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Spillikins #96. What Makes Indian Phone Manufacturers Popular

Contents:

  1. The Winter, the Cold and Batteries
  2. Motorola DEFY Defect
  3. Sales of Windows Phone 7 or Failure of the Concept
  4. Micromax as an exemplary Indian company
  5. Samsung became the leading supplier of Android solutions
  6. Sony Ericsson Z1 (Playstation)
  7. CES2011 and Nvidia

The Winter, the Cold and Batteries

The winter has come to Moscow and has brought subzero temperatures with it. For a few days, the thermometer was showing 20 degrees Celsius or even more than that. During that period, I had a lot of hard time talking on the phone in the street as on the one hand, it was too cold to hold the device without gloves and on the other hand, the sensor screen of the iPhone or HTC Desire wouldn't respond unless the gloves were taken off. My way of solving the problem is using a Bluetooth headset. You put the headset on and you have no problems answering calls or dialing numbers. Unfortunately, it takes just a few conversations and a 15-20 minutes' walk in the cold for the tiny battery in my Bluetooth headset to die whereas under the regular conditions it could last for a few days. Even putting the jacket's hood on, so that the headset becomes protected from the wind, can't help it.

Although we tend to neglect that, the cold affects phones, too. I remember my Samsung Xcover having spent two days in the cold and still having some battery power left, which was a real surprise. In my opinion, it would be great if batteries in mobile devices had some "clothing" that would help protect them from the cold. The necessary technologies are already there. One can create air pockets in the casing or apply some heat insulation. The only thing to keep in mind is that the protected device shouldn't overheat during the summer or while recharging. I don't think such protection would significantly increase the size of the battery or the device itself. It's just a matter of a few extra millimeters. Alas, I'm not an engineer and hence I will have to give away this idea to those who can actually do it. Who knows, maybe one day there will be a whole class of devices with cold resistant batteries on the market. From my experience, headsets should be priority number one.

There goes another observation to follow up on the cold theme. Several times last week, we were being visited by film crews that would come to our office with two gigantic batteries for their cameras. In the cold, those batteries would die very quickly despite the fact that the cameramen wouldn't spend much time outdoors.

Here is some unhealthy advice for you. If you want your phone to last longer, don't leave it in the bag but keep it an inner jacket or jeans pocket instead. The extra warmth will keep it from freezing. Most handsets have their working temperatures indicated in the user guide and those are rarely different from zero to 30 degrees Celsius. No device has been specifically designed for subzero temperatures and the Arctic phone is yet to be created. Correct me if I'm wrong.

I also did a little survey among my friends and colleagues trying to find out how many of them had bought the special iPhone gloves (with the little dots on the finger tips) last year. It turns out that those are being made by many different companies but nobody from my pool is actually wearing them. Occasionally having to take off one's favorite gloves or mittens, etc. appears to be preferred to having to wear the special gloves all the time. Surprised? Looks like I have identified another useless accessory on the market. Of course, my survey need not be precise and representative and may even turn out to be completely wrong yet, having discarded such gloves myself, I seriously doubt that. And what's your opinion?

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Motorola DEFY Defect

Although the review of the Motorola DEFY was written a few weeks ago, I didn't feel like publishing it because of the reports coming from Germany. It took me some time to do the research but now I can tell you what it all is about. And yes, the review will be published somewhere later this week. I truly fell in love with this model yet there is a fly in the ointment I can't but tell you about.

The problem is with the device speaker. At any time during the call, you can expect the voice of the person you are talking with to break or even disappear completely. The speakerphone mode is much more reliable but still not perfect. The problem arises quite often and has been reported by many European users, especially by those from Germany where the DEFY debuted and is quite popular now. So, what is the problem?

As of this writing, there hasn't been any official announcement made. On the support forum, Motorola employees are advising everyone to have their phones replaced or sent to the service center, without giving any comments on what is wrong with them. Some users are blaming the 3.5 mm audio jack, that is, the problem arises after it has been used according to them. I don't know, I think it's more of a symptom.

Since the phone is not officially available in Russia yet, I had to try really hard to find a defective unit in Moscow (special thanks goes to Vadim M. who helped me get one). With no service manual or spare parts at our disposal, we couldn't run a profound test. Instead, we found a similar speaker in one service center and had it temporarily installed to the device, just to see how it would work. A few days passed without any glitch. After that, the same very speaker was installed to my very own DEFY and the problem revealed itself immediately: I couldn't hear the other side.

There may always be some other reason for the speaker not to function properly, though. That is why I donated the original speaker from my DEFY to have it installed to the retail unit with a dead one. The recipient was being used big time for about a week after that, including voice calls, SMS and Internet. We even had it immersed into water a few times to demonstrate its ruggedness. The speaker is still alive.

I'm not 100 per cent sure that that is the speaker that is defective yet the evidence is very suggestive. Unfortunately, all manufacturers do their best to keep such information private. In my opinion, they should rather do the opposite – i.e. Motorola should be open about it and willing to remedy the defect.

Be that as it may, it's not the worst news. The complete stock of the Motorola DEFY for the year 2010 for Europe has already been assembled. And it is that very stock that is likely to use the defective component. As of this writing, we do not know how long it takes for the problem to reveal itself. I know people who have been using the device without any problems for more than a month now and those who had their units malfunction within a week. The situation appears identical to the Nokia 5800 XpressMusic case, where some early shipments had defective speakers.

All Nokia 5800 come with a defect?!

In total, several hundred thousand units are to be shipped to Europe. Every single one of them seems to have a defective speaker (it doesn't mean that it will break down for sure, though). According to my personal sources, Motorola has indentified the problem and the speaker is going to be replaced. If you are intended to buy this phone in 2011 you are facing a lottery. Unfortunately, I do not know the production week, starting from which the new speaker is being installed. This month, the official service centers are receiving the replacement speakers that solve the problem. Hence if you want to be on the safe side, you should probably wait for the next year and look for a model produced in late December or even in 2011.

Now, I hope you understand what I was busy with for the last few weeks and why the Motorola DEFY review was delayed. Finally, I can tell you to come back for it later this week.

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Sales of Windows Phone 7 or Failure of the Concept

There are no official data in public domain on sales of Windows Phone 7. Usually companies strive to reveal impressive figures in media to boost the demands and show the popularity of a product. Nothing of the kind happened to WP7. The answer is obviously predetermined by low sales of models based on this OS.

I would like to break the stereotype that the features and parameters of OS influence the sales. This is not really so. End users are interested in this info, but WP7 is an unknown quantity and the choice is influenced by carriers and shop assistants. Much depends on sales strategy.

Inquisitive minds are steel keen on getting sales data for WP7 and WMPowerusers.com showed statistics of users employing WP7 to access Facebook. Undoubtedly, we should take into account that not all owners of WP7 are Facebook users. How many people use Facebook is unknown, but as sales are actively promoted in English speaking countries, we can count on at least 50% of WP7 users. By the end of November 135,134 WP7 devices accessed Facebook through the proprietary client. This number is extremely low, especially taking into account that in July of 2010 Microsoft promised to give away 90,000 devices to its employees when models hit the shelves. I don't have exact figures, but I am sure that Microsoft must have distributed a considerable amount of phones.

WP7 is hardly a popular OS and it did not make any stir. Judging by search enquiries and other activities online WP7 has been so far ignored by mass customers. In the US WP7 will take part in a battle by cutting from Nokia and Blackberry segments. On the global scale it is still not serious enough.

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Micromax as an exemplary Indian company

During the week I had an argument with the representative of one large manufacturer of mobile phones. We had a very vocal argument during the dinner. His position was the following: we can't say that Nokia is constantly losing the market share in India. Local brands cannot provide appropriate service or marketing and can be attractive only due to low prices, especially if we speak about DUAL-SIM solutions. My interlocutor spoke for a period of time, while I kept on listening. He mentioned low quality and millions of people who purchased handsets to suffer afterwards. He added that Indian companies have no models of their own and only copy Chinese solutions. I heard a traditional speech of a mid level manager from Europe, who works for a manufacturing company. He sounded calmly and labeled the threat as temporary.

How a manager working in Russia can be sure about the superiority of products offered by his employer without ever visiting India and analyzing what is going on there. Low price alone cannot explain the tremendous growth of local producers. Apart from the price they should know the needs of customers. During the discussion I prepared several traps and when my opponent was caught in all of them I showed several web pages to spare him time and expense of going to India. It's a pity I have not taken a picture of his face when all arguments were shattered after he visited some web sites. Let's look at the video.

It is one of the first commercials for Micromax (Indian brand). It started in India in March of 2008. By the end of 1st quarter its share at home was 0.59% (according to IDC). In the first quarter of 2010 they could already boast 6.24%. During the quarter Micromax sold 2.57 million phones in India.

May be the ad looks naive, but pay attention to the fact that a 2 year old brand shoots its own commercials, has active marketing strategy and aims at foreign markets as well. This story is incredible!

Let's look at another example. The commercial displays a model from ZTE (Penguin) labeled Andro A60 in Micromax lineup. It is portrayed as the first Android phone. This low cost handset fetches only $150, comes equipped with a QVGA screen and resembles the majority of its rivals. At that moment my interlocutor exclaimed that he had told me that they attract customers mainly with price.

But look at channels of promotion apart from TV. I don't take into account leaflets, press and street ads. The manufacturer even made a separate web site to promote the model.

My opponent started finding fault again. "You see the site is in English, so they are going to sell it abroad ". Why not? I think Micromax just wants to reach for a bigger audience. This model aims at English speaking population in India without money to pay more. It is a winning solution for those who are not ready to buy expensive solutions, but would like to have an Android model.

The active promotion of local players has negative consequences only for Nokia. They lose the market share by dozens of per cent annually. I always laugh when the launch of genuine DUAL-SIM models from Nokia (e.g. C2-00) is postponed once again. Surprisingly, the head of Nokia Markets in India repeats the ideas of my Moscow interlocutor and denies the obvious:

D. Shivakumar, Managing Director of Markets for Nokia India, says: "We will be present in all segments. However, we are not into the price game. Whether this trend is sustainable over the long-term remains to be seen – especially with operators coming under increased pressure from tariff arbitrage. With 3G services expected to become main stream over the years and mobile number portability on the anvil, things may change in the future".

The source of the interview is available here.

In other words this top manager wants to say that Nokia has already lost the battle in low and mid segments, but they hope that 3 G networks will require appropriate models and Nokia will capitalize on this demand.

I have some doubts as local producers already offer cheap alternatives with 3G support. The question is not what to sell tomorrow, but how to make you brand attractive. Until employees keep on thinking in this vein nothing will change to the better. They are trying to justify their own blunders and it does not resemble the market conquering strategy at all.

Finally, I offer to get a closer look at Micromax products to see what and how this company successfully sells in India.

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Samsung became the leading supplier of Android solutions

Gartner shell-shocked the public by unveiling US retail details in the 3rd quarter of 2010. It happened that Samsung has a whopping 32.1% share of Android solutions, largely courtesy of carriers versions of Galaxy S. Only in the US the model sold 3 million items and the demand is still phenomenally high. Unprecedented demand for Galaxy S made the company reject the use of SuperAMOLED screens in other devices due to their deficit.

Samsung success is wonderful, especially taking into account attempts of Motorola to get a firm foothold in its home market with Android models. It is not a secret that the US is the leading market for Android models, though sales go up elsewhere too. In the Spillikins I have already mentioned that by putting all eggs in one basket (USA) Motorola can be left empty-handed if others come up with more attractive solutions. This scenario is becoming closer to reality even faster than I thought. Everything will depend on January announcement of Motorola and the market response to it. So far we can only claim that this news will not bring positive consequences for the manufacturer and will only increase pressure on it.

It also shows how unrealistic are top managers of Sony Ericsson amid the sound bite from its CEO that SE plans to become player No 1 on the market of Android solutions.

Samsung also released figures on sales of Galaxy TAB, which reached 1 million items worldwide and by the end of 2010 the company plans to sell around 1.5 million tablets. These results are better than expected, despite the inflated price. It became possible due to sales through many channels in numerous countries. Samsung views this product as crucial and uses this flagship to compete with iPad. Frankly speaking, I was surprised by these sales figures.

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Sony Ericsson Z1 (Playstation)

We also saw the video of Playstation phone. I have already explained why I don't believe in good prospects for the model. You can read an appropriate issue of the Spillikins or listen to the podcast in Russian. This product is a niche one, which can't survive competing with cheaper PSP available on the market. Efforts to reinvent dead products are unlikely to succeed. The video is interesting though, so pay attention to it.

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CES2011 and Nvidia

I have already mystified you that mobile revolution must be expected at CES, but I would like to add more fire. Watch a speech by CEO of Nvidia, which explains how the company sees future developments.

During the week Nvidia published a white paper on multi-core solutions for mobile devices, in particular, Tegra 2. They shattered a belief that this solution requires more power than its contemporary rivals. On the contrary, similar tasks will need 40% less.

The document is very interesting and puts everything in its places. I advise to familiarize with this PDF file (7 MB, English). Whether you want it or not, but dual core processors will become a norm for mobile devices with multi-core solutions (4, 8 and more) to come. It becomes a necessity.

I congratulate you with the beginning of winter! Have a nice week and find time for skiing and the rest of winter fun! It obviously applies only if you live in a snowy place. Take care.

Do you want to talk about this? Please, go to our Forum and let your opinion to be known to the author and everybody else.

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Related links

Spillikins #93. Sony Ericsson in 2011, or Strategy Failure?!

Spillikins #94. MeeGo: Dreams of World Dominance out of Great Nothing

Spillikins #95. Google Maps Attacking, or Voice-Assisted Turn-by-Turn Navigation for Everyone

Eldar Murtazin (eldar@mobile-review.com)
Twitter    Livejournal
Translated by Maxim Antonenko (maxantonenko@ukr.net), Olexandr Nikolaychuk (meiam@inbox.com)

Published — 07 december 2010

Have something to add?! Write us... eldar@mobile-review.com

 

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