wanted to step into a position where they had little say over the company’s direction.
In this light, Nadella’s choice is probably as good as the company could make. He has worked for Microsoft since 1992, so he knows the place. His most recent task was to run Microsoft’s cloud and enterprise group. This is one of the fastest growing divisions at Microsoft and represents the company’s future – selling software on demand to companies. He doesn’t have sales experience or much interaction with investors, which is important for a $303 billion market cap company. But Microsoft’s bench has enough depth to make up for these shortfalls.
The bigger question is where Nadella will take Microsoft. He didn’t give many hints in his opening memo to employees. The right course would be to focus on enterprise software, which is what Microsoft does best. A breakup or spinoff of the consumer and hardware operations would be welcome. But with Ballmer still on the board and holding some 4 percent of the company, and Gates remaining as the board’s technology adviser to “devote more time to the company,” such radical redrawing will be hard to accomplish any time soon.
But the message is unmistakable. The old guard is slipping into the background. That gives Nadella room to slowly turn Microsoft toward a more focused, and potentially valuable, future.
3. Bloomberg reports
:
- Microsoft Names Satya Nadella CEO, John Thompson Chair [Bloomberg YouTube channel, Feb 4, 2014]
Reporting related to that:
– Microsoft’s Nadella Named CEO to Transform PC Pioneer [Bloomberg, Feb 5, 2014]: “ ““He’s really the complete package — he has incredible intellect but he also combines that with a deep curiosity and willingness to learn,” said Doug Burgum, who sold business-software developer Great Plains to Microsoft in 2001 and oversaw Nadella while at the Redmond, Washington-based company. … Nadella keeps an eye on the moves of nimbler startups and has pushed Microsoft executives to learn from what people outside of Redmond are doing, a person with knowledge of his management approach has said. At a technology conference in Paris in December, he spent time with local startups like video-on-demand company Video Futur Entertainment Group SA.”
– Microsoft Signals New Era With Thompson as Chairman [Bloomberg, Feb 4, 2014]: “ “Thompson’s going to be a major voice for the company,” James Staten, an analyst at Forrester Research, said in an interview. “They wouldn’t have made him chairman, if he didn’t have strong opinions about how to drive the company forward. And Satya is looking for strong partners on the board.” … Thompson and Nadella will oversee a transition to a new organizational structure and integrate the $7.2 billion acquisition of Nokia Oyj (NOK1V)’s handset unit. The management transition at Microsoft follows the worst decline on record for personal computers in 2013, when shipments dropped 10 percent and are projected to languish through 2017. Thompson knows what it’s like to be at the head of a struggling incumbent. While at Symantec in 2005, he orchestrated the ill-fated $10.2 billion purchase of Veritas Software Corp., in an effort to push into data storage. When Thompson stepped down as CEO four years later, Symantec was contending with slowing growth amid an economic downturn and rising competition. … Thompson likes to tell people he spent “27 years, 9 months and 13 days at IBM” before joining technology security company Symantec as CEO in 1999. He took the company from $600 million to $6 billion in sales over his decade-long tenure, before stepping down in 2009. … A new director set to join the board next month is Mason Morfit, president of activist shareholder ValueAct Holdings LP. He’s eager to see Microsoft emphasize its business software and Internet-based cloud services rather than consumer technology, people familiar with the situation have said.”
– Microsoft Gets Style Shift With Nadella Replacing Ballmer [Bloomberg, Feb 5, 2014]
– Microsoft CEO Pick Leaves Losers Grappling With Fallout [Bloomberg, Feb 5, 2014]: “With Microsoft’s board disclosing today that it picked Satya Nadella as CEO, that leaves internal candidates such as Executive Vice President Tony Bates and Chief Operating Officer Kevin Turner among those who failed to get promoted, people with knowledge of the search have said. Stephen Elop, the former CEO of Nokia Oyj who was set to join the software maker after it closes a $7.2 billion deal for Nokia’s handset unit, was also on the shortlist, among others. … The CEO candidates were informed that they didn’t get the role last week … Turner plans to stay at the Redmond, Washington-based company, said a person close to the COO. And while Bates and Elop both have ambitions to be CEO, they are also set to continue at Microsoft for the time being since success in their current jobs may be the best way to attract other offers, said people close to the executives, who asked not to be identified because the information is private.”
– Who Is Satya Nadella and Why Is He Microsoft’s CEO? (video) [Bloomberg TV, Feb 3, 2014]: “Feb. 4 (Bloomberg) — Kurt Delbene, former president at Microsoft Office, and Bloomberg Contributing Editor Paul Kedrosky discuss Microsoft’s choice of Satya Nadella as its new CEO on Bloomberg Television’s “Bloomberg West.” “
– Nadella as CEO Good for Microsoft’s Future: Subotky (video) [Bloomberg TV, Feb 4, 2014]: “Feb. 4 (Bloomberg) — Jason Subotky, a portfolio manager at Yacktman Asset Management Co., talks about Microsoft Corp.’s decision to name Satya Nadella chief executive officer. Nadella will replace Steve Ballmer effective immediately after a five-month search, Microsoft said in a statement today. Subotky speaks with Scarlet Fu, Jon Erlichman, Matt Miller, Paul Kedrosky and Anurag Rana on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)”
– How Can Nadella, Gates Shape Microsoft’s Future? (video) [Bloomberg TV, Feb 4, 2014]: “Feb. 4 (Bloomberg) — Kurt Delbene, former president at Microsoft Office, and Bloomberg Contributing Editor Paul Kedrosky discuss how the shakeup in Microsoft’s c-suite can shape the future of the company on Bloomberg Television’s “Bloomberg West.” ”
- Microsoft Preps Insider Satya Nadella for CEO Promotion [Bloomberg YouTube channel, Jan 31, 2014]
Reporting related to that: Microsoft Said to Be Preparing to Make Satya Nadella CEO [Bloomberg, Jan 31, 2014]
- Microsoft Prescription: More Bill Gates? [Bloomberg YouTube channel, Feb 3, 2014]
Reporting related to that:
– Microsoft’s New Power Isn’t Gates, Nadella: Walia (video) [Bloomberg TV, Feb 3, 2014]: “Former Microsoft Executive Hardeep Walia discusses the search for a new Microsoft CEO on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)”
– Microsoft Begins New Era With Nadella, Gates (video) [Bloomberg TV, Feb 3, 2014]: “Feb. 4 (Bloomberg) — Bloomberg senior West Coast correspondent Jon Erlichman breaks down the management changes at Microsoft on Bloomberg Television’s “Market Makers.” ”
– Bill Gates to Assume Role as Technology Adviser [Bloomberg TV, Feb 4, 2014]: “Feb. 4 (Bloomberg) — Microsoft named Satya Nadella CEO, tapping an insider steeped in business technology to speed turnaround at a software maker that helped usher in the personal-computing age only to be left behind as the world shifted toward the Web and mobile devices. Bloomberg Contributing Editor Paul Kedrosky, Bloomberg’s Matt Miller and Jon Erlichman speak on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)”
- Kedrosky to Microsoft: Stop Killing Partners [Bloomberg YouTube channel, Feb 4, 2014]
4. Microsoft video and text messages for the world and its employees
(in addition to the pre-recorded interviews embedded in the beginning of this post):
Microsoft Chairman John Thompson on CEO Satya Nadella [Microsoft Feb 14, 2014]
Bill Gates welcomes Satya Nadella as Microsoft CEO [Microsoft Feb 14, 2014]
Steve Ballmer welcomes Satya Nadella as Microsoft CEO [Microsoft Feb 14, 2014]
Microsoft Chairman John Thompson addresses Microsoft employees [Microsoft Feb 14, 2014]
Bill Gates at Microsoft’s “Meet the CEO” event [Microsoft Feb 14, 2014]
Satya Nadella addresses Microsoft employees [Microsoft Feb 14, 2014]
Microsoft Board names Satya Nadella as CEO [press release, Feb 4, 2014]
Bill Gates steps up to new role as Technology Advisor; John Thompson assumes role as Chairman of Board of Directors.
Microsoft Corp. today announced that its Board of Directors has appointed Satya Nadella as Chief Executive Officer and member of the Board of Directors effective immediately. Nadella previously held the position of Executive Vice President of Microsoft’s Cloud and Enterprise group.
“During this time of transformation, there is no better person to lead Microsoft than Satya Nadella,” said Bill Gates, Microsoft’s Founder and Member of the Board of Directors. “Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together. His vision for how technology will be used and experienced around the world is exactly what Microsoft needs as the company enters its next chapter of expanded product innovation and growth.”
Since joining the company in 1992, Nadella has spearheaded major strategy and technical shifts across the company’s portfolio of products and services, most notably the company’s move to the cloud and the development of one of the largest cloud infrastructures in the world supporting Bing, Xbox, Office and other services. During his tenure overseeing Microsoft’s Server and Tools Business, the division outperformed the market and took share from competitors.
“Microsoft is one of those rare companies to have truly revolutionized the world through technology, and I couldn’t be more honored to have been chosen to lead the company,” Nadella said. “The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster and continue to transform. A big part of my job is to accelerate our ability to bring innovative products to our customers more quickly.”
“Having worked with him for more than 20 years, I know that Satya is the right leader at the right time for Microsoft,” said Steve Ballmer, who announced on Aug. 23, 2013 that he would retire once a successor was named. “I’ve had the distinct privilege of working with the most talented employees and senior leadership team in the industry, and I know their passion and hunger for greatness will only grow stronger under Satya’s leadership.”
Microsoft also announced that Bill Gates, previously Chairman of the Board of Directors, will assume a new role on the Board as Founder and Technology Advisor, and will devote more time to the company, supporting Nadella in shaping technology and product direction. John Thompson, lead independent director for the Board of Directors, will assume the role of Chairman of the Board of Directors and remain an independent director on the Board.
“Satya is clearly the best person to lead Microsoft, and he has the unanimous support of our Board,” Thompson said. “The Board took the thoughtful approach that our shareholders, customers, partners and employees expected and deserved.”
With the addition of Nadella, Microsoft’s Board of Directors consists of Ballmer; Dina Dublon, former Chief Financial Officer of JPMorgan Chase; Gates; Maria M. Klawe, President of Harvey Mudd College; Stephen J. Luczo, Chairman and Chief Executive Officer of Seagate Technology PLC; David F. Marquardt, General Partner at August Capital; Nadella; Charles H. Noski, former Vice Chairman of Bank of America Corp.; Dr. Helmut Panke, former Chairman of the Board of Management at BMW Bayerische Motoren Werke AG; and Thompson, Chief Executive Officer of Virtual Instruments. Seven of the 10 board members are independent of Microsoft, which is consistent with the requirement in the company’s governance guidelines that a substantial majority be independent.
Satya Nadella email to employees on first day as CEO
From: Satya Nadella
To: All Employees
Date: Feb. 4, 2014
Subject: RE: Satya Nadella – Microsoft’s New CEOToday is a very humbling day for me. It reminds me of my very first day at Microsoft, 22 years ago. Like you, I had a choice about where to come to work. I came here because I believed Microsoft was the best company in the world. I saw then how clearly we empower people to do magical things with our creations and ultimately make the world a better place. I knew there was no better company to join if I wanted to make a difference. This is the very same inspiration that continues to drive me today.
It is an incredible honor for me to lead and serve this great company of ours. Steve and Bill have taken it from an idea to one of the greatest and most universally admired companies in the world. I’ve been fortunate to work closely with both Bill and Steve in my different roles at Microsoft, and as I step in as CEO, I’ve asked Bill to devote additional time to the company, focused on technology and products. I’m also looking forward to working with John Thompson as our new Chairman of the Board.
While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation. This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places — as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.
As we start a new phase of our journey together, I wanted to share some background on myself and what inspires and motivates me.
Who am I?
I am 46. I’ve been married for 22 years and we have 3 kids. And like anyone else, a lot of what I do and how I think has been shaped by my family and my overall life experiences. Many who know me say I am also defined by my curiosity and thirst for learning. I buy more books than I can finish. I sign up for more online courses than I can complete. I fundamentally believe that if you are not learning new things, you stop doing great and useful things. So family, curiosity and hunger for knowledge all define me.
Why am I here?
I am here for the same reason I think most people join Microsoft — to change the world through technology that empowers people to do amazing things. I know it can sound hyperbolic — and yet it’s true. We have done it, we’re doing it today, and we are the team that will do it again.
I believe over the next decade computing will become even more ubiquitous and intelligence will become ambient. The coevolution of software and new hardware form factors will intermediate and digitize — many of the things we do and experience in business, life and our world. This will be made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning.
This is a software-powered world.
It will better connect us to our friends and families and help us see, express, and share our world in ways never before possible. It will enable businesses to engage customers in more meaningful ways.
I am here because we have unparalleled capability to make an impact.
Why are we here?
In our early history, our mission was about the PC on every desk and home, a goal we have mostly achieved in the developed world. Today we’re focused on a broader range of devices. While the deal is not yet complete, we will welcome to our family Nokia devices and services and the new mobile capabilities they bring us.
As we look forward, we must zero in on what Microsoft can uniquely contribute to the world. The opportunity ahead will require us to reimagine a lot of what we have done in the past for a mobile and cloud-first world, and do new things.
We are the only ones who can harness the power of software and deliver it through devices and services that truly empower every individual and every organization. We are the only company with history and continued focus in building platforms and ecosystems that create broad opportunity.
Qi Lu captured it well in a recent meeting when he said that Microsoft uniquely empowers people to “do more.” This doesn’t mean that we need to do more things, but that the work we do empowers the world to do more of what they care about — get stuff done, have fun, communicate and accomplish great things. This is the core of who we are, and driving this core value in all that we do — be it the cloud or device experiences — is why we are here.
What do we do next?
To paraphrase a quote from Oscar Wilde — we need to believe in the impossible and remove the improbable.
This starts with clarity of purpose and sense of mission that will lead us to imagine the impossible and deliver it. We need to prioritize innovation that is centered on our core value of empowering users and organizations to “do more.” We have picked a set of high-value activities as part of our One Microsoft strategy. And with every service and device launch going forward we need to bring more innovation to bear around these scenarios.
Next, every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this.
Finally, I truly believe that each of us must find meaning in our work. The best work happens when you know that it’s not just work, but something that will improve other people’s lives. This is the opportunity that drives each of us at this company.
Many companies aspire to change the world. But very few have all the elements required: talent, resources, and perseverance. Microsoft has proven that it has all three in abundance. And as the new CEO, I can’t ask for a better foundation.
Let’s build on this foundation together.
Satya
Steve Ballmer email to employees on new CEO
From: Steve Ballmer
To: All Employees
Date: Feb. 4, 2014
Subject: Satya Nadella – Microsoft’s New CEO
Today is an incredibly exciting day as we announce Satya Nadella as the new CEO of Microsoft. Satya will be a great CEO, and I am pumped for the future of Microsoft. You can read the full announcement here.
Satya is a proven leader. He’s got strong technical skills and great business insights. He has a remarkable ability to see what’s going on in the market, to sense opportunity, and to really understand how we come together at Microsoft to execute against those opportunities in a collaborative way. I have worked closely with Satya for many years and I have seen these skills many times. He is not alone, though. Our Senior Leadership Team has never been stronger, and together this group will drive us forward.
Microsoft is one of the great companies in the world. I love this company. I love the bigness and boldness of what we do. I love the way we partner with other companies to come together to change the world. I love the breadth and the diversity of all of the customers we empower, from students in the classroom to consumers to small businesses to governments to the largest enterprises.
Above all, I love the spirit of this place, the passion, and the perseverance, which has been the cornerstone of our culture from the very beginning.
Stay focused and keep moving forward. I am excited about what we will do. Satya’s appointment confirms that.
Thanks for making Microsoft the most amazing place to work on the planet, and thanks for the chance to lead.
Steve
Microsoft’s integrated solution for streaming video and Live TV providers on all devices, plus the upcoming live-action and “shared experience” TV of its own on Xbox
This is my finding as an update to the one of a year ago in “Microsoft entertainment as an affordable premium offering to be built on the basis of the Xbox console and Xbox LIVE services [Feb 13, 2013] OR create interactive content as a premium offering together with partners using Kinect technology as a starter OR moving Microsoft Xbox 360 to ‘entertainment console’ OR leaving the good quality commodities to others and going for a premium brand with Xbox as well”.
One cannot understand the Microsoft solution without first looking at:
- Cable and satellite video market (U.S. only)
- Pay-TV market (cable and satellite, IPTV, terrestrial)
- The overall TV market (home video, on demand video, linear TV)
- IPTV—AT&T U-verse TV and Verizon FiOS video in particular
- OTT (Over-the-top content)
Then the Microsoft solution could be presented as follows:
6. Microsoft’s live TV solution on Xbox
7. Preliminary information on the upcoming products from Xbox Entertainment Studios
8. Xbox Music and Xbox Video services for other devices
Before all that, however, we should also understand a key trend that the Installed Base of Internet-Connected Video Devices to Exceed Global Population in 2017 [iSuppli press release, Oct 8, 2013] which is also showing the immense difficulty for the Microsoft effort:
More than 8 billion Internet-connected video devices will be installed worldwide in 2017, exceeding the population of the planet, according to research from the Broadband Technology Service at IHS Inc. (NYSE: IHS).
The installed base of video-enabled devices that are connected to the Internet—a category that includes diverse product such as tablets, smart TVs, games consoles, smartphones, connected set-top boxes, Blu-ray players, and PCs—will expand to 8.2 billion units in 2017. This will represent a nearly 90 percent increase from 4.3 billion in 2013, as presented in the attached figure.
With the world’s population amounting to 7.4 billion people in 2017, this means that there will be 1.1 Internet-connected video devices installed for each global citizen.
“On average every human being in the world will possess more than one Internet-connected video device by the year 2017—a major milestone for the electronics market,” said Merrick Kingston, senior analyst, Broadband Technology, at IHS. “In practice, ownership of Internet-connected hardware will be concentrated among users whose homes are equipped with broadband connections. We’re quickly approaching a world where the average broadband household contains 10 connected, video-enabled devices. This means that each TV set installed in a broadband-equipped home will be surrounded by three Internet-connected devices.”
Asia-Pacific gets connected
The number of connected devices in the mature North American and Western European regions will grow at a relatively modest compound annual growth rate (CAGR) of 10 percent from 2013 to 2017.
In contrast, Asia-Pacific will expand at 20 percent during the same period. Driven largely by Chinese demand, Asia-Pacific will add 1.9 billion connected devices to the global installed base between 2013 and 2017.
On the other end of the regional spectrum, sub-Saharan Africa will contribute 145 million net additions to the total installed base during the next four years.
Challenges and opportunities
In order to cash in on this massive growth in Internet-connected devices, media companies across the operator, broadcast, consumer electronics manufacturing and over-the-top (OTT) businesses have embraced Internet protocol (IP) video distribution. Big names making a foray into IP video include HBO, Microsoft, DirecTV and Netflix.
However, all of these companies face a major challenge: how to wrap consumers into their ecosystems, given the proliferation of platforms, high switching costs and strong incentives for consumers to stay with their existing services.
Back in 2005, PCs comprised 93 percent of all connected devices. By the end of 2017, the base of connected devices will diversify dramatically, with PCs comprising only 23 percent of the connected installed base. Other devices will account for the rest of the market, including smart TVs at 5 percent, consoles at 2 percent, and smartphones and tablets collectively representing 67 percent.
“Addressing the full breadth of the device landscape, and recuperating the development cost of doing so, will pose a major challenge for a number of media firms,” Kingston added.
1. Cable and satellite video market (U.S. only)
Let’s start with a list of cable and satellite video providers in the U.S.:
The chart is from Would a DirecTV-DISH Merger Still Make a New Pay-TV Media Monopoly?
[24/7 Wall St., Oct 10, 2013]. Note that Newco is the DirectTV-DISH merged company
just imagined by the article. The actual Top 5 companies represented 75.4% of the U.S.
cable and satellite video subscribers: 35.6% satellite (newco) and 39.8% cable.
Relative to that Verizon FIOS video IPTV had 4.7M subscribers and
AT&T U-verse [IP]TV 4.5M by the end of Q4’12 (see below).
See also (in order to understand the challenges cable operators are facing everywhere):
– TWC rebuffs Charter’s latest takeover bid [[IHS] Screen Digest commentary, Jan 14, 2014] with “The saga to create the nation’s second largest cable operation is moving into a new phase … With so many sharks circling TWC, IHS believes that it will be a matter of not if but when TWC accepts a bid.”
– Time Warner Cable prepares for its business future [[IHS] Screen Digest commentary, Oct 8, 2013] with “TWC and other cable operators are in the unenviable position of seeing their primary product, pay TV video, declining. Coupled with encroachment from IPTV, and potential upstart OTT technologies, cable operators are pushing to grow other business lines. … Staying ahead of the technological curve is a problem for all pay TV operators, and cable more than IPTV, with Satellite experiencing the worst of it.”
– Netflix added to Virgin’s TiVo platform [[IHS] Screen Digest commentary, Sept 10, 2013] with “UK cable company Virgin Media has signed what is effectively an OTT carriage deal with Netflix to bring the streaming service onto the Virgin TiVo platform. Groundbreaking move is the first deal of its type and indicates a change in the positioning of Netflix and the competitive positioning of OTT against ‘traditional’ pay TV. … that more firmly positions Netflix as a content aggregator (read: channel) rather than a platform and opens the door for similar deals internationally. Move vindicates our long-held view that this was the correct way to position Netflix and other OTT content aggregators.”
Cable takes the fight to OTT [[IHS] Screen Digest commentary, Oct 28, 2013]
After years of subscriber losses, Comcast announced on October 25, 2013, the first widespread test of a cable network lite bundle, the combination high-speed data (HSD) and broadcast basic video and premium channel. The trial is slated to run a minimum of one year, the operator plans to have stepped increases in the starter $49.99 per month price at 6 months ($60-$70) and again at one year ($70+).
This is not the first such offering however. In August of 2013 Time Warner Cable (TWC) initiated a similar promotion targeted at transitioning college students back toward video products, including HBO and HSD. TWC partnered with nine colleges in this limited trial, again the term is likely to run for a year or less. TWC is charging $79.99 per month for one year, but did not list a non-promotional price.
In the following analysis IHS makes two assumptions: 1) That cord-cutting and cord-never households will likely buy HSD from pay TV providers, and that it will skew toward higher speed tiers. 2) The price for bundled 25-30Mbit is ~$55 and unbundled ~$60.
Our take
The fact that the business of pay TV is changing is no longer in doubt, but the business has insulated itself well and is preparing to weather the storm. Comcast and TWC are not the first to experiment with new offerings, Cox recently concluded its flareWatch trial, the first pay TV OTT trial. The difference between the Cox effort and Comcast and TWC is that the two latter companies have price efficiencies working on their side.
That’s not to say that IHS believes that the Cox trial was ended because of price, more likely Cox received valuable customer feedback and experience. The Comcast and TWC deals are predicated on completely different foundations. Both offerings provide significant perceived value, and combined monetary value to subscribers.
Both deals compare to a HSD and Netflix and/or Hulu+ plan. The Netflix/Hulu+ plan will likely cost $68 to $76 depending upon HSD tier and number of OTT subscriptions, compared with Comcast’s year one monthly average of $60 and TWC’s $70. Another significant point of difference is the depth of offering.
Both pay TV providers share four common features, 25-30Mbit HSD, local broadcast channels, HBO, HBO GO – Comcast also includes StreamPix (Library title Subscription VOD). IHS believes that both Comcast and TWC are at a minimum matching Netflix on a like-for-like price content offering when considering HSD and HBO versus HSD and Netflix/Hulu+. The addition of broadcast local channels as well as SVOD in the case of Comcast, signal that cable is not going to give up the fight.
2. Pay-TV market (cable and satellite, IPTV, terrestrial)
Then, according to Worldwide pay-TV Subscribers to Exceed 1.1 Billion in 2019 with Increasing IPTV Market Share [ABI Research, Jan 22, 2014]
Worldwide pay-TV market reached 903.3 million subscribers in 2013, generating $249.8 billion in service revenue. IPTV operators enjoyed significant growth (18.5% YoY) in 2013 to 92 million subscribers with a total of $37.2 billion in service revenue.
“Increasing FTTH [Fiber To The Home] subscriber base and bundled subscriber base of telcos are boosting the IPTV market. ABI Research forecasts that the IPTV subscriber base will grow to 161 million subscribers in 2019 accounting for 15% of overall pay-TV market,” comments Jake Saunders, VP and practice director of core forecasting.
The global terrestrial TV market reached 9.5 million subscribers at the end of 2013. A declining pay DTT subscriber base in Italy and Spain had an impact on the overall Western European DTT market which dropped around 5% in 2013. Unlike Western Europe, the DTT market in Africa grew a remarkable 45% to 2.1 million subscribers in 2013. “As African countries start to switch over to digital, digital terrestrial TV has become an affordable alternative to satellite TV service in the region. ABI Research forecasts that Africa will have over 4.8 million DTT subscribers in 2019,” adds Khin Sandi Lynn, industry analyst.
DirecTV maintains its largest market share in terms of pay-TV service revenue. The company had around 20.2 million subscribers in the US with an ARPU above $102 by the end of 3Q-2013. Globally, the pay-TV market is expected to grow to 1.1 billion subscribers with $320.3 billion in service revenue in 2019.
3. The overall TV market (home video, on demand video, linear TV)
Or a broader view representing all other segments of the TV market as well:
Global TV market revenue to grow at a steady pace: up 23% by 2018
[DigiWorld by IDATE blog, Jan 30, 2014] by Florence Le Borgne
Head of the TV & Digital content Practice, IDATE.
At a time when video has become pervasive across all of our screens, most national TV markets are losing steam: shrinking viewership and pressure on advertising markets, especially in Europe. Although pay-TV seems to be holding its own, the fast-growing popularity of OTT offerings is shaking up the traditional pay-TV model, while the demise of physical media is virtually a foregone conclusion.
If the decline of physical media now seems inevitable, television still has a chance to reinvent itself in a way that takes into account changes in viewer behaviour and competition from new online vendors.
Accessing TV
According to IDATE, the number of TV households worldwide will reach 1.675 billion in 2018 (+9.6% in 5 years), with the number of digital TV households worldwide being 1.542 billion in 2018, which translates into 92% of TV households
Cable will the remain the chief access channel (592.3 million households in 2018) but will gradually lose ground to satellite and IPTV which will account for 32.9% and 10.9% of TV households, respectively, at the end of 2018.
Despite the development of hybrid TV solutions, terrestrial TV should continue its decline on the first TV set and drop down to number three spot by 2018, with roughly 21% share of the global market.
The development of hybrid solutions that combine live programming on broadcast networks (terrestrial and DTH) and OTT video services over the open Web is a key variable in the future development of the various TV access modes, and may well shake up current trends.
TV: top money-maker
Breakdown of audiovisual market revenue in 2013
TV revenue
According to IDATE, the global TV industry’s revenue will come to €374.8 billion in 2013 and €459.2 billion in 2018.
Pay-TV revenue will grow by 21.3% between 2013 and 2018, or by an average 3.9% annually, to reach €220.2 billion in 2018.
Ad revenue will enjoy even stronger growth of 27.3% between 2013 and 2018, to reach €201.1 billion in 2018.
Public financing/licensing fees will continue to increase significantly (+7.7% in 5 years) to reach nearly €38 billion in 2018.
Video revenue
According to IDATE, physical media sales will total €16.3 billion in 2018, when video on demand (VoD) revenue will reach €35.4 billion in 2018, which is 90% more than in 2013.
This means that the global market will have shrunk to more than a quarter of what it was in 2013 (-27.2%).
Blu-ray will be the most common format and help temper plummeting physical media sales.
OTT video will continue to be the biggest earner, generating 51% of total revenue.
VoD will still be the dominant model on managed networks. It will generate €6.9 billion in 2018 versus €2.3 billion for subscription video on demand (S-VoD).
American OTT video providers’ footprint in Europe as of 31 December 2013
Source: IDATE, December 2013American OTT vendors already have a solid foothold in Europe
Netflix is already present in seven European countries: Britain, Ireland, the Netherlands, Denmark, Norway, Finland and Sweden. The service had 1.6 million subscribers in the UK and Ireland at the end of 2013.
LoveFilm was reporting 1.9 million subscribers in the UK and Germany at the end of 2013.
At the end of 2013, iTunes’ VoD rental service was available in close to 110 countries, and permanent downloads in 14 countries, chiefly in North America and Europe.
More information on TV and new video services market report & database
UK Video Rental Market Plunges in 2013 as Half of Country’s Blockbuster Stores Close [IHS iSuppli press release, April 23, 2013]
The market for Blu-ray (BD) and DVD rental in the United Kingdom is expected to plunge by 22 percent in 2013, as half the country’s Blockbuster video stores shut down in a restructuring initiated by the company’s new management.
The U.K. market for physical-video rental will drop to £202 million in 2013, down £57 million, or 22 percent from £259 million in 2012, according to a newly updated forecast from IHS (NYSE: IHS) . While the market is generally on the decline, 2013 will bring the sharpest predicted annual decrease for the 11-year period from 2007 through 2017.
By the end of 2013, only 264 Blockbuster stores will be open in the country, down 50 percent from 530 in 2012. Blockbuster is the largest video rental chain in the country.
“The year 2013 is set to become a watershed for the U.K. video rental market as a result of the wholesale closure of Blockbuster UK stores,” said Tony Gunnarsson, senior video analyst at IHS. “The massive downturn in the store-based video rental market represents a significant loss to the video market and will result in a major decline and radical transformation of the U.K. video market overall. From 2013 on, the U.K. physical-video rental business increasingly will be dominated by online rent-by-mail subscription services.”
Both DVD and BD transactions are due to decrease across the store-based sector this year. DVD rentals will fall by a steep 53.2 percent to 15.4 million. BD is set to drop by an even larger 61.3 percent to 2.8 million respectively.
Blockbuster gets busted up
After filing for administration in January 2013, Blockbuster’s administrators Deloitte announced two separate rounds of store closures, including some 224 sites. In February 2013, supermarket chain Morrisons purchased 49 of these former Blockbuster stores in its drive to increase its store presence in southeast England.
Out of the remaining Blockbuster stores, Gordon Brothers acquired a total of 264 locations, including a number of Blockbuster outlets earmarked for closure that will now remain open.
Pay-TV killed the video store
In 2012, rental stores were responsible for 41.3 percent of the video rental market based on consumer spending. In the latest forecast for 2013, however, the store-based sector is now projected to generate just 24.7 percent of the overall market. This tilts the market toward the online sector, which will see its share of market increase massively from 58.7 percent in 2012 to 75.3 percent this year.
At the same time, the lost rental business won’t result in customers that used to rent at Blockbusters automatically signing up to become rent-by-mail customers with online providers, IHS believes. Rather, those customers are more likely to turn to a host of other video platforms, primarily pay-TV services.
Video rental market winds down
In the longer view, the U.K. rental market will return to a normal trend of decline after 2013, with spending on renting physical video shrinking at an annual rate of under 5 percent until 2017. By then, the retreat in spending is expected to be slightly more negative at 7 percent.
4. IPTV—AT&T U-verse TV and Verizon FiOS video in particular
As far as the U.S. is concerned AT&T U-verse TV and Verizon FiOS video are the leading IPTV services by far*, having 5.5 million and 5.3 million subscribers respectively, which is 11.7% of the above 92 million subscribers number by ABI Research:
* The next service provider, CenturyLink “Ended the quarter with 149,000 CenturyLink® PrismTM TV subscribers, an increase of approximately 17,000 subscribers in third quarter 2013” according to its Q3 203 report [Nov 6, 2013]. CenturyLink only entered five U.S. markets after acquiring Embarq (2009) and Qwest (2010). In fact no other U.S. providers are in the Top 20 globally according to SNL Kagan Reports World’S 20 Largest IPTV Operators Served 83% of Global IPTV Households at End-2012 [June 6, 2013]. More:
– China’s leading telcos– China Telecom and China Unicom– serve an estimated 30% of the global IPTV subscriber base.
– Asian telcos accounted for 49.2% of the top 20’s IPTV subscribers in 2012, reflecting the region’s large market size and limited telco competition.
– France — the second-largest IPTV market by subscribers after China — is home to four operators ranked among the global top 20. [Note that among Top 5 are Iliad and France Telecom. Iliad’s Freebox TV offering proposes a broad selection of TV channels (over 450, of which more than 200 are included in the basic package), as well as numerous audiovisual services, such as catch-up TV (with 45 channels available on Freebox Replay), and a wide video-on-demand offering. It was actually the largest IPTV deployment in the world with 2.4 million IPTV-enabled customers as of end 2007 (see here).]
– Nine operators out of 20 are located in Western Europe and seven in Asia.
U-verse® Drives Wireline Consumer Growth and Broadband Gains
- Wireline consumer revenue growth of 2.9 percent versus the year-earlier period
- Total U-verse revenues, including business, up 27.9 percent year over year, now a $13 billion annualized revenue stream
- 10.7 million total U-verse subscribers (TV and high speed Internet) in service:
- 630,000 high speed Internet subscriber net adds; record annual net adds of 2.7 million
- 194,000 U-verse TV subscribers added, lowest churn in product history
- Continued U-verse broadband gains in the business customer segment, up 78,000, nearly doubling year-ago net adds
- Strategic business services growth accelerates with revenues up 17.4 percent year over year, now more than 25 percent of wireline business revenues
…
Record-Low U-verse TV Churn. Total U-verse subscribers (TV and high speed Internet) reached 10.7 million in the fourth quarter. U-verse TV had the lowest-ever churn in its history. U-verse TV added 194,000 subscribers in the fourth quarter with an increase of 924,000 for the full year to reach 5.5 million in service. AT&T has more pay TV subscribers than any other telecommunications company.
…U-verse TV penetration of customer locations continues to grow and was at 21 percent at the end of the fourth quarter.
- From AT&T Fourth Quarter 2013 Earnings Slide Presentation [Jan 28, 2014]
Note that after AT&T Extends TV Watching to More Devices with Launch of U-verse TV on Xbox 360 [press release, Oct 11, 2010] and even after New U-verse Internet Customers Can Take Their Pick: A Free Xbox 360, SONOS PLAY:3, Kindle Fire or Nexus 7 Tablet [press release, March 18, 2013] that Xbox tie-up ended with AT&T U-verse TV To Drop Support For Xbox 360 on December 31 [Multichannel, Nov 26, 2013]:
“We’ve made this decision due to low customer demand,” an AT&T spokeswoman said via email on Tuesday. AT&T declined to say how many customers currently use the Xbox 360 as a set-top. … AT&T, the spokeswoman added, currently has no plans to support U-verse TV on the Xbox One. Verizon Communications FiOS TV is the first, and so far only, U.S. pay-TV provider to offer an authenticated app for the Xbox One during its initial launch phase.
- From Verizon 4Q 2013 Quarter Earnings Conference Call Webcast [Jan 21, 2014]materials:
In FiOS video we added 92,000 new subscribers in the quarter. Total FiOS videos customers reached 5.3 million, representing 35% penetration.
…
As far as the OnCue acquisition [from Intel, i.e. the Intel Media operation], look, the focus here is really to accelerate the availability of the next-generation IP video service which we will integrate into the FiOS video service. And really what we are trying to do is differentiate this even more so with fiber to the home versus others with the TV offerings and reducing the deployment costs. And this really accelerates us from if we were trying to build IP TV versus buying the IP TV technology.
From an FiOS customer perspective, we expect the benefits that they will have more elegant search and discovery activity and cost stream ease of use. But also keep in mind, with the acquisition of Verizon Wireless and becoming 100% ownership of that we also plan to take that platform and integrate it more deeply with our Verizon Wireless 4G LTE network. So that really was the strategy behind this.
As far as would we enable this platform to take us over the top, obviously we have our video digital media services that we have been working on for 2.5 years. We’ve just made two acquisitions related to that platform. So, look, we are positioning ourselves strategically to be in a position to competitively compete around the whole mobile first world and video, so I think that is where we are.
Pay-TV Operators Can Stave Off OTT Threat with Multiscreen and CDN Investments [iSuppli press release, April 17, 2013]
Despite the dire competitive threat posed by over-the-top (OTT) services, pay-TV operators can thrive by investing in additional service offerings that should include multiscreen services to more than make up for the erosion in their customer base, according to the IHS Screen Digest TV Intelligence Service from information and analytics provider IHS (NYSE: IHS).
Speaking here today at the IHS PEVE Entertainment 2013 Conference, Guy Bisson, research director for television at IHS, noted that although European cable operators have lost 1.4 million households, they have gained 17.8 more revenue-generating units (RGUs), during the five-year period from 2007 through 2012.
While cable operators in Europe and other regions are expected to lose more households in the coming years, RGUs will continue to increase, driving revenue growth for the industry. The below figure presents the IHS history and forecast of cable households and RGUs for the 27 countries of the European Union.
5. OTT (Over-the-top content)
OTT and IPTV Integration Increasingly Popular [Pyramid Points, Nov 27, 2012]
How do you plan to spend your evening most times when you order a pizza? You’re very likely to watch a video.
In the UK, Domino’s Pizza Group saw the value of over-the-top (OTT) online video to boost customer loyalty, and back in October launched the Domino’s Pizza Box Office video streaming offer. Customers order a pizza and get a download code to stream a movie at home. This is just another example of how OTT is revolutionizing the way video content is delivered to consumers: Today almost anyone can become a content provider.
Exhibit: Evolving video delivery environment and video platforms
Source: Pyramid Research
Many operators see the proliferation of OTT as a threat to their established IPTV business models. They fear that OTT will subvert their role in the pay-TV value chain and cannibalize revenue. We’ve found, however, that the opposite is just as likely to be true. In our new report, “OTT Growth Sparks Innovation Multiscreen Video Business Models,” we argue that OTT is serving as an innovation stimulus for the pay-TV market, pushing telcos to enhance their IPTV services with more screens. We also find that an increasing number of operators, alongside their managed IPTV services, are directly entering into non-managed OTT environments. This means that more operators are using the open Internet to offer video services to potentially any consumer with a broadband connectivity, being their existing customers or not.
OTT in emerging markets: Challenges and opportunities
Operators are warming up to the idea of launching their own OTT services, especially in emerging markets. While IPTV remains a premium service, which requires subscribers to purchase more expensive bundles, OTT is more flexible and only requires a good broadband connection. This means that in the more price-sensitive markets, where there is still strong demand for online video, OTT is becoming an attractive option for users. Besides, OTT services are typically delivered over a wide range of screens and at different price points, including smartphones, tablets and gaming consoles, making them more accessible to different consumer profiles.
In Colombia, for example, ETB has announced that it will shortly launch an OTT service to complement its upcoming IPTV deployment. In Mexico, the OTT service provided by fiber-to-the-home (FTTH) operator Totalplay, dubbed Totalmovie, has rapidly become the main competitor to Netflix. It offers video content in Mexico alongside the operators’ IPTV platform and across Latin America by using third-party operator infrastructure. As of October, it had 1.9m registered users and 5m unique monthly visitors.
We expect to see more Latin American operators launching OTT services. The second largest regional group, Telefonica, is considering positioning OTT commercial offers in several countries. The decision between managed (IPTV) or unmanaged video delivery (OTT) ultimately depends on each country’s infrastructure, competitive environment and operator position. Telefonica has, however, confirmed that there are already ongoing OTT initiatives outside Spain.
In Turkey, TTNET, the ISP of fixed-line incumbent Turk Telekom, has already been quite successful in combining its IPTV and OTT offerings. TTNET wants to add value to the bundles, which in turns helps increase customer loyalty and reduce churn. This is crucial in preventing the decline of Turk Telekom’s fixed-line base. While IPTV is positioned as a premium service, OTT is priced very competitively. As of August this year, TTNET had over 1.2m OTT and 150,000 IPTV subscriptions.
OTT can provide significant benefits to operators. In the case of TTNET, positioning OTT alongside IPTV is encouraging consumers to break through their broadband allowances, thus creating the need to migrate to higher-value packages. In the case of Totalplay in Mexico, OTT is contributing to the monetization of the operator’s superfast fiber-based network. For both operators, using third-party infrastructure breaks the link between content delivery and network management.
The outlook is positive
In the near future, we expect to see significant revenue-generating opportunities associated with VoD, catch-up TV, and targeted advertising, especially when telcos can integrate their OTT and IPTV offerings with interactive and social media functions.
Using the open Internet for content delivery, however, has its downsides. The main shortcoming with OTT is that the operator is not in control of quality of service (QoS). Especially in emerging markets, quality of service and network speeds vary wildly from country to country, making it challenging to ensure the same quality of experience (QoE) that can be guaranteed through a managed IPTV network. Another challenge for operators is securing in-demand content for OTT platforms. Without doubt content is king, but content is also costly. Unless they are backed by multimedia and broadcasting groups, operators tend to be the weak link in the content production and delivery value chain. But that is a challenge with IPTV too.
All in all, if telcos are serious about developing a pay-TV offering that can resonate with the demand for multiple viewing platforms at different price levels, they need to seriously consider the opportunity of complementing IPTV platforms with OTT.
— Daniele Tricarico, Analyst
More information from Pyramid Research:
– Is the Arab World Ready for OTT Video? [Sept 13, 2013]
– CDNs Offer New OTT Revenue Hope [Feb 20, 2013]
– Chinese Regulator Opens Up to MVNOs [mobile virtual network operators] [March 15, 2013]
Finally here is a list of Top 10 Online Streaming Video Services [tom’sGUIDE, Jan 1, 2014] in the U.S. in order to understand the state-of-the-art of OTT video services:
Digital video options
Streaming video has just about displaced the DVD on the list of home entertainment options, and it may supersede cable and broadcast TV in the near future. Every modern computer has access to streaming video services, as do most game consoles and mobile devices, and even a growing proportion of televisions. Whether you’re looking to get your feet wet or expand your streaming horizons, check out 10 of the best services for watching movies, TV, music videos, Web shows and more.
Netflix
Netflix is the most popular video streaming service out there, and with good reason. The service is available on just about every platform, including computers, game consoles, set-top boxes and mobile devices, and it hosts movies and TV shows to accommodate every taste. From hit films like “The Avengers” to every “Star Trek” TV series to original programming like “Orange Is the New Black,” Netflix’s variety of content is unparalleled. You can even share an account among five different users to keep recommendations and viewing habits separate. Netflix costs $8 per month.
Inserts of mine:
– Netflix added to Virgin’s TiVo platform [[IHS] Screen Digest commentary, Sept 10, 2013] with “UK cable company Virgin Media has signed what is effectively an OTT carriage deal with Netflix to bring the streaming service onto the Virgin TiVo platform. Groundbreaking move is the first deal of its type and indicates a change in the positioning of Netflix and the competitive positioning of OTT against ‘traditional’ pay TV. … that more firmly positions Netflix as a content aggregator (read: channel) rather than a platform and opens the door for similar deals internationally. Move vindicates our long-held view that this was the correct way to position Netflix and other OTT content aggregators.”
– Netflix passes 38m paying ‘streaming’ subscribers [[IHS] Screen Digest commentary, Oct 22, 2013] with:
Netflix’s total number of paid streaming subscribers increased by 2.4m over the quarter, to reach 29.9m subscribers in the United States and 8.1m subscribers internationally. The international streaming service saw a larger than expected increase of free trialists to 1.1m driven by Latin America and the September launch of the service in the Netherlands.
The third quarter of 2013 is a significant milestone for Netflix, as the quarter in which the Netflix US streaming subscriber count pulled even with the US subscriber count of pay TV giant HBO. The company ended the quarter just shy of 30 million streaming subscribers with estimates for HBO at roughly the same level.
The comparison with HBO is the most appropriate for companies such as Netflix, Amazon and Hulu‘s subscription service, rather than with the pay TV operators. Netflix, as well as Hulu Plus and Amazon, are acting as premium channels in investing in acquired and original content and following in HBO’s early-1990s footsteps. Despite the investment Netflix has made in its own original programming, the company has reported that a greater percentage of overall viewing on the platform is of previous-season TV episodes and catalogue movies. Netflix indicates that it plans to double its investment in original content in 2014, although this will still represent less than 10per cent of global content expenditure.
…
Netflix’s international business remained a loss-making venture as the company struggles to gain profitability without scale and without a legacy high margin physical business. Whereas in the US the company initially bundled its streaming proposition with disc rentals add value to the physical subscription Netflix has not had a preexisting business from which to launch a digital subscription internationally. At present, the international ventures are subsidized by domestic market return and with ongoing market expansions planned by Netflix; IHS does not expect this to change in the mid-term.
End od my inserts for Netflix
Hulu Plus
If you want to catch TV shows almost as soon as they air, Hulu Plus may be right for you. This streaming service hosts a plethora of TV shows and movies. Whether you want to watch “Leverage,” “Family Guy” or “Spongebob Squarepants,” Hulu generally posts new episodes within days of their airing on TV. Hulu Plus costs $8 per month (with some shows available only on computers for free), and provides past seasons of shows along with Hulu’s original programs. It is available on computers, game consoles, streaming boxes and mobiles.
Amazon Prime Instant Video
Amazon Prime Instant Video is a streaming service that comes with an Amazon Prime subscription. In addition to offering free shipping on Amazon orders and free Kindle books to borrow, Amazon Prime allows subscribers to access approximately 40,000 movies and TV shows. In addition to unlimited streaming offerings, users can rent and buy other TV shows and movies a la carte. This makes Amazon Instant Video a good choice for watching newer movies before they touch down on unlimited streaming services like Netflix. Amazon Prime costs $79 per year.
See also: Amazon may hike Prime cost as earnings disappoint and further challenges lay ahead of the company for which it needs to adjust its business model and expand its operations [‘Experiencing the Cloud’, Jan 31, 2014]
M-Go
If you’re not interested in paying a monthly fee for your streaming video content, M-Go might be up your alley. M-Go, which is the default streaming service on Roku boxes and also available on computers and mobile devices, allows you to rent and buy TV shows and movies. Prices range from $2 for individual TV episodes to $20 for HD movie purchases. M-Go excels in offering both HD and SD versions of content, making it an attractive choice if you want a one-off rental.
Blip
Watching big-budget movies and TV is all well and good, but for curated, original Web shows from charismatic creators, nothing fits the bill like Blip. Think of Blip as a more curated, creator-friendly version of YouTube. Individuals create and upload original series, ranging from comedy to reviews to funny pet videos, and Blip ensures that the content has professional production values and that new entries are added regularly. All content on Blip is free, and you can access it via your computer, mobile device or Xbox 360.
Vevo
MTV hasn’t played music videos since the ’90s, but the medium is not dead just yet. Vevo hosts the latest music videos from artists ranging from Katy Perry to Old Crow Medicine Show, but audiophiles would be wise to stick around for its scads of original content. Users can access biographies, retrospectives, behind-the-scenes footage and interviews about their favorite musicians, and curated playlists for both individual artists and entire genres. Vevo is free, and available on computers, mobile devices, Rokus, Apple TVs and Xbox 360s.
MLB.TV
If you’re a baseball fan, you’re in luck: Major League Baseball‘s streaming service is one of the best in professional sports. MLB.TV allows viewers to watch most games during the regular MLB season. (Postseason games are available through the Postseason.TV service at additional cost.) Fans can watch both home and away games from anywhere in the world. Stat junkies can examine each pitch as it happens and compare their fantasy teams in real time. MLB.TV costs $130 per year and is available on computers, mobile devices, set-top boxes, Xbox 360s and PS3s.
Crackle
If you crave pop cinema, Crackle could be the best thing to happen to your TV since afternoon basic cable. The Crackle service offers a rotating selection of a few hundred movies and TV shows, including “Ghostbusters,” “The Cable Guy” and “The Shield.” Crackle also creates and hosts original content, ranging from espionage thriller serials to “Comedians in Cars Getting Coffee” starring Jerry Seinfeld. Crackle is free (though you’ll have to watch some commercials) and available on computers, mobile devices, set-top boxes and game consoles.
Twitch
Watching other people play video games is, surprisingly, almost as much fun as playing yourself — sometimes more so, if you have a good host. Twitch is a platform for gamers to livestream their play sessions. You can find streams of everything from “League of Legends” to “Minecraft.” Whether you want to see tutorials, speed runs or popular Web personalities’ reviews, Twitch has you covered. The service is free, both to watch and to stream your own sessions. Twitch is available on computers, mobile devices, set-top boxes and PS4s.
YouTube
The biggest video streaming service online is just about unbeatable when it comes to variety of content. YouTube is the go-to site to upload short videos: cats, clips from your favorite TV programs, cats, original Web shows, cats, movie trailers, cats and more. The service will be one of the first to support content for the higher-resolution 4K TVs. If you’re looking to watch short-form videos, this is the place to start. YouTube is free and available on just about every device with a screen and an Internet connection.
Discovery to take majority control of Eurosport [[IHS] Screen Digest commentary, Jan 22, 2014]
Discovery Communications has agreed to take a controlling interest in Eurosport International, the pan-European sports channel, from its partner TF1 Group [of France]. … Discovery, which primarily operates a portfolio of factual channels in Europe, has branched out in recent years with the acquisitions of SBS Nordic in Scandinavia and Italy’s Switchover Media. It now has the option to acquire 100% of Eurosport International and could also increase its interest in Eurosport France, though TF1 expects to retain its 80% interest until at least 1 January 2015.
…The US group‘s move to take control of Eurosport is, as the company noted yesterday, taking place a year sooner than originally planned. While sports is clearly a new playing field for Discovery, the male-skewing profile of Eurosport is a good fit with its factual channel brands, offering possibilities for combining advertising and network sales. To date, co-operation has focused on markets where Eurosport is not present, notably the US and China. In the US, Discovery has been showcasing Eurosport rally and superbike programming on its Velocity channel.
A further move into the US appears unlikely given the presence of ESPN and powerful rivals like Fox Sports, NBC Sports and CBS. Fox Sports in particular has recently made strong moves into the international market place. Outside the US, Eurosport successfully occupies a niche where it is not competing with premium pay operators like BSkyB, Canal Plus and Sky Italia for high cost events like league football, but instead focuses on lower profile events where rights are often shared with local free-to-air broadcasters.
The main uncertainty over Eurosport’s change of ownership surrounds its content supply from the European Broadcasting Union (EBU), which provides hundreds of hours of events like cycling, grand slam tennis, winter sports and athletics. TF1 is an EBU member, but with Discovery holding the reins, this arrangement will almost certainly have to be renegotiated, with possible implications for Eurosport’s cost base. Even now, there appears to be room for improvement: Discovery’s operating margin for its international operations was 44% in 2012, compared to a slender 14% for Eurosport International.
Sky sees future in OTT as upsell becomes focus [[IHS] Screen Digest commentary, July 26, 2013]
Sky [more precisely BSkyB] added more Now TV customers in the quarter to end June 2013 than new satellite customers and is increasingly pushing OTT access and connected devices as the core of its future growth strategy. In calendar second quarter (Sky’s fiscal Q4), the pay TV provider added 34,000 new TV customers to reach 10.442m and said the ‘bulk’ of TV growth came from OTT service Now TV. Organic growth for broadband stood at 119,000 (25 per cent more than BT added in the same quarter) with a further 400,000 added through the acquisition of O2’s UK broadband operations to reach 4.9m. Telephony grew 140,000 organically with 153,000 coming from O2 to reach 4.5m. The number of HD subscribers grew 117,000 to reach 4.789m or 46 per cent of the TV base, with 2.7m HD boxes connected to broadband. Annualised ARPU hit £577 up £29 in the year.
Sky said that its future strategy would focus on becoming the centre of the connected home across a range of content windows that would increasingly include DVD window for paid on-demand and movie retail as well as the traditional subscription window. The move comes on the back of impressive figures for on-demand and OTT content subscription with a three fold increase in Sky Store (on-demand) revenue and 166,000 customers paying £5 a month for the Sky Go Extra service that allows content download to mobile devices. Sky said that, on average, Sky homes have seven connected devices and that content access inside and outside the home was increasingly important to its offer. The operator said it had concluded four new studio deals with a wider range of rights to service this market and would prioritise getting its customer base connected. The new Sky HD box now comes with built in Wi-Fi and a new low-cost wireless connector is being made available. Sky also released a new Now TV box priced at £9.99 when a Now TV subscription is taken, the device also enables Smart TV functionality and is targeted at the 13m Freeview [a free-to-air digital terrestrial television service in UK, a joint venture between the BBC, ITV,Channel 4, BSkyB and transmitter operator Arqiva] homes who don’t currently subscribe to Sky services.
Our take
The latest move is interesting in that is represents a significant vote of confidence in both the incremental revenue that can be derived from OTT services and the potential to tap an entirely new customer base in the form of ‘dip-in’ Now TV users. While this goes hand in hand with an increased investment in original content and channels as well as sports rights to support the core service, it is clear that Sky sees the most upside in incremental revenue driven by OTT rather than strong additional growth in traditional satellite pay TV customers. With broadband and telephony being an increasingly important area of revenue growth, the connected device/OTT space becomes the next area for up-sell, meaning that the so-called ‘multi-product strategy’ becomes central. While none of the services require a tie-in to Sky’s own broadband, it is this very area that BT has chosen to attack with its bold move into sport. The free access to BT’s suite of new sports channels with a BT broadband 12 month contract means that not only could there be a subset of Sky TV customers who will migrate to BT broadband, but a further segment of existing BT customers who will not be available to Sky for triple-play up-sell. To date there has been no evidence that’s BT’s strategy is paying off (net TV additions for BT were roughly flat in the quarter to end June 2013). But BT says it believes this will change when the channels launch.
Sky’s strategy, then, is to fall back on its traditional strengths centred on content, but to do this in a way that embraces new forms of distribution and leverages the power of its existing customer relationships. Headroom for growth remains strong: despite triple-play penetration reaching 35 per cent among the Sky customer base, two-thirds of Sky customers have yet to take a broadband offer. With Sky out-performing the market in broadband net adds, this area is likely to ensure continued strong revenue and ARPU growth. But two areas of risk remain. If the majority of TV growth comes from Now TV, Sky will have to deal with an increasingly large segment of TV customers who are not tied into a contract and who are relatively low value in terms of ARPU. As this segment scales, clearly this could lead to large and seasonal fluctuations in churn and ARPU. The second area of risk is related: cannibalisation. While this is a risk that Sky is well aware of and keeping close tabs on, the renewed connected home push risks accelerating the transition to a more transient customer base.
UK TV viewing is about connection, says Ofcom report [[IHS] Screen Digest commentary, Aug 1, 2013]
The home entertainment experience is becoming increasingly connected with multi-tasking central to the enjoyment of TV content, according to the latest Communications Market Report from UK regulator Ofcom. According to the findings, there has been a huge increase in the devices that people take to the living room. On average, each UK household owns three different types on Internet-enabled device. The biggest growth over the last year in take-up of services and devices has been on the number of tablets and smart-phones. Thanks to the device mix, 22 per cent of people in the living room watching screens other than the main TV most of the time.
The main TV set remains important. Ninety-one per cent of UK population tune into the main TV set weekly up from 88 per cent in 2002, with viewers on average watching four hours a day in 2012 compared to 3.6 hours in 2006. Although the report finds that people gather around the TV in the living room, there has been a decline in the number of children with TVs in their bedroom; 52 per cent of UK children now have a TV set in their bedrooms which represents a 17 per cent decline over the last six years, mainly related to the increase number of tablets and Internet connected devices.
Average media household spend has increased in the last year to £113.51 a month after many years of decline. The biggest increase has been on mobile services (£46.73 a month) and fixed internet (£11.91 a month) and the biggest decrease has been on fixed voice (down £22.48 versus one year ago to £21.61 in 2012). TV spend has been stable over the last five years at between £28-£29 a month.
Our take
Ofcom figures reflect what IHS Screen Digest has long noted: live linear TV is not dead.
According to Ofcom, time-shifted viewing represents just 10 per cent of the total and hasn’t changed much over the last years despite the huge increase in DVR ownership. According to BARB figures DVR has grown from 18 per cent in 2007 to 55 per cent in 2010 and 67 per cent in 2012. Despite this, growth in time-shifted viewing has been only moderate up from six per cent four years ago.
More than half of UK adults are regular media multi taskers, they ‘stack’ or ‘mesh’while watching TV weekly, with tablet owners more likely to multi-task than average. Almost one in four UK adults made direct communication with friends and family about the programs as they watching (media meshing) and half of UK adults conduct other activities while they are watching TV on a weekly basis (media staking).
The increase in tablet owners has also changed consumer viewing behaviour with VOD requests coming from tablets increasing from three per cent in 2011 to 12 per cent in 2012. More than 56 per cent of tablet owners used them to watch TV and 57 per cent of those watched linear TV on the tablet.
Ofcom also found that, when it comes to the much-hyped area of social TV, it is news, reality shows and sport events that are engaging viewers through social media, but the knock-on effect is that consumers want to watch these shows live in order to engage socially, providing another boost for linear TV.
TV Everywhere Spreads Among US Television and Cable Networks; NBCUniversal Leads [IHS iSuppli press release, Oct 18, 2013]
NBCUniversal leads the US TV Everywhere (TVE) effort in providing access to TV content on second screens like smartphones and tablets, while EPIX and HBO share the distinction of supporting TVE on more second-screen devices than any other premium or basic cable network, according to a new report from the TV Intelligence Service at IHS Inc. (NYSE: IHS).
From Wikipedia: TV Everywhere (also sometimes known as authenticated streaming)[1] refers to a model wherein television providers and broadcasters, particularly cable channels, allow their subscribers to access their respective content on digital platforms, including video on demand and live streaming of the channels themselves. TV Everywhere systems utilize user accounts provided by the television provider—which are used to verify whether the user is a subscriber to a particular channel, thus allowing or denying access to the content. The U.S. provider Time Warner Cable first introduced the concept in 2009; in 2010, many television providers and broadcasters began to roll out TV Everywhere services for their subscribers, including major networks such as ESPN, HBO,NBC (particularly for its Olympics coverage).
NBCUniversal provides TVE in 15 of its 18 channels, or 83 percent of the studio’s total stable of cable and broadcast networks to pay-TV subscribers willing to authenticate on second-screen devices. Meanwhile, EPIX and HBO have been at the forefront of the TVE experience, with both very willing to embrace new technologies and offering significant amounts of content on their apps and portals.
EPIX first kicked off the TVE phenomena in October 2009, formed by partners Paramount, MGM and Lionsgate after their failed renewal with Showtime HBO followed suit in February 2010 with the launch of its web portal and how has a vast TVE library online, even though it does not yet offer live linear streaming.
HBO, along with Cinemax and BTN2Go, are the only three networks to have TV Everywhere authentication agreements with all major US pay TV operators.
For its part, Showtime is the only premium network offering live linear streaming through TV Everywhere. The company is also allowing for authentication outside of the home, a feature likely to expand to other basic and premium cable networks as TVE continues to evolve.
The last premium channel group to the party is Liberty’s STARZ. STARZ and Encore launched TV Everywhere services in October of 2012, but are still missing authentication deals with both Comcast and DISH Network.
One entity so far remains the lone hold-out among the major channel groups not providing any TV Everywhere content—Discovery Communications. But that will change as Discovery is expected to finally jump into the fray in the near to midterm time frame. It will likely become critical to offer similar services, IHS believes, as TVE access becomes more central to the future of US pay TV video.
Solving the cord-cutting problem before it gathers steam
All major pay-TV operators to date have implemented some form of the TVE service, although sometimes in very limited form, via either live linear streaming or video on demand (VoD). But while the streaming of live linear network feeds is largely relegated to in-home use, video on demand (VoD) is a significant out-of-home TVE product.
VoD streaming channels, at 73 including cable, premium and broadcast, far outnumber the channels offering live streaming, at 31, as shown in the attached figure. NBCUniversal, the TVE leader, has 15 VoD channels and five live streaming channels, followed by Time Warner with nine VoD channels and three live streaming channels.
“TV Everywhere has been developed as a collective strategy by both pay-TV operators and TV content owners to enhance the traditional linear TV proposition, so that secondary screens like tablets and smartphones can be used to view TV content in addition to the primary screen,” said Erik Brannon, analyst for U.S. cable networks at IHS. “And in spite of the differences in strategy, all TVE products have one thing in common: They allow for current pay-TV video subscribers to authenticate and consume on secondary screens a significant amount of content that they purchase as part of their normal pay-TV video subscriptions.”
TVE is one approach that pay-TV operators and network owners are using to stem the tide of cord-cutting among cable subscribers before the number of defections become significant. In many cases, cable subscribers are finding themselves increasingly tempted to end their subscriptions—either because of high costs or because of other alternatives now available, such as over-the-top (OTT) alternatives like Netflix. In the second quarter of 2013 alone IHS estimates that the pay-TV business shed 352,000 subscribers, mostly to seasonality, but some elements of cord-cutting are likely to have been present as well. To be sure, the combined price of $28 (Netflix, Hulu Plus and Aereo) may be more appealing to consumers than the $80+ average revenue per user that IHS estimates pay-TV video customers will pony up for service in 2013.
Through TVE, both pay-TV operators and network owners hope to add new functionality and interactivity to the television viewing experience. And by partnering with pay-TV operators, content owners like the broadcast networks hope they can continue to solidify their hold on the distribution of premium television content.
Device compatibility extending beyond iOS and Android
TV Everywhere is also evolving beyond Apple iOS and Android, the two platforms on which TVE apps first appeared. Now, TVE apps from networks are becoming available and are being deployed across a wide range of connected devices, including smart TVs; video game consoles like Microsoft’s Xbox; Amazon’s Kindle Fire; Blu-ray players; and digital media products such as Roku and Apple TV.
Adoption of TVE initiatives by the major channels is a reaction to the changing landscape of TV viewers in the country, Brannon noted. And as it continues to grow in awareness and popularity, TV Everywhere will remain a central focus for pay-TV operators.
6. Microsoft’s live TV solution on Xbox
From Worldwide launch of Xbox One sparks global celebration for a new generation in games and entertainment [Microsoft press release, Nov 21, 2013]
Xbox One’s innovative architecture means you no longer have to choose between your games and entertainment. Get multiplayer alerts while you watch TV, and keep watching TV while you play. Snap your NFL fantasy football stats next to the game. Jump instantly from a game to TV, movies, fitness, music, sports, the Internet and Skype video chat with the sound of your voice. With Xbox One, you never have to stop playing to talk to a friend, surf the Web or watch live TV. You also have access to a new generation of TV experiences, and starting in the U.S. and coming to many markets soon, OneGuide will allow you to access your favorite shows, channels, apps or games with the Bing natural language voice search.
Xbox One Live TV, Xbox Fitness with Yusuf Mehdi [scarlettgarden YouTube channel, Oct 27, 2013]
From Xbox One: Your Top Questions Answered [May, 2013]
Our goal is to enable live TV through Xbox One in every way that it is delivered throughout the world, whether that’s television service providers, over the air or over the Internet, or HDMI-in via a set top box (as is the case with many providers in the US). The delivery of TV is complex and we are working through the many technologies and policies around the world to make live TV available where Xbox One is available.
The TWC Case:
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With an unexperienced person: Hands-on video: The Xbox One as a media device [gigaom YouTube channel, Nov 19, 2013]
First Wave of TV & Entertainment Apps Coming to Xbox One Unveiled [Xbox Wire from Microsoft, Nov 8, 2013]
Offering more entertainment options has always been important to Xbox fans. For years, we’ve been working with leading entertainment brands and TV providers to offer our customers a wide variety of live and on-demand entertainment. Today we unveiled the complete Xbox One experience – showcasing how Xbox One delivers the best games and multiplayer features, along with your favorite movies, music, sports and live TV experiences – all in one place.
“We set out to make Xbox One the all-in-one games and entertainment hub for your home. The one system that offers the best games next to the best entertainment experiences and apps,” said Marc Whitten, Xbox Chief Product Officer. “Along with offering a stellar app portfolio from around the world, Xbox One takes the next step by offering them in a way that is seamless and easy to use.”
In addition to delivering live TV in every market where Xbox One will be sold, we are also bringing premium, voice and gesture controlled TV and entertainment apps specifically designed for your living room. These apps have been built from the ground up uniquely for Xbox One and are designed to harness the power of the all-in-one platform. For example, Xbox One is empowering partners to bring media achievements and exclusive Snap experiences, as well as many other things to entertainment apps, offering everybody the opportunity to achieve badges or rewards for the media they consume in addition to gaming.
Something truly unique we’re doing with Xbox One is bringing together your favorite TV channels and entertainment app channels into one screen. Xbox One is also the only games and entertainment system that enables HDMI pass through. You can create your own personal Favorites in OneGuide – the Xbox One electronic program guide – so you can quickly and easily choose what you want to watch, whether it’s a TV channel like CBS, NBC or ESPN, or something inside an app like Xbox Video, Hulu Plus or the NFL on Xbox One. You can even add your personal photos and videos from the SkyDrive app to your OneGuide Favorites.
Additionally, a Bing search for TV, movies, games, or music scans across all apps to find exactly what you’re looking for, instead of having to hunt through each app individually. For the first time, you don’t have to juggle multiple screens across cable TV, video streaming services and other entertainment apps to quickly find the entertainment you’re looking for.
Today, we’re announcing the very first wave of some of the world’s biggest names in entertainment rolling out on Xbox One in the 13 launch markets between Nov. 22 at launch and spring 2014:
Australia
- Crackle
- Machinima
- MUZU TV
- Network Ten’s tenplay
- Quickflix
- SBS On Demand
- TED
- Twitch
Austria
- Eurosport
- Machinima
- MUZU TV
- TED
- Twitch
Brazil
- Crackle
- Machinima
- Muu
- Netflix
- Saraiva Player
- Sky Online
- SporTV
- TED
- Telecine
- Twitch
- Vivo Play
Canada
- CinemaNow
- Crackle
- Machinima
- MUZU TV
- Netflix
- Rogers Anyplace TV
- Sportsnet
- TED
- The NFL on Xbox One
- Twitch
France
- 6Play
- Canal+/CanalSat
- France 2,3,4,5
- La TV d’Orange
- Machinima
- MUZU TV
- MyTF1
- MYTF1VOD
- SFR TV
- TED
- Twitch
Germany
- Amazon\LOVEFiLM
- Eurosport
- Machinima
- MUZU TV
- TED
- Twitch
- Watchever
- Zattoo
Ireland
- Eurosport
- Machinima
- MUZU TV
- Netflix
- TED
- Twitch
Italy
- Eurosport
- Machinima
- MUZU TV
- Premium Play
- TED
- Twitch
Mexico
- Clarovideo
- Crackle
- Machinima
- Netflix
- TED
- Televisa
- The NFL on Xbox One
- TV Azteca
- Twitch
- Veo
New Zealand
- Machinima
- MUZU TV
- Quickflix
- TED
- Twitch
Spain
- Eurosport
- Gol Televisión
- Machinima
- MUZU TV
- RTVE
- TED
- Twitch
- Wuaki.tv
- Zattoo
United Kingdom
- 4oD
- Amazon\LOVEFiLM
- blinkbox
- Crackle
- Demand 5
- Eurosport
- Machinima
- MUZU TV
- Netflix
- NOW TV
- TED
- Twitch
- Wuaki.tv
United States
- Amazon Instant Video
- Crackle
- The CW
- ESPN
- FOX NOW
- FXNOW
- HBO GO (coming soon)
- Hulu Plus
- Machinima
- MUZU TV
- Netflix
- Redbox Instant by Verizon
- Target Ticket
- TED
- The NFL on Xbox One
- Twitch
- Univision Deportes
- Verizon FiOS TV
- VUDU
The list above* is just the first wave of third-party apps that are coming to Xbox One over the course of the next few months. We will continue to announce more apps coming to the platform and both the Xbox One and Xbox 360 entertainment app portfolios will continue to grow weekly.
*Xbox LIVE Gold membership required
In addition to the entertainment apps coming from partners, in every market Xbox One will also feature:
- Xbox Fitness
- Xbox Video
- Xbox Music
- Internet Explorer
- Skype
- SkyDrive
- Upload
With games, multiplayer gaming, live TV and the best entertainment apps, Xbox One is the most complete entertainment system.
Note that after AT&T Extends TV Watching to More Devices with Launch of U-verse TV on Xbox 360 [press release, Oct 11, 2010] and even after New U-verse Internet Customers Can Take Their Pick: A Free Xbox 360, SONOS PLAY:3, Kindle Fire or Nexus 7 Tablet [press release, March 18, 2013] that Xbox tie-up ended with AT&T U-verse TV To Drop Support For Xbox 360 on December 31 [Multichannel, Nov 26, 2013]:
“We’ve made this decision due to low customer demand,” an AT&T spokeswoman said via email on Tuesday. AT&T declined to say how many customers currently use the Xbox 360 as a set-top. … AT&T, the spokeswoman added, currently has no plans to support U-verse TV on the Xbox One. Verizon Communications FiOS TV is the first, and so far only, U.S. pay-TV provider to offer an authenticated app for the Xbox One during its initial launch phase.
With highly experienced users: Xbox One All-in-One Demo with Yusuf Mehdi and Marc Whitten [xbox YouTube channel, Nov 8, 2013]
From Xbox One: The Complete All-in-One Games and Entertainment System [Xbox Wire from Microsoft, Nov 8, 2013]
…
As we head toward Nov. 22, we’re showcasing the all-in-one capabilities of Xbox One. This is the real Xbox One in action. Corporate Vice President of Marketing and Strategy, Yusuf Mehdi, and Chief Product Officer Marc Whitten show the best of Xbox One in this new video. And, you can see 10 of our favorite new features below.
#1 – Unleashing the Power of Your Voice
A simple voice command turns on your Xbox One, your TV, your set-top box and your AV system because Kinect for Xbox One is an Infra-Red blaster. And when you say “Xbox On,” your game is always ready to resume from wherever you left off. You can start playing your favorite game, find your favorite show, change channels, turn up the TV volume and more – with the sound of your voice, powered by Bing voice recognition technology. Just say “Xbox, go to ESPN” and your TV will change directly to the ESPN channel. Or, “Xbox, go to Hulu Plus,” “Xbox, Volume Up,” “Xbox, Mute,” “Xbox, go to Music” – it’s simple. Kinect “talks to” your TV, set-top box and AV receiver, making it easier than ever to navigate entertainment in your living room.
#2 – Biometric Sign In
…#3 – Instant Resume and Instant Switching
We’ve talked about instant switching before, but now you can see it for yourself in action. The video showcases how quickly you can jump from one experience to another and right back where you left off. You can literally jump from a game to live TV, music, movies, sports, Web sites and back again in seconds, just by using your voice.
#4 – Watch Live TV via Xbox One
Xbox One lets you watch live TV from your HDMI-compatible cable or satellite box, making it easy to switch from games to live TV – all with the sound of your voice, and without having to switch TV inputs. No more multiple remotes, missed multiplayer matches while you’re watching TV, or frustrating delays. Just connect your set top box to your Xbox One and you can watch live TV through your Xbox One.
#5 – Get a Multiplayer Invite, while you are Watching a movie or live TV
…#6 – Game DVR and Upload Studio Let You Record and Share Your Greatest Moments
…#7 – Do Two Things at Once
You can also choose to snap two experiences together – so you can play a game while you watch TV or listen to Xbox Music. Or, watch the big NFL game while you manage your fantasy football team. For gamers, snapping Machinima opens up a whole new world of opportunity. Just by saying “Xbox, Snap Machinima,” the Machinima app will be snapped next to “Dead Rising 3” or your favorite game, and walk-throughs, game reviews, help videos and more will appear.
#8 – Skype on the Big Screen, With Groups and Free Long Distance
Skype is amazing on Xbox One, offering the only big screen experience with Group Video Chat with up to four people. Kinect is the only camera in the world that will follow the caller and pan and zoom automatically as if you had your own camera man. You can talk with your friends while surfing the Web or checking the latest stats of a sports team. And have full 1080p video calls for one-to-one chats on your TV. 1
1 For 1080p video call, both users must have compatible HD displays, web cams, messaging clients, and broadband internet.
#9 – OneGuide Delivers Personalized Guide to TV, Apps and More
Xbox One has its own TV listings guide that can be navigated with your voice. Say “Xbox, what’s on Discovery Channel?” and boom, there you have the list of shows. Call out your favorite TV show by name and start watching it instantly. And, Xbox One is the only system that brings together your favorite TV channels and entertainment app channels into one screen. Create your own personal Favorites in OneGuide, so you can easily choose what you want to watch – whether it’s on Fox, CBS, NBC, ESPN, Hulu Plus or the NFL on Xbox One app. For the first time you don’t have to juggle multiple screens across cable TV, video streaming services and other entertainment apps to quickly find the entertainment you’re looking for.
#10 – Xbox SmartGlass Enhances Gaming in New Way
…
Microsoft Is Changing the Game for Sports Fans [Xbox Wire from Microsoft, Sept 3, 2013]
Whether it’s in the living room or on the playing field, Microsoft and products like Xbox, Surface, and Windows 8 are impacting the way we experience our favorite sports.
In May, Microsoft announced a multi-year, landmark partnership with the NFL. For the Xbox community, this means exclusive interactive NFL experiences for fans at home, found only on Xbox One starting this November. Today, we’re excited to share more details about this partnership and the game changing NFL experiences for Xbox One and Surface. We are also pleased to introduce NFL.com Fantasy Football on Xbox 360, Windows 8 and Windows Phone which are available for download today.
Also making headlines today is the confirmation and details around the all-new ESPN application for Xbox One. Leveraging the unique platform capabilities of Xbox One, sports fans will now have control of the live programming, highlights, stats and more across ESPN like never before.
The NFL on Xbox One and Surface
Tailored for you, the NFL on Xbox One will deliver the best of the NFL, in a way that will completely reimagine the way you experience football from the comfort of your home. Only Xbox One can bring interactivity to live games, stats, scores, highlights and your NFL.com Fantasy Football team all together on the best screen in the house – your TV. Xbox One will personalize your NFL experience, for your team, with the best content the NFL has to offer including NFL.com, NFL Network, and NFL RedZone. Whether you’re watching the game or not, Xbox One makes it easy to keep tabs on the league with Snap mode. You can watch live TV, play games, or watch movies, while simultaneously tracking your NFL.com Fantasy Football team, or checking in for the latest scores and stats.
While you’re watching at home, Surface technology is in the stadium, on the sidelines to help protect your favorite players. Teams and trainers will implement use of the X2 concussion testing application this season to quickly diagnose potential player concussions immediately after leaving the playing field with the help of Surface tablets, helping quickly determine if they can get back in the game or call it a day.
ESPN on Xbox One We are also excited to announce ESPN on Xbox One, which builds on our innovations with ESPN on Xbox 360, and provides you with the best of ESPN networks and web content personalized just for you. Featuring deeper sports content personalization, ESPN on Xbox One gives you immediate access to the teams and sports you care about most. With WatchESPN, ESPN.com, and ESPN3 video content, you get the best highlights, live events and on-demand sports in full screen mode. Additionally, you will receive personalized scores and stats in Snap mode from the most popular sports.
NFL.com Fantasy Football on Xbox 360, Windows 8, and Windows Phone
Beginning today, NFL.com Fantasy Football is now available on Xbox 360, offering a whole new way to track your team and leagues on the best screen in your house – your TV. This destination is tailored just for you and your NFL.com Fantasy Football team, and is easy to jump into and simple to use. The Xbox 360 app brings you an endless playlist of Fantasy Football highlights, Fantasy analysis, stats, scores and standings about your NFL.com Fantasy Football team and leagues, making sure you don’t miss a thing. Consumers can head to NFL.com today to sign up for a league and get in the game before kick off on September 5th.
And, with the new NFL.com Fantasy Football apps for Windows 8 and Windows Phone, you can keep tabs on your team and leagues on your tablet, PC, and mobile device as well.
Download NFL.com Fantasy Football for Xbox 360, Windows 8 and Windows Phone today, and stay tuned for game changing experiences on Xbox One this November.
7. Preliminary information on the upcoming products from Xbox Entertainment Studios
Best Advice: Nancy Tellem [Fortune Magazine YouTube channel, Oct 31, 2013]
Faces to Watch in 2014: Digital media | Nancy Tellem, Mike Hopkins, Issa Rae [Los Angeles Times, Dec 27, 2013]
A big year is coming up for game designers Ryan and Amy Green and Ruben Farrus, plus Microsoft’s Nancy Tellem, Hulu’s Mike Hopkins and Web writer-actress Issa Rae.
The Times asked its reporters and critics to highlight figures in entertainment and the arts who will be making news in 2014. Here’s who they picked:
Nancy Tellem | Microsoft’s president of entertainment and digital media
The veteran CBS television executive had her work cut out when she joined Microsoft Corp. in 2012 to launch a Santa Monica studio to create original content.
Long fascinated with changes in consumer behavior, Tellem is now playing an important role in determining what appeals to younger consumers accustomed to getting their entertainment on multiple screens. She is trying to build on the momentum that Microsoft has achieved by encouraging millions of consumers to consider the Xbox more than just a video game console. Xbox users spend more than half of their time online listening to music and streaming movies, TV shows and exploring other entertainment options. Microsoft wants to build a trove of exclusive content to differentiate its game system from the rival Sony PlayStation.
Microsoft’s slate of new shows designed to appeal to the digitally connected generation is expected to launch in the first half of 2014. Microsoft also brought Tellem on board to make inroads with Hollywood’s creative community. One of the first projects she announced was a live-action TV series, produced by Steven Spielberg, based on the “Halo” game franchise for Xbox Live, a feature that enables gamers to play against online opponents.
Tellem was trained as a lawyer and worked her way up the ranks in business affairs at Lorimar, Warner Bros. and then CBS. At the broadcast network, Tellem was a key executive in the development of new shows, including the hit reality show “Survivor.” She was one of the TV industry’s first female entertainment presidents.
— Meg James
Mike Hopkins | Hulu chief executive
…Issa Rae | Actress-writer-director
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Nancy Tellem at Wrap Power Women Breakfast: Microsoft Is Aiming for a “Game of Thrones” [The Wrap YouTube channel, Oct 30, 2013]
Nancy Tellem at Wrap Power Women Breakfast: Microsoft Is Aiming for a ‘Game of Thrones’ (Video) [TheWrap, Oct 30, 2013]
Nancy Tellem, Microsoft’s new president of entertainment and digital media, said on Wednesday she has the means and the ambition to make a “Game of Thrones”-like series for the new studio backed by the technology giant.
“I have the ambition” to make a show as grand as “Game of Thrones,” said the former president of CBS entertainment at TheWrap‘s Power Women Breakfast at the Montage in Beverly Hills.
“That, to me, was greatest testament to how wonderful television can be and how engrossed people are and committed – and it was a social experience,” she said.
And, she said smiling, Microsoft’s budget was “enough for me to do my job, let’s just say.”
…
Not being bound by the constraints of a 22-episode season or even show length and with the technology to engage the viewer through the Xbox platform allows Tellem and her team to “focus on the content itself” and then way viewers can “share that experience.”
Tellem said she expects that Microsoft will begin rolling out its new shows — which will range from sports programs to scripted series — as soon as the spring. She says they have not decided whether to release the episodes over time or put them all out at once, like Netflix.
Asked about binge viewing, Tellem said she was not sure if Microsoft would release all its content at once, observing that interactivity was more the distinctive purview of Microsoft.
Xbox One Reveal: Halo TV and NFL [xbox YouTube channel, May 23, 2013]
From Microsoft unveils Xbox One: the ultimate all-in-one home entertainment system [press release, May 21, 2013]
Blockbuster titles, Steven Spielberg-produced Halo TV series, and exclusive agreements with the NFL transform games, TV and entertainment for the 21st century living room.
…“Halo” television series. Award-winning filmmaker, director and producer, Steven Spielberg will executive-produce an original “Halo” live-action television series with exclusive interactive Xbox One content, created in partnership with 343 Industries and Xbox Entertainment Studios.
RTS Cambridge Convention 2013: Xbox One – From Gaming to Content [Royal Television Society, Sept 12, 2013]
Created for gaming, the Xbox One is the latest challenger to old-fashioned telly, but, said Microsoft entertainment and digital media president Nancy Tellem, it is not the final nail in the TV industry’s coffin.
“It’s an augmentation,” she argued. “Right now, [TV] is in a renaissance period — what Xbox offers is a different TV experience.”
Since joining Microsoft from CBS a year ago, Tellem has been spearheading the software giant’s move into TV, delivered via its Xbox One gaming console.
Interactivity among its current 76 million connected console users would be the key to Xbox One’s success. “It isn’t just delivering content. It really offers an immersive experience,” she said.
The session was chaired by Matt Frei from Channel 4 News, who said that he enjoyed being a “passive” consumer of TV. To laughter from the audience, Tellem replied: “Xbox addresses the next generation.”
Tellem identified sport, live events and scripted entertainment as genres particularly suited to Xbox One. Mentioning Game of Thrones as the type of complex drama suited to the console, she claimed: “You can give a much richer understanding of the characters and their history.”
Tellem is in discussions with studios and talent about commissions, which she hopes to announce in a few weeks. Earlier this year, Microsoft revealed that a TV show based on the Halo game, with the involvement of Steven Spielberg, was in the pipeline.
She also countered a suggestion from the audience that Xbox One’s programming would be geared at 18-year-old boys. Tellum said that her ambition was to reach out beyond traditional gamers, adding that 40% of its platform users were female, with most of the audience between 18 and 40.
“My mission it to transform it into an entertainment service,” she said, which would include music, film and sport as well as games. “It’s a simple offering that can access all your entertainment needs.”
Before joining Microsoft, Tellem had worked at the US network CBS for a decade and a half, latterly as senior adviser to chief executive Leslie Moonves.
Xbox Entertainment Studios to Debut Documentary Series Exclusively on Xbox in 2014 [Xbox Wire from Microsoft, Dec 19, 2013]
First Documentary Explores the Fabled Atari Mystery
Today, Xbox Entertainment Studios announced an original documentary series that will debut exclusively on Xbox in 2014. Xbox will produce the series with two-time Academy Award-winning producer Simon Chinn (Searching for Sugar Man and Man on Wire) and Emmy-winning producer Jonathan Chinn (FX’s 30 Days and PBS’s American High) through their new multi-platform media company, Lightbox.“Our collaboration with Xbox offers an unparalleled opportunity to make a unique series of films around the extraordinary events and characters that have given rise to the digital age,” said Simon Chinn. “Our goal is to produce a series of compelling and entertaining docs which will deploy all the narrative techniques of Simon’s and my previous work. It’s particularly exciting to be partnering with filmmakers like Zak Penn who come to this process from other filmmaking disciplines and who will bring their own distinctive creative vision to this,” added Jonathan Chinn.
“Jonathan and Simon Chinn are the perfect team to spearhead this series for Xbox. They are consummate story tellers and they plan to match their creative sensibility with the best talent in the industry,” commented Xbox Entertainment Studios President Nancy Tellem. “These stories will expose how the digital revolution created a global democracy of information, entertainment and commerce, and how it impacts our lives every day.”
The first film in the groundbreaking series investigates the events surrounding the great video game burial of 1983. The Atari Corporation, faced with overwhelmingly negative response to the video game “E.T. the Extra-Terrestrial,” buried millions of unsold game cartridges in the middle of the night in the small town of Alamogordo, New Mexico.
Fuel Entertainment, an innovator in cross-platform content development, secured the exclusive rights to excavate the Atari landfill and approached Xbox. Lightbox will document the dig, which is planned for early next year.
Filmmaker and avid gamer Zak Penn (X-Men 2, Avengers, Incident at Loch Ness) will direct. This episode will not only document the excavation, it will also place the urban legend of the burial in the context of the precipitous rise and fall of Atari itself.
“When Simon and Jonathan Chinn approached me about this story, I knew it would be something important and fascinating,” said Penn. “I wasn’t expecting to be handed the opportunity to uncover one of the most controversial mysteries of gaming lore.”
Shooting begins in January. The series will air exclusively on Xbox One and Xbox 360 in 2014 and will be available globally in all markets where Xbox Live is supported.
8. Xbox Music and Xbox Video services for other devices
Xbox Music + Video apps for Windows Phone 8 [Windows Phone Central YouTube channel, Dec 18, 2013]
Xbox Video for Windows Phone 8 Walkthrough [Pocketnow YouTube channel, Dec 19, 2013]
New Xbox Video and Xbox Music apps Available for Windows Phone 8 Customers [Xbox Wire from Microsoft, Dec 18, 2013]
It’s a big day for Windows Phone 8 customers. New apps for Xbox Video and Xbox Music are becoming available today in the Windows Phone store.
Xbox Video Comes to Windows Phone
Today, Xbox Video launches on Windows Phone 8, so now you can truly take your movies and TV shows with you wherever you go. Stream from the cloud or download your favorite movie or TV episodes to your phone to watch them offline. You can rent or buy the newest hit movies or search for classics from the massive catalog with the only app that lets you download movies and TV episodes right to your Windows Phone 8. You’ll even get Rotten Tomatoes ratings and Metacritic scores right on your phone.
Xbox Video on Windows Phone 8 also delivers countless TV shows. With a Season Pass, brand new episodes are automatically added to your collection so you don’t miss a beat from your favorite new shows. Or catch up with every episode from past seasons and relive the glory days of your favorite shows from years past.
With Xbox Video, your collection follows you from screen to screen in the cloud. For example, you can buy and start a movie or TV show from XboxVideo.com or Xbox Video on a Windows 8.1 tablet, and continue watching on your Xbox One, Xbox 360 or Windows Phone 8. And with Xbox SmartGlass, you get a richer viewing experience that isn’t found anywhere else. Xbox SmartGlass integrated with Xbox Video for Xbox One and Xbox 360 offers second-screen experiences with bonus content and exclusive extras, serves as a remote control, and gives you new ways to interact with whatever you’re watching.
Xbox Video is a free download in the Windows Phone Store today, and don’t forget to check out our new Web store at XboxVideo.com.
A Peek at the New Xbox Music for Windows Phone
Also releasing today is a new Xbox Music preview app. This early-access app gives Xbox Music Pass users a look into the new music experience on Windows Phone 8.¹ Stream millions of songs from your phone or download the ones you want for offline listening. Create playlists that sync across your devices. Play songs from your personal music collection alongside your Xbox Music Pass content. It’s the best way to experience all the music you love on your Windows Phone.
The Xbox Music Preview is available in all 22 markets where Xbox Music is available today and can be found in the Windows Phone Store. The full release will roll out in 2014. Xbox Music is available today on Windows Phone, Xbox One, Xbox 360, Windows 8/8.1, online at Music.Xbox.com and iOS and Android devices.
¹ Xbox Music Pass required to use the app. Compatible devices and internet required. Data charges apply. See Xbox.com/music.
Xbox Music For Android Review [Mikey Capoccia YouTube channel, Sept 9, 2013]
Microsoft launches Xbox Music across iOS and Android, adds free streaming on the Web [press release, Sept 8, 2013]
Enjoy your favorite music from a 30 million-song global catalog powered by the one service that integrates your music experiences across your tablet, PC, phone and TV. All the music you love, every way you want it.
Nearing its one-year anniversary, Microsoft Corp.’s all-in-one music service, Xbox Music, continues making strides to deliver all the music people want, wherever they want it played. Today, Microsoft announced its plans to bring Xbox Music to iOS and Android devices, as well as free streaming on Xbox Music via the Web.[1]
Accessing music across all the different devices people interact with has become complicated. People today use PCs, laptops, tablets, phones and TVs to access different music services that don’t connect with one another. Xbox Music is designed to solve this common problem by combining the best of all music offerings with free streaming on the Web and on Windows 8 PCs and tablets, Internet radio, subscription (called Xbox Music Pass), and download-to-own options.[2] With today’s news, access to Xbox Music grows to include iOS and Android devices, as well as a free Web-based interface on computers.
“Xbox Music now, more than ever, powers music experiences between Windows 8, Xbox, Windows Phone, and now iOS, Android and the Web,” said Jerry Johnson, general manager of Xbox Music. “We’re also excited to connect artists with their fans on the most anticipated consumer product of the year when Xbox One launches Nov. 22.”
Expanding the Xbox Music family of devices
Starting today, your Xbox Music Pass brings the catalog of music to iOS and Android devices. Get unlimited access to the songs and artists you want at any time with playback across your tablet, PC, phone and Xbox console for $9.99 per month or $99.99 per year. Add a song to your collection on your Xbox, and you’ll also have that song on your iOS, Android or Windows 8 device on the go or at the office. Xbox Music Pass also unlocks unlimited access to tens of thousands of music videos on your Xbox 360.
With the addition of free streaming on the Web, enjoy on-demand access to 30 million songs globally for free on the Xbox Music Web player at http://music.xbox.com or through the Xbox Music app on all Windows 8 tablets and PCs. Discovering and enjoying free music is as easy as typing an artist or song name and hitting “play.” Songs are instantly available to stream at no cost and for you to create an unlimited amount of playlists.[1]
Continued innovation
Xbox Music will continue to grow and evolve over the coming months. Microsoft will add Radio to the free Web player, a quick and dynamic way to personalize your collection, discover new favorites, and create ultimate playlists by launching instant mixes based on your favorite artists. With unlimited skips and a view of the full recommended music stream, Radio puts you in control of your Internet radio experience.[1]
Xbox Music will grow on Windows 8 when it adds the anticipated new Web Playlist tool this fall. The tool scans all the artists and music available on a given Web page and creates a custom playlist of all that music. Think about the Web page of your favorite radio station, or an upcoming music festival, and all the bands and songs included on that Web page. Web Playlist identifies all that music and creates an instant, custom playlist inside Xbox Music with the simple touch of a button. Web Playlist along with Windows 8.1 will be released Oct. 17.
In the coming months, additional updates for iOS and Android platforms will become available, including an offline mode that lets you save your music to your device for playback without an Internet or data connection.
About Xbox
Xbox is Microsoft’s premier entertainment brand for the TV, phone, PC and tablet. In living rooms or on the go, Xbox is home to the best and broadest games, as well as one of the world’s largest libraries of movies, TV, music and sports. Your favorite games, TV and entertainment come to life in new ways through the power of Kinect, Xbox SmartGlass and Xbox Live, the world’s premier social entertainment network. More information about Xbox can be found online at http://www.xbox.com.
[1] Free streaming available only on the Web and devices running Windows 8 or later. Limited hours of free streaming after six months; unlimited with paid subscription. Coming later this fall: artist-based Radio on Android, iOS and the Web.
[2] Xbox Music Pass is streaming only on Xbox consoles, Android, iOS and the Web. Applicable taxes extra. On Xbox consoles, Xbox Music requires an Xbox Music Pass and an Xbox Live Gold membership (both sold separately). Download music on up to four devices. Some Xbox Music content may not be available via Xbox Music Pass, and may vary over time and by region. Coming later this fall: Xbox music download-to-own on Android and iOS, and playlists and song sync on Windows Phone 8. See http://www.xbox.com/music.
For details, please visit http://news.xbox.com.
For assets, please visit http://news.xbox.com/media.
Microsoft cloud server designs for the Open Compute Project to offer an alternative to the Facebook designs based on a broader set of workloads
… while neither Amazon nor Google publicize their server designs yet
Designing Cloud Infrastructure for 1m+ Server Scale [“cloud scale”] – Kushagra Vaid (General Manager, Cloud Server Engineering, Microsoft) [Open Compute Project YouTube channel, Jan 29, 2014]
“The chassis can take 24 servers”
Microsoft Contributes Cloud Server Specification to Open Compute Project [Microsoft Data Centers Blog, Jan 27, 2014]
Today Microsoft announced that it will be joining the Open Compute Project Foundation (OCP) and will be contributing hardware specifications, design collateral (CAD and Gerber files), and system management source code for Microsoft’s cloud server designs. These specifications apply to the server fleet being deployed for Microsoft’s largest global cloud services, including Windows Azure, Bing, and Office 365. This significant contribution demonstrates our continued commitment to sharing our key learnings and experiences from more than 19 years of operating online services with the industry.
Microsoft manages a global portfolio of datacenters across all continents, has an installed base of over one million servers, and delivers more than 200 services for 1+ billion customers and 20+ million businesses in 90+ markets. Deploying and operating a huge cloud-scale [Cloud-Scale Data Centers, Feb 11, 2013; see also Microsoft Cloud-Scale Data Center designs [Microsoft Data Centers Blog, March 26, 2013]] infrastructure requires careful attention to several system design principles:
- Simplicity of the design is essential, since at cloud-scale the smallest issues can get magnified and potentially cause unexpected availability issues for customers.
- Efficiency gains across cost, power, and performance vectors are required to deliver the lowest total cost of ownership (TCO).
- Modular system design provides flexibility to accommodate hardware changes necessary for evolving workload requirements, plus it helps streamline the integration of new technologies.
- Supply chain agility is essential for adapting to rapid variations in server capacity demand signals.
- Ease of operations is key to ensuring system management at scale and cost effective servicing for hardware failures in the datacenter.
- Environmental sustainability is an important part of our cloud strategy. This includes minimizing material use and ensure re-use of components wherever possible across the server lifecycle.
Based on these guiding principles, Microsoft has designed an innovative system architecture that we believe will drive design and operational efficiency beyond the conventional commodity servers currently available in the market. The key design features include:
Chassis-based shared design for cost and power efficiency
- EIA rack mountable 12U Chassis leverages existing industry standards
- Modular design for simplified solution assembly: mountable sidewalls, 1U trays, high efficiency commodity power supplies, large fans for efficient air movement, management card
- Up to 24 commodity servers per chassis (two servers side-by-side), option for JBOD storage expansion
- Optimized for mass contract manufacturing
- Up to 40% cost savings and 15% power efficiency benefits vs. traditional enterprise servers
- Estimated to save 10,000 tons of metal per one million servers manufactured
Blind-mated signal connectivity for servers
- Decoupled architecture for server node and chassis enabling simplified installation and repair
- Cable-free design, results in significantly fewer operator errors during servicing
- Reduction of ‘No problem found’ incidents from loose cables
- Up to 50% improvement in deployment and service times
Network and storage cabling via backplane architecture
- Passive PCB backplane for simplicity and signal integrity risk reduction
- Architectural flexibility for multiple network types such as 10Gbe/40Gbe, Copper/Optical
- One-time cable install during chassis assembly at factory
- No cable touch required during production operations and on-site support
- Expected to save 1,100 miles of cable for a deployment of one million servers
Secure and scalable systems management
- X86 SoC-based management card per chassis
- Multiple layers of security for hardware operations: TPM secure boot, SSL transport for commands, Role-based authentication via Active Directory domain
- REST API and CLI interfaces for scalable systems management
- Support for server diagnostics and self-health checks
- Up to 75% improvement in operational agility vs. traditional enterprise servers
The Microsoft cloud server is a revolutionary design that brings the benefits of commoditization and cloud-scale operations to the industry. The specifications we’re contributing to OCP embody our long history and deep experience in datacenter architecture and cloud computing, and our commitment to sharing our cloud infrastructure best practices with the industry since 2007. As part of joining OCP, Microsoft will be making the following contributions for our Microsoft cloud server design and manufacturing collateral:
- Hardware specifications
- Server, mezzanine card, tray, chassis, and management card
- Management APIs and protocols (for chassis and server)
- Mechanical CAD models
- Chassis, server, chassis manager, and mezzanines
- Gerber files
- Management card, power distribution board, and tray backplane
- Source code for Chassis infrastructure
- Server management, fan and power supply control, diagnostics and repair policy
Microsoft will also be engaging in the OCP community via active participation in the various sub-committees and engineering forums. I am pleased to announce that Mark Shaw, Director of Hardware Development on my team, has been appointed as the Chair of the Server committee via the OCP community voting process. Additionally, MS Open Tech is releasing an open source implementation of the Chassis Manager specification [“As part of this effort, MS Open Tech is releasing an open source reference implementation of the Chassis Manager specification. Today, this code, is available on GitHub, and implements functions such as server management, and fan and power supply control.”]. We would like to help to build an open source software community for this project within OCP.
Our hardware partners are developing products for Microsoft based on these specifications and we look forward to availability of commercial offerings from our partners in the near future.
We are excited to share our cloud infrastructure learnings and operational experiences with the broader community to help drive the industry efficiencies forward, reduce the cost of hardware for all participants, and accelerate the adoption of cloud computing. You can find more information about the Microsoft cloud server specification via my customer discussion video, our white paper and at www.opencompute.org.
Compare this to the current (certified) and upcoming (new) boards from Intel based on current OCP specification (Decathlete for financial services, and Windmill the Facebook design with Intel for the dense servers) particularly designed by Facebook, as well as the upcoming Leopard being the next-generation compute module for Facebook):
But keep in mind Intel’s advanced interest in:
All from Designing the Datacenter of the Future – Eric Hooper (Director, Cloud Service Provider Optimization, Intel Corporation) [Open Compute Project YouTube channel, Jan 29, 2014] video:
In that video there is also a testimonial part from Goldmann Sachs using the jointly developed Decathlete design (code named “Swiss Army Knife”).
Device businesses should have a China-based independent headquarter at least for Asia/Pacific if they want to succeed
Back in August I found that China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web [Aug 5, 2013]. That statement was strengthened even more recently with MediaTek MT6592-based True Octa-core superphones are on the market to beat Qualcomm Snapdragon 800-based ones UPDATE: from $147+ in Q1 and $132+ in Q2 [Dec 22, 2013; Jan 27, 2014].
Latest Nokia vs Apple vs Android:
With a trend analysis of the importance of the Asia/Pacific market in general, and the Chinese market in particular one comes to an even more striking conclusion: except Samsung (as it is just nearby) all dominant players in the mobile device market of today, and especially tomorrow, have to operate from China based headquarters. Otherwise they are unable to take the relevant decisions (unlike what was possible for PC era, just from U.S. based headquarters). This is especially applied to the merged Nokia-Microsoft Device Business!
Sources:
– Analysys International: China Mobile Phone Sales Hit 100 Million in Q3, 2013 [Nov 8, 2013]
– Gartner sources: like the latest Gartner Says Smartphone Sales Accounted for 55 Percent of Overall Mobile Phone Sales in Third Quarter of 2013 [Nov 14, 2013]
– IDC Finds Worldwide Smartphone Shipments on Pace to Grow Nearly 40% in 2013 While Average Selling Prices Decline More Than 12% [Nov 26, 2013]
– For IDC look at Smartphones Expected to Grow 32.7% in 2013 Fueled By Declining Prices and Strong Emerging Market Demand, According to IDC [June 4, 2013] as well (for Worldwide Smartphone Shipments by Market Maturity i.e. emerging and developed). Here is the historical chart embedded there:
Developed Markets include: USA, Canada, Western Europe, Japan, Australia, and New Zealand.
With the latest news release of Jan 27 (Android ends the year on top but Apple scores in key markets) from Kantar Worldpanel Comtech one can compile an almost 2 years long representation of the smartphone trends in the key markets via a set of following charts:
The latest comments on that (from the news release) by Kantar Worldpanel Comtech:
Android ended 2013 as the top OS across Europe with 68.6% share, while Apple held second place with 18.5%. Windows Phone continues to show high year-on-year growth, but its share of the European market has essentially remained flat at 10.3% for the past three months.
Android finished 2013 strongly, showing year-on-year share growth across 12 major global markets including Europe, USA, Latin America, China and Japan. Apple has lost share in most countries compared with this time last year, but importantly it has held strong shares in key markets including 43.9% in USA, 29.9% in Great Britain and 19.0% in China.
Windows Phone has now held double digit share across Europe for three consecutive months. Unfortunately for Nokia the European smartphone market is only growing at 3% year on year so success in this market has not been enough to turn around its fortunes – reflected in its recent disappointing results. Its performance also deteriorated toward the end of 2013 in the important growth markets of China, USA and Latin America.
It’s no surprise that everyone is concentrating on high growth China, but currently local brands are proving clear winners. In December, Xiaomi overtook both Apple and Samsung to become the top selling smartphone in China – a truly remarkable achievement for a brand which was only started in 2010 and sells its device almost exclusively online. The combination of high spec devices, low prices and an ability to create unprecedented buzz through online and social platforms has proved an irresistible proposition for the Chinese.
Additional information for the period was provided by earlier Kantar Worldpanel Comtech news releases:
Android leads OS U.S. sales, as LG and Nokia see resurgence [Jan 7, 2014]
In the 3 months ending November 2013, Android maintained its lead of smartphone sales on the U.S., capturing 50.3% of the smartphone market. iOS follows with 43.1% of smartphone sales, an increase month on month, however, down 9.9% versus the same period a year ago, according to data on the U.S. market released today by Kantar Worldpanel ComTech.
Windows Phone, the third largest OS in the U.S, sold nearly 5% of smartphones in the 3 months ending November 2013, up 2.1% points from the previous year.
As with the previous period, Verizon maintained its lead as the top smartphone carrier, with just under a third of sales (31.7%). AT&T, in second, had 28.3% of smartphone sales in the 3 months ending November 2013. T-Mobile, overtaking Sprint as the third largest carrier had 13.3% of sales, and was the only major carrier to see growth year on year (up 6.3%).
The data is derived from Kantar Worldpanel ComTech USA’s consumer panel, which is the largest continuous consumer research mobile phone panel of its kind in the world, conducting more than 240,000 interviews per year in the U.S. alone. ComTech tracks mobile phone behavior and the customer journey, including purchasing of phones, mobile phone bills/airtime, and source of purchase and phone usage. This data is exclusively focused on the sales within this 3 month period rather than market share figures. Sales shares exemplify more forward focused trends and should represent the market share for these brands in future.
Kantar Worldpanel ComTech Global Strategic Insight Director, Dominic Sunnebo states, “The iPhone 5S and 5C were the two bestselling smartphones in the U.S for the 3 months ending November 2013. However, increased rivalry from Android brands and a resurgence of LG and Nokia, has made year-on-year share gains for Apple difficult. This is especially true on T-Mobile.”
On T-Mobile, the ‘UNcarrier’ strategy, launched earlier in 2013, has been successful because it has attracted first-time smartphone buyers, looking to upgrade to their first smartphone. Among T-Mobile smartphone buyers in November 2013, 55% of those that purchased an LG and Nokia smartphone were first-time smartphone buyers, compared to just 39% of Apple customers.
Sunnebo continues, “First-time smartphone buyers remain a key demographic for carriers and brand alike. The lower end iPhone 5C represents an opportunity for Apple to attract these customers. Thus far the majority of 5C customers have come from other smartphone platforms, though if historical trends hold, the lower end model (historically the older iPhone model following the release of a new iPhone), should be able to attract this demographic with its lower price and comparable specs.”
Apple launch momentum continues [Jan 7, 2014]
The latest smartphone sales data from Kantar Worldpanel ComTech, for the three months to November 2013, shows Apple’s share of smartphone sales continuing to grow month on month following the release of the iPhone 5S and 5C models. However, its share of most major markets remains lower than the same time last year as it increasingly faces challenges from its rivals.
While there’s no doubt that sales of the iPhone 5S and 5C have been strong, resurgent performances from LG, Sony and Nokia have made making year on year share gains increasingly challenging for Apple. Windows Phone, for example, is now the third largest OS across Europe with 10.0% – more than double its share compared with last year.
Apple now accounts for 69.1% of the Japanese market, 43.1% in the United States, 35.0% in Australia and 30.6% in Great Britain.
Strong sales of the iPhone 5S and 5C can be linked to high levels of customer satisfaction with both models, despite fears that the lower-end 5C could damage Apple’s appeal.
Some people worried that Apple was risking its historically high consumer satisfaction levels by releasing a lower cost, plastic iPhone. However, the latest data for the US shows that the iPhone 5C has an average owner recommendation score of 9.0/10 versus 9.1/10 for the iPhone 5S. Both devices attract different customers but crucially each group of owners remains very happy with their choice and are recommending it to others.
Android gains 3% market share each quarter in China [Nov 28, 2013]
Kantar Worldpanel ComTech is the first continuous panel to gather representative mobile phone data in China. The panel has been created to provide insight including mobile phone ownership, sales, usage, churn, loyalty and pricing in Chinese telecoms market.
The key points of Q3 report:
- Android’s steady growth in China is mainly coming from cheaper local brands, consumers are seeking for the ultimate value for money device.
- There were many speculations about the iPhone 5s and 5c prior their official launch. It actually made negative impact to iPhone Q3 sales, as people were holding out for the new models, and reduced Apple’s sales by almost 50% compared to the previous quarter.
- Almost a quarter of smartphone sales were made via online channels in 2013Q3. Even though online channels usually offer better price, the ability to test the phone is also a key purchase decision factor for Chinese customers, making it important for manufactures and leading retail chains to develop effective O2O strategies
- As most Android devices offer similar user experience, consumers are more focusing on cost effective devices.
¥ 1000 – ¥ 2000: US$ 165 – US$ 331
¥ 2000 – ¥ 3000: US$ 331 – US$ 496
¥ 3000- ¥ 4000: US$ 496 – US$ 661
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With Kantar Worldpanel Comtech vendor market shares be very careful as the latest Analysys International: Apple’s Share Declining in China Smartphone Market in Q3, 2013 is providing quite a different picture: The statistics from EnfoDesk, the Survey of China Mobile Terminals Market in Q3, 2013, newly released by Analysys International, shows that the sales of China mobile phone (excluding parallel imports and the cottage) hit 102.66 million, up 54.5 percent year on year with a sequential growth rate being 13.6 percent by 2013Q3. Samsung, Lenovo and Coolpad still ranked top three with market share being 18.1 percent, 11.4 percent and 9.0 percent. |
Nokia and Windows global momentum continues [Nov 4, 2013]
The latest smartphone sales data from Kantar Worldpanel ComTech, for the three months to September 2013, shows Windows Phone now makes up one in 10 smartphone sales across the five major European markets*, has overtaken iOS in Italy, and is gaining momentum in emerging markets. Android remains the dominant operating system across Europe with 71.9%, an increase of 4.2 percentage points compared with the same period last year.
Windows Phone, driven almost entirely by Nokia sales, continues to make rapid progress in Europe and has also shown signs of growth in emerging markets such as Latin America.
With the smartphone market in developed countries so congested, it is emerging economies that now present manufacturers with the best opportunity for growth.
Nokia dominated in Latin America for many years, and while its popularity declined with the fortunes of Symbian it now has an opportunity to regain the top-spot. The majority of consumers in Latin America still own a Nokia featurephone and upgrading to an entry level Lumia is a logical next step. Price is the main barrier in developing markets and the budget Lumia 520 opens the door to smartphone ownership for many.
…Local brands growing in China
China is increasingly dominated by Android which accounts for 81.1% of the market, up 14.6 percentage points from last year. Domestic manufacturers made up 44% of smartphone sales in the latest period, compared to just 30% the previous year. Huawei, Xiaomi, Lenovo and Coolpad handsets are particularly popular outside of China’s largest cities and represent a more value-for-money option than global brands.
Chinese consumers are prepared to make a huge investment in their smartphone, with some spending up to 70% of their monthly salary on a new device. With such a high investment, Chinese consumers want to get the best value for money and are increasingly opting for a high-spec local brand over a low-spec global equivalent. The message for global manufacturers is clear – Chinese consumers demand value, and overpriced entry-levels models no longer cut it against increasingly impressive local competition.
Kantar Worldpanel ComTech: Urban China Smartphone Sales Data to Q313
Windows Phone nears double digit share across Europe [Sept 30, 2013]
The latest smartphone sales data from Kantar Worldpanel ComTech, for the three months to August 2013, shows Windows Phone has posted its highest ever sales share of 9.2% across the five major European markets* and is now within one percentage point of iOS in Germany. Android remains the top operating system across Europe with a 70.1% market share, but its dominant position is increasingly threatened as growth trails behind both Windows and iOS.
Windows Phone has hit double digit sales share figures in France and Great Britain with 10.8% and 12% respectively – the first time it has recorded double digits in two major markets.
After years of increasing market share, Android has now reached a point where significant growth in developed markets is becoming harder to find. Android’s growth has been spearheaded by Samsung, but the manufacturer is now seeing its share of sales across the major European economies dip year on year as a sustained comeback from Sony, Nokia and LG begins to broaden the competitive landscape.
Windows Phone’s latest wave of growth is being driven by Nokia’s expansion into the low and mid range market with the Lumia 520 and 620 handsets. These models are hitting the sweet spot with 16 to 24 year-olds and 35 to 49 year-olds, two key groups that look for a balance of price and functionality in their smartphone.
A key milestone for Android in China [May 31, 2013]
Kantar Worldpanel ComTech, the global market leader in longitudinal Telecom research panels, reports at the end of Q1 2013, Urban China Smartphone penetration reached 42%, an increase of 1.2% compared to Q4 2012. According to Kantar Worldpanel ComTech’s latest research in China, most of Smartphone growth comes from new Smartphone adopters, with almost half of Featurephone owners who changed their device in last quarter upgrading to a Smartphone. Craig Yu, Consumer Insight Director at Kantar Worldpanel ComTech, comments:”Featurephones are losing their price advantage as Android Smartphones are rapidly becoming more affordable and delivering better value. We expect to see accelerated Smartphone adoption in China in the coming months.”
During the first quarter of 2013, Android continued its steady growth in China, marking a key milestone in reaching 50% share of Smartphone Installed Base. At the end of March 2013, Android widened its lead of Smartphone operating systems with a 51.4% market share, an increase of 2.8% compared to the previous quarter. Second and third place was taken by Symbian and iOS, whose market share is 23% and 19.9% respectively. Symbian has declined 2% in the last quarter, whilst iOS remained resilient. Following the same trend, Symbian looks likely to lose its second place to be the third in the next 2 quarters.
Kantar Worldpanel ComTech also tracks the performance of various mobile device brands, according to its latest report, many Chinese local brands have been working closely with carriers and demonstrated strong growth in the Smartphone market for the first three months of 2013. ZTE, Lenovo and Xiaomi all have experienced share increases.
The combined market share of above four local brands are at 20%, a 17.6% growth in the past 6 months. Huawei, ZTE, Lenovo, Coolpad & Xiaomi combined make up 1 in 5 of all Smartphones in active use in China-this proportion will continue to grow as Nokia’s existing dominance is challenged.
Yu continues:”Local manufacturer brands have been able to drive strong growth through bundling their handsets with carriers tariff offers, seeking out new sales channels & combining innovative product design with value to capture many first time Smartphone buyers and those residing in City tiers 2/3/4.
However, Samsung remains the fastest growing Smartphone brand in China, ended Q1 2013 with 15.2% share of Installed Base (1.5%pts). Craig Yu continues:”Samsung has recently launched the Galaxy S4, selling over 10 million units globally in less than one month-we predict the launch of Galaxy S4 mini in the not too distant future will greatly increase its product reach in urban China.”
Apple achieves its highest ever Smartphone share in US [Dec 12, 2012]
The latest smartphone sales data from Kantar Worldpanel ComTech shows Apple has achieved its highest ever share in the US (53.3%) in the latest 12 weeks*, with the iPhone 5 helping to boost sales. In Europe, however, Android retains the highest share with 61% of the market, up from 51.8% a year ago.
* 12 w/e 25th November 2012
Apple has reached a major milestone in the US by passing the 50% share mark for the first time, with further gains expected to be made during December.
Meanwhile in Europe, Samsung continues to hold the number one smartphone manufacturer spot across the big five countries, with 44.3% share in the latest 12 weeks. Apple takes second place with 25.3% share while HTC, Sony and Nokia shares remain close in the chase for third position.
Although Windows sales in the US remain subdued, Nokia is managing to claw back some of its share in Great Britain through keenly priced Lumia 800 and 610 prepay deals. The next period will prove crucial in revealing initial consumer reactions to the Nokia 920 and HTC Windows 8X devices.
Nokia continues to find it tough to attract younger consumers in Great Britain. Over the past six months, just 28% of Nokia Lumia 800 sales have come from under 35’s, compared with 42% of all smartphone sales. With the Nokia Lumia 920 being one of the few handsets available on EE 4G, new tariffs may help to change this by attracting early adopters in the coming months.
Smartphone percentage penetration in Great Britain hit 60% in the latest period, with 83% of all mobile phone sales over the past 12 weeks being smartphones.
iPhone 5 release slows Android gains [Oct 30, 2012]
Recent smartphone sales data from Kantar Worldpanel ComTech shows Android continuing to gain share across Europe in latest 12 weeks of sales* increasing its share to 67.1% share, up from 50.9% a year ago. However, its rate of growth has slowed as week one of iPhone 5 sales show iOS gaining in the US and Great Britain.
My insert (see Q4’12):
* 12 w/e 30th September 2012
(Apple iPhone 5 released on 21st September in US, GB, Germany & France. Italy & Spain on 28th September. Not yet released in China & Brazil).
Apple has increased its share from 18.1% to 28.0% in the past year across Britain, while in the US its share increased by 14.2 percentage points.
While this latest data set only includes one week of iPhone 5 sales, we can see that in markets with a large number of existing Apple customers, sales have already seen a significant boost. We expect this momentum to be fully realised in the next set of results.
Tomorrow the UK joins the likes of the US, Germany and much of Scandinavia with the rollout of EE’s superfast 4G network.
Chinese consumers are rarely loyal to their brands [June 29, 2013]
Bain & Company, a global business consulting firm, and Kantar Worldpanel, a global leader in consumer panel insights, released the 2012 China FMCG Shopper report in Beijing. In most of 26 of the top consumer goods categories sold in China across packaged foods, beverages, personal care and homecare, covering more than 80 percent of the country’s fast-moving consumer goods (FMCG) market, shoppers who purchase more frequently in a category tend to buy more brands rather than more of the same brands.
Kantar Worldpanel equips shoppers from 40,000 households throughout urban China with barcode scanners to record their purchases from all channels. The findings dispel several misunderstood notions about how Chinese consumers respond to product brands. Although over 60 percent of Chinese shoppers have said that brands were their top consideration when purchasing (in previous Bain research), in reality, they rarely act on that consideration at the moment of purchase. Instead, they are in a near-constant state of trial, without leading to eventual preference and loyalty.
End of the Nokia “magic” hurting European and Asian consumers while mobile carriers are uncertain about the future under the Microsoft brand
… Microsoft should act significantly faster to clarify the situtation, especially in the critical feature phone replacement market where the only real growth opportunities remain. Otherwise it could loose the mobile market even before starting the battle. Such conclusions are also strengthening my recent Nokia should introduce an Android forked smartphone for the $75-120 range in order to enhance its Asha Software Platform strategy and 2014 will be the last year of making sufficient changes for Microsoft’s smartphone and tablet strategies, and those changes should be radical if the company wants to succeed with its devices and services strategy conclusions posted here on January 17.
In addition, there are extremely worrying signs on the horizon as per Jan 27, 2014:
– MediaTek MT6592-based True Octa-core superphones are on the market to beat Qualcomm Snapdragon 800-based ones UPDATE: from $147+ in Q1 and $132+ in Q2
Just How Much Brand Damage Is Microsoft Doing To Nokia? [by Tero Kuittinen* on Forbes, Jan 23, 2014]
Analysts were widely expecting Nokia to sell 10 M smartphones in 4Q 2013. The company ended selling 8.2 M units, down from 8.8 M in the previous quarter. It’s a massive miss considering the strong sequential volume growth Nokia had delivered during the spring and autumn periods.
…
Nokia had real smartphone volume traction in the autumn and it was expected to continue – yet after the September announcement of Microsoft acquisition, device sales actually started to decline. For Europeans, the explanation is obvious: consumer backlash as Microsoft association started tarnishing the Nokia brand. Yet for Microsoft executives, this may come as a complete shock.From the West Coast perspective, Nokia has been a fading phone brand for twelve years. The deep emotional connection many European and Asian consumers have with the Nokia brand is not obvious for American tech executives. And this is why many transcontinental mergers fail: executives have real trouble gauging brand essence across continents. Nokia used to inspire Apple-like loyalty in consumers as recently as around 2005-2007. A residue of that affection buoyed its Lumia sales drive in first three quarters of 2013.
…
The scale of that backlash is hard to gauge – but 4Q 2013 seems like a genuinely ominous sign for the future. Nokia was expected to deliver 11-13% sequential smartphone volume growth. It delivered -7% decline – an abrupt reversal that blindsided both Wall Street and industry analysts. Something in the European and Asian attitudes towards the Microsoft purchase of Nokia has eluded American tech experts.
* His description of himself:
I have followed the mobile handset market since late Nineties. I spent eight years doing sell-side equity research on Wall Street, starting out at Alliance Capital. I have expanded from handset industry to mobile app market over the past three years. Now back to mobile telecom industry – mobile diagnostics, mobile trend research, mobile expense management. I regularly talk to handset distribution, OS development and app industry pros in Europe, Asia, Latin America and USA. I pay particular attention to tracking phone and app sales trends in Brazil, India, China, South Africa, Nigeria, Spain, Italy, Germany and the UK.
Lumia sales slump sabotages Microsoft’s strategy before it starts [Computerworld, Jan 23, 2014] in a rearranged way
But analysts aren’t buying the idea that Microsoft’s Nokia acquisition poisoned consumers’ minds …
… Instead, the experts pinned the blame on Nokia first and foremost, and secondly on the all-too-natural distraction caused by the Microsoft acquisition. …
Carolina Milanesi of Kantar Worldwide Panel:
There may have been some backlash in buying Lumia, but for the most part consumers don’t care about these things.
It’s like Nokia said, ‘It’s not our problem anymore.’ The numbers are the evidence that with the acquisition looming, Nokia essentially washed its hands of the business, and probably reduced its promotional efforts and lowered carrier incentives.
There’s still an opportunity for Microsoft, but it needs to work with the carriers and look for those users who have low-end Android phones, who have not invested in the ecosystem.
Those are the people Microsoft-Nokia should be going after. But they need to get devices on the market.
Tuong Nguyen, principal analyst at Gartner:
The wariness would come more from the vendor [i.e. mobile carriers]partnership side rather than consumers.
The challenge is two parts for Microsoft now.
First, the feature phone business is scaling down as they ramp up the Lumia line, but that’s not ramping up as fast as the feature phone is ramping down. And as the industry as a whole has seen less true innovation, the fourth quarter isn’t a blow-out quarter like it once was. The market’s hitting the point, in developed countries anyway, where it’s a replacement market now.
It is critical that when [Microsoft] lands the deal, they go out and show something and say something. Microsoft cannot take six months to do that. It would kill them.
Patrick Moorhead, principal analyst at Moor Insights & Strategy:
Microsoft does have a distribution problem. When only two out of 100 phones are Windows Phone, it’s very hard to drive meaningful share, it’s hard to get developers excited, and creates a vicious circle.
The top of everyone’s mind in the channel and among developers is, ‘What’s next, Microsoft? How are you going to drive volume?’ It needs a very early disclosure of what it wants to be in mobile, and must move as quickly as possible to do that.
I don’t think Build is early enough, but I do think that’s where they’ll give some disclosure.
Microsoft will want to take advantage of the friendly environment at Build, where developers who are arguably pro-Microsoft may be able to influence those who are on the fence.
The extraordinary attempt by Nokia/Microsoft to crack the U.S. market in terms of volumes with Nokia Lumia 521 (with 4G/LTE) and Nokia Lumia 520
Update: there was no effective result of the price elasticity trial on the U.S. market as per the below chart composed by myself from news releases from Kantar Worldpanel Comtech over the period in question:
(Credit: Kantar Worldpanel ComTech)
While we have Lumia 520 for Rs. 8850, i.e.US$ 144 in India, and US$121.5 in China as the minimum price, current prices in U.S. are much below of that (although in China there is also the improved and upgraded to 1GB RAM version, Lumia 525 is available from $103 up since December, but in all of the other places the price is up from $115, like here):
* Meanwhile the Nokia/Microsoft effort was instrumental for a new trend of ending smartphone subsidies on the U.S. market (see towards the end of the post related to T-Mobile’s so called Un-carrier strategy)
Nokia Lumia 521
|
Nokia Lumia 520
|
Everything started to work that way in Q3 2013:
Note that:
(Credit: Kantar Worldpanel ComTech)
Android leads OS U.S. sales, as LG and Nokia see resurgence [Kantar Worldpanel press release, Jan 7, 2014]
In the 3 months ending November 2013, Android maintained its lead of smartphone sales on the U.S., capturing 50.3% of the smartphone market. iOS follows with 43.1% of smartphone sales, an increase month on month, however, down 9.9% versus the same period a year ago, according to data on the U.S. market released today by Kantar Worldpanel ComTech.
Windows Phone, the third largest OS in the U.S, sold nearly 5% of smartphones in the 3 months ending November 2013, up 2.1% points from the previous year.
As with the previous period, Verizon maintained its lead as the top smartphone carrier, with just under a third of sales (31.7%). AT&T, in second, had 28.3% of smartphone sales in the 3 months ending November 2013. T-Mobile, overtaking Sprint as the third largest carrier had 13.3% of sales, and was the only major carrier to see growth year on year (up 6.3%).
The data is derived from Kantar Worldpanel ComTech USA’s consumer panel, which is the largest continuous consumer research mobile phone panel of its kind in the world, conducting more than 240,000 interviews per year in the U.S. alone. ComTech tracks mobile phone behavior and the customer journey, including purchasing of phones, mobile phone bills/airtime, and source of purchase and phone usage. This data is exclusively focused on the sales within this 3 month period rather than market share figures. Sales shares exemplify more forward focused trends and should represent the market share for these brands in future.
Kantar Worldpanel ComTech Global Strategic Insight Director, Dominic Sunnebo states, “The iPhone 5S and 5C were the two bestselling smartphones in the U.S for the 3 months ending November 2013. However, increased rivalry from Android brands and a resurgence of LG and Nokia, has made year-on-year share gains for Apple difficult. This is especially true on T-Mobile.”
On T-Mobile, the ‘UNcarrier’ strategy, launched earlier in 2013, has been successful because it has attracted first-time smartphone buyers, looking to upgrade to their first smartphone. Among T-Mobile smartphone buyers in November 2013, 55% of those that purchased an LG and Nokia smartphone were first-time smartphone buyers, compared to just 39% of Apple customers.
Sunnebo continues, “First-time smartphone buyers remain a key demographic for carriers and brand alike. The lower end iPhone 5C represents an opportunity for Apple to attract these customers. Thus far the majority of 5C customers have come from other smartphone platforms, though if historical trends hold, the lower end model (historically the older iPhone model following the release of a new iPhone), should be able to attract this demographic with its lower price and comparable specs.”
(data from Kantar Worldpanel ComTech, chart compiled by theguardian.com)
Regarding the US installed base see also Apple and Samsung Grow to Represent 68 Percent of Smartphones Owned in the US, According to The NPD Group [press release, Jan 16, 2014]
From Nokia Lumia 521 Price Deal: Lumia 521 Windows Phone 8 Smartphone Price Cut by MetroPCS to $29 [Video] [Tech: Latinos Post, Jan 15, 2014]
The price of the Nokia Lumia 521 received a significant reduction but only for MetroPCS customers.
The Lumia 521 Windows Phone 8 smartphone received a $29 price tag, although tax was not included.
The original price for the Lumia 521 was $99, but MetroPCS issued a couple discounts including a rebate offer for the $29 cost to come into fruition. To be precise, MetroPCS added an “Instant Discount” worth $50 followed by a $20 mail-in rebate.
The Lumia 521, also available with T-Mobile, can be purchased at full price $102. A $0 up-front offer is also available with T-Mobile as long as the consumer pays $4.25 for the next 2
04 months.Meanwhile, the online Microsoft Store has the Lumia 521 for $69, which is a discount from the original $99 price tag. The online Microsoft Store is offering free shipping and returns.
Amazon.com also has the Lumia 521 in stock. For $79.99, the Lumia 521 can be purchased following a 47 percent discount from its original $149.99 price tag.
From Nokia Lumia 520 vs. Nokia Lumia 521 Specs: Price Cuts for Windows Phone 8 Smartphones on Online Microsoft Store End Jan. 12 [Video] [Tech: Latinos Post, Jan 9, 2014]
The Nokia Lumia 520 and Lumia 521 have received price discounts but the opportunity to purchase either Windows Phone 8 smartphones is about to end this weekend.
The Lumia 520 is available with no contract courtesy of mobile carrier AT&T for $99. The online Microsoft Store, however, is offering the Lumia 520 for $40 less than AT&T. Until Jan. 12, potential customers can purchase the Lumia 520 for $59 from the online Microsoft Store, which includes free shipping and free returns.
…
The Lumia 521 is also on sale on the online Microsoft Store. The Lumia 521 also had an original price tag of $99 but can be bought for $69. The online Microsoft Store will also ship the Lumia 521 for free.
From AdDuplex Windows Phone Statistics Report for December 2013 [AdDuplex blog, Dec 30, 2013]
… The raw data analyzed was collected over the day of December 27th, 2013 (UTC time) unless otherwise stated. …
United States
We have a new number 2 in the US and that’s the global leader – Lumia 520. Therefore, the share of Lumia 52x devices in US is now pretty much aligned with global situation. It’s notable that L520 has jumped 3 places in just one month and that is, most likely, the result of the aggressive pricing we’ve seen recently.
Another notable fact about US is that T-Mobile is the new number 2 Windows Phone 8 operator in the country with 23.3% of the market. We will see if Verizon is able to come back next month when, hopefully, their new Windows Phone flagship is out. But, if history is any indication, it is the low end that drives the market share. So it is more likely that we won’t see any major changes in the lineup next month.
Note that according to MetroPCS Aggressively Expands, Adding 15 New Markets; Triples Reach to 45 Markets across the United States just Six Months after T-Mobile-MetroPCS Combination [press release Nov 5, 2013]
About MetroPCS
MetroPCS provides the freedom and convenience of unlimited, no-annual-contract wireless services on an advanced nationwide 4G LTE network for a flat rate. With MetroPCS, customers get great value and a wide variety of device choices from leading brands. A flagship brand operated by T-Mobile US, Inc. (NYSE: “TMUS”), MetroPCS products and services are available online and across the United States through a network of company-owned stores, authorized dealer locations, and leading national retailers.
In addition to that MetroPCS Broadens 4G Smartphone Lineup with Addition of New Nokia, LG Phones and Access to Nationwide 4G Network [press release July 25, 2013]
Nokia Lumia 521 is MetroPCS’ First Windows Phone 8 Smartphone; LG Optimus F3™ Adds LTE to Popular Optimus Line
In conjunction with the expansion of its MetroPCS brand into 15 new markets, T-Mobile US, Inc. (NYSE: TMUS) is tomorrow introducing two new smartphones to the brand’s 4G portfolio: the LG Optimus F3™ and the Nokia Lumia 521. These devices can be paired with MetroPCS’ affordable 4G service plans, featuring unlimited data, talk and text – taxes and regulatory fees included – starting at just ‘$40, period’ and all on a nationwide 4G network.
The Nokia Lumia 521 and LG Optimus F3 join MetroPCS’ lineup of recently launched HSPA+ and LTE smartphones — delivering all the speed wireless consumers need for a great mobile experience.
As the first Windows Phone 8 product in the MetroPCS lineup, the Lumia 521 is another way the company is delivering what consumers demand – more choice – and at a great price for just $99 (plus taxes and fees).
From Nokia Lumia 521 Specs, Price Deal Offer: Microsoft Store Cuts Lumia 521 Windows Phone 8 Smartphone Cost to $69 [Video] [Tech: Latinos Post, Dec 26, 2013]
The online Microsoft Store has reduced the price of the Nokia Lumia 521 Windows Phone 8 smartphone just as the holiday shopping season ends.
Previously priced at $99, the Lumia 521 can be purchased on the online Microsoft Store for $69. Back on Dec. 1, the online Microsoft Store had priced the Lumia 521 at $79.
The online Microsoft Store will also ship the Lumia 521 for free.
…
On Amazon, as of Christmas Eve, the Lumia 521 could be purchased for $97.93, which is a savings of $52.06 or 35 percent from the original price. The Lumia 521 was previously listed at $149.99 for its original price.
From Nokia Lumia 521 Specs and Price in USA: Amazon, T-Mobile New Price Offers for Lumia 521 Windows Phone 8 Smartphone [Video] [Tech: Latinos Post, Dec 7, 2013]
As Latinos Post reported on Dec. 4, Amazon had priced the Lumia 521 Windows Phone 8 smartphone for T-Mobile at $135.99. The price change comes two days after it was priced at $79.95 instead, which was a 47 percent discount from the original listed price of $149.99.
As of Dec. 7, the Lumia 521’s price changed and slightly better than the previous $135.99 cost. The Lumia 521’s new price tag is $94.97, which is a savings of $55.02 from the original $149.99 list price.
From Nokia Lumia 521 Specs and Price in USA: Amazon, T-Mobile New Price Offers for Lumia 521 Windows Phone 8 Smartphone [Video] [Tech: Latinos Post, Dec 7, 2013]
The Lumia 521 can also be purchased from the official T-Mobile website with $0 up front. On T-Mobile’s website, the full retail price of the Lumia 521 is $102, which is down from $126 previously listed. With the $0 up front offer, the T-Mobile customer will have to pay $4.25 for the next 24 months. If the consumer cancels the wireless service, the remaining balance on the Windows Phone 8 device will be due. With the purchase of the Lumia 521 from T-Mobile’s official website, the consumer will receive a $20 app credit.
From Nokia Lumia 520 Specs and Price in Amazon at $30 Off From Original $99.99 Price Tag for AT&T GoPhone Prepaid Plan [Video] [Tech: Latinos Post, Nov 26, 2013]
As seen on Amazon, the Lumia 520 Windows Phone 8 was originally offered for $99.99 as part of AT&T’s GoPhone prepaid plans. Amazon, however, reduced the price by $30, or the equivalent of 30 percent.
The new price for the Lumia 520 is $69.99 and with free shipping due to the item costing more than $35.
According to Amazon, the Lumia 520 is ranked as No. 35 in the Cell Phones and Accessories Best Sellers Rank. The Windows Phone 8 device is No. 2 among the No-Contract Cell Phones rank.
Meanwhile, AT&T’s official website is offering the Lumia 520 at the original cost with the GoPhone plan. AT&T has the Lumia 520 for $99.99, but the item comes with free shipping.
From AdDuplex Windows Phone Statistics Report for October 2013 [AdDuplex blog, Oct 14, 2013]
… The raw data analyzed was collected over the day of October 11th, 2013 (UTC time) unless otherwise stated. …
United States
US now has a new leader and if you combine it with its 520 sibling you can see that almost quarter of the Windows Phones in US is now represented by the lower end 52x line. There’s also a new leading operator for Windows Phone 8.
AT&T has reclaimed the crown from Verizon, and MetroPCS and T-Mobile continue to steal the market share from the 2 leaders.
Windows Phone 8 is now on almost 83% of devices in the US, so if you are targeting US market, I guess, you can start developing for WP8-only.
Canada
I don’t think we’ve covered Canada ever before, so it’s time to fix that. Lumia 520 and 920 almost share the top spot and it’s pretty clear that the smaller sibling will claim the crown next month. What is interesting to see is that Samsung ATIV S is at number 3 with a solid 14%. Not a picture we are used to seeing.
T-Mobile US Inc TMUS, Q3 2013 Earnings Call Transcript [Morningstar, Nov 5, 2013]
Our Un-carrier strategy continues to separate us from the competition, so let me give you a quick refresher of what we’ve done at a torrid pace so far this year. Un-carrier 1.0, Simple Choice, announced in March, got rid of the annual service contracts and introduced a radically simplified consumer rate plan. Un-carrier 2.0, JUMP!, launched in July, gave consumers the freedom to affordably upgrade their device when they want, not when they are told.
We already have more than 2.2 million net enrollments. It’s really working. Simple Choice for family launched at the same time as JUMP! Less families get rid of annual service contracts and offers affordable service plan with no credit check.
Simple Choice for business launched in August extended the benefits that consumers had been enjoying, no annual service contracts and simple rate plan. Businesses of all size can decouple services from the cost of devices to get rid of unpredictability.
Un-carrier 3.0 Simple Choice Global launched in October made the world our customer’s network as we now offer unlimited data in texting worldwide at no extra charge in over 100 countries.
Most recently, Un-carrier 3.0 part 2 where we unleashed tablets without up to 200 megabytes of three 4G LTE data every month. We think it’s insane that most tablet owners don’t even signup for mobile Internet data services, because they are worried about high fees and overages.
…
Smartphone sales showed continued growth coming in at 5.6 million devices or 88% of total phone units. This is a great trend that will continue as we now have all the leading devices in our lineup.
…
So, the strategy is managing to peel people away from AT&T, Sprint, Verizon, and the other carriers and you’ve seen churns start to elevate at some of the other carriers as the Un-carrier strategy at T-Mobile has taken hold.
…
In Bonn, we talked about the Un-carrier pain point strategy and how it would be successful, and we pointed out that the most vulnerable was AT&T, but not that we would solely take share from AT&T. But any customer that was feeling these pain points and that’s really been the process, but in the beginning obviously a lot of the ease of switching technology-wise were AT&T customers. We’re actually in a new phase now where there has been a lot of discussion recently in the industry about potential network speeds in 2015 or trials of speed in 25% of five Metro markets. What Neville and his team have announced now, are smoking fast industry-leading speeds everywhere now. That clearly along with our full device portfolio and our Un-carrier strategy does make us a threat across the entire market. So we will continue to attack the same foes. …
… We’re taking share from the low end and the high end. At the high end, it’s particularly AT&T and Sprint, and at the low end from a variety of prepaid players. I think we’ve described before that the Un-carrier strategy is about establishing a really effective midmarket space that’s in no trade-offs positioning. Meaning, traditionally people have had to down at the low end trade off what’s great about wireless to get great value or at the high ends go after one of the top two or three networks, but suffer restrictions and lack of value and lack of transparency and pricing, et cetera. What we do, as John just said, is provide a no-apologies, fantastic, market-leading network position booked back by the Un-carrier value proposition that’s simple and transparent, fair and flexible. So it’s a midmarket position, and therefore it’s taking share from above and from below, but more from above. So more of the share coming from AT&T and Sprint so far.
T-Mobile drops upfront price of Nokia Lumia 925 and 521 to zero [Neowin, July 26, 2013]
T-Mobile just started selling the Nokia 925 in the US less than 10 days ago for $49.99 upfront, but starting tomorrow that new Windows Phone 8 device, and indeed nearly all of the smartphones that T-Mobile sells, will have the low, low upfront price of zero.
T-Mobile Promotes Unprecedented Deal This Summer – Zero Dollars Down for All Devices [press release, July 26, 2013]
T-Mobile Promotes Unprecedented Deal This Summer – Zero Dollars Down for All Devices
America’s Un-carrier offers the ultimate promotion with the lowest upfront price on devices
BELLEVUE, Wash. – July 26, 2013 – In time for back-to-school, T-Mobile US, Inc. (NYSE: TMUS) will drive an unparalleled promotion this summer, dropping the upfront price on its entire lineup of devices in stores nationwide to zero dollars down. With this promotion, new and existing well-qualified consumers and small business customers will get affordable and hassle-free access to the latest 4G LTE smartphones, tablets, mobile hotspots and feature phones at the upfront price of $0 down with monthly device payments[1].
This limited-time promotion is available starting tomorrow, July 27, 2013. In addition to the promotion, customers also can take advantage of T-Mobile’s groundbreaking upgrade program, JUMP!(TM), which enables them to sign up to upgrade their phones when they want, up to twice a year as soon as six months from enrollment.
“The number of reasons not to switch to T-Mobile this summer is ZERO,” said John Legere, president and chief executive officer, T-Mobile US. “This is a fantastic offer and we’re making it easier than ever for customers to get the latest amazing devices. Adding Zero Down in addition to JUMP!, and Simple Choice with no contract is all about making wireless work for consumers and shaking up this industry.”
The hottest devices of the summer at the lowest upfront cost combined with T-Mobile’s Simple Choice Plan, unlimited data on a nationwide 4G network and no annual service contracts gives customers an opportunity that’s tough to beat. The promotion will be available nationwide at participating T-Mobile retail stores, via customer care, and online athttp://www.T-Mobile.com. A selection of the devices included in the promotion is as follows:
Device
Down Payment
Monthly Payments
24 equal monthly payments for 0% APR on approved credit1Samsung Galaxy S® 4
$0
$25
Samsung Galaxy Note® II
$0
$26
Samsung Galaxy S® III
$0
$22
Xperia® Z from Sony
$0
$25
iPhone 5[2]
$0
$27
Nokia Lumia 925
$0
$22
Nokia Lumia 521
$0
$6
BlackBerry® Q10
$0
$25
HTC One®
$0
$25
Samsung Galaxy Tab(TM) 2 10.1
$0
$20
JUMP!
JUMP!, only from T-Mobile, offers customers the freedom to upgrade to a new device more frequently and affordably, and it includes handset protection that helps to protect against malfunction, damage, loss or theft – all for just $10 per month, per phone (plus taxes and fees). Customers can upgrade to a new phone, financed through T-Mobile’s Equipment Installment Program (EIP), twice every 12 months after they’ve been in the JUMP! program for six months.[3] Simply trade in an eligible T-Mobile phone in good working condition at a participating store location. Any remaining EIP payments will be eliminated, and current customers can purchase new phones for the same upfront pricing as new customers, with device financing3 and a no-annual-service contract Simple Choice Plan.
Simple Choice Plan
T-Mobile’s Simple Choice and Simple Choice for Business Plan start with a base rate of $50 per month for unlimited talk, text and Web with 500MB of high-speed data. Customers can get 2.5GB of high-speed data for $10 more per month per line or unlimited data for an additional $20 per month per line. Customers can add a second phone line for $30 per month, and each additional line is just $10 per month. There are no caps and no overages on T-Mobile’s network, and no restrictive annual service contracts.
When small business customers activate a new line or renew an existing line of service with a Simple Choice for Business plan (min. 500 MB data required), they can access T-Mobile’s Business Extras bundle for added value. Business Extras customers with capable devices may opt into a free year of 24/7 remote IT support from a well-recognized, third-party service provider and a year of T-Mobile North American Flat-rate Data feature, allowing free monthly access to up to 150MB of overage-free, high-speed data across North America, including Canada and Mexico on our partner networks.[4] Other benefits include two free paper-to-mobile form conversions, waived activation fees, Business Care support, Wi-Fi Calling on enabled devices, and free Smartphone Mobile Hotspot on select rate plans.
T-Mobile’s 4G LTE Network
T-Mobile’s 4G LTE network now reaches more than 157 million people across the United States and is live in 116 metropolitan areas. T-Mobile remains on target to deliver nationwide 4G LTE coverage by the end of the year, reaching 200 million people in more than 200 metropolitan areas. In addition, T-Mobile’s 4G HSPA+ service is available to 228 million people nationwide. By combining 4G HSPA+ and LTE network technologies, T-Mobile can provide customers with a strong, seamless nationwide 4G network experience[5].
About T-Mobile US, Inc.:
As America’s Un-carrier, T-Mobile US, Inc. (NYSE: “TMUS”) is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The company’s advanced nationwide 4G and 4G LTE network delivers outstanding wireless experiences for customers who are unwilling to compromise on quality and value. Based in Bellevue, Wash., T-Mobile US operates its flagship brands, T-Mobile and MetroPCS. It currently serves approximately 43 million wireless subscribers and provides products and services through 70,000 points of distribution. For more information, please visit http://www.t-mobile.com.
Statement: Nokia Lumia 521 [T-Mobile, May 22, 2013]
Beginning May 22, the Nokia Lumia 521 – an exclusive to T-Mobile – will be available online at www.T-Mobile.com, at T-Mobile retail stores, select dealers and national retailers for $29.99 down with 24 equal monthly payments1 of $5 0% APR O.A.C. for well-qualified customers with the new Simple Choice Plan.
Powered by Windows Phone 8, the Lumia 521, which will run on T-Mobile’s fast nationwide 4G network, is a perfect, everyday smartphone that will embody a range of high-end features at an affordable price. The smartphone features a super sensitive 4″ touch screen, HD Voice, 5MP camera with auto focus and 720p HD video recording. It will also include exclusive Nokia applications such as Nokia Music, Cinemagraph, Creative Studio, Panorama, Smart Shoot and HERE Drive, Maps and Transit.
Lumia 521 smartphones sold through T-Mobile will also feature Wi-Fi Calling. Customers who have already purchased or ordered a Lumia 521 through HSN, Microsoft Retail Stores or Walmart will receive an over-the-air maintenance release beginning May 20, which will enable the Wi-Fi Calling feature.
The Nokia Lumia 521 will go on sale at Microsoft Retail Stores for $149 and at Walmart for $129.88 on May 11, as previously announced. For more information on T-Mobile’s Nokia Lumia 521, please visit the media kit.
1 If you cancel wireless service, remaining balance on phone becomes due.
T-Mobile’s Growth Is Bad News for Apple [The Motley Fool, Jan 8, 2014]
No wonder rival AT&T (NYSE: T ) has gotten so aggressive — T-Mobile‘s (NYSE: TMUS ) “un-carrier” initiatives have proven to be wildly successful. According to new data from Kantar Worldpanel, T-Mobile almost doubled its share of U.S. smartphone sales in the third quarter of 2013, while market-leaders AT&T and Verizon lost ground.
T-Mobile’s growth flies in the face of industry observers, who have long argued that consumers favor smartphone subsidies. If current trends persist, subsidies could soon become a thing of the past — and that’s not good for Apple(NASDAQ: AAPL ) shareholders.
T-Mobile ends contracts
T-Mobile spent 2013 rolling out a number of initiatives that cumulatively comprise its un-carrier strategy, the most significant of which has been the end of two-year contracts. Starting in 2013, T-Mobile did away with them — new subscribers pay for their service strictly on a month-to-month basis. Because T-Mobile’s subscribers now have the freedom to easily ditch their service, T-Mobile no longer pays for its subscribers’ handsets. T-Mobile customers can buy their phones in full, or pay them off in monthly installments, but either way, they’re paying the full retail price.
This stands in stark contrast to the business model long championed by T-Mobile’s rivals, including AT&T. Under the standard, two-year contract model, carriers foot the bill for much of their subscribers’ handsets, but lock them up with a contract.
AT&T warns smartphone subsidies are coming to an end
AT&T, however, could soon join T-Mobile in ditching subsidies. Last month, AT&T’s CEO warned that the current smartphone subsidy model cannot continue to persist.AT&T still offers subsidies and contracts for now, but in December the carrier rolled out a new initiative structured much like T-Mobile’s. AT&T’s new “Mobile Share Value” plan lets subscribers pay for their service on a month-to-month basis but doesn’t cover the cost of their phone. Last week AT&T went further, offering to give T-Mobile subscribers up to $450 in credit if they switched to one of AT&T’s new plans.
Based on Kantar’s recent numbers, AT&T has reason to shake up its business: last quarter, AT&T sold just 28.3% of new US smartphones, down from nearly 35% in the same quarter last year.
Apple’s iPhone business remains subsidy-dependent
A war between the two companies is good for consumers, but potentially bad for Apple. The King of Cupertino still derives the vast majority of its profit from the iPhone, and sales could take a hit if smartphone subsidies go away.Although Apple has just slightly more than 13% of the global smartphone market, it sells more than 43% of the smartphones in the U.S. The reason for the discrepancy comes down to subsidies — U.S. carriers’ willingness to heavily subsidize Apple’s iPhones has made them affordable to U.S. consumers. In most other countries around the world, smartphone subsidies are uncommon.
The pricing pressures that drive global consumers to pick alternative handsets could apply in the U.S. if smartphone subsidies go away. Without subsidies, the $350 Nexus 5 looks much more attractive when compared to Apple’s $649 iPhone 5s. And even if consumers continue to buy Apple-made handsets, they could choose to hold on to their old models for longer, resulting in much longer upgrade cycles.
Watch for other carriers to copy T-Mobile
T-Mobile’s incredible success has shown rival carriers that it’s possible to attract customers even without offering smartphone subsidies. With AT&T’s sales on the decline (according to Kantar), the carrier seems to be following T-Mobile’s lead in abandoning subsidies.If this trend spreads to other major U.S. carriers, Apple shareholders should be concerned.
