Displaying items by tag: revenue
A report released by ABI Research urges telecom operators to be more aggressive with their 5G deployment in cities to leverage the new potential economic value.
5G technology is expected to generate trillions of dollars through both direct and indirect contributions.
The study, titled ‘5G Urban Deployment: Debunking the CapEx myth and unlocking new growth’, found that 5G will generate growth in three areas between now and 2028.
They found that $2.4 trillion will be gained in direct contributions which will most likely be due to end-user subscriptions for connectivity services, $866 billion in indirect contributions such as through increases in the supply chain from infrastructure, advertising and devices, and finally, $3.2 trillion in productivity gains which will be generated from greater workforce efficiency due to increased connectivity within cities.
Vertical enterprise services are expected to mature by 2035 and ABI Research forecasts that 5G will generate $17 trillion in economic growth by then. However, at first these services will be evident in bigger cities but will then extend to non-urban areas.
“5G in urban areas can create a new wave of enterprise vertical use cases that will redefine consumer lifestyles and enterprise operations in cities. The dense population of urban areas will allow mobile operators to better monetize new 5G services without massive investment or a long ROI cycle,” the report read.
ABI Research also found that the first 5G-related use cases will be driven by enhanced Mobile Broadband (eMBB) but other advanced use-case-enabling 5G features like Ultra-Reliable Low-Latency Communications (URLLC) will begin to appear by 2020.
“We have reached a critical point today where our global economy is heavily reliant on our ability to deliver new technological services,” said Dimitris Mavrakis from ABI Research. “5G has the potential to completely change our everyday lives, but only if mobile service providers can roll out 5G in a way that makes economical and logical sense- that, to start with mobile broadband connectivity deployments in urban areas to create the right use cases that will justify investments in CapEx and OpEx.”
InterDigital’s (the company which commissioned the study) Chief Technology Officer, Henry Tirri, said “We expect 5G deployment to begin to place huge pressures on mobile operators over the next couple of years as they look to compete to capitalize on its revenue potential. Many are trying to understand how they will monetize this next generation of wireless technology, and most importantly, how they’ll deliver ROI from it. But while there may still be several questions and doubts surrounding 5G monetization, these findings clearly demonstrate the growth opportunities that 5G is set to bring about. While CapEx and OpEx investments will be high, it is evident that 5G technology will radically change our ability to deliver new and innovative consumer and enterprise services, and help dictate the trajectory of our future global economy.”
US ride-hailing colossus Uber disclosed its financial earnings for the final quarter of 2018 which showed its revenue growth has slowed ahead of its much anticipated stock market debut.
The financial figures released by Uber indicated that for the final three months of the year its loss amounted to $865 million, compared with $1.1 billion in the same period a year earlier.
The San Francisco-based firm reported revenue of $3 billion, which represented a 25 percent increase from a year earlier. Uber remains a private company, but routinely discloses some earnings information.
CEO Dara Khosrowshahi has managed to guide Uber through choppy waters since assuming the CEO role from Travis Kalanick.
He is also being tasked with the responsibility of steering the high-value startup to a stock market debut this year, and has promised greater transparency as he seeks to restore confidence in the global ridesharing leader that has been hit by a wave of misconduct scandals and has become embroiled in a series of legal battles regarding its services, particularly in Europe.
Revenue for the full year rose 43 percent to $11.3 billion, with Uber's annual loss shrinking 15 percent to $1.8 billion, according to an official statement from the startup.
Uber operates its’ rideshare business in dozens of countries and has expanded to new areas including food delivery, electric scooters and bikes. The company is recognized as the largest of the venture-backed startups with a presumed valuation of some $70 billion.
Uber CFO Nelson Chai expressed his satisfaction with Uber’s financial results and said, “Last year was our strongest yet, and Q4 set another record for engagement on our platform. Our ridesharing business maintained category leadership in all regions we serve, Uber Freight gained exciting traction in the US, JUMP e-bikes and e-scooters are on the road in over a dozen cities."
Based on gross bookings, Uber Eats has apparently become the largest online food delivery business outside of China.
Global smartphone sales saw their worst contraction ever in 2018, and the outlook for 2019 isn't much better, new surveys show. Worldwide handset volumes declined 4.1% in 2018 to a total of 1.4 billion units shipped for the full year, according to research firm IDC, which sees a potential for further declines this year.
“Globally the smartphone market is a mess right now,” said IDC analyst Ryan Reith. “Outside of a handful of high-growth markets like India, Indonesia, (South) Korea and Vietnam, we did not see a lot of positive activity in 2018.”
Reith said the market has been hit by consumers waiting longer to replace their phones, frustration around the high cost of premium devices, and political and economic uncertainty. The Chinese market, which accounts for roughly 30 percent of smartphone sales, was especially hard hit with a 10% drop, according to IDC's survey.
IDC said the top five smartphone makers have become stronger and now account for 69% of worldwide sales, up from 63% a year ago. Samsung remained the number one handset maker with a 20.8% share despite an eight percent sales slump for the year. Apple managed to recapture the number two position with a 14.9% market share, moving ahead of Huawei at 14.7%, the survey found.
IDC said fourth-quarter smartphone sales fell 4.9% - the fifth consecutive quarter of decline. “The challenging holiday quarter closes out the worst year ever for smartphone shipments,” IDC said in its report.
A separate report by Counterpoint Research showed similar findings, estimating a seven percent drop in the fourth quarter and four percent drop for the full year. “The collective smartphone shipment growth of emerging markets such as India, Indonesia, Vietnam, Russia and others was not enough to offset the decline in China,” said Counterpoint associate director Tarun Pathak.
Swedish telecom vendor Ericsson has surprised analysts with reduced losses in Q4 driven by the increase of sales revenues and costs reduction. Sales as reported increased by 10% Year-on-Year and sales adjusted for comparable units and currency increased by 4%. Costs related to revised Business Support Systems (BSS) strategy impacted Digital Services operating income in Q4.
US technology giant Apple has announced that it will impose a recruitment cutback - which has been primarily forced due to weak sales on the company’s iPhone devices in the lucrative Chinese market.
Bloomberg has reported that Apple CEO, Tim Cook, announced the recruitment cutbacks just a day after he sent a letter to Apple investors that warned the company was bracing itself for a year-on-year decline in revenue for its fiscal Q1, which would shave $5bn from its guidance.
In a series of meetings that were held following the disclosure, it was reported that Cook informed some staff that a number of divisions would reduce hiring, but stated that he didn’t think a complete freeze in recruitment would be an appropriate solution to take.
In addition to this, it has been further disclosed that the CEO is also yet to determine which divisions will face hiring cutbacks. However, it is believed that divisions such as Apple’s AI team will not be affected due to the leverage of investment made by the US tech company into the emerging technology.
The move will also not affect plans to open a state-of-the-art new office in Austin, Texas or its expansion plans in Los Angeles, where the company is fleshing out its original video content ambitions.
Bloomberg also pointed out that Apple has hired new staff at a significant rate over the past decade. The company recruited 9,000 workers in its most recent fiscal year, taking the total up to 132,000, while adding 7,000 a year earlier.
As India prepares itself for the transition to 4G, Qualcomm has observed a 23% increase of revenue due to a demand surge for phones.
The American chipmaker powers more than half of all smartphones sold in India and posted sales of Rs 5,426 crore locking in a net profit of Rs 518 crore in FY18, financials sourced from research platform Tofler. The company’s growth slowed down from a year ago when it grew 39%, but has nearly doubled sales and profit over the past three years.
“There are two aspects that have stood out for India; one, this is a growing market for smartphones and two, the telecom carriers have also rapidly adopted 4G, which has transitioned this market totally from 3G to 4G and now is moving the 2G to 4G,” said Rajen Vagadia, country manager of Qualcomm India.
The telecom industry in the world’s second-most-populous nation is transiting rapidly to 4G data technology after the entry of RelianceNSE -0.39 % Jio. The Indian mobile network operator started services in September 2016, and helped spur data consumption in the country with its 4G-only network, meaning rivals Airtel and Vodafone were forced to slash its tariffs.
India mobile phone shipment crossed 300 million units for the first time ever with smartphones capturing almost 44% of the total volumes in CY 2017.
San Diego-based Qualcomm said it has evolved over the last few years supporting end-to-end product engineering, contributing to technology innovation in areas such as 4G, IoT and now 5G.
“This transition has been fuelled by solutions that Qualcomm provided, including the explosive growth of the Jio 4G feature phone at one end of the spectrum while our partners like Xiaomi have brought premium tier Snapdragon 845 at affordable prices,” Vagadia added.
Qualcomm’s Indian revenue doesn’t account sale of all its products in India however. A bulk of its transactions are with global suppliers in the US and China, which in turn market them in the country.
Shobhit Srivastava, research analyst, Mobile Devices and Ecosystems, Counterpoint Research says that most of the smartphones featuring Qualcomm’s Snapdragon chipset are in the mid and high tier segment, which explains the company’s billion dollar sales value in India.
”Qualcomm India can further grow its revenues given the OEMs (original equipment manufacturer) and ODMs in India start sourcing products directly with the advancing manufacturing and designing ecosystem in India,” he said in an interview to The Economic Times.
Qualcomm has helped bring features such as voice calls over a 4G LTE network and voice over Wi-Fi for consumers in India, by working closely with Indian cell carriers. The chipmaker said most companies were looking to launch major global technologies concurrently in India, making the country the first or second market for such rollouts.
US technology behemoth Apple has signed a new agreement with Samsung in relation to its streaming and content services in an effort to offset a decline in iPhone sales. The deal brokered between Apple and the South Korean conglomerate will enable the use of iTunes streaming services on Samsung smart TVs.
Swedish telecom equipment provider Ericsson published its Q3 financial results on October 20. The company reported a 6 percent year-on-year drop in third quarter revenue which accounted for SEK47.8 billion ($5.9 billion) while the loss was SEK4.8 billion ($590 million), worse than last year’s, reaching $24.5 million.
“We continue to execute on our focused business strategy,” said Ericsson President and CEO Borje Ekholm. “While more remains to be done, we are starting to see some encouraging improvements in our performance despite a continued challenging market.”
Networks showed a slight sales growth year over year. Networks adjusted operating margin was 11 percent. While losses continue in IT & Cloud, said Mr. Ekholm, the company sees increased stability in product roadmaps and projects.
“The general market conditions continue to be tough,” he said. “Sales adjusted for comparable units and currency declined by -3 percent year-on-year. Sales in North America, adjusted for comparable units, currency and the rescoped managed services contract were stable. We also saw growth returning in several countries as operators are increasing their investments in network capacity.”
Mainland China declined for Ericsson as the market is normalizing following a period of significant 4G deployments, representing more than 60 percent of global 4G volumes in the industry. The company managed to increase its LTE market shares in Mainland China to position Ericsson in 5G. However, this will have a dilutive effect on gross margin in Mainland China in Q4 2017, but the ambition is to continue to deliver double digit adjusted operating margin in Networks in Q4 2017.
Sales in Networks grew for Ericsson. Higher hardware capacity sales and a more competitive product portfolio resulted in an adjusted operating margin of 11 percent. The Ericsson Radio System portfolio, accounting for 55 percent of total radio volumes year to date, is proving competitive, Mr. Ekholm said, contributing both to improved earnings and a stronger market position.
In IT & Cloud, sales declined and losses increased in the quarter for Ericsson. The increase in quarter-on-quarter losses is largely due to higher amortization than capitalization of development expenses.
“Our turn-around plan builds on stability, profitability and growth in that order,” said Ekholm. “The initial focus has been on stabilizing both product roadmaps and challenging contracts. We have made good progress in the quarter. However, securing deliveries on large transformation projects puts pressure on gross margin in the near term.”
“The IT & Cloud business is of strategic importance as our customers are preparing for 5G and will digitalize their operations and invest in a future network architecture based on software-defined logic,” Mr. Ekholm added.
Ericsson will now expand its focus to improve profitability through increased efficiency in service delivery. In addition, the company will scale the software part of the business mix and increase the level of pre-integration services, which will lead to a higher gross margin but lower services sales. Positive effects on gross margin are expected in 2018.
“Despite continued decline in legacy product sales, there is good traction in our new media portfolio with several important wins in the quarter,” said Mr. Ekholm. “We have accelerated our efficiency measures and continue to pursue strategic opportunities for this business. Managing our cash is a top priority.”
Ekholm concluded, “We remain fully committed to our focused business strategy. We continue to invest to secure technology leadership and year to date we have recruited more than 1,000 R&D employees in Networks. Customers give positive feedback on both our long-term strategy and on our current 5G-ready portfolio.”
Chinese telecommunications colossus ZTE has attributed its first-half net profit success to its investment in 4G infrastructure and handsets. The world’s fourth-largest vendor of smartphones has hit its projected first-half net profit target forecast of 30%.
Analysts said that domestic telephone network providers continued to invest in 4G infrastructure provided by ZTE, and the firm also enjoyed a significant growth in the sales of its mobile devices. ZTE’s profit was $344M, whilst revenue rose by 13% which incidentally was also ZTE’s projected target.
In a statement released to the press, ZTE acknowledged that the organization has been presented with many new opportunities and expressed its vision to deploy 5G products and services. 5G standardization is expected to be established in 2018.
The statement read, “Looking to the second half of 2017, the company faces new opportunities," ZTE said in a statement in Chinese. "4G users and traffic will enter a peak period and pre-5G products will have more application, while 5G's standardization, technology and testing will experience a breakthrough."
ZTE reported more growth in relation to its telecom equipment sector, disclosing that revenue in that business grew by 13%. Its telecoms sector focus primarily on constructing infrastructure such as communications towers and accounts for 60% of overall revenue. ZTE’s remarkable financial results were cemented with the fact that its consumer business had also increased by a whopping 24%.
In March of this year, ZTE was left reeling after it was found guilty by the US Commerce Department for breaching US trade rules. It was fined almost $900M for breaking exports regulations. It’s the only smartphone vendor with a real presence in the US, and it has recovered well since that setback earlier this year, remaining the fourth-biggest vendor in the US after Apple, Samsung and LG.
ZTE executives have insisted they will continue to aggressively invest in wireless and 5G technology, whilst also revealing it aims to invest more in international marketing in the second-half of 2017. Revenue from ZTE’s smallest business area which is government and enterprise services has declined by 18%.
In addition to this, ZTE confirmed that it has agreed to sell 10.1% of its smartphone subsidiary Nubia for 727 million Yuan. That will reduce its equity in the company to 49.9%.
Qualcomm CEO, Steve Mollenkopf has claimed that 5G will represent a revenue opportunity of around $12 trillion by 2035. Mollenkopf made the statement when he was delivering his keynote address at Mobile World Congress Shanghai. However, the CEO of the global chip giant did express his belief that we have to utilize 4G technology. He said it was imperative we made the most of 4G and focused particularly on new gigabit LTE networks.