360° Coverage : Phone makers look to emerging markets for growth

2 Updates

Phone makers look to emerging markets for growth

Feb 25 2014, 7:02am CST | by

BARCELONA, Spain (AP) — Here's the rub for companies: A good part of the key markets they serve already own smartphones and use them to connect various Internet services. How do you...

Filed under: news

 
 
 

34 weeks ago

Phone makers look to emerging markets for growth

Feb 25 2014, 7:02am CST | by

BARCELONA, Spain (AP) — Here's the rub for companies: A good part of the key markets they serve already own smartphones and use them to connect various Internet services. How do you grow from there?

Companies from Facebook to Firefox are looking to emerging markets for the next few billion people. They are not only targeting the obvious high-population countries such as India and China, but also see potential in Latin America, Africa and just about everywhere beyond the U.S., Canada, western Europe and a few Asian nations.

One message has been clear this week at the Mobile World Congress wireless show in Barcelona, Spain: Even as the affluent crave the latest iPhones or Android phones, most of the world can't afford the hundreds of dollars they cost.

So there's been a push to get mobile devices cheap enough to reach emerging markets without sacrificing so much performance that first-time smartphone owners will give up on the Internet and forgo a second smartphone down the road.

It's a delicate balance.

When Motorola Mobility introduced the low-cost Moto G smartphone last fall, the company emphasized how it was bringing the features of high-end smartphones to a device that starts at just $179. But even then, it had to sacrifice camera resolution and connectivity to the faster 4G LTE cellular networks. And $179 is still expensive for many.

At the Barcelona show this week, Nokia Corp. unveiled the Nokia X series, starting at 89 euros ($122).

"In the growth market . a couple of bucks make a huge difference," said Timo Toikkanen, Nokia's executive vice president for mobile phones.

Still too expensive? Try some of the $50 to $70 smartphones based on Firefox OS, a system adapted from the popular Firefox Web browser. Mozilla, the organization behind Firefox, announced a partnership with Chinese chipmaker Spreadtrum Communications Inc. to create a blueprint for any phone maker to make $25 smartphones.

Microsoft Corp., meanwhile, said it was relaxing hardware requirements to keep phone costs down. For instance, phones no longer need physical camera and control buttons. Those can now be done through software instead.

It is also working with Qualcomm Inc. on blueprints for any phone maker to quickly design a Windows phone. While global brands such as Apple and Samsung reign in industrialized countries, smaller, regional manufacturers thrive in emerging markets because of lower distribution costs and better tailoring to local needs.

Internet services also see opportunities in finding the next few billions in emerging markets.

In fact, getting the smartphone and the connectivity is just the beginning, Facebook CEO Mark Zuckerberg said during Monday's keynote. More important, he said, is giving people a reason to connect: basic financial services, access to health care information and educational materials. He sees Facebook as the "on ramp" to all those services.

In many ways, emerging markets provide unmatched opportunities.

Apple has insisted on making premium smartphones. Even last fall's iPhone 5c was just $100 cheaper, at $549, than the more-advanced iPhone 5s. That's way beyond the reach of many people in poorer countries.

"They are focusing on the premium segment," Lenovo CEO Yang Yuanqing told The Associated Press. "Their market has become mature, saturated. So now, if you want to further grow, you must focus on those emerging markets, particular those poor people."

He said Lenovo releases 40 or 50 smartphones a year to meet the diversity of needs in those markets.

And making cheap phones available will help companies expand in developed countries, too. Even in the U.S., not everyone wants or can afford a high-end smartphone, Sony Mobile President Kunimasa Suzuki said in an interview.

But emerging markets also pose challenges unfamiliar in the industrialized world.

The easy one to solve is to support two SIM cards in the same phone. Pricing and plans vary so much in emerging markets that it's common for people to use different carriers for different circumstances. The Moto G, the Nokia X and Sony's new Xperia M2 phone support that, and Microsoft will enable that in Windows Phone this spring.

More challenging is dealing with expensive data connections, something Zuckerberg posed as a bigger barrier than smartphone affordability. Firefox phones have FM radio tuners built in so owners won't waste data connection on streaming services, while another emerging system, Ubuntu, tries to make sure it has apps that work well offline.

And to address the lack of credit cards in emerging markets, Nokia replaced Android's card-based app store with one that permits billing directly to mobile operators.

Ultimately, companies need to figure out what to sacrifice to bring costs down. Forget high-resolution video or a giant screen, such as the 5.1-inch display on the Samsung Galaxy S5 that was announced Monday. Not only are those features expensive, they require faster processors and longer battery life, adding to expenses.

Cellular connectivity through 4G is also something often dropped, as many emerging markets are lucky just to have the slower 3G.

But what's good enough? Leo Li, CEO of Spreadtrum, said phones using his company's blueprints work as good as Apple's iPhone 4. But that's a 4-year-old phone. Nonetheless, he said performance is better than the basic phones that first-timers are upgrading from.

By upgrading, people can truly access the Web and aren't limited to the few services that phone makers already included.

"To spend a little more for a true Web experience is pretty good, even if the resolution isn't as good as the iPhone," said Jay Sullivan, Mozilla's chief operating officer. "People want to be connected. They want to be online and have access to all the information and all the things we do, like maps, as they explore new places."

___

AP Technology Writer Barbara Ortutay in New York contributed to this story.

Source: AP Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20,000 by 30 pe ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and MH17 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/31" rel="author">Associated Press</a>
The Associated Press (AP) is one of the largest and most trusted sources of independent newsgathering, supplying a steady stream of news to its members, international subscribers and commercial customers.

 

blog comments powered by Disqus

Latest stories

Ebola not to upset Africa's overall growth: IMF
Harare, Oct 23 (IANS) The Ebola outbreak in West Africa, which has claimed 4,500 lives, will have minimum impact on continent's overall growth, a top International Monetary Fund (IMF) official said Thursday.
 
 
Second MERS case reported in Qatar
Doha, Oct 23 (IANS) A 43-year-old man in Qatar has tested positive for Middle East Respiratory Syndrome (MERS) in the second confirmed case of the deadly virus in 10 days, media reported Thursday.
 
 
OPEC daily basket price falls again
Vienna, Oct 23 (IANS/WAM) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $81.94 a barrel Wednesday compared to $82.09 Tuesday, the OPEC Secretariat said.
 
 
Music therapy reduces depression in kids, adolescents
London, Oct 23 (IANS) Music therapy reduces depression in children and adolescents with behavioural and emotional problems, a study found.
 
 
 

Latest from the Network

Second MERS case reported in Qatar
Doha, Oct 23 (IANS) A 43-year-old man in Qatar has tested positive for Middle East Respiratory Syndrome (MERS) in the second confirmed case of the deadly virus in 10 days, media reported Thursday. The patient had...
Read more on Business Balla
 
Two people die in Pakistan bomb blast
Islamabad, Oct 23 (IANS) At least two people were killed and 12 others injured in an explosion that took place in Pakistan's Balochistan province Thursday, media reported. The bomb was planted on a motorcycle, Dawn...
Read more on Politics Balla
 
Trott extends contract with Warwickshire till 2017
London, Oct 23 (IANS) England batsman Jonathan Trott, whose mental issues led to his abrupt departure from last winter's Ashes tour, has confirmed his successful comeback to competitive cricket by signing a new three-...
Read more on Sport Balla
 
Srikanth, Kashyap big movers in BWF rankings
Kuala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest Badminton World Federation (BWF) rankings released Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Alvin Stardust dead
London, Oct 23 (IANS) English singer Alvin Stardust died after a short illness. He was 72. Stardust's manager confirmed the news about his demise Thursday, reports mirror.co.uk. He was recently diagnosed with...
Read more on Celebrity Balla
 
Indian man reunited with family after 40 years
Dubai, Oct 23 (IANS) An Indian man, who had disappeared from his hometown in Kerala nearly 40 years ago, has been found by his family at a hospital in Dubai in the UAE, a newspaper report said. Now in his 60s, Abdulla...
Read more on Politics Balla
 
Srikanth, Kashyap, Saina rise in world rankings
Kala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest released Badminton World Federation (BWF) rankings Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Flintoff signs for Big Bash side Brisbane Heat
Brisbane, Oct 23 (IANS) Former England captain and all-rounder Andrew Flintoff, who retired from international cricket in 2009, Wednesday confirmed that he will play for Brisbane Heat in the Big Bash League (BBL) this...
Read more on Sport Balla
 
OPEC daily basket price falls again
Vienna, Oct 23 (IANS/WAM) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $81.94 a barrel Wednesday compared to $82.09 Tuesday, the OPEC Secretariat said. The new OPEC...
Read more on Business Balla
 
Lopez to sign multi-million dollar deal?
Los Angeles, Oct 23 (IANS) Singer-actress Jennifer Lopez is reportedly in the final stages of securing a multi-million dollar deal to perform in Las Vegas. The 45-year-old is being offered $350,000 per show at The...
Read more on Celebrity Balla