Narrative: Maturing Smartphone Market

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    HMD Global Launches First High-End Android, Nokia 8 (Aug 16, 2017)

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    Amazon Says Smartphone Sales in India are Growing Rapidly, Driving Other Sales (Aug 10, 2017)

    NDTV’s Manish Singh has an interview with the head of consumer electronics sales for Amazon in India which provides several interesting insights on trends around smartphone sales there. It seems Amazon’s sales of smartphones in India have risen dramatically in India over the past year, up 100% overall but up by far higher percentages in the smaller cities around the country. Perhaps more importantly, Amazon is finding that a smartphone is often the first purchase a customer makes through the site, but in many cases turns the customer into an Amazon convert, with many other purchases following that first positive experience. In a sense, this is the equivalent of Facebook or Google pursuing strategies to expand internet access: the efforts are designed to create new potential customers who are more likely to be loyal to Amazon, though this would be even more effective if Amazon launched its own devices, something NDTV has previously reported it was working on. The piece here also talks about Amazon’s strategy of offering the broadest possible range of devices and brands while also securing the odd exclusive including phones from OnePlus and a particular model of the iPhone. That’s an interesting strategy in a market where a majority of smartphone sales are still made in offline retail, but online is an increasingly important channel. Overall, some good insights into both Amazon’s India strategy and the Indian smartphone market. Also worth noting: this separate story from NDTV on the new Nokia 6 (from HMD Global) hitting 1 million “registrations” (effectively a soft pre-order) on Amazon’s website in India, which is running some special promotions and bundles around the phone.

    via NDTV

    T-Mobile Launches Budget Smartphone and Offers Others on Lease Programs (Aug 9, 2017)

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    Essential Gets Additional Funding from Amazon’s Alexa Fund, Tencent (Aug 9, 2017)

    Essential, Android founder Andy Rubin’s fledgling smartphone outfit, has announced additional funding from companies including Tencent and Amazon, but still refuses to say exactly when its smartphone will go on sale, saying only that a date will be announced in a week or so. It’s also announced that Amazon and Best Buy will be the retail partners for launch, while Sprint was announced earlier as the exclusive US carrier partner. If you’ve read any of my previous pieces on Essential, especially the first one, you’ll know how skeptical I am that an effort like this can succeed. The market is so mature at this point and the distribution and other battle lines so clear that breaking in with yet another Android phone will be a real challenge, one further exacerbated by what’s going to be limited distribution on the weakest carrier in the US. The funding is therefore intriguing, because it suggests these backers see something in the phone that I don’t. Importantly, it’s Amazon’s Alexa Fund specifically that’s making that company’s investment, something the Journal piece I’m linking to here doesn’t dig into at all, but which suggests that the phone will major on Alexa integration, something hinted at earlier by Andy Rubin as part of a statement about the phone’s ecumenical approach to voice assistants, but not made explicit. And backing from both Foxconn and Tencent is intriguing in the context of a phone that’s mostly being launched in North America for now. Recent conversations I’ve had suggest Amazon’s smartphone sales business is going very well, but of course many of its sales are of the kind of low-end prepaid handsets people buy outright anyway rather than the higher-end premium hardware Essential will be selling. I continue to be very bearish on Essential, but at least it sounds like we might finally see the hardware hit the market soon.

    via WSJ

    Motorola Z2 Force Reviews Highlight Tradeoffs (Aug 3, 2017)

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    Chinese Smartphone Vendors Grew Strongly in Q2, Gaining on Big Two (Aug 2, 2017)

    New smartphone shipment and market share numbers are out for Q2 from various analyst firms, and they all show the same broad pattern: somewhere between a modest decline and modest growth year on year for the market as a whole, modest growth for Apple and Samsung, and strong performances by three Chinese vendors, with Huawei making significant gains in the number three spot. IDC, Strategy Analytics, and Canalys among others differed slightly on the exact shipment numbers, while Strategy Analytics seems to find another 20 million or so shipments somewhere compared with the others. The top four spots have now remained unchanged for over a year, with the exception of Q4 last year, when Apple briefly pipped Samsung for the number one spot, though this quarter Xiaomi’s resurgence squeezed Vivo barely out of the top five. Huawei got within a few million of Apple’s sales total for the first time off the back of pretty strong growth, but Xiaomi had by far the fastest growth (which you already know if you’ve read two earlier pieces on Huawei and Xiaomi). The broader picture has Chinese vendors dominating the top ten, though these firms only report the top five in their public releases: by my count, Chinese vendors take seven of the top ten spots, with Apple, Samsung, and LG the only exceptions. And those Chinese vendors rely enormously on the Chinese market for their sales, while several have no presence in the US at all, meaning that the smartphone market is increasingly fragmented globally, with different players taking the lead in different parts of the world.

    via Android Police

    LG Reports Weak Smartphone Results, Losses in Q2 (Jul 27, 2017)

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    Motorola Announces Moto Z2 Force, Shatterproof Phone With Mods (Jul 25, 2017)

    Motorola today announced the latest variant in its flagship Moto Z series, the Z2 Force, which is a follow-up to the Z2 Play announced a while back. Motorola, of course, is part of Lenovo, which had pared back the Motorola branding over the past year, although today’s launch suggested it’s reversed course on that front, with lots of “batwing” Motorola logos and the full version of the brand (not just “Moto”) on stage and elsewhere. The Moto Z is the only really high-end phone either Lenovo or Motorola makes, but even then the Z2 Play is priced at $500, well below flagships from other manufacturers. Lenovo has said on earnings calls over the past year that it expected the Z to sell around 3 million units in its first year, so this isn’t a mass-market flagship in anything like the same category as the iPhone or Samsung’s Galaxy S and Note phones, or even the LG G series. The Z line has been pretty much a niche proposition, and there are two big reasons for that: the modular approach, and the Verizon exclusivity in the US. Though neither of those changed with the Z2 Play, the Z2 Force will be available on all four US carriers, and offers a shatterproof screen and some other advantages over the Z2 Play. But it will also command a far higher price at around $800, putting it in line with the most expensive flagships from competitors. That’s a fairly bold move, but suggests Lenovo/Motorola feels comfortable about the device and its ability to differentiate in the market. Motorola has had an interesting set of differentiators over the last few years, in some ways going back to basics by emphasizing battery life and now shatterproof screens, while the modular approach is likely to be too niche to drive really meaningful sales. But will four-carrier support and a monthly financing program through Affirm, Motorola is definitely broadening the distribution this time around, and that should help it expand the addressable market quite a bit. None of that is going to catapult Motorola into being a major player in the US market again, but it should certainly allow it to take more meaningful share and re-appear on the radars of people who have written it off as a Verizon-only vendor in the US.

    via CNET

    India’s Jio Launches Free VoLTE Feature Phone, Cheaper Data Plans (Jul 21, 2017)

    I don’t usually cover the Indian market in depth here, but Jio feels like one of those stories that more people outside of India need to know about. It’s part of one of the big Indian conglomerates, Reliance Industries, and launched public LTE-only mobile services in September last year, signing up 125 million customers since then, an unprecedented rate of growth for any mobile operator anywhere. Until now, that service was available only on smartphones, either compatible devices customers brought with them or those sold by Jio. But today, Jio announced its own VoLTE-capable feature phone, which it will offer for free (albeit with a 1500 rupee – $23 – refundable security deposit) starting next month, with an unlimited voice, text and data plan for 153 rupees ($2) per month. What Jio has done in India over the past year or so is one of those things that just doesn’t seem like it should be possible – massive customer growth from zero, while offering fairly leading edge technology in devices and its network. The big enabler is that Jio is part of that massive conglomerate, which makes lots of money from the petroleum industry and therefore doesn’t need Jio to be profitable, at least not yet. In addition, although Jio touts its broad coverage (and promises to cover 99% of the population shortly), my understanding is that the coverage can be unreliable and some users are deploying it as a second-SIM solution rather than their only option. A lack of network density is likely the big problem, offering nominal coverage across a wide area but offering spotty coverage within that area in practice. But it’s been disruptive nonetheless, providing access to 4G and smartphones for those who previously hadn’t taken the plunge, and the new feature phone is going to extend 4G and some basic data services to a far larger number.

    via NDTV

    Essential Phone Will be Exclusive to Sprint in US, Further Limiting Appeal (Jun 12, 2017)

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