Despite some respite from being allowed to accept old Rs 500 / 1,000 notes for a brief period, the two big events, i.e. demonetization and full quarter of Jio’s free services, are likely to result in a sharp sequential revenue decline. Pressure from Jio’s free launch offers is likely to be felt on three fronts – data volumes (as industry’s paid volumes take an expected knock), data pricing (as the incumbents try to hold on to data volumes) and voice pricing (initial impact of bundled offerings in line with Jio’s announced pricing construct + step-up in aggression on pure voice plans)
Jio’s free offers have resulted in a sharp (more…)
There is lot of bugaboo about the proliferation of digital media in India. India too is estimated to follow the same consumption pattern as in US with surge in internet penetration . However, currently, broadband infrastructure in the country is too inadequate due to which internet penetration is limited to ~27.5%. Further, available wired broadband speeds to paying consumers in India are far below what the service providers promise. A data service package that promises 8mbps typically max out at 5mbps. This is due to high contention ratio (that measures the number of internet users sharing a fixed amount of bandwidth) given limited availability of bandwidth.
Nonetheless, mindset of consumers is rapidly (more…)
New car business accounts for 75% of the CarDekho’s revenues currently. There are three revenue streams in this segment: 1> advertisements by OEMs; 2> Lead generation for dealers/OEMs – CarDekho generates leads for ~2,000 partner new-car dealers; and 3> technology solutions including lead management systems for OEMs/dealers, virtual reality and sales & marketing solutions. CarDekho has strong OEM relationships with Renault, Ford, Nissan & Datsun, Tata Motors, Honda and M&M for a portfolio of solutions.
The revenue from the used car business is (more…)
Major internet companies still generate significant revenues from advertising models. As the softening macroeconomic environment continues to affect overall ad budget sentiment, internet companies are embracing opportunities and challenges by adapting to changing dynamics.
Specifically, 2016 has been challenging for search advertising post the Zexi Wei incident in April and stepped-up regulatory policy on (more…)
Cybersecurity is non-negotiable. Investments in cybersecurity can be split into three key fronts: 1) Technology (advancement of cybersecurity solutions to tackle the ever-growing nature of threats), 2) Operational, and 3) Talent (Lack of talent remains the biggest area of concern in the field of cybersecurity). There is no silver bullet when it comes to cybersecurity and organizations need to invest on all the key fronts.
Big Wall Street Firms spends roughly $500 Mn+ a year on cybersecurity (and has roughly 2,000 people working on this area) and views this as a risk management tool. Advancement in (more…)
The Executive management (including marketing and strategy heads) met with Analysts and discussed current on ground situation, near term execution strategy, strategic vision and market positioning over a 2-4 year horizon. Mukesh Ambani while he outlined his vision & road map suggested that Jio be positioned as Digital Service Provider and not as Wireless Operator.
Jio Subscriber growth has slowed; Welcome Offer could be extended. Jio’s Current subscriber base is round 40 Million [Chasing a Target of 100 Mn] If Jio is unable to achieve this target, there is high probability of extension of the Welcome Offer beyond Dec-16. However, there has not been any official internal communication regarding this. We note that back-end IT issues, poor consumer service and weak distribution network are (more…)
Amazon is accelerating its investment in its retail operations in India. For one, two years after committing $2bn, this Mr. Bezos announced that he was committing an additional $3bn in India. We believe this was likely due not only to the success that Amazon has been seeing and the significant opportunity that it still sees ahead, but may also have been due to the need to continue to investment its logistics in order to address infrastructure issues in India, to take advantage of potential challenges at local competitor Flipkart, and to address new regulations taking hold in India.
The Executive Management’s commentary on the 2Q16 earnings call that it plans to double video content investment in 2H16 likely points to acceleration in spend this year vs. 2015. Moreover, (more…)
Microsoft demonstrated an improved Surface Book as well as an all in one desktop (Surface Studio) running Windows 10 Creators update. Windows 10 Creators edition update to be released this spring, with the focus across 3 areas – 1) 3D creation for everyone; 2) an improved gamer experience; and 3) easier connection and content sharing. Updates ranged from being able to record a 3D image on a phone and then interacting with and editing it in 3D paint or powerpoint to improvements in game broadcasting and hosting a player created gaming tournament. While these changes were certainly interesting, may not be termed (more…)
The inbox earpods with the newly launched iPhone7 come with a lightning port and an adaptor to the 3.5mm jack. Key benefits include: 1) saving space in the phone: The 3.5mm jack is over 50 years old and doesn’t do much besides carrying an audio signal. It needs its own power amplifier and digital audio converter, which can be built into headphones, so removing the jack makes room for other things, such as a second speaker. iPhone7 has included a lightning-to-3.5mm adapter for a transition period. However, as the 3.5mm jack itself already suffers from some audio degradation and an adapter would make this worse, we think consumers may opt to purchase headphones that use (more…)
Amazon announced Amazon Music Unlimited, an on-demand streaming music service with a library of “tens of millions of songs.” The service costs $7.99/month (or $79/year) for Prime members and $9.99/month for non-Prime members. The company is also launching an “Echo plan” for $3.99/month, with music available on a single Echo device. This compares to $10/month for competitor plans, including Spotify and Apple Music. We note that this is separate from Amazon’s existing Prime Music offering, an ad-free streaming service which is included in a Prime membership, but includes only 2mn songs. Amazon’s new offering adds to the already intense competition in the streaming music space.
Amazon Music Unlimited will be appealing to current Prime subscribers as the offering is comparable to other streaming options, (more…)