Devices Archives - Counterpoint

Multi-sourcing, prioritizing premium helps Qualcomm exceed market expectations

Qualcomm ended the fiscal year with a huge bang, growing yearly revenues by 43% despite the global shortage of semiconductor components and continued global COVID-19 infection waves.

The key to Qualcomm’s revenue growth was its ability to dual and triple source manufacturing of key components, namely its Snapdragon 800 series SoC’s and its premium 5G modem.

Besides 21% growth within Snapdragon premium tier products, Qualcomm’s RF front-end components, automotive, and IoT components have grown impressively to become, cumulatively, a $10bn business. This has reduced the company’s dependence on Apple and mitigates some of the risk around if Apple eventually moves to making its modems in-house.

Other business units also contributed to Qualcomm’s bottom line; areas to watch include its drone platform, WiFi6 and WiFi6E solutions, XR platform, fixed wireless access solutions, wearable SoCs and its TWS solutions.

Source: Company data.

Keys to the quarter and outlook for 2022:

Global semi constraints continue, and Qualcomm has prioritized high-end / higher margin solutions.
Dual and triple sourcing has helped but look for semi component shortages to continue through 2022 – especially during the first half of the year.
New Android premium flagships in 2022 will likely bring in higher ASPs. Android foldables growth is also a growth opportunity in 2022.
Qualcomm’s licensing division brought in revenues of $6.3 billion. The company is bullish on its innovation within cellular technology and the value of its patent portfolio. It continues to see premium Android OEMs purchase both its 5G SoC’s along with its RF front-end solutions.
The RF front-end business continues to innovate with new ultraBAW filter technologies. At its most basic, these technology advances improve tuning within higher frequencies. As RF front-end continues to grow more complex, Qualcomm has gained revenue market share within the space.
WiFi6 / 6E solutions will grow as the consumer electronics industry rolls out the technology advancements into different verticals.
When XR hits critical mass, Qualcomm will be able to capitalize on greater XR adoption. Qualcomm is currently powering over 50 XR devices and most of the best-selling devices. Qualcomm also has interesting design wins within smaller verticals such as Peloton bikes and the Amazon ASTRO robot.
Qualcomm’s fixed wireless access solutions will gain momentum as Verizon, T-Mobile, AT&T and other global operators’ role out the broadband option to consumers.
Qualcomm’s automotive business unit grew 44% and Qualcomm remains aggressive in the space, growing outside of infotainment solutions. The company’s $4.5bn acquisition of the Swedish automotive technology company Veoneer will help to accelerate bringing new solutions to the market.
Qualcomm IoT services suite supports over 30 verticals. Retail and digital signage continues to stay under the radar but the company is delivering to leading firms in the space such as Square, Clover, Honeywell and Panasonic. Qualcomm has also won IoT service contracts from cities such as New Orleans. IoT as a service to municipalities is a key area to watch.
mmWave continues to roll out in the US and Japan. Qualcomm is the key supplier. It will be key to watch when China rolls out the technology. MediaTek may have solutions by the time China begins rolling out mmWave in earnest.

Finally, headwinds to watch (with varying effects on the company):

Google (and other OEMs) using their own silicon for smartphones. Google global market share likely to remain under 1% and its ambition of growing the Android user base will not affect Qualcomm. Qualcomm remains the key supplier to Android premium and mmWave market. It also powers other Google products.
Samsung Exynos could challenge Qualcomm within the $200-$400 price segments. There will be a competitive fight within this price segment.
MediaTek remains a strong competitor and has grown to become the largest smartphone SoC supplier in the market. Qualcomm has growing premium, 8-series momentum and should continue to lead within premium and the growing foldables market. Battle will remain fierce within Dimensity 700/800 series and Qualcomm 600 and 400 series. Ability to supply in 1H2022 will be key. India, APAC, LATAM, and MEA will be key battlegrounds to watch.
The China market continues to be sluggish. However, 5G sell through according to Counterpoint Premium Market Pulse, remains over 70%. OPPO, vivo, and Xiaomi have moved to supplying more 5G and higher-end devices. There will be a battle with MediaTek for design wins—especially within China.
Apple, Samsung, and Xiaomi remain top customers of Qualcomm. Considerable market share declines of any of the three would be a headwind.

Q2 2017: Chinese Brands Now Contributing To Almost Half Of Global Smartphone Shipments

Smartphone shipments set second quarter record clocking 365 million units, growing 3% annually

New Delhi, Mumbai, Hong Kong, Seoul, London, Buenos Aires – Aug 2nd, 2017

According to the latest research from Counterpoint’s Market Monitor service, global smartphone shipments grew 3% YoY in Q2 2017. Chinese brands now hold a record 48% smartphone market share worldwide as these brands continue to scale aggressively beyond mainland China.

Commenting on the findings, Jeff Fieldhack, Research Director at Counterpoint Research said, “The smartphone market continues to grow in single digits with the second half of 2017 expected to add further to the growth cycle thanks to the new iPhone cycle and additional new products from other OEMs. Brands are striving hard for new forms of hardware differentiation including bezel-free, alternative aspect ratio and dual screen smartphones. Currently such hardware differentiation is happening at the flagship level but we can expect such design changes to percolate to lower price bands in time. This will augment growth in the mid-range smartphone segment from later in 2018. Any uptick in replacement of flagships will also drive the volume of pre-owned devices that are increasingly being harvested by the industry for the value they can create.”

Commenting on the growth of Chinese brands, Tarun Pathak, Associate Director at Counterpoint Research said, “Chinese brands have been successful in not only cementing their positions in their home country, but also managing to expand beyond mainland China at the same time. Most of these players took offline as the primary channel strategy to enter new markets. In addition they have backed their channel strategies with aggressive marketing spend in both above-the-line and below-the-line campaigns. This has made them accessible to partners, including operators, in new territories. These brands will continue to expand their reach beyond China during the second half of this year. India, South Asia and Africa will be the key focus geographies to drive additional scale and market share. The geographic diversification will also help offset any turbulence in the domestic China market, which is increasingly saturated.”

Commenting on vendor performance during the quarter Research Analyst, Shobhit Srivastava, noted, “The competitive landscape is now changing drastically across many regions. In developed markets the top three brands are strengthening their hold. In emerging markets meanwhile, rankings continue to be volatile, with new players also entering the top ten rankings within a few quarters of launch. This has led to various strategies by OEMs during the quarter to counter competition. These includes ODM tie-ups, operator tie-ups in prepaid markets, cutting down excessive portfolios and even offering devices for free (Jiophone launch). We expect further innovation (and desperation) in go-to-market strategies by different OEMs struggle for traction in fast-moving market environments.”

Exhibit 1: Key Chinese Brands YoY Shipment Growth in Domestic vs Global Markets – Q2 2017

Market Summary

Global smartphone shipments grew 3% YoY reaching 365 million units in Q2 2017, a second quarter record.
Smartphone penetration reached over 80% of all the mobile phones shipped in the quarter.
Top 10 brands account for almost 76% of the smartphone volumes in Q2 2017.
Xiaomi, Vivo, Oppo & Huawei were the fastest growing Chinese brands outside China with their mix of overseas smartphones shipments increasing YoY.
China, India and South East Asia remain the key growth markets for Chinese brands. A Chinese vendor continues to hold one of the top three spots in most of these markets.
Almost 1/3^rd of the combined shipments of these brands are to markets outside China.

Exhibit 2: Global Smartphone Shipments Volume Share – Q2 2017

Source: Counterpoint Research: Quarterly Market Monitor Q2 2017

OEM Performance Insights

- Samsung led the smartphone market by volume with a market share of 22% in Q2 2017. Its smartphone shipments recorded a marginal growth of 4% annually during the quarter.
- Samsung shipments remained almost flat quarter on quarter. Average selling price of Samsung smartphones increased due to strong shipments of S8 and S8+. However, shipments of mid-tier A series and low send J series declined sequentially.
- Apple’s global smartphone market share declined due to seasonality. iPhone sales grew 1% YoY
- Demand for older generation iPhones remained strong in markets like Russia, India, Vietnam, Indonesia and other fast growing markets.
- Many users are likely to delay their purchase of a new iPhone in anticipation of the much awaited iPhone 10^th anniversary edition which is expected to be a super-cycle for Apple – though supply-side challenges might limit the initial volumes available.
- Apple’s decline in China continues as Oppo, Vivo and Huawei posted record Q2 2017 shipments in China.
- Huawei shipped record second quarter shipments of 38.4 million units, up 20% annually driven by strong performance in emerging markets.
- In China, Huawei continued to capture the top spot in 2Q17 ahead of rivals OPPO and vivo, shipping higher volumes into the channels. Huawei’s Nova and Enjoy series, along with flagship P10 were in strong demand during the quarter. Huawei’s share in the premium segment also expanded due to the strong performance of its Mate and P series.
- Oppo and Vivo were the fourth and fifth largest brands during the quarter, capturing market share of 8.4% and 6.6% respectively. Both these brands posted record quarters in India, their strongest market outside China.
- Xiaomi emerged as the fastest growing brand YoY (+60%) surpassing Vivo (+45%) & OPPO (+33%) which were the fastest growing brands in the previous quarter.
- Xiaomi shipped 23.2 million smartphones, capturing 6.6% market share of the global smartphone market in Q2 2017.
- The key reason behind the Xiaomi’s comeback can be attributed to strong demand for its latest flagship Mi 6 and low-tier models such as Redmi Note 4X. In addition it has focused on diversifying its distribution channel mix in both China and India, its strongest market outside China.
- LG registered 13.3 million smartphone shipments in Q2 2017 with strong performances in Asia and Europe. The company’s shipments declined 4% annually during Q2 2017. Its shipments in North America also declined sequentially because of lower than expected sales of its flagship G6.
- ZTE was the 8^th largest brand capturing 3.3% market share during the quarter.
- Lenovo and Alcatel continue to face tough competition in high growth markets like India, LATAM which led to the flat or declining market share respectively, during the quarter.

For press comments and enquiries please reach out to press (at) counterpointresearch.com

Q2 2017 Global smartphones: Chinese brand propelling growth outside of China

Global smartphone shipments grew 3% YoY in Q2 2017. The market continues to grow in single digits with the second half of 2017 expected to add incremental growth cycle thanks to the new iPhone and additional new products from other OEMs. Chinese brands now hold a record 48% smartphone market share worldwide as these brands continue to scale aggressively beyond mainland China. These brands have been successful in not only cementing their positions in their home country, but also managing to expand beyond mainland China at the same time. Most of these players took offline as the primary channel strategy to enter new markets. In addition they have backed their channel strategies with aggressive marketing spend in both above-the-line and below-the-line campaigns. This has made them accessible to partners, including operators, in new territories. These brands will continue to expand their reach beyond China during the second half of this year. India, South Asia and Africa will be the key focus geographies to drive additional scale and market share. The geographic diversification will also help offset any turbulence in the domestic China market, which is increasingly saturated.

Exhibit 1: Global Quarterly Smartphone Shipments by Brand Category- Q2 2017

Brands are striving hard for new forms of hardware differentiation including bezel-free, alternative aspect ratio and dual screen smartphones. Currently such hardware differentiation is happening at the flagship level but we can expect such design changes to percolate to lower price bands in time. This will augment growth in the mid-range smartphone segment from later in 2018.

Exhibit 2: Key Chinese Brands YoY Shipment Growth in Domestic vs Global Markets – Q2 2017

Global Market Summary For Q2 2017

Global smartphone shipments grew 3% YoY reaching 365 million units in Q2 2017, a second quarter record.
Smartphone penetration reached over 80% of all the mobile phones shipped in the quarter.
Top 10 brands account for almost 76% of the smartphone volumes in Q2 2017.
Xiaomi, Vivo, Oppo & Huawei were the fastest growing Chinese brands outside China with their mix of overseas smartphones shipments increasing YoY.
China, India and South East Asia remain the key growth markets for Chinese brands. A Chinese vendor continues to hold one of the top three spots in most of these markets.
Almost 1/3^rd of the combined shipments of these brands are to markets outside China.

Exhibit 3: Global Smartphone Shipments Volume Share – Q2 2017

OEM Performance Insights

Samsung led the smartphone market by volume with a market share of 22% in Q2 2017. Its smartphone shipments recorded a marginal growth of 4% annually during the quarter.
Samsung shipments remained almost flat quarter on quarter. Average selling price of Samsung smartphones increased due to strong shipments of S8 and S8+. However, shipments of mid-tier A series and low send J series declined sequentially.
Apple’s global smartphone market share declined due to seasonality. iPhone sales grew 1% YoY
Demand for older generation iPhones remained strong in markets like Russia, India, Vietnam, Indonesia and other fast growing markets.
Many users are likely to delay their purchase of a new iPhone in anticipation of the much awaited iPhone 10^th anniversary edition which is expected to be a super-cycle for Apple – though supply-side challenges might limit the initial volumes available.
Apple’s decline in China continues as Oppo, Vivo and Huawei posted record Q2 2017 shipments in China.
Huawei shipped record second quarter shipments of 38.4 million units, up 20% annually driven by strong performance in emerging markets.
In China, Huawei continued to capture the top spot in 2Q17 ahead of rivals OPPO and vivo, shipping higher volumes into the channels. Huawei’s Nova and Enjoyseries, along with flagship P10 were in strong demand during the quarter. Huawei’s share in the premium segment also expanded due to the strong performance of its Mate and P series.
Oppo and Vivo were the fourth and fifth largest brands during the quarter, capturing market share of 8.4% and 6.6% respectively. Both these brands posted record quarters in India, their strongest market outside China.
Xiaomi emerged as the fastest growing brand YoY (+60%) surpassing Vivo (+45%) & OPPO (+33%) which were the fastest growing brands in the previous quarter.
Xiaomi shipped 23.2 million smartphones, capturing 6.6% market share of the global smartphone market in Q2 2017.
The key reason behind the Xiaomi’s comeback can be attributed to strong demand for its latest flagship Mi 6 and low-tier models such as Redmi Note 4X. In addition it has focused on diversifying its distribution channel mix in both China and India, its strongest market outside China.
LG registered 13.3 million smartphone shipments in Q2 2017 with strong performances in Asia and Europe. The company’s shipments declined 4% annually during Q2 2017. Its shipments in North America also declined sequentially because of lower than expected sales of its flagship G6.
ZTE was the 8^th largest brand capturing 3.3% market share during the quarter.
Lenovo and Alcatel continue to face tough competition in high growth markets like India, LATAM which led to the flat or declining market share respectively, during the quarter.

Q2 2017: Apple: Operating Margins Dip to 2009 Levels

Apple reported its calendar Q2 2017 (Apr-Jun) results and on the 10th Year Anniversary of iPhone, the overall results followed the typical cyclic iPhone trends.

1. Operating Margins Dip to 2009 Levels

Lower iPhone ASP, Currency FX headwinds and mix shift to older iPhones as longer tail laggards upgrade during this period.

2.iPhone Cyclic Dip Continues

Apple has a serious problem or rather a lost opportunity to ignore the non-launch quarters to let competition grow especially in potential growth markets. Something has to change – perhaps switching to dual launch cycle to improve region/portfolio mix.

3.Services Remain the bright spot

As Apple after selling more than 1.1 billion iPhones, more than 270 million iPads with a device installed base of more than a billion devices mostly with premium users. Apple already has 185 million users subscribing to Apple services which is a quite healthy attach rate to generate billions of dollars in services revenues – Apps, Music, Pay, iCloud and more. Apple is now on an annual run-rate of $25 Billion+ services revenues

4.China Remains the Problem Child

Apple’s position in China continues to slip (see here) as its revenues also dwindle, which was one of its biggest markets alongside the USA. The key reasons being:

iPhone fatigue
Loss of share in $300-$500 priceband as older iPhones fail to compete with affordable premium Chinese flagships
Lack of stickiness with less control over digital services as most of the users spend their digital lives inside WeChat that actually has better experience on Android

5. Samsung Surpasses Apple in Operating Profits for First Time

On the 10th iPhone Anniversary quarter, Samsung actually for the first time surpassed Apple in terms of generating operating profits. Thanks to Apple and Chinese brands as well as tremendous job by Samsung Semiconductor (Memory) and Samsung Display units which have driven greater demand for its differentiated and high-scale offerings. While this could be a temporary pass, it’s nevertheless a remarkable feat for Samsung.

iPhone :: A Decade of Billions

On June 29th 2007, Apple first begin selling its then iconic smartphone the “iPhone” which with multiple iterations transformed Apple into one of the richest enterprises on the planet. The leaders in the pre-iPhone era surely launched touchscreen phones that were somewhat smarter for the time with hosts of productivity features powered by Palm OS or Windows Mobile OS. But the amalgamation of finger based touchscreen, slicker software (iOS) in iPhone buoyed by the growing ecosystem of third party developers creating innovative applications was the game changer for Apple. Lots has changed in the last ten years, as the mobile phone industry has undergone dramatic shifts with advent of iPhone as well as the simultaneous ‘democratisation’ of smartphone by Google’s Android platform and its derivatives.

iPhone undoubtedly is the most popular, revenue generating and profit making hardware ever made by any technology company. Apple has grown a massive cash cow:

Cumulative iPhone Units Sold: 1.17 Billion
Cumulative iPhone Revenues: US$ 775 Billion
Cumulative iPhone Profits: US$ 250 Billion

Over the decade since iPhone and iOS, Apple has amassed more than 2.5 million applications on its App Store via 16 million registered developers and in the process paid out more than US$70 Billion to developers and seen more than 180 billion app downloads. Apple’s services from iCloud to Music to Maps to iMessage have millions of users with Siri seeing almsot 400 million active users globally. With the advent of iOS11 and thus ARKit, Apple aims to be the number one player in Augmented Reality space as it expects iOS11 roll out to reach more than 200 million iOS users in just a few months after launch.

Apple still has lots of tricks up it sleeves to keep its loyal base interested in its products, offerings and ecosystem.

China smartphones Q2 2017: Samsung, Apple Slip as Domestic Brands Rule

Smartphones shipments in China grew a modest 3% annually during Q2 2017 (Apr-Jun), registering second consecutive quarter of annual growth this year. The Chinese market showed a positive uptick in demand as well as supply during the June ending quarter. June seasonally is a strong month for China as it is usually buoyed by portfolio upgrades from major brands such as Oppo, vivo and Xiaomi. The top four Chinese brands now capture close to 69% of the market as these brands have raced ahead of international and other local brands with expansive distribution reach and exciting portfolio.

Huawei and vivo were the fastest growing brands followed by OPPO and Xiaomi, together cementing the top four spots and extending their lead over Apple and Samsung by a widening margin. Apple’s performance continue to be seasonal, while Samsung is losing out to the Oppo-Vivo onslaught in offline. Xiaomi made a surprise comeback after being on decline for a few quarters against Huawei Honor.

Exhibit 1: % Smartphone Shipment Growth for OEMs in Q2 2017

As predicted, last quarter, the Chinese smartphone market saw a healthy sell-out through April, May of the second quarter with some level of inventory correction allowing the Chinese brands to ship more smartphones in June with a revamped portfolio.

Exhibit 2: % OEM Smartphone Shipment Share in Q2 2017

Source: Market Monitor – Q2 2017preliminary estimates

Huawei continued to capture the top spot this quarter ahead of rivals OPPO and vivo, shipping higher volumes into the channels. Huawei’s nova, enjoy series along with flagship P10 were in strong demand during the quarter.

OPPO and vivo were able to also grow significantly over last year with strong performance in mid-tier with A and Y series respectively as well as with F/R and V/X series in high-tier respectively. Each of the series are well positioned in the fast-growing $100-$199 (600-1300 rmb) and affordable premium $300-$399 (2000-2700 rmb) segments catering demand from tier-1 cities to tier-4 towns.

Meanwhile, Xiaomi saw a positive uptick growing 20% YoY and almost doubling the volumes sequentially after a dip in Q1 2017 when the vendor’s volumes reached almost 2013 levels. The key reason behind the comeback can be attributed to strong demand for its latest flagship Mi 6 and low-tier models such as Redmi 4X as well as focus on diversifying distribution channels.

The days of easy growth are over for Huawei, OPPO, vivo and Xiaomi in China. The competitive landscape is converging as all the top four Chinese brands have reached a steady and dominant position in a very slow growing market. The race for the top two spots is always up for grabs as one misstep can push a brand easily two spots behind.

The comeback of Xiaomi from the declining spiral has made the market further competitive and almost a zero-sum game. The dip in performance by either of brand could affect their global performance. As a result, China dependent brands such as OPPO, vivo and Xiaomi will be aggressive in expanding their reach beyond China during the second half of this year. India, South Asia and Africa will be the key focus geographies to drive additional scale and market share to make up any dip in domestic market.

Domestic Brands Captured 87% of the Chinese Smartphone Market in Q2 2017

According to the latest research from Counterpoint’s Market Monitor service, the smartphones shipments in China grew a modest 3% annually during Q2 2017 (Apr-Jun), registering second consecutive quarter of annual growth this year.

Commenting on the results, Research Director, James Yan, highlighted, “ The Chinese market showed a positive uptick in demand as well as supply during the June ending quarter. June seasonally is a strong month for China as it is usually buoyed by portfolio upgrades from major brands such as Oppo, vivo and Xiaomi. The top four Chinese brands now capture close to 69% of the market as these brands have raced ahead of international and other local brands with expansive distribution reach and exciting portfolio.”

Huawei and vivo were the fastest growing brands followed by OPPO and Xiaomi, together cementing the top four spots and extending their lead over Apple and Samsung by a widening margin. Apple’s performance continue to be seasonal, while Samsung is losing out to he Oppo-Vivo onslaught in offline. Xiaomi made a surprise comeback after being on decline for a few quarters against Huawei Honor.”

Exhibit 1: % Smartphone Shipment Growth for OEMs in Q2 2017

Mr. Yan, adds, “As predicted, last quarter, the Chinese smartphone market saw a healthy sell-out through April, May of the second quarter with some level of inventory correction allowing the Chinese brands to ship more smartphones in June with a revamped portfolio.”

Exhibit 2: % OEM Smartphone Shipment Share in Q2 2017

Source: Market Monitor – Q2 2017 preliminary estimates

Commenting on the vendor performance, Associate Director, Tarun Pathak noted, “Huawei continued to capture the top spot this quarter ahead of rivals OPPO and vivo, shipping higher volumes into the channels. Huawei’s nova, enjoy series along with flagship P10 were in strong demand during the quarter.”

Pathak continued, “OPPO and vivo were able to also grow significantly over last year with strong performance in mid-tier with A and Y series respectively as well as with F/R and V/X series in high-tier respectively. Each of the series are well positioned in the fast-growing $100-$199 (600-1300 rmb) and affordable premium $300-$399 (2000-2700 rmb) segments catering demand from tier-1 cities to tier-4 towns. Meanwhile, Xiaomi saw a positive uptick growing 20% YoY and almost doubling the volumes sequentially after a dip in Q1 2017 when the vendor’s volumes reached almost 2013 levels. The key reason behind the comeback can be attributed to strong demand for its latest flagship Mi 6 and low-tier models such as Redmi Note 4X as well as focus on diversifying distribution channels.”

Sharing insights on the growth prospects, Research Director, Neil Shah noted, “We are nearing the time where the days of easy growth are over for Huawei, OPPO, vivo and Xiaomi in China. The competitive landscape is converging as all the top four Chinese brands have reached a steady and dominant position in a very slow growing market. The race for the top two spots is always up for grabs as one misstep can push a brand easily two spots behind.

The comeback of Xiaomi from the declining spiral has made the market further competitive and almost a zero-sum game. The dip in performance by either of brand could affect their global performance. As a result, we believe heavily China dependent brands such as OPPPO, vivo and Xiaomi will be aggressive in expanding their reach beyond China during the second half of this year. India, South Asia and Africa will be the key focus geographies to drive additional scale and market share to make up any dip in domestic market.”

For full report on Q2 2017 Smartphones performance will be published on our research portal . Likewise for any further enquiries please reach out at press @ counterpointresearch.com

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high tech industry.

Analyst Contacts:

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JioPhone: Accelerating India to Cross The 4G Chasm

The most disruptive 4G operator in India Jio, part of Reliance Industries, announced a category of 4G Feature Phone “JioPhone” which is essentially basic feature phone on steroids today on July 21 at the company’s Annual General Meeting (AGM). A brief analysis on this important development

This is as disruptive as the first 100M subscribers Jio raced to in just six months and will help Jio to potentially attract another 100M from rival’s total base of more than 400M 2G subscribers.

Reliance Jio has well thought through the overall value proposition of this offering to accelerate the next wave of 4G subscribers on its network and in process potentially connecting next half a billion users to internet over the next few years who cant afford or doesn’t want to upgrade to a smartphone form-factor.
The so called JioPhone will come in a candybar form-factor with an alpha-numeric keypad maintaining the same usability, however, features a 2.4″ QVGA color display, larger battery, expandable memory, voice commands to control specific “smartphone-centric” functions, pre-loaded Jio ecosystem and other apps while also sporting NFC to enable Jio’s mobile wallet “JioMoney” ambitions
Further, JioPhone subscriber can subscribe to the highly affordable a INR 153 (US$2) pack per month for access to unlimited calling and data, very much inline with average ARPU for Indian mobile phone user.
Furthermore, the users with an additional accessory can stream the live TV content app “JioTV” to their old or new TVs consuming content on a bigger screen for just INR309 (US$4) /month. Brilliant move to enhance the “internet consumption” use-case and make JioPhone a virtual Set-Top-Box (STB).
Putting icing on the cake, the JioPhone will cost Rs 0 (US$0) though with a catch where user will have to pay INR 1500 (US$23) refundable deposit which can be released after 36 months, very smart as it ensures a “lock-in” to the Jio network and ecosystem.

This is a truly disruptive offering with Jio aiming to make almost 5 million units available every week as we believe this will be in very high demand. Having said that, Reliance Jio will have to be careful on few fronts – product quality of this device, Quality of Service (QoS) blanket coverage right to tier-3-4 towns where most of the demand will come from as well as from component supply especially for the low-configuration memory in this device.

We have deep dived into how much this opportunity is from potential TAM demand side as well as supply side constraint perspective and how Jio can drive this into a sustainable and disruptive business model in our exclusive report (see here).

Bezel-Free & Alternative Aspect Ratio Smartphones to Climb to 120 Million Units in 2017

In a quest for increased display sizes and new forms of hardware differentiation, leading smartphone OEMs are turning to new solutions to increase the effective display viewing area without increasing the overall physical size of the devices.

Commenting on latest trend of 18:9 displays in smartphones, Research Director Peter Richardson, noted, “With the rise of super-fast 4G networks and beyond, smartphones have become the primary devices for content creation and consumption, driving demand for bigger displays. Clearly, there is a practical limit to the physical size of a smartphone, typically determined by the size of the user’s hands or pockets.”

Mr Richardson, continues, “As a result, rather than increase the size of the display, handset OEMs are turning to solutions that increase the effective viewing area of the display without increasing the overall size of the phone. These include bezel-less designs and new aspect ratios. Yet another solution, available in the near future, will be that of foldable displays, which could allow a 10-inch tablet-sized displays to be folded and accommodated in a compact 5.5-inch smartphone-sized design.”

With Sharp’s Aquos, we have already seen one of the first phones trying to break shackles on bezels in 2014. However, it was not successful due to limited roll-out, poor battery life and a bulky design. So was Xiaomi’s Mi Mix, launched in 2016 with much fan-fare but bench marked heavily on Sharp’s initial design. While more of a proof of concept and only available in limited quantities, it also suffered from a bulkiness that deterred many. Fast forward to 2017, the vertically integrated Korean smartphone brands LG and Samsung, leveraging their display business and technologies, are getting it right. The LG G6 sports a beautiful LCD-based 18:9 display and Samsung’s Galaxy S8 series shows-off a much brighter, color-rich, curved OLED display. Apple is rumored to also launch an OLED version bezel-less display in its “special edition” smartphone later this Fall, marking its tenth anniversary for the iPhone. This should drive the bezel-free or alternative aspect ratio trend into a high scale and high demand feature. Next year’s flagships from competing brands will have to toe the line or risk being marginalized.

As with most areas of hardware differentiation, with few suppliers controlling OEMs’ access to this technology, the sustainability of the differentiation is levered to availability and supply. For 2017 both are likely to be limited, meaning that only those that gain access to the technology will be able to eke out some level of differentiation.

Counterpoint Research Director, Tom Kang, added: “While every brand would like to join the bandwagon, there will be serious supply constraints this year and first half of next year to match the demand. This will keep prices high and also enable deep-pocketed OEMs to lock-in the major part of supply. However by 2018 supply and availability issues should ease, and the amount of content formatted for 18:9 aspect ratio displays will become more widespread, leading to greater adoption. Samsung Display, JDI, LG Display should be the major beneficiaries, alongside display driver IC players. Chinese display manufacturers such as Tianma, BOE will also likely contribute by supplying these new wider, bezel-free displays to a growing crop of Chinese brands in the latter part of next year.”

Counterpoint forecasts more than 120 million smartphones including these differentiated alternative aspect ratio and near bezel-free displays will ship in 2017, accounting for almost 7% of the total smartphone shipments this year. This demand will more than triple next year as we see supply issues ease and more OEMs will be able to offer bezel-free flagship models in their portfolio in the second half of 2018. The trend towards bezel-less designs and 18:9 aspect ratio displays and the benefits and downside of both solutions, is captured in our in-depth report (here) which further evaluates whether these trends are likely to be adopted by all OEMs.

The comprehensive and in-depth report on component research is available for subscribing clients. Please feel free to contact us at info@counterpointresearch.com for further questions regarding our research, insights or contact at press@counterpointresearch.com for any press enquiries.

Infographic: Q1-2017 | Mobile Market Monitor

Our Q1-2017 Market Monitor report has been published. We release one Infographic in each quarter to summarize handset and smartphone market activities in a single page.

Some overview of the global mobile phone market is:

Global mobile phone shipments reached 469.7 million units globally in Q1 2017 with a YoY growth of 8%
Top 5 OEMs almost contributed almost 50% of the Global handset market
Huawei had a record quarter, shipping 34.6 million units
China handset market grew 6.1% YoY during Q1 2016 as HOV (Huawei, OPPO and vivo) intensified the ﬁght for the top spot.
In quest for expansion, OEM’s are moving beyond domestic boundaries to emerging markets such as India, Vietnam, South Africa, Turkey, Indonesia, Nigeria, Kenya

Full reports are available for clients on our portal. Please feel free to reach out to us for press or this research-related questions at: analyst (at) counterpointresearch.com

This report should be read to conjunction with Market Monitor reports available on our Research portal (requires subscription). Follow us on Twitter @CounterPoint TR

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Insights Tag： Devices

Multi-sourcing, prioritizing premium helps Qualcomm exceed market expectations

Q2 2017: Chinese Brands Now Contributing To Almost Half Of Global Smartphone Shipments