Which Brands Will Benefit from 3G SmartPhone Upgrade Cycle ?

3G SmartPhone Upgrade CycleIt is apparent that local smartphone brands gained share from foreign brands in 2012. Although Samsung remained the market share leader throughout the year, local brands, especially Lenovo, made significant progress. At the end of 2012, local brands’ combined market share was 61%, and we expect this to edge up to 66% in 2013, as brand names outgrow whitebox players.

As Operators derive higher profits from local brand smartphones than from Apple / Samsung smartphones local brands are likely to gain more subsidy share, even though overall operators’ subsidies could remain flat. Further, a successful flagship model also helps promote brand image, thus increasing sales volume across the product line. Notably, all flagship models (quad-core, 4”+ touch display, 8MP, etc.) from local brands are priced at below USD 600. (more…)

Can MVNO Policy be Re-Wriitten in India after Virgin’s Failure ?

In India, Virgin Mobile started its MVNO (though later changed, as a JV partner to Tata Indicom) in 2008. The company used Tata’s CDMA network to offer its services under the brand Virgin mobile and focused on attracting the youth segment with a heavy focus on advertising lower tariffs. Virgin, along with Tata, was the first to introduce “1p/sec call rates” and “get paid for incoming calls” like offers in the country. After failing to make an impact in a market with already low tariffs, Virgin decided to sell its stake to Tata.

India is a diverse Country with Large Population like China and here is how they are going to Play the MVNo Game in China. (more…)

MarketShare of SmartPhone Mobile Handsets in China

The China smartphone market is price driven (sub-Rmb1000 or US$150); consensus believes aggressive pricing will continue in 2013. We think the market will remain fragmented, but selective brands in China could benefit in 2013 through enlarged scale. We think share gains at Lenovo and ZTE could help the companies defend margins at the operating level better than peers.

The following Chart Shows MarketShare of SmartPhone Mobile Handsets in China between 2009 and 2013china smartphone marketshare
The marketshare dynamics will change substantially if Apple rolls out a low-priced iPhone to expand share in China, putting greater-than-expected pressure on margins.

Nokia Lumia Windows Phone too Late to Take on the Google Android Challenge

Nokia Lumia Launch IndiaNokia India has launched two smartphones to its Lumia series with the Lumia 720 targeted at the mid-range segment and the Lumia 520 targeted at the entry-level market. Nokia’s CEO, Stephen Elop, the launch of such smartphones now firmly puts Nokia and Microsoft’s Windows Phone 8 presence across all smartphone price points, starting from the Lumia 520 at the entry level to the Lumia 920 at the highest end, thus making a better mobile experience more broadly available.

The Lumia 720’s main highlighted attraction is the camera which has an aperture of f/1.9 on a Carl Zeiss lens, bigger than all the smartphones in its price-range and also some of the high-end (more…)

ZTE Shifts Focus to Operators for Increasing Sales

ZTE sold 65mn handsets in 2012 and became the 4th largest OEM in the world, according to IDC. 70% of the handset revenue came from smartphone. Looking into 2013, we expect ZTE to ship 40mn smartphone, up 42% YoY. ZTE ships ~40% of its smartphone in domestic market and ~60% in overseas. We expect ZTE to continue focusing on operator channel in 2013 and believe management should be cautious about moving towards open channel, due to high marketing expense. In China, growing volume in TD models would also benefit ZTE, who has a competitive edge against peers in TD. TD models deliver higher margin for ZTE thanks to less competition thus far.

ZTE management acknowledged that there’s still a gap between ZTE (more…)

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