Emerging Markets Communications Strategies

Analyzes the issues facing existing and new players who are looking for a share of growing mobile markets in over 30 developing countries, including the developing regions of Asia and Africa.

June 8, 2010 17:06 rgupta

Realizing the potential emerging markets have, Research in Motion (RIM) has upped its ante and is going full hog in the Chinese market, a market which has been a strong hold of Chinese handset manufacturers.  China Mobile launched Blackberry three years back, and now China Telecom is going to launch Blackberry handsets on its EVDO network. Not only this, RIM’s venture capital arm, Blackberry Partners Fund, which invests in Blackberry applications, has joined hands with China Broadband Capital partners to set-up a US$ 100 million fund for mobile internet and development of Chinese mobile applications in China.  Content localization or developing applications in local language is nothing new for established handset vendors. Nokia’s low cost handsets are available in 11 Indian languages and are offering Chinese content on its devices in China as well. But what’s more important is targeting the right audience at the right time and on the right platform.  Now that two major mobile operators are launching Blackberry on their networks, covering most of the Chinese population, RIM has made the right move to take advantage of the situation. At present Blackberry handsets have been mainly used by high end executives due to high device cost. Applications like email etc are accessed in English, which is not a preferred language in China.   Now that RIM’s focus is on consumer applications and 3G subscribers has been increasing every passing day, Chinese applications on Blackberry devices could make a killing in the Chinese market. It’s not rare for Chinese subscribers to have Chinese applications on mobile devices but it certainly makes a difference if a subscriber finds similar applications on Blackberry devices.  But just offering Chinese applications on the Blackberry may not be enough to ensure RIM’s success. Chinese handset vendors and other vendors like Nokia and Samsung are already offering such applications on their devices. RIM will have to differentiate itself from the already crowded Chinese market by launching some niche applications targeted at different consumer segments. But whether it will be able to make a difference in China, only time will tell.

Rahul Gupta

February 4, 2010 17:02 rgupta

I must first admit I was not a huge fan of Indian handset brands a year back and I still wonder what made them think about competing with established players like Nokia, RIM Blackberry, Samsung and even the ZTE’s of the world.   Maybe the thought of the untapped rural and low-income customer base of India crossed their minds but will they ever be able to match the scale of distribution network these established players have? I doubt it.  For over a year ,Indian handset brands like Micromax, Karbonn, and Intex have been aggressively selling handsets in the open market in India. The way they have positioned themselves and their hunger to grab customers really amaze me. They are tough competitors for low-cost Chinese handsets even though they offer similar features and price. and in fact have outsourced manufacturing to Chinese OEMs. Last quarter they got a break when the government banned Chinese phones which were without IMIE (International Mobile Equipment Identity) numbers, and aggressively marketed mobiles with valid IMIE numbers  Most of the Indian companies are concentrating on popular handset features such as FM radio, water resistance, currency checker, and 30 days of stand-by battery life.   Most of the Indian brands are following the footsteps of established players in branding and retailing. They are selling their devices at both organized retail -  mostly big retailers like ‘The Mobile Store’, ‘Hotspot’ etc. -  and unorganized retail which are mostly electronic stores and other multi-product outlets in rural areas.  Indian vendors are trying to use branding as effectively as the established players to grab the attention of customers. They are aware that the low-income and rural customer doesn’t care about brand value but the urban customer does. They have started sponsoring cricket events and entertainment shows which has resulted into getting mindshare among urban customers (http://timesofindia.indiatimes.com/sports/cricket/series-tournaments/sri-lanka-in-india-2009/top-stories/Karbonn-Mobiles-to-sponsor-India-Lanka-ODI-series-/articleshow/5336694.cms). Micromax and Karbonn are considered established Indian brands. Besides these, Lava, Intex, and Ray are some other brands which are getting good response from customers.  I believe the aggressive approach taken by Indian handset vendors could make a small impression in Nokia and ZTE’s ULCH market share not only in India but in neighbouring countries as well where they plan to launch handsets this year. 

Our Wireless device strategies report (http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4213) says that Indian handset vendors will grab 3% market share by 2013. They are obviously not dominating the market, but they are here to stay and could be a potential threat to foreign vendor that are eyeing rural and low-income subscribers.

Rahul Gupta   

December 4, 2009 15:12 David Kerr

sa photo dk 

As we rapidly close the cover on one of the toughest years the telecommunications, content and internet industries have ever seen, SA takes a look ahead beyond the recession to detail the key megatrends for the mobile industry in 2010.

We see a tough but positive mobile ecosystem outlook with devices recovering stronger than services. More consolidation is likely among network operators, while profits for device vendors will continue to flow away from handset only vendors in favor of device/services integration specialists. Emerging markets will continue to dominate volume with strong 3G rollout competition expected. The global market for services, applications, devices and infrastructure will post modest growth of approximately 3% in 2010.

The total mobile industry revenue including services, infrastructure and devices was flat in 2009. We expect a modest growth of 2.8% in 2010 to $1140B.

· In 2009, only strong growth in data spends by users ensured that total industry revenues did not decline. Data revenues grew 9.5% in 2009 and are expected to grow at a 13% rate in 2010 reaching over $200B.

· Handset market sell through revenue will rebound well in 2010, posting growth of 4% while the infrastructure market will continue to struggle and will decline slightly.

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Key issues shaping the 2010 landscape include:

  • Operators needing to balance the the strong rise in Capex requirements driven by the data traffic explosion against slow revenue growth. The likely outcome being significant M&A, network sharing and even applications development.
  • Handset OEMs will be forced will put the early stake in the ground for new device categories. Traditional OEMS will continue to struggle to match the Apple & Google vertical integration strategy which has proven so successful.
  • As the big five vendors focus on smart phones and content/services in the open markets, a race develops to get services/apps onto feature phone products or other operator customized devices
  • On-portal traffic continues to grow but is outpaced by off portal session growth. Contextualization and personalization of the user experience will determine winners and losers.
  • The rapid diffusion of Flash and HTML 5 on handsets could negate much of the need for mediacos to use open platforms/app stores in mature markets.
  • In the business sector we see SMEs and Manage Mobility as key battlegrounds. We see growth in hosted services for SMEs (e.g. Unified Communications infrastructure-one phone mobile and fixed, one voicemail etc.  Personal v corporate liable devices (iPhone v BlackBerry) becomes a major issue.
  • In the Emerging Markets area we see consolidation & 3G expansion in urban areas as key battlegrounds. With improved financing prospects, there will be significant consolidation among regional operators and rationalization of holdings.