Wireless Smartphone Strategies

The industry’s most comprehensive set of critical market statistics and qualitative analysis, tracking and reporting on smartphones.

April 22, 2015 20:24 nmawston

Following Day One at the global Huawei Mobile analyst event in China, compared to the first day where there were a lot of keynote speeches, Day Two events were separated by a couple of different tracks ranging from consumer business, enterprise business, enabling ICT transformation and SDN, through to digital business innovation. Our analysts from our Wireless Smartphone Strategies (WSS)service joined the consumer business track.

As stated in our Day One blog, "connection" is the keyword for this event. In its consumer business, Huawei plans to give consumers a “smart life” in the future with solutions of wearables, smart homes and vehicle-mounted devices for the connected person, connected home and IoT, by centering on smartphones to create a consistent user-experience. Huawei has cooperated with various wearable partners such as Tencent, Baidu, Codoon, Jawbone, Google, Myfitnesspal, Auto Navi and Boohee. It also partners with Mercedes and Audi in vehicle-mounted devices.

For wearable devices, Huawei currently provides two products: Talkband B2, which is released in China on April 22nd and begins to sell on April 23rd, and its predecessor Talkband N1. Huawei will also launch (slightly delayed) its Watch in the third quarter of this year. There will be three colors of Huaweil Watch: gold, silver and black, with 40+ watchfaces. It is a full-circle outlook, with a 42mm diameter, Sapphire crystal cover, 1.4-inch AMOLED display with 400x400 screen-resolution. It will be sold outside China first due to the well-known Google (Mobile Services) issue in China.

As smartphone products will still be centric to its consumer business, Huawei will still pay a lot of attention to this segment in the future. Huawei targets more than $40 billion revenue and 15% marketshare for its global smartphone division in 2019. Huawei will maintain its dual-brand (Huawei and Honor) smartphone approach, but it plans to reduce its number of products and focus on technical innovations to improve product competitiveness and sales volume of single models.

Huawei plans to grow its revenue of the smartphone segment from overseas to be over 60% in 2015 and higher in the future (currently around 50%). To achieve this goal of global development, it will continue investing in global retail stores, promoting the Honor brand outside China, and enhancing Huawei’s brand image and global influence by high-end marketing, Internet marketing and emotional connections.

To be sure, 2
014 was a banner year for Huawei and it has kept on doing very well in the first quarter of 2015. Will this momentum continue into 2016? It will depend on its "connection" with the whole ecosystem.



April 21, 2015 08:48 lsui

 There are over five hundred analysts and media worldwide attending Huawei's 12th Global Analyst Summit in Shenzhen, China, today. Our analysts from our Wireless Smartphone Strategies (WSS) service also joined the event.

The key theme of Day One is about the corporate overall performance review and strategy outlook. Looking in the rearview mirror, 2014 was a banner year for Huawei. Financially, company overall-revenue increased +21% YoY to RMB 288.1 billion (US$46 billion). Company overall-profitability also improved, with 9.7% net profit in 2014, up from 8.8% in 2013, mainly thanks to a streamlined organization and management structure, as well as improved average selling prices (ASP).

The operator business still made up the lion’s share (67%) of overall group revenue, but consumer (26%) and enterprise (7%) divisions have been growing faster in 2014. The consumer business group (smartphone, dongles, and other products) posted RMB 75.1 billion (US$12 billion) revenue in 2014, up 33% YoY, leading the pack among all three business groups.

Geographically, China contributed to 38% of total revenue in 2014, up from 35% in 2013, mainly thanks to the uptake of 4G LTE in China. Europe, Africa, Middle East, Asia Pacific and Latin America also saw healthy growth. In contrast, its North America performance remains lackluster and saw a decline last year.

For the smartphone business, in which Huawei ranked the third largest smartphone vendor by volume worldwide in 2014, according to a report from our Wireless Smartphone Strategies (WSS) service, Huawei reiterated its commitment to the sector but indicated it will continue focus on profit rather than scale. Compared with the two industry giants Apple and Samsung, the operating margin on Huawei's smartphone business is still quite slim, so there is scope for growth. Our Wireless Smartphone Strategies (WSS) service tracks the world's top-16 smartphone vendors by value and profitability on a quarterly basis in this extensive report.

Moreover, Huawei outlined some initiatives to upgrade the service-driven platform for its smartphone products, including building up offline-service networks, building a full-service online platform in key cities across 100+ countries, as well as establishing an operational excellence center (OEC) to realize synergy across online and offline channels.  We look forward to more details in the Day Two session tomorrow.

Connection is the keyword for this event. “Open road to a better connected world” is their slogan and can be seen everywhere at this event. We understand it refers to the connection between Huawei and customers, between consumers and service / product providers, between people and people, and between IoTs, etc. In the Consumer business, will Huawei extend into a more cross-product connected ecosystem, from its current smartphone and dongle-focused product lineup? How will Huawei execute its service-driven platform to provide consumers with full-lifecycle services? Please stay tuned for our Day Two blog.

 

 


April 7, 2015 23:48 nmawston

Our Wireless Smartphone Strategies (WSS) research team recently visited Cyanogen Inc., a two-year-old start-up, well known for its emerging Cyanogen OS, which has modified Android OS on the ROM level and is trying to challenge Google’s dominance in the Android ecosystem. How will Cyanogen change the existing Android ecosystem? What factors will determine its success? What does it mean for hardware / software players, such as Google, Microsoft and Firefox, in the smartphone value chain? More analysis can be downloaded by clients here.


April 2, 2015 05:33 woh

According to the recently-posted report, 'Is Google Losing Its Grip on the Android Ecosystem(s)?', cross-published across our Wireless Media Strategies (WMS) and Wireless Smartphone Strategies (WSS) services, we are seeing some clear signs of Google's robust Android Ecosystem being challenged by many companies, either competitors or partners, from Microsoft, to Chinese guys such as Baidu, Alibaba, Tencent and Xiaomi, to Cyanogen, to Yandex, to Micromax, its Android One partner.

This extensive insight report, available to our paid WSS clients, is analyzing the current status quo in regards to the tug of war between Google and Anti-Google competitors, from set makers, platform providers, service providers and countries perspectives.


March 27, 2015 06:25 lsui

According to the latest report from our Wireless Smartphone Strategies (WSS) service, global online channels will make up a significant 19% of all smartphone sales in 2015, of which pure e-retailers will contribute 8% of total global smartphone volume share. China and India lead the pack with the highest e-retailer share.

Jingdong is the largest e-retailer in China. In India, Flipkart remains the largest player.

Wireless Smartphone Strategies (WSS) clients can please click here to access the full report.


March 20, 2015 10:00 PLin

Breaking news today -- March 20th, 2015 -- that Peter Chou, the CEO of HTC in Taiwan, has stepped down from his position. He is replaced immediately by Cher Wang, co-founder and chairwoman of the smartphone maker. Peter Chou will remain at HTC, in a face-saving move as the head of its Future Development Lab, to lead new product innovation.

This executive transition today is, of course, NOT a surprise. It really should have happened two years ago when HTC's global handset marketshare had already halved and the downward spiral for the company was in full swing. HTC’s global smartphone shipments fell -2% YoY in Q4 2014 -- in a total market growing +31% YoY. This was the vendor’s twelfth straight quarter of global volume declines and it continues to lose traction in the valuable North America and China regions.

Where does HTC go from here?

To recover growth in 2015, HTC plans to launch more mid-range smartphone models in key territories like Taiwan, and to expand into tablets and wearables. However, a more diversified product portfolio will take resources and time to develop -- time and money that HTC simply does not have in its current weakened state.

We recommend HTC's best option is to find a white-knight merger partner. One that can bring stability and investment for R&D, marketing and enhanced retail distribution. Possible merger partners for HTC could include Microsoft (scale), Huawei (ambition) or Xiaomi (internationalizing).

For more analysis and forecasting of HTC and its future outlook, please visit our Wireless Smartphone Strategies (WSS) service here.


March 13, 2015 05:58 PLin

According to the latest report ‘Global Smartphone Revenues, ASPs & Price-Tier Forecasts: 2003 to 2020from our  Wireless Smartphone Strategies (WSS) research service, global smartphone revenues will grow +10% over the next 6 years. Increasing smartphone volumes will be partly offset by decreasing ASPs, as vendors and operators penetrate deeper into the price-sensitive prepaid market. Falling component prices will enable sales expansion in lower price-tiers, particularly for emerging markets like Asia and Latin America. Meanwhile, Apple and others will continue to target the subsidy-led premium category.    

Our report tracks global smartphone sales volume, revenues and wholesale ASPs by six major regions and eight price-tiers from 2003 to 2020. Extensive analysis of the premium, high, mid, entry and ultra-low price-bands is included. The report is a valuable tool for device vendors, operators, component manufacturers, software developers, financial analysts, car makers, and other stakeholders who want to measure the smartphone market by value and benchmark their pricing strategies. The report is available here to our paid clients.


February 26, 2015 12:02 nmawston

According to the latest research from our WSS (Smartphones) research service, global smartphone operating profit reached US$21 billion in Q4 2014. The Android operating system captured a record-low 11 percent global smartphone profit share during the quarter. In contrast, Apple iOS took a record-high 89 percent profit share.

Global smartphone operating profit grew 31 percent annually from US$16.2 billion in Q4 2013 to US$21.2 billion in Q4 2014. Android hardware vendors combined took a record-low 11 percent global smartphone profit share, down from 29 percent one year ago. In contrast, Apple iOS captured a record-high 89 percent profit share, up from 71 percent in Q4 2013.

Apple iOS continues to tighten its grip on the smartphone industry. Apple’s strategy of premium products and lean logistics is proving hugely profitable. Android’s weak profitability for its hardware partners will worry Google. If major smartphone manufacturers, like Samsung or Huawei, cannot make decent profits from the Android ecosystem, they may be tempted in the future to look at alternative platforms such as Microsoft, Tizen or Firefox. 

Exhibit 1: Global Smartphone Operating Profit Share in Q4 2014  [1]

Global Smartphone Operating Profit (US$, Billions)

Q4 2013

Q4 2014

Apple iOS

11.4

18.8

Android

4.8

2.4

Microsoft

0.0

0.0

BlackBerry

0.0

0.0

Others

0.0

0.0

Total

16.2

21.2

     

Global Smartphone Operating Profit Share (%)

Q4 2013

Q4 2014

Apple iOS

70.5%

88.7%

Android

29.5%

11.3%

Microsoft

0.0%

0.0%

BlackBerry

0.0%

0.0%

Others

0.0%

0.0%

Total

100.0%

100.0%

     

Total Growth Year-over-Year  %

~

31.4%

     

Source: Strategy Analytics

   

 



[1]  Numbers are rounded. Data refers to realized operating profit for smartphone hardware vendors aggregated by operating system.


February 26, 2015 00:08 nmawston

According to the latest research from our WSS (Smartphones) research service, global smartphone users reached 2 billion for the first time ever in 2014.

One in three of the world’s population now owns a smartphone.

Global smartphone users grew 37 percent from 1.5 billion in 2013 to reach 2.1 billion users in 2014. This is the first time worldwide smartphone users have surpassed the two-billion level. We forecast global smartphone users to increase a further 22 percent to 2.5 billion in 2015. An impressive 35 percent of the world’s 7.2 billion population will own a smartphone by the end of 2015, up from 29 percent in 2014.

Well over 2 billion people worldwide own a smartphone today. The smartphone has become one of the most widespread electronic devices of all time. The smartphone is ubiquitous and it is rapidly evolving to become a central hub for controlling consumers’ daily lives in the home, car and office of the future.

 

Exhibit 1: Global Smartphone Users in 2013 to 2015  [1]

Global Smartphone Users (Billions of Units)

2013

2014

2015

Total Smartphone Users

1.5

2.1

2.5

Total Population

7.0

7.1

7.2

Total Smartphone Users as % of Total Population

22%

29%

35%

       

Source: Strategy Analytics

 

 

 

 



[1]  Numbers are rounded. A “user” is defined as a person who owns and uses one or more active smartphones.


February 11, 2015 06:30 nmawston

As expected a few months ago, the world's first Ubuntu smartphone will finally be launched commercially today, Wednesday 11th February, 2015. Right before Mobile World Congress (MWC), the cellphone industry's biggest annual tradeshow.

The device in question is a repurposed BQ E4.5 mid-tier Android model -- but with Android software replaced by Ubuntu.

The new device will be distributed online (in Western Europe only) in a "flash sale" today, followed by three more such events by the close of February.

The BQ Aquaris E4.5 Ubuntu Edition has a 4.5-inch screen, 1GB RAM and dual-SIM connectivity. The hardware specs are good, but not groundbreaking, at that midrange pricepoint.

There will also, eventually, be a Meizu MX4 Ubuntu model launched in China in H1 2015. Meizu is currently the 11th largest smartphone vendor in China.

For the apps ecosystem, Ubuntu does not yet have a recognized apps store, but it does offer "scopes" that are single-screen windowpanes / homescreens on the handset for apps and services. For example, there is a "scope" (app) for Web-browsing, social networking, and so forth.   

BQ is a top-10 smartphone vendor in Spain. Like Wiko France, Xiaomi China and Micromax India, BQ Spain is a "local" smartphone vendor that is attempting to gain marketshare through local apps, local distribution and good, old-fashioned hardware price-cuts. So far, BQ has grown relatively well at home in Spain, but its international presence outside the country is tiny.

It is good to see innovation from Ubuntu, but BQ's (and Meizu's) new device will NOT worry the likes of Apple and Samsung. The BQ Ubuntu phone has limited global distribution, a limited apps ecosystem, limited developer support and limited hardware-vendor support. Our WSS (Smartphones) service forecasts Ubuntu to account for just 1% share of all smartphone shipments worldwide in 2015. Ubuntu will struggle to make headway in the crowded smartphone market.