Karbonn Mobile in India Outpaced Sony and Nokia to Capture Third Spot during Q1, FY 2013 Smartphone Shipment

Karbonn Mobile made major upset in Smartphone shipment during Q1, FY2013. The clear consumer understanding and continuous refreshment of Smartphone portfolio helped Karbonn to increase its smartphone shipment and marked its presence by capturing 5^th position during Q4, 2012. New Smartphone shipment tracker of IDC, Q1 FY2013 puts Karbonn on third spot validates the dynamic shift of consumer preferences of opting for price plus performance centric smartphone in Sub $300 range. It is interesting to observe the dynamic flavour of Consumer Preference and Adoption of Domestic Smartphone players devices compared to International Brand. By the end of 2011, the domestic device manufacturers were struggling to halt the onslaught of Samsung aggressive push in Sub Premium Class consumer base but effective and efficient repositioning of product portfolio helped Karbonn to turn the tide other way around. It is expected that the upcoming release of Smartphone supported with Quad Core Processors may help Karbonn to snatch market share from market leaders and further cement its positioning in Smartphone Segment.

Analyst Estimation (RBC Capital) - Blackberry to Ship 14 Million Units in 2013

With growing channel distribution across different geographies, analysts are estimating higher unit ship for Fiscal first quarter as well as for financial year 2013.

RBC capital analyst report predicted that Blackberry Q1, 2013 shipment to touch around 3.5 Million units as against previous projection of 2.75Mn units. The Q2 may experience 15% sequential growth in unit shipment to 4 Mn. The analyst firm also believe that Blackberry is going to hit 14 million unit shipments as against previous projection of 11 million units in financial year 2013. In the last few days, Blackberry attracted both negative and positive assessment from analyst firm and it would be interesting to see recovery path of Blackberry.

India Smartphone segment achieved 14% QoQ Growth

Based on IDC report, India Smartphone shipment reached 6.1 million units at the end of Q1, FY2013 achieving growth of 14% QoQ. The increase in shipment volume got major boost with Samsung offer, Micromax successful Canvas Series of Smartphone and Karbonn $200 smartphone positioning. Based on the Smartphone player’s strategy to launch multiple device in Sub $200 range is going to propel higher adoption by new customer and in replacement cycle mode. I would not be surprised if the growth and volume if going to be captured by domestic Smartphone player. It is also expected that based on the trend of Q1,FY13 smartphone shipment, the total FY 13 smartphone shipment is going to overshoot previous estimate of 27.8 million unit shipment by IDC analysts.

HTC Targeting 15% market share in Indian Smartphone segment by FY13 end– Isn’t it too difficult to achieve

According to GFK,– research agency assessment, HTC currently sitting on 6% of Indian smartphone market. Based on Cyber Media Research, FY12 smartphone volume size was 15.2 Million achieving YoY growth rate of 35.7%. In FY12, on volume side, HTC shipped 912000 smartphone. As local and global giants like Samsung, Apple, Nokia, Sony, Karbonn, Micromax are offering attractive payment options along with cutting edge features to attract to be converted smartphone users in India. Recent advertisement global and domestic players indicates that mid-level feature phone user adoption can be converted into smartphone user and expecting more than 40% growth YoY in Smartphone volume. Even if I consider the lower end with 30% growth YoY; it would translate total market size of around 20 Million. Targeting 15% pie from the same would require HTC to achieve 225% YoY. That too in a scenario; where domestic players like karbonn, Micromax, Lava are refreshing their device portfolio every quarter. The domestic players promoted canvas, Titanium are getting good reviews and are unable to fulfill volume demand. We also should not forget Lumia 500 series product line for the new smartphone users. Since, both Nokia and HTC offer WM based smartphone and it would be tough task HTC sales executives to convince Indian user that HTC is better than Nokia. Indian smartphone users consider brand name act as major component of Indian subcontinent decision making process. In my point of view, I would be salute HTC sales team even if they achieve 10% market share by the end of current fiscal year.

Nokia – Long term bet for investor

Most of the analyst feels that Nokia is under pressure to deliver both on product and profitability end. I observed that many analyst writing down Nokia prospect and predicting that it would be an acquisition target. I feel the other way and with confidence can claim that their strategy to be one of the best product portfolios would be achieved in next 2 quarter. Most of the print media focussing on their effort to halt market share loss vs. competitors in the last 2 years. Here are some of the crude facts for the critic of Nokia strategy. The major geographies which may impact the total device market are US, India & BRIC countries.

India Status

In recently published report cyber media about Indian mobile device market dynamic and Nokia leadership in India clearly demonstrate that even during transition phase, Nokia managed to hold on their Number 1 position. It is interesting to observe that Indian market offer full opportunity for the feature phone where Nokia Asha is giving competitors sleepless night. On the Smartphone segment, Lumia 500 series with sub $200 range and offering smartphone differentiated feature set attracting lost Nokia loyalist into their fold again. The recent upgrade of Lumia series across price point and their potential availability in said geography is going to offer more muscle power to govern dynamics.

China Status

After losing market share to local player, Nokia rejigged their china based management team. In the last few months, Nokia successfully collaborated with China Mobile and Chinese retailers to offer value for money. The china mobile deal and customized Lumia 920T mass delivery is only going to help Nokia regain their lost ground in china. The additional bulk buying of Nokia devices by online Chinese retailers are offering Nokia an opportunity to predict the expected delivery and according ramp up their cost effective and efficient manufacturing processes. The China story is not reflected in their released result last quarter. At the same time, China is one of the biggest market for feature phone and Nokia offering from $20 to $300 range device for one of most active replacement cycle market is going to play in Nokia favour only.

US status

The biggest achievement of Nokia with their changed strategy is US market penetration and successful adoption of product line. Most of the service providers and retailers are offering Lumia product line. The recent launch of customized Lumia high end smartphone with Verizon would definitely bring cheer to all Nokia Investor. Last quarter, Nokia volume was impacted due to component issues and Nokia is known for seamlessly fixing up those issues. The recent glitch of iPhone integrated maps helped Nokia to establish their brand effectively in US. One should not be surprised, if Nokia captures more than 10% of US smartphone market in Next two quarter.

I also would like to point out that it took Motorola good three years to be formidable device player post sudden debacle in 2001 whereas Samsung became king of Smartphone after 7 years of heavy investment in the segment.

What I observed that Nokia restructuring and their head office sell out got more negative publicity compared to their innovative product line.

I also would like to request post reader to name one of the mobile device manufacture who are directly associated with an organization offering most of your work based software. Nokia was criticized for going other way and collaborated with Microsoft instead of adopting Android. Everyone focussed on financial part of it but rarely found any article where the benefits were mentioned for potential customers.

In my point of view, smart investor should focus on their patent portfolio, patent win over Blackberry and other companies, licensing agreement with QUALCOMM, Nokia Siemens Stake, Value associated with Navteq, Ovi Store and many other. I don’t believe that the current market price and Market Cap of $ 3.48 and $ 12.92 is anywhere near to reality. It pops up simple query from potential downfall of share price; the answer is simple- big player moved out from share due to dividend and restructuring cost.

My recommendation to potential long term investor would be to analyse it your own and invest for multi fold gain in next one year.

Disclaimer: Request potential investor to consult their financial advisor before investing. The above assessment is purely my view regarding Nokia potential