Two Losers – Microsoft & Nokia in SmartPhone Trying to Make a Winner

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Mobile IndiaMicrosoft 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

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Baidu World Developers Conference – Light Apps to Take on Google Apps

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Baidu World Developers ConferenceBaidu CEO Robin Li spent much of the AM session of Baidu World discussing new mobile constructs. He noted that the Baidu open platform already has 700,000 developers and has a distribution platform capable of delivering 69mn apps on a daily basis, which we believe leads the industry. The 0.1% most popular apps represent 70% of all downloads.

Baidu and Concept of Light Apps
Baidu’s solution offers to replace native apps with “light apps” for long tail app developers, with a set of light app tools including

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A-Vo-ID Group Control 70% Revenues of Indian Telecom Industry

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Airtel Vodafone Idea - The AVOID Group MarketshareThe Indian telecom industry reported robust revenue growth of 5.6% q-q in the Apr-Jun quarter. Revenue growth was driven by increases in revenue per minute with most large operators reporting 4-6% increases in pricing. Year-on-year growth also improved to 9.7% after having slowed to 6.5-7% in last two quarters. Industry revenue growth picked up across circles.

Airtel, Vodafone, Idea Corner 70% Revenue Market Share.
Airtel, Vodafone and Idea combined revenue market share (RMS) crossed 70%, the highest market share of the top three in over five years. Despite India still having 12 telecom operators, industry revenue is consolidating. This quarter, Bharti, Idea and Vodafone gained RMS while RCOM, Tata and Uninor lost share. Uninor’s market share peaked at 2.6% in 1QFY13 but, post the SC directive on licence cancellation, the company has reduced its operations and its national RMS has reduced to 1.7%. The top three operators reported strong market share gains in each of the 22 circles in India, alleviating any concerns on market share

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How Airtel, Vodafone, Idea, Reliance Optimize their Voice Networks ?

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Indian Telecom Saga is still about 2G Voice as operators strive to bring in the most interior rural parts on to the telecom network. Apart from expanding the number of cell sites, the operators have alternative methods to boost capacity. These include usage of 3G network, fluid ICR agreements and vertical expansion. The following 4 Methodologies are Widely used by Airtel, Vodafone, Idea and Reliance to optimize and enhance the Voice Services in India

Vertical expansion – Cell sites can be expanded vertically by adding

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Qihoo 360 Mobile and Search Grows Faster – Google Out of Race

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Qihoo 360 Chinese Internet Giant GrowsQihoo continues to grow its search market share in China and strengthens the industry #2 position with 16-17% search query share by July 2013. We believe Qihoo’s target of 20% search traffic market share by 2013 is on track. Qihoo’s market share of China’s online search market by page views (PV) increased to 16.3% in July 2013 from 10.4% in Dec 2012, according to CNZZ. Qihoo continues to grab page view market share from Baidu, whose share declined from 71.7% in Dec 2012 to 67.7% in July 2013. Qihoo is also building an Intelligent Search Monetization System.

Qihoo believes market share and user experience improvement is more important than monetization in the near term. Management believes Qihoo can change the competition landscape

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Baidu’s Daily Android Active Users + Search Queries Grow

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Baidu Mobile Optimizations GrowthAccording to Baidu, Android daily active users (one DAU representing a connection to the internet at least once daily) saw a net increase of 20m in Q2, up 10% QoQ (vs +56% QoQ in 4Q12 and +27% in 1Q13) despite a 30% QoQ increase in the
sales of Android devices in China. The slow-down in Andriod DAU growth likely owes to: 1) second-time purchases of Android devices and 2) some new Android users having yet to establish an internet connection. The report forecasts that Android DAU will surpass 300mn by year end,

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How Airtel is better positioned in Mobile Data 3G /4G LTE than Idea ?

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Airtel IndiaAirtel network capex (3G, LTE, fibre), spectrum portfolio (3G, LTE) and operating costs reflect its significant investments to strengthen its data offerings. Hence, Airtel should be better positioned to capture a higher share of data revenue. Bharti’s capital employed currently reflects a total investment of Rs205bn in 3G/LTE spectrum in India. With these investments, Airtel covers 81% of the industry revenue.

Idea has bought 3G spectrum in 11 circles which covers only 49% of the industry revenue and doesn’t include the key metro circles of Delhi, Mumbai and Chennai. Idea’s investment in 3G spectrum

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Now Reliance Communications Gets Serious about Mobile Data Business

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Reliance Communications 3G DataIn its FY13 annual report Reliance Communications expects data and broadband services to be the new driver after multi years of voice leadership. While voice penetration of >70% has been achieved, that for broadband remains abysmally low at <1%. According to various market estimates, data & broadband services can grow ~7x from current Rs50bn to Rs350bn over the next 4‐5 years.

The biggest deterrents to 3G adoption stem from high handset and data pricing in our view but situation could be changing in the past few months. Device prices have

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China’s monthly mobile data usage hits 123MB – Unicom Leads

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According to MIIT, China’s average monthly mobile data usage per mobile Internet user reached 122.8 Mb in 1H13, up 36.6% YoY. Data usage from mobile music and video, mobile gaming, and mobile literature increased 14.0%, 18.9%, and 28.7% from the end of 2012, respectively.

The mobile data usage in China grew >35% YoY to 123MB per sub per month. While the growth rate was robust, the overall usage levels still remain far below the average in Developed Markets (1-2GB) and even other EMs such as Malaysia and Thailand (250-500MB). This remains the key driver of our positive view on China Unicom and China Telecom.

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China Mobile 4G LTE Expansion on Track

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China Mobile 4G ExpansionChina Mobile maintains guidance of building 200,000 LTE base stations in FY13, 20.8% of which will be based on the 2.3GHz E-band spectrum for indoor coverage. The base stations number split between software upgrade (F-band spectrum) and new towers (mainly on D-band spectrum) will partly depend on the equipment price. LTE equipment tender will be completed by August.

Management expects commercial TD-LTE smartphone will be launched by end of 2013, but mainly high-end models. TD-LTE smartphone priced around Rmb1,000 could be available by end of 2014, based on current feedback from chipset and handset vendors.

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