Emerging markets drive mobile device sales to 441 million

Demand for low-cost and dual sim mobile devices in emerging markets has driven Q3 worldwide mobile device sales to 441 million units.

Mobile phone evolution

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Gartner’s latest report has some other interesting facts:

  • Nokia still leads the field, but Samsung is catching up fast (24% vs 18% of market share)
  • Smartphone sales reached 115 million, representing 26% of the mobile device market
  • Android was on 53% of all shipped smartphones

Read more at Gartner Says Sales of Mobile Devices Grew 5.6 Percent in Third Quarter of 2011; Smartphone Sales Increased 42 Percent.

5 billion mobile broadband connections in 2016

Ericsson‘s Traffic and Market Data report predicts that mobile broadband connections will reach 5 billion, thereby driving a 10-fold increase in mobile data traffic. While the report says that the bulk of this growth will be due to mobile video, the ‘internet of things’ will also be a key catalyst.

Image via Ericsson

Read more at Ericsson predicts Mobile Data Traffic to grow 10-fold by 2016 – Ericsson.

The Empire (Nokia) Strikes Back with Asha

Nokia has announced the launch of a new line of 3G capable smartphones. Christened Asha (‘hope’ in Hindi), the phones are aimed at emerging economies (read India). India, where Nokia currently outsells the iPhone by a ration of 1:18, represents a huge market and opportunity, with its current 866 million mobile connections and growing smartphone sales.

The Asha line of phones will start at a price point of rupees 4000 (~$80). This will make internet access a possibility for millions of people in India, thus helping to bridge the digital divide. With such an aggressive pricing strategy, Nokia hopes to attract value-conscious customers and thus hit the sweet-spot between cheaper mass-market phones (where is currently dominates) and high margin smartphones.

The Asha 303 has a touchscreen, a QWERTY keyboard, 3.2 mp camera and will cost ~8000 rupees.

The Asha 300 (touchscreen and numeric keyboard) will cost ~6000 rupees and have a 5 mp camera .

The Asha 201 (dual sim) and Asha 200 will cost around 4000 rupees.

Read more at Nokia introduces Asha, new lineup of phones for emerging markets – TNW and Nokia’s Asha has potential to bring the Internet to the masses in Asia.

Why the iPhone doesn’t rule in India

This recent news report stated that Apple has found the going tough in the Indian smartphone market. Smartphones offered by RIM and Nokia outsell the iPhone by a ratio of 1:6 and 1:18 respectively. Analysts have offered two reasons for this “anomaly”. First, it is suggested that India lacks the wireless infrastructure to support the main features of the iPhone. Second, analysts claim that the Indian consumer is not mature enough for luxury products like the iPhone. The iPhone is a phone for the classes, not the masses.

Apple accounted for 2.6 per cent of India’s smartphone shipments in the quarter ended June 30, trailing RIM’s 15 per cent, Samsung Electronics Co.’s 21 per cent and Nokia’s 46 per cent, IDC estimates.

iPhone, iPhone 3G and 3GS

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While the above points may hold some weight, another major issue seems to be that Apple is not offering enough value to the discerning Indian consumer. Apple wants to charge a premium in the Indian market, but the Apple Experience, that it is so famous for, is missing. Let’s elaborate.

First the price premium. The iPhone 3GS retails at 20,000 rupees. That is around $400 as per the current exchange rate and around $1600 as per rough PPP calculations. Compare this with Android, RIM and Nokia offerings that start at less than half the price.

The cheapest iPhone 4 costs $705 at Reliance’s iStore, while the cheapest iPad 2 sells for about $603. In Apple’s US online store, the iPhone 4 starts at $199 with an AT&T Inc contract and the iPad starts at $499.

BlackBerrys under $200 made up 40 per cent of their shipments in India in the quarter ended June 30, said TZ Wong, an analyst for IDC.

Second, the missing Apple Experience. There are no Apple stores in India. If one wants to buy an iPhone, you buy at full price (with reverse subsidy) from a carrier, or visit an Authorized Reseller (which have many locations) or a Premium Reseller (who have less locations). There is no online store. At a typical showroom of an authorized reseller, the iPhone would be one of around 30 smartphones on display. It would be the most expensive smartphone on display. Some of its accessories would not be available for sale at the same site. And one would need to set up the phone on your own computer. If you don’t have access to a computer, well you may have to take it to another location (a Premium Reseller) to get it set up.

If you decide to take the plunge and buy an iPhone, you still don’t get the full Apple Experience. If you need to get your phone repaired, you will need to take it to a Authorized Service Center. The authorized reseller from whom you purchased it cannot fix it for you. There aren’t many service centers going around – for example, only 5 service centers in Delhi fix an iPhone. That’s about 1 service center per a potential 8 million customers (there are 41 million mobile subscribers in Delhi). Once you get to the Service Center, you will find out that they only repair stuff during a fixed 5 hour window, on weekdays. You cannot call them to fix an appointment, you cannot set one up online. Once your drop off your iPhone, they will give you a time when you can come and pick it up. Till then, you are without a phone.

Oh – and by the way, if you are visiting India and your iPhone needs service – tough luck. They don’t honor the warranty on an iPhone that is not purchased in India.

Compare this with the near magical experience in an Apple store and one might start to understand why the Indian consumer is not sold on the iPhone.

However, the Indian smartphone market presents a great opportunity to Apple. It is the world’s second largest cell phone market with 602 million subscribers and 866 million mobile connections. Smartphones are expected to take off in a big way. And with the advent of the iPhone 4S, coupled with a cheap iPhone 3GS, one can expect Apple to start increasing its share of this high potential market (more on this later!).

Smartphone shipments in India are poised to jump almost eightfold, or an average of 68 per cent a year, to 81.5 million units by 2015, according to IDC.

Read more at Tough for Apple selling iPhones in India: IDC – The Times of India.

India reaches 900 million phone connections

India had nearly 900 million telephone connections at the end of August, signifying a tele-density of 75. 866 million of these were mobile connections, of which 70% were active subscribers. Urban mobile tele-density was 158. There are still ample growth opportunities for mobile services providers in rural areas. Reduced growth rates (less than 1% increase per month) reflect increasing saturation of urban markets.

Map showing the population density of each dis...

Image via Wikipedia

Read more at India adds 7.3m mobile users in August; total at 866m – Reuters –.

India going LTE

India is going LTE. Close on the heels of Bharti Airtel’s plans for an LTE roll out in Kolkata, Reliance Industries has announced that it will be rolling out a pan-India LTE based 4G network in 2012.

Mukesh Ambani during World Economic Forum 2007

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Reliance’s choice of LTE as the basis for its 4G offer is significant, ending the hopes of backers of mobile WiMax that their standard could become the basis for services in one of the world’s largest mobile services markets. Reliance has reportedly been trialling TD-LTE with Nordic vendor Ericsson since the early part of 2011.

Currently restricted to data services, Reliance plans to entice customers with tablets starting from $60. It is expected that telecom policy changes will eventually allow companies to offer voice services via VOIP.

It plans to provide data connectivity with speeds of 50-100 Mbps, much faster than 3G services currently on offer, at cheaper prices.

Read more at India set for first 4G services with Reliance Industries in pole and Mukesh Ambani readies plans to roll out 4G data services, low cost tablets in 2012 – Economic Times.

Good week for 4G LTE

Last week was a good week for proponents of LTE. In the US, Sprint announced that its current WiMax based 4G network will be replaced by a LTE based network by 2013. In the UK, initial trials of the LTE based 4G network are underway in Cornwall. And in India, Bharti (the largest operator in India and the 5th largest in the world) was reported to have commenced a LTE rollout in the Kolkata circle.

LTE (Long Term Evolution) holds  great promise as it can enable download speeds of nearly 100 mbps while on the move and stationary download speeds of around 300 mbps. This can enable technology leapfrogging by allowing rapid adoption of high-speed broadband in non-urban areas, without the high costs of fixed line infrastructure.

Read more at Bharti taps China’s ZTE to begin 4G roll-out in India – The Next Web4G LTE broadband trial kicks off in rural UK – The Next Web, and Sprint Is Ditching 4G WiMax for 4G LTE: What It Means for You.