The Mini Mi? NO! It's Mi to the MAX. The Mi Pad $240 tablet. I'm telling you, it won't be easy beating Mi, so remember Mi name.

Get to know Mi. And companies like Mi. They are the danger. Good devices, good prices, new pronounceable branding tactics. They have the chemistry in place to change the market for good. Get ready. We are entering the next stage of the wireless business cycle. It's here. It's now. Work with it. Look for opportunities in adjacent markets. Content, services, the connection of things.


So, please do check out the new Xiaomi Mi Pad (Gigaom story), a very decently spec'd up tablet from the Chinese vendor. The Mi Pad has a 7.9-inch screen with 2,048-by-1,536 pixels, runs on an Nvidia Tegra K1 2.2 processor, has 2GB of RAM, an 8-megapixel rear camera, a 5-megapixel front camera, and a microSD slot. All this for $240 for the 16GB version. The tablet will be available in China this summer and I suspect other markets could follow.

Xiaomi (sort of pronounced “show me”) isn't a company looking to scrape some barnacles off of the side of the market. They are aiming for the top. Xiaomi's CEO, Lei Ju, said they “hope to put pressure on Apple.” Xiaomi is a company talking about bringing quality $50 smartphones to the masses. This is a company that is working its way global by spreading out across Asia.

So Apple, Microsoft, Samsung, Sony, others, please do remember Mi name.

No, you haven't heard the last of Mi.

The $240 quality-spec'd Mi tablet. Device prices are coming down, and a receding tide lowers prices for everyone.

Xiaomi the money. Is the smartphone profit margin a thing of the past? Where will the money come from now?

(Yes, "Xiaomi" is sort of pronounced "show me" but soon "mi" will do fine.)

It's a bit sad to see the company where I worked for 16 years break apart. The Nokia I knew no longer exists. But there really are no surprises here. Clever companies know when it's time to move on.

All industries are special, sexy, and exciting. Until the day they aren't. Toasters, refrigerators, transistor radios, televisions, VCRs. They all had their day in the sun, but got covered in a thin, dull layer of boring. They became very everyday objects. Key players come, and key players go.

So, how much have the players in the handset industry changed? Completely! As I've pointed out before, not one single top-ten vendor from 20 years ago is still in the global handset business. They haven't just lost market share, they have given up competing in the industry. The big, fat hardware profits dried up so they just got up and moved on. Let someone else fight for the table scraps. That's the smart move so long as you have another watering hole lined up. (I'll say that the chunk of Motorola owned by Lenovo is a different company than the Motorola we knew.)

I remember five years ago when I first came across a top-ten global handset vendor named Xiaomi. Who? Some company few of us had ever heard of (and few knew how to pronounce) suddenly appeared as a top handset maker. I checked out their website. They had a portfolio of handsets a mile wide with features that must have been stuffed into devices with a plunger. There were phones with televisions, radios, touch input. There were sliders and colors galore. So what is Xiaomi up to now. Well, they are becoming a serious global smartphone company with sharp-looking gadgets. They even make bionic bunny rabbits.

But hey, it's getting crowded in here. Check out Huawei, another company name people can't quite pronounce, but matters a ton nonetheless. Huawei's goal this year is to ship 80 million smartphones. That would give them around 8% global share. And Huawei means business with a $300 million global marketing campaign.

So, what happens when Google brings out the advanced $100 smartphone? And Motorola/Lenovo the sub-$50 smartphone? What happens when good phones reach bubblegum-machine pricing?

How can you compete? No, it's not easy beating Mi. (http://www.mi.com/en)

Is handset (hardware) profitability toast? Key players get burnt once an industry is no longer special.

Smartphones: The changing of the guard continues. Panasonic out. China Mobile, Xiaomi in big push.

CHINA MOBILE's $80 & $210 SMARTPHONE. STORY >>

PANASONIC SET TO LEAVE SMARTPHONE BEHIND >>

Xiaomi looks to take low-end share of the Chinese smartphone market >>


KEY MOBILE TRENDS: commoditization, decling ASPs and margins.

Last month, NEC announced it was leaving the smartphone business and possibly the handset business altogether (see my entry: "NEC's Minolta Moment"). NEC was once a top global handset vendor and number one in Japan.

Now, according to sources out of Asia, it appears that NEC's compatriot Panasonic will exit the smartphone business as well. The reason is clear: on-going losses in a increasingly competitive market. It's time to move on. Barriers to entry keep coming down, and so are ASPs and margins. Panasonic's smartphone push was doomed.

In reality, the marketplace won't notice the void. Panasonic's share of the pie was so thin, this is hardly worthy of much reading. However this is another signal of how drastically the handset business has changed during the past decade or so. During the mid- to late-'90s, Panasonic was consistently a top-five global handset vendor, and was a market leader together with NEC in Japan. Expect more big-name brands to sneak out of the hardware business during the coming years.

One of the key trends in the smartphone business is the changing of the guard. The old-time players are leaving, new blood is coming in.

So here is news of a smartphone push from two Chinese players, China Mobile and Xiaomi. I remember Xiaomi well from a report I wrote back in 2007 when I was a Nokia employee, highlighting this growing Chinese player. One Nokia manager got back to me to assure me that top management knew all about Xiaomi and in fact, Nokia's CEO at the time marked the company as a top future handset competitor in the Chinese market. Commoditization was always a key concern, and drove strategic thinking long before most industry followers realized.

The China Mobile news is not unprecedented: operators have been introducing in-house branded handsets for decades. But China Mobile is not just some operator: it's the world's largest by a margin. With 740 million subscribers, if you want to gain real market share in China, you want to work with China Mobile.

China Mobile's two handsets, Android devices based on MediaTek guts, support TD-SCDMA, China's own 3G standard. Many vendors, including Apple, do not have TD-SCDMA models yet.

Note that China will soon have 300 million Android users, which is about the population of the United States. China in becoming Android nation.


China Mobile's first branded smartphones: Androids for $80 and $210

Dual-SIM Samsung Galaxy S 4. The trend now is dual-SIM flagships.

KEY MOBILE TREND: dual-SIM.
EVENT HORIZON: immediate.

via Android Beat >>

PRODUCT PAGES >>


This isn't another entry about the dual-SIM smartphone trend; this is another entry about the dual-SIM flagship smartphone trend. A big difference.

No mainstream vendor has been on top of the dual-SIM trend like Samsung. Here's the dual-SIM Galaxy S 4 for the Chinese market. When one just isn't enough.

Neo's N003 is “world’s cheapest 1080p 5-inch smartphone” retailing at 899 yuan/€112/$145

via UNWIRED VIEW >>

KEY TRENDS: commoditization, 1080p, 5-inch screens

Smartphones keep reaching new lows.

I have friends in Europe who bought unlocked, unsubsidized smartphones in the €80 range with tax. Small screens, little memory, child-like cameras, but brand names. The low-end of the smartphone market is coming down and absorbing feature phone market share.

And the market will keep shifting down. Here is a smartphone from Chinese maker Neo which is being called the “world’s cheapest 1080p smartphone." The Neo N003 has a 5-inch, 1080p display running Android on a quad-core processor and is expected to retail at 899 yuan (€112/$145).

This is a Chinese device for the Chinese market, but devices like this will have trickle down effects across many markets.

PIC/STORY via UNWIRED VIEW

G-Trip & GMIC 2013. Global Mobile Internet Conference in Beijing May 2013. Go Get networked.

I've been writing quite a bit lately about the fantastic global influence of the Chinese mobile market and its players. China is not only the world's largest market and home to the world's largest mobile service providers, it is also home to more global top-ten smartphone vendors than any other country. Chinese companies are altering the market at all levels of the stack: Chinese component vendors, for example, are changing industry dynamics by lowering barriers to entry, and new Chinese mobile-web services are being envisioned and rolled out across a market of greater than one billion potential users. And beyond.

So, for those of you following this white hot market and its vendors and entrepreneurs, here's a conference that provides you with an opportunity to network with many of the key players.

The Global Mobile Internet Conference in Beijing this May and the extended "G-Trip" will provide you with the opportunity to meet an eclectic series of interesting executives including leaders from Tencent, Sina, UCWeb, Nokia, BMW, Jolla, Samsung, Softbank, and one of the hottest smartphone vendors around, Xiaomi.

The kind producers of G-Trip and GMIC contacted me to share a 25% discount code with any readers who might attend. You can register your attendance at http://beijing.thegmic.com/register/ and paste in the following code into the "discount code" section: GMIC-VQ9596MT .

Long-term shrinking. As the smartphone market quickly drifts away from some vendors, it's time to find a life raft or risk going down with the shift.

Nobody likes the smell of rotting animal flesh on their front porch.

KEY TRENDS: China, business development, services, long-term thinking

One of the more interesting – and impressive – business development stories of 2012 was Maersk's decision to slowly shift away from the shipping business (FT story) and into more profitable sectors such as oil services. At first read, a story about Maersk moving away from shipping is like hearing that IKEA will be getting out of the plywood-based furniture business. But for Maersk, this is an acknowledgement of a real and perhaps uncomfortable longer-term trend: although shipping volumes have been increasing, rising fuel costs and increased competition have been driving down freight rates and margins.

Does the theme music here sound familiar? Despite growth in global volumes, increasing competition is driving down average-selling prices and profit margins. Smartphones? Yes. So, at what point do vendors decide to sail for greener shores, where ever those may be?

When looking for larger market trends, take a good look back before looking forward: think long-term in reverse. Tangent lines can be very misleading. So, let's look back about six years to an era when the smartphone market was still in its youth. Nokia had greater than 50% of the smartphone market in early 2007 (and Symbian greater than 70%). To get an idea how powerful a position Nokia had then, take Samsung's current market share and Apple's current market share, add them up and then add a few extra points. That's what Nokia had. This shows the significant contrast to the current-day situation.

The market changes are amazing and nearly unprecedented across industries: not one of the top-five smartphone vendors from early 2007 (Nokia, RIM, Sharp, Motorola, and Palm) remains in the top five today, and some of those don't even remain. In addition, only 3.5 or 4.5 of the top-ten volume vendors of that era still remain in the top ten: Samsung (which dominates the market now but had less than 3% in early 2007), Sony (was "Sony Ericsson" thus the 0.5), HTC, RIM and possibly Nokia.

What should be highlighted here is the number of Chinese vendors who have entered the top-ten. Six years ago there were none. In fact, only two years ago there were none. But last quarter there were at least three (Huawei, ZTE, Lenovo) and it looks likely several more China-based Android vendors will join them in the coming quarters to satiate both local and global demand as the feature-phone market makes way for low-cost smartphones.

The market presence which some big smartphone brands had enjoyed has been shrinking at an accelerating pace and there are few solid or even delusional reasons to believe things will reverse. So now it's vital for those vendors to think forward five or six years and picture what the market could look like given current trends discussed above.

If such fading smartphone players aren't thinking about the possibility that they might not be in the business at all in five or six years from now, then they quite simply aren't thinking. For some vendors, it's time for reality to sink in: ignore long-term market trends and you'll go away.

Canalys' smartphone stats from 2006 highlights dramatic market changes.

MediaTekifikation. For those in the handset business who still haven't heard of MediaTek, it may soon be time to meet your maker.

Many people I speak with in the wireless industry have still never heard of MTK. To me, that's like meeting a kid who has never heard of Lego's.

Stories for your consideration:
— MediaTek & OmniVision tie-up for ADVANCED SMARTPHONE IMAGING >>
— Forbes: More Americans Learn About Taiwan's Amazing MediaTek >>
— Taipei Times: MediaTek’s chips transforming China’s smartphone market >>

...some thought continuation from my post about the "Chinafication" of the global handset industry:

Back in early 2008, in an internal report I wrote for Nokia management, I noted that a Chinese handset vendor named Tianyu had become a top-10 global brand. Even though I followed the industry closely, I had never heard of Tianyu before this. I decided to highlight the potential competitive threat of local vendors such as Tianyu who could appear out of nowhere in short order in vital growth markets.

I received some immediate feedback about my observations from one manager based out of Nokia's Beijing office: "Forget Tianyu: the company to really keep an eye on is MediaTek." That was a great tip.

Taiwan-based MediaTek may not be a direct competitor to smartphone vendors, but the company is an enabler of increased competition, lowering barriers to entry to the handset market. MediaTek offers complete chipset and software solutions allowing anybody with the desire to enter the handset business. It is MediaTek which enabled many of the "shanzhai" players to beat major vendors such as Nokia, Samsung, and Motorola to market with what appeared to be very similar-looking feature phones with risible brand names such as "Nokla" and "Sansung."

About two years ago, MediaTek announced their intentions of entering the market for smartphone ARM-based chipset solutions. The impact has been enormous: last year more than 110 million Chinese smartphones were based on MTK chipset solutions. This is greater than Qualcomm's market share in China.

MediaTek now offers solutions for both the higher-end of the smartphone market (quad-core) as continuing to enable very low-cost Android-based devices.

MTK has found its place in the mobile value chain. There are times when you shouldn't just look sideways to find your emerging competition, but at the bottom of the stack.

MediaTek's MT6575 optimized for low-cost Android 4 smartphones:

Is the "Chinafication" of the global handset industry inevitable?

For your consideration:
-Huawei SHOWS OFF A WINDOWS PHONE >>
-ZTE's new Budget-Oriented, 5-inch, Quad-core Smartphone >>
-Digitimes Story: Chinese smartphone brands steal CES spotlight >>
-Lenovo the first smartphone vendor using Intel's Clover Trail+ >>


Back in the 1950s there were more than 60 American-based television manufacturers. By the 1990s, there were none. The stats for Europe are similar: most Western European countries had a national TV-set brand or two. Now few do. The hardware business went East. But the profitable content business stayed behind.

So, will the mobile device torch soon be passed East as well? And for good?

To me, there is no doubt that commoditization is the largest general trend in the handset business. The underlying software has taken center stage and service providers such as Google, Facebook, and wireless operators look at devices as little more than screens for their services.

Most smartphones and more basic handsets are already made in China regardless of the label. (I'm not sure if any smartphones are assembled outside of China.) But one of the key recurring themes during the last few quarters of sales as well as at CES 2013 is the growing strength of Chinese brands. Brands few had heard of just a few years ago are now making headlines across the globe: ZTE, Huawei, Lenovo, TCL, Coolpad, Xiaomi, Tianyu (K-Touch), Haier. And it looks possible that Chinese vendors could take half of the top 10 spots among handset market leaders within the coming quarters taking total global volumes greater than 25%.

About five years ago I was speaking to one Nokia executive about this subject. As he said at the time, "Chinese vendors make great copies... but they won't be making copies forever."

What will the mobile hardware business look like in 10 years? I suspect the writing is already on the great wall.

Ascending to greatness? The Windows Phone 8 Huawei Ascend W1:

ZTE Nubia Z5. A super-thin, quad-core, 1080p superphone. Time to catch some Z's.

ENGADGET STORY with lots of PICS & VIDEO >>

Here come the Nubias!

ZTE recently established the "Nubia" sub-brand to stamp on its higher-end devices in order to make a serious push against competitors such as Samsung, Apple, LG, Nokia, and HTC. Will it work? This latest device does look serious.

The ZTE Nubia Z5 runs Android Jelly Bean on a Qualcomm 1.5GHz quad-core chipset, has a 5-inch 1080p display with 443ppi, 32GB of internal memory, a 13-megapix camera with a Konica Minolta branded lens, a 2-megapix front-facing camera, and 2GB of RAM.

All this comes in at 126 grams with a thickness of 7.6mm.

The unsubsidized retail price for a Chinese-specific version is $550 which is a good value for such a super smartphone.

So, will Nubia phones like this soon be on sale at your local Carrefour or Walmart or via key operators? I think it's safe to say that you will soon be able to catch some Z's at a retailer near you.

ZTE Nubia Z5:


Nubia logo:

How low can they go? How will the market adjust to lower revs and margins?

CNET STORY >>

TECH CRUNCH on $50 Androids >>

Informa: 1 in 2 smartphones to be sub $150 by 2017

There were several interesting stories this week directly related to the on-going trend of smartphone commoditization and dropping ASPs. Forget the $100 laptop, we're entering the world of the $50 smartphone.

Let's look at MediaTek's plans to begin offering low-cost quad-core smartphone chipset solutions. Taiwan-based MTK says that their quad-core platform will be available during Q1 2013 and already one big-name smartphone vendor, Sony, is kicking the tires. MTK provides the guts for hundreds of millions of handsets per year. While most of these are feature phones, the company has been pushing into smartphones over the past few years. Expect more competitive disruptions to come and a plethora of even more new industry entrants.

At a conference talk, Wikipedia founder Jimmy Wales highlighted the popularity of a $50 Android-based Huawei smartphone in Africa. And that's street price according to Wales. Frankly, I wasn't aware prices had already come down so low as only a few years ago, the sub-$80 trade-price smartphone still seemed years off. But it's a nice story about the march towards the democratization of information.

Today, industry analysts at Informa released some info from an interesting report saying that 50% of "smartphones sold in 2017 will be priced below US$150."

Informa:

The average smartphone price will drop from US$188 in 2011 to US$152 in 2017 as a result of it balancing the huge demand for entry-level smartphones in emerging markets and the demand for “super-smartphones” in developed markets. The devices’ average gross margin is expected to remain flat – in the range of 20 -25%.

I suppose they are referring to retail prices. Informa believes that Apple and Samsung will continue to maintain profit margins well above average, which runs under the assumption that the value of those brand names will continue on a linear trajectory.

In the year 2012, it seems like a safe bet to state that Apple and Samsung will continue to be the mind-share leaders in 2017. But let's recall that the Motorola RAZR and Nokia's N95 were two of the market's premium devices about half a decade ago.

I am not sure about brands, but one trend is clear: smartphone prices and margins are coming down and it's time for vendors to adjust to the competitive environment. And what happens to the market for feature phones when smartphones are retailing for $50?

Something Nubia. Can ZTE establish a hot new smartphone brand? Asian hardware influence is increasing no matter what.

Brands come & they go, and they're born & they grow.

Before there was LG, there was Goldstar. Back in the '70s and '80s, those who didn't want to spend the money on a Zenith-branded television set or a Technics-branded amplifier went to K-Mart to buy Goldstar-branded electronics. It was a downscale brand for the lower-end of the market. But back in the '90s, rising like a phoenix from the ashes, the LG brand was born from Lucky Goldstar. It went upscale. It went quality. And it worked.

So here comes the "Nubia" brand from ZTE. It's one vowel and one consonant away from the "Nokia" brand, but who's to say where inspiration comes from these days?

ZTE has been successful with some reasonably solid Android-based phones, and they've made some significant volumes with operator-branded devices, but now it looks like ZTE means business. Will the Nubia brand become a household name in Western Europe and North America. Is Nubia another Samsung or LG in the making? It could be.

The bigger trend here, however, is the on-going commoditization of smartphone hardware with Asia-based companies such as ZTE, Huawei, HTC, MediaTek, Foxconn, Compal, Xiaomi, Lenovo, TCL, and others growing their influence over the industry. If strong brand names can be built or bought by the same, more power to them, literally.

If Chinese and Taiwanese companies can build up big brand names, it's icing on the commoditization cake. There might soon be a nu sheriff in smartphone town.

The "Nubia" brand from ZTE. Will this be the hot, nu thing?