SmartPhones Tablets

The mobile games market in Asia is starting up rapidly in South Korea and China with the uptake of smartphones. We estimate that the leaders in terms of billings have already reached monthly sales of the ¥1bn level, and that many titles now have sales that bear comparison with top-class native apps in Japan—apart from Puzzle & Dragons with its monthly sales exceeding ¥10bn.

ARPU improvement now looks likely, driven by smartphone uptake and enriching of game content. Against this backdrop, some Japanese packaged software makers and social app providers have started to launch Japanese-made game titles in South Korea and China, and are taking steps aimed at achieving profitable operations. We spotlight the success of Square Enix Holdings’ Kaku-San-Sei Million Arthur as a forerunner of this

At the Asia Tech Conference, everybody was positive on the Sale of SmartPhones in Asia specifically, China followed by India and others. Overall growth within the smartphones segment remains strong, driven largely by the mid- and low-end smartphones. Mediatek sounded positive about the traction of its business as did several of the component suppliers supplying into this market. Taiwan suppliers also noted strength coming in from Samsung Electronics for components for mid-end smartphones. With Apple’s decision to not compete in the mid-priced smartphone segment (given the announced pricing of its 5C and 5S series of phones last week), we believe the deck is clear for companies like Samsung to make substantial headway into this market. It was interesting to note that a large portion of even the low- and mid-to-low

Microsoft has announced to acquire Nokia’s Devices & Services (D&S) business and license Nokia’s patents and mapping services. As the original leadership team from Nokia’s D&S business will remain intact (as stated by Nokia), we believe the ongoing project planning and rollout strategies would see limited impact with respect to Nokia’s supply chain, pending the close of the proposed transaction, including implications for Nokia’s sole Windows Phone (WP) ODM partner, Compal Communications.

According to Microsoft, the main strategic rationale behind the proposed transaction is to accelerate phone share. Microsoft believes the proposed collaboration would help make the market for WP, and

Microsoft has announced it would purchase Nokia’s entire devices & services business and its over 8,500 design patents, and license Nokia’s utility patents (including 60+ third party license agreements) for a total transaction price of $7.2Bn.

Given NOK’s small presence in the smartphones market (only 3% market share), this transaction isn’t a major event for anyone in the smartphone space in the near term, in our view. However, it does ensure the continued availability of Windows Phone hardware. Nokia has had a high market