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ABI Research Blog (94)

Nokia Rolls Out a CDMA Version of Lumia in China on Its Come-Back Campaign

Apr 8, 2012 12:00:00 AM / by Admin

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Since December 2011, Nokia has been executing its "come back campaign," with the launches of the Lumia and Asha series of handsets. While the Asha series is intended to shore up support in the low-end handset market, Nokia sees the Lumia playing a vital role in improving overall handset profit margins and attracting the aspirational purchasers in markets like China, Indiam and Indonesia. To that end, Nokia unveiled its first Lumia smartphones for the China market-a a CDMA2000-compliant Nokia 800C and the Nokia 610C. Furthermore it is emulating Apple and will have an exclusive launch partner: China Telecom.

The end-user experience is pretty good. Windows Phone 7 is a stylized, slick, and coordinated experience. There are a few niggles and at least one big irritation... Power drain has been a significant frustration which has been rectified to some degree.

Microsoft (and Nokia's) greatest challenge will be building localized app support. Nokia has stated that a range of China-specific apps and services have been lined up such as a Weibo, RenRen, Baidu search, and local games. In all, around 20,000 apps are currently available to Windows Phone 7 user in China. Is 20,000 apps enough? Not really... but it is a start.

ABI Insight: http://www.abiresearch.com/research/1012143

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With only hundreds of Aakash tablets deployed, India moves to 2nd generation devices

Apr 6, 2012 12:00:00 AM / by Admin

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In late 2011, India’s Ministry of Human Resource Development launched the Aakash media tablet destined for the masses through a subsidized school program. Fast-forward the clock nearly six months to the day: only a few hundred families participating in a pilot launch have received the slates.

Accusations have started flying as to who is to blame for the delays. Device OEM, Datawing, claims the Indian Institute of Technology Rajasthan (IIT Rajasthan) has subjected the product to undocumented quality standards and harming the company’s reputation in order to bring other suppliers into the Aakash project.
Datawing says it delivered 100,000 of the 1 million unit government order to specification, though these qualification delays have set schedules six months back from the original plan. As a result, the company has started production on a second-generation Aakash device. The Aakash 2 replaces the original resistive touchscreen with a capacitive touch display capable of multi-touch. The slate also receives an upgraded applications processor based on ARM’s Cortex A8 architecture. Shipments to replace the initial 100,000 piece order are expected to start this month to another IIT site located in Mumbai. The Ministry will ask for new OEM bids beyond this first quantity.
The Datawing-branded version of the Aakash tablet – called Ubislate – is also behind schedule. The vendor claims it has backlog for 3 million of the devices. Initial shipments are also expected this month with Datawing offering to ship an upgraded Ubislate+ tablet for the same price and as a token of appreciation for customers’ patience.
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The Fridge Magnet As Smart Appliance

Apr 4, 2012 12:00:00 AM / by Admin

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Back in the '90s there was a lot of talk and early investment in interactive services, primarily associated with the television. Any number of companies invested in these services, including the large telcos of the day and the IT suppliers seeing huge potential demand for their offerings. Around that time, I heard cultural critic and author Peter York comment about advertising in the age of interactive services. His comment has stayed with me. "The vast majority of people only want to interact with one thing - the fridge." He wasn't suggesting there was a need for a new wave of smart appliances; rather he was defining a wide level of apathy related to interactive services.

In March, a fridge magnet embedded with Bluetooth launched. It enables customers to place a delivery order for their favorite pizza at the push of a button on the tiny device. This simple device is developed with the less-than-grand aspiration of selling a few more pizzas to a target market of people who find walking to a fridge and pressing a button a more compelling option than picking up a phone and talking, or using the web, or even using a mobile app. Oh, it only applies to ordering from a single pizza delivery company, Red Tomato - operating in Dubai.

The device garnered broad international press coverage. Reports carried a range of reactions in the mainstream press. The NY Daily News labeled it one of the "world's stupidest inventions" while TIME went for faux elation in extolling its readers to "behold its majesty."

For a device that has garnered so much international interest, the fridge magnet is remarkably low-cost and simple. The Bluetooth transmitter is activated by the push of the button. That initiates a signal to a previously paired smartphone within close range. The phone sends a message for the favorite pizza type to be sent to the preregistered address. Pizza choices and other changes can be made at the application website.

There remains a belief in interactive services increasingly integrated with smart appliance. In the past year, both Samsung and LG have promoted smart fridges with a range of online capabilities. What is truly interesting about the fridge magnet is that perhaps the fridge doesn't have to be smart, or at least, not in the near term. Mobile handsets and tablets are increasingly the device of choice for an ever wider range of applications in the home. As with Red Tomato’s fridge magnet, consumers and the companies that want to interact with them can by-pass the need for a customer base with new smart appliances and instead provide connectivity that leverages the technology consumers already have in their hands. It's not the fridge that has to be smart, but rather the application and the marketing. Connectivity and interactivity with fridges and many other home devices for that matter is certainly a developing trend and a growing market, but that communication may well just be short range to a mobile handset rather than to the cloud directly. Like it or not, the single-button pizza delivery fridge magnet could just be the start.​

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"Track and Manage Everything" - Is that The Right Message To Tell?

Apr 4, 2012 12:00:00 AM / by Admin

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The strap-line for this week's RFID Journal Live!​ event in Orlando is "Track and Manage Everything" - this set a slight alarm bell off for me. The issue for me is that this gives a slightly misleading impression; do we actually want and/or need to track and manage everything?

Forme if you do this then you run the risk of creating wasted investment. RFID is certainly a very useful tool and it can enable companies to realise efficiencies - but it needs to be selectively applied in order to deliver the maximum ROI. By this I mean that it should only be used to generate data (for business intelligence) if this data serves a purpose and solves a problem.

As can be seen from the demo's here at the event, the breadth of use cases and applications that can be served by RFID are growing all the time. RFID implementation programs still require a fair degree of customization and this costs money, which means bthat small scale rollouts are not always cost-effective. My concern is that if you try to track and manage everything then the technology could be oversold, expectations could be unrealistically high, and returns may not always be realised. And this will harm RFID's take-up in the longer term.

It is important to ensure that RFID delivers value for (new) users. Perhaps rather than saying "Track and Manage Everything" the better message would be "Track and Manage Anything"?

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Windows Phone 7 Sales Overtake Symbian in the UK

Mar 30, 2012 12:00:00 AM / by Admin

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Windows Phone 7 (WP7) overtook Symbian in the UK smartphone market according to Kantar Worldpanel ComTech's latest data in February 2012. The mobile operating system (OS) provider WP7 has a 2.5% share of the UK smartphone market, while Symbian has 2.4%. A year ago, Symbian accounted for 12.4% of the same market and the latest data from Kantar Worldpanel makes for grim reading. The data is based on sales information collected from 15,000 users and collated over 12 weeks.
The Nokia Lumia 800 accounted for 87% of WP7 sales with the Nokia Lumina 710 and HTC phone WP7 models representing the remaining sales. This illustrates the considerable success WP7 Nokia handsets are having in the United Kingdom, as well as in Europe. Interestingly, the German smartphone market had the strongest WP7 sales in Europe; WP7 accounted for 3.1% of total smartphone sales in the study. In North America, however, sales have not been so promising and many believe Nokia's weaker brand in the United States is a key reason why.

Phones utilizing the Android OS represented 48.5% of UK smartphone sales - up 10.7% over the previous year. Apple also increased its UK market share to 28.7% and was the second largest OS followed by Research in Motion with 17.1%.

None of this comes as surprising news as Nokia has been concentrating more of its resources on the WP7 than on Symbian. Furthermore, surpassing a fading OS is hardly an incredible achievement and WP7 still has significant distance to catch up with Android and iOS. Nevertheless, its market traction is obvious and it is clear to see the success Nokia is having with its WP7 phones. Nokia need to take advantage of this by expanding its Lumina range quickly and soon.
Talking about a new Nokia smartphone that contradicts our ideas here, the Nokia 808 PureView is due to be released in Europe in Q2 2012. This smartphone has a massive 41 megapixel camera on board, 4-inch screen size and runs Symbian?! Apparently, the phone has been in the works for more than five years, explaining why it is using Symbian rather than its Microsoft lovechild, WP7. The PureView will not be released in North America as users in that neck of the woods have never taken to Symbian and Nokia plans to focus its marketing activities on countries in Europe that still have a strong Symbian presence. This is a shame, as the PureView image capture technology would probably generate significant publicity and interest in the United States and Canada.

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India's Mobile Telecom Industry

Mar 30, 2012 12:00:00 AM / by Admin

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The mobile telecoms industry is one of India's biggest success stories, alongside outsourcing. However, this once fast growing industry is now quickly maturing, with sedate growth and high levels of debt from previous license auctions. All the Indian operators except Bharti Airtel, make low returns on their mobile telecom capital inside the country. Nevertheless, Crisil, a credit rating agency, announced last month that Indian mobile operators' operating profitability could increase by 5% in the next two years.

The credit rating agency believes competitive intensity in the Indian mobile telecoms sector will decrease from the highs of mid-2011 after the February cancellation of the 122 mobile licenses between eight companies for India's 2G spectrum.
Furthermore, improved pricing power as key players such as Bharti Airtel, Vodafone, Idea, Reliance Communications, and Tata Teleservices increase tariffs in certain areas will improve profitability. Crisil judges the majority of the 5% increase in profitability will be generated from these tariff hikes. Additionally, companies will be able to generate substantial extra revenues from data services, such as 3G and value-added services.

Another key factor: these companies will be able to reduce their average capital expenditures (CAPEX), compared to the past. Most of these companies already have good coverage in high population areas and have outsourced large parts of their passive infrastructure requirements. Greater returns from their operations, combined with lower CAPEX will enable them to reduce their debt and leverage over the next two-to-three years.
Fraudulent documents, secret recordings, retroactively changing deadline dates, front companies, and many more abuses led to India's Supreme Court canceling all 122 mobile licenses on February 2nd. Of the previous 122 mobile licenses granted, 85 went to six new entrants, including several property firms, two of which promptly made fortunes by selling stakes in the licenses to foreign companies. In 2009, after a year, India's Comptroller and Auditor General found that none of the six had met its original obligation to roll out a network.
As you can imagine, this has caused chaos in theIndian telecom industry.The cancelled spectrum will be returned within four months (in June 2012) and auctioned off fairly, as the 3G auction was conducted in 2010 - and widely admired. The aim will be to cause minimum disruption to the 67 million customers using the mobile spectrum and almost a third of India's 2G spectrum capacity, as well as restore confidence to the overall telecom industry.

Nevertheless, there are still uncertainties about a potential new regulatory framework that will be a significant factor in the success of the Indian mobile telecom companies.
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When It Comes to NFC, I'm Sticking, Not Twisting

Mar 30, 2012 12:00:00 AM / by Admin

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Someone asked me recently if I felt that the NFC market developments which I have written about recently http://bit.ly/Hqcw36had affected my forecasts for this year and next​. For the record, my current expectation for this year is 81M handsets, and 174M in 2013.

Despite the proclamations of the advent of the new dawn I have to be honest and say no. At this point in time I am not seeing significant enough traction in terms of MNOs placing high volume orders for NFC-enabled handsets to justify any change at this time.

Orange is the only MNO that I am aware of to have put out a target for NFC handsets in circulation, and it was certainly on the conservative side of things. Having previously said 1M handsets was the target in France last year, this was revised down to 500K handsets, a target which was belatedly hit a few weeks ago. And the target for this year? 3M! And in 2013 it is aiming for 10M. This is not even in France alone, this is across its (primarily European) networks.

So whilst I am a fan of NFC, I am also a realist. And for this reason I am sticking, not twisting when it comes to my forecasts for NFC handsets this year. The MNOs have not fully identified their business cases for NFC, they don't quite fully trust the technology, or that they will be able to make money from it - which is as much a problem as anything else. By delaying investment they risk missing out altogether.

There has been some progress but it is limited. Vodafone has now stepped up and gone to the next level, appointing a TSM, as did O2 previously (although the silence on its progress is deafening). However, no significant launches, no flagship devices being promoted and no confirmed dates or targets. At least Orange has gone that far.

Their news, along with Isis' selected few cities, and Google's limited launch makes it clear that there will not be a grand stampede or flood of devices. Launches will be tentative so that they can be proven, and then they will be expanded and ramped up. Turkey and Korea have shown this to be the case and I expect that the same will be true in Japan, China, the US and the selected European countries this year and next.

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Maybe Google Wallet IS In Trouble

Mar 27, 2012 12:00:00 AM / by Admin

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Last week I wrote a blog outlining why I think Google Wallet is on track http://www.abiresearch.com/research_blog/1733 . I did caution at the end of the blog that the most critical factor to Google (or any other aspiring mobile wallet solution), is flawless execution of the consumer experience. If Google (or any other aspiring mobile wallet solution) mess up in the basics – completing transactions – for instance – the early adopters who use the service will not become the all-important evangelists needed to spur further consumer adoption.

I could have been considered one of those potential early adopter evangelists, but due to a fundamental mistake, I will think twice about using Google Wallet again.
I have been testing Google Wallet since November with mixed results. In terms of payment, for more than a dozen transactions, I only ran across one problem. At a Macy’s store, the payment simply would not take, and I had to use a plastic credit card to pay. Google Offers was more of a challenge as the offers can be misleading – when you pull up “Offers Near You” – some might be and some may not. None of these issues dissuaded me from thinking the Google Wallet was neat and would resonate with consumers.
Then I had a real problem. Last week I decided to use Google Wallet at a 7-11 store to purchase gas. I went into the store and told the clerk I wanted $40 worth. She set up the transaction, I opened Google Wallet and touched the phone to the pay pad. No beep. Tried again, no beep. Asked the clerk – did that go through? Nope.
Now at a convenience store, you don’t have a lot of time to dicker. I tried one more time and it didn’t work, so I pulled out a plastic credit card and paid for the gas. After I filled up, I looked at my Google Wallet transaction history and it showed that the payment went through.
A few days later I called Google Wallet. Very quickly I was given to a customer service rep. I explained what happened, and she said she could see the transaction, and explained that when a payment doesn’t go through, it sometimes takes a few days for the merchant and the payment provider to show the correction. She said to give it a couple more days and to call back if it didn’t show.
So I looked at the Google Wallet balance again about four days later. No correction. I called Google Wallet, promptly got a customer service rep, who looked at the transaction and told me that this was an issue between me and the merchant, that Google Wallet could do nothing about it.
That pissed me off.

Someone has $40 of my money that I supposedly spent two weeks ago. I’m expected to go to a merchant that happens to be on the other side of town, explain my issue and get my money back? How can I prove I didn’t get the gas? How much time is this going to take? Is it worth my time and energy?
More importantly, I’ve never had that kind of problem with a plastic payment card. Ever.
Google and any other aspiring mobile wallet providers, listen closely – it only takes ONE bad experience with a mobile payment, and you lose a customer for life. You also lose a potential evangelist. How do you solve this kind of problem? I’m not sure if mobile wallet providers can. They may be in for a rough ride.

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Telematics can help with Distracted Driving

Mar 27, 2012 12:00:00 AM / by Admin

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​A recent study by the AAA in the USA revealed that distracted driving was a bigger problem than ever, especially for teenage drivers. With electronic devices the number one problem, there were plenty of other causes, such as conversations with other occupants, personal grooming, and eating and drinking.

The one positive conclusion was that there was a significant improvement when an adult was present.

Now while it is not practical for adults to always accompany teenagers in their cars, telematics systems offer a range of alternatives that can have a similar beneficial effect. Some can restrict certain aspects of the vehicle such as music volume or maximum speed, and others can report on incidents such as sudden braking. In-car video systems are also available.

It is time that the safety aspects of telematics were given more attention in marketing materials. This and incentives to install ADAS would do a lot more to rectify the distracted driving epidemic than more laws banning specific activities when driving.

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NTT DoCoMo's LTE Subscriber Growth Reiterates the Importance of 4G Smartphones

Mar 22, 2012 12:00:00 AM / by Admin

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Everyone by now knows how important 4G smartphones are to growing 4G subscribers. But it is always good to see how imporant it is by looking at the data. In this LteWorld blog, you can see an important inflection point in subscriber growth. LTE subscribers on NTT DoCoMo's network took one year to reach 1 million, and that was with a large boost from its first LTE smartphone. It then took less than 4 months to reach 2 million LTE subscribers. The inflection point stands out. Note that the month of March is not yet finished, so while it looks like the curve is starting to flatten because the March number is lower than it will be at the end of March, this will not be the case.

NTT LTE Subscriber Growth


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