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DI Prime Internet Mobile Mobile Apps

India Is In The Midst Of An App Boom: How Can You Take Advantage Of It?

When it comes to the smartphone ecosystem, the APAC region, and India in particular, is undoubtedly one of the hottest prospects across the world. We have already analyzed the state of the smartphone market in India at length in the past. There is no doubt that India is rapidly becoming the next frontier for the smartphone manufacturers and represents the single largest opportunity for explosive growth. However, as lucrative as the smartphone economy is, it has also spawned several other industries which are immensely successful in their own right. The chief among these is the smartphone app economy. Today, the smartphone app forms the basis for the immense success the smartphone has enjoyed. It is the fundamental building block of the smartphone ecosystem.

Given the central importance of apps to the smartphone ecosystem, it is natural to wonder about the state of the mobile app industry in India. This thought-provoking analysis addresses few of the most important questions every app developer in India must be concerned about:

  • Has the recent smartphone boom in India had any effect on the regional app economy as well?
  • What is the growth potential for developers, and what trends are dominating the industry?

Let’s delve deep into it.

 

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Apple Companies DI Prime Mobile Smartphones

Apple’s Indian Conundrum: Replicating The Global Success In India

The word Apple is perhaps one of the most recognized brand names of our generation. The tech giant’s name is synonymous with the smartphones that rule the modern world today. It’s a name that evokes powerful responses from billions of users and fans across the world, and the famous iPhone has become a pop culture phenomenon. Such is the popularity of Apple Inc. (NASDAQ:AAPL) and its products, that company is now the most valuable on earth with a valuation of over $922 billion as of March 2018. It is now only a matter of time before the company becomes the first in history to shatter the $1 trillion value ceiling. The company is also sitting on a massive cash pile to the tune of over $256 billion, along with enjoying the crown of being the most valuable brand in the world.

Therefore it is all the more surprising to see the world’s most successful smartphone manufacturer suffer such a torrid time in one of the world’s most promising smartphone markets – India. For all its successes across the world, Apple has, thus so far, failed to crack the Indian market, and now finds itself falling further and further behind the competition. This is the matter of huge concern for the Cupertino giant, as India is the world’s fastest-growing smartphone market, and offers the single largest avenue for growth as the smartphone market continues to saturate in the West.

The scenario leads us to few head-scratching questions:

  • why is Apple failing in India?
  • What are the deficiencies in its India strategy, and just how different is the Indian market compared to its Chinese and American/European counterparts?

In a bid to solve the above puzzle, we ended up thought-provoking analysis.

 

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Mobile Mobile Apps

Can The Reserve Bank’s KYC Norms Help UPI Gain The Upper Hand Over Mobile Wallets?

Unless you have been living under a rock for the past year or so, you must have some idea about the meteoric rise in popularity of mobile wallets in India. The sudden explosion in popularity and the subsequent ‘arms race’ in the mobile wallet industry has been one of the most notable developments in the Indian technology and financial landscape for years. A few days ago we analyzed the growing cashless economy in India, and what factors are driving adoption. However, one of the major contributors to the digitization of financial transactions in India is undoubtedly the mobile wallet.

This time, we have dug deep into the mobile wallet space, in particular, to understand how the industry is faring, the current competitive landscape, user engagement as well as opportunities for the future.

 

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Categories
Ecommerce Innovations Internet Mobile Mobile Apps Smartphones Technology

From Bits Of Paper To Bits And Bytes: Evolution Of The Cashless Economy In India

We live in an era where technology has permeated every single aspect of our daily lives. The impact of technology on our day to day activities is undeniable, as is its incessant forward march. This phenomenon can be most acutely felt on one of the most fundamental aspects of our society – currency and financial transactions. As technology progresses, the quest for replacing antiquated physical money with digital counterparts is well and truly underway. Of course, the idea of digital currency and transactions is not anything new. Credit/Debit cards have been around for a long time now, as have digital bank transfers and other similar mediums of digital currency transactions.

However, over the past few years, the financial digital revolution has picked up an incredible amount of momentum. An undeniably huge factor behind this is the ongoing digital revolution in India, and its push towards a cashless economy. India is the world’s second most populous country with over 1.3 billion people. Not only does that constitute a huge chunk of the global population, but any new trends or changes to the status quo in the region can reverberate across the world.

  • So, just how big is the digital currency market in India?
  • What are the factors that brought the digital revolution in currency, and which developments played a key role in facilitating it?
  • Where do we go from here?

Let’s dig deep into the changing equations in the Indian payment industry to unveil the future face of the cashless economy in India.

 

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Facebook Social Media

Can Facebook Recover From Its Craterous Impact, Or End Up Meeting MySpace?

Unless you have been living under a rock for the past month or so, chances are you must have, at the very least, heard of the massive Cambridge Analytic scandal that has rocked Facebook Inc. (NASDAQ:FB) to its very core. The social media giant has found itself in a quagmire, with its future looking somewhat uncertain. Every day the scandal only seems to grow in scale as new details emerge about the largest data breach in Facebook’s history and their part in it.

However, in this article, we are not going to be looking at the details of the scandal itself; to get up to speed with the finer details of what actually happened, refer to this article that we published a few weeks ago. Instead, we are going to be focusing on Facebook and deep dives into the matter to understand:

  • How has the scandal affected Facebook, and what is their response to it?
  • Is this response good enough to placate angry users and lawmakers around the world?
  • What tangible impact has this scandal had on Facebook, both financially and in terms of the size of their user base?
  • Can Facebook recover from this, or is this the beginning of the end of the golden era of Facebook?

Let’s take a deep dive into it.

Cambridge Analytica – The Gift That Keeps On Giving

What started out as a scandal of moderate proportions has now snowballed into a behemoth that is threatening to crumble Facebook’s very foundations. When the scandal first broke, Facebook confirmed that only 270,000 people had downloaded the notorious ‘thisisyourdigitallife’ app used by Cambridge Analytica to gather user data. However, it was also revealed that this app unscrupulously gathered the data of anyone in the original user’s friend’s list as well. Many estimations pegged the total number of users affected to as many as 50 million! Surprisingly, the number turned out to be a gross underestimate.

Now a newer estimate claims that the total number of affected users may be as high as 87 million. This figure has been corroborated by Facebook CEO Mark Zuckerberg, who said, “I’m quite confident it’s not more than 87 million.” Former Cambridge Analytica researcher and whistle-blower Christopher Wylie believe that this number could even be higher than 87 million.

As expected, there has been a tremendous global response to the scandal. Users across the world have directed their ire at Facebook with #DeleteFacebook trending everywhere. The movement has rapidly gained momentum globally, with several high profile personalities also lending their support. This includes the billionaire visionary CEO of Tesla and SpaceX, Elon Musk, WhatsApp co-founder Brian Acton and even Apple co-founder Steve Wozniak. Such was the anger directed at Facebook that the #DeleteFacebook movement even got CEO Mark Zuckerberg worried.

The scandal has also opened up Facebook to regulatory and governmental scrutiny across the world. Few hours before Mark Zuckerberg had to appear before the US Congress in order to testify. This was not the first time when Zuckerberg faced few very tough questions; Facebook has also heard the music from lawmakers across the world seeking justification over their growing list of concerns regarding the social media giant.

A nasty Pandora’s box has been opened, and everyone across the world is questioning Facebook’s motives. They have even been accused of being complicit in the scandal after it emerged that Facebook knew about Cambridge Analytica’s misdeeds as early as in December 2015, but chose to cover it up instead. All of this also comes at a time when Facebook is still recovering from the effects of widespread fake news and Russian interference in the 2016 US Presidential elections through their platform. People are also questioning the role Facebook and Cambridge Analytica in undermining democratic processes across the world, including Africa and the Brexit vote in the UK. It is fair to say that global user and governmental trust in Facebook has hit rock bottom, and it is up to them to quickly remedy that situation.

Facebook’s Response: Good Enough?

In the light of recent events, one would expect Facebook’s response being quick and effective. Contrary to belief, things got off to a bad start when they maintained radio silence during the initial few days when the scandal broke. Since then, the top honchos at Facebook have come out with apologies, including CEO Mark Zuckerberg and COO Sheryl Sandberg. Naturally, apologies ring hollow without the requisite actions to back them up, and Facebook has outlined several ways it seeks to remedy the myriad of issues plaguing their platform:-

  • Facebook is planning audits of companies and apps related to Cambridge Analytica in any shape or form.
  • Restrictions will be placed on Facebook login tools which allow users to log into various services using their Facebook data. Consequently, all apps requiring sensitive information such as check-ins, likes, photos, posts, videos, events and groups will need individual approval.
  • Third-party apps will not be allowed to gather information regarding political or religious views, relationship status and work history of individual users.
  • The ability to search for people using their phone number will now be disabled by default.
  • The content of text messages on Messenger will not be collected, and call logs will be deleted after a year.
  • Shutting down Partner categories, which allowed third-party data-providers offer their targeting directly on Facebook.
  • Greater transparency, by showing people what apps they use, and what information those apps have access to. The app removal process has also been simplified.
  • Facebook has announced plans to partner with news service Agence France-Presse (AFP) to fact check news, images and even video on its platform in order to combat fake news.
  • Facebook intends to have a team of 20,000 employees working on security and content reviews by the end of the year. They have already hired 15,000 of them.

All of these measures are too little, too late. They are merely a band-aid on a gaping wound. Don’t take this from me, take it from Mark Zuckerberg himself, who has stated that it will take Facebook years to completely fix itself.

While Zuckerberg has owned up to the mistake and even taken personal responsibility for it, he has cheekily conveyed the message that all users are using Facebook at their own risk, and will be doing so for the foreseeable future. This has come as somewhat of a shock to users and lawmakers across the world but makes sense if we consider the state of the Facebook platform. Eliminating or even minimizing such abuse of users’ private data fundamentally clashes with Facebook’s primary business model, which relies heavily on targeted advertising. Limiting advertiser access to users’ public data will have an extremely detrimental effect on their financial model, and could drastically reduce revenue. Facebook COO Sheryl Sandberg acknowledged this problem, stating that users may have eventually had to pay to completely stop sharing their profile data with advertisers.

Could Facebook End Up Meeting MySpace?

There is no denying the fact that this scandal has hit Facebook hard. Facebook’s stock fell over 22% since the Cambridge Analytica scandal broke, resulting in over $100 billion being wiped out from its market capitalization. The scandal has also affected CEO Mark Zuckerberg personally, who saw $14 billion being wiped out from his personal wealth, including losing $6 billion in one day alone! In addition, Facebook has also had to contend with the #DeleteFacebook movement and regulatory scrutiny.

Despite all of this, Facebook’s user metrics haven’t seemed to have suffered at all. Analyst Brent Thill claims that time spent on the platform is up by 15% on average in March 2018 compared to the same time last year (Android users). A survey of 750 Facebook users also found that more than 60% were using Facebook as much or more than they did before the scandal broke. This data has seemingly also been corroborated by Zuckerberg, who said that the #DeleteFacebook campaign did not have a significant effect on their user-base or advertising spend on the platform.

It would seem that despite all the noise, the scandal actually did very little to fundamentally affect Facebook. But it does not mean that there hasn’t been any near-term impact. The effects have started appearing and are quite evident in Facebook stock’s performance, which has been going from bad to worse since the scandal broke.

The Wall Street, however, remains positive over the long-term health of the company and its stock. All of this is not very surprising; while statements such as #DeleteFacebook may sound incendiary, they are not a viable solution to the problem at hand. Social media is now ingrained into the fabric of our lives, and it is no longer feasible to completely abstain from it. Today, it is probably the only best way for millions across the globe to connect with friends and family. It has also developed into a vital marketing tool for businesses, and can be especially critical for smaller ventures. In fact, in parts of the world such as many African nations, Facebook is the internet. As such, deleting Facebook is not an option for them. This realization is made even more acute by the fact that there are no natural challengers to Facebook’s throne as the king of social media. Competitors such as Snapchat are nowhere near or big enough to inherit that crown, and have been plagued with troubles of their own over the past year or so.

Nevertheless, this has not stopped some from calling for Zuckerberg’s head, as they feel he is no longer the right man to lead the company forward. However, as we outlined a while ago, that would be extremely counterproductive from a financial and growth perspective. Under Zuckerberg’s leadership, Facebook has posted record-breaking growth and shown impressive ambition. They have become the world’s 8th most valuable brand, and one of the biggest entities globally in terms of market valuation. They have also successfully branched out into other lucrative ventures, including video streaming and Virtual Reality, both of which are slowly paying dividends. Keeping all of this in mind, it seems extremely unlikely that Zuckerberg would step down.

But, this does not mean that Facebook has got off completely scot-free. A lot rests on the outcome of the congressional testimony on April 11. If lawmakers decide to impose further regulatory burdens on Facebook, they could find themselves struggling to comply adequately. Meanwhile, stock performance could continue to suffer in the short term.

Undoubtedly, Mark Zuckerberg and its core team understand the gravity of the situation. There won’t be a stone unturned by the youngest billionaire mind to keep Facebook growth intact. No one better than Mark Zuckerberg knows that it’s not impossible to pull down the social media titan from its numero-uno position; and even a small competitor could do that – exactly the way he dethroned MySpace in 2005.

Categories
Internet Mobile Mobile Apps

Time To Face The Music: The War For The Indian Digital Music Streaming Industry Is Beginning To Heat Up

In case you hadn’t noticed, India is in the midst of an unprecedented digital revolution. The events, that have transpired in the past two years, have culminated together to usher the world’s second most populous nation into the digital age. This has had far-reaching effects on India’s 1.3 billion inhabitants, as well as stimulating the burgeoning digital technology industry in the region. We’ve seen the explosion in smartphone adoption as well as data and video consumption, but one vertical has flown under the radar until now. We are referring to the digital music streaming industry, which has failed to really take off in India so far.

However, that looks set to change in the very near future, as companies both in India and across the world are looking to battle it out for control of a market which has the potential to be a veritable goldmine. The latest piece of evidence for this comes in the form of news that Reliance Industries has agreed to buy out popular music streaming platform Saavn in a $104 million cash and stock deal.

Let us look at the current digital music streaming scenario in India, where it is headed and what opportunities it affords for those looking to get involved.

 

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Technology

The Mi TV Lineup Part Of Xiaomi’s Grand Plan For The Indian Landscape?

When it comes to the Indian consumer tech industry, the name on everyone’s lips over the past couple of years is Xiaomi. From being a relatively unknown Chinese brand barely a few years ago to securing the numero-uno position in the smartphone industry in India, the unprecedented meteoric rise of Xiaomi is well documented and worth every second you invest in reading. However, while Xiaomi might have made its name in India due to the immense popularity of their smartphones, they are more than just a smartphone OEM. Back in their native China, Xiaomi is also known for their laptops, mobile apps, smart water purifiers/air purifiers, smart lights and plenty of other smart connected devices, in addition to their smartphones. It was only a matter of time before Xiaomi tried to expand and replicate their ecosystem in India as well. The launch of the Xiaomi Mi TV 4 and the Mi TV 4A smart televisions marks the first step in Xiaomi’s bid to take control of the emerging smart home ecosystem in India.

However, the launch of this new line of Mi TVs has left plenty of people confused and led to the few questions:

  • Why is a smartphone manufacturer delving into the TV market?
  • What is the potential for growth in the Indian TV market? What is Xiaomi’s strategy behind this strange move, and is it likely to end in success?

Let’s have a closer look.

State Of The Indian TV Market

Before we delve into Xiaomi and their new lineup of smart TVs, it is important to understand the state of the Indian TV market. Currently, about 780 million Indians have access to a TV. Urban TV penetration has topped 87%, but rural penetration still lags behind at 52%. The Indian television industry has reached INR 660 billion in 2017. Rapid and consistent growth is expected over the next few years. By 2020, the number of TV household is expected to reach 200 million.

Even now, however, an overwhelmingly large portion of the population (86%) uses CRT (cathode-ray-tube) TVs. This leaves plenty of potential for growth for smart LED TVs. According to Raj Nayak, COO of Viacom18, 27% of all television owners owned smart TVs. This number is expected to rise to 35% in 2018.

Of course, the growth of the hardware sector, in this case, is also highly dependent on content development. Once again, India is doing extremely well in this respect as well. The Indian Media and Entertainment sector was worth $19.59 billion in 2016 alone. Estimates suggest that the industry will grow at about 13.9% CAGR, reaching a whopping $37.10 billion by 2021 in valuation. This growth rate is also appreciably above the global average for this industry. As the quality and quantity of media content improve and evolve, so do the methods of content consumption.

There is a cable digitization revolution occurring in India as we speak. Seminal decrees such as the digitization mandate and GST (Goods and Services Tax) implementation kick-started an overhaul which is gaining rapid momentum. This has undoubtedly contributed to the growing popularity of LED smart televisions in the country. The popularity of these devices has been further aided by the introduction and subsequent demand for OTT (Over The Top) video streaming services such as Netflix, Hotstar, Amazon, etc. According to Counterpoint Research, Hotstar, Voot, Amazon Instant Video, Sony Liv and Netflix have a combined subscriber base of nearly 100 million people, with a valuation of $280 million. Aggressive growth at 35% YoY is expected over the next few years.

All the above data and facts prove one thing – the Indian television market is ripe for smart TVs to take over. An already competitive market is set to heat up even more as various OEMs seek to cash on its potential.

A Quick Look At The Xiaomi Mi TV Lineup

While quite new to the Indian TV market, Xiaomi has already expanded its portfolio to three primary offerings. The flagship product is the Mi TV 4, which features a 55-inch LED panel with a full-fat 4K UHD resolution of 3840×2160. The panel also supports HDR (High Dynamic Range) and is powered by a 64-bit quad-core Amlogic Cortex-A53 SoC with 2 GB of RAM and 8 GB inbuilt storage. Xiaomi is also marketing the Mi TV 4 as the ‘slimmest LED TV’ in the world, with its 4.9mm thickness 38% slimmer than the Samsung Galaxy S8 smartphone. On the lower end of Xiaomi’s catalogue is the Mi TV 4A. The larger 43 inch variant of the Mi TV 4A features a Full HD 1920×1080 resolution panel, whereas the smaller 32-inch variant features an HD Ready 1366×768 resolution panel. Both variants are powered by an Amlogic quad-core SoC with 1 GB of RAM and 8 GB of internal storage.

Something to consider here is that while small, Xiaomi’s TV portfolio already accounts for a variety of niches. The 32-inch, 43-inch and 55-inch TV sizes together account for 80% of the TV market by volume, and also offer a variety of resolutions and feature sets. The idea here is to have a product designed to fit every customer’s requirements.

While all of this sounds impressive, it is hardly groundbreaking.

So then why is there such a fuss being created about the Mi TV lineup? The answer, as with all things Xiaomi, is the pricing. The flagship Mi TV 4 is priced at only INR 39,999, whereas the Mi TV 4A’s 43-inch and 32-inch variants cost INR 22,999 and INR 13,999, respectively. This pricing is frankly absurd, especially considering that many competitor offerings are priced at more than double of this. At such prices, Xiaomi’s profit margins are bound to either be razor thin, or non-existent. So why is Xiaomi selling TVs if they are not making any appreciable profit? The answer emerges once we look at their smartphone strategy and their purported plans for the future.

Why And How Is Xiaomi Seeking To Compete In The TV Market?

Contrary to what many may believe, Xiaomi is not just a smartphone OEM. They are known to make a whole range of products including consumer appliances. Xiaomi, however, is very much rooted in connectivity based smart tech, not just mere home appliances. Most of their consumer appliance offerings are ‘smart’ devices, which offer a whole host of benefits over their more traditional counterparts. The Xiaomi Mi TV 4 and Mi TV 4A fall firmly in this category as well. Just like their smartphone business model, Xiaomi is treating the hardware as a content delivery mechanism, rather than a profitable product. In fact, Xiaomi’s strategy for their TVs seems to be eerily similar to their smartphone strategy. Xiaomi’s plan for driving sales can be summed up as follows:-

  • Razor Thin Margins – Eschewing profitability on the hardware itself allows Xiaomi to severely undercut its competitors in terms of pricing, while not having to compromise on quality. This results in products that are cheaper than their multi-national competitors, yet superior in quality to local Indian offerings. Xiaomi then turns a profit from content delivery and services instead.
  • Unorthodox Retail Model – Xiaomi bucked the trend, and started off with an online-only retail model that reaped several benefits. Manu Kumar Jain, Head of Xiaomi India, once claimed that brands lose up to 5%-20% of their margin following the traditional retail model. While he was referring to the smartphone industry at the time, a similar principle can be applied here. By cutting down on overheads and other margins, Xiaomi can afford to pass on those savings to consumers, thus developing a loyal userbase. Xiaomi is now gradually opening Mi branded stores for their products to develop an offline presence as well.
  • Effective, Yet Cheap Marketing – As with their sales channels, Xiaomi’s approach to marketing has been unorthodox, yet wildly successful. By successfully leveraging social media and sales events during festive seasons, Xiaomi has developed highly efficient cost-effective marketing strategies. Just for reference, Xiaomi’s SG&A ( Selling, General and Administrative) expenses were a tenth of Apple’s in 2014. They seem to employ similar tactics with the Mi TV lineup.
  • Strong MiFan Community – Unlike all the smartphone brands who failed to capitalise on the network-power of existing customers, Xiaomi made sure to rope in and engage every customer under MiFan community. No matter how big or small contribution a customer makes to Xiaomi’s revenue the company enthrals him by making him feel equally important. The strong Mi Fan community has emerged as one of the important driving forces of Xiaomi unparalleled growth, both in India and China.
  • Local Flavor – As with their smartphones, Xiaomi has shown that they understand the requirements and desires of their user-base very well. Their devices focus on features that their consumers desire most and provide extensive local language support in order to expand accessibility and reach. This is also applicable to the Mi TV lineup, which features support for a host of local languages as well.

There are a lot of parallels to be drawn between Xiaomi’s smartphone and smart TV strategy. The reason for that is, Xiaomi’s end game for both is the same. Xiaomi is attempting to create their own ecosystem here, just like they have done in China. Eventually, the goal here is to have their customers using a range of smart and interconnected Xiaomi devices. Instead of making money from the devices they sell, Xiaomi aims to generate revenue by facilitating content and service consumption via their device ecosystem.

This is evident in the headlining feature of the Mi TV lineup – PatchWall UI. PatchWall is an Android-based tiled user interface developed in-house at Xiaomi exclusively for their smart TVs. The goal of this endeavour is convenience and minimalism. PatchWall puts the content itself front and centre. It integrates content from various sources into one seamless interface and uses artificial intelligence to provide viewing suggestions. PatchWall even has the ability to integrate content from set-top boxes, although that requires an adapter which is sold separately. Currently, Xiaomi has partnered with Hotstar, Voot, SonyLiv, Hungama Play, Zee5, TVF and more, and are claiming 500,000 hours of streaming content out of the box. Xiaomi also claims that 80% of this content will be free. Plans are in the pipeline to partner up with streaming giants Netflix and Amazon as well. Voice services integration is also another planned update in the future. That could potentially open the door for Virtual Digital Assistant services, which is another hugely promising industry. Xiaomi is hoping to get people invested in their ecosystem now so that they can reap the rewards later.

Can They Succeed?

Despite Xiaomi’s tag as newcomers in the Indian TV market, only a foolish man would bet against them. Xiaomi’s have shown that they have cracked the Indian market with the immense success they have achieved in the smartphone world. By adapting the same strategies for their smart TV business as well, they already have a ready-made recipe for success. They have also done something like this before; Xiaomi co-founder Wan Chuan outlined the rapid growth in popularity of smart TVs in China facilitated by Xiaomi – the share of smart TVs there increased from 5% to 80% in just 4 years.

However, all this does that mean that this will be a cakewalk for Xiaomi. They face stiff competition on all fronts from the likes of LG, Samsung and Sony (who collectively have more than 75% of the market share) at the high end and Vu, TCL, etc. at the lower end. In addition, they face the prospect of sky-high customs import duties on flat panels, which can further cut into their profits. There is also the risk that their smartphone business model may not translate all that well over to TVs. Traditionally people like to view TVs in person before committing to a purchase, opportunities for which are quite limited under Xiaomi’s current retail model. Finally, Xiaomi is likely to face several new logistical and after sale service-related challenges. Their post-sales service framework is likely to be less robust compared to their incumbent rivals, something that could dissuade potential customers.

Categories
Companies Intel Technology

Is Intel’s Rumoured Bid For Broadcom A Stroke Of Genius Or Just A Panic Response?

Mergers and acquisitions are a fairly common occurrence in the technology industry in today’s day and age. New and exciting technologies are on the horizon, and the industry is constantly consolidating as industry giants try to evolve and get a leg up on their competitors. This is especially true of the mobile chip industry, which has been undergoing a wave of consolidation over the past few years. However, the single most audacious potential acquisition is the one everyone is talking about these days – the proposed takeover of mobile chip giant Qualcomm Inc. (NASDAQ:QCOM) by rivals Broadcom Ltd. (NASDAQ:AVGO).

Back in November last year, we reported on Broadcom’s brazen attempt to take over their biggest competitor, Qualcomm, in a deal valued at $130 billion! The proposed deal had the potential to completely change the face of the semiconductor industry and could have had far-reaching effects on the smartphone industry as well. Qualcomm eventually went on to reject multiple bids from Broadcom, and the deal quickly turned hostile.

Amidst all the attrition, another major player has decided to throw their hat into the ring. PC chip-making giant Intel Corporation (NASDAQ:INTL) is now reportedly considering a massive bid for Broadcom!

The latest development leads us to few head-scratching questions:

  • Why is Intel looking to buy Broadcom while Broadcom is embroiled in their own hostile takeover attempt of Qualcomm?
  • What benefits would Intel gain from such a deal?
  • Will Intel go through with the deal even though the Broadcom–Qualcomm merger looks to have fallen apart?

While the situation has created a three-party tug of war, taking a deep dive to find the answers of above questions would be a kind of an exciting ride.

 

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Categories
Mobile Smartphones

Worldwide Smartphone Sales Drop: Is Just A Blip Or Is The Industry In Trouble?

In the past decade or so, the smartphone has overwhelmingly dominated the consumer tech hardware industry, and for good reason. The unprecedented worldwide smartphone sales, growth levels, as well as consumer popularity over the years, mean that the smartphone is the industry’s biggest cash cow. Companies such as Apple Inc. (NASDAQ:AAPL) were rejuvenated by the smartphone boom, which catapulted them to the very top of the tech industry hierarchy. Others such as Samsung and Google also owe their current status as global powerhouses to the overwhelming success of their smartphone hardware and software ventures.

The immense success, however, enjoyed by smartphones has also, in a sense, made many of these companies, as well as the industry itself, over-reliant on smartphones. Now the fate of these companies is directly tied to the success of the smartphone industry. For example, the iPhone accounted for almost 55% of total revenue generated by Apple in Q4 2017. This means that smartphones sales growth and revenue is a vital metric that dictates the future of numerous companies. Unfortunately for the industry, the latest numbers are quite troubling.

A new report outlines the worldwide smartphone sales in 2017, and the findings are extremely worrisome, if not all that surprising. In Q4 2017, global smartphone sales to end users numbered in at about 408 million units. This number is quite a bit lower than the 432 million unit sales in Q4 2016 and represents a decline of 5.6% YoY. The smartphone industry, which has traditionally exhibited consistent growth, suffered its first-ever YoY decline (since Gartner commenced tracking metrics in 2004).

So what does this represent? Is this just a one-off blip, or is it symptomatic of a larger issue? Is there an impending change of status quo in the industry, or has the industry begun its gradual descent from the top?

Let us have a closer look and take a deep dive into the questions.

worldwide smartphone sales q4 2017

Worldwide Smartphone Sales: Dissecting The Factors Behind The Decline

The fourth quarter of 2017 witnessed the first ever YoY decline in global smartphone sales. Considering the remarkable consistency and impressive growth the industry has achieved over the past decade or so, this new development cannot be dismissed as a one-off occurrence. So what has changed as of late? Why have global sales declined in Q4? Some of the factors behind this are:-

  • Inability To Break The Low-Cost Floor – Over the past year or two, much of the volume sales growth for mobile phones, particularly those from new customers, has come from emerging markets. The popular purchasing trend here is heavily biased in favour of low-cost devices, both smartphones and feature phones. While there has been significant advancements and improvements in the low-end smartphone segment, they are still unable to compete with feature phones in terms of quality in similar price brackets. As a result, the smartphone industry has failed to breach this particular barrier to growth.
  • Technology Ceiling – Just like most new technologies, smartphone development proceeded at a breakneck speed for the early parts of its lifetime. However, over the past few years, we have begun to see diminishing returns. It is increasingly common to see yearly device upgrades only benefiting from spec upgrades and minor form factor changes. As such, there is less and less every year that differentiates the newer smartphone models from their predecessors. This has resulted in lesser desire to purchase or upgrade from both prospective and existing customers.
  • Longer Device Lifespans – Smartphone design and technology has unceasingly marched forward ever since the device’s inception. Today, smartphones feature sturdier construction materials, more powerful hardware and bigger feature sets than ever before. Metal constructions are common and greatly help in enhancing durability. Smartphone SoCs have gotten powerful enough then even older chips breeze through everyday tasks. These developments have greatly diminished customer desire to upgrade as often, contributing to falling sales.
  • Saturation In Elite Markets – Elite markets such as the US and Europe powered the initial smartphone sales boom. However, due to the limited population, the growth potential in these regions has been rapidly shrinking. Smartphone penetration in the US surpassed 80% in 2016. The primary market here is now customers upgrading from older smartphones rather than new customers.

Is The Industry On The Path To Irreversible Decline?

While this is the first time the industry has experienced the yearly decline in a quarter, growth has been slowing down for years now. Q4 2016 saw a 7% increase in sales compared to Q4 2015 resulting in 432 million unit sales. Q4 2015 itself saw a 9.7% increase over Q4 2014 with 403 million unit sales. These numbers heavily contrast with the sales figures for Q4 2017, which fell to 408 million, representing a YoY decline of 5.6%. With this in mind, we ask ourselves – Is the industry on the path to decline? If there is one lesson we can take from the history of consumer technology, its that nothing remains at the top for too long. The Personal Computer, which dominated the industry for so many years, now languishes near the bottom of the industry hierarchy. The smartphone as we know it could share the same fate. In fact, it is all but certain that it will. It is not a question of if it will happen, but rather when it will happen.

A while back we took a look at the nascent yet hugely promising Augmented Reality technology, and how AR based hardware could replace smartphones as the personal consumer technology device of choice for a lot of people. However, like we pointed out back then, these exciting new technologies are still in their infancy, and the smartphone is still very much king at this point in time. Despite a fall in sales in Q4, overall smartphone sales in 2017 still resulted in a net growth. Global smartphone sales in 2017 totalled over 1.5 billion, a small yet notable increase of 2.7% over 2016. This means the smartphone is not going anywhere anytime soon, even if it may not be the unstoppable juggernaut it once was. It also raises the possibility that these newer sales numbers may be indicative of discrete issues, or a shift in status quo, rather than an irrevocable decline. A closer look shows that this is indeed the case.

A Change In The Status Quo

While the overall sales declined in Q4 2017, the major contributors to this were industry leaders such as Samsung and Apple. Both of these companies, who arguably powered the smartphone boom, suffered poor quarters by their lofty standards. Meanwhile Chinese upstarts Huawei and Xiaomi continued to march forward with impressive growth numbers.

  • Samsung – Samsung sold just over 74 million smartphones in Q4 2017, a 3.72% YoY decline. However, their flagship Galaxy S8 and S8+ devices sold quite well. These devices usually have a much higher selling price, as well as profit margin, resulting in a higher overall average selling price for Samsung. The issue here is Samsung’s mid and low-end portfolio has suffered, particularly is strategically important markets such as India. This means that Samsung will be increasingly dependent on the premium smartphone segment in elite markets such as the US to generate revenue going forward. There are reports of Samsung planning to refresh its low-cost portfolio in the near future in order to return to competitiveness in other markets.
  • Apple – Apple suffered more than its biggest rival in Q4 of 2017. Sales fell by a worrying 5% margin, despite three new offerings in the form of the iPhone 8, iPhone 8 Plus and iPhone X. However, there are some extenuating circumstances that might explain this. The staggered release of the iPhone 8/8 Plus and the iPhone X may have affected sales, with many customers holding out for the special 10th anniversary model instead of the regular iPhone 8/8 Plus. The iPhone X itself was itself mired in production issues due to low component availability, resulting in low stocks. As a consequence, some analysts expect iPhone X sales to pick up in Q1 2018.
  • Huawei – Chinese OEM Huawei had a decent quarter in Q4 2017, with nearly 44 million smartphone sales and a YoY sales growth of 7.6%. Huawei has enjoyed quite a bit of success in Europe as of late, which has undoubtedly helped fuel their growth. However, Huawei still does not have a strong hold on other key markets such as the rapidly growing low-cost market of APAC, or the premium market in the US. In order to challenge the big boys Apple and Samsung, Huawei needs to find a way to expand their reach in these regions.
  • Xiaomi – Compared to the rest of the industry, Xiaomi’s sales numbers in Q4 2017 are frankly ridiculous. Xiaomi sold over 28 million smartphones in Q4, a massive 79% increase over Q4 2016! The primary driver behind this is their Mi and Redmi lineup of smartphones, which sold incredibly well in India as well as China. In fact, Xiaomi broke several sales records in the Q4 festive sales period in India, selling over 1 million smartphones in just 2 days during a sales event. They now have a stranglehold over the hugely promising and rapidly growing smartphone industry in India. With their plans to expand further in other markets such as Indonesia, Xiaomi is well on their way to becoming a global phenomenon.
Categories
Mobile Mobile Apps

Smart Devices Could Fundamentally Change How We Design And Engage With Mobile Apps

There is no doubt that the past decade or so has been monumental for consumer mobile technology. The smartphone has dominated the conversation, as well as the industry, ever since the launch of the original iPhone back in 2007. However, in the evanescent world of technology, any device’s reign at the top can be very fleeting indeed. Through the march of technology and slowing growth of the smartphone, industry titans are now expanding into other ventures. Perhaps one of the most exciting and promising of these ventures are smart home devices and the inevitable ‘Internet of Things‘ revolution.

Industry and market interest in IoT is rising very swiftly. In fact, IoT spending is expected to top $1.4 trillion by 2021 as more and more companies realize the potential of the technology. Leading this new technological revolution is the device which acts as a kind of central hub for smart devices – the smart speaker.

The Amazon Echo smart speaker has been a runaway success, with the Google Home is also performing quite admirably. Now, smartphone giant Apple has also thrown their hat into the ring with the launch of the Apple HomePod, and others are expected to follow the suite as well. According to a survey, now almost a quarter of all smartphone owners in the US also own a smart home device as well. It seems like smart home devices are set to become ubiquitous in the near future. However, as hardware technology evolves, so must software and app design to keep up. Smart home devices are extremely varied in their make up and are fundamentally different from a smartphone. This means that the traditional app design philosophy doesn’t translate particularly well for smart device integration.

Let us have look at how the emergence of smart home devices is affecting mobile app design and engagement, as well as the many possible pitfalls and concerns regarding this burgeoning new enterprise.

 

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Mobile Tablet Devices Technology

From Consumer Darling To Industry Underperformer: Is The Tablet Doomed?

The technology and computing industry has been dominated by the rise of the mobile consumer hardware over the past decade. In many ways, we have seen a shift in consumer and manufacturer priorities to form factor, mobility, and convenience in addition to pure function and feature set. Perhaps the biggest evidence of this was the introduction and subsequent success of the tablet, which typified this growing new trend in the consumer electronics industry. The tablet offered little in the way of new features and utility, yet its rise to popularity was stratospheric. It ushered in the decline of Personal Computing devices, and many predicted that the tablet would eventually kill off PCs as we know them.

Obviously, that has not happened. In fact, it is the tablet space that has suffered its own setbacks as of late. Rather than marching on and bringing about the death of PCs, tablets have found themselves stagnating and struggling to halt their gradual decline.

So what changes in the industry, as well as, the consumer psyche has led to faltering tablet sales? Does the industry still have the potential to bounce back from its current torpid state? Or is the tablet doomed to a slow and painful death, much like the way of other once ubiquitous devices such as CD and mp3 players?

Let’s have a closer look.

 

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Featured Mobile Smartphones

David Beats Goliath: Why Has Samsung Fallen Behind Xiaomi In The World’s Fastest-Growing Smartphone Market?

Ever since the start of the smartphone revolution, the global smartphone industry has been at the forefront of the consumer technology innovation, consistently posting incredible growth figures. The smartphone has dominated the past decade, so much so that some of the biggest companies in the world today owe their success to this device. However, after all this time, the global smartphone industry is now at an inflexion point. Growth has been steadily slowing over the past few years, as many traditional elite markets approach dangerous levels of saturation. The majority of sales in these regions now come from replacement buyers rather than new customers. This has invariably shifted the industry attention to alternate markets to some extent. Markets in Asia, particularly China and India, now afford the highest potential for growth for companies looking to expand rapidly.

India, in particular, is a supremely appealing prospect for many manufacturers due to its large population and status as the ‘fastest growing smartphone market in the world’. Of course, gaining a foothold in the Indian market is easier said than done. Over the years, many popular global smartphone manufacturers have failed miserably in their efforts in India, but Samsung is not one of them. Their vast and multi-price tier product portfolio and extensive marketing have brought them much success in this region, with the South Korean giants topping sales charts for over half a decade.

Xiaomi Beats Samsung For the First Time In India

However, all that changed at the tail end of last year. Several reports now indicate that Xiaomi has dethroned Samsung with 8.2 million smartphone shipments in India in Q4 2017. This is quite startling considering the profiles of these companies, and the fact that Xiaomi has only been around in India for nearly four years only.

The change equations in the India smartphone market lead to think:

  • What has prompted such a dramatic change of fortunes?
  • What are the deficiencies in Samsung’s India strategy?
  • Why is a company of Samsung’s size struggling to keep up with a relative newcomer like Xiaomi?

Today we are digging deep to understand what are factors that forced a cash-rich Samsung to leave grounds for relatively new entrants, likes of Xiaomi. And, what’s holding Samsung back from winning the lost grounds from newbies in India.

 

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Mobile Smartphones

Is The Shine Wearing Off The iPhone? Stagnating Sales And Reports Of Production Cut Reveal A Worrying Scenario For Apple

The year 2017 was supposed to be the year of the iPhone. On the tenth anniversary of the original iPhone, everybody expected the next generation of iPhones to redefine the smartphone as we know it, and put Apple Inc. (NASDAQ:AAPL) firmly back on top of the smartphone industry. There was an overwhelming sense of excitement over what Apple would come up with it, with many predicting an iPhone ‘super-cycle‘ that would shatter previous sale records. Fast forward to February of 2018, and there are already reports emerging about the imminent demise of the iPhone X, Apple’s premier flagship device. In what could be considered one of the biggest disappointments of the year, the landmark tenth-anniversary edition of the iPhone has failed to stamp its authority in the smartphone market.

While the underwhelming performance of the iPhone X is in itself a disappointment for Apple, the more worrying issue is that it is a part of larger pattern of stagnation and deterioration that seems to have permeated the company. iPhone sales have been either been gradually falling or stagnating for several quarters now. It seems as if Apple has hit a ceiling of sorts when it comes to iPhone sales.

It leads us to many questions:

  • What factors have arrested the once in-suppressible growth enjoyed by the world’s most iconic smartphone?
  • Would Apple really consider killing its landmark tenth anniversary iPhone?
  • If so, why? And what does it mean for Apple going forward? Let us have a look.
 

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Mobile Smartphones Technology

The Radical Shift: How India Emerged As The World’s Most Promising Smartphone Market

The smartphone has been at the forefront of the technological revolution in the 21st century. The importance of smartphones in the modern world is outmatched by their near ubiquity. Perhaps it is due to the increasingly central role these devices occupy in our daily lives now that we tend to forget that the smartphone itself is a fairly new entrant to the tech landscape. However, the evolution of this industry over the years has been outlined by constantly evolving patterns and trends, along with tremendous growth.

Just like most cutting-edge consumer technology, the smartphone craze first gathered momentum in the West. Regions like the USA and Western Europe drove massive growth and sales. However, saturation in these markets has led to the industry shifting its focus towards other regions, particularly in South East Asia. The most pertinent of these is definitely the Indian smartphone market. With a population of over 1.3 billion and growing, the potential for market growth in the region is nearly limitless. Due to its high volume potential, and rapidly increasing adoption, India now represents the next gold rush for smartphone manufacturers across the world. Therefore, now might be a good time to have a closer look at the Indian smartphone industry over the years, and scrutinize the various trends and patterns that are defining the world’s fastest-growing smartphone market.

 

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Mobile

A Proposed Merger That Could Change The Face Of The Global Mobile Tech Industry, Forever! [UPDAED]

It is no secret that the mobile technology is one of the biggest industries in the world, as well as a fundamental pillar of the global economy. Often when we think of the mobile technology industry, our minds turn towards the likes of Apple Inc. (NASDAQ:AAPL), Samsung Electronics Co Ltd (KRX:005930) and Google. However, while these companies might make up the glamorous face of this enterprise, the true beating heart of the industry is something else entirely. I am, of course, referring to chip manufacturers. These companies create and manufacture the SoCs (System on a Chip), modems, WiFi and Bluetooth chips and many more vital components that form the very basis of modern mobile devices.

Earlier this week, the entire industry was left stunned when Broadcom Limited (BMV:AVGONmade a formal buyout offer for QUALCOMM, Inc. (NASDAQ:QCOM) to the amount of $105 billion. While there had been rumours circulating for days prior, the sheer scale and ambitiousness of the offer have undoubtedly turned several heads. For one, were this deal to go through, it would mark the largest acquisition in the history of the technology industry, dwarfing the $67 billion take over of EMC by Dell in late 2016.

Despite this detail, the sheer monetary scale of the deal might be the least interesting facet of the deal. Due to the nature of the industry, and the two entities involved in the deal, the long and short-term consequences of this merger promise to be immense. However, we dwell deep to find that out it’s important to have a quick look at the involved parties.

 

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