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Android 6.0 Marshmallow (Android M) and its route to OEMs such as Xiaomi

Sept 29, 2015Android 6.0 Marshmallow – Official Announcement of all features (Nexus Event 2015) – GIGA TECH in 8 minutes 

Oct 6, 2015: The Top 3 new features highlighted for the Android 6.0 Marshmallow on the android.com/history

Now On Tap

Get assistance without having to leave what you’re doing—whether you’re in an app or on a website. Just tap and hold the home button.

Permissions

Define what you want to share with apps on your device and when. Turn permissions off at any time, too.

Battery

Enjoy a battery that works smarter, not garder. Marshmallow optimizes your juice for what matters most with features like Doze and App Standby.

Sept 29, 2015: All Features of Android 6.0 Marshmallow from the official Android – Marshmallow page

All about Android 6.0, Marshmallow

  • Contextual Assistance
    • Now on Tap: get assistance without having to leave what you’re doing—whether you’re in an app or on a website. Just touch and hold the home button.
    • Do more with your voice. Now you can have a dialogue with any of your apps that support the new voice interaction service. For example, if a user says “play some music on TuneIn,” TuneIn will respond by asking “What genre?”.
    • Direct Share: a fast and easy way to share to the right person in the right app.
  • Battery
    • Doze: when your device is at rest, Doze automatically puts it into a sleep state to increase your standby battery life.
    • App Standby: no more battery drain from seldom used apps; App Standby limits their impact on battery life so your charge lasts longer.
    • USB Type C support*: Quickly transfer power and data all through the same cable. Lightning fast charging gives you hours of power in just minutes.
  • Privacy & Security
    • On an Android Marshmallow device, apps designed for Android Marshmallow only ask for permission right when it’s needed. You can deny any permission and still continue to use the app.
    • Advanced controls to turn permissions on or off for all your installed apps.
    • Verified boot: when your Android device boots up, it will warn you if the firmware and Android operating system have been modified from the factory version.
    • Use fingerprint sensors* to unlock your device, make purchases in Google Play, authenticate transactions in apps, and pay in stores.
  • Android Runtime (“ART”)
    • Improved application performance and lower memory overhead for faster multi-tasking.
  • Productivity
    • Bluetooth stylus support*, including pressure sensitivity and modifier keys.
    • Improved typesetting and text rendering performance.
    • Smarter text selection, built-in undo/redo, and text actions closer to your fingers.
    • Text selection actions such as a new Translate option that lets you translate text from one language to another right on the spot. (Note: requires Google Translate app installed)
    • Save paper with duplex printing support.
  • System usability improvements
    • App links: enables installed apps to automatically handle their web URLs so you can jump right into the app, rather than the mobile web site, as appropriate.
    • Easily toggle and configure Do Not Disturb from quick settings.
    • If someone calls you twice within 15 minutes, you can choose to allow the call to ring through while Do Not Disturb is enabled.
    • Use automatic rules to enable Do Not Disturb for as many custom time blocks as you like or around events on your calendar.
    • Simplified volume controls allow you to manage notification, music, and alarm volumes easily from anywhere with the touch of your volume keys.
    • Streamlined Settings let you manage an app’s settings all in one place, from battery and memory usage, to notifications and permissions controls.
    • Google Now Launcher app list refreshed with search, fast alphabetic scrolling, and predictive App Suggestions.
  • Connectivity
    • More power efficient Bluetooth Low Energy (“BLE”) scanning for nearby beacons and your accessories.
    • Hotspot 2.0: Connect to compatible Wi-Fi networks seamlessly and securely.
    • Bluetooth SAP: Make calls from your carphone using your phone’s SIM.
    • Portable Wi-Fi hotspot now supports 5GHz frequency bands.
  • Expandable storage
    • Flex Storage: makes using SD cards or external storage devices as encrypted expanded storage for your apps and games on Android Marshmallow a whole lot easier.
  • Device setup and migration
    • Easily transfer your accounts, apps and data to a new device.
    • During setup, you can add an additional personal or corporate email account (e.g., IMAP)
    • Auto backup for Apps: seamless app data backup and restore.
    • Backup/restore of additional system settings such as your Sync settings, preferred apps, Do Not Disturb settings, Accessibility settings and enabled IMEs.
  • Media
    • MIDI support: create, consume, and perform music using your Android device with USB MIDI devices, MIDI over BLE, and software-based MIDI devices.
  • Internationalization
    • Android is now available in 74+ languages with 6 new additions: Azerbaijani, Gujarati, Kazakh, Albanian, Urdu, and Uzbek.
  • Android for Work
    • When receiving calls or viewing past messages, you can now see the full work contact details even if you’re not logged into your work profile.
    • Work status notification: A status bar briefcase icon now appears when you’re using an app from the work profile and if the device is unlocked directly to an app in the work profile, an alert is displayed notifying the user.
    • VPN apps are now visible in Settings > More > VPN. Additionally, the notifications that VPNs use are now specific to whether that VPN is configured for a work profile or the entire device.

Sept 29, 2015: A developer’s overview of Android 6.0 Marshmallow by Android Developers 

Sept 29, 2015: Android 6.0 Marshmallow based lead devices information from S’more to love across all your screens from the Official Google Blog

New Nexus phones
We made Android to be an open platform that anyone can build on, and today there are 4,000+ Android devices in all shapes and sizes. Android’s diversity is why it’s become the most popular mobile platform in the world, and the latest version, Marshmallow, takes Android to a new level of performance.

While we love all the Android devices out there, every year we build Nexus devices to show off the latest and greatest, directly from the people who built Android. Today we’re introducing the latest Nexus treats, both running Marshmallow, sweetened by amazing apps and sandwiched by some cutting-edge hardware (see what we did there?):

  • Nexus 6P is the first all-metal-body Nexus phone. Built in collaboration with Huawei, this 5.7” phone is crafted from aeronautical-grade aluminum, with a USB Type-C port for fast charging, a powerful 64-bit processor, and a 12.3 MP camera sensor with massive 1.55µm pixels (hello, better photos!). The Nexus 6P starts at $499.
  • You’re not the only one who misses your Nexus 5. We’ve joined forces with LG to bring it back with the new Nexus 5X, which gives you great performance in a compact and light package, with a beautiful 5.2” screen and the same 12.3 MP camera and Type-C port as the Nexus 6P. Nexus 5X starts at $379.

Both phones include a new fingerprint sensor, Nexus Imprint, which gives you quick and secure access to your phone, as well as use of Android Pay (in the U.S.). They are available for pre-order on the Google Store from a number of countries, including the U.S., U.K., Ireland and Japan, and come with a free 90-day subscription to Google Play Music. In the U.S., pre-orders include a $50 Play credit to help you stock up your favorite music, apps, games and shows. And, finally, for you Project Fi fans out there, you’ll be happy to know Nexus 6P and Nexus 5X will work on your favorite network. Request an invite to our Early Access Program at fi.google.comAN_BH_Groupshot_JH-150908+_Alt_Crop[1]

Oct 5, 2015Official Android 6.0 Marshmallow Review by Tim Schofield 

Oct 15, 2015: Answer to the question “Will Xiaomi finally step to the conventional way of upgrading to Android?” put to Hugo Barra in Hangout with Mi – Episode 2 from Xiaomi India 


The official release of Android M has just happened. That means that people like us only now have been given what they need to be able to start the porting process. Of course Google has been working with M for the new Nexus devices for a while. That’s exactly the reason why Nexus exists. So we’ve just started the porting work, and it takes some time to make sure that it all super well optimised.

By the way I should mention, if you look a little bit about the process for doing an upgrade. It’s not like just get some code from Google, like start moving into our code base. Actually it’s at least a two-step process. In fact I would argue that it’s a three-step process.

The first thing to happen is: Whoever makes the chipset, the SoC that powers that particular phone. Maybe let’s talk about Mi4i. Mi4i is on Qualcomm MSM8939, Snapdragon 615 v2 [rather Snapdragon 616 MSM8939v2, see Snapdragon 616 on Qualcomm site], it means it’s powered by Qualcomm. So Google Android team provides the build to Qualcomm. Qualcomm—beginning of now, just like happened—then will take a few months to do the work of making sure that the kernel level stuff is optimised, and correctly able to support then the layers above, the BSP [?Board Support Package?] framework, the so one and so forth.

Then Qualcomm takes that codebase, let’s assume it will be ready in January—to give you a hypothetical date here—and then provide that to the different smartphone brands like Xiaomi for example. Then our BSP team, which stands for basement processor—it’s the low level part of the operating system that includes everything under the framework—they will take that codebase from Qualcomm and then putting the extra work [needed to ensure] that it’s very optimised for battery consumption, for performance, so on and so forth, for Mi4i. They have to do the same work for every other device.

Then the System UI team—concerning that most OEMs have done some amount of System UI work—has to do a little bit of work of optimisation obviously to make sure that all the features are there.

At least these 3 steps that have to be taken by not only Xiomi, but every OEM to be able to bring devices to a new version of the operating system. Make sure that it’s optimised. It’ll be unacceptable for us to launch Android M on Mi4i in a way that doesn’t perform at least as well, if not obviously, ideally better, then it performed on [Android 5.0] Lollipop. So it’s like quite a long process.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

Aug 13, 2015Additional videos from XiaomiHK YouTube channel:

Xiaomi – MIUI Introduction (with English subtitles)

Xiaomi – MIUI V7 Endurance

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

Xiaomi – MIUI V7 Performance

Xiaomi – RedmiNote2″>Xiaomi – RedmiNote2

Xiaomi – RedmiNote2 Camera

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

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

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

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

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

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

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

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

Other videos from Bloomberg Business YouTube channel:

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

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

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

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

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

Other videos from the CCTV America YouTube channel:

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

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

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

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

 



Tablet and smartphone market trends

September update: Qualcomm’s smartphone AP revenues declined 17% year-over-year in the second quarter of 2015, Strategy Analytics estimated. Qualcomm maintained its smartphone AP market share leadership with 45% revenue share, followed by Apple with 19% revenue share and MediaTek with 18% revenue share. For the rest 18%: After a difficult 2014, Samsung LSI continued to recover and more than doubled its smartphone AP shipments in the second quarter of 2015 compared to the same period last year. Samsung LSI capitalised on its Galaxy S6 design-win in Q2 2015. In addition the company featured in multiple mid-range smartphones from Samsung Mobile. Full report: Smartphone Apps Processor Market Share Q2 2015: Samsung LSI Maintains Momentum
… The global tablet AP market declined 28% year-over-year to reach US$679 million in the second quarter of 2015, according to Strategy Analytics. Apple, Intel, Qualcomm, MediaTek and Samsung LSI captured the top-five revenue share rankings in the market during the quarter. Apple led the tablet AP market with 27% revenue share, followed by Intel with 18% revenue share. Qualcomm ranked number three, narrowly behind IntelGT400150821[1]Full report: Tablet Apps Processor Market Share Q2 2015: Apple and Intel Maintain Top Two Spots

Digitimes Research saw global tablet shipments fall to 45.76 million units in second-quarter 2015, showing a 10% decrease on quarter and representing more than a 15% decrease on year. Full report: Global tablet market – 2Q 2015 End of September update 

Investors.com comments on tablet and smartphone market trends — Q2’2015:Investors.com comments on tablet and smartphone market trends -- Q2'20151. Apple, Samsung lose ground in tablet market — LG and Huawei gain
2. Apple, Huawei [and Xiaomi] buck slowing smartphone sales trend

As the commenting articles by Investors.com are based on press releases of 2 market research companies I will give the web reference here for those press releases themselves, as well as 3 other press releases not commented on by Investors.com (if there are trend indications in the press releases themselves I will copy them alongside the web reference):

  1. July 29, 2015Worldwide Tablet Market Continues to Decline; Vendor Landscape is Evolving, According to IDCIDC on the Top 5 WW Tablet Vendors between 2014Q2 and 2015Q2“Longer life cycles, increased competition from other categories such as larger smartphones, combined with the fact that end users can install the latest operating systems on their older tablets has stifled the initial enthusiasm for these devices in the consumer market,” said Jitesh Ubrani, Senior Research Analyst, Worldwide Mobile Device Trackers. “But with newer form factors like 2-in-1s, and added productivity-enabling features like those highlighted in iOS9, vendors should be able to bring new vitality to a market that has lost its momentum.”
  2. July 30, 2015Huawei Becomes World’s 3rd Largest Mobile Phone Vendor in Q2 2015 [says Strategy Analytics]
    Strategy Analytics - Huawei becomes world's 3d largest phone vendor in 2015Q2 -- 30-July-2015

    • Woody Oh, Director at Strategy Analytics, said, “… Smartphones accounted for 8 in 10 of total mobile phone shipments during the quarter. The 2 percent growth rate of the overall mobile phone market is the industry’s weakest performance for two years, due to slowing demand for handsets in China, Europe and the US.”
    • Neil Mawston, Executive Director at Strategy Analytics, added, “… Samsung has stabilized volumes in the high-end, but its lower-tier mobile phones continue to face intense competition from rivals such as Huawei in Asia. … Apple outperformed as consumers in China and elsewhere upgraded to bigger-screen iPhone 6 and 6 Plus models.”
    • Ken Hyers, Director at Strategy Analytics, added, “… Huawei is rising fast in all regions of the world, particularly China where its 4G models, such as the Mate7, are proving wildly popular. Huawei has finally overtaken Microsoft to become the world’s third largest mobile phone vendor for the first time ever.”
    • Neil Mawston, Executive Director at Strategy Analytics, added, “Microsoft shipped 27.8 million mobile phones and captured 6 percent marketshare worldwide in the second quarter of 2015. Microsoft’s 6 percent global mobile phone marketshare is sitting near an all-time low. Microsoft continues to lose ground in feature phones, while its Lumia smartphone portfolio is in a holding pattern awaiting the launch of new Windows 10 models later this year. Xiaomi shipped 19.8 million mobile phones and captured 5 percent marketshare worldwide in Q2 2015. Xiaomi remains a major player in the China mobile phone market, but its local and international growth is slowing and Xiaomi is facing intense competition from Huawei, Meizu and others. As a result, Xiaomi may struggle to hold on to its top-five global mobile phone ranking in the coming quarters.”
  3. June 17, 2015Business smartphones shipments in Q1 up 26% from last year, now 27% of total smartphone market [says Strategy Analytics]
    Strategy Analytics - 1Q15 Worlwide Business Smartphone Shipments -- 17-June-2015Android was the most dominant OS in terms of business smartphone shipments in Q1, accounting for nearly 60% of all business smartphones (corporate- and personal-liable). It was also the dominant BYOD device; 68% of personal-liable shipments in Q1 were Android. Apple iOS accounted for only 27% of BYOD shipments in Q1, but was the dominant platform in terms of corporate-liable smartphones, with 48% of Q1 CL shipments. The difference in Android/iOS shipments between the CL and IL categories reflects the continuing corporate perception that iPhones are “safer” than Android-based devices.

    • Shipments of personal-liable smartphones (i.e. “bring your own device,” or BYOD, phones) drove market growth in Q1
    • Strategy analytics defines personal-liable devices as devices purchased by the end-user and expensed back to the company or organization, or devices purchased outright by individual users but used primarily for business purposes linking to corporate applications and backend systems.
    • While personal liable devices dominate worldwide business smartphone shipments, some regions are more resistant to the BYOD trend than others. Such regions include Western Europe and Central Europe, where corporate-liable devices are the dominant types of business smartphones. In Western Europe in Q1, 61% of the 10 million business smart phones were corporate-liable. Central and Eastern Europe had a slightly higher rate of BYOD devices shipped in Q1 — 41% — but the majority of smartphones shipped in this regions was also corporate-liable. This a sharp contrast to North America, where three-quarters of business smartphone shipments are personal-liable. The trend in Western and Eastern Europe reflects the more corporate-centric approach businesses take to mobility in these regions.
  4. July 29, 2015Mobile Broadband Tablet Subscriptions to Double to 200 Million by 2021, says Strategy Analytics Strategy Analytics - Mobile Broadband Tablet Subscription forecasted till 2021 - 29-July-2015

    • Strategy Analytics forecasts global mobile data subscriptions on tablets will more than double from 2015 to 2021, reaching over 200 million
    • Around the globe, over 100 million wireless connections on cellular enabled tablets will be added through 2021. By 2021 tablets will only account for 2 percent of total mobile subscriptions, a 2.7 percent population penetration rate.
  5. July 29, 2015Intel Maintains Top Spot in Non-Apple Tablet Apps Processors in Q1 2015 says Strategy Analytics
    Strategy Analytics - 1Q15 Tablet AP Revenue Share $733M -- 29-July-2015
    ⇒The global tablet applications processor (AP) market declined -6 percent year-over-year to reach $733 million in Q1 2015

    • According to Sravan Kundojjala, Associate Director, “Intel maintained its top spot in the non-Apple tablet AP market in unit terms in Q1 2015. Strategy Analytics estimate Android-based tablets accounted for over 70 percent of Intel’s total tablet AP shipments in Q1 2015. We expect Intel’s Atom X3 cellular tablet chip product line to help Intel maintain its momentum in the tablet AP market.”
    • Stuart Robinson, Executive Director of the Strategy Analytics Handset Component Technologies (HCT) service added, “Strategy Analytics estimates that baseband-integrated tablet AP shipments accounted for over one-fourth of total tablet AP shipments in Q1 2015, helped by a strong push from Qualcomm, MediaTek and Spreadtrum. We expect continued momentum for integrated APs as IntelRockchip and others join the bandwagon.”
  6. July 30, 2015Windows Tablet Shipments Nearly Double in Q2’15, says Strategy Analytics
    ⇒Global Tablet Shipments and Market Share in Q2 2015 (preliminary)
    Strategy Analytics - Global Tablet Shipments and Market Share in Q2 2015 (preliminary) -- 30-July-2015

    • Windows-branded Tablets comprised 9 percent of shipments in Q2 2015, up 4 points from Q2 2014
    • Android-branded Tablet shipment market share was flat at 70 percent in Q2 2015
    • Apple continued its slide in market share down to an all-time low of 21 percent in Q2 2015, 4 points lower than Q2 2014
    • Vendors with strong 3G and LTE connected Tablet strategies such as Huawei, LG, and TCL-Alcatel gained market share as leaders like Apple, Samsung, and the White Box community lost ground
Tablet & Touchscreen Strategies Senior Analyst Eric Smith added, “Windows share continues to improve as more models become available from traditional PC vendors, White Label vendors, and Microsoft itself though a healthy Surface lineup and distribution expansion. The key going forward will be if the coming wave of 2-in-1 Detachable Tablets is a hit with consumers or if they go the way of the Netbook—we remain cautiously optimistic on this point.”
Tablet & Touchscreen Strategies Service Director Peter King said, “Apple’s fortunes will turn around soon as it will launch the 12.9-inch iPad Pro as well as an iPad mini 4 in Q4 2015. New features in iOS 9, which are exclusive to iPad such as multi-tasking and a more convenient soft keyboard, will also help compel upgrades by owners of older iPad models. Meanwhile, Huawei and LG have posted fantastic growth primarily due to well-executed 3G and LTE connected Tablet strategies.”

Then I will add 2 additional information pieces from  Strategy Analytics:

Oct 8, 2014: Replacement Demand to Boost PC Sales in 2015, says Strategy Analytics

Having experienced negative growth since 2012, global PC sales are expected to rise 5 percent in 2015 driven by replacement of an ageing installed base according to Strategy Analytics’ Connected Home Devices (CHD) service report, “Computers in the Post-PC Era: Growth Opportunities and Strategies.”

Click here for the report:

http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=10146

  • PC sales will fall by 4 percent in 2014 before returning to modest growth in 2015 and beyond to support replacement demand.
  • Strategy Analytics’ consumer research of computing device usage in developed markets indicates that PCs remain essential computing devices despite healthy Tablet sales.
    • Frequent Tablet usage has grown by 22 percentage points from 2011 to Q4 2013 up to 32 percent of all households while frequent Mobile PC (excluding Tablets) usage has stayed steady through this period, as 63 percent of all households indicated they frequently used Mobile PCs.
    • Frequent usage of all PCs (including Mobile and Desktop PCs and excluding Tablets) remained above the 90 percent mark of all households, falling only 3 percentage points during this period.

Strategy Analytics - Global Computing Devices Installed Base 2009-2018 -- 8-Oct-2014Quotes:

Eric Smith, Analyst of Connected Home Devices, said: “Multiple PC ownership is falling as Tablet sales supplant replacement demand for secondary PCs mainly used for casual tasks. Still, PCs will remain essential devices as households eventually replace their primary PCs used for productivity tasks such as spreadsheet and video editing or personal banking.”

David Watkins, Service Director, Connected Home Devices, added: “The modern Tablet user experience is quickly arriving on the PC thanks to more affordable 2-in-1 Convertible PCs and new operating systems which blend traditional PC and Tablet user experiences. We see development of these forces aligning perfectly with an older PC installed base ripe for replacement in 2015.”

May 1, 2015: Children Change Disney’s Digital Strategy: “App TV” Now Central To Content Planning by David Mercer

Multiscreen TV behaviour is at the centre of television’s stormy transformation – viewing of broadcast, linear TV on the TV screen is apparently in decline while consumption on smartphones and tablets is increasing. Making sense of the big picture is increasingly challenging, and legacy players like broadcasters and the major content owners are inevitably somewhat resistant to the idea that their traditional businesses are under serious threat.

Strategy Analytics - The New TV - Global TV Capable Screens Installed Base -- 1-May-2015We have monitored the early stages of this transformation for the past decade and see its results in our own research, and we continue to predict further industry disruption in our forecasts. But sometimes it is only when you hear the evidence given in person by a senior executive at a leading global player that the scale of the challenge and opportunity are finally brought home.

This happened at last week’s AppsWorld event in Berlin, where I chaired the TV and Multiscreen conference. The speaker was Andreas Peters, Head of Digital for the Walt Disney Company Germany, Austria and Switzerland. Andreas presented some of the most compelling evidence I have yet heard that television is truly a multiscreen medium for the next generation of viewers.

Disney’s challenge in Germany was to launch a television show called Violetta aimed at 8-12 year old girls. It had been introduced successfully in Argentina but had failed in the UK. As it often does, Disney had invested considerable amounts in merchandising and retailers were eagerly anticipating sales of the new product lines. The show was first broadcast on German free TV on May 1st 2014 but it achieved only very low ratings.

The question for Disney managers was whether traditional TV had stopped working. A crisis meeting was held with a view to writing off the investment. Disney had previously not made its shows available online in Germany but the Violetta situation was so serious they were persuaded to experiment. Two episodes were made available on Youtube with a link to Disney’s own website. Viewing of the content on Youtube very quickly went viral until Disney had achieved a reach of 50% of 8-12 year old girls and eight million views. Violetta went on to become a success in German-speaking markets.

The evidence was clear: for some shows at least, younger children cannot now be reached using the traditional broadcast TV/big screen model. Peters explained that the Violetta experience was transformative for the Disney organisation and led to the inclusion of online and digital media as a key element in the business case for many products. In fact it also led to the development and launch of Disney’s own Watch App, which includes live streaming and seven-day catch-up programmes from the broadcast Disney Channel.

Even after the Violetta experience Disney was sceptical that an app was needed – there was a feeling that the website would be sufficient. Nevertheless the app was launched and Disney had planned for 20,000 downloads. Instead it has passed one million downloads in its first six months. Peters noted: “This was a real shock for us. We completely underestimated the demand.” Around 500,000 viewers are now using the Disney Watch app for linear television viewing, in addition to millions of shows being downloaded for catch-up viewing. Peak app viewing hours are between 6am and 8am and then between 1pm and 9pm on school days, with a different pattern at weekends. Peters made it clear that children did not want lots of features built in to the app – just like TV, they just want to hit “play” and watch.

“Our TV colleagues of course don’t want to believe this,” said Peters. “But the world has changed and it will continue to change.” Disney has also seen a knock-on effect from its app launch with an increase in free-to-air broadcast TV viewing. But the firm is now clear that mobile is not just an add-on to TV or a promotional tool; it must be an integral part of the entire process.

There are many implications for content strategy. TV and Digital have to “understand each other”, which is a challenge when the KPIs in each world are very different. As we have often heard, the video industry is crying out for a set of common metrics which can apply and support advertisers in both TV and online worlds. Video consumption patterns vary and different content may be relevant to different platforms.

But the overall lesson is clear: “TV” is not just the big screen in the corner of the living room. It must embrace multiscreen distribution strategies in order to reach its maximum potential. TV companies are betraying their audiences and their investors if they don’t target the 6.4bn addressable screens available to them.

Xiaomi’s global offensive with Hugo Barra in charge is threatening Apple—with 10.4 million smartphones sold in China it had already outsold Apple in Q1’14, having “just” 9 million iPhones sold there

And this is just a global start as their plan for the whole year is “only” 60 million units, i.e. given the 4×10.4 units just for China (at least) their direct sales abroad will not be more than 20 million this year.

Note that according to internal to China market research (EnfoDesk) Xiaomi’s true internal sales were 8.98 million in Q1’14, the rest quite probably went to Chinese resellers stocking themselves (but even Apple had only 6.44 million true iPhone sales in China for the same period):image

How Apple’s New Rival Plans to Take Over the World [Bloomberg News YouTube channel, June 4, 2014]

Here is everything you need to know about the 4-year-old Chinese mobile company that has become the 6th largest handset company on Earth and the 3rd largest in China. Bloomberg Businessweek’s Brad Stone reports.

Xiaomi Redmi launches in Singapore Feb 21 [TODAYonline (Singapore), Feb 19, 2014]

Chinese smartphone maker Xiaomi has made its first steps for a global presence with the launch announcement of their budget Redmi phone today (Feb 19). The phone will be available on the Xiaomi store at http://www.xiaomi.com/sg.

Xiaomi also announced the upcoming launch of their flagship Mi3 phone in Singapore on March 7 for S$419 without contract.

The smartphone will be available online at http://www.xiaomi.com/sg from Feb 21, and from local telco StarHub from Feb 27. …

China’s Xiaomi is working on phone launches in India, Indonesia, and other Asian markets [Tech in Asia, Feb 19, 2014]

Chinese phone-maker Xiaomi held an event in Singapore this morning. Aside from launching the Redmi and Mi3 phones in Singapore, Xiaomi’s Hugo Barra and Lin Bin talked a lot about Xiaomi’s ambitions around the world.

Xiaomi’s Hugo Barra explained to the event’s Singapore audience that the company will use the same customer-focused tactics in Singapore as it does in China – such as listening to users and making small changes to the product throughout its lifecycle based on what they say. Xiaomi will have a service store in Singapore that’s only for repairs, just as it does in China. Sales will be conducted online or via partner telcos, but telcos may set their own prices.

No plans yet for US and Europe

Barra also explained why the startup chose Singapore as its first stop in Southeast Asia – indeed, as its international HQ – by saying that it was tempted by the small but very sophisticated market, which would allow them to iterate fast. Xiaomi can then use those lessons in neighboring markets like Malaysia, Indonesia, and Thailand.

Xiaomi is also looking closely at India, Barra says, where it’s actively looking for partners. Those four, mentioned specifically by the company at today’s event, look to be the next markets for launch.

However, Barra described the US and European markets as far too difficult at the moment. And so the disruptive Chinese phone-maker looks set to focus on Asia for growth of its brand.

Xiaomi isn’t actually the first Chinese smartphone brand to look to Asia for expansion, as Oppo, Meizu, and Coolpad have been doing the same thing with their Android-based phones in the past year.

Xiaomi Fan Meet Singapore – Hugo Barra Interview [Foliath R YouTube channel, June 5, 2014]

Xiaomi set to expand into 10 more countries this year, including India, Indonesia, and Brazil [Tech in Asia, April 23, 2014]

This afternoon Xiaomi, China’s fast-growing smartphone maker, held a meetup in Beijing to announce it would enter some new markets and also reveal a new product it had been teasing for the past several weeks.

At the event, Xiaomi founder Lei Jun confirmed that the company would expand internationally in full force. Specifically, he claimed that the company will enter no less than 10 countries this year:

  • Asia: Malaysia, Indonesia, India, the Philippines, Thailand, Vietnam
  • Europe: Russia, Turkey
  • Latin America: Mexico, Brazil

Earlier this month Xiaomi’s Hugo Barra listed a few of these territories as upcoming destinations for the company.

Earlier this month Xiaomi’s Hugo Barra listed a few of these territories as upcoming destinations for the company. Earlier this week Xiaomi launched a new website at Mi.com, marking a symbol of its commitment to going global. “When it comes to ecommerce, a short domain name helps obtain higher user traffic because it is easy to remember,” said Xiaomi VP Li Wanqiang in a statement.

Xiaomi is aiming to sell a total of 60 million smartphones over the course of this year, more than three times the number it sold in 2013.

Interview with Xiaomi’s Bin Lin & Hugo Barra [LowyatTV (Malaysia) YouTube channel, June 6, 2014]

After the Malaysian launch of the Xiaomi Mi 3, we sat down with both Hugo Barra (VP, Xiaomi Global) and Xiaomi co-founder Bin Lin for a broad-ranging chat on Xiaomi, its unique approach and of course, accusations of being an “Apple clone”.

Xiaomi Malaysia added 4 new photos.  May 19 at 6:55am ·

Here are some of the key highlights during the press event of#‎XiaomiMYLaunch‬ in Kuala Lumpur, Malaysia.
-Malaysians Mi Fans can finally purchase Mi 3 starting from tomorrow (Onwww.mi.com/my)
Redmi 1S will be arriving in Malaysia next month.
-We’re trying super hard to bring other products into Malaysia.
-We will be working with Celcom, Digi and Maxis. Stay tuned for announcements from them.
-We currently have 4 authorised service centres in Malaysia. (For more info http://bit.ly/XiaomiMYShippingFAQ)

Last but not least, we love all you Malaysian Mi Fans! If you have any comments, please share it with us. We’ll try our very best to assist you.

Make sure you log on to www.mi.com/my at 12PM tomorrow to buy your Mi 3/Mi Power Bank!

Xiaomi Mi3 launched in Malaysia, out of stock in 17min [MalaysianWireless, May 20, 2014]

Xiaomi Malaysia launched the Mi 3 in Malaysia. The Android device, price at RM889 [$280] went on sale at 12pm earlier today and sold out approximately 17 minutes later. Xiaomi Malaysia said some 4000 units of the Mi 3 and 5000 units of the Mi Power Bank (RM36) were sold.

[Xiaomi] Hugo Barra – Why You Must Have Xiaomi Devices? [MIUI, June 6, 2014]

Hi MIUIers, during Hugo’s visits to Indonesia, he said so many things about Xiaomi, and here’s one of it “Why You Must Have Xiaomi Devices?”

‘Meet & Greet with Hugo Barra’, Indonesia Cellular Show, Jakarta 5 Juni 2014

[Xiaomi] Hugo Barra – Marketing Strategy of Xiaomi in Indonesia [MIUI, June 8, 2014]

Hi MIUIers, this is another video of how will Xiaomi marketing their devices in Indonesia.

Yes…They will use ONLINE system like in the other country, but the different is, Xiaomi will cooperate with local ecommerce to sell the devices. And this happen because of the regulation in Indonesia.

Hugo Barra talks about Mi 3, Redmi 1s, Redmi Note, Mi Pad and Xiaomi Philippines Launch [Joey Abiog YouTube channel, June 9, 2014]

[From Joey Abiog’s related blogpost] Xiaomi will soon be launching Mi smartphones in the Philippines as well as opening its store, service centers and drop off locations in the country. We were lucky enough to meet Hugo Barra, Xiaomi Global VP and get first dibs on the Mi devices that will be launched in the country including the Mi 3 flagship smartphone, Redmi 1s midrange smartphone, Redmi Note octa core smartphone and the Tegra K1 powered Mi Pad. Check out the video below above as Hugo Barra talks about Mi 3, Redmi 1s, Redmi Note, Mi Pad and Xiaomi Philippines Launch.

More information:

First of all, we are focused on the South East Asia region to start because these are large markets with [very tech-oriented population], people that love specs and are very interested in phones with aggressive prices. Collectively speaking, when you look at Philippines along with Indonesia, Thailand [and other countries in the region], it’s a very significant market and it’s one that’s relatively close to us. The Philippines is following right after Malaysia, honestly, because it’s the one that’s gonna be ready first; It was the fastest process among the remaining countries [in terms of dealing with] customs, certifications, and imports […] It was actually very smooth that’s why we are here first,” Hugo told me [i.e. Mark Milan Macanas].

Xiaomi Global VP Hugo Barra explains why the company has decided to launch headquarters in the Philippines and how it intends to operate here.

How Big a Threat Is Xiaomi to Apple? [Bloomberg News YouTube channel, June 5, 2014]

Xiaomi’s Rise to Selling 100K Phones in 90 Seconds [Bloomberg News YouTube channel, June 5, 2014]

Meet the Billionaire ‘Steve Jobs of China’ Lei Jun [Bloomberg News YouTube channel, June 5, 2014]

Xiaomi answer to Apple [XIAOMI GLOBAL YouTube channel, May 31, 2014]

[Xiaomi] Xiaomi’s Phones Have Conquered China. Now It’s Aiming for the Rest of the World! [MIUI, June 5, 2014]

On May 15, behind the curving, imperial facade of the China National Convention Center in Beijing, a veteran technology executive named Lei Jun walks onstage before a thousand raucous fans and members of the media. It’s a familiar scene everywhere now, and like many technology chiefs, Lei peppers his talk by ticking off some of the recent successes enjoyed by his company, the mobile device maker Xiaomi. Sales have been higher than expected; more than 50 million people use the company’s MIUI operating system. Then he gets to the new products, which today are a smart TV that can be controlled with an app and an Android-powered tablet computer, called MiPad, that comes in five colors and is priced to undercut the iPad mini. “I hope through our endeavor we can make Apple (AAPL) feel some pressure,” Lei says.

The crowd reacts to each product revelation as if it’s a World Cup goal. The hardware is indeed slick—the TV has the latest high-def specs, and the tablets are the first devices to use the newest processor from chipmaker Nvidia (NVDA). But Lei is delivering another, more potent message. He’s effectively giving an hourlong demonstration of an historic moment: China, for the first time, has its own technology brand that consumers truly lust after.

Following the event, the fans mill around in the Beijing smog, taking selfies with their MiPhones, waving Xiaomi signs, trading impressions of the new gadgets. Some made 15-hour trips to be here. Zhi Yuan, 28, who took a seven-hour train ride from Shandong province, proudly shows off his Xiaomi phone, the economical RedMi model. He likes it because it’s easy to use. Lei, he says, “can understand our wishes. He knows what Xiaomi fans want.”

STORY: Xiaomi Aims at Apple, Samsung With a Low-Cost Tablet and TV

Xiaomi (pronounced she-yow-mee) is one of the fastest-growing tech companies in the world. It’s the sixth-largest handset maker on earth and No. 3 in China, behind Samsung Electronics and Lenovo Group, according to research firm Canalys. Xiaomi’s recent growth is impressive, and its potential is even greater. In 2013, the company says, it sold 18.7 million smartphones almost entirely from its own website, bringing in $5 billion in revenue. Earlier this year, Lei set an internal goal of selling 40 million smartphones in 2014, then raised it to 60 million. In a financing round last August, venture capitalists gave Xiaomi a $10 billion valuation, about on par with 30-year-old PC maker Lenovo and Silicon Valley darlings Dropbox and Airbnb. At the same time, Xiaomi has branched out from smartphones to tablets, the large-screen HDTVs, a set-top box and home router, phone cases, and portable chargers, as well as a $16 white plush toy bunny—Mitoo, the company mascot, who wears a red-starred Chinese army hat.

While the phones and tablets have obvious echoes of better-known products from Apple and Samsung, they’re not clones. Xiaomi’s Mi3 smartphone, its flagship, is appropriately light and thin (8.1 mm), with nicely beveled curves. A color-popping display from LG and a high-performance Qualcomm (QCOM) processor give buyers the same components they’d find in other top-of-the-line phones. The device runs MIUI, Xiaomi’s own version of the Android operating system. Regular software updates, which come at the end of each week, often incorporate ideas from users. One popular feature, originally suggested on a Xiaomi online forum, activates the flashlight and shuts down the battery-hogging display when a Mi3 owner holds down the power button for five seconds. “Typically, Chinese companies have been relegated to copycat status,” says Chetan Sharma, a strategic consultant who advises businesses on mobile. “Lei Jun aspires to build a Chinese brand that stands up to the legends of the industry.”

Xiaomi’s real invention is its business model. It sells online, never in stores, and avoids conventional advertising, devoting only about 1 percent of its revenue to marketing. (By comparison, Samsung earmarks 5.4 percent.) Instead, the company relies on China’s social networks, Weibo and WeChat, and the free press Lei gets as a national tech hero. The money Xiaomi saves on marketing lets it buy top-notch components while keeping retail prices down. The Mi3 costs 1,699 yuan, or $270; the iPhone in China starts at more than twice that. A Mi3, or any Xiaomi phone, is a great deal if you’re lucky enough to snag one—the latest models routinely sell out. Xiaomi sells handsets in batches, usually of around 100,000. The first Mi3 release, the company trumpeted, was bought up in only 86 seconds. It’s the technology equivalent of Air Jordans.

VIDEO: Xiaomi Will Change Tablet Market: Barra

Lei’s newest goal is to take Xiaomi beyond China and into Brazil, Mexico, Russia, Turkey, India, and five countries in Southeast Asia. “The creative economy here continues to rise, entrepreneurship is surging, and our innovation abilities are growing,” Lei said in an e-mail translated from Chinese, since he does not speak or write in English. “We’re the world’s largest consumer market. After several decades of effort, this is the trend. Chinese technology companies are coming to the rest of the world.”
Lei was born in 1969 to what he calls an ordinary family in Xiantao, a midsize city in Hubei province. Always good at math, he entered the computer science department of nearby Wuhan University on a scholarship in 1987. In the library his freshman year, he discovered a Chinese translation of Fire in the Valley: The Making of the Personal Computer, the seminal history of the U.S. tech industry and the early careers of Bill Gates and Steve Jobs. The book inspired Lei, who got his degree in two years and joined Kingsoft, then a small, Beijing-based purveyor of office-productivity software that was clearly imitating Microsoft (MSFT).

Chinese migrants to Beijing, it’s commonly said, work harder than city natives to prove themselves, and Lei was no exception, putting in round-the-clock hours. After five years he was named Kingsoft’s chief executive officer and ran the company alongside its founder. Newspapers in the late 1990s dubbed him the láomó, or “model worker,” of Zhongguancun, Beijing’s emerging technology district.

It wasn’t an easy ride. For much of its early life, the embattled Kingsoft was staving off bankruptcy. Piracy of its products was rampant, and its word processing software, WPS Office, went head-to-head with Microsoft Word. Over the course of a decade, Lei tried to find safer ground, steering Kingsoft into video games and security software and spinning off an e-commerce company, Joyo.com, which was acquired by Amazon.com (AMZN) in 2004, though for a relatively paltry $70 million.

STORY: Xiaomi Steps Out of China, Brings Cheap Smartphones to Singapore

Lei finally took Kingsoft public in 2007, raising $99 million on the Hong Kong Stock Exchange largely on the strength of its online gaming revenue. Its market capitalization was a meager $400 million. He resigned from the company two months later.

VIDEO: Xiaomi Unveils ‘Mi Pad’ as Apple-Samsung Challenge

Local news accounts cited health issues as the reason for Lei’s departure. Friends say he was merely fed up. Younger entrepreneurs, such as Jack Ma at e-commerce conglomerate Alibaba Group, Pony Ma at the entertainment company Tencent Holdings, and Robin Li at local search leader Baidu (BIDU), had built vastly larger Internet empires. They were the true stars of the Chinese technology scene. “[Lei] was financially secure, but he didn’t feel reputationally secure,” says Robin Chan, an angel investor who backed Xiaomi. “He wasn’t being considered in the same breath as Jack Ma and Pony Ma, which is where he is now. It drove him.”

After Kingsoft, Lei started a personal venture capital fund, structuring his investments around mobile, social networking, and e-commerce companies. In 2007 he backed Vancl, an online apparel and household goods retailer. The company almost folded in 2011 after loading its warehouses with products such as handbags and brooms that didn’t sell. “It was a very important lesson for Lei Jun to not get trapped by inventory,” says Hans Tung, a venture capitalist who invested in both Vancl and Xiaomi.

In the fall of 2009, Lei started meeting with Lin Bin, a local Google (GOOG)executive with notions of founding a startup. Lin was in charge of Google’s mobile efforts in China, overseeing about 50 engineers. That fall, the pair met in the lobbies of hotels across Beijing, first to discuss Google’s relationship with a mobile browser company called UCWeb, which Lei had invested in, and then to discuss Lin’s entrepreneurial ambitions.

STORY: Xiaomi’s Resolution: Double Its Smartphone Sales Volume in 2014

Lei was about to turn 40 and was infatuated with the dawning smartphone craze. He carried two dozen phones in his backpack, which he meticulously studied, as well as an Amazon Kindle that he had dismantled to understand how it worked. He talked obsessively about the software that ran on smartphones and how it could be improved for China’s massive population of mobile phone users, which was about to surpass 1 billion.

The pair would meet at night and, though both had families with young children, talk well into the morning. They were natural friends, both driven and deeply technical.

VIDEO: Move Over Apple, Samsung Here Comes Xiaomi’s Mi Pad

Lin eventually figured out there was something else going on during these midnight meetups. “I suddenly realized he wanted to do the startup with me,” he says. “It didn’t make any sense. I checked the guy’s fortune. He was wealthy enough to retire 10 times for 10 lives, he was so successful at investing. And many [of his investments] were on the path to an IPO, which would make him a hundred times richer.”

“Chinese technology companies are coming to the rest of the world”

In early 2010, Google declared it was reorganizing its operations in China in the face of mounting censorship demands by the Chinese government. It was the nudge Lin needed. He told Lei he was ready to leave Google and start a company together. Lei wanted to create not just mobile software tailored to the Chinese market, but actual smartphones, too. He also wanted to sell the phones exclusively online, so they could save on the 20 percent to 25 percent cut paid to retailers, and deliver high-quality phones at prices affordable to the Chinese masses, who on average earned a little more than $2,000 a year.

The partners set up shop in a small office near the Third Ring Road in the north part of Beijing. Lei would be CEO and product chief; Lin, president in charge of daily operations. One of their first tasks was finding a name for the venture. Their first choice was Redstar, after the communist symbol, which was sure to inspire patriotic fervor in Chinese customers. But the trademark was taken. Someone then suggested the word Mi, or rice. The romanized spelling was fortuitously short for “mobile Internet” and, less auspiciously, for “mission impossible.” They considered using the Chinese words for black rice and big rice, before settling on a more humble alternative: small rice, or Xiaomi.
Investors were skeptical that a new Chinese brand could make a dent in the crowded smartphone market. “People thought they were crazy,” says Richard Liu, managing director in Shanghai for Morningside Ventures. “Everyone knew it would take a huge amount of money to enter the phone business, because the competition is so strong.” One prospect said, “The only way this could work is if Nokia (NOK)and Motorola went out of business and there was a hole in the market,” recalls Chan, the angel investor. That proclamation, absurd at the time, wasn’t too far off the mark.

STORY: What Ex-Google Exec Hugo Barra Can Do for China’s Xiaomi

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Lei (fourth from left) and Lin (far right) with Xiaomi’s other founders in 2013

Liu, who’d backed UCWeb, first heard Lei’s pitch over the phone, in a call that lasted from 9 at night to 9 in the morning. Liu recalls that Lei described a smartphone company that moved with the speed of an Internet startup, listening and responding to users, selling hardware at or near cost, and earning a profit on accessories and Internet services. Liu ended up supplying half of the initial $10 million in capital. The VC arm of Qualcomm kicked in a minority investment.

Lei and Lin then set about assembling an uncommonly large founding team, with accomplished high-tech veterans who could independently manage the interlocking parts of the company, including hardware, software, design, and manufacturing. To lure senior Chinese executives away from other technology companies, they awarded them the status of co-founder and the stock that comes with it. (There are now eight Xiaomi founders; both Lei and Lin forgo a salary.) Hong Feng, a member of Lin’s team at Google, joined to run the MIUI group. In his first interview with him, Hong recalls, Lei spent an hour talking about how he might redesign the alarm clock on the smartphone because users don’t really need to see every minute (few set their alarm for 7:37 a.m.). That feature hasn’t actually launched. “There are many things we talked about that we haven’t gotten around to actually doing yet,” Hong says.

Xiaomi produced MIUI first, making it available free online in mid-2010 as a software package that technically proficient owners of Android phones could install over their phone’s default operating system. The software, downloaded half a million times in the first few months, was lauded by Android enthusiasts for its user-friendly, common-sense features, such as an easy way to record phone calls and send text messages simultaneously to groups of friends.

VIDEO: When Will Xiaomi Come to America?

The company forged a hard-driving office culture. The founders agreed to work from 10 in the morning to 10 at night—10 to 10, they called it—six days a week. They also set a goal of pushing out a new version of their software at the end of each week. Xiaomi still does this, making MIUI updates available to a core group of beta testers who work for free to try the preliminary software and hunt for bugs.

Lei and Lin planned to wait a year before starting work on their first phone. But the founders were unhappy with MIUI’s performance on other companies’ hardware. Xiaomi also unexpectedly snagged a new co-founder, Zhou Guangping, or “Dr. Zhou,” who in 2005 had been responsible for producing Motorola’s popular Ming phones in China.

Lei, Lin, and Zhou canvassed suppliers, offering to pay cash upfront for components such as batteries and camera modules. They visited screenmaker Sharp in Tokyo in spring 2011 and contracted with Taiwanese manufacturer Inventec to assemble the phones.

VIDEO: Smartphone Maker Xiaomi to Expand

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The Mi1 was announced in August 2011 to a packed crowd of 2,000 MIUI fans and press. Lei wore a black shirt and jeans, intentionally provoking comparisons to you-know-who. Part of the Mi1’s buzzy appeal was that it was packed with the newest components, such as the latest dual-core chip from Qualcomm. It was a huge gamble—“confidence from nowhere,” as Lin puts it. The phone also had a tantalizingly low price—1,999 yuan, or about $300 at the time, a third of the price of an imported iPhone 4.

Over the next six months, Xiaomi sold out three separate batches of the Mi1, each a few hours after they went on sale. The company says it wasn’t deliberately constraining supply to stimulate demand. “There’s a saying here: Don’t be greedy. Greed can kill a hardware company,” says another vice president and co-founder, Huang Jiangji.

There were plenty of glitches after the Mi1 went on sale. Buyers complained it took several weeks to receive phones. Others grumbled about shoddy customer service, forcing Xiaomi to hire more phone reps and open a network of small repair shops around the country. But the device kept selling, and since the cost of components fell while the price stayed the same, the phone eventually netted the company a 15 percent profit margin.

VIDEO: Does Xiaomi Have World Domination in its Sights?

Xiaomi originally estimated it might move 300,000 Mi1s. It sold more than 7 million. A year later it introduced the Mi2, which was the first phone on the market to feature Qualcomm’s newest Snapdragon processor. Xiaomi would sell more than 15 million units.
Xiaomi’s 5,200 employees are jammed into two crowded office buildings near the Fifth Ring Road, in a former wool-manufacturing district in the north part of Beijing. A stray mutt, adopted by employees and named Prosperous Wealth, is tied up in one lobby. Behind Prosperous Wealth, rows of twentysomethings sit in cubicles, handling customer service calls. Many wear orange T-shirts featuring Mitoo, the communist bunny.

“There’s a saying here: Don’t be greedy. Greed can kill a hardware company”

In March, Lei announced the purchase of land for a Xiaomi office building in Zhongguancun, where he was once hailed as the model worker. The office park will provide a home not only for Xiaomi but also Kingsoft; Lei returned to the software company as chairman in 2011 after its fortunes declined even further. The office park will take several years to be completed. Another thing that won’t happen soon is a Xiaomi IPO. “It’s only a four-year-old company,” Lei said via e-mail. “We have to focus on how to provide better products and services. Xiaomi has no plans to go public within the next five years.”

The pace at Xiaomi has slowed somewhat since the early days, though employees continue to pull 10-to-10 schedules before major product launches. “But we are still happy every day,” says Joy Han, a Xiaomi spokeswoman.

VIDEO: Is Xiaomi’s Lei Jun the Steve Jobs of China?

The hardest worker, employees are fond of pointing out, remains Lei. Lin estimates that his partner easily works 100 hours a week. Huang Jiangji, who oversees the company’s new $110 home media server, has a four-hour morning meeting every Saturday with the boss to go over product plans. The server, if all goes according to strategy, will allow users to easily control the coming wave of new devices, such as smart thermostats and appliances—many of which Xiaomi no doubt wants to make itself.

In an end-of-the-year e-mail, Lei implored employees to work harder to meet the challenge laid down by Chinese rivals Huawei Technology and Lenovo, which have larger market shares and are now targeting Xiaomi’s prices and customers. “This means that we will face a more severe test,” Lei wrote. “We are a pioneer in driving change, but whether or not a pioneer can become a true leader in the industry depends on our future efforts.”

On the 11th floor in the main building, in a corner office, is the realm of Hugo Barra, the Brazilian-born Google executive who made news by joining Xiaomi in 2013 to lead its overseas expansion. As he talks, Barra paces his spare office, which overlooks the old tenements that once housed the workers of the demolished wool factories. Barra’s shelves are stocked with Mitoo dolls and other knickknacks. Evidence of his five-year tenure at Google hangs on the walls, including a framed Pac-Man doodle that once appeared on the search engine’s home page.

Barra is naturally bullish about the company’s prospects abroad, and one new weapon is the $130 RedMi smartphone, which Xiaomi introduced last year alongside the pricier Mi3. The phones look alike, but the RedMi sports an inexpensive processor from Taiwan’s MediaTek. Barra even mulls the prospect of a $50 smartphone that might one day upend the economics of mobile. “I don’t think it’s possible today, with the quality of software and hardware that we would expect,” he says, “but I expect that could change over time.”

Xiaomi has to show it can use Western social media tools such as Twitter (TWTR)as well as it has exploited Weibo and WeChat. It must extend its supply chain across oceans and adjust its business model to countries where carriers sell handsets and customers aren’t accustomed to buying phones online. It must also overcome the association that Chinese brands have with piracy and counterfeiting. And Xiaomi will have to learn to do with less free, worshipful publicity. “Lei Jun is a relative nobody outside China, so leveraging his fame may be a little bit more difficult to do,” says Michael Clendenin, managing director of China’s RedTech Advisors. “Guerrilla marketing won’t be as easy.”

Perhaps Lei can use scarcity to his advantage yet again—making Xiaomi phones as rare and coveted in foreign markets as they are back in Beijing. Outside the convention center, the crowd of Xiaomi fans finally begins to thin out. Ma Yun Yan, 24, has dyed red hair, a pink baseball cap, and a T-shirt that reads “Don’t trust anyone.” She took a three-hour flight from Nanning to attend the event and is considering a MiPad with a yellow plastic back, because “yellow is bright and young.” Nearby, Zhao Zhe, 29, says he’s a big fan of MIUI but complains the MiPad is “not cheap enough” and says the experience of trying to buy a Xiaomi gadget online is mafan—a lot of trouble.

The crowd may be hoping for a final appearance from Lei, but they leave disappointed. He is somewhere else, though he continues to post all afternoon and evening to his 8.6 million followers on Weibo. “We’ll definitely fully push forward on Android tablets,” he writes to one fan concerned about the MiPad’s competitiveness. “We have great determination.”

Source

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

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

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

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

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

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


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

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

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

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

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

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

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

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

China smartphone will continue to proliferate

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

Use of Local Apps Is Strong In China

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

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


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

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

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

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

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

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

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

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Worldwide:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


United States
:

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

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

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

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

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

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

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

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

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

Chinese smartphone brands to conquer the global market?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Region

Shipments (M Units)

India

212.3

Middle East & Africa

150.0

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

140.7

Latin America

76.4

PRC

68.1

Central & Eastern Europe

43.6

Western Europe

39.8

North America

13.9

Total

744.9

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

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

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

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

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

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

700 Million active smart devices in China

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

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

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Fragmented Android device market

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

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

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

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

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

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

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India Smartphones Market

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

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

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

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

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

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

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

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Q413 Perspective:

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

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

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

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

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

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

Top Five Smartphone Vendor Highlights

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

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

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

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

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

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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)