A Tale of Three Asias

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Source: GfK data

I’ve just been playing around with some smartphone data from GfK, which collects its data by point-of-sale (POS) tracking in 90+ markets and estimates values based on unsubsidized retail pricing — meaning I guess that these are not the prices that folk may be paying for their phones exactly, but ultimately. The chart above is me calculating the Average Selling Price by dividing unit sales with sales value.  

Raw conclusions: Emerging APAC — India, Indonesia, Cambodia, Philippines, Malaysia, Thailand and Vietnam — have the cheapest smartphones in the world, and they’re getting cheaper. Two years ago they were above $200, now they’re less than $160. 

Then there’s Developed Asia: Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea and Taiwan. There smartphones are the most expensive in the world, by a yard or two. Although prices have fallen too, by 8%, in the two years, folk in this part of the world still pay $150 more for their smartphones.

And then there’s China. China started below the Middle East and Africa, Central/Eastern Europe and Latin American but ended it up above all three, with the ASP rising by 16%. Interestingly, the rise occured in one spurt (making me worry there’s a problem with the data, though this might be down to the launch of the iPhone 6 in China in the last quarter of 2014. ASPs there have held steady since.) 

Bottom line: Anyone selling phones in Asia — indeed, anything that involves mobile — needs to think in terms of at least three distinct markets, in terms of purchasing power, in terms of computing power, in terms of screen size and connectivity. 

Meshing and Stacking Away from Disaster

I’m often haunted by the folk in Wall-E, the movie where humans have abandoned Earth to trash, a small waste-collecting robot and a cockroach. That’s not the bit that scares me: it’s the space-bound humans who are ferried around on pods, their eyes permanently glued to a screen in front of them.

Is this, I ask my worried self, our future? Or has it already happened?
In some ways it has. But for what it’s worth I think it’s a blip. The future won’t in fact look like that at all.

Right now we definitely have a problem. The problem is that screens have gotten smaller, or rather more portable, more convenient, and the content on them has become so compelling that we risk life and limb to watch them as we walk, stand and sit.

But this is just a phase.

I detect the beginnings of a shift. Not of our behaviour – sadly we’ll always be vulnerable to fixating on any screen with bright colours and movement. But the sheer multiplicity of screens is forcing change on us.

Consider the following: Of the seven hours a day spent gazing at a screen, at least two of those hours are actually watching two or more screens. Millward Brown, a brand consultancy, calls it meshing and stacking.

Whereas before we’d pop off to the kitchen to put the kettle on, now we scroll through our tablet to see what people are saying on Twitter about what we’ve just watched. Then there’s shifting, where we start watching something on one screen, and then finish it on a laptop, a smartphone or a tablet.

This may seem like appalling behaviour, slicing our attention into ever thinner chunks. And in some ways it is, but it means that we’re unlikely to be subsumed by any one screen. And that’s good, because we’re dominating the screens, not them dominating us.

There are other things afoot. Screens don’t need to be big to do big things for us: the latest version of Google’s Android operating system allows the user to stitch together separate photos of a view and then relive the panorama by moving the phone around in the air, the image moving as if the scene was in front of the viewer. It’s a extraordinary feeling, recreating a mural on a screen the size of your hand.

Then there’s something called Spritz, an app that allows you to speed read a book in a viewer no larger than 18 letters. The maker of the app says by shuttling words past your vision at speed 80% of your effort is saved for reading and absorbing. I was pretty amazed; it seemed to work, and makes you think about whether you really need a book-sized screen to recreate the experience of reading a tome.

Then there’s something called Snapchat, where users can send photos to each other which can only be viewed for a few seconds before disappearing forever. It’s hard to see the value in this, until someone pointed out that the value lies in the intimacy of the moment. Users don’t open the picture immediately, preferring to find a quiet, private space to enjoy it. Counterintuitively, by making the photo ephemeral, the app makes the process of viewing it special and the memory of it longer lasting.

Some might say I’m grasping at straws. But I see in these examples the beginnings of a new approach to how we relate to our screens. For sure, some of us will remain their slaves. But for others we may find new ways to derive pleasure from them, whether it’s recreating a vista, reading a tome or viewing a photo.

The Rising Noise of Silence

This is a commentary piece for a semi-regular slot on the BBC’s World Service. It’s not content that appears on Reuters, nor does it reflect the views of my employer. 

I’m here to report a new scourge of the public space: folk who watch video on their tablets in public without a headset. Just the other day someone sat next to me in a coffee shop watching a local soap opera on her iPad quite oblivious to the disturbance she was causing me and, well, just me.

Now this may sound like a small thing, but I’ve canvassed friends and it’s clearly a problem that extends far and wide. I’m told ferries in Hong Kong are abuzz with this kind of noise pollution, as are subways and buses in Singapore, as well as flights into and across the Philippines and India.

Putting aside my own tendency to be annoyed by more or less anything these days, I think we have here an example of a counterintuitive trend: what sociologists might call the reclaiming of public space from intrusive technology.

Think about it for a second. Up until a few years ago our biggest bugbear were loudmouths on their cellphones intruding on our reverie in trains, coffee shops and dentists’ waiting rooms.

This is not exactly yet a thing of the past, but it’s beginning to be, because as we’ve embraced the smartphone so have we preferred to occupy our time communicating via text or playing games on our devices. Take mobile phone usage in the UK as an example: the number of minutes most people spend talking on their mobile phone has fallen by 19% between 2007 and 2012. This, I believe, is a global trend whenever phones go from those basic ones that just do voice and SMS to smartphones, where you can do lots of other things.

The trend, therefore, is less time spent talking on phones, which means less time annoying other people in public.

This is a good thing. It basically reverses a trend we thought was irreversible – namely that technology was always going to intrude further into our lives.
So back to the watching video in public without a headset thing.

We’ve gone through an interesting couple of years on mobile. We’ve seen a lot more people buy smartphones, and we’ve seen smartphone screens get bigger. We’ve also seen a lot of carriers deploy faster networks, and in many cases reduce prices. All of this makes video on a portable device possible.

So it’s not surprising that folk are consuming video on their devices in extraordinary quantities. In 2013 video accounted for about a third of global mobile data traffic, according to Ericsson. By 2019, it will account for more than half.

Driving this are deeper phenomena: a lot of the people with these devices and connections don’t have a lot of space to call their own: they live and commute through crowded sites, sleep in cramped flats or dorms. While I do worry about all the neck problems we’re going to see in the years to come, it’s hard to begrudge people carving out a little private space for themselves wherever they can find it.

In a way, I’m amazed that this revolution hasn’t been more intrusive and irksome. For all the folks who aren’t wearing a headset when they immerse themselves in streaming soap, there are thousands, millions of folks who are.

So I’ll desist from decrying these inconsiderate souls, and marvel at how quickly we’ve adopted these new ways of reclaiming some privacy out of public space. What’s astonishing is probably how seamless this transition has been – and how quiet our public lives have become.

Asha to Ashes: Microsoft’s Emerging Markets Conundrum

A piece I wrote with Devi in Delhi, and the help of a couple of other colleagues. 

Asha to Ashes: Microsoft’s emerging market conundrum

By Jeremy Wagstaff and Devidutta Tripathy

SINGAPORE/NEW DELHI | Thu Sep 5, 2013 9:22pm EDT

(Reuters) – Microsoft Corp’s acquisition of Nokia’s handset business gives the software behemoth control of its main Windows smartphone partner, but leaves a question mark over the bigger business it has bought: Nokia’s cheap and basic phones that still dominate emerging markets like India.

Microsoft Chief Executive Steve Ballmer has said he sees such phones – of which Nokia shipped more than 50 million last quarter – as an entree to more expensive fare.

“We look at that as an excellent feeder system into the smartphone world and a way to touch people with our services even on much lower-end devices in many parts of the world,” he said in a conference call to analysts on Tuesday.

But analysts warn that’s easier said than done.

The problem, said Jayanth Kolla, partner at Convergence Catalyst, an India-based telecom research and advisory firm, is that Microsoft simply lacks Nokia’s retail and supply chain experience in the Finnish company’s most important markets.

“The devices business, especially the non-smartphones business in emerging markets, is a completely different dynamic,” he said.

Kolla pointed to the need to manage tight supply chains, distribution, and building brands through word-of-mouth. “Microsoft doesn’t have it in its DNA to run operations at this level,” he said.

India is a case in point. Nokia has been there since the mid 1990s and the country accounted for 7 percent of its 2012 revenue while the United States generated just 6 percent, according to Thomson Reuters data. Its India roots run deep: it has a presence in 200,000 outlets, 70,000 of which sell only its devices. One of its biggest plants in the world is in the southern city of Chennai.

For sure, Nokia has slipped in India as elsewhere: After nearly two decades as the market leader it was unseated by Samsung Electronics Co Ltd in overall sales last quarter.

But it still sold more of its more basic feature phones.

As recently as last October, market research company Nielsen ranked it the top handset brand. The Economic Times ranked it the country’s third most trusted brand.

LOYALTY RUNS DEEP

In a land of frequent power cuts and rugged roads, the sturdiness and longer battery life of Nokia’s phones have won it a loyal fan base – some of whom have stayed loyal when trading up.

Take Sunil Sachdeva, a Delhi-based executive, who has stuck with Nokia since his first phone. He has just bought his fifth: an upgrade to the Nokia Lumia smartphone running Microsoft’s mobile operating system.

“Technology-wise they are still the best,” he said of Nokia.

But Microsoft can’t take such loyalty for granted. Challenging it and Samsung are local players such as Karbonn and Micromax, which are churning out smartphones running Google Inc’s Android operating system for as little as $50.

Such players are also denting Nokia’s efforts to build its Asha brand, touchscreen devices perched somewhere between a feature phone and a smartphone.

Nokia shipped 4.3 million Asha phones globally in the second quarter of this year, down from 5.0 million the previous quarter.

“The sales performance of the Asha line has been quite poor,” said Sameer Singh, Hyderabad-based analyst at BitChemy Ventures, an investor in local startups. “With increasing competition from the low-end smartphone vendors, I’m unsure how long that business will last.”

That leaves the cheap seats. Singh estimates that the Asia Pacific, Middle East and Africa accounted for two-thirds of Nokia’s feature phone volumes in the last quarter, at an average selling price of between 25 to 30 euros ($32.99 to $39.59).

“I don’t see how Microsoft can really leverage this volume,” he said. “The market is extremely price sensitive and margins are racing into negative territory.”

TOO BIG TO IGNORE

The quandary for Microsoft is that while the basic phone market may be declining, it may simply be too big to ignore.

“If you look at markets like India and Indonesia, more than 70 percent of the volume comes from the feature phone business,” Anshul Gupta, principal research analyst at Gartner said. “It’s still a significant part of the overall market.”

That means that if Microsoft wants to herd this market up the value chain to its Windows phones, it needs to keep the Nokia and Asha brands afloat – while also narrowing the price gap between its smartphones and the feature phones and cheap smartphones.

Microsoft has hinted that lowering prices of smartphones would be a priority. The Windows Phone series includes the top-end Lumia 1020, which comes with a 41-megapixel camera, while it also sells simpler models such as the Lumia 610 and 620 aimed at first-time smartphone buyers.

“The lower price phone is a strategic initiative for the next Windows Phone release,” Terry Myerson, vice president of operating systems said on the same conference call, while declining to provide details.

An option for Microsoft, analysts said, would be to shoe-horn services like Bing search, Outlook webmail and Skype, the Internet telephony and messaging application, into the lower-end phones as a way to drive traffic to those services and make the devices more appealing.

“So you can bundle services with these low-end products and that way you can reach a wider audience,” said Finland-based Nordea Markets analyst Sami Sarkamies.

But in the meantime Microsoft needs to brace for assault on all fronts as emerging market rivals see an opportunity to eat further into Nokia’s market share. In India, said Convergent Catalyst’s Kolla, cheap local Android brands have been held back by Nokia’s strong promotion of its mid-tier Asha brand.

“Now, I expect them to pounce,” he said. ($1 = 0.7577 euros)

(Reporting By Jeremy Wagstaff in Singapore, Devidutta Tripathy in New Delhi, Bill Rigby in Seattle, Ritsuko Ando in Helsinki; Editing by Emily Kaiser)

Deconstructing Carrier IQ’s Press Release

I couldn’t find this press release on their website, and it’s a couple of weeks old, but I thought it worth deconstructing anyway. My comments in quotes. The rest is from the release. I don’t pretend to have got anything right here, but these might be the starting points for deeper questions.

Carrier IQ Says Measuring Mobile User Experience Does Matter! – MarketWatch:

MOUNTAIN VIEW, Calif., Nov 16, 2011 (BUSINESS WIRE) — Carrier IQ would like to clarify some recent press on how our product is used and the information that is gathered from smartphones and mobile devices.

Carrier IQ delivers Mobile Intelligence on the performance of mobile devices and networks to assist operators and device manufacturers in delivering high quality products and services to their customers. We do this by counting and measuring operational information in mobile devices — feature phones, smartphones and tablets.

operational information is a very vague term. And it’s clear from this comment that it’s not just smart phones that have the software installed. Feature phones and tablets also have it.

This information is used by our customers as a mission critical tool to improve the quality of the network, understand device issues and ultimately improve the user experience. Our software is embedded by device manufacturers along with other diagnostic tools and software prior to shipment.

It calls it a diagnostic tool, but most people’s understanding of a diagnostic tool is one that runs in diagnostic mode. This doesn’t. It runs all the time–even on WiFi and airplane mode. But this comment also hints that there are other tools and software installed by manufacturers too.

While we look at many aspects of a device’s performance, we are counting and summarizing performance, not recording keystrokes or providing tracking tools.

‘Recording’ keystrokes could be as it looks, or it could be weasel language, given the fact that keystrokes are definitely logged. Logging could be considered different to recording in this context.

The metrics and tools we derive are not designed to deliver such information, nor do we have any intention of developing such tools.

But they clearly do, so is that a bug? Is the word deliver here key, as in not designed to deliver such information to certain parties?

The information gathered by Carrier IQ is done so for the exclusive use of that customer, and Carrier IQ does not sell personal subscriber information to 3rd parties.

This doesn’t really help. Not only was it not really the issue that Carrier IQ was selling the data–it was assumed the carrier would be, if anyone was–and the term personal subscriber information is quite possibly a weasel term, as personal has tended to mean to include the actual subscriber’s name. But we know now that even anonymized data can be mined so it is quickly connected to a specific person.

The information derived from devices is encrypted and secured within our customer’s network or in our audited and customer-approved facilities.

I don’t know enough about this, but I’m guessing these are weasel words too. The key word is within. It seems pretty clear that most if not all of the Carrier IQ data is in plain text, so presumably the encryption and securing is only when that data reaches the customer’s network (i.e. this doesn’t include the external network, but the customer’s own computer network.) It also makes clear that the data, whether encrypted or not, also resides within Carrier IQ’s systems.

Our customers have stringent policies and obligations on data collection and retention. Each customer is different and our technology is customized to their exacting needs and legal requirements.

Except that at  no point was any customer, as far as we know, actually asked whether they approved this data being collected about them. In fact, we don’t even know who those customers are in order to be able to verify this.

Carrier IQ enables a measurable impact on improving the quality and experience of our customer’s mobile networks and devices. Our business model and technology aligns exclusively with this goal.

Don’t get me started on the word ‘experience.’ It covers a multitude of sins and can mean more or less anything. My experience of call dropouts? Yes, sure, fix that. My experience of what services I use, how many times I enter my password, whether I’m buying something in Starbucks or Coffee Bean, how many people are in my address book etc. No. Not what I want you to log.

I think there’s another element at play here. Clearly the device manufacturers have allowed this to happen since the software is installed at the point of manufacturer. A carrier can use the service because whatever device their customer uses, they can be pretty confident that the Carrier IQ software is embedded. So one has to ask what data are being shared between carrier, Carrier IQ and manufacturer? And how does this work?

SOURCE: Carrier IQ

Southeast Asia’s Third Mobile Tier

The mobile revolution is moving from second tier countries in Southeast Asia to the third and final tier. Whereas previously Indonesia and the Philippines were seeing the biggest growth in mobile Internet traffic, now it’s Burma (Myanmar) and Cambodia which top the list in terms of user- and usage-growth, according to the Opera State of the Mobile Web report for July:

    • Myanmar and Cambodia lead the top 10 countries of the region in terms of page-view growth (6415.0 % and 470.1 %, respectively).
    • Myanmar and Cambodia lead the top 10 countries of the region in growth of unique users (1207.5 % and 179.1 %, respectively).
    • Myanmar and Cambodia lead the top 10 countries of the region in growth of data transferred (3826.6 % and 353.2 %, respectively)

Of course these figures are from a low base, and the Opera data is not the easiest to trawl through. (The Opera mobile report is always interesting reading, so long as you take into account that the Opera browser is for many people a Symbian browser and so of declining popularity in some quarters. Also their data is never presented in quite the order one would like, so you have to dig. )

Looking at the figures in more detail, and throwing them into a spreadsheet of my own, it’s clear that Burma is definitely an outlier. Cambodia’s growth is impressive, but Burma’s is by far the greatest out of all 27 countries surveyed. Here’s how it looks:

2011-07 Page view growth SEA

So is the Burma usage real, or is this just a jump from nothing to slightly more than nothing? I suspect it may actually be a sizeable jump. Opera are coy about the actual number of users (so we may actually be dealing with a small dataset). But the figures suggest that this is a real spurt in usage: Burmese mobile users are transferring more data per page view than any other of the 27 countries surveyed, and the page views per user is on a par with the Philippines and Thailand.

I’d cautiously suggest that Burma, along with Cambodia and Laos, are beginning to show exhibit some of the signs of what one might pompously call “mobile societies”: using the mobile phone as an Internet device as a regular part of their activities. Take the page views per user, for example, which measures how much they’re using the mobile phone to view the Internet (Brunei seems to be in a league of its own; I don’t know what’s going on there, except that in terms of nightlife, I’d have to say not much):

2010-07 Page views per user SEA

It’s probably too much to conclude that mobile phones as Internet devices are now mainstream in this third tier of the region, but it’s a healthy sign, with lots of interesting implications.

Logitech’s Bluetooth pen

Logitech are about to bring out their io2 pen for Bluetooth:

This summer, Logitech will launch a Bluetooth-enabled version of the io2 Digital Pen, designed to address the current data entry shortcomings of mobile data capture devices. Logitech’s Bluetooth digital pen, when used in combination with a Bluetooth wireless handheld device, will help an organization’s mobile workforce more efficiently gather, transmit and share important data.

A press release gives a bit more detail: Using the Logitech io2 Digital Pen with Bluetooth technology, a mobile worker will be able to capture information by using a customized version of a standard paper form, such as for an insurance appraisal or a work order. The pen automatically creates a digital record that is transmitted to a complementary Bluetooth wireless technology enabled handheld communication device, such as a smart mobile phone, PDA or Blackberry. That data can be stored and processed on the handheld device or immediately sent into an organization’s central database for processing. For the mobile worker, it’s an automated process that starts with filling out a familiar form and ends with a confirmation on his or her wireless handheld communication device that the information has been sent and received.

Sounds interesting, although I’m not quite clear about how this differs from the Nokia SU-1B pen, which originates from the same Anoto source. And why aim only at business users with this?