In less than 1 month, Apple will launch its Apple iWatch. And the question is : will it be a success?
This is always difficult to know if a new product will be a success or not … But there is 1 thing to understand when we launch a new product : what are the main failure of the competitor products?
And Samsung Gear, the main competitor is not completely success. Do you see nowadays, in the subway, in the street, people with the Samsung Gear Watch? … And the problem is not that the Samsung smartphones are not the leader, isn’t it? In 2013/2014, the average Worldwide market share of Samsung was about 30% ; in January 2015, nevertheless, the market share was reduced to 20%, decreasing from 30% (in ratio).
But, nevertheless, Samsung with Samsung Gear is the leader of smartwatches sold in 2014 with 1,2 millions of units.
Is people satisfied by their smartwatch ? … No!
3 main topics are not relevant for the Samsung watch:
- Autonomy : with 1 day of autonomy, you always have to recharge the battery of your watch … And if you are using your connectivity at the maximum, it is less than 4 hours …
- Apps: there is not a lot of usage for the Samsung watch : we are speak about 20 to 30 Apps, and not all of them are good
- Connectivity: with Bluetooth, the connectivity is not good and not secure …
- Sensors : camera, sound, … nothing incredible ! Less than a smartphone !!!
With Apple, what do we know:
- Autonomy : 18 hours … probably in the same condition as Samsung ; in full usage of connectivity, 3 hours … as rumor said !
- Apps : 34 Apps advertised on Apple Store for the moment ; and nothing that seems to be a revolution. What is the real interest to have a new connected object with a computer inside with so few Apps. To be dramatically upgraded!
- Connectivity : with Wifi in addition of Bluetooth, we can expect better connectivity, more secure than Samsung … Nevertheless, this connectivity between a smartphone and a watch will remain via Bluetooth … This is only connectivity with public Wifi area that could accelerate the connectivity; not so sure that it will be sufficient !
- Sensors : no revolution compare to Samsung Gear ; how to measure diabetes, arterial pressure, temperature, virus and batteries overview … and more!
To conclude, Apple could probably sell around 1 million of iWatch in 2015 … but not more than Samsung Gear in 2014. You will not see 100 millions of iWatch sold, as for smartphones.
Why? No revolution of this object …
What could be the future of the revolution ?
- Autonomy : 1 month, 3 months, 1 year or … without any recharge! How to do that: reduction of energy usage by 10 or 100 by thinking the OS differently than for a smartphone. And use the energy to recharge with heat of the skin, solar and moving of the hand. If the autonomy is not the same or better than for a non connected watch, what is the real interest to
- Apps : minimum of 1000 Apps to have a real added of these connected objects with connection to bank, credit card, insurance, police, hospital …
- Connectivity : without 3G / 4G direct connection with military encryption is a must do for this type of objects
- Sensors : measure of health situation is a must do
Of course, Apple iWatch will not be completely a failure. And having 1 million of iWatch sold this year is not so bad. But this is not the revolution that Apple is pushing with its marketing. The connected revolution is not really ongoing with this object ; Apple just not would like to be outside the competition.
And the real revolutionary smartwatch remains to be invented with, this time, a lot of innovations.
There are critics of Samsung who argue that its success is mostly due to copying and then tweaking the innovations of others. There is a good deal of truth in this, especially around the early Galaxy designs.
But Samsung is a global leader in screen technology, TVs, batteries, and chip design. So in terms of innovation it is doing a lot right. But we know very little about how.
We know how its competitors innovate – we look at Google and see the 20% time, the big adjacencies, the search for disruption, the bold statements about the future of autos, for example.
We know that within Apple when a project gets to a critical stage, the company assigns three teams to its development, each of which competes against the other. We know the importance of design thinking, an attribute Google is learning about. And of customer experience.
What does Samsung do in comparison? How does it line up against these American masters or conversely are Google and Apple good enough to compete against Samsung?
There’s no doubt that patent circumvention is an aim when Samsung innovates. From its early forays into innovation, competing against Toshiba in washing and drying machines, Samsung has chased patents in areas where its competitors appear to have protection and has oriented its innovation efforts to find new patentable ideas in its competitors’ backyard.
Samsung has nurtured a close relationship with the Russian Academy of Science since then. There is a framework agreement between the two parties. And the Korean Government has its own agreement under which it funds Korean small businesses to develop projects on the back of Academy research. Samsung meanwhile appears to help the Academy to increase its patent count and to exploit its inventions.
The relationship with Russian science was the introduction of TRIZ, an innovation method that Samsung adopted from 2000 onwards but which only reached American companies from the mid-2000s onwards.
TRIZ is a methodology for systematic problem solving. Typical of its origins in Russia, it asks users to seek the contradictions in current technological conditions and customer needs and to imagine an ideal state that innovation should drive towards.
Samsung had early successes with TRIZ, saving over $100 million in its first few projects. It was also adopting Six Sigma at the time.
But it was TRIZ that became the bedrock of innovation at Samsung. And it was introduced at Samsung by Russian engineers whom Samsung had hired into its Seoul Labs in the early 2000s.
In 2003 TRIZ led to 50 new patents for Samsung and in 2004 one project alone, a DVD pick-up innovation, saved Samsung over $100 million. TRIZ is now an obligatory skill set if you want to advance within Samsung.
At the Samsung Advanced Institute for Technology, Hyo June Kim, who wrote The Theory of Inventive Problem Solving, a foundation text on TRIZ published in Korean, trained over 1,000 engineers across Samsung companies in 2004 alone.
At Samsung even the subsidiary CEO has to take TRIZ training. From looking at the various presentations I estimate that engineers get about 15 days of training plus 7 days specific project work. That’s quite an investment in method and people.
So the answer to why Samsung is so innovative – with at least two major product announcements this month – is that it is heavily invested in its people, it goes in search of special talent wherever it can find it, but specifically made astute moves into Russia early on; it targets its innovations towards specific competitors and patents that it wants to overhaul (as Apple did under Jobs); and it has an innovation culture based on extensive training, repeatable methodology and creative elite formation, backed by the highest levels of management.
2013: Global SMARTPHONE market share: Samsung 32.3%, Apple 15.5%, Huawei 5.1%, LG 4.8% Lenovo 4.6%.
Global Smartphone Shipments Reach a Record 990 Million Units in 2013.
Global smartphone shipments grew 41 percent annually to reach a record 990 million units in 2013. Huawei, Lenovo and LG were the star performers, capturing a combined 14 percent marketshare worldwide and closing the gap on Apple.
Global smartphone shipments grew 34 percent annually from 217.0 million units in Q4 2012 to 290.2 million in Q4 2013. Global smartphone shipments for the full year were just shy of the 1 billion level, but they nonetheless reached a record 990.0 million units in 2013, increasing from 700.1 million in 2012. Global smartphone shipment growth decreased slightly from 43 percent in 2012 to 41% in 2013, due to high penetration in some major markets like the United States.
Samsung shipped a record 319.8 million smartphones worldwide and captured 32 percent marketshare in 2013. This was the largest number of units ever shipped by a smartphone vendor in a single year. Despite tough competition from a long tail of Chinese and American brands, Samsung continued to deliver numerous hit models, such as the Galaxy S4 and Note 3.
Apple grew a sluggish 13 percent annually and shipped 153.4 million smartphones worldwide for 15 percent marketshare in 2013, dipping from the 19 percent level recorded in 2012. Apple remains strong in the high-end smartphone segment, but a lack of presence in the low-end category is costing it lost volumes in fast-growing emerging markets such as India.
Samsung and Apple together accounted for almost half of all smartphones shipped worldwide in 2013. Large marketing budgets, extensive distribution channels and attractive product portfolios have enabled Samsung and Apple to maintain their grip on the smartphone industry. However, there is clearly now more competition coming from the second-tier smartphone brands.
Huawei, LG and Lenovo each grew their smartphone shipments around two times faster than the global industry average and captured a combined 14 percent marketshare. Huawei is expanding swiftly in Europe, while LG’s Optimus range is proving popular in Latin America, and Lenovo’s Android models are selling at competitive price-points across China. Samsung and Apple will need to fight hard to hold off these and other hungry challengers during 2014.
In parallel of the Google Glass developed by Google and that could be sold starting 2014 or 2015, it seems that Apple is working on a new Apple patent for glasses recently discovered, detailing the project “iGlass” as we call them. Apple could work on reality augmented glasses projects since 2008.
These glasses are mounted in HMD (Head Mounted Display) or a display to the eye. HMD has an OLED screens or two with magnifying lenses and other optical elements associated. Lenses and other components are used to give the user a view image far as not to tire the eye. This is explained in the preamble Apple.
Currently, there are HMDs for military or engineers to have some first-hand information as geographical data or stereoscopic representations (techniques to reproduce a depth perception from two planar images) from CAD drawings.
The “iGlass” could, using a processor, display source images from external sources. This means that the iPhone could serve as a source eyeglasses for example. Apple glasses are therefore an accessory in addition to your device. So most of the applications running on your iPhone or iPod could work with your glasses.
To conclude, the HMD is revolutionary and allows the user to adjust the glasses to his vision and thus enjoy a unique experience.
iGlass would be probably introduced with other connected devices like iTV and iWatch, using contextual computing concepts with multi sensors management.
Worldwide, IDC estimates 76.9 million tablets were shipped in Q4 2013, which comes out to 62.4 percent growth over Q3 2013 and 28.2 percent on Q4 2012. In all of 2013, 217.1 million units were shipped, up from 144.2 million in 2012.
IDC’s latest Q4 2013 report of global tablet shipments showed only Lenovo and Samsung increased their market share among the top five brands.
Apple still holds a firm position at the top with 33.8 percent of the market, but that figure fell 4.4 percent year-on-year. South Korea’s Samsung, in second place, gained a hefty 5.8 percent of the market and shipments grew 85.9 percent year-on-year. China’s Lenovo rounded out the top five growing from 1.3 to 4.4 percent market share. That might not seem like much, but Lenovo’s shipments more than tripled in the past year.
Lenovo’s access to the Chinese whitebox manufacturing infrastructure has helped it drive more low-priced tablet products into the market; the company’s strength in emerging markets, and its increased market share in adjoining markets such as PCs and smartphones, makes it well positioned to see additional tablet gains in 2014.
Amazon and Asus make up the remaining spots in the top five. Amazon’s market share dipped from 9.9 to 7.6 percent, while Asus held a steady 5.1 percent.
Flexible OLED displays launched in January
In January 2013 Samsung officially launched their flexible OLED displays, calling them YOUM displays. YOUM panels are bendable – but it’s likely that the first products to use those displays will actually be rigid. The display can be “curved” thought. A plastic based AMOLED will also be shatterproof, and also lighter and thinner compared to glass based OLEDs.
1st product using flexible display in October
In October 2013, Samsung announced the world’s first product to use a flexible OLED display – the Galaxy Round curved smartphone. This is an Android 4.3 smartphone similar to the Galaxy Note 3, with the major feature being the 5.7″ Full-HD curved flexible display; samsung simply refers to it as a flexible Super AMOLED, strangely they are not using the YOUM brand.
Flexible OLEDs are lightier and thinner compared to glass-based panels, and they should also be much more durable. In fact in the past they were said to be shatterproof, although Samsung did not mention this during the Galaxy Round release.
When will we see the first YOUM product?
As we said, in October 2013 Samsung finally launched the first flexible OLED product, although this was not branded as YOUM. Samsung announced they have started to mass produce flexible OLEDs – 5.7″ Full-HD panels.
Samsung currently capacity is about 8,000 5.5-Gen sheets, which is about 1-1.5 million 5″ panels a month assuming 100% yield. But they are producing larger panels, yields won’t be that high and the line is also used for R&D which means that actual production will be a few hundreds of thousands of panels a month.
As you can see, Samsung’s capacity is very limited; consider the fact that they currently make around 10 million 5″ AMOLEDs in a month for the Galaxy S4. So at first Samsung will not use these panels in a mass market phone. As we said, some reports suggest that Samsung will unveil a Galaxy Note 3 variant with a flexible OLED – this phone will be lighter, thinner and more durable than the regular Note 3.
- The Samsung Galaxy Round: Why the Curved Smartphone Display is Truly Innovative (thedroidguy.com)
- Samsung Galaxy Round with flexible display likely to debut soon (thenewstribe.com)
- What you should know about flexible displays (FAQ) (news.cnet.com)
- Flexible Displays: FAQ (business2community.com)
- Samsung Galaxy Round tipped to come this week with flexible display (androidcommunity.com)
- LG begins mass production of flexible OLED smartphone displays (androidos.in)
Despite beating Wall Street expectations in terms of shipment volumes, Apple’s share in the worldwide smartphone operating system market posted a year-over-year decline during the second quarter of 2013 (2Q13). Meanwhile, Android and Windows Phone both managed slight increases during the same period. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 236.4 million smartphones in 2Q13, up 51.3% from the 156.2 million units shipped in 2Q12. Second quarter shipments grew 9.3% when compared to the 216.3 million units shipped in 1Q13.
Smartphone OS Highlights
Android maintained its leadership position, with strong contributions from Samsung and its Galaxy S4. Not to be overlooked were LG and Chinese vendors Huawei, Lenovo, and ZTE, which each recorded double-digit shipment volumes in the millions. Combined, these vendors accounted for 62.5% of all Android-powered smartphone shipments during the quarter. Still, the remaining vendors within the Android ecosystem should not be overlooked, as many have developed a strong local presence within key developing markets.
iOS finished the quarter as the clear number 2 operating system, showing that, even without new product launches, demand remains strong. Moreover, Apple added new mobile operators to its camp, boosting short-term volumes and cementing long-term end-user relationships. What remains to be seen is how the new iOS 7 will be received once it reaches the market later this year, as much of the look and feel of the user interface has been revamped.
Windows Phone posted the largest year-over-year increase among the top five smartphone platforms, and in the process reinforced its position as the number 3 smartphone operating system. Driving this result was Nokia, which released two new smartphones and grew its presence at multiple mobile operators. But beyond Nokia, Windows Phone remained a secondary option for other vendors, many of which have concentrated on Android. By comparison, Nokia accounted for 81.6% of all Windows Phone smartphone shipments during 2Q13.
- Wndows Phone shows signs of life while BlackBerry keeps crumbling (news.yahoo.com)
- IDC’s 2Q13 Smartphone Share Report: It’s iOS vs. Android, and Windows Phone vs. Everyone Else (globalnerdy.com)
- The Android Stat That Shocked the Smartphone World (mobilemarketingwatch.com)
- Apple loses ground to Android and Microsoft in smartphone operating systems (telegraph.co.uk)
Apple CEO Tim Cook touted iOS 7 as “the biggest change to iOS since the introduction of the iPhone.” And it’s true. All the icons are still there in the familiar grid, but all the felt and wood-grain design elements have been taken out to pasture. Everything looks far more modern than it did before, and it’s all presented in a flatter, more layered interface.
It’ll be interesting to see how the general public responds to the new design. It looks a lot slicker, but some may find it less homey than previous versions.
Some of the new features include:
- There’s a parallax effect for 3-D-like motion for home-screen images. Basically, your background photo responds to the angle at which your phone is being held to make it seem like your icons are floating above the picture.
Control Center gives you quick access to common settings (sound, brightness, connectivity options) by swiping up from the bottom of the screen.
- Multitasking has been expanded as well to include all apps instead of select ones like music apps or apps like Skype.
- AirDrop lets you quickly share photos with your friends around you wirelessly. Taking a dig at Samsung’s marketing efforts, Federighi added, “No need to wander around the room bumping your phone.”
- The revamped Photos app organizes your photos by location and date. Apple calls the feature Moments.
Siri has been overhauled with a less-robotic female voice and the addition of a male voice.
- “iOS in the car” is a new initiative involving several major car companies in which they’ll build the ability to turn your car’s information screen into a stripped-down version of iOS, with access to Maps, messaging and voice-activated controls. Look for it in cars starting in 2014.
- The App Store will finally allow you to let your apps automatically update themselves.
- The long-rumored iTunes Radio feature has been realized. It functions very similarly to Pandora, letting you play custom Web radio stations based on particular artists. Songs can be purchased in iTunes or shared with friends; the service is free but ad-supported. If you’re an iTunes Match subscriber, the service contains no ads.
- Activation lock makes it so your phone can’t be used if it gets stolen, even if the thief wipes everything first.
- Apple Inc. (AAPL): No Surprises At WWDC, According To Analysts (valuewalk.com)
- 8 Apps Apple Killed Today At WWDC (cultofmac.com)
- iOS 7 vs iOS 6 – Side By Side Visual Comparison [IMAGES] (redmondpie.com)
- iTunes Radio will only be available in the U.S. at launch (thedroidguy.com)
- Apple Unveils iOS 7, ‘Biggest Change Since the Original iPhone’ (mashable.com)
- iOS 7 specs versus Android 4.2, Windows Phone, BlackBerry 10 (reviews.cnet.com)
It has been one of those weeks where I have not had time to sit down and think about the various news announcements from Apple’a annual World Wide Developer Conference. However, I have come across some really great articles that are worth reading and sharing. Here are some of my picks.
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The chart at right represents the worst case scenario for Apple’s share of the global SmartPhone market.
Using Apple’s own numbers for fiscal Q2, we calculate that iPhone sales grew 7% year over year in a sell-in basis while the overall smartphone market grew by about 36%. The net result is that Apple’s share of the global smartphone market fell from 23% last year to 17% share this year — the largest year-over-year decline in the iPhone’s history.
The situation won’t get any better by June. Based on Apple’s fiscal Q3 revenue guidance, we estimate Apple will sell about 25 million iPhones in the current quarter. If the overall market grows 30%, Apple’s share will fall to 12.3%. If it grows 36%, Apple’s share falls to 11.7%.
Given this, how can be maintained a $600 price target for Apple and an Outperform rating?
- Apple’s market share typically troughs before new offerings… Apple’s share could increase dramatically with the introduction of a lower priced device, and meaningfully with the addition of new carriers. We estimate that adding China Mobile would boost Apple’s global smartphone market share by over 100 bps in the first year, and that a successful low end iPhone could boost share by 500 bps or more.
- iPhone is still growing healthily. As gloomy as these market share forecasts appear, we model iPhone unit sales growing 15% in FY 2013, and 10% in FY14, and our model does not include the introduction of a lower-priced device. Yes, Apple is growing at a fraction of the market – because it is not participating in the fastest growing, low end segment – but we still expect it to grow.
- The size of the total iOS ecosystem remains staggering on both an absolute and relative basis – and Apple’s customer base remains intensely loyal. In short, iOS is in no risk of going away… Moreover, our consumer surveys point to iPhone repurchase intentions of over 90%, notably ahead of competing ecosystems, including Android.
- Market share does not necessarily correlate with profitability. Currently, Apple’s iPhone positioning is increasingly mirroring the Mac, which commands just 5% PC market share, but is highly profitable, accounting for an estimated 40% of total PC industry profits.
- Philip Elmer-DeWitt: Analyst: Apple’s smartphone share in single digits by Sept. (tech.fortune.cnn.com)
- CHART OF THE DAY: The iPhone’s Market Share Is Dead In The Water (AAPL, GOOG, MSFT, GOOG) (businessinsider.com)
- Analyst: Apple’s smartphone share in single digits by Sept. (forums.pinstack.com)
- Analyst: Apple’s Smartphone Share Could Drop to 9% by Q3 2013 [Chart] (iClarified.com)
- IDC on Smartphones in Q1: Android Dominant , WP up , iOS down (techysants.wordpress.com)
- Verizon iPhone First Take (reviews.cnet.com)
- What does the iPhone 5 mean to Android? Not a lot (reviews.cnet.com)