Jolla Smartphone – Finnish Innovation bound to be Successful

Nokia decision of adoption of Microsoft mobile OS as default mobile operating system for Nokia Smartphone instead of Android brought many surprises. The crude shock came as thousands of job losses and losing out of midas understanding of consumer adoption. Repeated restructuring, scrapping innovative project in favor of closed Microsoft operating system turned Nokia into small smoke ball bound to burst and that happened recently when Microsoft decided to acquire Nokia to fulfill their dream of cracking into search and mobile advertisement market segment where they are struggling to maximum level

The restructuring at Nokia offered likeminded Finland based ex Nokia employee to be in their work DNA and offer innovative device to consumers. It is another crude reality for scandavian people to let go iconic brand based device to International players and they are feeling vacuum in the space.
Jolla Smartphone which is based on MeeGo OS extension codenamed Sailfish with many dynamic applications, UI definition. The true differentiation is device design with inbuilt gesture based feature set also supported with drag and drop UI development. Interestingly the most differentiating stickiness of the product is cross OS application support. Any user can use Jolla Smartphone for both Sailfish and Android based applications. The innovative approach and implementation of cross mobile OS based application support created huge opportunity of Jolla to be adopted by end consumers and mitigated any threat of low adoption by users. It’s an excellent example not repeating past problem.

Company successfully secured Euro 200 million in funding and also successfully fully booked its order book from 136 countries. The huge focus on multi platform OS based application support to attract thread developers to create applications for both the mobile OS as well as attract Chinese based ODM into their manufacturing fold.

Once Jolla successfully demonstrate their unique design and attached volume then it would not be long before major chipset, ODM will queue to support new OS. Interestingly, Jolla will fill up emotional disconnect which scandavian citizen where feeling post acquisition of Nokia and given the population and teledensity, one should not be surprised if Jolla received overwhelming adoption in Europe in the beginning. It would be too early to predict as serious contender for third position in mobile os segment but one must not be shocked if it happened in next one year given their truly innovative approach of support all and move up in the ladder.

Microsoft Faces Many Hurdles – Transformation Delayed

Microsoft released their impressive Q3 result beating street forecast. On one hand OEM, Online and Entertainment/Device business unit still struggling whereas their cash cow Enterprise business unit covers up the weakness of other business unit. Microsoft for the last many years trying to break out from Google dominated online and mobility ecosystem and showed little improvement. At one hand their online service business unit showed impressive revenue growth of 25% and achieved 872 million but it was not enough to make the business unit operation profitable. In sharp contrast Google is still dominating the Online services and minting fat profitability. Microsoft managed to reduce online service business unit loss to 321 million but at the same time acted as major hole of profitability pull down. Microsoft also achieved 6% growth in Entertainment and Device business unit with revenue achievement of $2.08 billion. The deep cut in product prices and low off-take of device license resulted in 171% loss in operating income and made the business unit as a loss making unit. The struggle in both unit clearly indicate that everything is not good in Microsoft and they are trying hard to turn the tide in their favor. When Microsoft launched Nokia device buyout move, it received criticism as well as thumbs up from different section of analyst. At that point of time, I highlighted Microsoft hidden agenda and that was to buy in user ecosystem to turn online business and its associated service into driving force for future revenue. With the growing competitive environment in both Online and device segment and especially post exponential growth of mobility ecosystem dominated by iOS and Android mobile OS is going to slow down Microsoft attempt to revert Entertainment and Device business unit into profitability. In my point of view, Microsoft move to acquire Nokia Device unit is going to propel their advertisement and online business unit provided Microsoft opt to open their mobility ecosystem. It is also clear post recent market share decline their Mobile OS due to competing OS compelling offer is going to keep many potentials at bay. I observed that Microsoft equity price is higher by 10% post result but it is not out of the woods. In my point of view, they are many quarter away before posing competitive threat to bigger players of online and device segment. The most crucial success KPI’s of Transformation would depend on impending management change in next 6 month post current CEO pass the baton to new one.

HTC Need to Shift Gear for Survive – More Pain in the Offing for Investor

One of the first mover of Smartphone HTC posted first ever Quarterly loss with more than $100 million. For the last 10 month, HTC is experiencing MoM lower revenue compared to previous year. Year till date their revenue came down by 29% YoY as well as volume is going down due to component shortage as well as demand. During last AGM, HTC management assured investor that company is going to recover post multiple innovative Smartphone launch whereas the current situation shows difficult circumstances given the dynamic shift of marketplace. The emergence of Sony, LG, Huawei, ZTE and Motorola Mobility is eating out HTC customer base. It is high time that HTC develop strong tactical positioning of its product otherwise it would not be long when it takes the same route of Nokia and Motorola way. In July, HTC also set the vision of capturing 15% market share and at that point of time, I countered their claim in my post and Q3 result justify my assessment in July 2013. I still believe that HTC is having all the internal inertia to develop cutting edge Smartphone which can give tough competition to big player as they already proved it through HTC One. It’s time to act rather than releasing press release to ease out investor frustration with unachievable targets

Apple and Samsung Defining Their Target Territory – Developed vs. Emerging

The two titan of Smartphone segment in just concluded quarter clearly demonstrated the changed dynamic of market place. Apple post 5C and 5S outclassed Samsung in and out in its home turf whereas struggled in emerging market. Samsung on the other hand in its quarterly result demonstrated their continued growth in price sensitive geographies such as Eastern Europe, LatAm, BRIC countries where Apple is struggling due to high price associated with device price. The Samsung managed to hold on to Smartphone growth in terms of volume and earning as they used volume as advantage point to get the cost of production even lower and offered discounted price point devices which entered into phase 2 of its lifecycle. The move paid well for Samsung in Eastern Europe, LatAm and BRIC. Apple also showing high traction in it’s another stronghold Japan and many parts of ME and Western Europe. Samsung in quarterly result indicated that coming quarter would be low single digit whereas Apple is expecting high single to double digit growth. It would be interesting to wait and watch the Holiday quarter result of both the companies as the result will sure bring cheer for one of the company investor and but it can’t be cheer for both the company investor. It is also possible that in a market share fight between Smartphone Titans, smaller players like Sony and LG will get benefited.

Apple May Further Gain US Smartphone Market Share during Holiday Season Quarter

Apple launch of 5C and 5S received thumbs up by consumers and prosumer’s. The phenomenal orders of 9 million devices as well as rush for Apple devices especially golden colour even surprised Apple. It prompted Apple to open online order to capture competitor loyalist customer base. By the end of Sept 2013, Apple captured 39% US Smartphone market and achieved 130% MoM growth whereas Samsung managed to achieve only 29% of the market share which is 22% MoM de-growth. As holiday season round the corner and considered as gadget boom time for all player may bring huge traffic to Apple retail and online space. With the revamp of iPad mini and new iPad Air is going to help Apple attract high net worth customer and would enable them to make maximum traffic and successful conversion rate for one or another product. The nearest competitor of Apple, Samsung is also gearing for Holiday season with Note and Galaxy 4 as well as wearable gadget but all those products are in the market and experienced slow uptake. Apple 5C and 5S is currently in the top 3 selling device in US market which is always considered as KPI’s for any successful or failed launch of product. The other players such as Motorola Mobility and LG also experienced market share loss in sept2013 and may experience the same in coming few quarter. I strongly believe that upcoming holiday season sales of Apple would bring cheer for Apple investors. I would not be surprised, if Apple crosses 50% Smartphone market share at the end of holiday season quarter.

Apple – Symbol of Calibrated Innovation

The late entrant in mobile device ecosystem keeps on sending shock waves to competitor twice in a year. Apple had turbulent time starting April 2013 when they started observing continuous fall in their Smartphone market share. As per counter point, Apple market share skidded from 34% in April 2013 to 17% in August 2013 whereas Samsung share managed to increase their market share to 37% to the total Smartphone market share. The other players such as Motorola Mobility, HTC, Nokia and LG tried to steal the show from each other. Most of the analyst started talking the downwards potential of Apple innovation innovations and subsequently the power of competing with born rivals. It is human nature that everyone talks about leaders and that what happened with Samsung. It is really surprising that many missed the inner ecosystem strength of Apple devices. Apple exactly did the same by calibrating the ecosystem and correlated their specification to map the features of 5C and 5S with the ecosystem hosted value added services to offer unique differentiated value proposition to customer. I failed to see any such ecosystem environment from Apple competitors. In my point of view, if any new Apple user uses iPhone for the first time he falls in love with Apple ecosystem more than Apple devices where competitor lags. It offers Apple to keep on adding loyal customer base. That is the reason that Apple two launches in a year is more than enough to create ripple factor within competitors. Apple focuses on innovation where competitors lag the most to differentiate itself and maintaining the highest level of QoS factor for device and attached service.

Oracle - Master of Seamless Integration & Execution

In current Technological world most of the talks are centred around mobility and associated application. Most of the Technology companies roadmap carries mobility as major strategy. In dynamic environment of Technological shift Oracle is refining their strategy through slew of acquisition around cloud based services and trying to translate themselves as dynamic solution provider of ICT sectors. They calibrated their move to target customer base in CPE and Cloud model by offering both onetime as well license model. Recently they collaborated with Microsoft, Salesforce to enhance their single solution provider capabilities. Oracle claim during their Quarterly result conference call that they will not be doing more acquisition but Oracle unpredictable aggressive CEO suddenly opens his wallet and surprise competitor. Oracle again went for Big Machine acquisition to give more flavour to its Cloud offerings for Enterprise. It is very interesting that they do acquire organization and in no time implement process oriented monetization of acquired organization product line by mapping acquired product with hundreds of other acquired product. With every passing quarter, their capabilities to win customer from competitors are increasing and in turn forcing competitors to match their acquisition to in turn put their competitor in integration activities rather than sales activities. With current valuation of just over $150 Bn and yearly cash flow of $12bn, it gives Oracle enough muscle power to take on competitors and also makes it very attractive investment opportunity. In my point of view, Oracle would be most attractive investment opportunity post US and Europe economic environment moves on to growth trajectory.

Social Networking Site - Valuation Bubble Bust Coming

The Social Networking Companies valuations are growing like gorilla on the basis of number of registered users and unique monthly user base. It is interesting that few years old blogging site Tumblr was acquired by Yahoo in $1Billion deal whereas 751 million was attributed to Goodwill and on top of that Tumblr had a liability of $141 million. Similarly Instagram sold itself to Facebook in $1Bn. Another Social Networking company Pintrest raised another round of $225 million funding and managed to get $3.8 Bn in valuation on the basis of 50 million unique user base.

I still remember MySpace, the darling of Social Networking in 2005 and News Corp. decided to purchase it for $580 million in Cash. In 2007, New Corp tried to merge MySpace with Yahoo with tentative valuation of $12 Bn. Unfortunately, the rise of Facebook in 2007 pulled most of the users from MySpace and turned them into loss making unit of News Corp. At last in 2011, News Corp decided to sell MySpace in merely $35 million.  Classic example of Social Networking one is AOL $160 Bn acquisition by Time Warner in 2000 which led Time Warner share in single digit and heavy write-off. Now AOL is still trying to survive as standalone company post Time Warner washed their hand from AOL and huge write-down. Most of the investor invest heavily in Social Networking site with an assumption that they may turn their investment into gold mine post the classic example of Google but most of them miss to analyze that the change in user contextual pattern may wipe out user base in no time. In my point of view, most of the Social Networking Companies with many billions dollars will go bust an in turn may inflict heavy losses to investor or acquirer. I can say currently its Social Networking era which may lead to debacle of many good companies in coming years.

Twitter Playing it Safe- Opportunity for Long Term Investor

Twitter implemented the learning from Facebook IPO and going cautious in valuing Twitter. Twitter is going for investor road show with $16 to $20 price range and may raise $1.6 Billion provided the offered price hit $20. Given huge user base of more than 225 million is ignored due to the associated increasing loss company is experiencing in the last many quarters. Twitter is hopeful of getting good response post Google stellar quarterly performance on the back of strong mobile centric advertisement revenue as Twitter also bought MoPub which is mobile ad company. Based on the offered IPO price, Twitter allotted 15 million share to MoPub and increased overall outstanding share of 545 million. The huge traffic on Twitter may turn their MoPub platform as goldmine for the future revenue growth. The conservative move by Twitter can be misused by long term investor to reap in maximum return from Twitter in next 2 - 3 years. Post raising funds, Twitter would be in better position to go for small but innovative companies acquisition spree to build ecosystem around its micro blogging as Twitter fully know contextual pattern of their user. In my point of view, Twitter is going to offer better return than Apple and Google in next 2 years.

Is Cloud & Mobility the right blends of technology for Indian SMB? - By Ritanshu Saxena

Availability & awareness of smart/ right blend of Technology are key pegs behind IT adoption in SMB. A decent sized SMB cannot afford to sustain downtime hassles, limitation to scale up in earlier deployed IT infra (end-to-end fresh investment for any scale up of manpower or functions), poor software functionalities yielding no advantage in process automations and restricted provision to use information on the move.

Interesting incidence of well-known company were HR department was busy making calls and fetching and updating Leaves, Tax, reimbursement etc. details manually during last week of the month to sales employees spread across nation. Observing such a sympathetic situation to see 5 member HR team literally struggling till 10 pm in night in Technology era is nothing but unfortunate. Fortunately the server (desktop used as server) crashed at 10pm when all HR employee got a chance to leave for home. The salary could not get processed on scheduled date and was delayed for 2 more days. The cloud adoption can remove such bottlenecks and assure the availability of data.

Well no failure is a loss if it leaves behind some learning’s. The company has now implemented cloud based HR portal with an Android based enterprise Apps running on handsets of all sales employees. The data is now collected on the go, without extra man effort, with no extra electricity & time wastage and moreover hassle free with almost no failure. Sales guy just have to click on leave button on App and wait for it to turn green for approval. The leave status is automatically updated in backend. The local travel is tracked from the app and actual reimbursement is automatically calculated. Moreover the pdf format of tax proofs can be directly uploaded to central DB.

Sales function, logistic tracking, HR, accounting ERP modules implemented on cloud and interfaced on mobile devises can drastically improve efficiency and help precisely estimate the ROI. Though RAS (Reliability, Availability & Scalability) features could be derived from in-house Server client deployment, Yet the ease of pay per use, pay as you go, pay as your grow can result on wise selection of cloud functionalities.

By the way who understand RAS in SMBs, and why should they, it is meant for consultants and white colored CIOs. The easy way out is off shoulders the IT management to Cloud and let SMB owner focus on his core business. Simplicity in implementation, speedy roll over, optimised investments based on pay as you use model is the key behind enterprise cloud adoption. Cloud adoption well weaved with enterprise mobility to extract the best mileage from investments hence can prove the right blend for SMB automation.

Well, easy said than done. Is the Cloud benefits well known to SMB/Es?

Closing doors even before it is adequately opened – Challenges with Smart IT adoption - By Ritanshu Saxena

India current 65% population age is less than 35 years. It inflicted agility; experimentation behaviour and hunger for innovative technology centric product adoption which is enhancing awareness across society. India is home of 8 million plus SMB and major contributor to jobs opportunities for young professional vying for success. SMB contributes 45% of India export and around 70% of outsourcing jobs. The above dynamics of India indicates that SMB IT adoption practices must be flawless to spread cutting edge technology to young professionals as well as utilize it for the best interest of organization. The IT process adoption by SMB may help professional to bring in innovation and thus in turn create patented product line and help SMB to convert them from narrowband vision to global vision. US bay area is an excellent example of the same. The self-proclaimed CXO’s of home grown business termed as Indian SMB prefers to use localized IT infrastructure which is easily available from Local System Integrator who uses high configuration based desktop as servers in order to run local ERP’s. The mindset of self-proclaimed CXO’s runs around ROI’s by investing minimum capex for the project and inturn neglect the major unseen hurdles on opex. In these IT implementation process, home grown SMB misses the security aspect of their so called out of box excellent solution and puts themselves in higher probability of security breaches or hacking. Interestingly, in all the SMB misses the critical aspect of patch management and due to localized version of most of the IT infrastructure, their under skilled resources faces hurdles during operation and management while executing patch management to plug the unplugged holes of the IT infrastructure. On top of that they neglect on the resource skillset, training and retraining which is impacting most of the young professional aspiring to grow with these SMB

I have observed this practice in several SMB clusters (Faridabad, Surat, Bhilwara , etc ) which eventually result in building a perception that limited or no advantage is gained by self-proclaimed CXO’s in IT adoption. This is alarming… we are closing doors even before they are adequately opened. The Indian government must offer tax breaks for SMB’s who is willing to invest in authenticated IT infrastructure and in turn helping Young Professional prosper. At the end it will be process of new India buildup

Blackberry Struck Right Node – Survival Threat for OTT Messaging Players

In recent years, Blackberry struck right node post launching their popular BBM service for Android and iOS operating system. Post multiple delay and technical glitches, BBRY last managed to launch it successfully. Based on early reports, 6 million users are already registered to get the BBM. Once Blackberry recalibrates their delivery infrastructure and opens the platform for consumers as well as prosumer’s then it is highly expected that it is going to break maximum number of download of specific service of multiple stores. Blackberry strategy to monetize non blackberry user base by promoting its secured messenger service may work well for them. As BBM service offer higher level of privacy to end consumers as well as technological superiority of the platform is going to attract many users who is currently using other OTT messaging services. Given the high brand value and proven service, it would be very easy for Blackberry to be the number on messenger service in no time. The launch must be observed very minutely by other successful messaging service providers and BBM may hurt them very hard. It will also give blackberry an opportunity to offer contextual advertisement and other service offering through their messaging service and may command good price point negotiation from publishers. I also believe that Blackberry strategy would be more fruitful and may sail them through the difficult transition. Most importantly, it will act as major valuation part in their overall valuation game when it comes to situation where Blackberry decides to sell themselves. Good news for Blackberry investors

Apple iPad Air & Mini Launch May Act as Spoiler of Nokia Tablet Move

Apple timed product launch is nothing but a classic strategic move. Nokia was rumoured to launch their first and last Tablet before its device division goes in Microsoft fold. Nokia in Abu Dhabi launched its first Lumia 2520 Tablet supporting 10.1 screen, 2.2GHZ quad processor, power keyboard runs on Window RT 8.1 operating system. Nokia integrated their HERE application and focussed on photo sharing feature set. Apple also came out strongly with extra ordinary enhancement of their product with thinner and low weight iPad Air which support 9.7 inch screen, 4^th generation processor, free productivity and media apps priced at $499 (Lowest model). Apple also offered holiday gift by revamping iPad mini with Retina to convert the feel of 7.9 inch to 9.7 inch. Interestingly, iPad mini will be sold at $399 whereas promised last year iPad mini at $299. Given the tried and testing product line as well as availability Apple ecosystem of iTune, iRadio, iCloud and its store makes Apple move unbeatable. Nokia also priced their first Tablet price at $499 and it would be long before they will slash their Tablet price. As holiday season round the corner, Apple new offering on devices and Tablet is going to be must have gadget for most of gadget lover. As Apple 5C and 5S is already breaking all records, it would be interesting to see if Apple would be able to fulfil expected explosive demand from customers. I am sure that Nokia will make all attempts to make sure that their Tablet gets roaring acceptance from customer but also fear that with kind of offering Apple is offering, it would not be wrong to say that Apple spoiled Nokia party before it started. One should not be surprised if Nokia take big write off for their first Tablet. Still hope for the best.

Tellabs Finally Surrendered & Going Private– Heavy Loss for Investors

Once the darling of wall street went down the wire post multiple failed restructuring attempts. Marlin Equity Partners are buying Tellabs in 891 million cash translated into $2.35 per share. The successful company Tellabs survived deep depression of 2001 and share traded at more than $50 whereas maintain $8- $9 during Telecom bust era. The continuous share repurchase program to keep share price at an attractive level impacted Tellabs dearly as they chocked down on research and development spending. Tellabs started feeling the pinch of misstep by 2011 and attempted to recover through multiple management realignment and product release but never managed to gain the confidence back from customer as well as investors. In most recent quarter they came out with 8 million loss as well as all financial KPI’s showed major downwards trends. Tellabs investors must be feeling cheated and it is clear with multiple lawsuits. The only learning one should have for investor that they must focus on organization management vision, research and development capabilities as well as shift of new product based on technology trend. Given the current technology trend many old gems may fall in the same route. In my point of view, every organization must learn from Sun Microsystem debacle. Even after having cutting edge technology and platform, it is more important to align business as per the industry trend rather than taking adamant self convincing approach. In industry “ My way or Highway never works”.

China Mobile Achieved Impressive 3G Growth

China number one mobile operator China Mobile successfully demonstrated the success of their strategy to propel higher data usages and revenue. China Mobile continuous effort to enhance the Quality of Service of their 3G network translated in huge adoption of 3G subscriber in most recently concluded Q3, 2013. China Mobile added net 31.6 million 3G subscriber and their 3G subscriber base increased to 170 million. China Mobile 3G subscriber base is 22% of China Mobile total subscriber base (755 million). The 20% QoQ 3G subscriber growth also propelled impressive data growth. India wireless operator and regulator must realize the hidden potential of 3G services and accordingly refine policies including spectrum sharing, roaming, pricing etc. Great going for China Mobile and believe that Indian wireless operator in future would see same level of traction.

China Mobile Struggling to Maintain ARPU

The unprecedented growth in China mobility user base and adoption of high speed enabled data services. The growth attracted many OTT players to target the new service hungry user base and started floating many OTT application attached with attractive value proposition. This prompted exodus of China Mobile subscribers from OnNet to offnet service offering from OTT players. During Q3 2013, China Mobile profit fell by 9% even after stellar performance in the 3G subscriber base adoption and data usage. The average ARPU for the first nine month is hovering around $10.9 post bump in higher 3.1% usage of voice. China is considered as home of many innovations in the mobility segment and OTT players were encouraged by biggies to attract subscribers from competitors. Now these OTT players with their free offering are hurting their bottom line. It would be increasingly difficult for China Mobile to shore up their VAS revenue in the current environment of competition from OTT players without twisting their service offerings.

Google Play – One Stop Success for Application Developer

In Android ecosystem, Google Play is acting as must have prerequisite to be successful. It is mandatory for any Mobile Application companies or developers to target Google Play attach mobility users. Google achieved major milestone of 50 billion application push through Google Play and acts as default Apps Store for all Android ecosystem enabled applications. It would not be wrong to say that it is now “ iTune of Android World. The astonishing growth trajectory of Google Play helped many small sized Application developer or Companies to gain access to investor interest and acted as instrumental for many small and large scale acquisitions. Its default validation for any application success and all checks Google Play download for any particular application success. In my point of view, Google will be more aggressive in Technological upgrade of Google Play with many innovative branches to be competitive with Apple Store

Google Acquisition of Motorola Mobility Increasingly Hurting Bottom line

Google acquired Motorola Mobility to gain access of mobility patent as well as to control mobility ecosystems. For the last two years Google worked hard to develop premium class Smartphone coupled with closely knitted Google product to position itself against Apple. To some extent Google succeeded to release innovative Smartphone branded under Motorola and achieve good reviews. Post recent quarterly result, it is evident that Google vision of achieving out of proposition success with Motorola series of device is not working. Google posted $998 million revenue from Mobility device business unit and posted operating loss of $342 million which is way ahead of $199 million loss posted during the same quarter last year. The heavy investment in the mobility device unit impacted Google bottom line as profit came down from $3.55 Billion to $3.23 Billion. It would be interesting to obverse Google strategy to convert loss making into dominating and profitable unit. Google may decide to go low with Motorola strategy as any aggressive push may push many collaborators on Mobile OS side out of the Google block

Indian Telecom Operator Flip-Flop Tariff Strategy

Indian wireless operator post few good quarters of good growth in data traffic and subsequent data ARPU slashed data download tariff by 80%. It is interesting to know that currently data ARPU hovers near to $1 per active data user. Indian wireless operator believes in snatching business from one another by using tariff as tool which always hurts all the ecosystem players dearly. The data tariff slash 2 months back received good response from subscribers and wireless operators started feeling the pain. Last week, Airtel and Idea reduced their offer of data download instead of increasing data tariff and in-turn increased data tariff by 30%. They also raised International calling charges to compensate the free fall of mobile value added service. The flip flop initiation by Indian wireless operator gives an opportunity to regulatory body to scrap service provider’s continuous concern that their business model is under pressure. In my point of view, Indian wireless service provider must stop playing around with tariff and focuses on quality of service of offered products or services to maintain their competitive edge

Apple 5C, 5S May Dent Competitors Volume Growth in India

The blown out success of Apple latest 5C and 5S pre order raising the competitive environment of mobility device segment. The mobile OS players are trying hard to bring out innovation to match Apple iOS feature sets. Even with non-echoed feature set, the latest offering from Apple is creating buzz around different geographies and created anxiety among Apple loyalist to own new offering whereas other OS loyalist are contemplating to switch in toward Apple side. Now, Apple would be offered in India by Airtel and Reliance Communications from November 1^st is going to be festival gift. The launch is going to impact Samsung, Sony and Nokia high end device sell. Nokia recently launched 49990 INR Lumia high end device with 41MP camera whereas Samsung offer few device in that segment. With Apple 5C and 5S offering in the range of 45000 INR to 74000 INR depending upon the internal memory size is going to attract top 2% of Indian mobile subscriber and considered to be high net worth Indians. The initial 9Million device pre order already set the centre stage of Apple new offering in India and it will attract many first timers to own 5C or 5S. The launch is going to give Apple another opportunity to cement its position within HNI community and more struggle for competitor.

Google Quarterly Result – Validate Microsoft Strategy

Google released their quarterly result achieving YoY and QoQ revenue growth of 19% and 1% fuelled by advertisement network. The Google owned properties generated 93% of total $14.11 Bn revenue and advertisement segment generated $12.1 Billion. The exponential growth of Google owned mobile ecosystem and attached advertisement engine is one of the major growth area. The CPC went down 6% YoY whereas paid click went up 23% YoY. The takeaway from Google quarterly result is attached growth of mobility ecosystem. Recently, Microsoft received mixed reaction by its investor as well as Analyst community post their acquisition of Nokia device business. As highlighted in my other articles, Microsoft post failed attempt in Search especially attached with Windows Mobile wants to buys in Consumer reach in order to encroach in Mobile Search and advertisement business. Microsoft spent more than $10 Billion in the last one decade but failed in achieving any success. The Google result must offer some breather for Microsoft strategy team about their decision as well as to convince their jittery investor community. In my opinion, Google may turned impressive advertisement revenue but facing many hurdles too.

Twitter Mobile Play Crucial for Post IPO Equity Return

Twitter is getting ready to be public company and offer its growth story benefit to potential investor base. With around 232 million active user base, its international user base is growing faster than domestic user base. With the potential valuation achievement of around $15Bn at the time of NYSE listing, the investors are contemplating the right valuation. Twitter is expected to cross $625 million revenue ending FY13-14, and more than $150 million in losses. The growing losses are making potential investor nervous regarding Twitter ability to change track and become profitable. Post Google blow out quarter, investors must be assured of upcoming success of Twitter. Twitter invested heavily in building their micro blogging site, technology robust and started to play around with big data recently. Twitter is generating more than 80% of its revenue advertisement and 65% of the total comes from mobile. It indicates the potential hidden opportunity with Twitter. Investors are nervous post disastrous IPO of Facebook but post adoption of mobile ecosystem, it is trading at $54 valuing company around $132 Billion. In my point of view, post buying many company focussed towards advertisement segment, it is evident that Twitter mantra is to target their user base information and target with preference based advertisement management to reap in maximum return. The value long term investor may opt for value centric Twitter IPO

New Threat for Messaging OTT Player’s

The phenomenal growth of messaging OTT player’s raised eyebrows of many. In the last two years, Whatsapp, Line, WeChat attracted millions of user through multiple integrated voice and data features. The wireless operators observed huge drop in SMS traffic as well as SMS attached services. The launch of messaging application attached voice services turned out to be big hit among price sensitive mobility users. In due course, wireless operators tried to stem the revenue loss from other value added service but with global downturn, the expected adoption of new service met with low growth oriented product. In order to offer stickiness service, many wireless operators’s started their own messaging service. Recently Sprint launched its Over-the-Top (OTT) messaging application compatible with Android and iOS to stem encroachment of its user’s by other players. The application includes Text, IM, Video Chat and Group Chat for geographies like US, Canada and Mexico. The strategy is to exploit network attached subscriber contextual pattern to generate real and non real time centric product revenue. Similarly, China mobile, Unicom, T-Mobile and Telephonica launched its own or partnered product to push other value added service through messaging application to its esteemed user base. It would be interesting to observe the moves by OTT player’s to mitigate threats from wireless operator with similar feature set

Sony Facing Stiff Competition in Smartphone Segment

Sony strategy to use mobility devices to bring its loss making electronic business back into profitability is taking more than expected time frame. Post buying out Ericsson share and calibrated direction of targeting Smartphone segment to garner high margin is firing back. Sony generates 60% of its mobility division revenue from Europe and Japan whereas lags in china. The first evidence of loosing grip in its home turf is successful collaboration of NTTDoCoMo with Apple to sell iPhone. Still the dominant Smartphone player in Japan, the home turf market size of Smartphone is less than 25 million and Apple huge popularity is eroding most of the competitor market share. In US market, Sony only manages to collaborate with T-Mobile which in turn post merger with Metro PCS may offer some respite for Sony to gain traction in US market. Sony CEO admitted that they are moving cautiously in oversees market such as US and China in order to achieve set goal of capturing third position in global Smartphone market. Even after launch of Xperia’s series for the classes, Sony failed to convert Apple and Samsung loyalist to switch over to Sony. In Indian market, Sony volume is too low to mark any presence as well as contribute in Sony goal of selling 42 million for FY13-14. It would be interesting to observe Sony tactical move to position their product against newly launched iPhone where the entry price range of both the products are more or less same.

Mobile Value Added Service without Consent Activation Complaint Far From Reality - Indian Environment

Mobile Value Added Services are making all rounds of talk post MVAS regulation enforcement in India. Indian wireless operators and value added service developers strongly opposed MVAS regulation during consultation with TRAI. Even GSM body COAI opposed it vigorously but failed to stop consumer friendly regulation. TRAI released report claimed as loud success to reduce the number of complaint around mobile value added service is far from real picture. As per TRAI report, in June 2013, the total number of VAS complaint received stood at 259476 whereas the complaint alleging mobile value added service activation was only 104996. Post MVAS regulation amendment enforcement from 1^st July2013, TRAI claiming that due to amendment the number of total MVAS and alleged activation complaint went down to 95510 and 9338 respectively in August 2013. By demonstrating huge drop of 60% and 90% in total and alleged activation complaint is none other than self acknowledgement of successful enforcement of regulation. Based on reports, India total MVAS user base is around 150 mn and if only 0.1% of the total VAS users are only facing issues then it’s hard to accept. The reality is different, majority of user’s donot even know the reach out number to launch complaint and even though user’s achieve success in launching complaint, they do not know the final outcome of the same. One of my know is charged heavily for various MVAS services without requesting for the charged MVAS and he tried to launch an complaint through different ways for the last many day. It is also interesting to share that after repeated attempt he spent more money than what he was charged and am not talking about the mental agony and time cost during his attempt. The reality is that the released numbers may reach to unhandled level if wireless operator creates awareness around it. I have seen many advertisements by wireless service providers promoting their new launches but failed to see any awareness advertisements which clearly help their end consumer’s.

Mobile Value Added Service without Consent Activation Complaint Far From Reality - Indian Environment

Mobile Value Added Services are making all rounds of talk post MVAS regulation enforcement in India. Indian wireless operators and value added service developers strongly opposed MVAS regulation during consultation with TRAI. Even GSM body COAI opposed it vigorously but failed to stop consumer friendly regulation. TRAI released report claimed as loud success to reduce the number of complaint around mobile value added service is far from real picture. As per TRAI report, in June 2013, the total number of VAS complaint received stood at 259476 whereas the complaint alleging mobile value added service activation was only 104996. Post MVAS regulation amendment enforcement from 1^st July2013, TRAI claiming that due to amendment the number of total MVAS and alleged activation complaint went down to 95510 and 9338 respectively in August 2013. By demonstrating huge drop of 60% and 90% in total and alleged activation complaint is none other than self acknowledgement of successful enforcement of regulation. Based on reports, India total MVAS user base is around 150 mn and if only 0.1% of the total VAS users are only facing issues then it’s hard to accept. The reality is different, majority of user’s donot even know the reach out number to launch complaint and even though user’s achieve success in launching complaint, they do not know the final outcome of the same. One of my know is charged heavily for various MVAS services without requesting for the charged MVAS and he tried to launch an complaint through different ways for the last many day. It is also interesting to share that after repeated attempt he spent more money than what he was charged and am not talking about the mental agony and time cost during his attempt. The reality is that the released numbers may reach to unhandled level if wireless operator creates awareness around it. I have seen many advertisements by wireless service providers promoting their new launches but failed to see any awareness advertisements which clearly help their end consumer’s.

Alcatel Lucent Continuous Restructuring – CEO Warning Signal

Telecom bubble burst impacted Alcatel Lucent more negatively than any of its peers. The emergence of Chinese competitors such as ZTE and Huawei added to its wounds and pressurized to sell premium products as commodity product. Post merger with Lucent Technologies and subsequent restructuring processes are not dying out. One after another assets sell out to human capital realignment is not helping company to push itself back to profitability. The other competitor’s are using Alcatel-Lucent’s focus, surrender; refocus back on strategic and tactical basis as confusing state of direction for the potential customer and snatching customer from Alcatel-Lucent with bare minimum effort. During last restructuring, the company decided to focuses on IP domain especially Mobile Broadband segment by leveraging some of the stand out product innovations. Few weeks back, Alcatel-Lucent came out with another round of restructuring and announced 10000 job cuts in which 900 would be from France. As one of the most vocal advocator for its citizen, even the President of France came out strongly and objected on the proposed layoff in France. It triggered protest and amidst of that the respectable CEO during an Radio Interview sent warning to all and suggested that for survival; it is unavoidable for Alcatel Lucent to sit tight without action otherwise it risk of disappearance. I feel sorry for Alcatel Lucent shareholders as they deserve the protection of their investment instead of that the virtual roadblocks are trying to be developed which may in turn would be disastrous for shareholders as well as employees. What if Alcatel Lucent go under lockout and in that scenario what would be the French Union take on the protection of their citizen job. I strongly believe that innovation driven company like Alcatel Lucent must survive to keep on bringing in innovation at the hand of many.

Indian Wireless Mobile Subscriber Growth Facing Stagnation

The growth story of Indian wireless subscriber base is experiencing near to zero percent growth. Post achieving 900million plus subscriber base during low tariff regime, the subscriber addition growth muted down. For the last one year, more than 60 million subscribers surrendered their wireless mobility connection for one or another reason. The slews of regulatory enforcement such as MNP, Roaming, and MVAS also helped subscribers are maintain single connection compared to multiple connection. As per TRAI released report for the month of July 2013, the wireless subscriber base increased from 873.36 Mn to 874.88 Mn MoM and achieved less than quarter of percentage point growth. On analyzing last 12 month subscriber growth, it is evident that few months of growth and de-growth is neutralizing the net subscriber growth. Moving forward, it is expected that Indian wireless subscriber base would settle around 850 million post connection cleanup process of BSNL and other wireless service providers as they are still reporting high non VLR active subscriber base.

Indian Wireless MVAS Activation Experiencing Negative Growth – No Place To Hide

Indian MVAS sector experienced major roadblock post MVAS regulation enforcement by TRAI. The purpose of TRAI was to control MVAS centric complaint. The growth of MVAS attracted many service providers to launch slew of MVAS products with loosely coupled consumer management. The lack of QoS attached with product monitoring on the delivery, billing, activation and deactivation pushed consumer and prosumer initiated complaint against service providers for billing and deactivation issues. The MVAS regulation enforcement started impacting MVAS revenue and in FY 12-13, Indian wireless operator experienced MVAS revenue share going down from by 2% point. The second wave of amendment by TRAI which included double consent and subsequent enforcement of the same drastically impacted MVAS service activation. As per TRAI report, MVAS activation falls down from monthly 69million in June 2013 to 29.8 & 27.65 million in July & Aug, 2013 respectively. The unprecedented MoM fall of MVAS activation de-growth of 58% & 7% respectively indicate nothing but serious danger poised to explode. It is evident that Indian wireless operator for just concluded July-Sept 2013 will experience huge fall in MVAS revenue and thus low or nil overall revenue growth. In my point of view, the MVAS solution providers must focus on innovation vs. replication to offer cost effective product line ups.

Indian Regulatory Impact On Content Mobilization Delivery and Digital Revolution

The exponential growth of Media and Entertainment attracted ICT ecosystem players to define, refine and correlate their delivery mechanism to tap into $10Bn yearly TAM (Source: PwC). It also attracted many new players with innovative product offerings to consumer’s/prosumer’s and agnostic to   Network, Platforms and Devices. The pre-requisite to seamless content delivery must fulfill 5C’s mechanism such as:-

1. Content: Content must be of high quality and should be self compatible to underline network support
2. Context: The platform must have the capabilities to capture device initiated consumer/prosumer access and delivery trend in order to define, refine device generated user data and accordingly create personalized service for requesting device.
3. Collaboration: The collaboration tools must support all underline regulatory and standardization process in order to support device, platform and network under different delivery mechanism
4. Commerce: The heart of content commercialization must be supported with delivery mechanism for seamless request and response delivery of content on connected devices
5. Connectivity: With the revolution of Telecom attached devices under different delivery network, it is must have high data rate (actual instead of raw) support to offer unique content experience in high resolution/ frame based devices.

The above 5C’s can be achieved through combination of Service Delivery Platform with sub content delivery network and attached billing mechanism. It would enable consumers and prosumer’s to use single content across connected wired and wireless devices.

Connected device being the central ecosystem in media and entertainment segment, the adoption lies in Download Speed, Quality, Compression, Storage and Security. Today’s consumer’s/prosumer’s today likes to buy content using WEB but at the second moment wants to port in on its wireless device and that brings IP QoS and Wired QoS KPI’s.

The above mechanisms are attracting lots of focus but at the same time, the missed point is “Security in connected device environment and impact of Regulatory moves on adoption”.

With the growing adoption of Media and Entertainment centric content indirectly forced all delivery networks to enhance their platform to support enhanced security as content is the easiest way to push malware on devices. The converged Mobile OS of today’s Smartphone support the entire format which is also the part of PC and Laptop.

In the last 4 years, Indian Regulatory Authority, Ministry of Home Affairs, Intelligence Bodies, Reserve Bank of India and many other regulatory bodies started pushing their own regulation to mitigate any threat on government and non-government installation. Even after the regulation, many ministries, research installations, BFSI sector and others got major hit with hacking. Post Consolidated review, TRAI initiated multiple regulations such as

1.    MNP regulation: From the top, it looks like that it was meant for consumers maintaining single MSISDN and not happy with serving wireless operator whereas it also carried other sub-clauses which is worth noting

a.       All server must be installed in India

b.      None of CLI information can be exported out of Indian geography

c.       O&M team of service must be of Indian Origin and located in India

d.      Lawful agency must be having access to service provider servers

2.       MVAS Regulation: In 2011, MVAS regulation to protect consumer and prosumer from billing, mobile marketing etc, pushed Media and Entertainment companies into tailspin as wireless device owners are major source revenue generator. The next amendment in 2013 regarding Double consent mechanism implementation by 1^stJuly 2013, forced many media and entertainment content companies to suspend their service temporarily in order to be complaint

3.   Telecom Security Policy: The regulators pushed another proposed regulatory policies on security covering Telecom and IT equipment security certification before installing to carry information. On the one hand its very good move but quick process execution is not adhered. Now, Regulators are also talking about putting device OEM’s to take security clearance from DoT on malware free device software.

4.  Cyber Security 2013 Policies: It enforces service providers to implement extensive security functionality such as Content, Application filtering, IPS/IDS, SoC ( Security Operation Center), DoS, DDoS mitigation solution and many more.

The revolution post digitization drive in content creation, delivery and commercialization got trapped into 200 meter hurdle race with above mentioned few of the regulation. All the above can be clubbed into one regulation which would be easy for Media and Entertainment companies to follow and adhere at the same time would offer said companies to use Karbonn Mobile as delivery mechanism to millions of consumer’s and prosumer’s on monthly basis. It would create new seamless process to reduce GTM for content creator to consumer. The consolidation moves by different ministry based regulatory may offer huge kick start to already growing digitized Media and Entertainment through connected device offering from device OEM’s like Karbonn Mobile in seamlessly dynamic and secure manner.

Nokia Lumia 1020 with 41MP Camera – Price vs. Performance vs. Consumer Segment

Nokia in July announced mobile imaging device to target multiple consumer segments in one go. Finally Lumia 1020 is available for Indian consumer with enthusiasm for high quality digital camera. The price point of 49,999 INR is the one of the most expensive device. Company also offer freebies in the form of applications to consumer. The devices carry most of the digital camera features in order to enable users to experience high quality imaging while on the move. Through Lumia 1020, Nokia is trying to capture high net worth users currently ruled by iPhone and Samsung. Nokia is also trying to convey message to users that era of standalone mobile device and digital camera is over and it is more economical to carry single unit. Given Nokia device unit pending acquisition by Microsoft may play spoiler as user always want stable company who can offer long term servicing for the expensive product. Nokia is also offer accessories like Camera Grip is priced at Rs 7,499 and snap-on wireless charging for Rs 3,199. In my point of view, Nokia did great in terms of device but fall short of iPhone in offering excellent ecosystem for user to manage their digital content. Based on the contextual pattern of Indian mobility user, they are still very price and perception conscious. On the perception side, Nokia still command great brand respect from mobility user whereas would lag in convincing potential device buyers to shell out high price point. It would in interesting to observe Lumia range success during last quarter when Nokia releases its result.

Blackberry Android Compatible BBM Launch Delayed Indefinitely – Missed Opportunity

Blackberry announced few months back that flagship popular BBM (Blackberry Messenger) would be available across Android and IOS. The vision was to extend and expand BBM service huge popularity. Post two disastrous years of missed guidance and committed delivery, the news got front page of media. Many analyst predicted the move as fantastic one to keep the viability of BB10 OS and attract application developer towards closed environment mobile OS. Google Play observed many versions of BBM and forced BBRY to pull potential launch. Many device manufacturers across different geographies rushed to announce their intention to launch integrated BBM with their potential upcoming devices. The user excitement around BBM indicated one clear message that secure messaging offering may attract millions of Android and iOS mobile OS based device users. It would offer BBRY huge opportunity to offer developer single platform to connect with potential customer base of applications or content buyers. At the same time, BBM platform attached advertisement flash would also offer major brand quick visibility compared to other application. The indefinite pull out of launch may turn out to be final misstep to keep their viability. I am confident that potential buyers must have observed user positive response around BBM or was it management move to analyse hidden diamond with BBRY.

Bharti Airtel Excellent Move – Bonanza for Post Paid Subscribers

Telecom Industry players post experiencing major headwinds started showing some sign of stability. In the last two years coins turns in favour of incumbent telecom operator and challengers as well as regional players are struggling to hold on to their explosive growth. Bharti Airtel seems taking the charge given their end to end telecom service offering including high speed data offering through 4G network. Bharti Airtel came out with unique tariff plan exchange for post paid subscribers. The move is going to give Bharti Airtel edge over competitor as well as opportunity to convert high APRU oriented Post Paid subscriber. Interestingly, Bharti Airtel identified the pain of subscriber of getting confused in choosing tariff plan from ‘000s available one as well as to manage multiple different plans for different kind of telecom services. Indian Telecom Service providers total ARPM or ARPU from VAS or ARPU from data is low compared to peers in developing countries. One of the major reasons of the same is freebies attached with pre-paid plan and MNP (Mobile Number Portability). Many pre-paid subscribers use Mobile Number Portability as mechanism to keep on taking freebies. The launched tariff exchange offer post-paid subscriber flexibility to allocate their chosen plan for voice, data, and value added service. It also offer subscriber to opt for remodelling of their plan once in a month. It would reduce Bharti Airtel resources in handling billing issue and would offer better revenue recognition capabilities. The predictive nature of plan would also help Bharti Airtel to add scalability for their successful VAS or data service by using dynamic resource allocation management. In my point of view, the launched plan is going to attract many subscribers and may fulfil Bharti Airtel goal of more post-paid user to increase ARPU across quad play services.

Advertisement Time Capping Impacting Broadcasting Companies – Many May Disappear

Advertisement time Capping: The Broadcasting regulators directives to cap advertisement time to 12 min per hour is going to reduce much needed cash for Broadcaster to cover their cost. Post big Broadcasting companies withdrawing their petition from TDSAT against regulatory move, it is evident that small players may find it difficulties to have sustainable business model. The regional broadcasters are important ecosystem players are they focus deep in rural sectors and offer huge repository of cash rich content across multiple delivery network. Analysts are predicting that big players will be successful in increase prime time ad tariff whereas regional players due to their geographical positioning may find it difficult to increase ad tariff. With more than 500 broadcasting companies, the intended regulation is going to initiate consolidation process and big player would be the beneficial to get even bigger. In the current economical environment, the move is not going to impact the industry but also millions of attached resources. Regulators must think twice to enforce the proposed regulation to trigger consolidation process as handling large sharks are always tough and examples are in front of us, such as Time Warner, News Corporation.

Cisco Launches Dynamically Configurable nPowerX1

Cisco unveiled powerful and dynamically programmable nPowerX1 processor. The four billion transistors make it powerful enough to act as single processor to execute multiple functionalities. The network processor is unique as it has inbuilt circuit which allows administrator to do programmable changes while in use and enable them to execute their monitoring management. The low power consumption oriented network processor can effectively manage and execute packet processing, traffic management and input-output related functions. It can be a game changer for Industry to get solution in one box and at the same time may offer huge cost advantage to end customer. In an environment of quad play centric Internet traffic, the dynamic configuration management system may act as differentiating value proposition to enhance QoS and define priority based services to both internal and external stakeholder.

IBM Commit $1Bn For Linux Based Power System Servers

In major push, IBM announced $1bn investment to develop Power system server using enhanced Linux and open source technologies. It would offer potential clients to leverage on big data and cloud computing using differentiated application arrays attached with data center. IBM also announced new Client center which would based out of Europe and rapidly growing Linux based power ecosystem oriented Power development cloud.

IBM Cloud Based Real Time Digital Marketing Network

IBM is making big push in offering centralized digital marketing network to enable its customer to capture pie of lost $83 Bn in lost sales. The integrated analytics can aggregate or segregate information for any marketing service to help marketers offer dynamic and effective customer experience based on the contextual pattern of end consumers. The solution would immediately enable marketer and end consumer to connect through request response mechanism.

Network offer real time activity monitoring by client using customized dashboard across hosting and delivery media. It in-turn offer marketer insight around leakage and adoption pattern and subsequently take appropriate measures to improve the performance on the fly. Given double digit growth in online and mobile ad sales, the proposed network is win win for ecosystem players

Long Term Investment Opportunity in Nokia – Post Device Deal

On June 3rd 2013, posted on article on “Is Nokia Worth for Future Investment” and offered insight about potentials around Nokia. The purpose of the article was to offer investment opportunity and subsequently reap in huge upside potential. At the time of last article, Nokia was trading around $3.50 range with market cap lower than $13 Bn. The fast changing market dynamic and competitor environment, Nokia decided to sell its device business with favorable term sheet with Microsoft ignited Nokia share to $6.21 and market cap reached to $23 bn. It represents more than 70% increase in share price. Many early equity investors are in dilemma to hold or sell their equity to book profit. With patent and CTO office, HERE and Network solution business with Nokia, it offer great long term return bet. At the same time, post device unit sellout, Nokia will have net cash position of around $10Bn along with reduced work force of little more than 56000. It is interesting to note that Nokia may fetch more than $1.2 Bn from patent and royalties whereas network solution business unit is profitable and may grow faster than Industry growth given its extended competitive positioning in next generation networking. The HERE business is gaining moment post some big ticket client acquisition. On consolidated basis, Nokia may reach close to $2Bn in profitability without any drag from financing cost. The uptick in steady growth is going to propel Nokia equity price to shore in next one year. In my point of view, post Alcatel Lucent restructuring and continuous struggle with restructuring, Chinese vendor hurdle to get government contract in developed countries is going to offer Nokia Solutions excellent opportunity to extend their market reach and profitability

Nokia Delayed Phablet Launch

The much anticipated Nokia Phablet launch pushed to late Oct 2013. As per the reports, Nokia alerted journalist community that Oct 22, 2013 announcement would be reinventing innovation era. The potential Phablet is supposed to work on Window Mobile 8.1. This is the first pinch of Nokia acquisition by Microsoft. I wonder if the potential product is reinvented innovation then what pushed Nokia to sell its device business. In my point of view, reinventing innovation means “game changer” the way Apple did with iTune and then iPod. It would be eagerly waiting for press release of the same.

Is India out of Economic Downturn – Hard Reality

India is experiencing fluctuating equity and bond market and totally driven by economic data. In the last 4 weeks, Indian equity market experience deep cut and subsequently great comeback. Indian currency fall was dramatic and in the same manner the rebound. In the last 4 weeks, analyst on daily basis offered different views similar to currency fall and rebound. In the mean time reserve bank came out with few measures to control steep Indian currency fall but failed to control that. Finance ministry came out strongly with multiple measures to control gold import to curb CAD. Oil marketing companies where allowed to increase gasoline price by 10% to negate currency impact. Cabinet Committee on Investment cleared stalled mega project in the infrastructure segment to kick start economy. Coal ministry forced Coal India to sign FSA with power generation companies struggling to procure coal and subsequently forced to import coal at higher price. The aim was to make sure the local coal delivery and at the same time improve on CAD. Power ministry allowed PSU to import Gas without duties and deliver it to gas based power plant. The financial market regulators came out with an option for NRI to buy stock through FII route and similar approach was announced for the bond market.

All initiative looks very good and change of RBI government fuelled Indian equity market and market recovered all the losses which happened in last 3 weeks. The bumper news came out with higher export growth and low gold import which impacted CAD to be around $10 Bn instead of analyst expectation of $14 Bn plus. Street cheered low import of Gold and all of us felt that India is able to control the import of gold. If we feel so then its grossly misjudgments.

The positive IIP and inflation number released early this week turned many bears into bulls and started talking economy is bottoming up and in next two quarter, there would be upwards growth surprise. Even Prime Minister economic advisor also predicted to achieve 5.3% GDP growth.

The reality is simple. None of the business houses announced any investment plan instead all are struggling to control their financing cost which they have taken to complete mega project but unfortunately most of the project got delayed due to environment and land acquisition delay. Major steel project was pulled out due to continual delay in the said areas.

High taxes, duties and interest rates are keeping investment climate in negative mode. The employment opportunity is near to zero as all companies are trying to control cost to keep afloat.

There is no control to put the curb on imports which is hurting steel, power sector and thus even India best PSU’s as well as private companies are struggling.

Any policy decision is not going to be reflective by the end of this year and then it would be general election fever which is going to stall the decision making process.

I am surprised that how on my TV channels, the views on economic climate changes within hours.

Microsoft Fresh Attempt to Capture Tablet Market Share in US

Microsoft recently took $900 Mn write down hit during Q4 for Surface Tablet inventory adjustment. It indicated that Microsoft may take a pause and going to rethink twice on Surface Tablet offering and GTM before making fresh attempt.

On a contrary Microsoft came out strongly during US Back-to-School advertisement blitz targeting Apple iPad user. Microsoft is offer $200 discount coupon for iPad 2, 3, 4 trade in which customer can redeem against Microsoft product. Surface Tablet run on lighter Window 8 operating system and supporting Internet Explorer and Office suit. The price tag offered is $349 is nothing to attract customer looking for basic solution based Tablet.

When it comes to Surface Tablet adoption, I feel that Microsoft struggle is going to increase as Apple iOS and Google Android mobile OS based Tablets are also supported with more than 200k application which add value. In my point of view, Microsoft should create developer ecosystem around connected device and offer differentiated application, services and product. In today’s world devices are commodities, the value comes from VAS service which enable device more productive and effective for any Tablet Customer.

Blackberry Offer Acquisition Hurdle and Opportunities

The acquisition of Nokia device business by Microsoft increased speculation around Blackberry acquisition by Microsoft or its competitor. The patent rich Blackberry still offer command deep penetration among prosumer’s due to its integrated security whereas BYOD device running on multiple OS still struggling to garner Enterprise segment confidence. With current market capitalization of less than $5.4 Bn and register 75 plus Million user for its services makes Blackberry very attractive acquisition candidate. The launch of new operating system and premium device from BB received mixed reception from customers and at the same time lost crucial mobile OS market share YoY.

Even Blackberry management came out openly and admitted that they are exploring all options to make sure that iconic solution offer donot die away. Many fund players who invested in Blackberry in its glory time are contemplating to join hand with private equity firm to take the company private and subsequently realign the business as per the industry direction. Based on the messaging register user base, patent valuation, cash in hand indicate that the fair value of Blackberry is somewhere $12-13 Bn. With current share price, value investors are buying with expectation of acquisition by either funds or competitor to reap in high returns. The major roadblock indicate Canadian government as they are not comfortable giving Blackberry to third party due to the security reason.

The reservation of Canadian government is keeping many potential bidders at bay. Based on the last financial quarter, it is evident that Blackberry is few quarter away to make its business profitable and start recapturing market share with slew of device launch and adoption of its BES and BIS by Enterprise Customers. Even during worst phase faced by Blackberry during transition to new operating system, it was observed that the registered user base de-growth was not in double digit. It would be interesting to see how Canadian government and regulators tackles Blackberry acquisition issue in case of acquisition bid comes down the line

Stringent Indian Security Regulation May Hurt OTT Players

The elevated adoption of data network centric text, voice and data oriented applications gained quick adoption. It prompted many International and Domestic OTT players to position their offerings to consumer using network delivery media in order to mint maximum leverage from ongoing blind adoption. Many of the OTT players are not even registered with local government authorities and positioning their product. It is really difficult for Indian regulator to create vigilance team to keep close tab on ongoing happening. Most the mobility user in India focuses on price vs. security and in-turn also responsible for the potential vulnerability across ecosystem attached directly or indirectly with Telecom ecosystem.

I must admit that there are many OTT player’s who is really offering differentiated product positioning by adhering the regulation of land whereas many OTT players are bypassing regulatory implementation as it would cost them dearly on the systems. Interestingly, Indian regulatory body TRAI and DoT till now came out with network, platforms, product, services and consumer level regulation but still need to come out with Applications related regulations. Everyone perception regarding Applications, it is one of the major source of security threats in case of any design flows and generally consumer neglect those part of the applications. Many of the OTT players are taking consent from consumer regarding their permission to capture user information on its server to serve them better but unfortunately consumer gets trapped over there as higher percentage of consumer never read application attached Terms & Conditions.

The problem start from that point when OTT player extract consumer information for the better service but unfortunately in case of any problem with devices triggered by those applications, consumer connects with Mobile Operator customer care or device manufacturer inflicting heavy support cost without being compensated from OTT players. It’s a open query, How many of OTT application providers runs their Customer Care service in India, Also, if they push updates to consumer to upgrade Applications and unfortunately it crashes device or degrade performance then who is responsible for the payout. Currently the Device Manufacturer brand is getting hit and Mobile Operators are losing money. The Regulatory may come out with stringent guideline to stop the revenue leakage as well as higher threat to telecom and associated networks by forcing OTT players to invest in infrastructure, resources, support in India and it would make OTT player model completely unattractive.

Is Apple Losing Investor Confidence – Expectations Vs. Delivery

In the last 5 years, Apple innovative products ignited its share prices. The emergence of Apple as mobility product leader with differentiated value proposition enabled them to command premium price for their product compared to competitor. Even their loyal customer base also supported them by buying their product with a presumption that product would be innovative and different in design. Share price skyrocketed from $80 in 2009 and touched $700. The huge success of iPhone and recurring high margin ecosystem revenue pushed Apple EPS multiple fold. The QoQ and YoY supersonic growth rate brought in speculators and pushed share prices to new high. Many analysts started predicting that share price is going to touch $1000 soon. The shock wave came with one misstep around Map and investors got trapped in negative direction. Apple also lost its iconic thought leader and motivation face Steve Job which prompted many analysts to doubt about Apple continuous focus on research and innovation during their half yearly product launch kept many investor on the sideline. Even during economic downturn in US, Europe and Japan; Apple continued their explosive growth. For the last two to three quarters, Apple is showing little vulnerability while Samsung got very aggressive in pushing their Galaxy range of Smartphone and Tablet. Investor’s started expecting that Apple is going to react with low cost device to increase iOS market share to keep continuing attracting application developer and maintain strong ecosystem in order to sustain minimum earning growth expectation from investor. On a contrary, Apple new device launch indicates that Apple is still weighting on maintaining profit margin compared to regaining lost mobile OS market share. Post device launch, Apple share price lost more than 8% clearly showing low confidence factor. Once, the darling of Street is slipping its grip to be maximum value generator whereas Google is gaining confidence from investor.

Indian Telecom Ecosystem is Killing MVAS Players and Associated Innovations

The competitive environment is driving Indian Telecom ecosystem modules such as Mobile VAS into downwards tailspin. In 2010, Industry pundits used to project MVAS as future revenue driver for Mobile Operator. The Indian regulator identified uneven proposition within MVAS segment offering through Mobile Operator and tried to offer more breathing space to MVAS solution providers to Indian Mobile Operators. Many round of consultation paper and heavy lobbying by Mobile Operators for not to disturbing the ongoing revenue to deployment mechanism. Ecosystem players including content owner, content aggregators, and MVAS developers all stood united with Mobile operator to protect then revenue sharing agreements. Ecosystem players managed to pass through so called hurdle on the revenue sharing to operational part but got trapped on the consumer billing segment.

The so called confirmation mechanism for enabling services, rollback for non active services, mechanism to deactivate service within set stipulated timeline as per the TRAI guideline acted negatively for Industry. The MVAS solution provider argument for maintaining the same revenue share model now started hurting MVAS with the depressed economic environment. MVAS service providers are paying large part of overall revenue to Mobile Operator for using their billing system and left with 30 to 40% of overall revenue. These left over revenue are shared with more than three other ecosystem player and ending MVAS player to have very low to negative RoI.

MVAS service providers in India experienced negative growth in high double digit for the last 2 years and most of them are looking towards other geographies to generate much needed revenue. The current revenue sharing mechanism is impacting MVAS service providers capabilities to invest in research and new innovation. That is the reason, Indian MVAS players are still offering auto running legacy product or replicated product line which is also impacting their competitiveness over International peers.

It’s high time that Indian Mobile Operators must recognize known but un-talked discussion point and offer higher revenue share to their MVAS service provider partner. The higher revenue share percentage allocation to MVAS players are going to help only Mobile Operator as their MVAS service providers would be able to invest and come out with innovative product line which may lead to growth in MVAS revenue. It is expected that MVAS market would continue to fall and collaborative approach from ecosystem player’s end is important to safeguard falling king.

Apple Unique Differentiation – Offer Connected Device and Service Play

The recent launch of Apple 5C and 5S generated buzz around price points and their focus on maintaining niche market share rather than focusing on mass market segment. Print media came out strongly in criticizing Apple for their move and analyst gave negative comment by lowering Apple share price targets. On a contrary, Apple playing very interesting move by creating connected device play and offering one point solution to its consumer and prosumer’s which is also supported with certifications including security. Apple new device support of 13 LTE band with 8 & 40 hours of video and audio playback is far better than competitor environments and may offer unique experience to user while on move. Apple move to support multiple LTE band is to keep on targeting data hungry consumer who is willing to shell out more money to have higher quality experience. The integrated Control and Notification center with supported Multitasking capabilities calibrates effective utilization of device resource. The other supported applications such as iTune, iMovie, pages, Numbers, Keynote and free iRadio offer consumer and prosumer’s one stop solution. The porting and interoperability of all Apple devices w.r.t content, context, commerce, communications is enabling Apple to maintain consumer or prosumer’s commitment towards them which competitors failed to maintain. As against analyst and consumer expectation of very innovative iPhone launch, Apple went for iOS7 integration to offer differentiated value proposition to keep on minting high revenue from attached music, video, application segment. It is expected with the launch of “KitKat” version of Android by Google and rampup of new OS version based device may force Apple to refine their device form factors to offer innovative experience to their consumer but as of now they are following the footstep Motorola with Razor phone range.

Apple New Device Launch – Focusing on Classes Compared to Masses

Market, Analyst speculation around type of potential device design received mixed reactions post launch of two devices 5C and 5S by Apple. As per the announcement that 5C would be supported with multiple color reminds me of Nokia initiative and the price points indicate that Apple is not willing to compromise on the price premium they command over competitor in order to maintain their healthy margin. The price point of 5C in US under contract for two years is $99 whereas non contract based is going to cost around $549. Interestingly, Apple would be charging $750 for the same device in China which is one of the fastest growing premium class device markets also. On a contrary the launched 5S is going to be $869 for 16GB memory. In case user opts for higher memory device then it is going to be dearer to customers. The reality is that Apple new device is more costly than iPhone 5 which is having list price of $799. It clearly indicate that Apple is focusing more on niche market of high net worth consumer segment by offering them Classes feel compared to Masses feel. It would be interesting how these devices are received by Apple loyalist.

Microsoft May Attempt to Enhance its Search Market Share and Ad Network Growth

In the last 5 years, Microsoft is trying hard to position itself as strong competitor of Google in the search and advertisement segment for both Web and WAP level. The failed attempt of acquiring Yahoo, write down of $6.2 aQuantive advertising service are some of the example of Microsoft attempt and reattempt to position itself. Post Yahoo failure, they collaborated with Yahoo on search segment in order to develop alternative to Google. Unfortunately for Microsoft, the explosive growth of Android apps market place and OS adoption positioned Google undisputed king of device based default search engine as well as created very robust ad services offering huge reward to application developer to earn extra money.

The Nokia collaboration turned out to be market research for Microsoft in order to position itself as alternative search and ad network in the Mobile segment. The continuous struggle by Microsoft and huge revenue opportunity from Search engine and Ad network segment propelled Microsoft to buy out Nokia user base as potential Bing Userbase. There is strong probability that Microsoft would lure Technology Titans like HP, Dell to use its WM and create connected device environment and also offer porting and interoperability of Mobile and Web based application. Any successful outcome will create quick and effective return of Microsoft with higher probability of sustained competitive environment this time around.