Messages

916

SmartPhones & Apps / LINE From Messaging App to Mobile Gaming

« on: October 27, 2014, 10:46:17 AM »

Recently, LINE announced plans to diversify its mobile game offerings via a series of strategic partnerships with talented game developers in Japan. Given LINE?s large casual gamer base, we believe it will need more time and have to exert more effort to attract premium mobile gamers who typically generate high ARPU, strong loyalty, and longer paying cycles. LINE needs to find the optimal mix of game offerings for both premium and casual gamers to avoid over-monetisation risks

LINE's online-ad sales will show modest growth until the company finds some powerful mobile-ad products, rather than the typical
search and display ad formats

917

SmartPhones & Apps / Qunar Top Low End Hotel App

« on: October 27, 2014, 08:38:24 AM »

Qunar recently further expanded its hotel coverage to lower end hotels in China; including inns, hostels, apartments, etc. Prices in this range of accommodation run as low as RMB20/bed/night or even less. Qunar mainly offers these low-end hotels through group-buy, cash rebate, direct sales and flash sales. The average daily booking volume of Qunar's Low-end hotel segment during the Golden Week was some 73% higher than the volume in the prior week. Unique Visitors (UV's) were some 40% higher, and conversion ratio was ~25% higher, according to survey data from ctcnn.com.

Qunar remains #1, with a total of 6 apps and cumulative downloads of 166m (+13% MoM) as of Sep 2014. Ctrip came in #2 with total 4 apps and total downloads of 164m (+20% MoM). Tong Cheng, ranked #5, is ramping quickly with 37% MoM growth for total downloads of 113m.

918

3G / HSPA / EVDO / Require 5MHz Spectrum for Mobile Broadband - Idea

« on: October 27, 2014, 08:35:48 AM »

Idea Cellular suggested that an operator will need at least 4/4.5 MHz of spectrum in the 900 MHz spectrum band for GSM/2G services and 5 MHz for mobile broadband services .This implies that the only way both data spectrum and voice spectrum demand can be met is by increasing spectrum supply, which looks difficult to achieve in the short term, in our view.

Idea faces renewal in nine service areas, accounting for 72% of its revenue, and the company has no backup 1800 MHz spectrum in two service areas. We highlight that data growth is picking up and incumbent operators will need to add more data spectrum in their key markets. Given the demand for data spectrum, there is a good possibility that the upcoming auctions may see aggressive bidding. While we see a low possibility of Idea losing spectrum in key markets, the possibility of disruptive pricing cannot be ruled out.

17% of Idea's subscribers have a 3G handset, of which only 43% have taken up a 3G data connection. This latter ratio has stayed
largely stable for the last few quarters.

How Much RMS Required for an Operator to Turn Profitable ?
According to Idea's management explained that for the new circles to turn profitable, a threshold revenue market share of 8% has to be
reached.

919

Web 2.0 / eCommerce Wars - Blessing for Print Media

« on: October 24, 2014, 09:28:47 PM »

In our view, Indian ecommerce companies flush with cash from fresh rounds of funding are splurging on marketing like never before. While the online medium has long been considered a nemesis of the print medium, we think the explosive growth in the Indian e-commerce space implies it could add 100-200bps of ad growth for print names liek Hindustan Times, Dainik Bhaskar and other National Dailies.

In the ecommerce segment, the high competition and ample cash at the disposal of the e-commerce companies should provide further impetus to ad growth.

920

Technology / Monetization - Facebook Vs Twitter

« on: October 24, 2014, 09:22:52 PM »

Recent reports have suggested that Facebook?s (FB) monetization (i.e., ad revenue per user) is materially greater than Twitter?s (TWTR), which suggests that FB may not have as much upside in monetization as one of its closest comps.

The report has not considered an important variable ? the relative differences in engagement (i.e., time spent), which directly impacts the available ad inventory (i.e., monetization potential). When engagement is taken into account (e.g., avg. feed views per month of 210 for Twitter users vs. 950 for FB), we estimate that FB?s monetization is actually 50-60% less than Twitter (not 100% greater as some have reported).

In the case of FB and TWTR, the differences today are significant. Using both time spent data from comScore and our own method for comparing avg feed views per user, we estimate that TWTR?s ad monetization per user ($0.53/Feed View/Month and $1.84/Mins Spent/Month) is actually 2-3x greater than FB?s ($0.23 and $0.63, resp.).

921

4G / LTE / Challenges for Standalone 4G LTE Network

« on: October 24, 2014, 04:15:31 PM »

We have not yet seen a robust ecosystem/handset that would be able to support the launch of TD and FD together. While China is seeing some progress on 4G we do not expect low-cost 4G handsets to become available on the market any time soon.

That said, we do note that QCOM Snapdragon 210 represents clear progress, but a commercial rollout is unlikely before the first half of
2015; it will most likely begin with China and it could be early 2016 before it is available in India. Furthermore, by that time, we expect low-cost branded 3G smartphones to be available in the USD50 price level, which we think would be sufficiently affordable to drive mass market adoption in 3G

4G operators have 20MHz of spectrum in the poor 2.3GHz band. Given this, pure-play 4G operators need to deploy a very large number of towers and a pan- India operator will need to start a tower population of c150k. Moreover, 4G requires towers located
at short distances apart. Even existing tower companies may find it tricky to meet demands as new tower deployment in urban centres is a big challenge

While network sharing could allow new entrants to benefit in terms of capex savings and shorter rollout times, it comes with a near- to medium-term challenge. Most of these towers do not have fibre backhaul, which may limit the capacity advantage of the 2.3GHz spectrum

Although we are of the view that TD-LTE will work, we believe that TD-LTE VoLTE is still a couple of years away from mass market adoption. Consequently, we believe it is difficult to see how a pure-play 4G operator can achieve viable commercial scale with this expensive, complex, early-stage technology; however, we expect VoLTE to work in the medium term in low-income markets such as India.

922

5G / Wi-Fi / Wireless Broadband Users Rise

« on: October 24, 2014, 02:26:26 PM »

In a market where data is emerging as the key growth driver, trends in the wireless broadband (3G and EVDO; the latter is the 3G-equivalent CDMA offering) subs metrics appear to be in favor of the incumbents. We note CDMA operators have been offering EVDO dongles for a long time and hence have an established base of subs in that segment. This meant the wireless broadband (BB) subs share of the top-three combined was a lowly 51% at the end of December 2013 (when TRAI started publishing this data).

In eight months through August 2014, wireless Broadband subscribers share of the top-three rose to 63.8% as they captured 91% of the incremental subs. We expect the trend to continue given that data sweepstakes will be driven by the ability to invest and good judgment on right timing of investments, in our view.

923

SmartPhones & Apps / What is IBM MobileFirst for iOS ?

« on: October 22, 2014, 11:34:27 AM »

IBM will sell iPhones and iPads with the industry-specific solutions to business clients. IBM will develop native apps for iPhone and iPad. Apple has said that it will continue allowing enterprise app developers to sell directly to enterprises without Apple taking a cut

IBM will offer cloud services optimized for iOS (device management, security, analytics, and mobile integration) Packaged offerings from IBM for device activation and supply management. Possible incremental opportunity for Apple to increase sales to the secondary market.

AppleCare service and support for enterprise

924

SmartPhones & Apps / Microsoft OneNote Works Seamlessly on Android, iOS and Windows

« on: October 22, 2014, 11:32:21 AM »

In our hands-on testing we found Microsoft OneNote to work consistently and seamlessly across Windows, iOS, and Android devices
with different form factors ? PC, Tablet, and Phone.

Importantly, we found that the feature set for OneNote was virtually identical across the different platforms we tested.

We think OneNote represents a good example of consistent capabilities that Microsoft could potentially deliver through native versions of Office for Android and iOS in the future, leveling the Enterprise playing field between iOS and Android.

925

Web 2.0 / Baidu Advertisers Spend 35% on Mobile

« on: October 22, 2014, 11:14:37 AM »

Data Suggests that search agencies and advertisers are on track to achieve their annual budget on Baidu, and are now spending 30-40% of their budget on mobile, depending on the industry. The healthcare advertisers (~35% of Baidu?s search revenue) now allocate 50-70% of their budget to mobile, with CPC and ROI achieving or surpassing that of PCs. We believe mobile will sustainably drive Baidu?s
search revenue for the next 2-3 years

Qihoo may launch healthcare search ads in 4Q, we do not expect it to negatively impact Baidu much, as 1) it seems that Qihoo?s
budget is mostly incremental; and 2) healthcare-related traffic is shifting to mobile from PCs faster than other categories, a long-term positive to Baidu

926

Web 2.0 / Qihoo's healthcare search market

« on: October 22, 2014, 11:12:48 AM »

The healthcare advertisers we met with have prepared a budget for Qihoo equivalent to 15-25% of that for Baidu and all budgets are incremental.

We note that healthcare-related traffic is shifting towards mobile from PC faster than other categories, likely out of more privacy protection
consideration. Given Qihoo?s weak position on mobile search, it is negative to Qihoo in the long term.

Mobile games on the other hand is slowing faster than we expected, likely due to a weak pipeline and intense competition from Tencent and Baidu.

927

Smart Connected Devices / Who Uses Tablets in China ?

« on: October 17, 2014, 01:11:53 PM »

According to the report, approximately 70% of users access their tablets every day, with an average time spent of 1.9 hours per day. The report noted that iOS users on average install 16 apps, compared with 12 for Android users. In terms of user demographics, the report claimed that tablet PC users are mainly white-collar, with approximately 65% of them having monthly incomes of over RMB3,000

Advertising cost in terms of CPM is higher on tablet PC's compared with smartphones and PC's due to higher user pedigree and better
display qualities. Leading online video player Youku has already put much  effort into this area in rolling out its multiscreen strategy. In addition, the relatively low ad inventory levels on tablets also imply some upside potential.

928

3G / HSPA / EVDO / Broadband Subscribers Reach 74.31 Mn

« on: October 16, 2014, 07:57:53 AM »

Total Broadband Subscribers in India [Speed Greater than 512 Kbps] reached 74.31 Mn at the end of August 2014 This includes Wireless & Wired Broadband Subscribers.

Wireless broadband [EVDO + 3G] is the fastest growing segment which added 3.48 Mn Users in the month of August 2014 taking the Total to 58.82 Mn Subscribers.

Wired broadband [DSL / Cable] subscriber number reached 15.05 Mn at end of Aug 2014.

Wi-Fi, WiMax and other P2P Broadband subscriber number stands at 0.44 Mn

929

SmartPhones & Apps / Baidu Reports 38% in users of its App

« on: October 16, 2014, 07:27:40 AM »

Baidu today published a report regarding China's Android app distribution platforms. According to the report, the total number of Android marketplace users in China has grown by 27% since the beginning of the year. Baidu claims to have seen an increase of 38% in users of its app distribution platforms (including 91 Wireless and Baidu Mobile Assistant, etc) over this period. The report also revealed that each Baidu app store user on average downloaded 3.1 new apps or app updates per day (vs a market average of 2.9 downloads).

Baidu further revealed in the report that its app distribution platforms have grown to cover 600m Android users, with more than 1m developers working with them. The company also claimed that it has increased download volumes for new apps, thanks to improvements in the targeting of promotions, which is in turn backed by its leading technology in big data analysis.

While growth of the app store market still seems quite robust, we are cautious of the potential for slowdown due to the fact that penetration rates have already reached relatively high levels. Big players such as Baidu and Tencent may boast better performance in a market with moderating growth and intensified competition given their clear competitive advantages. We believe both players for instance to be spending quite heavily in the area of app pre-installations

930

SmartPhones & Apps / Facebook + WhatsApp Messenger Lead WeChat by 60%

« on: October 15, 2014, 02:49:30 PM »

According to tweet from the company's cofounder, Jan Koum, WhatsApp reached 600mn MAUs, which accounted for y/y
growth of approximately 100%. Given Facebook?s 200 million monthly actives on Messenger in 2Q, and assuming a likely conservative 50% overlap between Messenger and WhatsApp, MAUs for the combined Facebook Messaging service could be approximately 700mn active users ? approximately 60% higher than the closest competitor WeChat, and likely more geographically diverse

This may be surprising for some US-based investors as shown by recent data from Parks Associates that shows WhatsApp as only the seventh most popular messaging app amongst US messaging app users. However, over the last five months WhatsApp remains among the top four most downloaded apps globally.

With Facebook Messenger?s presence in the US and WhatsApp presence internationally, Facebook has clearly become the preeminent global player within the messaging services space.