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.