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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

Aug 13, 2015Additional videos from XiaomiHK YouTube channel:

Xiaomi – MIUI Introduction (with English subtitles)

Xiaomi – MIUI V7 Endurance

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

Xiaomi – MIUI V7 Performance

Xiaomi – RedmiNote2″>Xiaomi – RedmiNote2

Xiaomi – RedmiNote2 Camera

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

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

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

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

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

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

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

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

Other videos from Bloomberg Business YouTube channel:

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

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

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

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

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

Other videos from the CCTV America YouTube channel:

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

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

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

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

 



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

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

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

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

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

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


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

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

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

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

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

image

image

image

image


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

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

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

China smartphone will continue to proliferate

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

image

image

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

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

image

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

Use of Local Apps Is Strong In China

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

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


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

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

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

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

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

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

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

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Worldwide:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


United States
:

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

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

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

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

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

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

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

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

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

Chinese smartphone brands to conquer the global market?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Region

Shipments (M Units)

India

212.3

Middle East & Africa

150.0

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

140.7

Latin America

76.4

PRC

68.1

Central & Eastern Europe

43.6

Western Europe

39.8

North America

13.9

Total

744.9

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

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

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

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

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

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

700 Million active smart devices in China

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

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

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Fragmented Android device market

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

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

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

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

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

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

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India Smartphones Market

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

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

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

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

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

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

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

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Q413 Perspective:

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

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

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

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

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

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

Top Five Smartphone Vendor Highlights

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

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

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

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

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

image

IDC India Forecast:

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

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

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

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

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

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

Upcoming FireFox OS powered $25 smartphones with Spreadtrum SC6821 EDGE SoC having 128MB on chip RAM used via zRAM swap by the OS

Hands on with the $25 Smartphone running Firefox OS at MWC 2014 [TrustedReviews YouTube channel, Feb 24, 2014]

We got hands on with the proposed $25 Smartphone which sees Firefox partner with Chinese chip designer Spreadtrum Communications.

[0:15] “This is the newest … set that is running on ultra low-end memory which is 128MB RAM and 256MB ROM. So that’s why we call it the lowest [price] smartphone you probably can get on the market” [0:30]

From With Firefox OS, Mozilla begins the $25 smartphone push [CNET, Feb 23, 2014]

Mozilla doubled down on its bet that low-end smartphones will give Firefox OS a place in the crowded mobile market, announcing partnerships Sunday that will bring $25 smartphones to the large number of people who can’t afford high-end models like Apple’s iPhone 5S and Samsung’s Galaxy S5 that cost hundreds of dollars.

At the Mobile World Congress here, Mozilla announced a deal with Chinese chip designer Spreadtrum Communications that will mean Firefox OS smartphones will arrive in extremely cost-sensitive markets like India and Indonesia where people often buy phones from a bin in a store.

We’re working with them to break through the $50 $25 barrier [should be corrected, obviously], which is hard,” Mozilla Chief Technology Officer Brendan Eich told CNET. “This is going to be for a set of [sales] channels in Asia that do not involve operators,” the carriers that in other parts of the world dominate distribution.

One company that plans to make and promote the phones is Indonesia-based Polytron. And Indonesian carriers Telkomsel and Indosat plan to sell the devices. Hands-on testing shows the cheap Firefox OS phones to be workable. “This is a price point currently out of the reach of Google and even the lowest-cost Android handset vendors. It pushes Firefox OS into feature-phone territory, potentially signaling the beginning of the end for the category,” said Ovum analyst Nick Dillon in a statement.

Mozilla has found a small niche in the mobile OS market by pursuing its low-end strategy, with the first phones debuting in countries such as Hungary, Venezuela, Colombia, Brazil, and Greece. Mozilla, a non-profit organization, hopes to use the browser-based operating system to lower the barriers that today keep people locked into ecosystems linking hardware, OS, app store, services, content, and apps.

Firefox OS takes on challenges
Today, Apple’s iOS and Google’s Android dominate the market for smartphones and tablets. Challengers like Microsoft’s Windows Phone, Ubuntu Touch, WebOS, BlackBerry OS, and Samsung’s Tizen have struggled to push these aside: it’s hard to compete against an incumbent that’s got millions of users, hundreds of thousands of apps, and few signs of the complacency that can open a door for challengers.

Firefox OS won’t have an easy time of it. There’s not as much money to be squeezed from low-end markets, so developers aren’t as likely to pursue it as avidly. The Spreadtrum chipset will support only 2.5G Edge mobile networks that, while common in poorer parts of the world, are too slow for a lot of modern apps. And Google is pushing toward lower-end phones, with Android 4.4 memory-saving techniques [“zRAM swap can increase the amount of memory available in the system by compressing memory pages and putting them in a dynamically allocated swap area of memory.”] that fit KitKat into phones with 512MB of RAM.

At the same time, though, Firefox is pushing, too. It uses the same ZRAM memory compression technique to halve its memory requirement to 128MB of memory, Eich said.

Getting down to $25 phones means Firefox OS will provide an alternative for people who’d otherwise buy a feature phone — a model with a few built-in apps but not much more.

So Firefox has a chance there. But in the long run, to succeed, Firefox OS will need to push up-market, and it’s not clear how Mozilla will succeed there with much stronger competition.

Think Big at #MWC14: Mozilla leadership discuss innovation and digital literacy [ThinkBigEurope YouTube channel, Feb 25, 2014]

During the world’s largest mobile exhibition, Think Big roaming reporters from across Europe cover the smart phone that will give access to the web for millions and the need for increased digital literacy.

Note: Think Big is a Telefonica initiative targeting young people in six European countries: Ireland, UK, Spain, Germany, Czech Republic and Slovakia (countries where Telefonica operates in Europe)

How good is the $25 smartphone from Mozilla – BBC News [BBC News YouTube channel, Feb 24, 2014]

At the Mobile World Congress in Barcelona Mozilla Corp has unveiled a prototype model of what it hopes will become a $25 smartphone. The BBC’s LJ Rich tried it out. #MWC14

Mozilla plans ‘$25 smartphone’ for emerging markets [BBC News, Feb 23, 2014]

Mozilla has shown off a prototype for a $25 (£15) smartphone that is aimed at the developing world.

The company, which is famed mostly for its Firefox browser, has partnered with Chinese low-cost chip maker Spreadtrum.

While not as powerful as more expensive models, the device will run apps and make use of mobile internet.

It would appeal to the sorts of people who currently buy cheap “feature” phones, analysts said.

Feature phones are highly popular in the developing world as a halfway point between “dumb” phones – just voice calls and other basic functions – and fully-fledged smartphones.

Mozilla hopes that it will capture an early lead in a market that is now being targeted by mobile device manufacturers who see the developing world as the remaining area for massive growth.

It will face stern competition from bigger, more established brands, however – with more announcements of this kind expected over the course of the next couple of days at the Mobile World Congress in Barcelona.

“These solutions expand the global accessibility of open web smartphones to first-time and entry-level smartphone buyers by reducing the time and cost required for handset makers to bring these devices to market,” said Spreadtrum in a press statement.

Mozilla said the phone “redefines” the entry-level phone market.

The concept of a cheap smartphone may seem likely to appeal to consumers in developed countries, particularly those who locked into long contracts in order to subsidise the cost of the likes of the Apple iPhone and Samsung Galaxy range.

But analyst Carolina Milanesi, from Kantar Worldpanel, said it should not be seen as a competitor.

You’re not really talking about smartphone experience.

You’re talking about a clumsy smartphone that’s a little bit better than a feature phone – still primarily for voice and text.”

The phone runs Mozilla’s own mobile operating system – something that could cause problems as competition in the cheap smartphone market steps up, Ms Milanesi added.

Mozilla also announced new high-end smartphones

image

In addition to the $25 smartphone, Mozilla also launched several high-end models, including devices from Huawei and ZTE.

Mozilla press conference about Firefox OS at MWC 2014 [firefoxchannel YouTube channel, Feb 23, 2014]

Mozilla demonstrated the breadth and growth of its Firefox OS open mobile ecosystem at a press event on the eve of Mobile World Congress in Barcelona on Sunday, February 23, 2014. To learn more about Firefox OS please visit: http://mzl.la/1dPqt71.

The $25 smartphone announcement comes at [15:30] with the following slides (note the 1Gb, i.e. 128MB LPDDR1 Embedded in the SoC!!):

image

image

From Firefox OS Unleashes the Future of Mobile [Mozilla Press Center, Feb 23, 2014]

Spreadtrum has announced WCDMA and EDGE turnkey reference designs for Firefox OS as well as the industry’s first chipset for US$25 smartphones, the SC6821, that redefines the entry level for smartphones in key growth markets. These solutions are already creating a stir, with global operators such as Telenor, Telkomsel and Indosat, and ecosystem partners such as Polytron, T2Mobile and Thundersoft expressing interest.

$25 Firefox Smartphone (MWC 2014) [ARMflix YouTube channel, Feb 25, 2014]

Mozilla introduced their $25 Firefox smartphone based on 1 GHz Single Core Spreadtrum ARM processor. http://www.mozilla.org/en-US/firefox/os/

[0:33] “The key thing about this device is that this is only powered by 128MB of RAM. So this is only one half or one quarter of the existing entry level devices that we are seeing on the market.” [0:47]

Warning: This article does not take into account the SC6821 characteristics, especially its 128MB on chip RAM used via zRAM swap by the OS, as well as its EDGE only networking!
Is a US$25 smartphone possible? [DIGITIMES, Feb 25, 2014]

Mobile World Congress (MWC) kicked off with a bang, with Mozilla announcing a US$25 smartphone built around a turnkey solution that features silicon from China-based Spreadtrum and software from Firefox.

According to a Mozilla press release, Spreadtrum and Mozilla have now completed the integration of Firefox OS with several of Spreadtrum’s WCDMA and EDGE smartphone chipsets, including the SC6821, unveiled by Spreadtrum as the industry’s first chipset for a US$25 smartphone.

So the key to the solution is the SC6821, which Spreadtrum stated is “designed with a unique low memory configuration and high level of integration that dramatically reduces the total bill of materials required to develop low-end smartphones.” Mozilla added that with this chipset, handset makers will be able to bring to market smartphones with 3.5-inch HVGA [eg. 480×320] touchscreens, integrated Wi-Fi, Bluetooth, FM and camera functions, the advanced phone and browser features of Firefox OS, and access to an ecosystem of web and HTML5 applications.

With a clearer picture of the specs Mozilla envisions for a US$25 smartphone, I approached Digitimes Research Analyst Luke Lin to ask if he thought it was possible to deliver such a product to the market at this time. According to Lin, the simple answer is that it would be “impossible” to see a US$25 Firefox phone hit the shelves this year, unless operators are willing to provide subsidies.

Lin explained that currently, the absolute lowest smartphone BOM in China is estimated to be around US$22 (and most are significantly more than that) and that manufacturing costs are highly unlikely to go below US$20 this year, which would be the cost needed to deliver a US$25 smartphone to end users. The cost would need to get to US$15-20 FOB in order to get a selling price of US$25, Lin said.

In terms of Spreadtrum‘s claims it has produced a level of integration and memory requirements that can reduce the BOM cost significantly, Digitimes Research Analyst Anthony Chen commented that Spreadtrum’s solution is no more integrated than any other integrated solution on the market so there is no clear advantage there. And as for memory, the cheapest and smallest memory modules (ROM and mobile DRAM) for smartphones in China run about US$5 for a configuration of 256MB ROM and 256MB of mobile DRAM, and Chen highly doubts the Mozilla solution could run with a lesser configuration than that.

One other argument being offered as to why Spreadtrum could offer lower pricing than competitors is that the China government has a stake in the company. The logic is that an edge in pricing could help Spreadtrum better compete with Taiwan-based MediaTek and US-based Qualcomm.

Chen responded to the suggestion by pointing out that such a statement is not really an argument. It’s merely speculation. Moreover, Chen noted that Spreadtrum’s cheapest products currently sell in the US$3-4 range, and he doesn’t see much chance for the price to be reduced significantly, with subsidies or without.

While it is true that BOM costs are always falling, Lin and Chen agreed that component makers are much more likely to be squeezed in the higher-end segments, where they have margins. At the bottom of the market, the component makers are not really making any money. As a long term strategy for the low-end of the market, they would much prefer to provide improved specs at the same price rather than cut prices, Lin explained, while adding that it is unlikely that the BOM would drop much further at the bottom end of the market, as it is already close to US$20. Therefore, while prices may drop a little, Digitimes Research does not expect prices to drop all that much in the near future.

Another perspective was offered by Digitimes Research Analyst Jason Yang, who stated that if there is any component that could influence the low-end smartphone BOM at this point, it was the touch panel, not the application processor. Yang indicated that currently the touch panel module, with LCD display, accounts for the largest portion of the BOM, at around US$7-8 for the cheapest modules. Yang did state that he believes the price may drop this year, but not enough to bring the overall BOM cost of the cheapest phones to below US$20.

So, if ultimately the announcement was all about Mozilla driving the launch of a US$25 smartphone, Lin doubts that this will happen this year or anytime soon. Based on the current cost structure, Lin believes Firefox models priced in the US$60-80 are more likely to appear in 2014. Of course, users may be able to find spectacular deals and price cuts, but such a situation would more likely be inventory clearance or something similar, not a mainstream price point.

However, if this announcement is not about Mozilla driving the market to low-cost smartphones and is more about a trend where emerging markets will become flooded with cheap smartphones, then it should be noted that this is a process that is already underway.

Currently in China, entry-level smartphones – mostly white-box but even some brands – are already selling in the US$50 range. And these smartphones are not just being shipped to the domestic market. China vendors exported about 30% of their smartphones in 2013 and that proportion is forecast to rise in 2014. According to Digitimes Research data tracking smartphone shipments by vendor and the related market breakdown, the non top-10 segment (which is dominated by Greater China vendors and white-box players) accounted for 12% of global smartphone shipments in 2012, 21% of the global market in 2013, and Digitimes Research forecasts the share will rise to 25.6% in 2014.

So the flow of cheap smartphones from China going to emerging markets has already started and the shipments are steadily increasing, it’s just that the devices cost a bit more than US$25 and almost all of them feature Android as the OS.

Spreadtrum and Mozilla Take Aim at Global Smartphone Accessibility with Turnkey Solution for US$25 Smartphones [press release, BARCELONA, Spain, Feb. 23, 2014]

– Integration of Spreadtrum’s entry-level smartphone chipsets with turnkey reference designs for Firefox OS aims to bring Open Web Devices to an underserved audience of entry-level smartphone buyers around the world

– Spreadtrum unveils the SC6821, the industry’s first chipset for US$25 smartphones (retail), on Firefox OS

Today at Mobile World Congress, Spreadtrum Communications, Inc., a leading fabless semiconductor company in China with advanced technology in 2G, 3G and 4G wireless communications standards, and Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, announced that they have teamed up to deliver turnkey Firefox OS reference designs with Spreadtrum’s entry-level smartphone chipsets. These solutions expand the global accessibility of open Web smartphones to first-time and entry-level smartphone buyers by reducing the time and cost required for handset makers to bring these devices to market. Spreadtrum and Mozilla have now completed the integration of Firefox OS with several of Spreadtrum’s WCDMA and EDGE smartphone chipsets, including the SC6821, unveiled today by Spreadtrum as the industry’s first chipset for US$25 smartphones. These smartphones are available for demos at Mozilla’s booth (3C30) at Mobile World Congress 2014 in Barcelona.

“The combination of Firefox OS with Spreadtrum’s entry-level smartphone platforms has the potential to dramatically extend the reach of smartphones and the Web globally,” said Dr. Li Gong, Mozilla Senior Vice President of Mobile Devices and President of Asia Operations. “Firefox OS delivers a customized, fun and intuitive experience for first-time smartphone buyers and our collaboration with Spreadtrum enables the industry to offer customers an extremely affordable way to get a smartphone and connect with Web apps.”

At Mobile World Congress, Spreadtrum unveiled the SC6821, its new smartphone chipset that redefines the entry level of the global smartphone market. The chipset is designed with a unique low memory configuration and high level of integration that dramatically reduces the total bill of materials required to develop low-end smartphones. With this chipset, handset makers will be able to bring to market smartphones with 3.5″ HVGA [e.g. 480×320] touchscreens, integrated WiFi, Bluetooth, FM and camera functions, the advanced phone and browser features of Firefox OS, and access to a rich ecosystem of web and HTML5 applications, at prices similar to much more minimally featured budget feature phones.

Spreadtrum’s turnkey reference design brings together this highly cost-effective chipset platform with the intuitive, easy-to-use experience and Web/HTML5 application ecosystem of Firefox OS. “Turnkey solutions benefit the vast majority of small handset makers by reducing the time and cost involved in bringing new devices to market,” said Stuart Robinson, analyst at Strategy Analytics. “This joint effort between Spreadtrum and Mozilla will help make Firefox OS more readily available to handset makers that focus on the needs of entry level smartphone buyers in emerging markets.”

Firefox OS smartphones are the first devices powered completely by Web technologies to deliver the performance, personalization and price users want in a smartphone with a beautiful, intuitive and easy-to-use experience that is unmatched by other phones. Firefox OS has all the things users need from a smartphone as well as the things they want like built-in social integration with Facebook and Twitter, HERE Maps with offline capabilities, much-loved features like the Firefox Web browser, the Firefox Marketplace for apps and more. Firefox OS features a brand new concept for smartphones – an adaptive app search that literally transforms the phone to meet a user’s needs and interests at any moment.
Firefox OS offers Mozilla-pioneered WebAPIs that unlock the power of the Web and enable developers to build fun and rich app experiences that were previously only available to proprietary native apps, which are fragmented by platform and not portable.

Xiaomao Xiao, Spreadtrum’s vice president of software development added, “By integrating Firefox OS support with our smartphone platforms, we are providing our customers with flexibility and choice in how they develop and design their smartphones as well as access to the increasingly rich base of HTML5 applications that are available on this platform. We are pleased to work with Mozilla to expand Firefox OS support to all of our smartphone platforms to provide the benefits of open web technologies to consumers around the world.”

Spreadtrum and Mozilla have completed the integration of Firefox OS with Spreadtrum’s SC6821 and SC7710 WCDMA smartphone chipsets, and expect to complete a turnkey reference design for the SC7715, Spreadtrum’s single-core WCDMA smartphone chipset with integrated connectivity, next month. Spreadtrum and Mozilla’s collaboration will extend across Spreadtrum’s full chipset portfolio.

About Spreadtrum Communications, Inc.
Spreadtrum Communications, Inc. is a fabless semiconductor company that develops mobile chipset platforms for smartphones, feature phones and other consumer electronics products, supporting 2G, 3G and 4G wireless communications standards. Spreadtrum’s solutions combine its highly integrated, power-efficient chipsets with customizable software and reference designs in a complete turnkey platform, enabling customers to achieve faster design cycles with a lower development cost. Spreadtrum’s customers include global and China-based manufacturers developing mobile products for consumers in China and emerging markets around the world. Spreadtrum is a privately held company headquartered in Shanghai and an affiliate of Tsinghua Unigroup, Ltd. For more information, visit www.spreadtrum.com.

About Mozilla
Mozilla has been a pioneer and advocate for the Web for more than 15 years. We create and promote open standards that enable innovation and advance the Web as a platform for all. Today, half a billion people worldwide use Mozilla Firefox to discover, experience and connect to the Web on computers, tablets and mobile phones. For more information please visit https://www.mozilla.org/.

Firefox OS Expands to Higher-Performance Devices and Pushes the Boundaries of Entry-Level Smartphones [Mozilla Press Center, Feb 23, 2014]

Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, today previewed the future of Firefox OS to show how the flexibility, scalability and powerful customization will empower users, developers and industry partners to create the exact mobile experience they want with relevant and innovative features, localized services and more.

Expanding Ecosystem
imageToday, device partners ALCATEL ONETOUCH, Huawei, LG and ZTE are all using Firefox OS on a broad range of smartphones that are tailored for different types of consumers. The Firefox OS devices unveiled today showcase dual-core processors for better performance, higher screen resolution and more. The newest Firefox OS devices to join the family include the ZTE Open C and Open II, Alcatel ONETOUCH Fire C, Fire E, Fire S and Fire 7 tablet, all using Snapdragon™ processors from Qualcomm Technologies Inc., a leader in mobile communications.

In the few months since initial launch, Firefox OS smartphones are now available in 15 markets, with new operators and new markets around the globe announced today. Mozilla is working to create a level playing field with the openness of the Web. The ecosystem is catching fire and resulting in development of new form factors beyond the smartphone. For example, Panasonic announced they will make SmartTVs powered by Firefox OS, Foxconn and Via are making Firefox OS tablets, and Mozilla is working with suppliers to enable devices for all target user groups.

Significant growth is also happening with apps and content on Firefox OS, proving the Web has the potential to be the world’s largest marketplace. Firefox OS offers two ways to discover and utilize apps and content – the Firefox Marketplace and an adaptive app search that enables discovery and access to apps that users can instantly use once or download to keep. This innovative approach helps maximize data and storage usage.

The Firefox Marketplace has seen thousands of developers submitting apps and millions of downloads of popular global and relevant local apps. Top global apps include Cut the Rope, Disney’s Where’s My Water?, Facebook, EverNav, HERE, Line, Pinterest, SoundCloud, The Weather Channel, TimeOut, Twitter, Yelp and YouTube.

image

The ZTE Open C will offer the latest version of Firefox OS
in Venezuela and Uruguay in Q2 of 2014

The Firefox Marketplace makes it possible to create local and niche apps with relevant regional content by allowing developers to build on basic Web technologies, without gatekeepers. The top new local apps in the Firefox Marketplace include Despegar.com travel booking, Capp World Cup highlights, Captain Rogers game, Manana reading app, Napster, SurfTime and more.

Future of Firefox OS
At Mobile World Congress, Mozilla is showing off a preview of what to expect from Firefox OS in the coming year and what’s possible when the Web is the platform.

Firefox OS is made to change with each individual and adapt to his or her interests and needs with features like adaptive app search, offline use and cost control. New content can be enjoyed instantly with a simple search, making downloads virtually a thing of the past. Firefox OS offers deep levels of customization that are unmatched by any platform or device. This is possible because Firefox OS is built on the flexible technologies of the Web and the user interface is made of a modular architecture of building blocks that make it easy for anyone to customize.

Upcoming versions of Firefox OS will offer users fun and innovative new features and services including new and intuitive navigation, a powerful universal search feature, support for LTE networks and dual SIM cards, easy ways to share content, ability to create custom ringtones, replaceable home screens and Firefox Accounts.

New versions of Firefox OS have many performance improvements that dramatically improve the user experience including speedier launch times, smoother scrolling and improved keyboard accuracy.

Here are highlights on a few of the features coming next for Firefox OS:

  • Deep customization options for operators and manufacturers, developers and users. This includes the ability to create custom ringtones and replaceable home screens, which were direct requests from Firefox OS users.
  • A new universal search that will revolutionize how users discover content on their phones. The feature is available on any screen – simply swipe down from the top to find new apps, content or navigate to anything on the phone or the Web.
  • New navigation features to make multitasking intuitive, fluid and smart, much like how users interact with the Web. Users can easily swipe from the left and right edges to seamlessly move between pages, content and apps in a fun way that saves time.
  • Easy and direct sharing of content (and even software updates) in a secure way with NFC support, without the need for data or Wifi.
  • LTE support to make the mobile experience even faster.
  • Firefox OS will introduce Firefox Accounts and services. Firefox Accounts is a safe and easy way for users to create an account that enables them to sign in and take Firefox everywhere. With Firefox Accounts, Mozilla can better integrate services including Firefox Marketplace, Firefox Sync, backup, storage, or even a service to help locate, message or wipe a phone if it were lost or stolen.

As the platform evolves, Firefox OS will enable new technologies for the mobile industry. Mozilla is already leading the way in areas like gaming, privacy and security, WebRTC and other services. Firefox OS is a great platform for which partners can build additional services that meet the needs of their customers regionally and individually.

Early examples:

  • Telefonica offers a very helpful cost control app for customers to manage their usage and top off their account.
  • Deutsche Telekom just announced they are utilizing the deep levels of customization Firefox OS offers to develop new privacy features for the Future of Mobile Privacy project, a joint effort with Mozilla to create effective, user-driven privacy functionality for mobile devices.
  • WebRTC is an open, standards-based technology that enables operators to offer services like real time chat, image and file sharing. With WebRTC, operators can let users make calls to any desktop or mobile device, regardless of platform or service provider.

“We’re pleased to see the Firefox OS ecosystem grow so quickly as users, developers and partners come together to experience and build the future of mobile experiences,” said Andreas Gal, Mozilla Vice President of Mobile. “Firefox OS will continue to evolve and add more features to offer choice and customization that is unmatched by any other smartphone. We’re excited to see what other features and services will result from an open platform being contributed to by developers, partners and community around the world.”

About Mozilla
Mozilla has been a pioneer and advocate for the Web for more than 15 years. We create and promote open standards that enable innovation and advance the Web as a platform for all. Today, half a billion people worldwide use Mozilla Firefox to experience the Web on computers, tablets and mobile devices. With Firefox OS and
Firefox Marketplace, Mozilla is driving a mobile ecosystem built entirely on open Web standards, freeing mobile providers, manufacturers, developers and consumers from the limitations and restrictions imposed by proprietary platforms. For more information, visit http://www.mozilla.org.

For More information: https://blog.mozilla.org/press/kits/firefox-os/

New Developer Hardware and Tools Show Firefox OS Ecosystem Momentum [Mozilla Press Center, Feb 23, 2014]

Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, today announced new developer reference hardware and tools that will continue to accelerate momentum around the Firefox OS ecosystem, making it cheaper, faster and easier for developers, operators and OEMs to deploy innovative Web apps and create personalized Firefox OS experiences.

Mozilla announced a 4.5” dual-core reference phone, enabling developers to test new Firefox OS features and apps against different memory configurations. It also expanded the Mozilla tablet program that helps developers test their apps and build out Firefox OS for tablets.

New Firefox OS developer tools and hardware demonstrate ecosystem momentum

New Firefox OS PhoneGap integration was also announced, allowing hundreds of thousands of PhoneGap developers to port their existing apps to Firefox OS in a matter of hours, while new WebAPIs will continue to narrow the gap between native and Web apps. At Mobile World Congress, Mozilla also launched developer tools that will allow OEMs and operators to easily customize Firefox OS for a variety of customer segments.

Developers have always been the key to driving innovation around the Web, and continue to enable it as a platform for app development and distribution. With these new reference devices, tools, and WebAPIs, Mozilla is catalyzing the growth of Web apps and continuing to break down the barriers and restrictions inflicted by other app ecosystems. The Web not only simplifies app development and reduces fragmentation, but allows developers to own the direct customer relationship with the option to host their own apps and or sell them through the Firefox Marketplace.

Vision Mobile recently published a report showing that developer interest for Firefox OS continues to grow, capturing 7% of developer mindshare in just six months. The report also highlighted that during Q1 2014, 52% of developers were already using HTML5 for mobile websites or Web apps with an additional 16% indicating their intention to join them.

A recent survey by Strategy Analytics found that the number of mobile app developers building for Firefox OS is expected to triple this year, showing the biggest rise in developer interest of any mobile platform.

This industry momentum is fueled by the fact that there are already millions of Web developers programming in HTML5 who are eager to target mobile without having to learn a new programming language, or pay engineers to target specific mobile platforms.

The following expanded reference hardware, tools, and WebAPIs, will continue to drive growth of the Firefox OS ecosystem and help prove why the Web is a powerful platform for app development and distribution:

New Reference Phone

At Mobile World Congress, Mozilla is showcasing its new developer reference phone, the Firefox OS Flame, enabling developers to test the capabilities of Firefox OS in a real environment with a mobile network and true hardware characteristics like the accelerometer, NFC and camera. Like the commercially available Firefox OS phones, the Flame developer reference phone is powered by a Qualcomm processor, in this instance a high powered 1.2GH dual core processor, so developers can test their more processor-intensive games and apps with ease. Developers looking to target their apps for specific Firefox OS phones with lower memory footprints also have the option to alter the RAM capacity of the Flame, from 1GB to 256MB, to see how their apps would perform on lower specked phones. The Flame also provides developers and early adopters with access to the latest Firefox OS builds to test nightly releases and contribute to the overall development platform.
Firefox OS Flame Specs (Reference device):

  • Qualcomm MSM8210 Snapdragon, 1.2GHZ Dual core [Cortex-A7 with Qualcomm Adreno 302 GPU] processor
  • 4.5” screen (FWVGA 854×480 pixels)
  • Cameras: Rear: 5MP / Front: 2MP
  • 3G UMTS quad-band (850/900/1900/2100)
  • 8GB memory
  • 256MB -1GB RAM (adjustable by developer)
  • A-GPS, NFC
  • Dual SIM support
  • Battery capacity: 1,800 mAh
  • WiFi: 802.11 b/g/n, Bluetooth, Micro USB

Hundreds of Thousands of PhoneGap Users Can Now Target Firefox OS

Firefox OS will be supported in the next release of PhoneGap, the leading developer tool for building apps across platforms. This builds on the recently announced Firefox OS integration with Cordova, a popular Apache Foundation open source project that allows HTML5 applications to be packaged as native apps.

PhoneGap is a mobile application development framework used by hundreds of thousands of developers. It is based upon the open source Apache Cordova project and allows developers to write an app with HTML, CSS and JavaScript, and then deploy it to a wide range of mobile devices with the same capabilities as native apps. With the Firefox OS integration, developers can now port their existing PhoneGap apps to Firefox OS in a matter of hours, with minimal work. For more information, please see this Hacks post.

App Manager Simplifies App Development with Live Prototyping and Debugging

App Manager brings the Firefox Web developer tools to mobile app developers. It shows how the power of the Web helps developers test, deploy and debug Web apps on Firefox OS phones directly from their desktop. The Firefox Web developer tools are already used by millions of Web developers for creating Web pages, and now the App Manager extends these capabilities to mobile app creation, with the same familiar workflow. There is no SDK to download, developers simply use the App Manager as part of the integrated developer tools in the Firefox browser.

Because the App Manager and Firefox OS both use open Web technologies, debugging, live editing and prototyping is straightforward. For example, an operator or OEM may want to prototype different branded homescreen themes for different audiences. Using the App Manager, they can code this on their desktop and in real-time see the changes appear on their connected Firefox OS phone, eliminating lengthy build times. To see how this is done, please see this MDN article.

New WebAPIs and Industry Adoption

There are now more than 30 Mozilla-pioneered WebAPIs with at least eight new APIs introduced in the last year, including WebNFC and Data Store API. These new APIs build more functionality and features into the Web for app development. There is increasing industry adoption as these APIs move towards standardization. Samsung added the Vibration API and Battery Status API to WebKit, while tools like Apache Cordova and Adobe’s PhoneGap now integrate six of the most popular WebAPIs into their products.

Foxconn and VIA Join Tablet Contribution Program

Mozilla recently introduced a tablet contribution program aimed at accelerating the build of Firefox OS for tablets and its supporting ecosystem, with Foxconn as the first hardware partner.

As part of the Firefox OS tablet contribution program, VIA is offering a 7” Vixen reference tablet for developers around the world to help the Mozilla community complete the build of Firefox OS for tablets. Developers can now apply to be a part of this program from this Mozilla Hacks post.

Developer Reference Tablet Specifications:

VIA Vixen:

  • 7’’ 1024×600 HD LCD screen
  • 1.2 GHz Dual Core Cortex-A9 processor
  • ARM Mali-400 Dual-Processor GPU
  • 8GB storage
  • 1GB RAM
  • Cameras: Front 0.3 MP, Back 2.0 MP
  • Wifi: 802.11 b/g/n

Foxconn InFocus:

  • 10” screen (1280 x 800 pixels, 24-bit color)
  • [Allwinner] A31 (ARM Cortex A7) Quad-Core 1.0GHz w/ PowerVR SGX544MP2 GPU
  • 16GB storage
  • 2GB RAM
  • Cameras: Rear 5MP/ Front 2MP
  • A-GPS
  • Battery capacity: 7,000 mAh
  • WiFi: 802.11 b/g/n, Bluetooth, Micro USB

“It’s clear that more and more developers are choosing the Web as their preferred development platform for mobile apps, as the technical gap between native and Web apps narrows,” said Brendan Eich, Mozilla CTO and SVP Engineering. “We listen to what developers are asking for to make the Web their primary development platform and think Mozilla and its partners have made significant progress with these new hardware, tools, and WebAPIs. It’ll be exciting to see what new mobile innovations come in 2014.”

Firefox OS Unleashes the Future of Mobile [Mozilla Press Center, Feb 23, 2014]

Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, demonstrated the breadth and growth of its Firefox OS open mobile ecosystem at a press event on the eve of Mobile World Congress in Barcelona. The event introduced seven new commercial Firefox OS devices and highlighted advancements and partnerships that will enable the platform to scale up in 2014.

In the year since MWC 2013, Firefox OS devices have gone on sale in 15 markets with four global operators and handsets from three manufacturers. Firefox OS will be expanding into important new markets in 2014. Telefónica will build on the list of countries where it’s selling Firefox OS phones, with eight more launching this year: Argentina, Costa Rica, Ecuador, El Salvador, Germany, Guatemala, Nicaragua and Panama. Deutsche Telekom will also add four new markets: Croatia, the Czech Republic, Macedonia and Montenegro.

Operator support for Firefox OS also continues to expand, as Telkomsel and Indosat have joined the list of 21 key operators across the globe that support the open Web device initiative. That list also includes partners announced last year: América Móvil, China Unicom, Deutsche Telekom, Etisalat, Hutchison Three Group, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia Group, Telefónica, Telenor, Telstra, TMN and VimpelCom.

A new smartphone entry level
Spreadtrum has announced WCDMA and EDGE turnkey reference designs for Firefox OS as well as the industry’s first chipset for US$25 smartphones, the SC6821, that redefines the entry level for smartphones in key growth markets. These solutions are already creating a stir, with global operators such as Telenor, Telkomsel and Indosat, and ecosystem partners such as Polytron, T2Mobile and Thundersoft expressing interest.

In six short months, Firefox OS has more than established itself in the very markets it aimed to address,” said John Jackson, VP of Mobility Research, IDC. “Today’s announcements underscore the platform’s rapid maturation and growing ecosystem benefits. New products, tools, categories, partners, features, and extraordinarily compelling price points will reinforce Firefox OS’s momentum into 2014. IDC expects year-on-year Firefox OS volumes will grow by a factor of six times in the smartphone category alone.”

Flexibility and customization
Firefox OS devices are the first devices built entirely to open Web standards, with every feature developed as an HTML5 application. Mozilla previewed the future of Firefox OS at its press event, demonstrating how its flexibility, scalability and powerful customization empower users, developers and industry partners to create the exact mobile experience they want. Carriers can easily and deeply customize the interface and develop localized services that match the unique needs of their customer base.

Deutsche Telekom is utilizing this customization to develop new Firefox OS features for the Future of Mobile Privacy project, a joint effort with Mozilla to bring data privacy closer to customers. The organizations’ privacy offices have been collaborating over the past year to conceptualize and develop new privacy features that are currently being tested for consideration in future Firefox OS releases.

Firefox OS is also expanding to additional form factors, as partners and contributors work to optimize the software for TVs, tablets and other devices. In January, Panasonic announced a partnership with Mozilla to release next-generation smart TVs powered by Firefox OS.

“Firefox OS is off to an amazing start. We launched our first smartphones in July, and have since expanded into fifteen markets,” said Jay Sullivan, chief operating officer of Mozilla. “People in Latin America and Eastern Europe have eagerly upgraded from their feature phones to Firefox OS smartphones and now have rich access to the Web and apps. Sales have far exceeded our targets. But 2013 was just the beginning. In 2014, we are differentiating our user experience and our partners are growing the portfolio of devices. We are also enabling a whole new category of smartphone, priced around $25, that will bring even more people around the world online.”

Streamlining the support process
Mozilla has received significant interest from mobile manufacturers looking to differentiate themselves by producing Firefox OS phones and tablets. To help service this demand and facilitate the next wave of device growth, Mozilla launched a new self service partner portal to fast track manufacturers and streamline bringing devices to market. Manufacturers get all the resources and branding required to launch a Firefox OS device in one place.

In order to promote the success of this ecosystem, the Open Web Device Compliance Review Board (CRB) was formed by Mozilla and major global partners in late 2013. The CRB’s aim is to define and evolve the process of encouraging API compatibility and competitive performance for open Web devices.

Partner quotes
Marieta Rivero, Global Chief Marketing Officer at Telefónica, said: “We started marketing Firefox OS less than eight months ago, commencing with Spain and expanding to several Latin American countries. In a number of these countries, Firefox OS has been a market leader in smartphone sales from the very start. We’re transforming the market, and will continue focusing our efforts on open environments that give clients more freedom, and prices that are better suited to their possibilities. 2014 will undoubtedly be a key year for all of this.”

“The continuing rollout across our European markets is tangible proof of our drive to push Firefox OS, together with Mozilla and bring an open operating system to all of our customers,” said Thomas Kiessling, Chief Product & Innovation Officer at Deutsche Telekom. “The introduction of an even more affordable handset on the one hand and a higher-end model on the other also show we are reaching more market segments.”

“Telenor and our operating businesses have seen great consumer satisfaction and a continued appetite in the market for quality, low-cost products based on Firefox OS,” said Holger Hussmann, VP Device and OS at Telenor. “We are supportive and welcoming of the efforts of enabling vendors and device partners focused on serving this great, underserved market opportunity.”

Alistair Johnston, Director of Marketing for Telkomsel, said: “Telkomsel will support Mozilla with its Spreadtrum turnkey solution and device partner as an attempt to bring the smartphone to the palm of every Indonesian and to perform Telkomsel strategy to speed up and enrich the DNA (Device – Network – Application) ecosystem in Indonesia.”

President Director & CEO of Indosat, Alexander Rusli, said: “Indosat as the leading communications provider in Indonesia is ready for Firefox OS smartphones based on the Spreadtrum solution. This is in line with our strategy in 2014 to provide the best experience to our customers and become the customer’s preferred choice for smartphones and smart device users.”

“Polytron is announcing the intention of supporting the manufacturing, distribution, and promotion of Firefox OS smartphones based on Spreadtrum’s latest solution,” said Mr. Hariono, CEO of Polytron, Indonesia’s leading mobile device brand. “T2Mobile specializes in offering our customers the ability to rapidly address the needs of its customers in every segment of the wireless ecosystem,” said Aaron Zhang, CEO, T2Mobile, a leading ODM specializing in Firefox OS-based mobile solutions. “The creation of new Firefox OS and open Web devices will be further accelerated by these solutions and we are pleased to support these new offerings.”

“We are excited by the new and highly affordable possibilities enabled by Firefox OS,” said Hongfei Zhao, CEO, Thundersoft, a leading global technology and solutions provider that helps OEMs’ accelerate high quality product development and achieve fast time to market. “We have expanded our services in new areas including support for Firefox OS, enabling new and unique offerings in the mobile Internet device industry and ecosystem.”

More information
Opening remarks by Mitchell Baker, Executive Chair and Jay Sullivan, Chief Operating Officer

Please visit Mozilla and experience Firefox OS at stand 3C30 in Hall 3, at the Fira Gran Via, Barcelona from February 24-27, 2014.

For additional resources, such as high-resolution Firefox OS images and b-roll video, visit: https://blog.mozilla.org/press.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Answer #5: India will be key to future smartphone growth as it represents more than a quarter of the global feature phone market. “Growth in the India market doesn’t rely on high-end devices like the iPhone, but in low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than US$120,” said Kiranjeet Kaur, Senior Market Analyst for mobile phones at IDC Asia/Pacific.
From Smartphone Prices Race to the Bottom as Emerging Markets Outside of China Come into the Spotlight for Future Growth, According to IDC [press release, Feb 24, 2014]

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

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

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


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

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

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

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

There are a couple of answers to that question.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

image

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

image

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

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

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

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

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

image

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

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

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


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

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

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

Mobile Handsets

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

CMR identifies the following trends for 2014 in Smartphones

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

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

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

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

image

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

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

image

India Smartphones Market

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

image

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

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

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

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

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

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

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

    imageimage

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

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

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

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

    Top Five Smartphone Vendor Highlights

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

    Duos and Galaxy Star continued to drive their volumes.

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

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

    image

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

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

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

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

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

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

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

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

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

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

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

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

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

    image

    image

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

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

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

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

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

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

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

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

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

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

    image

    Notes:

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

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


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

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

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


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

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

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

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

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

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

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

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

    We’d have it no other way. 🙂

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

    New hardware partners and tools will accelerate global scale.

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

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

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

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

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

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

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

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

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

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

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

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


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

    Let’s start with Windows Phone.

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

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

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

    New Windows Phone Hardware Partners

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

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

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

    New Windows Phone Hardware Support

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

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

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

    Evolving Windows 8

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

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

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

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

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

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

    More news still to come

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    My findings supporting the above title:

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

    image

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

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

    image

    While for the worldwide market:

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

    image

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

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

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

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

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

    image

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

    image

    Mobile Phone Vendor Perspective

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

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