Displaying items by tag: emerging markets
Xiaomi just launched the Mi A1 smartphone in collaboration with Alphabet’s Google, the first Xiaomi device to run on the evolved Android One program. Priced from INR 14,999 in India (US$233.90), Mi A1 combines hardware innovations, including an optical zoom dual camera setup, with Google-designed software.
The device runs on stock Android to offer a high-quality software experience designed by Google, underscoring Xiaomi’s commitment to providing more choices for users. At a launch event in New Delhi, India, it was announced that Mi A1 would be available in India and also in more than 40 markets around the world including Indonesia, Vietnam, Russia, Poland, Hong Kong, Taiwan, Ukraine, and Mexico.
Android One is a low cost line of devices that run the Android operating system – a hardware and software standard created by Google for Android systems and customers in the developing world, although later on it was made available in limited form in some developed nations. Android One phones initially rolled out in Pakistan, India, Bangladesh, Nepal, Indonesia, the Philippines, Sri Lanka, Myanmar and other South Asian countries in 2014.
When Google started Android One in 2014 – a signature project of Google CEO Sundar Pichai (then Google’s Android head) – the company’s early OEM partners couldn’t sell enough of the devices, thus interest waned, Bloomberg reported. Google has now teamed with Xiaomi to bring the program back to life for India, continuing a stalled effort to showcase its mobile software for users in emerging markets.
Xiaomi and Google are now together aiming at the middle market with the launch of Mi A1, which will likely see them reach fewer Indian buyers, but also avoid the intensely competitive low end market, where brand affiliation matters less and margins are thin, Bloomberg highlighted.
“Mi A1 is a strategic device in our global expansion, marking a milestone on our quest to bring innovation to everyone,” said Xiaomi Senior Vice President Wang Xiang. “From the beginning Xiaomi has been all about choice, and we are delighted to offer users a new way to experience the power of Xiaomi.”
Wang noted that this is a logical extension of Xiaomi’s long partnership with Google. “Google has been a great partner, and given our strong collaboration, we thought their idea to launch a Xiaomi smartphone on Android One would be a great opportunity to give our users a different user experience,” he said. “I’m truly excited about what this partnership will bring to our users across the world!”
What’s it got to offer? Mi A1 incorporates a dual camera configuration similar to that in Mi 6, Xiaomi’s latest flagship device, with wide angle and telephoto lenses used to incredible effect. The two lenses allow Mi A1 to calculate what is in the foreground and what is in the background, creating a depth-of-field effect that typically requires a DSLR lens to achieve, allowing the user to create photos of unparalleled clarity and color.
In addition, an improved ‘Beautify’ mode that makes selfies look more natural, now works with both the front 5MP camera as well as the 12MP dual rear camera. Mi A1 supports 2x optical zoom, which makes photos of distant subjects remain clear, while 10x digital zoom is also supported.
Mi A1 is Xiaomi’s first Android One phone, with a software experience designed by Google, offering users a simple, pure Android phone that stays fresh over time with OS upgrades. As an Android One smartphone, Mi A1 comes with the most popular Google services built-in as default, such as free unlimited high quality storage from Google Photos.
Available in Black, Gold and Rose Gold, Mi A1 has a full-metal body design that measures just 7.3mm in thickness, with discreet separation lines for a seamless look and rounded edges for great hand feel. It also comes with a rear fingerprint sensor.
Featuring a 5.5-inch 2.5D curved glass screen with Corning Gorilla Glass protection, the device also boasts a 10v power amplifier for deeper lows and higher volumes, ensuring it provides an immersive media experience. A dedicated amplifier also provides support for high-impedance headphones (up to 600 ohms).
The device is powered by the Qualcomm Snapdragon 625 processor based on the 14nm manufacturing process, as well as a 3080mAh battery. It also features 4GB RAM and 64GB internal storage.
Huawei, Xiaomi, Oppo and Vivo represent an uprising in the smartphone industry. Together, these Chinese OEMs (original equipment manufacturers) accounted for a record 48 percent of global device shipments in Q2 2017, according to Counterpoint Research. Emerging markets represent a gold mine for Chinese OEMs, as they continue to aggressively scale beyond their mainland.
The smartphone industry has been dominated for almost a decade by Apple and Samsung who hold the top two sales spots. But that could soon change as customers in emerging markets look to cheaper options supplied by Chinese OEMs. Huawei was the first Chinese smartphone manufacturer to go global and they spent significant investments to establish a presence across multiple markets. This provided momentum for other Chinese OEMs in the same league to consider the same.
“We are currently experiencing the rise of three emerging OEM players from China: Xiaomi, Oppo and Vivo. These three manufacturers are now considered global smartphone suppliers and they are competing head-to-head with the traditional players,” said Jay Srage, President East Europe and MEA at Qualcomm, in a recent interview with Telecom Review.
An emerging smartphone brand like Xiaomi, with a brand that is going viral in emerging markets like India, Russia and Indonesia, is now emerging as one of the top global players in the smartphone industry because of its “unique vision of how to address the sector” Srage said. The OEM has a strategy to set a price/quality ratio that sets it apart, by emphasizing the importance of user experience, in addition to quality, at an affordable price.
The success of Chinese smartphone brands is their ability to be successful not only in cementing their positions in their home country, but also managing to expand beyond mainland China at the same time, explains Counterpoint Research Associate Director, Tarun Pathak. Emerging markets such as India, South Asia, Southeast Asia, and Africa will be the key focus geographies to drive additional scale and market share for Chinese OEMs, Pathak explains.
Research Analyst, Shobhit Srivastava, noted, “The competitive landscape is now changing drastically across many regions. In developed markets the top three brands are strengthening their hold. In emerging markets meanwhile, rankings continue to be volatile, with new players also entering the top ten rankings within a few quarters of launch. This has led to various strategies by OEMs during the quarter to counter competition.”
Clamping down on competition, claims Srivastava, has resulted in ODM (original design manufacturer) tie-ups, operator tie-ups in prepaid markets, reducing excessive portfolios and even offering devices for free. Counterpoint Research expects “further innovation (and desperation) in go-to-market strategies by different OEMs struggle for traction in fast-growing market environments,” Srivastava said.
Breaking Apple and Samsung’s reign
Samsung still reigned supreme over the smartphone industry by a volume market share of 22 percent in Q2 2017, Counterpoint Research says, closely followed by Apple. But Samsung’s shipments remained almost flat quarter-on-quarter, the research indicates. Huawei, on the other hand, has steadily been catching up to its rivals.
Huawei retook the number two spot from Apple in Central and Eastern Europe in Q2 2017, according to Canalys research. The Chinese vendor shipped 1.8 million smartphones to take a 12 percent market share, beating Apple by fewer than 50,000 units. Its strength was in low-to-mid-range products, with the P10 Lite becoming its best-seller in the region.
“Huawei slipped behind Apple briefly in Q1 2017,” said Canalys Analyst Ben Stanton. “Apple did an excellent job of up-selling its installed base to the iPhone 7 Plus, whereas Huawei suffered the fallout from its extremely aggressive end to 2016. It built a great deal of channel inventory last year as its sales teams chased a 140-million-unit annual global shipment target. But Huawei is back, growing 11 percent in Q2 2017. Its inventory has now largely cleared and it is firing on all cylinders.”
Apple’s global smartphone market share declined due to seasonality this year, with iPhone sales growing just 1 percent year-on-year. But demand for older generation iPhones remains strong in markets like Russia, India, Vietnam, Indonesia and other fast growing markets. Many users are likely to delay their purchase of a new iPhone in anticipation of the much awaited iPhone 10th anniversary edition which is expected to be a super-cycle for Apple.
However, Apple’s decline in China has paved the way for Oppo, Xiaomi, Vivo and Huawei to take the lead. In China, Huawei continued to capture the top spot in 2Q17 ahead of its rivals, shipping higher volumes into the channels, according to Counterpoint. Huawei’s Nova and Enjoy series, along with flagship P10, were in strong demand during the quarter, and its share in the premium segment also expanded due to the strong performance of its Mate and P series.
Meanwhile, Oppo and Vivo were the fourth and fifth largest brands during the quarter, capturing market share of 8.4 percent and 6.6 percent respectively. Both brands posted record quarters in India, their strongest market outside China. Xiaomi emerged as the fastest growing brand year-on-year (+60 percent) surpassing Vivo (+45 percent) and Oppo (+33 percent) which were the fastest growing brands in the previous quarter.
Emerging markets like Africa and the Middle East also represent a great opportunity for Huawei. Gene Jiao, president of Huawei consumer business group Middle East and Africa (MEA) emphasized the importance of the region for Huawei at the end of 2016 following the launch of the Mate 9. He said MEA is an important market for Huawei to tap into, because of its growing population.
“The MEA region has 67 countries, with a population of 1.62 billion. Within ten years the population will grow by 400 million. In the next five years it will grow by 200 million,” said Jiao. For this reason, Jiao added, it makes perfect sense to expand into MEA, particularly with affordable products.
The GCC is the most developed part of MEA, and traditionally OEMs have targeted the region with high-end and premium range devices, consolidating to only a few major players. However, the GCC is now seeing the rise of the mid-range device segment, according to Qualcomm’s Mr. Srage. The main growth driver for this segment, he said, has been the advent of high quality devices at affordable prices.
Huawei has the advantage over its Chinese rivals that it’s already a major player in the sale of networking gear and telecommunications equipment. Last year, the company's top consumer executive, Richard Yu, set a target of becoming the No. 1 smartphone vendor within five years. Huawei is “committed to helping operators increase efficiency and drive profitable growth by promoting the sustainable development of emerging markets,” Yu said at Mobile World Congress this year.
Other emerging Chinese OEMs such as Lenovo and Alcatel continue to face tough competition in high growth markets like India and Latin America which led to the flat or declining market share respectively, during the quarter, according to Counterpoint. However, Mr. Srage commented positively about the companies for their strategic efforts in acquiring and reviving once trusted brands. Lenovo, for instance, revived the Motorola brand, and TCL revived Alcatel.
“These companies have taken existing brands that were once at the top and revived them with new products that aim to recapture their customer base,” said Srage. “The real challenge, however, is for these companies to capture the attention of customers who aren’t familiar with these once prominent brands, and reestablish loyalty with those who are.”
NuVu, an Ericsson entity, is the first online streaming platform that provides 'off-peak' video downloading for operators in emerging markets where streaming is slow and expensive. It's the first time Ericsson has licensed content, says Stephan Riome, Ericsson's Global Head of Programming Acquisitions & Marketing Broadcast and Media Services, to provide a video subscription on demand service for operators to compete against the likes of Netflix.
Ericsson announced the launch of its first end-to-end subscription video-on-demand content service, NuVu, at the end of 2015. Ericsson co-brands the NuVu service with its partner operators in emerging markets that want to provide the service, for example: 'NuVu by (the operator)'. Ericsson works with the operator and their networks to provide a customer experience that is matched and relevant to their respective market.
For example, Airtell provides NuVu for its customers in Nigeria. Nigeria has legacy networks such as 2G and 3G, and they are moving into 4G. To offer a video subscription on demand service as an operator would be very challenging in Nigeria, says Stephan, because the networks aren't developed enough for the capability to stream online, and data costs are very high.
"What we do is work with the operators to license relevant content, such as Nollywood movies (Nigerian films), second-pay output agreements with Hollywood studios like Foxx and DreamWorks, CBS, MGM, etc, and the latest pay TV series from international and locally relevant suppliers," Stephan told Telecom Review.
Once the platform is downloaded, the user can add showcased content from the site to their list of selected content to temporarily download it. The download exists for thirty days; however, users have the choice to stream if they wish. It provides the choice for those with a poor internet connection to enjoy the services that platforms like Netflix provide.
The benefit of NuVu is that it provides "off peak" temporary downloads, which means the download occurs when there is less internet traffic, typically during the night. The customer ends up with an "all you can eat" type of experience with their content. The benefit to the customer is that they're getting a very low cost subscription service with no "data bill shock" at the end of the month.
"The service is cheaper on the basis that we're working in the African market on an 'off-peak' download basis. You're selecting content to be downloaded overnight," Stephan explained. "We rely on operators who know their network to provide us with the off-peak hours. That way, the off-peak hours really depend on the operator that's hosting NuVu."
Ericsson can provide additional options to the operators to give their users the choice of waiting for the content to download during off-peak hours or the option to download the content immediately, as well as the option to stream. The service can be "as advanced or as basic as the operator and the market requires," said Stephan. It's a "mass market proposition."
There will be customers that want instant gratification, and for that reason, Ericsson typically launches NuVu with the 'download now' and 'download later' options combined. But based on customer experience, once the customer has paid for the data to 'download now' they only tend to do it once, according to Stephan.
Ericsson is working with operators to tap into mass scale streaming within emerging markets through NuVu. The operator gets a premium video subscription service to offer their customers that is branded with their name which is something that Netflix wouldn't offer.
The biggest challenge that Ericsson faces with NuVu is piracy. But Stephan believes customers want a solution that is commercially viable, offering choice, convenience and control. People want to be able to "grab and consume content and be in control of what they watch," he said. In fact, over 50 percent of consumers binge-watch content at least once a day, according to Ericsson Consumer Lab research, and only 5 percent claim that they never binge watch content.
The NuVu brand identity was created by the award-wining creative agency Red Bee, which is part of Ericsson. It's a perfect solution for emerging market mobile operators that haven't launched video yet allowing them to jump into the market potentially many years before they could have otherwise.
Ericsson recently announced a partnership with HomeSend, a joint venture between MasterCard, eServGlobal and BICS that is changing the way money moves around the world by bridging the gap between financial institutions, non-financial entities and mobile network operators. HomeSend’s partnership with Ericsson is to simplify and accelerate the adoption of international remittances via mobile across emerging markets.
With access to HomeSend’s growing network of money transfer operators (MTOs), cash agents and banks in over 200 countries, millions of Ericsson-powered mobile wallet users globally will benefit from easier and faster international payment services.
The Ericsson Wallet Platform is now certified by HomeSend. The HomeSend-Ericsson partnership will give financial service providers a low-cost, simple and fast way to connect the HomeSend global money transfer hub with Ericsson’s mobile money offering around the world. With this, mobile money users can now enjoy new levels of flexibility, choice and value.
Ericsson’s Mobile Financial Services solutions now also include Ericsson Interconnect, the company’s cloud-based financial transactions switching and mediation service, which aims to extend reach to Financial Services providers using any wallet or mobile banking platform.
Stephen Doyle, CEO, HomeSend said: “The partnership represents HomeSend’s continuing commitment to displace cash and facilitate electronic payments, advancing financial inclusion in the new global economy. Millions of new unbanked consumers will gain improved access to digital inflows from friends and relatives, as we continue to advance toward a fully open ecosystem for global mobile money remittances.”
In 2016, the World Bank expects remittances to reach over $600 billion, with more than $440 billion being sent to developing countries. Being able to reliably, safely and conveniently send and receive money across borders are basic requirements for financial inclusion. The partnership bridges the gap between finance and telecommunication service providers, enabling mobile wallet users to send and receive money from their family abroad through their mobile phones and enables financial institutions to offer their customers the convenience of digital money transfers – regardless of their location or that of the recipient.
Peter Heuman, Head of Mobile Financial Services, Ericsson said: “By enabling fast, secure integrations to HomeSend’s remittance hub, we are providing growth opportunities for our customers. Integration with the HomeSend Hub connects Ericsson mobile wallet powered financial service providers, and potentially other financial service providers, to a global network of financial institutions and MTOs. This represents a major advance in helping to grow mobile financial services ecosystems whilst supporting financial inclusion.”