Tag: apple

Chinese smartphones to shake things up

Posted on July 22, 2013 by - News, Opinions

android-china-communistSales of high-end smartphones are still very strong, but the market seems to be slowly shifting to cheaper gear.

As smartphone penetration rates in developed markets are already relatively high, much of the new growth is coming from emerging markets which don’t have the capacity to gobble up millions of pricey iPhones and flagship Galaxies.

According to IDC, the average price of smartphones has dropped from $450 to $375 since early 2012. As growth is now being generated in China and India, cheaper smartphones are starting to take off. Lenovo stands to gain from the trend, as it already has a very powerful grip on the Chinese market. Chinese players like Huawei and ZTE should also do well. The big losers might be Apple and Samsung, but nobody expects them to sulk and sob in the corner while their lead evaporates.

Apple is apparently working on a cheaper, plastic iPhone, designed specifically to target emerging markets. Samsung and HTC already have mini versions of their flagship phones and although the Galaxy S3 Mini was a disappointment, HTC seems to have cracked it with the HTC One Mini. Motorola’s new X-phone, or Moto X, is set to launch in a week or so and it won’t be a high-end device as many had expected.

However, Chinese smartphone makers still might get the best of big brands. We are seeing similar trends in the low-end tablet market. Chinese manufacturers can respond to changes much faster, they are more dynamic and their costs are much lower. Samsung and Apple might spend hundreds of millions on marketing, but no-name smartphone makers can’t rely on an overpaid hype machine – their only choice is to come up with low-BOM (bill of materials), yet competitive low-margin products, which means China is actually teaching the West a lesson in capitalism.

ABI analyst Michael Morgan told Bloomberg that the days of fast growth in the high-end smartphone market are over.

“It’s the Chinese companies who know how to survive on tiny margins that are ready for the fight that’s about to ensue,” he said.

In other words we may be in for a repeat of the PC price slump of the mid nineties. Chinese manufacturers can churn out cheap smartphones and tablets, much like PCs, but this time around the shift might even be faster. Even if Chinese companies can’t access the latest and greatest in mobile tech, that doesn’t really matter in the mid-range and low-end. Last year’s tech is good enough and it’s cheap, which is exactly what they need.

Furthermore, most chipmakers should have no qualms about selling their latest processors to anyone willing to pay – since most of them don’t have their own smartphone business, although Samsung is an exception. The same goes for most other components and some chipmakers have a vested interest in peddling their own designs. Nvidia seems to be leading the way, as it is already working on reference smartphone and tablet designs. Its next SoC (Tegra 4i) is a mid-range chip with LTE and the first products based on the new chip, and possibly Nvidia’s reference design, should appear in early 2014.

This is also pretty bad news for Nokia, which had hoped to replace its Symbian and S40-based offerings with cheap Windows phones. However, Nokia feature phone users in emerging markets seem to be choosing cheap Chinese Androids instead.

However, most high-end smartphone sales in Europe are still coming from carriers, thanks to comprehensive (and usually quite pricey) two-year plans. If European and US carriers embrace more mid-range Chinese phones, things could change in a heartbeat.

Apple on schedule for next gen iPad

Posted on July 8, 2013 by - News, Products

applecoreSupply chain whispers in Taipei assert that Apple is on schedule to gets its next generation, 9.7 inch iPad out for September.

The iPad mini, meanwhile, may be tinkered with to improve the specs and make it more appealing.

Digitimes thinks the 9.7 inch tablet will sport a slimmer bezel design to make the viewing area larger, with improved battery and half the LED tubes. Upstream suppliers, Digitimes’ sources say, are done with the preparation so last minute spec updates are unlikely. A slimmer bezel would be more in line with Samsung and HTC smartphone designs.

The rumour is suppliers haven’t had word from Apple on the amount they should put out just yet are are shipping for pilot productions, but that will be able to meet initial launch demand. Shipment estimates are expected early August at the latest.

Apple, the sources say, is pondering whether or not it wants to bung a retina display on the 7.9 inch iPad mini. If so, this could lead to delays.

French police raid Apple over reseller treatment

Posted on July 1, 2013 by - News

peter_sellers_3918 Inspector Clouseau of the French Yard has raided Apple’s Paris headquarters on behalf of the government competition authority.

French police were in the building for 24 hours seizing documents as part of an ongoing government antitrust investigation.

Investigators are interested in the relationship between Apple and its resellers in France.  It was spurred by a premium reseller in France, eBizcuss, which went bankrupt last year.

According to Apple Insider the company filed a complaint against Apple accusing it of unfair competition.

According to the complaint Apple favoured its own retail stores rather than resellers like eBizcuss, which exclusively sold Apple products.

Apple made it difficult for resellers to obtain the latest models of new Apple products, while Jobs’ Mob’s cathedrals to consumerism were packed.

The French competition authority is also interested in Apple’s iOS App Store.  Apple increased the minimum selling price for magazines and newspapers last year and the authority is worried that Fruity co is abusing its power for digital downloads as well.

Cupertino should have seen the writing on the wall and that it was suddenly off the French government’s Christmas card list when it was ordered to pay $6.5 million in 2011 taxes for iPad sales.

The mandate came from a French professional association that collects revenue for artists’ copyrighted works.

Notebook shipments hit new low

Posted on June 28, 2013 by - News

ancient-laptopContract manufacturers of notebooks had one of their worst quarters on record in Q1. According to IHS, they suffered a worse than expected quarter, with shipments to Apple and HP tumbling to the lowest level in three years.

Global shipments from ODMs in the first quarter totalled 33.2 million units, down 17 percent from 40.1 million in the fourth quarter of 2012.

The downturn was four to five percentage points than what IHS had originally forecast, prompting more concerns about the beleaguered industry. Taiwan based ODMs build notebooks for Apple, HP, Dell, Samsung, Lenovo, Acer, Asus and Toshiba.

The knock on effect hit ODMs hard. Quanta got the worst of it, with a 27 percent plunge in shipments. It lost its spot as the world’s top ODM to Compal as a result. Furthermore, Quanta apparently received “conservative” orders from Acer, Asus, HP and Apple during the quarter. Compal saw a quarterly decline of 5 to 7 percent and it weathered the storm a bit better than other ODMs, thanks to stable shipments to Dell and Lenovo.

Wistron’s drop in shipments was 16 percent, but it still managed to rank third. Inventec saw a 9-percent drop and it ended in fourth spot, while Pegatron wasn’t as lucky. It saw its shipments plummet 21 percent, finishing the quarter in fifth spot.

There’s light at the end of the tunnel, though. ODM shipments are expected to improve in the second half of the year. The key drivers of growth will be cheap ultrathin PCs with touchscreens, along with new models based on Intel Haswell parts. In addition, Microsoft will lower the licencee fee for Windows for notebooks with a screen size of up to 11.6 inches, as we reported from Computex a few weeks back. Better late than never.

Asian tablets will win the day

Posted on May 31, 2013 by - News

Keep taking the tabletsAs I was having a mango and orange juice round the corner from the somewhat unique hotel I’m staying in here in Old Taipei, I had an invitation from Sascha Pallenberg, I popped round to pay a visit to Mobile Geeks, and it was something of an eye opener.

Sascha, and fellow reporter Nicole Scott, have offices in rather a swanky building on the 11th floor of an office block near the metro. Obviously they are gearing up for next week’s Computex but we had time for a chat about the state of the tablet market.

Sascha showed me two tables – one Chinese one sells for $35, while the other, a well built machine from Ramos, sells for $225.  Both are Android devices and Sascha tells me there are dozens, maybe hundreds of these babies manufactured in China, which obviously has implications for the big boys, the Taiwanese boys and, well, the whole world. Heck, you could bundle a $35 notebook with a carton of cigarettes, I suggested.

Can you obtain these machines in the USA and Europe?  Well, you can certainly get hold of the Ramos machine – check out its site here.  But most of the tablets, Sascha suggested, were destined for the Asian, Indian and African markets, where no one can lash out the amounts of cash Apple and others expect.

The real question for me is how vendors can possibly expect people to pay vast sums of money in the USA and Europe when it’s obviously not hard for the Chinese to master manufacturing and with a bill of materials at a considerably less cost.  Surely it can only be a matter of time before the majors are forced to slash prices to match the Chinese offerings – and then it will be a case of just how they can make such big margins as they do now, in the future.

And with the heady mix of Windows tablets, Android tablets battling it out, where exactly is this going to leave the old guard – Microsoft and Intel?

Apple retail revenue is $58 per customer

Posted on May 21, 2013 by - News, Products

iPad-miniApple has been in the news for all the wrong reasons lately. Its falling share price has been a source of concern for Wall Street, the lack of revolutionary products is another, and a big gap in the update cycle is yet another. However, Apple’s retail operations are going from strength to strength.

In fact, the average Apple consumer who happens to walk into a retail store nets the company $57.6, twice as much as shoppers who enter Tiffany shops, minus those who ask for breakfast. According to Apple’s latest financials, retail numbers are still going strong, reports Hot Hardware.

The number of average visitors per store was about 250,000 per quarter, up from 170,000 in the same period three years ago. It is worth noting that the iPad launched three years ago, which should explain the sudden spike in numbers. However, the iPad mini was introduced last year and it does not seem to have had much of a negative impact on retail spending, despite the fact that it is significantly cheaper than the full size iPad.

In addition to the second generation iPad mini with a high resolution display, Apple is widely expected to introduce a cheaper version of the iPhone later this year. Although it is supposed to be designed with emerging markets in mind, a cheaper iPhone could also cannibalize sales of the flagship iPhone in developed markets. The exact same trend was observed in the quarters following the iPad mini launch.

With that in mind, the average Apple retail consumer might start to spend a bit less, as more and more of them are likely to opt for the iPad mini and cheaper iPhone over their bigger and pricier siblings.

Handset sales up, Samsung gains share

Posted on May 14, 2013 by - News, Products

nexus4-ceSmartphone wars are becoming rather predictable. Every quarter sales notch up and every quarter Samsung emerges as the big winner. The last quarter was no exception. However, growth is slowing as the market matures, although there is still plenty of room for growth in emerging markets. 

Worldwide phone sales totalled 426 million units in the first quarter, up 0.7 percent year-on-year. Smartphones saw a lot more growth, with sales totalling 2010 million units, up 42.9 percent from a year ago, according to a Gartner survey.

Sales of feature phones are down in all regions except Asia, while smartphones accounted for 49.3 percent of all phone sales worldwide, up from 34.8 percent in Q1 2012. At the same time feature phone sales contracted 21.8 percent.

“Feature phones users across the world are either finding their existing phones good enough or are waiting for smartphones prices to drop further, either way the prospect of longer replacement cycles is certainly not good news for both vendors and carriers looking to move users forward,” Gartner analyst Anshul Gupta said.

Samsung saw its market share go up from 21.1 percent to 23.6 percent. Apple also did well, growing from 7.8 to 9 percent, while Nokia’s share dropped from 19.7 to 14.8 percent. However, looking at smartphone sales, Samsung’s share was 30.8 percent, up from 27.6 percent. It was trailed by Apple at 18.2 percent, down from 22.5 percent. LG grabbed the bronze, with a 4.8 percent share. Huawei also had a good quarter, upping their share to 4.4 and 3.8 percent respectively and outperforming former heavyweights like Nokia, Sony and HTC.

Android is still the dominant mobile operating system, with a share of 74.4 percent, up from 56.9 a year earlier. Apple’s iOS share stands at 18.2 percent, down from 22.5 percent a year ago. Just so it wouldn’t look like a two-horse race, Blackberry is still in the game with a 3 percent share, down from 6.8 percent last year. Apparently BB10 did not make a huge difference. Windows Phone has a 2.9 percent share, up from 1.9 percent last year. It is growing, but at a painfully slow rate.

Microsoft readies a Surface re-run

Posted on May 2, 2013 by - News

Microsoft SurfaceWhile Microsoft’s Surface tablets proved completely underwhelming, a report suggests that the company might have another bash at the platform.

According to Taiwanese wire Digitimes, the company is expected to announce next generation Surface machines at the end of June.

The company only managed to shift 1.5 million tablets of the first generation Surface – way beyond what it expected to achieve.   But the pricing was all wrong and the competition in this field is now very intense.

The wire claims that the second generation Surface will largely retain the same suppliers as Surface Mark I – including microprocessors from Intel and Nvidia, screens from Samsung and LG and touch panels from TPK.

The report also said that displays for Surface Mark II will be smaller – supposedly because there’s more demand for these type of devices, although it’s entirely possible that Microsoft wants to bring down the bill of materials (BOM) costs. It will certainly have to do something spectacular to make Surface tablets fly – particularly on retail costs.

Cheap smartphones are the next big thing

Posted on April 24, 2013 by - News, Products

nexus4-ceAs the smartphone juggernaut rumbles on, vendors are increasingly turning their efforts to emerging markets, with less disposable income and a much lower smartphone penetration rate. As smartphones are projected to outsell feature phones this year, the need for inexpensive smartphone designs is greater than ever and ABI Research reckons it will continue to grow.

ABI Research divides the smartphone market into three price brackets, low-cost smartphones priced at up to $250, mid range models in the sub-$400 price range and high-end devices, priced at $400+. Shipments of low-cost phones are expected to grow from 259 million this year to 788 million in 2018. Sales of high-end and mid-range phones are forecast to grow from 635 million to 925 million.

It is clear that there is a lot more room for growth in the low-end, and to some extent the mid-range. ABI Research estimates that low-cost units will account for 46 percent of all smartphone shipments by 2018, up from 28 percent last year.

Although most growth is expected in emerging markets, it is very likely that western consumers will change their habits as well. As smartphones mature it will become increasingly difficult to come up with very innovative designs and the lukewarm response to the Samsung Galaxy S4 and iPhone 5 might be a sign of things to come.

“As smartphone penetration moves from early adopters to mass-market and laggard consumer segments, the smartphone as a product will be less dependent on technical superiority, and more dependent on reliability and value,” said senior practice director, Jeff Orr.

Low-cost smartphones are expected to do exceptionally well in underdeveloped markets, with plenty of pre-paid users and very little in the way of subsidies. However, they could also play a role in developed markets, helping feature phone consumers convert to smartphones at a fraction of the cost of high-end gear.

PCs plunge as smartphones and tablets soar

Posted on March 27, 2013 by - News

ipad3The latest survey of connected intelligent devices from IDC has revealed what we were all beginning to suspect – the day of the PC has gone, while tablets and smartphones continue their inexorable ascent.

The survey covers PCs, notebooks and smartphones.

IDC thinks that shipments of tablets will exceed desktop PCs in 2013 and topple notebook PCs next year. The tablet market is expected to grow year on year by 48.7 percent, representing 190 million units, and the smartphone market  will grow 27.2 percent to 918.5 million units.

Apple did better than expected in the fourth quarter of 2012, closing the gap with Samsung. That’s because of sales of the Apple iPhone 5 and the iPad Mini, meaning that Apple had 20.3 percent unit shipment market share compared to 21.2 percent for Samsung.  However, from a revenue point of view, Apple had 30.7 share compared to 20.4 percent for Samsung.  In short, Apple kit is more expensive.

During the rest of the decade, tablets and smartphone sales will continue to rise, as they are taken up by emerging markets.  Notebook PCs will only show single digit growth and desktop PCs will continue to fall. By 2017, desktop PCs will show to practically no growth.

Megha Saini, IDC research analyst, said that in emerging markets in particular, consumer spending starts with mobiles but move directly to tablets before they think about PCs.

Intel forced to take axe to Ultrabook prices

Posted on March 26, 2013 by - News, Opinions

titanicThe writing was on the wall for Intel-based Ultrabooks well over a year ago.

Overpriced, underwhelming, and facing massive competition from tablets and smartphones and trends such as bring your own device (BYOD), few families would take the risk of spending over $1,000 to have a bright shiny Ultrabook and keeping an eye on jobs and the general economic situation, large corporations weren’t going to splash the cash either.

So the news that Ultrabooks are set to cost far less for the holiday season this year is probably a case of too little too late. It also begs a number of questions about Intel’s business model which remain to be resolved.

Intel’s phenomenal growth was due, in a large part, to the monopolistic hold it had on the PC industry.  True, AMD was around to mitigate that, but it was only in the days of the AMD Opteron that Intel was forced to react.  Because it holds such a large X86 market share, that meant that the revenues from sales of its microprocessors allowed it to finance developing the next generation of its CPUs.  Building fabs is not a trivial matter and involves billions of dollars of investment.  Intel could afford to do this because during its so-called “tick tock” cycle, it was able to maximise profits on its current generation of semiconductors, while developing its next generation.

However, this continual growth could never be guaranteed, and disruptive technology, in the shape of tablets and smartphones, meant that given a choice, lots of people preferred to pay far less for tablets and smartphones rather than go for Ultrabooks at $1,000 plus.

And with this we come to applications and the realm of the other great X86 monopolist, Microsoft.  It’s certainly true that typing on a smartphone or a tablet is not nearly as convenient as using a conventional keyboard.  And if you are into solid beancounting, you’ll certainly need a sophisticated spreadsheet to manipulate the numbers.  Despite the now decades long promise of the paperless office, people still print stuff.  Microsoft, with Windows 8 and its tablet ready interface is too expensive.  It, like Intel, has lost its grip on the electronics market.

There’s another factor to consider, too.  Right now, Intel is in an interregnum period.  Paul Otellini, the current CEO, is due to leave at the end of May.  Intel is actively recruiting for another CEO, but that means, in the short term, that no-one is going to make huge company wide decisions.

In truth, it’s hard for me, as a seasoned Intel watcher, to see quite what rabbit the new Intel CEO, whoever she or he might be, might pull out of the corporate top hat.  Intel has been in fixes before, and because of its size and its sway can never be underestimated.  But it’s hard to see it making very much more than a ripple in the smartphone and tablet market, leaving it between a ROC and a hard place. It’s also hard to see where the complex supply chain it generates is going to end up, too.

Apple tops US PC satisfaction list

Posted on March 22, 2013 by - News

dellsigA survey of 10,000 US consumers has pointed to Apple and HP taking the top end of the satisfaction ratings for the computing segment in a Temkin Experience study. At the bottom of the rankings were Sony and Lenovo.

The survey looked at three areas of customer satisfaction, that is, functionality, accessibility, and the emotional reaction to the use of their product across different industries, including with computing.

Acer, Apple, Compaq, Dell, eMachines, Gateway, HP, Lenovo, Sony, and Toshiba were included. According to the survey, personal computers have been making steady gains in customer satisfaction – the average experience rating has increased to 60 percent for this year, up six percent from 54 percent in 2011.

Apple’s enormous popularity in the States put it on top for computing, reaching 134th place of any brand across every industry at 64 percent customer satisfaction. That is slightly below its 2012 rating at one percent less, however, it pipped other computer makers to the spot with top feedback for the accessibility and emotional categories. HP was second, beating Apple in functionality, and scoring 62 percent overall.

Of the PC brands, Dell scored the biggest improvement from 2012 with an increase in six percentage points. Sony and Lenovo however were the lowest ranked PC brands, both scoring 54 percent – not dismal, but showing significant declines for the segment. Sony scored poorly on functionality and accessibility, while Lenovo users were just not that attached to their machines with a low rating for the emotional category. Overall, ratings for PCs were 13th out of the 19 included industries.

The full ratings can be found at Temkin’s website, here.