How Ongoing pain in E-Commerce Segment will Impact Many Device Manufacturers

Indian E-Commerce companies are going through the transformation phase as per my view. The investors pulled back with their wallet and now more demanding with these companies to be self reliant instead of relying on cash burn to gain userbase as well as market share.

We all know that around 60 to 70% of their GMV is coming from Electronics segment predominantly from Smartphone segment. The fall in funding and more pressure to make the organization EBITA positive, E-Commerce companies in India are cutting down commission to discount which is making them less attractive for consumer to sellers on the portal. We must note that many of the retailer took an advantage of E-commerce portal and used as a platform to sell their idle inventory without making any losses.

The change in E-Commerce companies dynamics will have direct impact on Smartphone companies relying heavily on E-Commerce companies for their sale while appointing 3rd party servicing outlets. On a contrary the established home grown Smartphone player's are going to regain the market share in the second half of FY17. The home grown Smartphone player posses strong retail presence as well as relationship and stood with the retailer when the onslaught was going on.

The loss of market share by E-commerce companies in total Smartphone sell through percentage will also impact E-Commerce companies valuation as their chunk of GMV comes from Electronics section.

Smartphone Player's Using Online Portal Based Sell is Going to Lose Market Share in Coming Months in India

Indian Smartphone sell through mechanism is again taking a U turn towards the retail segment. It is a known fact about Indian consumer that they love to get attracted towards the discount and never loses that opportunity. The sudden growth in online segment fueled by investor money and subsequent rush by those online players to attract userbase landed many International as well as domestic Smartphone companies to mint out the sell. The Online industry also understood it well that Mobile Smartphone and accessories is one of the area which will bring user onto their portal and it happened.

The international players more specifically tapped Online companies to enter into Indian market as well as to grab the market share without losing anything. On a contrary, Online companies lost millions of $ to gain as well as retain the userbase.

The slide in online companies funding forced them to reduce the discounting which is now reflecting in their market share going down to 31% from 37 % as per 91mobile.com  published report. Companies like One plus, LeEco, Cool pad, lenovo, In Focus and host of other companies heavily relies on Online companies like Flipkart, Amazon, Snap Deal as well as smaller player for the major chunk of their sale through exclusive launch of their Smartphone through mentioned E-Commerce  portal. The reduction is discounting will neutralize the E-Commerce portal based pricingwith retail pricing.

It is evident that in coming months, Smartphone player's relying heavily on E-Commerce portal will see drastic fall in their sell and it may lead to recalibration of market leaders to laggards

Panasonic Mobile - Transition In Two Years From Bottom To Leader Quadrant

Panasonic Mobile once considered as dominant player across globe shocked world when they decided to pull out from Mobile Device production segment post multiple quarter of loss and mounting competition in 2013. At the same time, Panasonic catches the potential of selling Rebranded Panasonic Device in India and other parts of the globe through outsourcing model.

When Panasonic Launched their first device under rebranded outsourced model, the organization faced uphill task to move the inventory and decided to move slowly with product while improving the channel and sales team.

The team under India Panasonic Mobility head Mr.Pankaj Rana did fabulous job while designing the devices and more importantly focusing on device performance through rigorous testing model to reduce post disastrous misstep when some of the devices were launched with heating problem.

The coordinated branding by hiring the brand ambassador helped Panasonic Mobile to popular in youth segment as well as focused design started attracting Indian Smartphone buyer. By keeping the device price segment in two domain of 6k to 10 INR and 10K onwards; Panasonic strategy worked seamlessly to capture both prosumer and consumer segment.

Based on recent interview of Mr.Pankaj Rana across leading print media and his confidence of reaching 2500Cr to 3000Cr with 25 plus device launch during remaining part of 2016 is more on the conservative side. I also observed which many may overlooked that Panasonic Mobile will come out with low end Smartphone loaded with all feature should be considered as warning bell for many established player's in the Industry. The Total shipment of 3Mn device forecast by him is also on the conservative side.

Here Are The Reason Why I Think That His Statement Is On The Conservative Side

1.  Even during the downturn in Smartphone sell through in the last couple of month, Panasonic Shipment is growing while competitor is struggling to maintain their shipment level.
2. Every month shipment growth is around 12 to 15% and the percentage of data user is very high. It is a clear indication that Panasonic Mobile is very popular in prosumer segment.
3. Most of the Panasonic Mobile User bases are data user.
4. The Smartphone market will attain the growth path once replacement cycle will start from Sept or Oct 2016 as in India, replacement cycle is 1.8 years.
5. Indian Smartphone market size for 2016 will be around 110 Mn and hence it will offer Panasonic to capture market share through their planned launch and especially enter into low margin but volume game centric cheaper device.
6. It's the unmatched strategic and tactical maneuver of India Panasonic CEO Mr. Manish Sharma and Jaina Marketing India (P) Ltd MD, Mr. Pradeep Jain.

In My Point Of View And Assessment Done By My Organization

Panasonic will be selling around 4 Mn device in 2016 and will be in top 5 Smartphone seller in 2017 . Hats off to Panasonic Mobile outsourcing partner Jaina Marketing India (P) Ltd ; CMO Mr. Shashin Devsare visionary modulation of brand enhancement skill set. Keep going....

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Indian Consumer Pains And Expectation From Application Providers– Tushar Singhal

India being one of the hot destinations for global and domestic mobility player to tap Indian mobility user’s from diverse categories. The active mobility user base of 740 million out of total registered mobile user base of 870 million created niche innovation segment focused towards mobile applications. The growing adoption of Smartphone which is more than 44 million in the last fiscal year communicated well about user adoption pattern on the device side. At the same time one must not ignore that feature phone market still command above 75% of the total device with most having data communication capabilities indicate that India users are still predominately cost and performance conscious. Most of the mobility users are moving from mobile operator hosted simple VAS services based on voice, SMS to data centric applications, product and services.

The Applications segment possess huge opportunity for niche and established players to gain maximum user base and inturn be differentiated. During the race of acquiring more user base, somewhere somehow; application developers completely ignored the need of mobility user. If one looks at the current model of applications offering, it is very clear that most of the brand especially e-commerce or entertainment or Games or classified or security or system tools specific applications are floating in each and every application centre. Indian mobility users which is using high end device with price tag of 15-25k should be considered as prosumer’s and may understand the mechanism of using such applications. During the process, application providers are retrieving all personal information of device user under the pretext of Terms and Condition and reuse it on multiple fronts. Indian device users are fond of such applications which are ONE TAP and fast. The expectations are of good quality video on demand or live TV but unfortunately, Indian mobility network is still under the evaluation end when it comes to data coverage. Even though Mobile operators are very aggressive in claiming that wireless data connectivity is good but they must come out of self imposed myth in order to identify the problem and solve it for the better mobile user retention.

As Indian mobility users are cost conscious and wants to have applications free but without imposed advertisements or flood of notification of additional applications. Indian applications market is ripe of applications which offer consumer information management which directly connect and solve consumer and prosumer daily life needs if Applications providers really needs to make loyal application user base. There are multiple applications offering device system tools which are nothing but the realigned application of Android feature set. There applications providers reaches out to end consumer in one or another medium and making consumer more confused. The solution providers of such applications must create tiered applications which seamless guide user or execute the functionalities offered to consumer. Lastly and most important the applications must be dynamic in populating information based on the inputs of consumer and prosumer choices.

Currently, mobility users are being used by Applications providers to create consumer adoption pattern module rather than fulfilling consumer needs and one should not be surprised in case of government watchdog jumps in to protect consumer privacy.

Why Microsoft Move To Position Nokia Android Device May Falter

Just before closing Nokia deal, Microsoft played strategically. They positioned Nokia Android device without being held responsible for recognizing Android success. The projected price and performance of proposed Nokia Android device is not fulfilling the competitive threshold. On minute assessment it’s clear that there are other players offering better specifications at 20-30% lower price points. The Camera specification of 3MB without any front camera support is one of the weakest linked coupled with RAM specs whereas now standard is minimum 5MP and 1GB RAM.

Interestingly, Microsoft in the last few quarter realized it loud and clear that there Lumia play is not picking up as Average selling price is going down and they are not getting good traction in major geographies like US. The other realisation by Microsoft that Nokia is king of low end device and major adoption of Asha platform based device left them vulnerable of losing market share in case of Microsoft insistence of constantly focusing on Window Mobile OS push.

In IDC released report, Nokia capture more than 14% total device market share in India where the market size is around 250 Mn per annum but unfortunately they were pushed out of top 5 Smartphone in India. It is indicative that Microsoft cannot afford to let go huge chunk of loyal Nokia customer. They also realised that it would be better to adoption strip down version of Android to broaden the probability of market share gain rather than keep on focusing on Asha platform.

As, I constantly reminded post Microsoft announcement of Nokia that Microsoft is not interested in device but using it as a medium to promote its other services. The upcoming Android powered device is nothing but validation of my raised point. Most of the Microsoft product such as Outlook, Bing, Cloud services, one drive, Nokia Maps, Nokia Store and BBM is going to be integrated in order to capture some of the traffic from Google.

Microsoft and Nokia must recognize competitive landscape in Android ecosystem where every alternate day there is price reduction by one or another OEM’s whereas the suggested price point of Nokia upcoming Android device to too pricy and may face uphill task to command premium from consumer with many of Android ecosystem features are missing. I strongly believe that the move is going to bring additional potential customer on their deck but it would be difficult for their sales team to convince users to use device which is so much Microsoft centric. We all must admit that Google did one thing beautifully that now most of the Android ecosystem users are used to use Google centric services. The change in environment may turn out to be show stopper of Nokia to get their adopted apart from Price points.

I will keep my finger crossed and would wait eagerly to see the potential traction by Nokia.

Why Indian Device Users Should Be Careful While Playing Around With Applications

The era of SMS is being replaced with data centric Applications. The mobile ecosystem players are now focusing on data hungry Application segment to drive revenue. Mobile Service providers are focusing on selling their data pipes and create auto cycled data revenue driven by Infotainment and Entertainment. On the other side many Applications providers from Retail, BFSI’s, FMCG’s, Education, Servicing and other sectors are offer mobile network agnostic Applications to increase awareness among their existing customer base and trying to capture additional one in order to propel growth and competitiveness.

The competitive environment among consumer and prosumer segment based Application providers offering lots of opportunities as well as concerns for the end consumers and prosumer’s. The two dominant Mobile OS ecosystem such as Android and iOS capture more than 90% of the Application system where iOS market share is only 14%. The iOS ecosystem is much closed whereas Android ecosystem is very open system and widely adopted by consumer and prosumer’s base.

The rampant push by Application providers through multiple means without taking responsibilities on themselves, they create Terms and Conditions favorable for them to bypass any legal liabilities on them.

Indian ecosystem is not having any regulation with respect to Applications and the following are the some of the focal assessment points for mobile device user before downloading or using any applications.

1. Read terms and condition carefully, if T&C force mobile device user to give consent for taking mobile user information or contact list information then donot accept. It may lead to exposing ones near and dear one information to Application providers. Please note that the retrieved contact information can then be used by Application providers to push unwarranted Applications to your contact list based people as well as increased pesky call and SMS. The current trend of most of the Application provider to collect mobile device user information along with other information sitting on one’s devices.

2. Before downloading any Application, please visit Application providers website and check their location. One must make sure that even though device owner give their consent to Application providers to take their primary information such as Mobile Numbers, Device Type, Requested Application for download but the information should reside in India. Most of the Application providers maintain their servers outside of India and incase of any hacking of their servers, device owners information would be exposed for security attack.

3. Before downloading an Application, Please make sure about the size of an application. If the size of Application is high then it would consume more RAM and subsequently impact the performance of device such as device slowdown, battery dranage etc. If mobile device owner decide on downloading an Application then they must check the RAM and ROM consumption on manage Application section. In the APP section, the actual size of Application would be visible whereas on screen pullover, the Running section would let you know the exact consumption done by Application.

4. Post downloading an Application, please check if Application is continuously running on the background or one can close it. If it is running continuously then there might be a chance that Application is reading all your activities and according pushing advertisement or other applications.

5. Always maintain SD card and download all new applications on SD card and it carry multiple benefits to device owners. Generally device user buying device with high internal memory and neglect in adding SD card. Directly downloading on device internal memory may expose all activities of mobile device user.

6. Post downloading an Application; please check if Application is not wrapped with other Applications. There are numerous Applications which carry multiple applications. Once device owner download particular application, he suddenly start experiencing appearance of additional application sitting on OS Tray.

7. If device owner is heavy user of social media site then please ensure that device owner clear browser history and cache on regular basis.

8. In today’s world every device users are using messaging Applications in one or another form. Please make sure that device owner cleans the conversation on regular basis. It mitigate the risk of exposing device owner conversation in case of malware or adware sitting on device and communicating with remote servers of hackers.

9. It’s a perception that Mobile security solution impacts the performance of the device but being a device owner; one must make a choice of being vulnerable or subscribe for good security solution from Symantec, MacAfee, Fortinet, Websence, Trendmicro and many more. The mobile security software is very effective in telling mobile device users about any unlawful activities initiated by Malware or Adware pushed by Applications. It is true that these security solution works continuous on the backend but it should be device owner choice to make a decision to secure their activities including financial, privacy, highly priced devices or saving few $ per annum to have a peace of mind.

10. With the adoption of mobile banking, commerce and heavy push by the companies involved in these sectors; it is imperative that today or tomorrow the adoption would increase. Any negligence on device owner end may cost them “robbery through mobile”. The indications are very clear that hackers are moving their focus from wired based connected devices such as PC or Laptop to wireless device centric. The lack of connected technology implemented created vulnerability for Mobile device owner. It would be great if device owner wakes up and initiate mitigate solution implementation else it would not be long before you can also be the target.

11. Never leave your Bluetooth enabled while you are on the move or in crowded place. Device owner may risk their information.

12. Never ever store your banking details in your device. In case of device loss or stealing or information redirect attack, device might lose such important information to unsocial person which inturn can be reused to create havoc.

13. Device owners aware of threats towards device through sleeper applications must create awareness to develop an environment of viral education. It would in turn make device owners more careful while downloading. The indirect impact would be on Good Applications investing millions of $ in Client server development fulfilling all prerequisite and there will be spike in those Application download.

14. Never ever register for multiple email accounts signed in along with the corporate email id. It would risk device owner information in case they click email attached with phishing attack.

15. Always download battery optimizer and Application cleaner as it would help device owner to close multiple running Application and inturn save battery getting drained quickly.

16. And many more and can drop queries through comment. Read more about Smartphone Review

Given the trend of Application usages and activities of many application provider initiatives to capture contextual pattern of device owner and subsequently makes million of $ by compromising device owner privacy, I consider this article as awareness one and should be pushed in viral form. If reader can develop awareness within their dear and near ones then one should consider it as social awareness drive