According to IDC report, Samsung
is number one in Finland. Nokia market share declined
to 33.6% in 2013 from 48% in 2012 whereas Samsung market share moved up to 36.1%
in Q1 FY13. I consider this as a temporary bump and expect a major shoot up in
market share of Nokia across different geographies. The transition of OS and
subsequent platform offered golden opportunity to competitors in order to dent Nokia
market share in its strong turf. It is observed that the frequency of new
handset from Nokia improved to cater different segment of user. It won’t be
wrong to say that Nokia would make number of good news in upcoming quarters.
E2E Applications
TRAI fixed SMS termination Charges – Is it going to make any difference in UCC Traffic?
Indian Telecom regulator announced
two new regulations that will be applicable from 1st June 2013. The new regulation
includes SMS termination charges based on cost fixed at 2 paisa whereas sets a transnational SMS charge of 5 paise per transnational SMS.
In changed scenario, the current
formulation agreed between different Access Provider at different price point
and bill & keep mechanism would be replaced with cost based fixed charges.
The move is interesting as TRAI
is also trying to bring UCC (Unsolicited Commercial Communication) under
control and incumbent advocated that regional players are selling bulk SMS and
partly responsible for UCC traffic. In order to reduce the UCC, they advocated rigorously
increasing termination charges to make bulk SMS unattractive.
Recently, TRAI also released clear directives
to access provider to initiate all process and network optimization to stop UCC
to improve subscriber privacy.
In my point of view, the SMS
termination charges for both P2P and Promotional one is going to give UCC
originator an opportunity to remodel their pricing model as the current set
charges are still very low compared to A2P messages. I request reader to share
their opinion.
Intel Broader Strategy - Acquiring ST-ERICSSON GPS Unit
Intel new CEO made his first move by buying
troubled ST-Ericsson’s mobile GPS business unit. As per STMicro and Ericsson
announcement in March that they would be closing or selling their troubled
business unit which experienced huge fall in order as their largest customer
Nokia reduced their orders. Intel move to acquire their business is focused on
related intellectual property as well as skilled resource to bolster Intel’s
existing and upcoming GPS technology. The flurry of collaboration in recent
weeks clearly indicates Intel’s vision to refocus on mobility segment. The
large customer base is going to be a differentiator for them.
Nokia Windows Operating System – Potential Challenger and Differentiator in Smartphone OS Segment
The Android and iOS smartphone operating system captured 92.3%of all smartphone shipment worldwide in Q1, FY13. The major move happened for the third position as Windows Phone sneaked past BlackBerry. Based on IDC Mobile Phone Tracker Android smartphone vendors and Apple collectively dispatched a total of 199.5 million units worldwide during Q1FY13, and achieved 59.1% YoY growth. For the last many quarters, Two leading mobile OS are the front runner of unit shipment but Q1,FY13 started to indicate upcoming dynamic shift in market place with other OS based smartphone player gaining market share especially Nokia driven Window Mobile OS. Blackberry slipped due to the new operating system launch but got good response for their BB10 and already shipped more than million units within quarter post device launch
Android captured Lion share of smartphone operating system market led by Samsung Galaxy Model and supported by more than 100 smartphone vendors. Samsung helped to weather seasonality impact and helped Android to increase market share QoQ. Samsung captured 41.3% of Android based smartphone market and other vendors scrambled to capture the remaining with single digit market share.
Apple achieved largest ever shipment in first quarter but it failed to maintain YoY OS market share and shipment growth. The demand for Apple iPhone remains robust as the form factor and huge repository of Applications help company to manage onslaught of Samsung with similar device form factor. Analysts are predicting massive overhaul of UI and UX in to be launched iOS 7
Nokia driven Windows Phone achieved more than 100 percent growth compared to previous year. Nokia contribute 79% window smartphone shipment volume through their limited release of Window based Smartphone serious. Till date Nokia shipped 20.3 million Windows unit and expected to continue growth in high double digit for next many quarters. The Nokia shift in strategy to partner with mobile operator to target larger user base and reduced activities of direct to market got lots of attentions and many leading mobile operators in US, Europe and China collaborated to launch High to Medium end smartphone devices to target replacement cycle. The recent market share growth in US clearly indicates that Nokia is gaining traction in most lucrative smartphone market. The recent announcement of Verizon launching Nokia Smartphone would act as another catalyst for Nokia to achieve 10% of total Smartphone market well ahead of time. The recent management rejig in China and collaboration with largest wireless service provider would also aid Nokia to return to their ‘90’s fame. It was written in many articles that Nokia is burning cash, restructuring, M&A target and many more. I believe the other way around, the changed strategy implementation and development of new ecosystem takes time and Nokia passed through it successfully. Recent Map issues with iPhone and Nokia Map solution only demonstrate hidden value. The recent patent infringement lawsuits and settlement against HTC and Blackberry by Nokia demonstrate their huge patent arsenal to protect customer and shareholders interest. Interesting to note that Nokia strategy to collaborate with Microsoft was considered wrong move by Industry but again I feel the other way around. The Microsoft reach in the enterprise sector and Nokia reach in service provider sector offered them the mechanism to integrate Enterprise centric capabilities to help Enterprise customer base through Enterprise Mobility platform. The recent flurry of low end Asha, Lumia series in developed and BRIC geographies forced competitors to match Nokia. I strongly believe the strong end to end ecosystem development in the last 2 plus years would give Nokia an opportunity to pose stiff competition to top 2 operating system.
BlackBerry suffered the most with double digit decline due to OS launch and availability of new devices across different geographies. It would be an opportunity for Blackberry to capture their existing customer base through replacement cycle. It is expected that Blackberry is still few quarter away to mark its presence due to non-availability of Applications across sectors.
Once considered as the future of smartphone OS, Linux continue to follow downhill path and reached to a level not seen since Q1 FY10. The reason of lower volume is due to the shift of loyalist such as Samsung shifted towards Android and its own vision to develop Tizen based smartphone
Multiple other platforms, such as Mozilla, SailFish, Tizen, and Ubuntu are expected to launch their first smartphone in coming Quarters.
The surrendered operating system Symbian by Nokia recorded the largest YoY decline and expected to follow the same path.
It would be interesting to see how the two leading OS enhances their operating system to mitigate new challenge posed by recharged Nokia and Blackberry and coming quarters
Mobile broadband deal between Nokia and Intel – Winning Model
Network equipment giant Nokia Siemens networks and Intel signed MoU to develop and improve the mobile broadband ecosystem.
The vision of signed MoU is to develop Liquid Applications to achieve seamless delivery of media-rich services and content directly from the base station.
It also includes development and enhances mobile broadband usage experience for service provider in order to enable them to act as differentiator with revenue assurance
The signed agreement includes creation of a mobile edge computing ecosystem to discover new business model around mobile operator centric and supported ecosystem.
The success of mobile broadband in developed geographies whereas slow adoption in developing geographies such as India prompted many solution providers to remodel the mechanism. The initiation is going to bring close knitted delivery of 5C’s and in-turn would be very beneficial for service provider revenue generation model, security and QoS
Smartphone Shipments May Experience Growth Slowdown
Shares of smartphone makers dropped recently post recent flow of smartphone maker statement on the industry shipment. United States users are active user of smartphone and one of the largest markets for smartphones device manufacturers. Analysts are predicting sluggish growth in coming years.
IDC predicted global smartphone shipments to total 918.6 million units in 2013. That translates 29 percent year over year growth. The growth rate in 2013 slowed down from last year's annual growth rate of 44 percent. BRIC market markets such as China, India and Brazil are projected to be key areas for expansion in the smartphone market. The home of expected 33% smartphone shipment is China and would be a catalyst for future growth or de-growth in smartphone segment growth.
Analyst expect that China's smartphone consumption rate to maintain the pace and continue to be big drivers to keep the market increasing as it leads the way towards low priced smartphone availability and transition towards 4G network to tap in data hungry users.
Recently analyst lowered their forecasts for Apple post their result and tentative two plus quarter delayed timeline for next generation iPhone. Most of the analyst also reduced to rating for Apple equity and its price target. It is visible that device form factor driven hype of Apple got redirected towards company strength to maintain or exceed double digit growth potential.
The recent cutting edge smart phone from Blackberry and Nokia which is capable of targeting and fulfill prosumer requirement and their strong collaboration on the technology front forced smartphone players to realign their strategy. The recent flurry of low end smartphone by Nokia and high end device launch would definitely play spoiler for leaders device margin and would be recapturing market share which is clearly visible in recently concluded quarter.
Back in 2002-2004, when camera phone was launched by Motorola, Samsung and Nokia, it generated replacement cycle phase and user were more interested in buying handset to experience the picture quality and share over Internet with their near and dear one.
The same is getting factored in where user already experienced the rich experience of using social media through smartphone and shifted towards prosumer behavioral pattern of using smartphone for end to end purpose.
It would be interesting to see battle between device form factors vs. device as technology enabler.
Indian Telecom Industry Regaining Tariff Power
According to information, the new
Rcom tariff will cost subscribers two paise per second for mobile-to-mobile
calling. The Base amount, or the title contract price, relates to clients not
protected under any unique plan provided by their telecommunications owner.
Reliance decided to hike base
prices for both GSM and CDMA pre-paid mobile-to-mobile calling by 33 % to two
paise per second from 1.5 paise per second valid for clients not protected
under any unique plan provided by Rcom.
Recently, the organization
improved contact prices up to 30 % for both GSM and CDMA pre-paid clients to
improve the earnings.
The increase in mobile-to-mobile
contact prices among incumbent players, except Aircel, has gone up by up to 100
% in last two years. The phase wise increase in base prices kicked-in post termination
of 122 second generation (2G) telecommunications permits by the Superior Court
on Feb 2, 2012.
While Airtel started with higher
base price of two paisa per second this year whereas other leading players Idea,
MTS, and Tata Teleservices, grabbed an opportunity to increase base prices to
two paise per second.
Aircel is asking for a highest
possible of 1.75 paise per second from its mobile users that are not protected
under any unique or discount plan of the organization.
The move clearly suggest that
incumbent mobile service providers are able to find good footing for pricing
power post disastrous 2 years of tariff war in Telecom history . The incumbent
decision in the past few quarters to clean up their non-active subscriber base,
consolidation of vendors and product offering enabled them to clearly plan a
strategy on the tariff front to achieve year over year growth. It is believed
that Indian Telecom sector is on the verge of another upwards trend
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