Samsung looks to wrestle back control of India with financing initiative

With India one of the few markets which is demonstrating positive growth for smartphone shipments, Samsung is reasserting itself in the space with the launch of financing plans.

Launched in 5,000 outlets, the plan is to reach 10,000 by the end of 2019, Samsung Finance+ is a ‘universally accessible’ digital lending platform that provides financing to enable the purchase of Samsung devices. Samsung has also stated the platform is customisable, suggesting almost every Indian customer will be applicable for an offer of some kind.

“Samsung Finance+ is a testimony of our consumer-centric innovation,” said Mohandeep Singh, SVP of the Mobile Business at Samsung India. “It is also a ‘Make for India’ initiative towards financial inclusion and Digital India. We are confident that Samsung Finance+ will touch the lives of millions of consumers in India.”

Developed at the Samsung R&D Institute India-Bangalore, the process is an entirely paperless journey, while DMI Finance has partnered with the team for the initiative.

This appears to be a means for the business to wrestle back market share in one of the fastest growing technology markets.

Looking at India over the last couple of years, this is a region which has been fruitful for Samsung. Up until recently, Samsung had enjoyed a market leading position though this has been challenged by Xiaomi in recent quarters.

As it stands, Xiaomi is currently leading the market share rankings, controlling 28% of the shipments into the country during the second quarter, according to estimates from Couterpoint Research. 6% year-on-year sales increases were driven through portfolio expansion and aggressive offline expansion in the budget segment. Xiaomi usurped Samsung as leader of the market over the course of 2017/18 and is remaining in a strong position.

For Samsung, this couldn’t really have come at a worse time. India is under-going its own digital revolution thanks largely to the efforts to democratise connectivity by Reliance Jio.

Prior to the entry of Jio, the India telco market was stagnant. There was little enthusiasm from the incumbents to drive aggressive network expansion or evolution, while tariffs were prohibitively expensive for large swathes of the popular. Jio entered with a simple business plan; scale the adoption of affordable tariffs and bundle on digital services in the future.

Not only has the Jio disruption opened up the connectivity market to millions of new customers, it has also forced the likes of Bharti Airtel and Vodafone Idea to invest heavily in their networks, rethink pricing strategies and create new products. Jio has not only brought more customers into the connectivity fray, but it is quickly increasing the appetite of Indian consumers for digital services.

With the likes of Jio offering a wide-range of digital services, Netflix driving original content and Google creating an ecosystem which has been customised to the demands of India, the growing digital economy is only going add more momentum to smartphone sales. The more of a consumer’s life which is digitised, the more they are inclined to spend on smartphones. These are all positive developments for Samsung and its rivals.

With the India market surging towards the digital economy, Samsung could not have lost its leadership position at a worse time. Indian consumers are decreasing their refreshment cycles and increasingly looking to spend more on devices.

The fastest growing segment for devices in India is the $200-300 price range, and while there is still a huge space for feature phones, this is likely to shift over the coming years as more manufacturers alter the focus of their portfolio. Although this is a market which has been growing healthily over the last few years, due to the previously under-developed position and the sheer size of India, there is still plenty of room north.

As it stands, Samsung has slipped to second-place in the market share rankings, however it is recapturing some progress. During the second quarter, shipments declined by 7% year-on-year, however the numbers did increase 30% quarter-on-quarter. Analysts have suggested this growth is driven by refreshed A series and M series, price cuts of older J series and higher channel incentives. The financing element could offer a bit more breathing room for Indian consumers who are looking to step-up the smartphone tiers. Theoretically, it should aid the recovery.

Samsung is not in the worst position, though momentum is gathering behind competitors more readily. Apple is one company which has yet to crack the Indian market, though it is poised to open itself up more to consumer through offline purchases and the establishment of a branded retail footprint. Vivo is another Chinese brand which has been making strong progress thanks to its portfolio of cost-effective devices.

There are of course many markets around the world which can offer smartphone manufacturers significant growth when it comes to 4G devices, though India is one where momentum is gathering very quickly through an increasingly wealthy and digitally-defined society.

Xiaomi launches $6 billion IPO in Hong Kong

Chinese gadget giant Xiaomi has launched its initial public offering in the Hong Kong stock exchange that could raise over $6 billion.

2,179,585,000 shares will be on offer at a price range of HK$17 to HK$22 per share. If they all sell at the upper end of that range that will value the company at around $70 billion and raise around $6 billion. A proposed listing in China has been shelved for now.

“Today we present ourselves to you as we prepare to enter a new stage in our journey,” said Lei Jun, Founder, Chairman and CEO of Xiaomi. “We are an innovation-driven internet company committed to the principle of ‘amazing products at honest pricing’.

“Leveraging our unique ‘triathlon’ business model, we maintain excellent design and outstanding quality in our products, while pricing our products as close as possible to cost by selling them to users through highly efficient online and offline new retail channels. We then provide our users with a range of comprehensive and engaging internet services.

“Xiaomi’s achievements so far illustrate the strength and resilience of our model. Within seven years of our founding, our annual revenue exceeded RMB100 billion, achieving a growth rate that many traditional companies are unable to match.

“We believe that the potential of our global business is limited only by our imagination. With our unique ecosystem model, we have mobilized many like-minded entrepreneurs, and we are not only changing industries in China, but also elsewhere in the world.

“Fundamentally, the Internet is all about transparency, efficiency, and equality. We want to allow everyone to enjoy the benefits of technology. That is the goal that all Xiaomi employees and I are working tirelessly for.”

The triathlon business model simply refers to Xiaomi’s involvement in hardware, internet services and ecommerce all at once. In that sense it’s often compared to Apple, but it has only recently started to embrace third party sales channels. Xiaomi plans to spend the money raised equally on R&D, other investments and global expansion.

Xiaomi triathlon

Cisco offers to lend cities enough cash to buy its IoT gear

Cisco Capital has teamed up with a bunch of other sources of cash to launch the City Financing Acceleration Program.

The apparent purpose of this program is to front up the cash to local authorities keen to become Smart Cities. Apparently smartening an entire city’s worth of infrastructure involves fairly hefty capital outlay and that’s putting some cash-strapped councils off taking the plunge. So Cisco has decided to go down the financing route to kick-start the market.

“Funding is a major stumbling block for municipalities beginning their smart city transformation,” said Anil Menon, Global President of Cisco’s Smart+Connected Communities. “With our partners, Cisco will bring the capital and expertise it takes to make smart city projects a reality. Digital Alpha, APG, and Whitehelm Capital bring a fresh perspective on investment in an area that has previously been perceived as too new and, therefore, too difficult to finance.”

In other news Cisco renamed its Smart+Connected Digital Platform to Cisco Kinetic for Cities, in reference to its general IoT platform recently. On top of that is has added additional tools to support public safety, including Cisco Spark Collaboration stuff. Lastly Cisco is using the town of Cary, North Carolina as a ‘living lab’ to showcase all this smart city cleverness.