Smartphone Buyer Fatigue Hampering Growth

Apple and Samsung dominate global smartphone markets with several new flagship handsets unveiled each year.

Has The iPhone Peaked in The U.S.?

Apple’s vice like grip in the US smartphone market is falling off as sales of the overpriced gadgets slump.

Research outfit Kantar Worldpanel ComTech said the 2.3 per cent drop in US sales had been covered by rises in China, Japan and Australia.

But the fact that Apple’s home ground is the US and that it has become increasingly dependent on its iPhone, this statistic does not bode well, particularly as the company depends on continual growth to maintain its share price the whole lot is starting become unstuck.

For the second quarter of 2015, iPhone sales grew by 2.1 percent from the same quarter last year across Europe’s five biggest markets, namely the UK, Germany, France, Italy and Spain. Growth was strongest in the UK at 5.5 percent and weakest in Italy at only 0.1 percent. Beyond Europe, iPhone sales surged by 9.1 per cent  in Australia, 7.3 percent in China and 2.7 percent in Japan.

It is worthwhile pointing that the European growth outside the UK, Australia and China is more indicative of a flat market rather than actual growth.

A possible reason for the fall in the US is better competition from Android where Apple’s Android rivals provided a tougher fight.

Carolina Milanesi, chief of research at Kantar Worldpanel ComTech, said in a press release. “In the U.S., as we forecasted last month, Android’s growth continued in the quarter ending June 30, with both Samsung and LG increasing their share sequentially. Forty-three percent of all Android buyers mentioned a ‘good deal on the price of the phone’ as the main purchase driver for their new device.”

“Android in the U.S. is undergoing its strongest consolidation yet, with Samsung and LG now accounting for 78 percent of all Android sales,” Milanesi added. “LG is the real success story of the quarter. Not only did it double its share of the US smartphone market once again, but it was also able, for the first time, to acquire more first-time smartphone buyers than Samsung.”

Screen size was the main driver for Android buyers across Europe, according to Dominic Sunnebo, business unit director at Kantar. Samsung and LG both sell big-screen “phablet” phones. Samsung’s Galaxy Note 4 sports a 5.7-inch screen, while LG’s G4 packs in a 5.5-inch screen.

Though the iPhone 6 Plus also uses a 5.5-inch display, iOS buyers are driven by a wider range of factors, Sunnebo said, including “phone reliability and durability, as well as the quality of the materials.”

Of course if you are member of Tame Apple Press you will forget to report the news and say the opposite and claim that the iPhone’s wonderful sales are a problem.

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Cheaper Windows Phones Forthcoming

Lower priced smartphones running Microsoft’s Windows Phone operating system are on the way, according to Microsoft.

Speaking at the Computex trade show in Taipei, Microsoft’s Nick Parker, who handles the company’s partnerships with device makers, said the new handsets could be out by the end of the year.

Compared to current models, which are in the “fours, fives and sixes,” he said referring to prices between $400 and $699, the new phones would have price points in the “ones, twos and threes.”

Asked to clarify if he was referring to end-market prices without carrier subsidies, Parker said he was.

He didn’t identify the manufacturers that would be bringing the phones to market, but there’s a good chance they are among nine companies Microsoft signed up to its Windows Phone development program earlier this year.

In addition to existing partners Nokia, Samsung, HTC and Huawei, Microsoft added Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE.

Some of the new partners have significant market share in developing countries where phones generally have lower prices than in developed markets.

Microsoft launched the latest version of its Windows Phone operating system, Windows Phone 8, in late 2012 to critical praise. The operating system was slow to catch on with consumers though, perhaps due to the absence of several popular apps on the platform, but has been slowly increasing its market share.

Windows Phone had a 3 percent share of the smartphone market in the fourth quarter of 2013, up from 2.6 percent in the last three months of 2012, according to IDC. In contrast, Google’s Android dominated the smartphone market at the end of 2013 with a 78.1 percent share. Apple’s iOS was in second place at 17.6 percent.

IDC forecasts Windows Phone will continue to increase its market share to hit 7 percent in 2018.

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Is China Hurting U.S. Vendors?

Shipments of servers from Chinese vendors grew at a rapid pace while the top server vendors in the U.S. declined during the first quarter of this year.

Worldwide server shipments were 2.3 million units during the first quarter, growing by just 1.4 percent compared to the same quarter last year, according to Gartner.

Growth was driven by Chinese server vendors Huawei and Inspur Electronics, which were ranked fourth and fifth, respectively, behind the declining Hewlett-Packard, Dell and IBM.

Huawei has been in the top five for server shipments for more than a year, but Inspur Electronics is a new entrant. Inspur builds blade servers, rack servers and supercomputers, and is best known for being involved in the construction of China’s Tianhe-2, which is currently the world’s fastest supercomputer, according to Top500.org.

Chinese servers partly benefitted from the 18 percent shipment growth in the Asia-Pacific region, while shipments in other regions declined, Gartner said in a statement.

Server buying trends have changed in recent years. Companies like Facebook, Google and Amazon, which buy servers by the thousands, are bypassing established server makers and purchasing hardware directly from manufacturers like Quanta and Inventec. That trend in part led to the establishment of the Open Compute Project, a Facebook-led organization that provides server reference designs so companies can design data-center hardware in-house.

Similarly, Chinese cloud providers are building mega data centers and buying servers from local vendors instead of going to the big name brands, said Patrick Moorhead, analyst with Moor Insights and Strategy.

The trend of buying locally is partly due to the security tension between the U.S. and China, but servers from Chinese companies are also cheaper, Moorhead said.

The enterprise infrastructure is also being built out in China, resulting in a big demand for servers. There is also a growing demand for servers from little-known vendors based in Asia — also known as “white box” vendors — in other regions, Moorhead said.

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MediaTek To Offer New LTE SoC

MediaTek has shown off one of its most interesting SoC designs to date at the China Electronic Information Expo. The MT6595 was announced a while ago, but this is apparently the first time MediaTek showcased it in action.

It is a big.LITTLE octa-core with integrated LTE support. It has four Cortex A17 cores backed by four Cortex A7 cores and it can hit 2.2GHz. The GPU of choice is the PowerVR G6200. It supports 2K4K video playback and recording, as well as H.265. It can deal with a 20-megapixel camera, too.

The really interesting bit is the modem. It can handle TD-LTE/FDD-LTE/WCDMA/TD-SCDMA/GSM networks, hence the company claims it is the first octa-core with on board LTE. Qualcomm has already announced an LTE-enabled octa-core, but it won’t be ready anytime soon. The MT6595 will – it is expected to show up in actual devices very soon.

Of course, MediaTek is going after a different market. Qualcomm is building the meanest possible chip with four 64-bit Cortex A57 cores and four A53 cores, while MediaTek is keeping the MT6595 somewhat simpler, with smaller 32-bit cores.

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Can MediaTek Challenge Qualcomm?

A top analyst has said that Qualcomm has nothing to fear from Media Tek’s announcement that it is gunning for the smartphone market.

Qualcomm rules North America and Europe while right now MediaTek is best known for being the leading player in the Chinese market. Now there are signs that MediaTek seems to have reached the maximum market share that they can achieve in China and will be looking to go after Qualcomm in other markets.

But Jefferies analyst Peter Misek views MediaTek’s cunning plan as more of a medium to long-term threat to Qualcomm versus a near-term threat.

He commented, “The high-end smartphone market is saturated and while we believe that pricing and subsidy pressure will become more severe globally, Qualcomm has significant opportunities through integration, iPhone 6, and royalty collections in China.”

Of course it is optimistic to think that the iPhone 6 will do well in China. Many analysts have lost their lunch money betting on Jobs’ Mob doing anything in China.

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MediaTek’s Octa-Core Processor Tested

MediaTek raised quite a few eyebrows earlier this year when it announced it would build the world’s first proper ARM octa-core, not a big.LITTLE design. The MT6592 has now popped up on a Chinese site, with the first Antutu results.

It scored 25,496, which places it behind the 1.7GHz Snapdragon in the HTC One, but it’s still a lot faster than the Nexus 4’s Qualcomm APQ8064, although throttling may have something to do with that. The score seems too high, but not long after the results emerged, a number of mobile sites started talking about disappointing results, claiming that MediaTek’s octa-core was somehow supposed to end up on a par with Samsung’s latest Exynos 5 big.LITTLE chip and the Qualcomm 800.

This of course is utter rubbish and FUD of the highest order.

The 28nm MT6592 is indeed an octa-core, but it has eight A7 cores, not a combo of A15 and A7 cores. The A7 is about one fifth of the die area of an A15 and according to ARM it consumes one quarter to one fifth of the power, making such comparisons asinine. In other words, MediaTek’s octa-core should end up a lot smaller and cheaper than a quad A15, maybe even a quad A12. That is why we find the 25,496 result hard to believe – it should be less, not more. For example, the Tegra 4 on Shield hits about 36,000, yet it’s a much bigger chip, on a device with more RAM.

The benchmarked chip ran at 1.7GHz, but MediaTek said the MT6592 should have no trouble hitting 2GHz, which could make it faster than a Snapdragon 600. What’s more, the tested device featured 1GB of RAM, 720p display and a Mali-450 GPU, so it is clearly not high-end.

However, the big problem for MediaTek’s curious new SoC is the sheer number of cores. Most apps simply can’t put them to good use and unless MediaTek has a clever trick up its sleeve, the chip might not be nearly as fast in real world applications. It does look promising in benchmarks, though.

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3G And 4G Modems Pose Security Threats

Researchers Nikita Tarakanov and Oleg Kupreev analyzed the security of 3G/4G USB modems obtained from Russian operators for the past several months. Their findings were presented Thursday at the Black Hat Europe 2013 security conference in Amsterdam.

Most 3G/4G modems used in Russia, Europe, and probably elsewhere in the world, are made by Chinese hardware manufacturers Huawei and ZTE, and are branded with the mobile operators’ logos and trademarks, Tarakanov said. Because of this, even if the research was done primarily on Huawei modems from Russian operators, the results should be relevant in other parts of the world as well, he said.

Tarakanov said that they weren’t able to test baseband attacks against the Qualcomm chips found inside the modems because it’s illegal in Russia to operate your own GSM base station if you’re not an intelligence agency or a telecom operator. “We’ll probably have to move to another country for a few months to do it,” he said.

There’s still a lot to investigate in terms of the hardware’s security. For example, the SoC (system on a chip) used in many modems has Bluetooth capability that is disabled from the firmware, but it might be possible to enable it, the researcher said.

For now, the researchers tested the software preloaded on the modems and found multiple ways to attack it or to use it in attacks.

For one, it’s easy to make an image of the USB modem’s file system, modify it and write it on the modem again. There’s a tool available from Huawei to do modem backup and restore, but there are also free tools that support modems from other manufacturers, Tarakanov said.

Malware running on the computer could detect the model and version of the active 3G modem and could write an image with malicious customizations to it using such tools. That modem would then compromise any computer it’s used on.

The researchers also found a possible mass attack vector. Once installed on a computer, the modem application — at least the one from Huawei — checks periodically for updates from a single server, Tarakanov said. Software branded for a specific operator searchers for updates in a server directory specific to that operator.

An attacker who manages to compromise this update server, can launch mass attacks against users from many operators, Tarakanov said. Huawei 3G modems from several different Russian operators used the same server, but there might be other update servers for other countries, he said.

Research in this area is just at the beginning and there’s more to investigate, Tarakanov said. Someone has to do it because many new laptops come with 3G/4G modems directly built in and people should know if they’re a security threat.

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Baidu Heads To The Cloud

China’s largest search engine Baidu said on Monday that they would provide 30GB of free cloud storage to Android devices built with certain Qualcomm chips, in what’s the latest move by the company to build a presence in the country’s mobile services sector.

Baidu’s limited-time offer applies in China to two of Qualcomm’s latest chips, the Snapdragon S4 MSM 8×25 processor, and the Snapdragon S4 MSM 8x25Q processor. Users activating Baidu’s cloud service will receive 15GB of free cloud storage over the device’s lifetime, and an additional 15GB of storage free for one year.

As of Monday phones containing the chips, from Chinese manufacturers including Lenovo and Huawei, will ship with the free Baidu cloud storage enabled as a result of the partnership with Qualcomm.

Baidu is offering the free storage after the company in September declared China’s mobile Internet space as its next major focus, and announced a $1.6 billion investment to build a new cloud computing center.

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Did Huawei Steal From Cisco?

Huawei has replied to US rival Cisco after the networking firm made allegations about the Chinese company relating to a lawsuit between the two firms.

The case dates back to 2003 and relates to the alleged theft of source code by Huawei from Cisco for use in its networking products. The case was settled confidentially out of court.

Cisco complained about what it saw as a willful distortion of the facts of the case after Huawei’s chief representative in the US, Charles Ding, claimed the outcome was that Cisco stood down over its allegations.

In response, Cisco released excerpts from a report by an independent analyst that was used to form the basis of a settlement, which Cisco said proved Huawei had used its source code in its products.

However, in a statement sent to The INQUIRER, Huawei said it was “disappointed with the continued rhetoric from Cisco” and claimed there was no basis to its argument.

“With respect to the lawsuit which took place about 10 years ago, the fact is the court dismissed the case, upon a joint stipulation of the parties, after the neutral expert’s review. This shows Cisco’s present allegations have no merit,” it said.

Furthermore, the firm also said it didn’t believe Cisco had the right to report elements of the review.

“We don’t think Ding violated the agreement between Cisco and Huawei, which had a negotiated confidentiality provision in it,” it said. “Cisco’s general counsel’s selective and misleading cropping of a confidential report from the Neutral Expert may have violated that provision.”

Huawei added that it would consider releasing more information on the case, though, in an effort to paint a more complete picture of the case.

“However, since Cisco has put selected snippets into the public domain, the truth may require that more than carefully selected quotes be put in the public record. Huawei is exploring the best way to accomplish that goal,” it said.

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