China plummeting and India soaring but Apple just can’t get a break

IDC had a stab at smartphone shipments in two of the worlds most lucrative markets, and it does not make pleasant reading for Apple.

As the Apple management team has now decided against dishing out the specifics on iPhone shipments in the quarterly statements, analysts are the closest we’re going to get for sales figures. Here, IDC is suggesting a sluggish market overall in China, with iPhone sales dropping considerably, while the Indian market is booming, but Apple can’t claim a slice of the action.

Starting with the Indian market, IDC estimates 142.3 million units were shipped across 2018, demonstrating a 14.5% year-on-year increase, though the final quarter saw a 15.1% sequential decline. This might not look as bad as it originally sounds however, as Q4 actually increased year-on-year 19.5%, suggesting the third quarter was just exceptionally positive.

“Amongst the big highlights of 2018 were the online-focused brands that drove the share of the online channel to an all-time high of 38.4% in 2018 and a whopping 42.2% in 2018Q4,” said Upasana Joshi of IDC. “This was primarily driven by several rounds of discounts by e-tailers driving affordability through various financing options, cashback offers and buyback schemes.”

The Jio effect is clearly sustainable across the country as Indian consumers appetite for the digital economy continues to grow. With the disruptive telco promising further expansion, greater digital inclusivity and additional services over the coming months, more consumers might be encouraged to upgrade to more premium devices. As Joshi notes, the premium end of the market was the fastest growing price segment, demonstrating 43.9% year-on-year growth.

What will be worrying for the iLeader is the inability to get a foothold in the market and capture the attention of Indian consumers. India is traditionally a market driven by low-end devices, however the encouraging growth of handsets priced north of $500 should offer some traction for Apple.

Xiaomi led the market, having recently overtaken Samsung, with 28.9% of total shipments, a healthy 58.6% increase from 2017. Samsung collected 24.7% of Indian devices sales, while Vivo had 10%, Oppo 7.2% and Transsion with 4.5% completes the top five vendors. The remaining 27% of shipments were shared through multiple vendors, Apple included, though the bundled peloton chasing the leading five saw total sales drop by 10.7% year-on-year.

With sales across the world seemingly declining for Apple, the booming Indian market is one it can ill-afford to miss out on. Last year, it announced it was moving manufacturing into the country, with partner Foxconn aiming to be up and running in early 2019, while there are also plans to expand the retail footprint. The team reportedly plan to open three massive stores in both Delhi and Mumbai, owing to the success of retail operations elsewhere around the world.

While India might be a headache due to the iLife indifference of the locals, China is turning into a full-blow migraine for completely separate reasons.

IDC estimate Apple’s smartphone shipments have declined by 19.9% in China, while the home favourite Huawei saw its own shipments grow by 23%. Apple’s loss is Huawei’s gain, though it does appear the iChief is losing its prestige badge in the market.

These figures are of course estimates, as Apple has decided against telling anyone about specific shipment numbers, though the revenues over the last quarter give a decent idea. During the last quarterly results, revenues for the Greater China region declined by roughly 26% from $17.9 billion to $13.1 billion. In years gone, Apple used to be able to simply release a new colour variant of flagships and China consumers would be queuing out the door, but the bonanza is over for the moment.

The big question is why? Of course, there will be a preference from some for local brands, and there will of course be the cash-conscious. But ultimately you have to wonder whether Apple is living up to the brand promise which it spend so many years cultivating; where is the innovation?

Over the last decade, Apple has crafted a brand which is built on the principles of innovation and technological supremacy. Steve Jobs was the figurehead of this image, and many Apple enthusiasts were prepared to pay the premium on devices because of this identity. However, in recent years, Apple has done little to differentiate its devices and justify the pricing premium which is placed on products. Of course, this is not just Apple, innovation has stuttered across the segment, but gone is the assumption Apple immune to market trends.

With revenues declining across the international markets, and Apple set to sit out the initial 5G devices euphoria over the next couple of months, 2019 is starting to look like a very uncomfortable year for Apple.

Designing IoT for Asia periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Ong Geok Chwee, CEO of Bridge Alliance, looks at the opportunities in IoT and the considerations when thinking about scaling IoT into Asia.

The “Internet of Things” is a term we cannot avoid in this age. Yet, even industry experts still find it a challenge to grasp how its potential can be unlocked. This calls for design – designing with intention, rather than just letting things happen. This is important as we start wrapping our heads around IoT and the functions or people it will serve. Who or what will be using IoT? When and how does IoT come into play? And where will IoT be readily received?

We often talk about IoT as a gold mine that many are sitting on. In fact, that that gold mine is in Asia – the leading region for IoT spending, accounting for more than 40 per cent of the total worldwide IoT expenditure in 2018.

So how do we design our intelligently connected products for the Asian market?

It is important to note that though seen as a collective region, the Asian market is highly fragmented. There is a significant variance in the urbanisation levels and characteristics of each country. Some are more advanced and have better infrastructure, while others have a larger population, with a wonderful climate for farming.

This means that the use cases for IoT in these markets might vary, especially when we talk about scale. IoT solution providers might want to consider these variances and identify similar markets, so you may further refine your offering to serve a common need across multiple geographies.

Designing for Feasibility

Feasibility is also an important element to the design phase. How do we design our IoT solutions to be cost effective? Keep it simple. The simpler your process, the more you save on unnecessary features that are not core to your offering. Take for example the use of a global eSIM, where from a manufacturing point of view, it is simply a single stock keeping unit (SKU). This optimises the logistics and distribution process, reducing the number of production lines required.

The Battle of the Platforms

The GSMA predicts that platforms, applications and services growth in the emerging IoT segment will soon surpass that of connectivity, capturing 68 per cent of the total by 2025. This means that IoT platforms are very much the focus. When it comes to platforms and technology, interoperability is critical. This is the trick behind the seamlessness of IoT, where platforms are the enabler of machine-to-machine connectivity. However, this means that there will be a huge advantage for whichever platform that captures the greater market share. In this case, the risk of a monopoly emerging is highly likely, which raises the concern of how the market will adjust to such a situation.

Internet of Things, or Internet of People?

We are ultimately trying to solve issues for people in our IoT designs. It is easy to get carried away when designing a solution with such complicated technology involved. We need to remember to simplify – the emergence of IoT came about with a purpose to simplify our lives and make things as seamless as possible.

It is not just about the devices and platforms, nor just about connecting places and things, but about connecting the people. That is why we see the move towards customer experience and building relationships. This is also because the human connection is most often superior and an innate need, deftly enabled by the connectivity of things. Through this new age of IoT, we may understand people more through analytics, serve them better through experiences empowered by technology and delight them at just the right moment where it counts, through intelligence and the effective use of big data. Such an exciting time to be continuously designing, redesigning, testing and living in the world of technology and telecommunications.


Hear more from Ong Geok Chwee at 5G Asia 2018 in Singapore next month, where she will be discussing what the telco of the future will look like in our CxO keynote panel.


Shaping the Asia Pacific MVNO Market 2018

MVNOs Series explores the latest developments in the Asia Paficic MVNO market. With contributions by Gary Bhomer, Tel-Consult, and Renato Reis, Acqua Telecom, this report offers you a snapshot of the market, the impact of regulation and the latest business trends in the region.

Comprising more than 50 nations and territories, two continents and an area equivalent to more than a third of the total landmass of the Earth, the Asia-Pacific APAC) region boasts around 60% of the global population, including three of the five most populous countries.

Given its sheer size, it is no surprise the 2.7bn unique mobile subscribers across the APAC region represent an unrivalled market. But due to the varied demographics of a region characterised by sharp contrasts between urban and rural, wealthy and poor, connected and remote populations, mobile ownership only represents a 67% penetration rate.

This is why, as well as ranking as the world’s largest mobile market, APAC is the grand prize being chased by many Western brands. As domestic markets across the region open up to MVNOs, virtual operators are widely viewed as having most to gain. When asked their opinions on the prospects of regional MVNO markets, participantswere unanimous – APAC is the region where industry insiders expect to see most growth in mobile overall, and it is where they see the best opportunities for MVNOs.

This is backed up by most economic forecasts for the key APAC markets. According to GM Insights, China – the world’s single biggest domestic mobile market – MVNOs are expect to grow year-on-year 16% through to 2024, above the global average of 12%. This figure soars as high as 56% CAGR for MVNOs in emerging Asian markets, where low mobile penetration in less developed economies presents even greater growth opportunities.

In emerging economies like Pakistan and Bangladesh, mobile penetration remains as low as 50%, creating ideal ‘virgin territory’ for MVNOs to move in on. Predictions for explosive MVNO market growth in these economies are largely founded on the rapid roll out of 4G – the GSMA predicts these two countries, alongside India and Indonesia, will be major drivers of 4G connection growth in the coming years.

Relationships between virtual operators and MNOs remain crucial to MVNO prospects in individual domestic markets. In the Middle East, despite some signs that governments in countries like Israel and UAE might be prepared to introduce MVNO licenses, a lack of will on the part of MNOs is preventing virtual markets from emerging. Elsewhere, in countries including Australia, restrictive commercial structures are viewed as holding back innovation amongst MVNOs.

In this report, we provide you with a snapshot of the current state of play in the MVNO market across the APAC region, while also addressing the impact of regulation and market liberalisation, and how relationships with network operators are evolving in different domestic and sub-regional markets.

Download the full report and get a more in-depth analysis of four key markets from across the region and insights from top industry analysts with their ear to the ground – including Renato Reis from Acqua Telecom, Futoshi Sasaki from Internet Initiative Japan, and Gary Bhomer from Tel-Consult.

Interested in the MVNOs market in the APAC region? Then MVNOs Asia is the event for you. Join us at the only dedicated MVNO event for the Asia Pacific region.

S9 halts Samsung run of progress but semiconductors stand strong

Samsung’s run of reporting record quarterly results has come to an end as sluggish sales for its flagship S9 device hit a wall.

Analysts had been predicting this would be a tough quarter for the device, some believing this would be the weakest launch for years, and it appears the fears have become reality. With sales of roughly $52.1 billion for the three months, a decline of 4% year-on-year, Samsung at least offered somewhat accurate guidance in a note a couple of weeks ago.

“Second quarter revenue fell due to softer sales of smartphones and display panels, despite robust demand for memory chips,” said Samsung in the earnings statement. “The continued strength of the Company’s memory business contributed to the higher operating profit. Net profit was little changed from a year earlier due to higher income tax.”

While this is certainly not an ideal situation for the business, at least it is not alone. The iPhoneX has also been experiencing sluggish sales, as the continued trend of flat innovation and limited differentiation continues. Apple might have been able to avoid the dip over the last couple of years, selling on its brand more than product innovation, but it seems not even the iLifers can continue to blindly follow the iChief down the trail of mediocrity any more. No-one is permanently exempt of global trends.

For the short-term future, the story is unlikely to change significantly, but there is a light at the end of the tunnel. With 5G networks set to be switched on over the next couple of years, manufacturers will soon be able to begin a refreshment cycle of devices, with flagship products being marketed as ‘5G Ready’. The consumers insatiable appetite for data and the need for speed will likely spur on the need to update devices.

This might not be the best time for the devices division, Samsung does at least have the burgeoning, if not as sexy, semiconductor unit. The NAND and DRAM markets continued to be big earners for Samsung, despite commenting on weak seasonal demand. With global cloud trends continuing to surge, front-line suppliers to the data centre industry are not going to be going hungry any time soon.

For servers, demand for SSD for data centres is forecast to remain strong, while for enterprise, adoption of high-density server SSD over 8TB is expected to continue. The adoption of SSD is expected to expand into more sectors and all product segments are projected to use more high-density eStorage, perhaps explaining the South Korean drive for innovation in the semiconductor market.

According to Yonhap News Agency, the South Korean government has pledged roughly $1.34 billion to the semiconductor industry over the next ten years, to support the country’s position in the global standings, but also to capitalise on the expected growth in the segment. The semiconductor space is considered to account for roughly 20% of the country’s exports.

“In order to have South Korea maintain its reputation as the world’s top semiconductor powerhouse, we will support the development of the chip industry by focusing on three strategies,” said Paik Un-gyu, Minister of Trade, Industry and Energy.

The three pillars of the strategy are the development of next-generation materials that will replace existing memory chips, the seeking of combined growth of fabless and foundry businesses, and hosting production lines of global semiconductor companies. Samsung will almost undoubtedly benefit from government interest in this area.

Samsung’s flagship business unit, its smartphone division, has had a rough couple of years, owing to a global slowdown on devices and also its own engineering ‘difficulties’, but this decline is not something which we should be surprised at; the writing has been on the wall as consumers start to favour refurbished or second devices, while also extending the lifecycle of their current devices. But on the positive side, Samsung is collecting profits through diversification.

Investors will moan about the deficit in sales and profits, but a burgeoning semiconductor division and a device refreshment cycle on the horizon, it could be in a worse position.

MWC Shanghai: Co-creation and collaboration becoming the new buzz of 5G

Buzzwords are nothing new to the telecoms and tech space, but 2018 is starting to see the rise of a few more; co-creation and collaboration

In most cases, vendors and telcos use tech-orientated buzzwords to dazzle, amaze and confuse customers, but this is a new type of euphoria. Its softer, less tangible and more acute. Co-creation and collaboration are necessary aspects of developing the digital economy, but purely by the flexible nature of the concepts, the buzz-bending, hype-escalating PR ‘gurus’ of the industry are going to have some fun here.

The definition and application of the two words are relatively simple on the surface. 5G can potentially take telcos beyond the realms of connectivity utility, providing an opportunity to become more of a consultative service provider. Instead of selling SIMs, telcos will be able to evolve offerings to be more than connectivity for enterprise customers. This means solutions which can proactively improve the efficiency of business operations.

Think of intelligent factories, smart cities or autonomous vehicles. In these examples, connectivity can be used to enhance the business, instead of just making it work. But before this dream of new revenues can be realised, the business needs to be transformed and new solutions need to be imagined.

This is where co-creation and collaboration comes into play. Telcos cannot simply knock on the door of a customer with a 5G offering and say ‘here you go, have come capacity, bandwidth and latency’, a solution specific to the industry, or the individual business, has to be created. It is a different type of business model.

One company which is taking this approach is NTT Docomo. Speaking during MWC Shanghai, CEO of Docomo Beijing Labs, Lan Chen told us the team now has more than 1400 industry partners, with plans to continue to grow. Chen said each of the partners were working with the Docomo research team to create products specific to industry, whether it would be AI-driven taxi solutions which predict demand or virtual assistants which are contextually aware. These partners range from technologists in enterprise organizations, to the internet giants like Baidu, as well as academic researchers. The point is they have experience in building services and products specific to the verticals.

Docomo is defining this research as co-creation, and there are already examples of services in the real world. Chen said there are several taxi companies working in Japan and China to hone the predictive demand service, and while it is not perfect, progress is certainly being made.

Elsewhere on the agenda, Intel had the chance to beat its chest and declare how collaborative it is. Robert Topple, GM of the 5G Advanced Technologies group, pointed to the work the team is doing with operators around the world to discover the future benefits of 5G.

“Important thing about 5g is the need to focus on scale not speed,” said Topple. “When you architect, it’s important that you build the foundation for bigger ideas in the future.

“Need to be software defined, virtualised wherever they are, but also built for the use cases of tomorrow. 5g is not about today.”

Looking at the R&D work, in Sydney the team is working with Telstra and Ericsson to use 5G to support eSports. This is something which is very unique; gamers can become content creators inside the game as opposed to linear content platforms of the past. This impacts the way in which you build 5G for gaming. In Japan there is work with Docomo applying mobility concepts into vehicles. The need here is to make sure an effective handoff between base stations and radio heads occurs, while also maintaining the experience. With autonomous vehicle the environment will change from a cockpit to passenger experience, which Topple highlighted changes the way which we need to think about connectivity and engagement.

Other projects included drones in China for maintenance of the Great Wall of China, an initiative with AT&T in the US for create wireless networks to support 4K video content and smart mining projects in Estonia with Telia. Each of these examples build the case for collaboration.

A final example is a conversation with Jane Rygaard, Head of 5G Marketing at Nokia. Rygaard pointed to the development of 5G networks and Bristol is Open as a great of example of where collaboration can work brilliantly. In Bristol, the initiative has evolved into a mish-mash of university academics, the local authorities and private industry all collaborating with the aim of making 5G accessible and successful for the digital economy. It accounts for different perspectives, ultimately making connectivity more useful.

Bristol is fast becoming one of the most technologically advanced cities in Europe, but it pales in comparison to some of the Asia metro areas. Bristol has a population of roughly 450k, which allows for some interesting PoCs, but China has 120 cities with a population of more than one million people. The scale, should collaboration be done effectively, offers great opportunity to apply variables on PoCs and collect mountains of data to hone models and services.

Collaboration and co-creation might seem like a simple idea, but the foundations of the telco business need to be sturdy and thorough. Such practices need a new structure and external contributions to be a success, something which is starting to catch on in Europe now. That said, the Asian telcos are miles ahead.

Walking around the exhibition floor, the industrial use cases were clear. Almost every stand had elements of enterprise emblazoned on the temporary walls and stacked high in the marketing literature. Asia has been thinking about this evolution for some time, adapting business models, moulding the ecosystem and liaising with external partners to create a more fluid and innovative environment. Industrial applications, the solutions and the communication strategies to engage customers are much more mature.

Collaboration and co-creation might seem like fluffy buzzwords which can fuel the lofty ambitions of creative PR powerhouses, but there is substance to the claim. Those who genuinely embrace the fundamental changes to business which collaboration demands will find themselves in an attractive position to reap the rewards of the enterprise connectivity game. Those who simply use the buzz to empower the marketing department will soon be found out.

China Telecom and Liquid tie up in search for scale

China Telecom Global and Liquid Telecom have announced a new collaboration to extend their respective network coverage in the African and Asian markets.

The partnership will allow both of the telcos to offer additional network solutions and services to enterprise and wholesale customers, as well as increasing coverage across two challenging regions. China Telecom Global has already established a Point-of-Presence (PoP) at Liquid Telecom’s East Africa Data Centre in Nairobi, though this will be extended facilities in Johannesburg and Cape Town.

“With more than 50 countries in the region, Africa is nonetheless the booming new market with the highest development rate just after Asia, and a very important market for CTG,” said Changhai Liu, Managing Director of China Telecom, Africa and Middle East. “This collaboration will enable both CTG and Liquid Telecom better serve our customers and explore untapped business potential for further development. Under this partnership, we are well positioned to enhance the connectivity and network infrastructure in both regions.”

“This partnership with China Telecom Global reflects the strong global demand for world-class network services across Africa. Our combined service and network capabilities will be of great value to multinationals operating in some of the fastest growing economies across Africa and Asia-Pacific,” said Willem Marais, Group Chief Business Development Officer at Liquid Telecom.

Partnerships like this should be encouraged in regions where investments can be challenging to justify. While telcos in more developed markets can build business cases around investment in network infrastructure, the difference in economics between the developed and developing nations mean the rules are not the same. Telcos in developing nations aren’t even playing the same game, as economy of scale becomes much more difficult to realise.

Research paints gloomy 5G picture for Europe

New findings from research consultancy CCS Insight forecast Europe lagging behind the US and Asia as countries look towards the future 5G world.

While the 5G promise has been a slow burner so far, this was largely expected. The telco industry is excellent at overhyping a technology in its infancy, only for the world to be impatient at what should be considered normal progress. That said, the emergence of the 3GPP NR standards at the end of 2017 gave a jolt of life to the old-timers falling asleep in the board rooms.

2018 has begun with a boom, with numerous companies signing agreements on standards, trials, deployment of chipsets and infrastructure, while several operators committed to 5G deployments towards the end of this year and beginning of 2019. Unfortunately for us living in Europe, those commitments have come from the US and Asia. We might have to watch the glory of bufferless cat videos longingly from afar for the first few years.

“The industry might be struggling to establish the business models for investment in 5G, but this isn’t stopping leading operators battling for bragging rights to launch the first networks,” said Kester Mann of CCS Insight. “Competitive forces and the need for capacity are the leading drivers of early deployment, although we caution this could set unrealistic expectations for initial network capability.”

CCS forecasts that while the early launches might be in the US, Korea and Japan, China should storm to the front of the 5G pack. Estimates predict 5G in the country would hit 100 million connections in 2021 before passing 1 billion in 2025. Despite most other markets having launched commercial services by 2025, China will still account for nearly four in every 10 global 5G connections.

The first connections are likely to come in the US however, with the three main operators (and Sprint) fighting for the bragging rights. Verizon has promised commercial 5G services in Sacramento with Samsung during the second half of the year, Dallas, Atlanta and Waco have hit the AT&T 5G jackpot with the end of 2018 as a deadline, while T-Mobile US has been preaching it will be the first to have a nationwide 5G network.

Western Europe is not looking as promising though. The region is expected to pass 100 million connections in early 2023, though Telia and Telecom Italia are showing a bit more appetite than the rest of the pack. CCS notes that aside from these minor bright spots, the region seems further adrift from the leaders than ever before. Perhaps this is down to the search for the elusive 5G business case.

While operators in the US and Asia seem a bit more adventurous in their quest for 5G, there does seem to be a ‘build it and they will come’ attitude, while European are seemingly much more risk adverse. Last year we watched both BT and Orange at a Huawei conference say that the monetization would of 5G would have to be sorted out before commitments would be made, though this is a very lethargic and dated.

Some of the services and products which are now available on 4G networks would not have been imaginable five years ago, but that is the way innovation works. The technologists need the tools to be able to create and drive innovation. A 5G network is one of those tools for the next wave of digital evolution. Searching and waiting for the business case to justify 5G investments will force Western Europe into the second tier of the global economic rankings.

Soon there will be another cable populating the subsea superhighway

China Telecom, China Unicom, Facebook, Tata Communications, and Telstra have all teamed up to sign a turnkey contract for the deployment of the Hong Kong-Americas (HKA) submarine cable network.

The Hong Kong-Americas (HKA) consortium, as they are officially known, has signed the agreement with Alcatel Submarine Networks to deliver a submarine cable network which will span more than 13,000km. The new asset will increase connectivity between Hong Kong and the US.

“We are committed to continually investing in our capabilities to meet our customers and partners’ increasing data demands,” said Tata Communications’ CTO, Genius Wong. “Joining the HKA consortium and connecting the new next-generation subsea cable system to our global network means that we are able to offer our customers and partners enhanced speed, diversity and reliability of connectivity between the business hubs of Asia and the US.

“With our growing network – and the cloud, mobility, security and collaboration services which it underpins – as the foundation, our customers and partners are better placed than ever to transform how they operate through new disruptive digital services and expand to new markets with agility.”

“The trust placed upon us by the HKA consortium validates our position as a key player for submarine network infrastructures in the Asia-Pacific region and the reinforcement of our local presence,” said Philippe Piron, President of Alcatel Submarine Networks.

“It also provides a strong platform to further demonstrate our commitment in project management and in the development of local relationships to support operators and content providers for their network and capacity expansion strategies.”

The new cable has promised to deliver greater diversity of connections, enhanced reliability and network efficiency, as well as improving connectivity between data centres in Asia and the US. In terms of the kit being used, Alcatel Submarine Networks has promised it will be top of the line, delivering 80 Tbps transmission capacity.

While it might not be the most glamorous part of the telco space, subsea cables are a crucial one. Google is another company which is boasting about its subsea party, as it announced investment into three new cables recently, one of which will be privately owned by the internet search giant.