The Entry Level SmartPhone / Feature Mobile Phone [Sub $200] market will be under the control of WhiteBox Phone Manufacturers in 2013. The Mid and High end SmartPhone market belonged to Brands such as Samsung, Apple, HTC etc. However, the equation is likely to change as we have already seen with the disruptive launch by Xiaomi in China.
Xiaomi launched MI2 based on QCOM’s first quad core processor, MSM 8064 (definitely the most powerful mobile processor in the world right now), with 2GB of mobile DDR, 4.3 inch HD quality display (342 ppi vs iPhone 5 of 326ppi and HTC One X of 312 ppi) and 8MP camera sensor with aperture of f/2.0. From a pure hardware perspective, MI2 probably has the most advanced hardware in the world and is also priced at only US$310, around half of the retail price vs smartphones with comparable hardware specs. Continue reading Will Internet Companies Cannibalize Mid-End SmartPhone Market ?
Reliance Jio Infocomm does not have a Data Only Business Model in India for the next few years. So if 2G Voice is a must, why can’t Reliance do a CSFB arrangement with an existing operator ? It could tie up with existing 2G/3G operators to offer voice calls using CSFB. However, we doubt if a voice business can run completely on leased capacity especially in a spectrum-starved situation such as the one in India.
The other possibility is that Reliance Jio Infocomm builds out its own 2G network by acquiring spectrum in the upcoming auctions (or by acquiring an existing operator). Thus, Reliance could have an underlying 2G network to drive coverage (essential for voice service) and have an LTE network as an overlay on this 2G network. Reliance has lobbied hard with the Government and will soon acquire a UASL required to provide voice service paying Rs 1,650 Cr.
Is Videocon Really Front End Company for Reliance Jio ?
As whispered in market circles, Videocon is the front end company for Reliance Jio building a 1800Mhz Voice and FDD-LTE network but chose to bid selectively and is likely to expand its presence in subsequent Spectrum auction and establish a nationwide foot print. Now if Reliance Jio was front end company why would Reliance separately pay Rs 1,650 Cr UASL License fees when Videocon has already paid the same ?
Mukesh Ambani and His Clout in manipulating Policies In the past, Reliance has been able to manipulate Government policies from Polyester & Petrochemicals  to CDMA Mobile Service launch  to stay ahead of competition. However, chances are bleak this time as Mukesh has an enemy within and many outside. With the nation losing trust in the Corrupt UPA Government after the Multi Billion Dollar 2G Spectrum Scam, the writing on the wall is clear – Any Biased Decision especially on Spectrum will land in the Court of Law with a long and tedious battle for all stakeholders. Chances are high that M&A rules may still be rigged in favor of Reliance Jio but Seller will command an exit premium.
In this backdrop, Reliance Jio Infocomm has Herculean tasks ahead – Network & Tower Rollout, Evolving eco-system of 4G-LTE, Lack of International Bandwidth and fierce competition from Airtel, Vodafone, Idea Cellular, DoCoMo and Reliance Communications on all fronts.
In the Rich Feature Phone Market, most of the Chinese / Taiwanese brands are profitable (razor thin margin). Despite higher ASP driven by smartphone, the vast majority of these brands could actually be loss making. In my view, these brands are making even poorer profitability on smartphone than on feature phone due to higher R&D cost, rising marketing expenses, and much shorter product cycle for them to recoup the cost.
With whitebox makers now selling 2G smartphones below US$50 and 3G dual core smartphones around US$100, there is very little room for Chinese brands to make money in the sub-US$100 segment. With the whitebox 2G smartphone dropping below US$50 and 3G below US$100, expect whitebox smartphone to take meaningful market share in other emerging markets in 2013. Continue reading WhiteBox Mobile Handset Manufacturers Force Brands to Look Above $100 SmartPhone Market
India’s largest Wireless Carrier Airtel dismissed any near term threat from the launch of Reliance Jio 4G LTE Infocomm Services. DoT recently gave the Green Signal for 4G / BWA Operators to offer Voice Services by acquiring the Unified Access Services License in addition to the ISP License they hold so that they can offer full Voiice Services. Airtel does not see recent news flow around LTE as an impediment to its voice and data strategies.
Airtel further emphasized that its per-minute realizations should improve gradually over time. Airtel believes that industry needs price improvements. Higher input prices and lower Continue reading Airtel & Idea Shrug Off Reliance Jio Infocomm 4G Voice Threat