Will Chinese Giant Alibaba compete with Google, Facebook, Amazon & friends?

The importance of Chinese economy is not a surprise and it is well known, it is not only manufactured related but also it has relevant technological brands as Lenovo, Huawei and so on, but so far it wasn’t so present, at least in common man mind, in the market segment handled by Google, Facebook, Amazon. Well, now this barrier is broken, Alibaba confirmed its willingness to quote itself  in Wall Street and analysts think that it could collect about 15 USD Bln IPO, and in the more optimistic forecast it could also exceed Facebook (16 USD Bln) with so a capitalization of about 100 USD Bln. Alibaba Group is a privately owned company based in Hangzhou –China, the Wall Street Journal defines Alibaba as a sort of Amazon, eBay (with Alibaba and Taobao) and Paypal (with Alipay) mix with a bunch of Google and obvious Chinese related stuff. It has an online of slight less than 800 million products and the money flow in an year is claimed by Alibaba about 170 USD Bln (1.1 trillion yuan) , more than Amazon and eBay summed.

The importance and of Alibaba has been also highlighted by the fact that its owner, Jack Ma (Ma Yun) was named the Financial Times’ 2013 Person of the Year because he personifies the Chinese internet referring to him as the “godfather of China’s scrappy entrepreneurial spirit.”

from http://www.telegraph.co.uk

Is the Chinese Smartphone Market already mature?

From an IDC press release we can see, through the figure below, that after 9 consecutive quarters of impressive growth, making China one of the top smartphone market in the world in 2013 Q4 we can see the first slow down. The numbers say that in such Quarter 90.8 million units has been shipped compared to 94.8 million in 2013 Q3, declining by 4.3% quarter on quarter. As we can see, these are still huge numbers, considering for example that India Market that is the number three in the World in 2013 and sees 15.06 Million of Smartphones shipped, but it is anyway a signal that even if is too early to warn it is interesting follows in the next months.

From Engadget’s guys and still IDC we can see that the Chinese Market is dominated by Android (it is not explicited but we can consider this as a reasonable assumption) from OS point of view and in detail by Samsung with 19% if we consider the Manufacturers. Lenovo in Q4 2013 has a good second place with 13% and after the acquisition of Motorola Mobile it is interesting to see in future if this will impact in market share. Coolpad, not so much known in Europe but the 3rd largest smartphone company in China and sixth-largest worldwide, has a good 11% of such big Market, and Huawei, that it is now an important player also in Europe, has the 10%. Apple with its 7% is waiting for the result of the launch with China Mobile.

Xiaomi, that in my opinion is one of the most interesting Manufacturer in Android environment is in the “other” sector considering PRC market and with a 3% considering Taiwan.

Last, let’s see the lack of Nokia in the pie graph and Nokia in the past was a very important vendor in China. We’ll see if the Normandy/Nokia X that is expected to be presented in MWC, Barcelona in the next week will move the market in the near future.

Another Brick Out of the Wall. Rumors about the possibility for IBM to sell its Chip branch

After PCs sold to Lenovo some days ago, new rumors on Big Blue.

The best source that I found on such possible deal is very interesting article from electronicsweekly.

The importance of such event is huge considering the history in semiconductor R&D that IBM has –and in my opinion also the strategic role  that such branch still has for the USA

Anyway, starting from the strict financial reasons we could see of a loss of lost $130 million last year possible other $130 million this year with a capital cost to stay in such market of  $5 billion, the mentioned article shows as possible interested buyers:

The list of the “obvious ones” sees Intel, TSMC, GlobalFoundries and Samsung, all of them with some reason to DON’T buy IBM chips.

Other possibilities are JVs with Apple (do you remember the RISC PowerPC?) or TowerJazz or some European or Chinese company or  -why not?- some Indian or Brazilian Company that need a boost in semiconductor market.

I have some perplexity that such IBM R&D will be in the near future in Chinese hands for eco-political reasons bu I fully agree with electronicsweekly that “Whatever the outcome of this, a chip industry without IBM will be a diminished industry”.

I suppose that will see next steps very soon.

Is it worth for Sony selling Vaio brand? And for Lenovo buying it? (update)

Rumors about the sales of PC sector by Sony are crowding internet in the last days. The brand owned by Japanese Company, the well known Vaio, is one of the most respected and appreciated in the World but recently it has been afflicted by the general weakness of PC Market.

As already analysed, the PC market is in transformation more than in decline and this transformation means that more of the common tasks done on a PC (e-mail, browsing, …) are now done in the device part of Mobile sectors (tablets, phablets and also smartphones). Sony is also present in Mobile Market with its brand Xperia that, contrary to PCs sector, is growing in the last time after buying the remaining part of what was Sony-Ericsson.

Market trends from Gartners Data elaboration

Vaio series already presented some tablet (or tablet-like) alternatives as Sony Vaio Duo, that really are well done devices, but it also has some tablet and phablets from Xperia brand.

Up to now, the approach that seems taken by Sony is to focusing the Xperia brand on Android OS and the Vaio on Windows OS. This approach in principle could be good also in case of announce of Windows Phone Smartphones, as some rumors. But is it worth having two main brands, meaning marketing, R&D effort,…? Probably not, especially when you can still sell Vaio brand for about 500 Million USD. Of course this will mean to refocus Xperia brand also on Windows Phone, but this is more feasible than having two brands partially overlapped.

Is it worth for Lenovo buying Sony Vaio? At a first glance, I would say no. Lenovo already have a well known brand in laptop business sector (probably the most known), the famous ThinkPad (formerly IBM) and recently it bought also the IBM server sector. The consumer PCs is taken with IdeaPad and Yoga series and even if not, at least in Europe, known as Vaio, it has a good success in the last year. Of course Vaio brand could add value and market share to Lenovo, but typically in such acquisition 1+1 < 2, so I expect that Lenovo simply buy the brand for avoiding a competitor and use the brand itself for some kind of rebranding of products without spend too much in R&D.

Anyway we’ll see soon, and in the meantime Sony shares this morning saw a god +4.58% also for such rumors.

Update: Reuters reports: ” Sony Corp is in talks with investment fund Japan Industrial Partners to sell its loss-making Vaio personal computer division, a source familiar with the matter said on Wednesday.

A new company would be set up by Japan Industrial Partners to take over the Vaio brand’s operations in Japan, according to the plan under consideration, the source said. Financial details and stakeholdings in the new entity were still being discussed.”

Sony shares, 5th Feb 2014

Android takes the Throne of Smarthones, is Lenovo capable to exploit it?

Interesting Data from Canalys about the Market situation in Smarphone and Mobile World that I suggest to see.
Canalys’ guys give us a useful lot of information that can help us to think what could be the future evolution of Market distribution about Manufacturers and OS.
In this post I start from the Smartphones shipped  Worldwide in 2012 and 2013 and we see the following picture:

Smart phones, Worldwide, units by platform, 2012 and 2013- source Canalys – http://www.canalys.com

 

In the figure above we can see some aspects:

1. The number of Smartphone units is quite 1 Billion that is, really, an important milestone.
2. Android confirms its first position and also increase its market share from 2012, in my calculation from 68% to 79%.
3. iOS don’t exploit the Market increment and even if the number of iPhones is augmented, the share is decreased from about 20% to 15%.
4. Windows Phone increase the shipment of about 90% but the market share in the 50 countries considered by Canalys is still 3.22% in 2013 and if we see other analysis we can see that the European countries are the places that appreciate such operating system.

Another bunch of data is the analysis of smartphones shipped by Lenovo vs the ones shipped by Motorola and Google (Nexus), and we can see that Lenovo already increased its volume from 23 million to 45 million, ehi guys: +90% (increasing the market share vs total from 3.4 to 4.5), Motorola -54% and Google Nexus quite stable.

Smart phones, Worldwide, units by vendor Lenovo/Motorola/google, 2012 and 2013 – data from Canalys

Lenovo at the moment Lenovo+Motorola bases its numbers in a value of 52Million of smartphones with a percentage of 5.22% and from this value we start to follow the Company in order to see if the Motorola adventure will be a good game for the Chinese Company.

 

 

 

Is it time for a Lenovo MicroTac? It is not only buying time for Google, rumors about Motorola sold to Lenovo (Update: Confirmed)

Update: confirmed by Google that Lenovo has bought Motorola Mobile. Google will hold the IPRs and it will have the 5% of Lenovo.
Google is for sure a Market Mover in the recent days because of its acquisition, but now it seems that the reason is the possibility to sell Motorola to Lenovo that in the last days has been another important player in the Market.
Lenovo in fact, already Last Thursday announced it would spend $2.3 billion to buy IBM’s x86 server business now it seems to make another goal with Motorola. It seems that a deal is expected to be announced shortly for about $3 billion in cash, stock and a deferred payment from Lenovo to Google.

The “old” Motorola Inc was split on 2008 in two branches: Motorola Mobility focused on  cell phone and cable television equipment company spun off  into an independent company at beginning of 2011 and acquired by Google for a huge amount of $12.5 billion. Motorola Solutions (NYSE:MSI) focused on  Government and Enterprise Business , that is considered the direct successor of Motorola, Inc. because of the previous mentioned spun off of Motorola Mobility. Network part was also sold to NSN (Nokia Solutions and Networks formerly Nokia Siemens Networks).

The sum spent for Motorola in these 2 years raises several questions, because only in last time some new smartphones with a certain appeal was announced as Moto X and Moto G, but for sure the $ 12.5 billions are not so justified neither with such products nor with IPRs.

Moto X

If the deal with Lenovo will be finalized, it is in my opinion an important step for the Chinese Company and not only for an acquisition for $3 Billion of a Company bought by Google with 12.5 $ Billion just less than 3 years ago. It is some time, following some rumors, that Lenovo is interested to improve its presence in Mobile sector and the brand Motorola, well known and not yet fully in decline could help so much Lenovo in such adventure.
In the meantime Lenovo, after IBM’s x86 server, and I want just remember that Lenovo already bought IBM PCs including the ThinkPad Series in 2004 with a very remarkable success in these years, has reorganized its business with some interesting aspects if we consider possible Motorola Mobility acquisition, as from Wall Street Journal, in the new structure, Lenovo will have four business groups:

PC, Mobile, Enterprise and an Ecosystem-and-cloud group that focuses on content and services for the company’s user base.

The interesting part is the Mobile sector that seems ready to take Motorola Business. I think that, if Lenovo will buy Motorola Mobility, the brand of course will be more Chinese than US based but if the approach will be the same for PC we could hope in good high-end phones (as ThinkPad in PCs) and good and affordable feature or low-end phones (as the IdeaPad or Yoga in PCs).

So will see if it is time for a Lenovo MicroTac.

Is PC dead? No, it is probably just changed

Let’s see some numbers about the PC and mobile devices shipment and forecasts.

Taking some recent tables from a press release (Gartner Says Worldwide PC Shipments Declined 6.9 Percent in Fourth Quarter of 2013)  from Gartner, that as usual is a very interesting source for market figures, we can understand that the traditional PC market is in decline in 2013 respect to 2012 and I think that this is quite under the eyes af all. If we see the comments made on such tables browsing the net, some sites highlighting this fact as a decline in the market at all, but I want to compare such tables with other numbers, always from Gartner, about the shipments of all mobile devices.

“The proverb says do not compare apples with oranges” someone could say, but I think that from some time the mobile devices could in some way overlap and substitute PCs and even if this is not applicable in all the environments, think about SW development, for other stuff like browsing, word processor writing, e-mailing, consumer user stuff via Apps, this is for sure true. This overlapping is also increasing if you see the newest Samsung Tablet Galaxy PRO with 8.4, 10.1 and 12.2 flavors and the rumors about an upcoming 12.9-inch iPad Pro that will make a further step in the replacement of PCs by Tablets.

Just starting from the title of two Garner’s news:

1) Gartner Says Worldwide Traditional PC, Tablet, Ultramobile and Mobile Phone Shipments On Pace to Grow 7.6 Percent in 2014

Vs

2) Gartner Says Worldwide PC Shipments Declined 6.9 Percent in Fourth Quarter of 2013

I would say that more than a decline there is a market moving and the devices that could do what up to some years ago were done only by traditional PCs including now also Tablets.

So, starting from PC market in which data includes desk-based PCs and mobile PCs, including mini-notebooks but not media tablets such as the iPad with data based on the shipments selling into channels

Table 1

we can put it in a visual form as follows:

In which it is clearly visible the loss of about 7% in terms of total shipments and also that among the others Lenovo and Dell are performing better than the Market.

If we see the preliminary Worldwide PC Vendor Unit Shipment Estimates for 2013, as in the table below, the situation for PC market is even worst.

Table 2

We can see that it is estimated a loss of about 10% in 2013 respect 2012 in PC shipments.

But… if we consider that not media tablets such as the iPad are included in data, and analyzing what the Gartner itself said about the Mobile Market we could make some additional considerations.

Table 3

The table 3, that is in line with the first table, if I aggregate PC and Other Ultramobiles I see  values comparable with the table 2 for 2012 and 2013 (350617 and 316537 thousand of units) for what could be considered in some way traditional PCs put, is useful for other aspects.
As I said above If I could consider Tablets as PC substitutes in some environments and taking in consideration that before iPAD Era the Tablets market wasn’t significative I can obtain the following table

Table 4

From above we can see that even if there is a decrease in the shipment of PC among the years, a decrease of PC+Other Ultramobiles except than in 2014-2015, the shipment of PC+Tables+other Ultramobiles has a positive trend also in 2012-2013 showing a +5.5%.

And if we add also the mobile phones and the total number of devices shipped, the positive trend is confirmed if we see the blu column representing the total number of devices shipped worldwide, and the fact that the market is clearly dominated by mobile smartphones (grey column).

So the conclusion of this rough considerations – and if something is not clear or wrong, please comment, is that even if there is a Market decline for PCs and it probably will continue in the next years, this is just an indication that tasks are now spread among more devices and if the PC Manufacturer want survive they have to consider it, but if we see Dell, Sony, Lenovo, Apple, … this seems on track.