For some observers in the Western media the Nokia X family is a kind of challenge to Microsoft unlike my earlier post describing it as Nokia’s “best of everything” X range smartphones to conquer the smartphone market between the Asha and Lumia devices [‘Experiencing the Cloud’, Feb 24, 2014]. In Will Satya Nadella and Microsoft Pick Up The Challenge Laid Down By The Android-Powered Nokia X? Forbes contributor, Ewan Spence simply concludes that:

If Nadella is looking to move Microsoft towards a future with more focus on easily accessible services rather than hardware lock-in, then the Nokia X should continue to receive some love and affection, along with continued support in the media and from the press teams in Redmond. It may even be made available for other manufacturers looking for an Android base to build on with some preferential patent licensing bundled along with the deal.

Other journalists accustomed to the U.S. market, where you don’t buy your smartphone but getting it as part of your paid subscription “for free”, even critisizing the Nokia X performance (see two critics on the right) unlike the head of UX Design, an American (see his view on the left) in charge of the team in Beijing, China “with global scope and BRIICA (Brazil, India, Indonesia, China, Africa) focus”:

Is the head of MP UX design is right or such a harsh critic as Tom Warren? You could decide it for yourself by watching the video below. Draw special attention to the Fastlane performance difference between the Nokia X with 512MB of RAM and Nokia X+/XL with 768MB ([3:46-4:30] vs. [5:53-6:26]). It is also not an accident that “Resizeable tiles” are demonstrated on the 768MB version. My impression is, that if you are buying the 768MB versions (Nokia X+ or Nokia XL) you won’t feel the problems Tom Warren outlined above, won’t feel at all:

Nokia Launches Nokia X At Mobile World Congress In Barcelona [Red Robot - Intelligent Distribution YouTube channel, Feb 24, 2014]

[0:06] Press conference
>> [0:50] Elop’s 1st introduction: the new Nokia 220
>> [1:20] 2nd introduction: the new Nokia Asha 230
>> [1:32] 3d introduction: the new Nokia X and Nokia X+
>> [2:07] Preloaded great applications on the Nokia X family, hundreds of thousands of Android apps, Nokia signature experiences (HERE Maps, Nokia Mix Radio)
>> [2:42] Fastlane as a fantastic element of Nokia X experience
>> [2:57] 4th introduction: the Nokia XL
[3:40] B-roll (i.e. alternative) footages (with no sound):
> [3:42] Nokia X: Runs Android Apps, 4″ display, Fastlane, 3MP camera, 1GHz Dual Core Processor, Dual SIM
>> [3:46] Nokia X: Fastlane
>> [4:30] Nokia X: Skype
>> [5:08] Nokia X: Nokia Store
>> [5:33] Nokia X: Third Party App Stores
> [5:49] Nokia X+: Runs Android Apps, 4″ display, Fastlane, 3MP camera, 1GHz Dual Core Processor, 768MB RAM, Dual SIM
>> [5:53] Nokia X+: Swipe
>> [6:26] Nokia X+: Resizeable tiles
>> [7:15] Nokia X+: Nokia Mix Radio
>> [8:02] Nokia X+: Demo App: Plants VS Zombies 2
> [8:40] Nokia XL: Runs Android Apps, 5″ display, Fastlane, 5MP camera with flash, 2MP fron-facing camera, 1GHz Dual Core Processor, 768MB RAM, Dual SIM
>> [8:45] Nokia XL: Swipe
>> [9:26] Nokia XL: Camera: 5MP with autofocus and flash

Even more, as the rest of my post goes through the below details (i.e. sections 1. to 4.), you will find (along with with me) that from the point of view of focusing on the BRIICA (Brazil, India, Indonesia, China, Africa) markets (which was the task of the development team in Beijing China) this is an excellent product with no problems mentioned by some media people in the West. There is even no conflict with Microsoft at all (another critical speculation typical to the Western Media) as the Nokia X family is also preparing the ground for the upcoming super low-cost (higher levels as well) Windows Phone devices from local and regional brands like the #3 Karbonn and the #4 Lava (Xolo) in India, as well as Gionee which is a large local brand in China with strong recognition in India as well, not to speak of those who will supplied from Foxconn, the biggest white-label phone manufacturer in China.

1. Why does this post concentrate on the Indian market?
2. Nokia X family has been well positioned for the highest growth Indian market
3. The feature phone and smartphone markets in India according to CyberMedia Research India and IDC
4. New low-cost Windows Phone partnering strategy by Microsoft especially aimed at the Indian market

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1. Why does this post concentrate on the Indian market?

Answer #1: The Indian smartphone market is expected to double and touch 80 million by the end of current fiscal, a top Samsung India official said today.

“We are expecting smartphone sales in the country to touch 80 million mark by the end of current fiscal [Samsung’s fiscal years are the same as the calendar years], while total sales were around 40 million in 2012-13,” Samsung Mobile and IT India Head Vineet Taneja said.

From Indian smartphone market to double to 80 million by fiscal end: Samsung [The Economic Times (of India), Feb 18, 2014]

Answer #2: “Now is the right time because there is a rapidly growing low-price affordable smartphone segment that’s really taking off in a number of growth economies. We’re seeing that in countries like Indonesia, Russia, Vietnam and a number of others,” [Stephen] Elop [former Nokia CEO and soon-to-be Microsoft executive vice president] says in the interview, shot at Mobile World Congress in Barcelona.

While Nokia X is based on Android, the user interface “is remarkably similar to the Windows Phone interface,” he says.

That means these customers, many of whom have never owned a smartphone before, will learn to navigate in Microsoft’s world first, with the potential over time to buy higher end Nokia Lumia phones that run Windows Phone as Lumia prices drop.

“And so we’ve gone for that and we’ll take advantage of that to keep people in the Lumia family but using Nokia X as a feeder system into our Windows Phone strategy,” Elop says.

The strategy isn’t meant for the U.S. where cellular carriers widely and generously subsidize the price of high-end phones in order to lock customers in to long-term contracts, he says.

The above excerpts are from the Nokia’s Stephen Elop Talks Android video interview:

From Nokia chief: Nokia X Android smartphone is a gateway drug to Windows Phone [Network World, Feb 25, 2014]

Answer #3: is in another post of mine: Nokia’s “best of everything” X range smartphones to conquer the smartphone market between the Asha and Lumia devices [‘Experiencing the Cloud’ Feb 24, 2014] but before reading that here is Nokia X/ Nokia X Plus Hands On (Dual SIM) [WPXBOX YouTube channel, Feb 24, 2014] video from which you can easily understand why is it “best of everything” instead of a stock Android smartphone:

Answer #4: in section 2 of this post I will show you that these smartphones will quite probably have a competitive on line pricing starting at most from:
- Rs 7400 ($119) for Nokia X vs. the list price of EUR 89 [$122]* (Rs 7582)
- Rs 8000 ($129) for Nokia X+ vs. the list price of EUR 99 [$136]* (Rs 8434)
- Rs 8600 ($139) for Nokia XL vs. the list price of EUR 109 [$150]* (Rs 9284)
* Although these prices are before local taxes.

Answer #5: India will be key to future smartphone growth as it represents more than a quarter of the global feature phone market. “Growth in the India market doesn’t rely on high-end devices like the iPhone, but in low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than US$120,” said Kiranjeet Kaur, Senior Market Analyst for mobile phones at IDC Asia/Pacific.
From Smartphone Prices Race to the Bottom as Emerging Markets Outside of China Come into the Spotlight for Future Growth, According to IDC [press release, Feb 24, 2014]

Answer #6: In addition to existing partners — Nokia, Samsung, HTC and Huawei — Microsoft has announced it is now working with Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE to develop on the Windows Phone platform. … Customers can expect to see an even broader array of devices, from iconic to lower-cost options, coming to market. … The expanded Windows Phone ecosystem will also provide mobile operators and retail partners with additional opportunities to offer white-label Windows Phone devices under their own brands.
From Microsoft adds nine new Windows Phone hardware partners [press release, Feb 23, 2014] where Karbonn is the #3 and Lava (Xolo) the #4 brands (after #1 Samsung and #2 Micromax), while Gionee is a local brand in China with strong recognition in India as well, and Longcheer as a local Chinese brand that has long been in India as well (albeit with top recognition already lost). Finally Foxconn is the biggest white-label phone manufacturer in China whose production has already influenced the Indian market very much.

We are adding support for Qualcomm Snapdragon 200 and 400 series chipsets, with options that support all major cellular technologies, including LTE (TDD/FDD), HSPA+, EVDO and TD-SCMA. We will also support soft keys and dual SIM where our partners want it for their devices. One nice benefit of these additions is that many hardware vendors will be able to use the same hardware for both Android and Windows Phone devices [obviously if they are using the Qualcomm SoCs]. From Joe Belfiore, corporate vice president of Microsoft Windows Phone in Scaling Windows Phone, evolving Windows 8 [Windows Phone Blog, Feb 23, 2014]

Q. Many of your recent partnerships and announcements have focused on emerging markets. Is that a major priority?
A. It’s not our only focus, but it’s a very big one. The purpose of low-cost phones in emerging markets is to drive volume. From Joe Belfiore, corporate vice president of Microsoft Windows Phone in Q.&A. With Joe Belfiore on the Future of Windows Phone [Bits blog of The New York Times, Feb 23, 2014] That is the Nokia X family will not only prepare the ground for its own Lumias but for these upcoming low-cost Windows Phone devices as well (also why IMHO Microsoft will not kill the Nokia X family after Nokia devices and services becomes part of it)

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2. Nokia X family has been well positioned for the highest growth Indian market

X marks the sweet spot [Nokia Conversations, Feb 25, 2014]

We asked Jussi Nevanlinna, VP for Mobile Phone marketing, some of your questions about the new Nokia X family, why it’s important for Nokia and why customers will be delighted with the phones.

First of all, why now? Why is the timing now right for an Android-based smartphone from Nokia?

There are a couple of answers to that question.

To launch the Nokia X family, we needed to be able to create a product that was true to Nokia’s heritage in design and build quality. But we also needed to make it very affordable. Lots of different components had to come into place for us to create something that’s clear and easy to use, but also high quality and within people’s financial reach.

The other answer is that the market itself is moving. We’re the number one manufacturer in growth markets in the ‘entry-level’ and ‘feature phone’ categories. But a lot of those people are now aspiring to smartphone products. There are a significant number of users worldwide who are about to experience the Internet through a mobile device. As you can imagine, we want to be ready for them.

The Nokia X family is based on the Android Open Source Platform (AOSP). Does that put the future of the family at the mercy of Google?

To fully explain, this is a Nokia smartphone that runs Android apps. At its heart, we have AOSP on top of which we have added Nokia design and usability expertise to create the user interface that people see. Then we have added Nokia experiences like HERE Maps and Nokia MixRadio, and Microsoft services like Skype, Outlook.com and OneDrive. What we don’t have is Google services: this was deliberate. Instead, we have implemented Nokia and Microsoft services to create something truly differentiated.

So who is the target audience for the Nokia X family?

These are global products, which will be available pretty much everywhere except North America, Korea and Japan. We have a particular focus on growth markets – for example, India and China, Thailand and Indonesia then over to Egypt, Kenya and Nigeria, and South America, especially countries like Brazil, and Mexico. They are all places where we’re seeing this big shift from feature phones to affordable smartphones.

Our Nokia X family customers are young, social, very aspirational and are fans of Nokia. They love our brand and our product design. And they also love Android apps: the quantity and choice is very appealing to them.

So we’re offering them the best of three worlds:

• Nokia design and build quality;
• Microsoft cloud services; and
• Android apps.

Does the X family compete with the Lumia family and maybe mean lost sales for Lumia?

Our approach to compete in the affordable smartphone market is twofold. While Lumia remains our primary smartphone platform and we continue to push the prices down, Nokia X addresses price points that are generally lower than those reached by Lumia, and we’ll keep pushing the Nokia X prices down even further.

In fact we see Nokia X as a stepping-stone to Lumia. With Nokia X we are bringing people the best of Nokia and Microsoft services and experiences, making a future switch to Lumia natural.

Some might see creating an Android-based device as strange considering that the plan is for Nokia’s devices and services business to join Microsoft soon?

I can’t speak on Microsoft’s behalf; what I can say is our strategy with Mobile Phones has been, and remains, connecting the next billion. Microsoft is equally focussed on ‘mobile first; cloud first’. As I have explained, getting people exposed to and loving Microsoft and Nokia services in the affordable segment creates a natural pathway to Lumia, which is designed to be the pinnacle smartphone experience.

Technology becomes cheaper all the time. When it becomes possible to create a Lumia for $100, will the X family be retired?

I think the key word is ‘family’. We will be announcing more products in the family over the course of the next year, and the price range it covers will change to suit the markets. We will be taking Nokia X into even more affordable price points.

What do app developers need to do to make their Android apps available for the Nokia X family?

The short answer is: nothing. In the vast majority of cases, Android apps will run very well on the Nokia X family, out of the box.

Furthermore, we’re working with developers to make it very easy to submit apps into the Nokia Store. In most cases, they simply republish their apps to Nokia Store .

Where apps depend on functionality that isn’t on the Nokia X family devices, like Google Maps, we’ve created API plugins for the Android SDK to allow developers to simply tick the box to use HERE Maps instead.

And what advantages can developers and customers gain by using Nokia Store?

Android developers stand to make big gains by supporting the Nokia X family. We have heard many times that they find it hard to monetise their apps. One reason for that is, in emerging markets, people are a lot less likely to have credit cards. The Nokia Store offers in-app payments through operator billing, and we have the largest network of operators signed up for that. It’s been shown through experience that when operator billing is available, then revenues increase by up to five times.

That’s one reason the Nokia Store offers a better alternative. The other is from the user’s side. The Nokia Store is curated. The apps are screened and scanned so you won’t bump up against malware or inappropriate content. So they can shop in our store with confidence and security.

And worldwide, people are very comfortable with using third-party app stores that aren’t owned by Google. In Russia, the Yandex Store dominates the Android marketplace. In China, Google Play isn’t available, so all app purchases are through third parties. So you see, non-Google stores are already the norm for most Android owners.

Nokia X is a phone made for India [India Today, Feb 24, 2014]

The Finnish handset maker has finally unveiled its much talked of Android phone, the Nokia X, at the ongoing Mobile World Congress 2014.

Nokia has launched a family Android phones with three variants–Nokia X, X+ and XL–at affordable prices. All three Nokia X variants are going to be low-cost phones with the Nokia XL expected to be priced around Rs.9,000 [$145]. For now, the prices that have been revealed are: Nokia X for 89 euros, the X+ 99 euros and the larger LX carries a price tag of 109 euros.

Specs-wise, these are basic level phones. All three devices are powered by a Qualcomm Snapdragon Dual Core processor and are dual SIM. The Nokia X comes with 4-inch display, the X+ has a bit of more storage options and the XL variant comes with 5-inch LCD screen and and 5-megapixel rear and 2-megapixel front cameras.

The Nokia X phones do not come with pre-installed Google Play Services. As a result the Play Store isn’t available on the Nokia X or Nokia X+. Though, Android apps can be downloaded through Yandex Store.

Once, Nokia was the leader of Indian mobile industry. Nokia feature phones used to be first choice of the Indian consumers. But it could not keep pace with the emergence of smartphones. Its competitors like Samsung, Sony and Micromax took away the markets from the Finnish handsets maker with innovative smartphones at affordable prices.

With affordable Android phones, the world’s largest smartphone maker, Samsung, is dominating the Indian market. Even, the home grown tech company Micromax made a market for itself with range of affordable Android phones having great features.

With its budget prices and widely used Android OS, the Nokia X series of smartphones will target the consumers looking to upgrade themselves from feature to smartphones. As the smartphone market is growing in India, given its brand reputation in the country, Nokia phones are going to give its competitors a run for their money in the sub Rs.10,000 [$161]segment. An Android phone from the Nokia at affordable price will be a good deal.

Well aware of its advantageous positing in the price-sensitive Indian market, Nokia has listed the X series devices on its India website as coming soon just after unveiling the devices at the ongoing Mobile World Congress 2014 in Barcelona.

Nokia Lumia 525 – First Impressions [Digit YouTube channel, Jan 7, 2014]

The current (Feb 25, 2014) lowest online price for Lumia 525 (in India) is on Snapdeal.com:

Rs 11499 [$186] (list price) –> Rs 9519 [$154] Black/White –> Rs 9712 [$158 ] Yellow

Competing with the following models of the marketing leading brands (Samsung, Micromax, Karbonn):

Rs 11230 [$181] Rs 9244 [$149] … Rs 12100 [$195] Rs 9379 [$151] … Rs 12990 [$207] Rs 9997 [$161]

11945	13820	16888	7639
Broadcom BCM21664T	MediaTek MT6589	MediaTek MT6589	Qualcomm Snapdragon S4 MSM8227

For comparison the preceding the Lumia 520 on the same site:

Rs 10499 [$169] (list price) –> Rs 7976 [$128] Black –> Rs 7995 [$129] White
–> Rs 8169 [$132 ] Yellow

Then some leading competitors for the Nokia X range (also from Snapdeal.com):

All list prices: Rs 9999 [$161] Rs 8949 [$144] … Rs 7225 [$117] … Rs 7895 [$127]

Which means a competitive on line pricing starting at most from:
- Rs 7400 ($119) for Nokia X vs. the list price of EUR 89 [$122]* (Rs 7582)
- Rs 8000 ($129) for Nokia X+ vs. the list price of EUR 99 [$136]* (Rs 8434)
- Rs 8600 ($139) for Nokia XL vs. the list price of EUR 109 [$150]* (Rs 9284)
* Although these prices are before local taxes.

For  comparison the top of the Asha Touch range, the Asha 503 on the same site (currently):

Rs 7399 [$119] (list price) –> Rs 6549 [$106] Black/White –> Rs 6894 [$111] Yellow
–> Rs 6939 [$112] Red

Which means that the price of Asha devices could be lowered after the Nokia X devices appear on the market. This is especially true with the introduction of Asha 230 using the same SoC:

As the Asha 230 was announced for EUR 45 [$62]* (Rs 3823) you got an immediate price indication for such a decrease. In fact this new model is an effective replacement for the current Asha 500 as the entry level Nokia Asha Software Platform 1.1 device which has:

• 2 MP rear camera instead of a 1.3 MP one on Asha 230
• standby time up to 840 h (2G), talk time up to 14 h (2G) because of an 1200 mAh battery instead of the 1020 mAh one on Asha 230

but has the best online price of Rs 3999 ($66), actually from Nokia India against the list price of USD69 before taxes or subsidies.

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3. The feature phone and smartphone markets in India according to CyberMedia Research India and IDC

From CMR announces top Telecom trends for 2014 in India [CyberMedia Research India press release, Dec 31, 2013]

CMR today released its MarketVision 2014 for Telecommunications in India.  Below are the key trends identified for 2014 for some priority segments.

Mobile Handsets

2013 witnessed the first time decline in growth of feature phones in India and this trend is going to further sharpen in 2014 as the primary focus of the industry as well as consumers would remain around the smartphones.

CMR identifies the following trends for 2014 in Smartphones

• LTE enabled smartphone releases to be among priority areas of the vendors.
• Chinese ODM’s have started taken a direct OEM route towards India Smartphone market.  CMR expect around 10 Chinese ODMs entering into India Mobile market in 2014.
• ‘Made in India’ smartphones amount to 47% of the total sales.  With such tremendous growth and success witnessed by these brands in the local market, 2014 will be the time to look at newer geographies including MENA, Latin America and the SAARC [South Asian Association for Regional Cooperation] region for the home grown vendors.  CMR expects 3-4 such brands looking for new geographic markets.
• With the increasing confidence and reliance of Indian consumers on the online retailing, particularly after the emergence of successful platforms like flipkart, CMR expects the role of ‘etailing’ becoming important for emerging brands who for various reasons cannot establish their physical distribution network across the country, particularly the non-metro cities and towns.
• While the ecosystem partners like ODMs and app developers will be exploring Windows as a platform for mobility, CMR identifies Tizen, Firefox, Ubuntu and Sailfish among the new open source OSs emerging in 2014 in the India market.
• CMR expects vernacular apps to start getting focus in 2014 from the developer community in the country.  Since national elections are going to be among the predominant themes for 2014, we expect a lot of apps being developed around this space which could be owned by a political party or being promoted by a neutral app developer.

62.9 million mobile handsets shipped in India during July-Sept 2013, a Y-o-Y growth of 10.9%; September registers, 19.5 million handset shipments; Nokia retains overall leadership [CyberMedia Research India press release, Nov 19, 2013]

• Smartphone shipments cross 11.1 million units; Samsung still the market leader in smartphones category with Micromax and Karbonn at #2 and #3, respectively. Top 3 vendors make up nearly 63.1% of the total smartphone shipments.
• Featurephone segment witnesses the first ever negative growth in shipments in the India Mobile handsets market.

According to CMR’s India Mobile Handsets Market Review, 3Q 2013, November 2013 release,India registered 62.9 million mobile handset shipments for the period July-September (3Q) 2013. During the same period, 11.1 million smartphones were shipped in the country.

Commenting on the results, Faisal Kawoosa, Lead Analyst, CMR Telecoms Practice said, “We have been saying that the way forward is smartphones. JAS 2013 is the first quarter to actually report this trend in numbers. This means vendors can expect to see large opportunities in the upgrades market where many featurephone users will upgrade to a smartphone. It may also so happen that new smartphone purchases register lower volumes vis-à-vis upgrades. But this phenomenon may be a few quarters away.”

“So there is going to be a huge opportunity as well as competition in the entry- to mid-level smartphone segments, which is where the volumes would remain for a while,” Faisal further added.

India Smartphones Market

The India smartphones market during July-September 2013 saw a rise in shipments by 152.3% over and above the July-September 2012 number, taking the contribution of smartphones to 17.6% of total mobile handset shipments during the period July-September 2013.

Commenting on these results, Tarun Pathak, Analyst, CMR Telecoms Practice said, “The India smartphones market continues to be a competitive space with close to brands vying with each other. Going forward, we expect this segment to be even more competitive as we expect some of the China-based ODM partners entering directly into the India market during 1H 2014. It will be interesting to see what impact this will have on the market share of existing smartphone players.”

“Another interesting observation is that local handset brands have now close to 47% market share in the India smartphones market and this momentum has been a source of confidence to a couple of players to enter new geographies outside India where the smartphone market is on the rise. Going forward 3G smartphone shipments will continue to rise and we can expect to see a few smartphone vendors introduce 4G-enabled devices by the end of 2013,” Tarun concluded.

Notes for Editors

1. This release is a part of the CyberMedia Research (CMR) Smart Mobility Market Programme.

2. CyberMedia Research (CMR) uses the term “shipments” to describe the number of handsets leaving the factory premises for OEM sales or stocking by distributors and retailers. For the convenience of media, the term shipments has been replaced by ‘sales’ in the press release, but this reflects the market size in terms of units of mobile handsets and not their absolute value. In the case of handsets imported into the country it represents the number leaving the first warehouse to OEMs, distributors and retailers. CyberMedia Research does not track the number of handsets brought on their person by individual passengers landing on Indian soil from overseas destinations or ‘grey market’ handsets. These are, therefore, not part of the CyberMedia Research numbers reported here.

3. CyberMedia Research (CMR) tracks shipments of mobile handsets on a monthly basis. However, as per convention, the market size is reported on a calendar quarter basis where appropriate to the context; in all such cases this refers to an aggregated number for the three calendar months in the quarter to which the press release refers.

About CyberMedia Research

A part of CyberMedia, South Asia’s largest specialty publisher, CyberMedia Research (CMR) has been a front runner in market research, consulting and advisory services since 1986. CMR offers research and consulting services – insights, market intelligence, market sizing, ecosystem mapping and go-to-market services – covering the Information Technology, ITeS, Semiconductor & Electronics, Telecommunications, Government, SMB & Entrepreneurship, Smart Infrastructure, Energy & Utilities and Healthcare & Life Sciences verticals.

Cyber Media Research Ltd., an ISO 9001: 2008 company, is a member of the Market Research Society of India (www.mrsi.in) and enrolled with ESOMAR (www.esomar.org) CMR’s forthcoming studies include stakeholder satisfaction surveys, mega spender assessments and market mapping studies for these domains.

For more details, please visit http://www.cybermediaresearch.co.in or http://www.cmrindia.com/

Explosive Smartphone Growth Driven by Lower-Priced Models, Cannibalises Feature Phone Sales in Indian Mobile Market, Says IDC [press release, Dec 2, 2013]

The India smartphone market grew by 229% year over year (YoY) in the third quarter of 2013 (3Q13).  According to International Data Corporation’s (IDC) APEJ Quarterly Mobile Phone Tracker, vendors shipped a total of 12.8 million smartphones in 3Q13 compared to 3.8 million units in the same period of 2012. 3Q13 grew by close to 28% over the units shipped in the second quarter of 2013 (2Q13).

The 5.0 inch-6.99 inch screen size smartphones (phablets) continued to show sustained growth in 3Q2013 as well – the phablet category contributed to 23% in the overall market in terms of volume.

The overall mobile phone market (Feature Phones and Smartphones) had a 12% growth YoY and a 7% growth quarter over quarter (QoQ) with the share of feature phones sliding further to make 81% of the total market in 3Q13 despite the feature phone market growing at 3% in 3Q2013 over 2Q2013.

Source: IDC Asia Pacific Quarterly Mobile Phone Tracker, 3Q 2013

The third quarter of 2013 witnessed a slowdown in the numbers for top local vendors such as Micromax and Karbonn – while international vendors like Samsung and Nokia powered by their new product launches made up for close to 30% of the overall market in 3Q2013.

“The growth in the smartphone market continues to drive the overall growth numbers for the phone market – given that there’s still a huge potential for smartphone penetration in India, this trend is expected to continue in the coming quarters”, said Manasi Yadav, Senior Market Analyst with IDC India.

“The change agents for this rapid shift of consumer preference towards Smartphones have been the narrowing price gap between Feature phones and Smartphones. The Smartphone market is expected to maintain these elevated levels of growth in the near future” comments Kiran Kumar, Research Manager with IDC India.

Top Five Smartphone Vendor Highlights

Samsung: Samsung maintained its leadership spot with about 33% in terms of market share. Its smartphone shipments grew by close to 36% from 2Q 2013 to 3Q2013. The third quarter saw quite a few new launches across price points by Samsung – however the low-mid tier phones such as Galaxy S

Duos and Galaxy Star continued to drive their volumes.

Micromax: Micromax held on to its second spot with about 17% in terms of market share in 3Q2013. Some of the top selling models were A27 and A26 in terms of volumes – we have seen a dedicated marketing and advertising push from the brand with continued investments to up the brand recall.

These efforts are expected to bear fruit in the coming quarters in time for their upcoming launches.

Karbonn: The market share for Karbonn in 3Q2013 was close to 11%, some of the top selling models for this brand were A6 and A50. There has been a significant pick-up for the Titanium range of phones especially S5 and S2 specifically.

Nokia: The Lumia range of devices continued to show a growth trajectory in 3Q2013 and garnered close to 5% market share – the trend is expected to continue with greater support from Microsoft in the coming quarters. The third quarter of 2013 saw a few notable launches like the Lumia 625 and Lumia 925 which have been able to generate positive interest from consumers and developers alike.

Lava : Lava made it to the top 5 for the first time in 3Q2013 owing to huge shipments coming in from its XOLO and IRIS range of competitively priced devices. Some of the top selling models for the brand are IRIS 349 and IRIS 402. Keeping in mind the shifting consumer preferences, there has been a conscious shift from feature phones to smartphones, which is expected to continue in the upcoming quarters too.

Smartphone Prices Race to the Bottom as Emerging Markets Outside of China Come into the Spotlight for Future Growth, According to IDC [press release, Feb 24, 2014]

Singapore and London, February 24, 2014 – Emerging markets have become the center of attention when talking about present and future smartphone growth. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, in 2013 the worldwide smartphone market surpassed 1 billion units shipped, up from 752 million in 2012.  This boom has been mainly powered by the China market, which has tripled in size over the last three years.  China accounted for one out of every three smartphones shipped around the world in 2013, equaling 351 million units.

Recently the surge in growth has started to slow as smartphones already account for over 80% of China’s total phone sales.  The next half billion new smartphone customers will increasingly come mainly from poorer emerging markets, notably India and in Africa. 

“The China boom is now slowing,” said Melissa Chau, Senior Research Manager for mobile devices at IDC Asia/Pacific.  “China is becoming like more mature markets in North America and Western Europe, where smartphone sales growth is slackening off.”

Emerging markets in Asia/Pacific outside of China, together with the Middle East and Africa, Central and Eastern Europe, and Latin America, account for four fifths of the global feature phone market, according to IDC data. “This is a very big market opportunity,” said Simon Baker, Program Manager for mobile phones at IDC CEMA.  “Some 660 million feature phones were shipped last year, which could add two thirds to the size of the current global smartphone market.”

India will be key to future smartphone growth as it represents more than a quarter of the global feature phone market. “Growth in the India market doesn’t rely on high-end devices like the iPhone, but in low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than US$120,” said Kiranjeet Kaur, Senior Market Analyst for mobile phones at IDC Asia/Pacific.

“Converting feature phone sales to smartphone sales implies a relentless push towards low cost,” added Baker. IDC research shows nearly half the mobile handsets sold across the world have retail prices of less than US$100 without sales tax. Two thirds of those have prices of less than US$50.

“The opportunity gets larger the lower the price falls,” continued Baker. “If you take retail prices without sales tax, in 2013 nearly three quarters of the US$100-125 price tier was already accounted for by smartphones. Within US$75-100 the proportion was down to just over half, and between $50-75 it was not much more than a third.”

Many smartphone vendors have begun gearing up for this next wave of cost pressure. Samsung is increasingly switching production to Vietnam, where manufacturing costs currently undercut mainland China. Even Hon Hai [better known outside as Foxconn], one of the largest contract manufacturers for handsets in China, has announced plans for a plant in Indonesia to furnish a lower production cost base.

In addition to the table below, an interactive graphic showing worldwide sub-$100 feature phone shipments by region is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

The China Smartphone Market Hiccups as Growth Streak Ends with First Sequential Decline in 2013 Q4, Says IDC [press release, Fev 13, 2014]

Singapore and Hong Kong, February 13, 2014 – After 9 consecutive quarters of explosive growth, which propelled China into the top smartphone market in the world, the China smartphone market experience its first slowdown in 2013 Q4.

According to the International Data Corporation (IDC) Asia/Pacific Quarterly Mobile Phone Tracker, shipped 90.8 million units compared to 94.8 million in 2013 Q3, declining by 4.3% quarter on quarter (see Figure 1). Several factors drove this stumble – for one, China Mobile’s 4G TD-LTE network went live on December 18, translating into supplies of 4G handsets not able to reach the market fully until 2014 Q1. The increasing popularity of phablets and channel inventory also played a role, whereby operators cut phone subsidies on phones with smaller screens, triggering distribution channels looking to clear out those stocks.

“The world has increasingly looked to China as the powerhouse to propel the world’s smartphone growth and this is the first hiccup we’ve seen in an otherwise stellar growth path,” says Melissa Chau, Senior Research Manager with IDC Asia/Pacific’s Client Devices team.

“There will certainly be future drivers to unlock further smartphone growth in China, as Apple demonstrated with its China Mobile tie-up in January, and the massive device migration to come of phones only supporting 2G and 3G networks to devices supporting 4G networks. However, we are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year’s model”

Looking ahead at the prospects for the Asia/Pacific (excluding Japan) region, with mature Asia/Pacific markets like already having hit market saturation and China growth facing more moderate increases, two trends will become more prominent.

First, growth will increasingly shift to ever-more emerging markets. While India volumes significantly lag China, India has taken the number three ranking of largest smartphone markets in the world in 2013, surpassing Japan, the United Kingdom, South Korea, Germany and France, which were all ranked higher in 2012.

Second, Chinese phone players which have previously been content to make their mark on the China market itself, are looking to expand their ambitions overseas. While this trend has started already through 2013, IDC expects it to become more common in 2014.

“Chinese players are getting hungrier to turn themselves into international rather than China-only brands. Nowhere is this more clear than Lenovo’s acquisition of Motorola’s handset business, and even smaller players, some unknown to much of the world, like Oppo, BBK, Gionee and of course Xiaomi are ramping up on international expansion.”

Figure 1.
Asia/Pacific (Excluding Japan) Smartphone Shipments by Sub-Region, 2011Q1-2013Q4

Notes:

• Mature markets include Australia, Hong Kong, New Zealand, Singapore and Taiwan
• SEA markets include Indonesia, Malaysia, Philippines, Thailand and Vietnam

Source: Asia/Pacific Quarterly Mobile Phone Tracker, February 2014

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4. New low-cost Windows Phone partnering strategy by Microsoft especially aimed at the Indian market

Mobile World Congress, Microsoft and Nokia [The Official Microsoft Blog, Feb 24, 2014]

The following post is from Frank X. Shaw, Corporate Vice President of Communications at Microsoft.

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Mobile World Congress is in full swing in Barcelona this week, one of the biggest events of the year for the mobile industry. I love Barcelona, and am sad to miss MWC this year. There is something about the combination of the history and tradition of Barcelona past and the energy and innovation of Barcelona present, with all the attendees of MWC a punctuation mark. And there is always something new, companies with something to say.

Microsoft is no exception. On Sunday afternoon, we hosted a press conference where we reinforced the momentum we’re seeing for Windows Phone – the fastest growing mobile OS with 91 percent year-over-year growth. We announced we’re working with nine new Windows Phone hardware partners , including Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE as well as a collaboration with Qualcomm to help more manufacturers build Windows Phones faster. You can read Joe Belfiore’s blog post [see also below] from yesterday for more details.

Nokia held its press conference earlier Monday. They announced a number of new devices from their Mobile Phone division including Nokia X, which will compete with Android devices in the affordable smartphone category and introduce the Microsoft cloud to a new set of customers in growth markets.

There’s been lots of speculation about what this announcement means for Microsoft and about our pending acquisition of Nokia’s Devices and Services business. Here are a couple of points to put things into context.

First, our transaction with Nokia has not yet closed. Today, we operate as two independent companies as required by antitrust law, and we will until the acquisition is complete. The anticipated close timeframe for the acquisition remains end of the first quarter of 2014.

Second, we’re pleased to see Microsoft services like Skype, OneDrive and Outlook.com being introduced on these devices. This provides the opportunity to bring millions of people, particularly in growth markets, into the Microsoft family. The Skype team on Monday announced an offer in select markets for the first customers who purchase a Nokia X, one month of Skype’s Unlimited World Subscription. Read the Skype blog for more details.

Finally, our primary smartphone strategy remains Windows Phone, and our core device platform for developers is the Windows platform.

It is a fascinating time in the industry today. The rate of improvements in devices, the breadth of services offered, the way consumers and businesses are using devices of all shapes and sizes to do more – it is a reminder to all of us that what is considered status quo in Barcelona this year has the potential to look very different in the rear view mirror a year from now.

We’d have it no other way.

Microsoft adds nine new Windows Phone hardware partners [press release, Feb 23, 2014]

New hardware partners and tools will accelerate global scale.

Microsoft Corp. on Sunday announced nine new hardware partners for Windows Phone and direct access to tools that will broaden the portfolio of devices for consumers and introduce new price points to accelerate growth in key markets. In addition to existing partners — Nokia, Samsung, HTC and Huawei — Microsoft has announced it is now working with Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE to develop on the Windows Phone platform.

With this latest news, Microsoft is now working with seven of the top 10 smartphone manufacturers in the world in addition to leading brands in China, India and Taiwan, representing more than 56 percent of the addressable market globally (IDC Worldwide Mobile Phone Tracker, 2013). Customers can expect to see an even broader array of devices, from iconic to lower-cost options, coming to market.

“We are pleased to add these new partners to our expanding Windows Phone ecosystem. They will be key contributors to continued growth across price points and geographies for Windows Phone,” said Nick Parker, corporate vice president of the OEM Division at Microsoft.

Windows Phone is the fastest-growing smartphone operating system, according to IDC, and posted the largest increase for 2013 (90.9 percent), more than doubling the growth of the overall market during the year.

Microsoft also unveiled expanded hardware support that provides more flexibility so Windows Phone partners can build devices to meet the unique needs of their region or customer segments. Microsoft is adding support for Qualcomm Snapdragon™ 200 and 400 processors by Qualcomm Technologies Inc. with options that support various major cellular technologies, including LTE (TDD/FDD), HSPA+, EVDO and TD-SCMA. Windows Phone will also support soft keys and dual SIM, critical requirements particularly in Asian markets. These changes allow for manufacturing partners to easily leverage existing design investments to diversify their portfolio to include Windows Phone devices, including larger screen phablets.

On Sunday, Microsoft launched the Windows Hardware Partner Portal, which is designed to speed up device commercialization while minimizing development costs. Speed and economies are especially important for manufacturers needing to compete and win in the dynamic high-volume smartphone segment. The Windows Hardware Partner Portal is now open to all smartphone device manufacturers to learn about and begin the process to develop on the Windows Phone platform. Windows Phone device manufacturers will also be able to leverage the great services Microsoft has to offer in that market, which could include Office Mobile, Skype, Xbox and Bing; a growing app catalog; and features like Live Tiles and People Hub, which make Windows Phone so uniquely personal.

To further help enable smartphone device manufacturers to quickly and easily broaden their portfolio to include Windows Phone devices, Microsoft and Qualcomm Technologies are collaborating to give OEMs and ODMs that are working with the various Qualcomm Reference Designs for Snapdragon 200 and 400 processors direct access to Microsoft tools, content and adaptation kits to build devices on the Windows Phone platform. With Microsoft and Qualcomm Technologies, through its Qualcomm Reference Design program, delivering the building blocks to help design and build Windows Phones, Microsoft hardware partners will be able to focus on differentiating their offering based on apps and services. Device manufacturers will now be able to choose from hundreds of ways to customize their Windows Phone devices while keeping the consistently high-quality experience that the Windows Phone platform provides.

“We are making it easier, faster and more affordable for partners to develop a Windows Phone,” Parker said.

The well-established Qualcomm Reference Design program offers Qualcomm Technologies’ leading technical innovation, differentiated hardware and software, easy customization options that save engineering costs, access to an ecosystem of hardware providers, and testing and acceptance readiness for regional and leading operator requirements.

The expanded Windows Phone ecosystem will also provide mobile operators and retail partners with additional opportunities to offer white-label Windows Phone devices under their own brands. Mobile operators will also have more options to build custom apps and services for their Windows Phone devices that increase customer satisfaction, retention rates and revenue streams.

Scaling Windows Phone, evolving Windows 8 [Windows Phone Blog, Feb 23, 2014]

The following post is from Joe Belfiore, Corporate Vice President of corporate vice president of Windows Phone and Windows Program Management & Design at Microsoft.

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A lot of you folks know me as “the Windows Phone guy.” Over the past five years I’ve been co-managing the Windows Phone product team on a mission to make Windows Phone a delightful and successful platform. Recently my job changed to focus not just on Windows Phone but also on the user experience of Windows 8 and future versions of Windows. Today Nick Parker and I had a chance to talk to media and analysts from around the world attending Mobile World Congress in Barcelona—we shared some updates about Windows and Windows Phone, and we announced a new phase in our plan to continue growing and scaling Windows Phone globally.

Let’s start with Windows Phone.

We’ve experienced steady growth in recent years due to our “highly personal” approach to the smartphone experience and the amazing devices we’ve seen from our hardware partners HTC, Huawei, Nokia and Samsung. Together we’ve solidified our spot among the top three operating systems and celebrated some impressive milestones:

• Recognized as the fastest growing OS with 91% year-over-year growth in 2013 (IDC, February 2014)
• More than 10% share across Europe—which is more than double compared with last year. (Kantar Worldpanel ComTech, January 2014)
• Most important to me, we’ve seen high customer satisfaction data—a fact that even our competitors have acknowledged!
• Reached critical mass in the Windows Phone Store (now over 240,000 apps) and are still growing – fast – with an average of 500 apps added each day. We’ve had key additions such as Instagram, Vine, Waze and Mint—and today, we announced Facebook Messenger will be available in the coming weeks.

This past year was especially busy as we delivered three updates to the Windows Phone platform—we continued building the platform out for scale (via new chipsets, new carrier/country support, and more screen sizes) and we enabled some great scenarios for customers (e.g. the Nokia Lumia 41 MP camera and advanced camera features).

New Windows Phone Hardware Partners

Broadly speaking, our partners overall are the engine of growth for Windows. In addition to our great partners HTC, Huawei, Nokia and Samsung, today in Barcelona we announced we’re now working with nine new Windows Phone partners, including: Foxconn, Gionee, JSR, Karbonn, Lava (Xolo), Lenovo, LG, Longcheer and ZTE. Collectively, Windows Phone partners make up an impressive 56 percent of the global smartphone market, according to IDC.

This is exciting news for phone buyers around the world. With seven of the top 10 global OEMs—in addition to some of the leading brands in China, India and Taiwan— now collaborating with Windows Phone, you can expect to see an incredible new range of devices across screen sizes and price points. And of course we’re committed to delivering this device diversity without compromising the consistent, designed-around-you Windows Phone experience our users have grown to love.

Some of these partners are names that might not be familiar to you, but they’re leading the global expansion in the smartphone category. They bring competitive products to market because of their knowledge of the local markets, channels and consumers. They are important partners that will help broaden availability of Windows Phones to new and emerging markets.

New Windows Phone Hardware Support

Getting a wider range of device builders to create Windows Phones required us to enable even more hardware flexibility and to make the engineering process of building a Windows Phone even easier. Thus we also announced:

• We are adding support for Qualcomm Snapdragon 200 and 400 series chipsets, with options that support all major cellular technologies, including LTE (TDD/FDD), HSPA+, EVDO and TD-SCMA. We will also support soft keys and dual SIM where our partners want it for their devices. One nice benefit of these additions is that many hardware vendors will be able to use the same hardware for both Android and Windows Phone devices.
• To streamline the process of building a Windows Phone device, today we launched the Windows Hardware Partner Portal so that all our hardware partners will have direct access to the tools and content needed to build and market their Windows Phone devices efficiently and cost-effectively.

We also are working closely with Qualcomm Technologies, Inc. to help manufacturers anywhere in the world quickly and easily broaden their portfolio by building Windows Phone devices through the well-established Qualcomm Reference Design (QRD) program. Making it easier for manufacturers to take advantage of reference design options is an important step for Windows Phone. ABI Research notes a major smartphone industry shift towards reference designs since they speed time to market, and estimates that more than 400 million reference design smartphones will be shipped in 2014.

Evolving Windows 8

As part of my “new job,” I talked as well about Windows on tablets and PCs, and what to expect from us in the near future.

We are committed to making Windows the best place for our partners to build great devices. Today that means different screen sizes, input methods, connectivity needs, and usage scenarios. Above all, we want that experience to feel natural for our customers. We want it to be familiar and tailored to the device. We want your stuff to be there no matter where you are, ready for whatever you need, and we want it to run beautifully on hardware made by partners around the world.

With Windows 8, there’s no doubt that we made a big bet and took a first step toward that future. We bet on touch and on mobility in a big way, and included a fresh take on what a touch-based interface could be for customers. We believe deeply in this direction and the future will continue to build on Windows 8.

We shipped Windows 8.1 in under a year in response to customer and partner feedback, and we’ll continue to refine and improve Windows to deliver a productive and delightful experience for all users on all devices. And, you’ll see us continue on a more rapid release cadence where we deliver ongoing value to all your Windows devices.

Over the next few months, we’ll continue to deliver innovation and progression with an update to Windows 8.1, coming this spring. We’re especially excited about several things I want to preview with you here.

• We’ll enable our partners to build lower cost hardware for a great Windows experience at highly competitive price points.
• We are making improvements to the user interface that will naturally bridge touch and desktop, especially for our mouse and keyboard users. We have a number of targeted UI improvements that keep our highly satisfying touch experience intact, but that make the UI more familiar and more convenient for users with mouse/keyboard. Don’t worry, we still LOVE and BELIEVE IN touch… but you’ll like how much more smooth and convenient these changes make mouse and keyboard use!
• We are enhancing support for enterprise customers via a few tweaks, particularly including features that greatly improve IE8 compatibility in Internet Explorer 11, which is especially critical for web-based line of business applications. Additionally, we’re extending mobile device management capabilities and making deployment easier.

More news still to come

Speaking of our enterprise customers, we are also hard at work on delivering a compelling new update for Windows Phone that will add key features for consumers, as well as a big investment in enterprise customer capabilities, including VPN, S/MIME support, enterprise Wi-Fi, extended mobile device management and certificate management. Along with a host of great developer and consumer value, we expect to deliver this to customers this spring with new phones following as we move into summer.

2013 was an exciting and busy year chock full of big changes in our industry and at Microsoft. I’m really excited about seeing what the new and hot technologies are as Mobile World Congress opens tomorrow, and even more excited about the work we’ll be able to deliver for customers, partners and developers over the next several months. Stay tuned!

Q.&A. With Joe Belfiore on the Future of Windows Phone [Bits blog of The New York Times, Feb 23, 2014]

Joe Belfiore is the corporate vice president of Microsoft Windows Phone, and he oversees the software that powers handsets using the company’s operating system. Microsoft is expected to close its $7.2 billion deal to buy the handset and services division of Nokia by the end of March. The acquisition will give Microsoft control of both mobile software and hardware, as it looks to expand its 4 percent market share in global smartphone sales. Mr. Belfiore will play a crucial role in Microsoft’s efforts to take on Apple and the cellphone makers that use Google’s Android operating system.

On Sunday, Mr. Belfiore declined to comment on rumors that Nokia would unveil an Android-based phone on Monday at the Mobile World Congress conference in Barcelona. But during a news conference earlier in the day, he said, “What they do as an independent company is up to them. There are some things they do that we are excited about. There are other things that we are not so excited about.”

The following is an edited interview with Mr. Belfiore on other questions facing Microsoft and Windows Mobile.

Q. You have talked about 2013 being a year that Windows Phone had to eat its vegetables. What do you mean by that?

A. We faced a massive problem. It would have been very difficult to create a range of devices for every operator at every price that included every app in the world. We decided to focus on building something at a limited set of price points in a small, limited number of countries. That’s what we did this year. We had to get that right. Now that we’ve done that, we want to get Windows Phone at more price levels and in more countries.

Q. It’s difficult to attract users if you can’t offer them the apps that they want. But to get the apps, you need users. How do you solve that problem?

A. There’s no magic solution. We have to grow phone volume where we can. To increase our market share, we have to be available where customers are at low-cost and high-end price points. The stage is now set. Given our hardware partners, and Microsoft and Nokia coming together, we are in a good position to kick-start our market share.

Q. The Microsoft-Nokia acquisition is expected to close this quarter. What excites you about the deal?

A. There are some straightforward benefits. We can build on our existing healthy engineering relationship between software and hardware. And when one company takes products to market, it can tell the story with one voice. That will be a benefit. The biggest problem we face is how to get the word out about what we do. Those marketing activities, the storytelling around our products, are underestimated.

Q. When Microsoft closes the deal with Nokia, it will compete directly with other handset makers that also use the Windows Phone operating system. What is your response to that?

A. We can help build the market for Windows Phones. When there’s a healthy ecosystem, there’s a sales opportunity for all our partners. There are some markets and some countries where Nokia already competes with other manufacturers. But there’s a large opportunity out there. There are niches that are partners will be able to fill.

Q. Many of your recent partnerships and announcements have focused on emerging markets. Is that a major priority?

A. It’s not our only focus, but it’s a very big one. The purpose of low-cost phones in emerging markets is to drive volume. But doing high-end products like the Lumia 1520 and Lumia 1020 also gives an aspirational view of the way the product line will go.

Q. In a year’s time, where would you like the Windows Phone experience to be?

A. A year from now, I would like to have widespread consumer knowledge of the type of value proposition that is available with Windows Phone. People who use the phones have a favorable experience with them. But we need to get the word out there.

Q. Smartphones that use either Android or Apple’s iOS have almost 95 of the global market share. What is your response to analysts who say that Microsoft should give up on Windows Phone?

A. We benefit from investing in mobile innovation. And we think we have a lot to offer our partners and customers. The mobile market will continue to grow, the opportunities will continue to grow. We are not going anywhere.

Q. Microsoft has just appointed a new chief executive. How does Windows Phone fit into his vision?

A. The way we’ve built our team and how we have approached innovation is massively focused on mobile first, cloud first. That’s very much aligned with the vision that he has outlined.

Hands on with the $25 Smartphone running Firefox OS at MWC 2014 [TrustedReviews YouTube channel, Feb 24, 2014]

[0:15] “This is the newest … set that is running on ultra low-end memory which is 128MB RAM and 256MB ROM. So that’s why we call it the lowest [price] smartphone you probably can get on the market” [0:30]

From With Firefox OS, Mozilla begins the $25 smartphone push [CNET, Feb 23, 2014]

Mozilla doubled down on its bet that low-end smartphones will give Firefox OS a place in the crowded mobile market, announcing partnerships Sunday that will bring $25 smartphones to the large number of people who can’t afford high-end models like Apple’s iPhone 5S and Samsung’s Galaxy S5 that cost hundreds of dollars.

At the Mobile World Congress here, Mozilla announced a deal with Chinese chip designer Spreadtrum Communications that will mean Firefox OS smartphones will arrive in extremely cost-sensitive markets like India and Indonesia where people often buy phones from a bin in a store.

“We’re working with them to break through the $50 $25 barrier [should be corrected, obviously], which is hard,” Mozilla Chief Technology Officer Brendan Eich told CNET. “This is going to be for a set of [sales] channels in Asia that do not involve operators,” the carriers that in other parts of the world dominate distribution.

One company that plans to make and promote the phones is Indonesia-based Polytron. And Indonesian carriers Telkomsel and Indosat plan to sell the devices. Hands-on testing shows the cheap Firefox OS phones to be workable. “This is a price point currently out of the reach of Google and even the lowest-cost Android handset vendors. It pushes Firefox OS into feature-phone territory, potentially signaling the beginning of the end for the category,” said Ovum analyst Nick Dillon in a statement.
…
Mozilla has found a small niche in the mobile OS market by pursuing its low-end strategy, with the first phones debuting in countries such as Hungary, Venezuela, Colombia, Brazil, and Greece. Mozilla, a non-profit organization, hopes to use the browser-based operating system to lower the barriers that today keep people locked into ecosystems linking hardware, OS, app store, services, content, and apps.
…
Firefox OS takes on challenges
Today, Apple’s iOS and Google’s Android dominate the market for smartphones and tablets. Challengers like Microsoft’s Windows Phone, Ubuntu Touch, WebOS, BlackBerry OS, and Samsung’s Tizen have struggled to push these aside: it’s hard to compete against an incumbent that’s got millions of users, hundreds of thousands of apps, and few signs of the complacency that can open a door for challengers.

Firefox OS won’t have an easy time of it. There’s not as much money to be squeezed from low-end markets, so developers aren’t as likely to pursue it as avidly. The Spreadtrum chipset will support only 2.5G Edge mobile networks that, while common in poorer parts of the world, are too slow for a lot of modern apps. And Google is pushing toward lower-end phones, with Android 4.4 memory-saving techniques [“zRAM swap can increase the amount of memory available in the system by compressing memory pages and putting them in a dynamically allocated swap area of memory.”] that fit KitKat into phones with 512MB of RAM.

At the same time, though, Firefox is pushing, too. It uses the same ZRAM memory compression technique to halve its memory requirement to 128MB of memory, Eich said.

Getting down to $25 phones means Firefox OS will provide an alternative for people who’d otherwise buy a feature phone — a model with a few built-in apps but not much more.

So Firefox has a chance there. But in the long run, to succeed, Firefox OS will need to push up-market, and it’s not clear how Mozilla will succeed there with much stronger competition.

Think Big at #MWC14: Mozilla leadership discuss innovation and digital literacy [ThinkBigEurope YouTube channel, Feb 25, 2014]

Note: Think Big is a Telefonica initiative targeting young people in six European countries: Ireland, UK, Spain, Germany, Czech Republic and Slovakia (countries where Telefonica operates in Europe)

How good is the $25 smartphone from Mozilla – BBC News [BBC News YouTube channel, Feb 24, 2014]

Mozilla plans ‘$25 smartphone’ for emerging markets [BBC News, Feb 23, 2014]

Mozilla has shown off a prototype for a $25 (£15) smartphone that is aimed at the developing world.

The company, which is famed mostly for its Firefox browser, has partnered with Chinese low-cost chip maker Spreadtrum.

While not as powerful as more expensive models, the device will run apps and make use of mobile internet.

It would appeal to the sorts of people who currently buy cheap “feature” phones, analysts said.

Feature phones are highly popular in the developing world as a halfway point between “dumb” phones – just voice calls and other basic functions – and fully-fledged smartphones.

Mozilla hopes that it will capture an early lead in a market that is now being targeted by mobile device manufacturers who see the developing world as the remaining area for massive growth.

It will face stern competition from bigger, more established brands, however – with more announcements of this kind expected over the course of the next couple of days at the Mobile World Congress in Barcelona.

“These solutions expand the global accessibility of open web smartphones to first-time and entry-level smartphone buyers by reducing the time and cost required for handset makers to bring these devices to market,” said Spreadtrum in a press statement.

Mozilla said the phone “redefines” the entry-level phone market.

The concept of a cheap smartphone may seem likely to appeal to consumers in developed countries, particularly those who locked into long contracts in order to subsidise the cost of the likes of the Apple iPhone and Samsung Galaxy range.

But analyst Carolina Milanesi, from Kantar Worldpanel, said it should not be seen as a competitor.

“You’re not really talking about smartphone experience.

“You’re talking about a clumsy smartphone that’s a little bit better than a feature phone – still primarily for voice and text.”

The phone runs Mozilla’s own mobile operating system – something that could cause problems as competition in the cheap smartphone market steps up, Ms Milanesi added.

Mozilla also announced new high-end smartphones

In addition to the $25 smartphone, Mozilla also launched several high-end models, including devices from Huawei and ZTE.

Mozilla press conference about Firefox OS at MWC 2014 [firefoxchannel YouTube channel, Feb 23, 2014]

The $25 smartphone announcement comes at [15:30] with the following slides (note the 1Gb, i.e. 128MB LPDDR1 Embedded in the SoC!!):

From Firefox OS Unleashes the Future of Mobile [Mozilla Press Center, Feb 23, 2014]

Spreadtrum has announced WCDMA and EDGE turnkey reference designs for Firefox OS as well as the industry’s first chipset for US$25 smartphones, the SC6821, that redefines the entry level for smartphones in key growth markets. These solutions are already creating a stir, with global operators such as Telenor, Telkomsel and Indosat, and ecosystem partners such as Polytron, T2Mobile and Thundersoft expressing interest.

$25 Firefox Smartphone (MWC 2014) [ARMflix YouTube channel, Feb 25, 2014]

[0:33] “The key thing about this device is that this is only powered by 128MB of RAM. So this is only one half or one quarter of the existing entry level devices that we are seeing on the market.” [0:47]

Warning: This article does not take into account the SC6821 characteristics, especially its 128MB on chip RAM used via zRAM swap by the OS, as well as its EDGE only networking!
Is a US$25 smartphone possible? [DIGITIMES, Feb 25, 2014]

Mobile World Congress (MWC) kicked off with a bang, with Mozilla announcing a US$25 smartphone built around a turnkey solution that features silicon from China-based Spreadtrum and software from Firefox.

According to a Mozilla press release, Spreadtrum and Mozilla have now completed the integration of Firefox OS with several of Spreadtrum’s WCDMA and EDGE smartphone chipsets, including the SC6821, unveiled by Spreadtrum as the industry’s first chipset for a US$25 smartphone.

So the key to the solution is the SC6821, which Spreadtrum stated is “designed with a unique low memory configuration and high level of integration that dramatically reduces the total bill of materials required to develop low-end smartphones.” Mozilla added that with this chipset, handset makers will be able to bring to market smartphones with 3.5-inch HVGA [eg. 480x320] touchscreens, integrated Wi-Fi, Bluetooth, FM and camera functions, the advanced phone and browser features of Firefox OS, and access to an ecosystem of web and HTML5 applications.

With a clearer picture of the specs Mozilla envisions for a US$25 smartphone, I approached Digitimes Research Analyst Luke Lin to ask if he thought it was possible to deliver such a product to the market at this time. According to Lin, the simple answer is that it would be “impossible” to see a US$25 Firefox phone hit the shelves this year, unless operators are willing to provide subsidies.

Lin explained that currently, the absolute lowest smartphone BOM in China is estimated to be around US$22 (and most are significantly more than that) and that manufacturing costs are highly unlikely to go below US$20 this year, which would be the cost needed to deliver a US$25 smartphone to end users. The cost would need to get to US$15-20 FOB in order to get a selling price of US$25, Lin said.

In terms of Spreadtrum‘s claims it has produced a level of integration and memory requirements that can reduce the BOM cost significantly, Digitimes Research Analyst Anthony Chen commented that Spreadtrum’s solution is no more integrated than any other integrated solution on the market so there is no clear advantage there. And as for memory, the cheapest and smallest memory modules (ROM and mobile DRAM) for smartphones in China run about US$5 for a configuration of 256MB ROM and 256MB of mobile DRAM, and Chen highly doubts the Mozilla solution could run with a lesser configuration than that.

One other argument being offered as to why Spreadtrum could offer lower pricing than competitors is that the China government has a stake in the company. The logic is that an edge in pricing could help Spreadtrum better compete with Taiwan-based MediaTek and US-based Qualcomm.

Chen responded to the suggestion by pointing out that such a statement is not really an argument. It’s merely speculation. Moreover, Chen noted that Spreadtrum’s cheapest products currently sell in the US$3-4 range, and he doesn’t see much chance for the price to be reduced significantly, with subsidies or without.

While it is true that BOM costs are always falling, Lin and Chen agreed that component makers are much more likely to be squeezed in the higher-end segments, where they have margins. At the bottom of the market, the component makers are not really making any money. As a long term strategy for the low-end of the market, they would much prefer to provide improved specs at the same price rather than cut prices, Lin explained, while adding that it is unlikely that the BOM would drop much further at the bottom end of the market, as it is already close to US$20. Therefore, while prices may drop a little, Digitimes Research does not expect prices to drop all that much in the near future.

Another perspective was offered by Digitimes Research Analyst Jason Yang, who stated that if there is any component that could influence the low-end smartphone BOM at this point, it was the touch panel, not the application processor. Yang indicated that currently the touch panel module, with LCD display, accounts for the largest portion of the BOM, at around US$7-8 for the cheapest modules. Yang did state that he believes the price may drop this year, but not enough to bring the overall BOM cost of the cheapest phones to below US$20.

So, if ultimately the announcement was all about Mozilla driving the launch of a US$25 smartphone, Lin doubts that this will happen this year or anytime soon. Based on the current cost structure, Lin believes Firefox models priced in the US$60-80 are more likely to appear in 2014. Of course, users may be able to find spectacular deals and price cuts, but such a situation would more likely be inventory clearance or something similar, not a mainstream price point.

However, if this announcement is not about Mozilla driving the market to low-cost smartphones and is more about a trend where emerging markets will become flooded with cheap smartphones, then it should be noted that this is a process that is already underway.

Currently in China, entry-level smartphones – mostly white-box but even some brands – are already selling in the US$50 range. And these smartphones are not just being shipped to the domestic market. China vendors exported about 30% of their smartphones in 2013 and that proportion is forecast to rise in 2014. According to Digitimes Research data tracking smartphone shipments by vendor and the related market breakdown, the non top-10 segment (which is dominated by Greater China vendors and white-box players) accounted for 12% of global smartphone shipments in 2012, 21% of the global market in 2013, and Digitimes Research forecasts the share will rise to 25.6% in 2014.

So the flow of cheap smartphones from China going to emerging markets has already started and the shipments are steadily increasing, it’s just that the devices cost a bit more than US$25 and almost all of them feature Android as the OS.

Spreadtrum and Mozilla Take Aim at Global Smartphone Accessibility with Turnkey Solution for US$25 Smartphones [press release, BARCELONA, Spain, Feb. 23, 2014]

- Integration of Spreadtrum’s entry-level smartphone chipsets with turnkey reference designs for Firefox OS aims to bring Open Web Devices to an underserved audience of entry-level smartphone buyers around the world

- Spreadtrum unveils the SC6821, the industry’s first chipset for US$25 smartphones (retail), on Firefox OS

Today at Mobile World Congress, Spreadtrum Communications, Inc., a leading fabless semiconductor company in China with advanced technology in 2G, 3G and 4G wireless communications standards, and Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, announced that they have teamed up to deliver turnkey Firefox OS reference designs with Spreadtrum’s entry-level smartphone chipsets. These solutions expand the global accessibility of open Web smartphones to first-time and entry-level smartphone buyers by reducing the time and cost required for handset makers to bring these devices to market. Spreadtrum and Mozilla have now completed the integration of Firefox OS with several of Spreadtrum’s WCDMA and EDGE smartphone chipsets, including the SC6821, unveiled today by Spreadtrum as the industry’s first chipset for US$25 smartphones. These smartphones are available for demos at Mozilla’s booth (3C30) at Mobile World Congress 2014 in Barcelona.

“The combination of Firefox OS with Spreadtrum’s entry-level smartphone platforms has the potential to dramatically extend the reach of smartphones and the Web globally,” said Dr. Li Gong, Mozilla Senior Vice President of Mobile Devices and President of Asia Operations. “Firefox OS delivers a customized, fun and intuitive experience for first-time smartphone buyers and our collaboration with Spreadtrum enables the industry to offer customers an extremely affordable way to get a smartphone and connect with Web apps.”

At Mobile World Congress, Spreadtrum unveiled the SC6821, its new smartphone chipset that redefines the entry level of the global smartphone market. The chipset is designed with a unique low memory configuration and high level of integration that dramatically reduces the total bill of materials required to develop low-end smartphones. With this chipset, handset makers will be able to bring to market smartphones with 3.5″ HVGA [e.g. 480x320] touchscreens, integrated WiFi, Bluetooth, FM and camera functions, the advanced phone and browser features of Firefox OS, and access to a rich ecosystem of web and HTML5 applications, at prices similar to much more minimally featured budget feature phones.

Spreadtrum’s turnkey reference design brings together this highly cost-effective chipset platform with the intuitive, easy-to-use experience and Web/HTML5 application ecosystem of Firefox OS. “Turnkey solutions benefit the vast majority of small handset makers by reducing the time and cost involved in bringing new devices to market,” said Stuart Robinson, analyst at Strategy Analytics. “This joint effort between Spreadtrum and Mozilla will help make Firefox OS more readily available to handset makers that focus on the needs of entry level smartphone buyers in emerging markets.”

Firefox OS smartphones are the first devices powered completely by Web technologies to deliver the performance, personalization and price users want in a smartphone with a beautiful, intuitive and easy-to-use experience that is unmatched by other phones. Firefox OS has all the things users need from a smartphone as well as the things they want like built-in social integration with Facebook and Twitter, HERE Maps with offline capabilities, much-loved features like the Firefox Web browser, the Firefox Marketplace for apps and more. Firefox OS features a brand new concept for smartphones – an adaptive app search that literally transforms the phone to meet a user’s needs and interests at any moment.
Firefox OS offers Mozilla-pioneered WebAPIs that unlock the power of the Web and enable developers to build fun and rich app experiences that were previously only available to proprietary native apps, which are fragmented by platform and not portable.

Xiaomao Xiao, Spreadtrum’s vice president of software development added, “By integrating Firefox OS support with our smartphone platforms, we are providing our customers with flexibility and choice in how they develop and design their smartphones as well as access to the increasingly rich base of HTML5 applications that are available on this platform. We are pleased to work with Mozilla to expand Firefox OS support to all of our smartphone platforms to provide the benefits of open web technologies to consumers around the world.”

Spreadtrum and Mozilla have completed the integration of Firefox OS with Spreadtrum’s SC6821 and SC7710 WCDMA smartphone chipsets, and expect to complete a turnkey reference design for the SC7715, Spreadtrum’s single-core WCDMA smartphone chipset with integrated connectivity, next month. Spreadtrum and Mozilla’s collaboration will extend across Spreadtrum’s full chipset portfolio.

About Spreadtrum Communications, Inc.
Spreadtrum Communications, Inc. is a fabless semiconductor company that develops mobile chipset platforms for smartphones, feature phones and other consumer electronics products, supporting 2G, 3G and 4G wireless communications standards. Spreadtrum’s solutions combine its highly integrated, power-efficient chipsets with customizable software and reference designs in a complete turnkey platform, enabling customers to achieve faster design cycles with a lower development cost. Spreadtrum’s customers include global and China-based manufacturers developing mobile products for consumers in China and emerging markets around the world. Spreadtrum is a privately held company headquartered in Shanghai and an affiliate of Tsinghua Unigroup, Ltd. For more information, visit www.spreadtrum.com.

About Mozilla
Mozilla has been a pioneer and advocate for the Web for more than 15 years. We create and promote open standards that enable innovation and advance the Web as a platform for all. Today, half a billion people worldwide use Mozilla Firefox to discover, experience and connect to the Web on computers, tablets and mobile phones. For more information please visit https://www.mozilla.org/.

Firefox OS Expands to Higher-Performance Devices and Pushes the Boundaries of Entry-Level Smartphones [Mozilla Press Center, Feb 23, 2014]

Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, today previewed the future of Firefox OS to show how the flexibility, scalability and powerful customization will empower users, developers and industry partners to create the exact mobile experience they want with relevant and innovative features, localized services and more.

Expanding Ecosystem
Today, device partners ALCATEL ONETOUCH, Huawei, LG and ZTE are all using Firefox OS on a broad range of smartphones that are tailored for different types of consumers. The Firefox OS devices unveiled today showcase dual-core processors for better performance, higher screen resolution and more. The newest Firefox OS devices to join the family include the ZTE Open C and Open II, Alcatel ONETOUCH Fire C, Fire E, Fire S and Fire 7 tablet, all using Snapdragon™ processors from Qualcomm Technologies Inc., a leader in mobile communications.

In the few months since initial launch, Firefox OS smartphones are now available in 15 markets, with new operators and new markets around the globe announced today. Mozilla is working to create a level playing field with the openness of the Web. The ecosystem is catching fire and resulting in development of new form factors beyond the smartphone. For example, Panasonic announced they will make SmartTVs powered by Firefox OS, Foxconn and Via are making Firefox OS tablets, and Mozilla is working with suppliers to enable devices for all target user groups.

Significant growth is also happening with apps and content on Firefox OS, proving the Web has the potential to be the world’s largest marketplace. Firefox OS offers two ways to discover and utilize apps and content – the Firefox Marketplace and an adaptive app search that enables discovery and access to apps that users can instantly use once or download to keep. This innovative approach helps maximize data and storage usage.

The Firefox Marketplace has seen thousands of developers submitting apps and millions of downloads of popular global and relevant local apps. Top global apps include Cut the Rope, Disney’s Where’s My Water?, Facebook, EverNav, HERE, Line, Pinterest, SoundCloud, The Weather Channel, TimeOut, Twitter, Yelp and YouTube.

The ZTE Open C will offer the latest version of Firefox OS
in Venezuela and Uruguay in Q2 of 2014

The Firefox Marketplace makes it possible to create local and niche apps with relevant regional content by allowing developers to build on basic Web technologies, without gatekeepers. The top new local apps in the Firefox Marketplace include Despegar.com travel booking, Capp World Cup highlights, Captain Rogers game, Manana reading app, Napster, SurfTime and more.

Future of Firefox OS
At Mobile World Congress, Mozilla is showing off a preview of what to expect from Firefox OS in the coming year and what’s possible when the Web is the platform.

Firefox OS is made to change with each individual and adapt to his or her interests and needs with features like adaptive app search, offline use and cost control. New content can be enjoyed instantly with a simple search, making downloads virtually a thing of the past. Firefox OS offers deep levels of customization that are unmatched by any platform or device. This is possible because Firefox OS is built on the flexible technologies of the Web and the user interface is made of a modular architecture of building blocks that make it easy for anyone to customize.

Upcoming versions of Firefox OS will offer users fun and innovative new features and services including new and intuitive navigation, a powerful universal search feature, support for LTE networks and dual SIM cards, easy ways to share content, ability to create custom ringtones, replaceable home screens and Firefox Accounts.

New versions of Firefox OS have many performance improvements that dramatically improve the user experience including speedier launch times, smoother scrolling and improved keyboard accuracy.

Here are highlights on a few of the features coming next for Firefox OS:

• Deep customization options for operators and manufacturers, developers and users. This includes the ability to create custom ringtones and replaceable home screens, which were direct requests from Firefox OS users.
• A new universal search that will revolutionize how users discover content on their phones. The feature is available on any screen – simply swipe down from the top to find new apps, content or navigate to anything on the phone or the Web.
• New navigation features to make multitasking intuitive, fluid and smart, much like how users interact with the Web. Users can easily swipe from the left and right edges to seamlessly move between pages, content and apps in a fun way that saves time.
• Easy and direct sharing of content (and even software updates) in a secure way with NFC support, without the need for data or Wifi.
• LTE support to make the mobile experience even faster.
• Firefox OS will introduce Firefox Accounts and services. Firefox Accounts is a safe and easy way for users to create an account that enables them to sign in and take Firefox everywhere. With Firefox Accounts, Mozilla can better integrate services including Firefox Marketplace, Firefox Sync, backup, storage, or even a service to help locate, message or wipe a phone if it were lost or stolen.

As the platform evolves, Firefox OS will enable new technologies for the mobile industry. Mozilla is already leading the way in areas like gaming, privacy and security, WebRTC and other services. Firefox OS is a great platform for which partners can build additional services that meet the needs of their customers regionally and individually.

Early examples:

• Telefonica offers a very helpful cost control app for customers to manage their usage and top off their account.
• Deutsche Telekom just announced they are utilizing the deep levels of customization Firefox OS offers to develop new privacy features for the Future of Mobile Privacy project, a joint effort with Mozilla to create effective, user-driven privacy functionality for mobile devices.
• WebRTC is an open, standards-based technology that enables operators to offer services like real time chat, image and file sharing. With WebRTC, operators can let users make calls to any desktop or mobile device, regardless of platform or service provider.

“We’re pleased to see the Firefox OS ecosystem grow so quickly as users, developers and partners come together to experience and build the future of mobile experiences,” said Andreas Gal, Mozilla Vice President of Mobile. “Firefox OS will continue to evolve and add more features to offer choice and customization that is unmatched by any other smartphone. We’re excited to see what other features and services will result from an open platform being contributed to by developers, partners and community around the world.”

About Mozilla
Mozilla has been a pioneer and advocate for the Web for more than 15 years. We create and promote open standards that enable innovation and advance the Web as a platform for all. Today, half a billion people worldwide use Mozilla Firefox to experience the Web on computers, tablets and mobile devices. With Firefox OS and
Firefox Marketplace, Mozilla is driving a mobile ecosystem built entirely on open Web standards, freeing mobile providers, manufacturers, developers and consumers from the limitations and restrictions imposed by proprietary platforms. For more information, visit http://www.mozilla.org.

For More information: https://blog.mozilla.org/press/kits/firefox-os/

New Developer Hardware and Tools Show Firefox OS Ecosystem Momentum [Mozilla Press Center, Feb 23, 2014]

Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, today announced new developer reference hardware and tools that will continue to accelerate momentum around the Firefox OS ecosystem, making it cheaper, faster and easier for developers, operators and OEMs to deploy innovative Web apps and create personalized Firefox OS experiences.

Mozilla announced a 4.5” dual-core reference phone, enabling developers to test new Firefox OS features and apps against different memory configurations. It also expanded the Mozilla tablet program that helps developers test their apps and build out Firefox OS for tablets.

New Firefox OS developer tools and hardware demonstrate ecosystem momentum

New Firefox OS PhoneGap integration was also announced, allowing hundreds of thousands of PhoneGap developers to port their existing apps to Firefox OS in a matter of hours, while new WebAPIs will continue to narrow the gap between native and Web apps. At Mobile World Congress, Mozilla also launched developer tools that will allow OEMs and operators to easily customize Firefox OS for a variety of customer segments.

Developers have always been the key to driving innovation around the Web, and continue to enable it as a platform for app development and distribution. With these new reference devices, tools, and WebAPIs, Mozilla is catalyzing the growth of Web apps and continuing to break down the barriers and restrictions inflicted by other app ecosystems. The Web not only simplifies app development and reduces fragmentation, but allows developers to own the direct customer relationship with the option to host their own apps and or sell them through the Firefox Marketplace.

Vision Mobile recently published a report showing that developer interest for Firefox OS continues to grow, capturing 7% of developer mindshare in just six months. The report also highlighted that during Q1 2014, 52% of developers were already using HTML5 for mobile websites or Web apps with an additional 16% indicating their intention to join them.

A recent survey by Strategy Analytics found that the number of mobile app developers building for Firefox OS is expected to triple this year, showing the biggest rise in developer interest of any mobile platform.

This industry momentum is fueled by the fact that there are already millions of Web developers programming in HTML5 who are eager to target mobile without having to learn a new programming language, or pay engineers to target specific mobile platforms.

The following expanded reference hardware, tools, and WebAPIs, will continue to drive growth of the Firefox OS ecosystem and help prove why the Web is a powerful platform for app development and distribution:

New Reference Phone

At Mobile World Congress, Mozilla is showcasing its new developer reference phone, the Firefox OS Flame, enabling developers to test the capabilities of Firefox OS in a real environment with a mobile network and true hardware characteristics like the accelerometer, NFC and camera. Like the commercially available Firefox OS phones, the Flame developer reference phone is powered by a Qualcomm processor, in this instance a high powered 1.2GH dual core processor, so developers can test their more processor-intensive games and apps with ease. Developers looking to target their apps for specific Firefox OS phones with lower memory footprints also have the option to alter the RAM capacity of the Flame, from 1GB to 256MB, to see how their apps would perform on lower specked phones. The Flame also provides developers and early adopters with access to the latest Firefox OS builds to test nightly releases and contribute to the overall development platform.
Firefox OS Flame Specs (Reference device):

• Qualcomm MSM8210 Snapdragon, 1.2GHZ Dual core [Cortex-A7 with Qualcomm Adreno 302 GPU] processor
• 4.5” screen (FWVGA 854×480 pixels)
• Cameras: Rear: 5MP / Front: 2MP
• 3G UMTS quad-band (850/900/1900/2100)
• 8GB memory
• 256MB -1GB RAM (adjustable by developer)
• A-GPS, NFC
• Dual SIM support
• Battery capacity: 1,800 mAh
• WiFi: 802.11 b/g/n, Bluetooth, Micro USB

Hundreds of Thousands of PhoneGap Users Can Now Target Firefox OS

Firefox OS will be supported in the next release of PhoneGap, the leading developer tool for building apps across platforms. This builds on the recently announced Firefox OS integration with Cordova, a popular Apache Foundation open source project that allows HTML5 applications to be packaged as native apps.

PhoneGap is a mobile application development framework used by hundreds of thousands of developers. It is based upon the open source Apache Cordova project and allows developers to write an app with HTML, CSS and JavaScript, and then deploy it to a wide range of mobile devices with the same capabilities as native apps. With the Firefox OS integration, developers can now port their existing PhoneGap apps to Firefox OS in a matter of hours, with minimal work. For more information, please see this Hacks post.

App Manager Simplifies App Development with Live Prototyping and Debugging

App Manager brings the Firefox Web developer tools to mobile app developers. It shows how the power of the Web helps developers test, deploy and debug Web apps on Firefox OS phones directly from their desktop. The Firefox Web developer tools are already used by millions of Web developers for creating Web pages, and now the App Manager extends these capabilities to mobile app creation, with the same familiar workflow. There is no SDK to download, developers simply use the App Manager as part of the integrated developer tools in the Firefox browser.

Because the App Manager and Firefox OS both use open Web technologies, debugging, live editing and prototyping is straightforward. For example, an operator or OEM may want to prototype different branded homescreen themes for different audiences. Using the App Manager, they can code this on their desktop and in real-time see the changes appear on their connected Firefox OS phone, eliminating lengthy build times. To see how this is done, please see this MDN article.

New WebAPIs and Industry Adoption

There are now more than 30 Mozilla-pioneered WebAPIs with at least eight new APIs introduced in the last year, including WebNFC and Data Store API. These new APIs build more functionality and features into the Web for app development. There is increasing industry adoption as these APIs move towards standardization. Samsung added the Vibration API and Battery Status API to WebKit, while tools like Apache Cordova and Adobe’s PhoneGap now integrate six of the most popular WebAPIs into their products.

Foxconn and VIA Join Tablet Contribution Program

Mozilla recently introduced a tablet contribution program aimed at accelerating the build of Firefox OS for tablets and its supporting ecosystem, with Foxconn as the first hardware partner.

As part of the Firefox OS tablet contribution program, VIA is offering a 7” Vixen reference tablet for developers around the world to help the Mozilla community complete the build of Firefox OS for tablets. Developers can now apply to be a part of this program from this Mozilla Hacks post.

Developer Reference Tablet Specifications:

VIA Vixen:

• 7’’ 1024×600 HD LCD screen
• 1.2 GHz Dual Core Cortex-A9 processor
• ARM Mali-400 Dual-Processor GPU
• 8GB storage
• 1GB RAM
• Cameras: Front 0.3 MP, Back 2.0 MP
• Wifi: 802.11 b/g/n

Foxconn InFocus:

• 10” screen (1280 x 800 pixels, 24-bit color)
• [Allwinner] A31 (ARM Cortex A7) Quad-Core 1.0GHz w/ PowerVR SGX544MP2 GPU
• 16GB storage
• 2GB RAM
• Cameras: Rear 5MP/ Front 2MP
• A-GPS
• Battery capacity: 7,000 mAh
• WiFi: 802.11 b/g/n, Bluetooth, Micro USB

“It’s clear that more and more developers are choosing the Web as their preferred development platform for mobile apps, as the technical gap between native and Web apps narrows,” said Brendan Eich, Mozilla CTO and SVP Engineering. “We listen to what developers are asking for to make the Web their primary development platform and think Mozilla and its partners have made significant progress with these new hardware, tools, and WebAPIs. It’ll be exciting to see what new mobile innovations come in 2014.”

Firefox OS Unleashes the Future of Mobile [Mozilla Press Center, Feb 23, 2014]

Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, demonstrated the breadth and growth of its Firefox OS open mobile ecosystem at a press event on the eve of Mobile World Congress in Barcelona. The event introduced seven new commercial Firefox OS devices and highlighted advancements and partnerships that will enable the platform to scale up in 2014.

In the year since MWC 2013, Firefox OS devices have gone on sale in 15 markets with four global operators and handsets from three manufacturers. Firefox OS will be expanding into important new markets in 2014. Telefónica will build on the list of countries where it’s selling Firefox OS phones, with eight more launching this year: Argentina, Costa Rica, Ecuador, El Salvador, Germany, Guatemala, Nicaragua and Panama. Deutsche Telekom will also add four new markets: Croatia, the Czech Republic, Macedonia and Montenegro.

Operator support for Firefox OS also continues to expand, as Telkomsel and Indosat have joined the list of 21 key operators across the globe that support the open Web device initiative. That list also includes partners announced last year: América Móvil, China Unicom, Deutsche Telekom, Etisalat, Hutchison Three Group, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia Group, Telefónica, Telenor, Telstra, TMN and VimpelCom.

A new smartphone entry level
Spreadtrum has announced WCDMA and EDGE turnkey reference designs for Firefox OS as well as the industry’s first chipset for US$25 smartphones, the SC6821, that redefines the entry level for smartphones in key growth markets. These solutions are already creating a stir, with global operators such as Telenor, Telkomsel and Indosat, and ecosystem partners such as Polytron, T2Mobile and Thundersoft expressing interest.

“In six short months, Firefox OS has more than established itself in the very markets it aimed to address,” said John Jackson, VP of Mobility Research, IDC. “Today’s announcements underscore the platform’s rapid maturation and growing ecosystem benefits. New products, tools, categories, partners, features, and extraordinarily compelling price points will reinforce Firefox OS’s momentum into 2014. IDC expects year-on-year Firefox OS volumes will grow by a factor of six times in the smartphone category alone.”

Flexibility and customization
Firefox OS devices are the first devices built entirely to open Web standards, with every feature developed as an HTML5 application. Mozilla previewed the future of Firefox OS at its press event, demonstrating how its flexibility, scalability and powerful customization empower users, developers and industry partners to create the exact mobile experience they want. Carriers can easily and deeply customize the interface and develop localized services that match the unique needs of their customer base.

Deutsche Telekom is utilizing this customization to develop new Firefox OS features for the Future of Mobile Privacy project, a joint effort with Mozilla to bring data privacy closer to customers. The organizations’ privacy offices have been collaborating over the past year to conceptualize and develop new privacy features that are currently being tested for consideration in future Firefox OS releases.

Firefox OS is also expanding to additional form factors, as partners and contributors work to optimize the software for TVs, tablets and other devices. In January, Panasonic announced a partnership with Mozilla to release next-generation smart TVs powered by Firefox OS.

“Firefox OS is off to an amazing start. We launched our first smartphones in July, and have since expanded into fifteen markets,” said Jay Sullivan, chief operating officer of Mozilla. “People in Latin America and Eastern Europe have eagerly upgraded from their feature phones to Firefox OS smartphones and now have rich access to the Web and apps. Sales have far exceeded our targets. But 2013 was just the beginning. In 2014, we are differentiating our user experience and our partners are growing the portfolio of devices. We are also enabling a whole new category of smartphone, priced around $25, that will bring even more people around the world online.”

Streamlining the support process
Mozilla has received significant interest from mobile manufacturers looking to differentiate themselves by producing Firefox OS phones and tablets. To help service this demand and facilitate the next wave of device growth, Mozilla launched a new self- service partner portal to fast track manufacturers and streamline bringing devices to market. Manufacturers get all the resources and branding required to launch a Firefox OS device in one place.

In order to promote the success of this ecosystem, the Open Web Device Compliance Review Board (CRB) was formed by Mozilla and major global partners in late 2013. The CRB’s aim is to define and evolve the process of encouraging API compatibility and competitive performance for open Web devices.

Partner quotes
Marieta Rivero, Global Chief Marketing Officer at Telefónica, said: “We started marketing Firefox OS less than eight months ago, commencing with Spain and expanding to several Latin American countries. In a number of these countries, Firefox OS has been a market leader in smartphone sales from the very start. We’re transforming the market, and will continue focusing our efforts on open environments that give clients more freedom, and prices that are better suited to their possibilities. 2014 will undoubtedly be a key year for all of this.”

“The continuing rollout across our European markets is tangible proof of our drive to push Firefox OS, together with Mozilla and bring an open operating system to all of our customers,” said Thomas Kiessling, Chief Product & Innovation Officer at Deutsche Telekom. “The introduction of an even more affordable handset on the one hand and a higher-end model on the other also show we are reaching more market segments.”

“Telenor and our operating businesses have seen great consumer satisfaction and a continued appetite in the market for quality, low-cost products based on Firefox OS,” said Holger Hussmann, VP Device and OS at Telenor. “We are supportive and welcoming of the efforts of enabling vendors and device partners focused on serving this great, underserved market opportunity.”

Alistair Johnston, Director of Marketing for Telkomsel, said: “Telkomsel will support Mozilla with its Spreadtrum turnkey solution and device partner as an attempt to bring the smartphone to the palm of every Indonesian and to perform Telkomsel strategy to speed up and enrich the DNA (Device – Network – Application) ecosystem in Indonesia.”

President Director & CEO of Indosat, Alexander Rusli, said: “Indosat as the leading communications provider in Indonesia is ready for Firefox OS smartphones based on the Spreadtrum solution. This is in line with our strategy in 2014 to provide the best experience to our customers and become the customer’s preferred choice for smartphones and smart device users.”

“Polytron is announcing the intention of supporting the manufacturing, distribution, and promotion of Firefox OS smartphones based on Spreadtrum’s latest solution,” said Mr. Hariono, CEO of Polytron, Indonesia’s leading mobile device brand. “T2Mobile specializes in offering our customers the ability to rapidly address the needs of its customers in every segment of the wireless ecosystem,” said Aaron Zhang, CEO, T2Mobile, a leading ODM specializing in Firefox OS-based mobile solutions. “The creation of new Firefox OS and open Web devices will be further accelerated by these solutions and we are pleased to support these new offerings.”

“We are excited by the new and highly affordable possibilities enabled by Firefox OS,” said Hongfei Zhao, CEO, Thundersoft, a leading global technology and solutions provider that helps OEMs’ accelerate high quality product development and achieve fast time to market. “We have expanded our services in new areas including support for Firefox OS, enabling new and unique offerings in the mobile Internet device industry and ecosystem.”

More information
Opening remarks by Mitchell Baker, Executive Chair and Jay Sullivan, Chief Operating Officer

Please visit Mozilla and experience Firefox OS at stand 3C30 in Hall 3, at the Fira Gran Via, Barcelona from February 24-27, 2014.

For additional resources, such as high-resolution Firefox OS images and b-roll video, visit: https://blog.mozilla.org/press.

The smartphone market in China became saturated between Q3’12 and Q4’13 as per the below chart from Analysys International (EnfoDesk):

Note that this chart corresponds to Chinese writing traditions, i.e. in Q2’11 16.81 million smartphones and 51.01 million feature phones were sold, while in Q4’13 97.63 million smartphones and 9.2 million feature phones. Source: 易观分析：2013年第4季度中国手机销量增速放缓，智能手机市场呈现饱和态势 (Analysys analysis: China mobile phone sales growth slowed in the fourth quarter of 2013, the smart phone market is saturated) [EnfoDesk, March 11, 2014]

Chinese Handset Vendors Will Account for Over 50% of Mobile Handset Sales in 2015 [ABI Research press release, March 10, 2014]

ABI Research reports that Chinese handset vendors will account for over 50% of mobile handsets in 2015. Chinese vendors already accounted for 38% of mobile handset shipments in 2013 and the ongoing shift in growth to low cost handsets, especially smartphones, will increase their market share.

Greater China has long dominated the mobile handset manufacturing supply chain, but now its OEMs are beginning to dominate sales at the expense of the traditional handset OEMs, including even Samsung.

Many of the Chinese OEMs have focused almost exclusively on the huge Chinese market, with little activity beyond its borders, but this is set to change. Huawei (6th in worldwide market share for 2013) and ZTE (5th) have already made an impact on the world stage, but other Chinese handset OEMs like Lenovo—the Motorola acquisition is a clear statement of intent—and Xiaomi are set to join them.

“Chinese vendors already take up five of the top ten places in terms of worldwide market share, despite three of them only really shipping into China. The Chinese vendors highlight the changing shape of the mobile handset market, as the Chinese manufacturing ecosystem, specifically reference designs, enable the next wave of smartphone growth in low cost emerging markets and amongst price conscious consumers everywhere,” said Nick Spencer, senior practice director, mobile devices.

“South East Asia has already experienced this trend, but ABI Research expects to see the impact of these Chinese vendors increasing in all emerging markets and even advanced markets, especially on prepay,” added Spencer.

The New Phone Giants: Indian And Chinese Manufacturers’ Fast Rise To Threaten Apple And Samsung [Business Insider India, March 15, 2014]

The top Indian and Chinese smartphone manufacturers are classically disruptive. They produce products that are “good enough,” at a fraction of the cost of comparable models from premium brands. These ultra low-cost devices are the key to nudging consumers in massively untapped markets like India and Indonesia onto smartphones.

And these companies are starting to aim higher – producing 4G LTE smartphones that have the same processing power as Samsung and Apple premium devices.

They’re also far more innovative than they’re given credit for in terms of their strategy, supply chain management, and hardware.

In a new report from BI Intelligence, we explain why global consumer Internet and mobile companies will increasingly need to work with companies like Xiaomi and Micromax – not to mention Lenovo, Huawei, ZTE, Coolpad, Karbonn, and others – if they don’t want to miss out on mobile’s next growth phase in emerging markets

• Major local manufacturers now account for two-fifths of China’s smartphone market, and one-fourth of India’s. Xiaomi already sells four of the top 10 best-selling Android devices in China, and operates one of the top five app stores.
• Combined, the top five manufacturers in China and the top two in India – the “Local 7″ in the chart above – are now shipping about 65 million smartphones every quarter, more than Apple, and coming close to drawing even with Samsung.
• These local manufacturers wield influence in various ways. They run their own successful app stores, mobile operating systems, and mobile services. They also hold the keys to which apps are preloaded on their phones. When BlackBerry wanted to take its BBM messaging service for Android into India, it signed a deal with Micromax.
• The local manufacturers are not provincial outfits producing knock-offs, as some might be inclined to assume. But their main competitive tool, for now, remains price. Local manufacturers in China and India match the features of more expensive devices and manage to produce comparable hardware at a fraction of the price. A Micromax handset comparable to Apple’s iPhone 5C costs less than one-fourth as much.
• Xiaomi has used a four-point strategy in its three-year rise to produce four of the most popular phone models in China. We discuss all four aspects, including tight inventory management and crowdsourcing product development feedback.
• These manufacturers will continue to expand overseas, in search of new growth opportunities. Micromax is in Nepal, Bangladesh, and Sri Lanka. Xiaomi has its eyes on Malaysia and Brazil. Huawei is already in the U.S. For example, it sells a 4G LTE handset on MetroPCS.

Smartphone Prices Race to the Bottom as Emerging Markets Outside of China Come into the Spotlight for Future Growth, According to IDC [press release, Feb 24, 2014]

Singapore and London, February 24, 2014 – Emerging markets have become the center of attention when talking about present and future smartphone growth. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, in 2013 the worldwide smartphone market surpassed 1 billion units shipped, up from 752 million in 2012. This boom has been mainly powered by the China market, which has tripled in size over the last three years. China accounted for one out of every three smartphones shipped around the world in 2013, equaling 351 million units.

Recently the surge in growth has started to slow as smartphones already account for over 80% of China’s total phone sales. The next half billion new smartphone customers will increasingly come mainly from poorer emerging markets, notably India and in Africa.

“The China boom is now slowing,” said Melissa Chau, Senior Research Manager for mobile devices at IDC Asia/Pacific. “China is becoming like more mature markets in North America and Western Europe, where smartphone sales growth is slackening off.”

Emerging markets in Asia/Pacific outside of China, together with the Middle East and Africa, Central and Eastern Europe, and Latin America, account for four fifths of the global feature phone market, according to IDC data. “This is a very big market opportunity,” said Simon Baker, Program Manager for mobile phones at IDC CEMA. “Some 660 million feature phones were shipped last year, which could add two thirds to the size of the current global smartphone market.”

India will be key to future smartphone growth as it represents more than a quarter of the global feature phone market. “Growth in the India market doesn’t rely on high-end devices like the iPhone, but in low-cost Android phones. Nearly half of the smartphones shipped in India in 2013 cost less than US$120,” said Kiranjeet Kaur, Senior Market Analyst for mobile phones at IDC Asia/Pacific.

“Converting feature phone sales to smartphone sales implies a relentless push towards low cost,” added Baker. IDC research shows nearly half the mobile handsets sold across the world have retail prices of less than US$100 without sales tax. Two thirds of those have prices of less than US$50.

“The opportunity gets larger the lower the price falls,” continued Baker. “If you take retail prices without sales tax, in 2013 nearly three quarters of the US$100-125 price tier was already accounted for by smartphones. Within US$75-100 the proportion was down to just over half, and between $50-75 it was not much more than a third.”

Many smartphone vendors have begun gearing up for this next wave of cost pressure. Samsung is increasingly switching production to Vietnam, where manufacturing costs currently undercut mainland China. Even Hon Hai, one of the largest contract manufacturers for handsets in China, has announced plans for a plant in Indonesia to furnish a lower production cost base.

In addition to the table below, an interactive graphic showing worldwide sub-$100 feature phone shipments by region is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

Worldwide Sub-$100 Feature Phone Shipments by Region, 2013

Region	Shipments (M Units)
India	212.3
Middle East & Africa	150.0
Asia/Pacific (excluding Japan, China, and India)	140.7
Latin America	76.4
PRC	68.1
Central & Eastern Europe	43.6
Western Europe	39.8
North America	13.9
Total	744.9

Source: IDC Worldwide Mobile Phone Tracker, February 24, 2014

Analysys International: Xiaomi Ranked Among Top Five in Q4, 2013 [March 11, 2014]

The statistics from EnfoDesk, the Survey of China Mobile Terminals Market in Q4, 2013, newly released by Analysys International, shows that the market share of Samsung, Lenovo, Huawei, Coolpad and Xiaomi ranked the top five of China smartphone in Q4, 2013. The market share of Samsung shrink slightly over the previous quarter, but it still accounted for 15.07 percent of smartphone market and maintain the leading position.

The release of Apple‘s new product has brought efficiency in Q4, and its market share slightly rebounded. Owning to the release of MI3 (Xiaomi), the market share of Xiaomi up 3.85 percentage points compared to the previous quarter. MI3 still should be bought from booking and the booking is relatively frequent. Meanwhile, the purchase restriction of MI2(Xiaomi) and Red MI(Xiaomi) has been relaxed, coupled with the strategic cooperation between Xiaomi and mobile operators, making it easier to buy custom models as well as contributing to the  enlargement of Xiaomi’s market share. It can be expected that Xiaomi will put more energy into the complement of its retail capabilities and continue to increase their market share.

From: UMENG Insight Report – China Mobile Internet 2013 Overview [UMENG, March 12, 2014]

- The number of active smart devices in China exceeded 700 Million by the end of 2013. - The five fastest growing mobile apps categories (excluding games) are : news, health & fitness, social networking, business, and navigation. These areas will bring new opportunities for developers in 2014. - Socializing your apps is the key to success for developers. Currently among the top 1,000 apps (apps and games) in the Chinese market, 55% of them provide links to Chinese social networking services (e.g. Sina Weibo, Wechat, QQ, Renren) The amount of app content sharing to social network platforms per mobile Internet user per day has tripled in the last 6 months. - Social network sharing in game has become incredibly popular on all social networking platforms, 48% of in app sharing traffic to social networks are from games. - High-end devices (pricing above 500US$) have a significant market share in China, contributing 27% of total devices. These users have dynamic needs on mobile apps . The users of below 150US$ phones prefer casual games for their entertainment requirements. - The year of 2013 became known as the first year Chinese developers took IP seriously with many developers licensing IP from rights holders. By the end of 2013, among the Top 100 games, 20% license 3rd party IP. - Over the course of 2013 the percentage of iOS jailbroken devices in the Chinese Mainland fell by 17% to 13% of all devices. Domestic users are becoming more hesitant to jailbreak their devices.

…

700 Million active smart devices in China

• By the end of 2013, the number of active smart devices in China had exceeded 700,000,000, including smart phones and tablets.       
• In the 4th quarter 59% of new devices were bought by smartphone users upgrading their existing hardware. The remaining new devices where bought by users buying their first smartphone. As smartphone use becomes more commonplace in China new sales are increasingly driven by existing users upgrading, rather than from users purchasing their first smartphone.               

…

The market for budget Android phones is strong in China with 57% of devices under 330 USD price range. However over a quarter of users are using high-end smart phones costing over 500USD, 80% of these are iPhones.

…

Fragmented Android device market

• In the 4th quarter of 2013, Samsung and XiaoMi (a local brand) prove to be the most popular Android brands as between them they manufacture all of the top 10 active Android devices.
• However the Android market is still highly fragmented with hundreds of different handsets on the market. Samsung who manufacture many devices in all price ranges control 24% of the device market, while the domestic manufactures are battling it out with the international brands to extend their market share.

…

• In 2013, changes to device connectivity saw a large growth in WiFi connectivity, from 38% at the beginning of  the year to 52% at year end. Mobile Internet infrastructure has become better in China. However Chinese users are still price sensitive to mobile data tariff.       

…

• Glossary:   
  Active Device: active device refers to device which has activated at least one app covered by Umeng platform in the stipulated time frame. All  the “devices” in the report refers to “active devices”, not the actual shipment.

…

• Data Source:   
  Analysis data in the report is based on over 210,000 Android and iOS apps from the Umeng platform. All data was collected from January to December 2013.

From: More than 247 million mobile handsets shipped in India during CY 2013, a Y-o-Y growth of 11.6%; over 70 million mobile handsets shipped in 4Q 2013 alone [CyberMedia Research press release, Feb 26, 2014]

According to CMR’s India Monthly Mobile Handsets Market Review, CY 2013, February 2014 release, India recorded 247.2 million mobile handset shipments for CY (January-December) 2013. During the same period, 41.1 million smartphones were shipped in the country.

…

India Smartphones Market

The India smartphones market during 2H 2013 saw a rise in shipments by 60.3% over 1H 2013, taking the overall contribution of smartphones to 16.6% for the full year. Further, 65.8% of the total smartphones shipped in the country were 3G smartphones during CY 2013.

Commenting on these results, Tarun Pathak, Lead Analyst, Devices, CMR Telecoms Practicesaid, “CY 2013 was primarily the year of smartphones for the India market, particularly for local handset vendors. A first for the India market was a marginal decline in featurephone shipments on a year-on-year basis. This trend is likely to continue with more vendors focusing on entry level smartphone offerings aimed at the consumer segment.”

“Nearly 70 vendors operated in the highly competitive India smartphones market in CY 2013, with ‘Tier One’ brands like Apple, Samsung, Nokia, Sony, HTC, LG and Blackberry capturing close to 53% of the total smartphones market, followed by India brands capturing close to 43% of total smartphone shipments. The remaining market of roughly 4% smartphone shipments was captured by China OEM brands, where we expect a few more players to enter the India market directly, instead of continuing as ODM partners to Indian brands”, Tarun added.

Rapid Growth In Smartphones Offset The Slump Witnessed In Feature Phone Sales In 4Q13, Says IDC [press release, Feb 26, 2014]

India was one of the fastest growing countries worldwide in terms of smartphone adoption in 2013. According to the International Data Corporation (IDC) in 2013 the smartphone market surpassed 44 million units shipped, up from 16.2 million in 2012.  This surge has been mainly powered by home grown vendors which have shown a tremendous and consistent growth over the past 4 quarters of 2013.

The overall phone market stood at close to 257 million units in CY 2013 – an 18% increase from 218 million units in CY2012.

CY2013 also witnessed a remarkable migration of the user base from feature phones to smartphones primarily due to the narrowing price gaps between these product categories.

Q413 Perspective:

The India smartphone market grew by 181% year over year (YoY) in the fourth quarter of 2013 (4Q13).  According to International Data Corporation’s (IDC) APEJ Quarterly Mobile Phone Tracker, vendors shipped a total of 15.06 million smartphones in 4Q13 compared to 5.35 million units in the same period of 2012. 4Q13 grew by almost 18% Quarter-on-Quarter.

The shipment contribution of 5.0inch-6.99inch screen size smartphones (phablets) in 4Q2013 was noted to be around 20% in the overall market. The category grew by 6% in 4Q13 in terms of sheer volume over 3Q13.

The overall mobile phone market (Feature Phones and Smartphones) stood at 67.83 million units, a 16% growth YoY and a meager 2% growth quarter over quarter (QoQ).The share of feature phones slid further to make 78% of the total market in 4Q13, with the market showing a decline of 2% in 4Q13 over 3Q13.

The fourth quarter of 2013 witnessed a spike in the smartphone shipments by smaller homegrown vendors like LAVA, Intex which have shown tremendous growth in the past couple of quarters.

“The growth in the smartphone market is being propelled by the launch of low-end, cost competitive devices by international and local vendors which are further narrowing the price gaps that exist between feature phones and smartphones”, said Manasi Yadav, Senior Market Analyst with IDC India.

“The international vendors have understood the importance of creating a diverse portfolio of devices at varied price points and are striving to launch cost competitive devices that cater to every segment in the target audience ” comments Kiran Kumar, Research Manager with IDC India.

Top Five Smartphone Vendor Highlights

Samsung: Samsung maintained its leadership spot with about 38% in terms of market share. Its smartphone shipments grew by close to 37% from 3Q 2013 to 4Q2013. The fourth quarter saw quite a few new launches across price points by Samsung – however the low-end Galaxy portfolio in smartphones contribute to 50% in terms of shipment volumes

Micromax: Micromax held on to its second spot with about 16% in terms of market share in 4Q2013. Some of the top selling models were the entry level smartphones like A35 Bolt and A67. The Canvas range of devices has also done well in terms of volume contribution owing to the marketing campaigns launched around them.

Karbonn: The market share for Karbonn in 4Q2013 was close to 10%, some of the top selling models for this brand were A1+ and A51.

Sony: Sony managed to make a comeback in the top-5 smartphone vendor list in 4Q13 and garnered a market share of 5%. The top selling models included Xperia M Dual and Xperia C handsets, which are targeted at mid-tier price range.

Lava : Lava managed to hold onto the number 5 spot in the top-5 smartphone vendor list. The continued traction around the XOLO and IRIS range of devices helped the vendor garner a market share of 4.7% in 4Q13. Some of the top selling models include the newly launched XOLO A500 S and the existing models like IRIS 402 and IRIS 349.

IDC India Forecast:

IDC anticipates the growth in Smartphone segment to outpace the overall handset market growth for the foreseeable future. The end-user shift towards mid-to-high screen size products will be amplified by the declining prices and availability of feature-rich localized product offerings. Vendors who are able to differentiate their offerings at affordable prices will maintain a competitive edge and secure a strong position in the mobile phone market in CY 2014.

From: Gartner Says Annual Smartphone Sales Surpassed Sales of Feature Phones for the First Time in 2013 [press release, Feb 13, 2014]

…

Worldwide Smartphone Sales to End Users by Vendor in 2013 (Thousands of Units)

Company	2013 Units	2013 Market Share (%)	2012 Units	2012 Market Share (%)
Samsung	299,794.9	31.0	205,767.1	30.3
Apple	150,785.9	15.6	130,133.2	19.1
Huawei	46,609.4	4.8	27,168.7	4.0
LG Electronics	46,431.8	4.8	25,814.1	3.8
Lenovo	43,904.5	4.5	21,698.5	3.2
Others	380,249.3	39.3	269,526.6	39.6
Total	967,775.8	100.0	680,108.2	100.0

Source: Gartner (February 2014)

Worldwide Smartphone Sales to End Users by Vendor in 4Q13 (Thousands of Units)

Company	4Q13 Units	4Q13 Market Share (%)	4Q12 Units	4Q12 Market Share (%)
Samsung	83,317.2	29.5	64,496.3	31.1
Apple	50,224.4	17.8	43,457.4	20.9
Huawei	16,057.1	5.7	8,666.4	4.2
Lenovo	12,892.2	4.6	7,904.2	3.8
LG Electronics	12,822.9	4.5	8,038.8	3.9
Others	106,937.9	37.9	75,099.3	36.2
Total	282,251.7	100.0	207,662.4	100.0

Source: Gartner (February 2014)

Top Smartphone Vendor Analysis

Samsung: While Samsung’s smartphone share was up in 2013 it slightly fell by 1.6 percentage points in the fourth quarter of 2013. This was mainly due to a saturated high-end smartphone market in developed regions. It remains critical for Samsung to continue to build on its technology leadership at the high end. Samsung will also need to build a clearer value proposition around its midrange smartphones, defining simpler user interfaces, pushing the right features as well as seizing the opportunity of bringing innovations to stand out beyond price in this growing segment.

Apple: Strong sales of the iPhone 5s and continued strong demand for the 4s in emerging markets helped Apple see record sales of 50.2 million smartphones in the fourth quarter of 2013.

“However, Apple’s share in smartphone declined both in the fourth quarter of 2013 and in 2013, but growth in sales helped to raise share in the overall mobile phone market,” said Mr. Gupta. “With Apple adding NTT DOCOMO in Japan for the first time in September 2013 and signing a deal with China Mobile during the quarter, we are already seeing an increased growth in the Japanese market and we should see the impact of the last deal in the first quarter of 2014.”

Huawei: Huawei smartphone sales grew 85.3 percent in the fourth quarter of 2013 to maintain the No. 3 spot year over year. Huawei has moved quickly to align its organization to focus on the global market. Huawei’s overseas expansion delivered strong results in the fourth quarter of 2013, with growth in the Middle East and Africa, Asia/Pacific, Latin America and Europe.

Lenovo: Lenovo saw smartphone sales in 2013 increase by 102.3 percent and by 63.1 percent in the fourth quarter of 2013. Lenovo’s Motorola acquisition from Google will give Lenovo an opportunity to expand within the Americas.

“The acquisition will also provide Lenovo with patent protection and allow it to expand rapidly across the global market,” said Mr. Gupta. “We believe this deal is not just about entering into the U.S., but more about stepping out of China.” 

Gartner expects smartphones to continue to drive overall sales in 2014 and an increasing number of manufacturers will realign their portfolios to focus on the low-cost smartphone sector. Sales of high-end smartphones will slow as increasing sales of low- and mid-price smartphones in high-growth emerging markets will shift the product mix to lower-end devices. This will lead to a decline in average selling price and a slowdown in revenue growth.

In the smartphone OS market, Android’s share grew 12 percentage points to reach 78.4 percent in 2013 (see below). The Android platform will continue to benefit from this, with sales of Android phones in 2014 approaching the billion mark.

Worldwide Smartphone Sales to End Users by Operating System in 2013 (Thousands of Units)

Operating System	2013 Units	2013 Market Share (%)	2012 Units	2012 Market Share (%)
Android	758,719.9	78.4	451,621.0	66.4
iOS	150,785.9	15.6	130,133.2	19.1
Microsoft	30,842.9	3.2	16,940.7	2.5
BlackBerry	18,605.9	1.9	34,210.3	5.0
Other OS	8,821.2	0.9	47,203.0	6.9
Total	967,775.8	100.0	680,108.2	100.0

Source: Gartner (February 2014)

…

Although the title is just:

1. Qualcomm, Intel Threatened as Allwinner Nabs Tablet Share [Bloomberg, March 17, 2014]
2. Qualcomm, Intel Threatened as Allwinner Gains Tablet Share: Tech [BloombergBusinessweek, March 17, 2014]

Note that for me there is nothing new about those titles as I introduced a whole new blog to the “Allwinner phenomenon” as evidenced with a specially designed banner on the right here:

And the first post of mine, “Hello world! Here is the Allwinner SoC and the ecosystem built around it”, was created 16 months ago, on November 26, 2012. For very well founded reasons which were explained in quite a detail in that post. Please read them as you will learn much more about the Allwinner case than from the whole Bloomberg (Businessweek) articles. Your interest will be more satisfied with quite a number of additional posts in January 2014, October 2013, September 2013, June 2013, April 2013, March 2013, January 2013 and December 2012.

Allwinner’s success is explained now in the Bloomberg (Businessweek) articles by the following quote:

Local chipmakers benefit from their proximity to the device manufacturers because it bolsters their ability to anticipate and react to new features that are in demand, said Ben El-Baz, head of U.S. marketing for Allwinner.

“Shenzhen is really the electronics hub for the world,” El-Baz said in a phone interview. “We are so close to the market that we’re able to come out with new solutions faster than our competitors. We can do it at lower cost.”

as well as the fact that:

The surge in cheaper devices hasn’t gone unnoticed by more established computer makers. Hewlett-Packard this year began selling the HP 8, a $170 tablet that runs on an Allwinner quad-core processor.

In [1], however, the internal text contains reference to Rockchip as well:

Note that this same blog of mine started to recognize Rockchip 2 years ago with MWC 2012: Fuzhou Rockchip Electronics post which was followed 10 months later with another one claiming no less than China’s HW engineering lead: The Rockchip RK292 series (RK2928 and RK2926) example. Under the Rockchip tag you could find even more recent ones.

Intel Corp. (INTC) and Qualcomm Inc. (QCOM), the two largest U.S. chipmakers, are under threat in the fastest-growing part of the tablet market from a band of upstarts with names like Allwinner Technology Co. and Fuzhou Rockchip Electronics Co. that are little known outside southern China.

Allwinner, based in Zhuhai near the manufacturing center of Shenzhen, became the No. 2 tablet-processor maker behind Apple Inc. in 2012 as demand for cheaper tablets stoked sales of its low-cost chips, according to IDC. Qualcomm ranks third, while Intel comes in at No. 6, following Rockchip.

…

Success at Allwinner, which was founded in 2007, and Rockchip, established in 2001, is being driven by increasing demand for inexpensive tablets in their home market, where some devices sell for as little as $50, and in other developing economies. Sales of tablets that retail for less than $150 and don’t carry a brand name will rise 36 percent this year, IDC estimates, driving a 22 percent increase in total tablet shipments. The market for tablet processors grew 32 percent in 2013 to $3.6 billion, according to Strategy Analytics.

…

Allwinner accounted for 18.2 million of the 88.3 million tablet processors shipped in the fourth quarter of 2013, IDC said. That was more than three times what Santa Clara, California-based Intel, the world’s largest chipmaker, shipped in the same period. Rockchip sold 9 million.

…

Rockchip representatives didn’t return messages for comment.

…

while both articles contain a whole paragraph devoted to Spreadtrum as well:

Note that this same blog of mine started to recognize Spreadtrum 27 months ago with World’s lowest cost, US$40-50 Android smartphones — sub-$100 retail — are enabled by Spreadtrum post which was followed 7 months later with another one claiming no less than Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets. Under the Spreadtrum tag you could find even more recent ones.

Spreadtrum’s Relationships

Like MediaTek, Shanghai-based Spreadtrum Communications Inc. is building on its relationship with handset makers serving the China market and exporting from there. The company, founded in 2001, supplies both processors and modems for smartphones that can retail for as little as $25, said Diana Jovin, a U.S.- based vice president at Spreadtrum.

Her company, which is owned by the Chinese government, has learned that quickly providing adaptable solutions is needed to succeed in a rapidly changing market, she said.

“A significant part of the mobile-handset ecosystem is centered in China,” Jovin said. “We’re the only vendor located in China serving those customers. We’ve expanded our portfolio quite rapidly and have the breadth and depth to compete effectively on a global basis.”

Spreadtrum, which has supplied chips used in Samsung’s Galaxy Star model and HTC Corp.’s Desire, is looking to build on its China base just as Qualcomm, the largest maker of semiconductors used in phones, is trying replicate its worldwide market dominance in that country, the biggest global mobile-phone market.

Regarding the question how the western chipmakers could meet these challenges:

Intel Priority

Intel Chief Executive Officer Brian Krzanich — who has made catching up in mobile computing a priority since taking over the company in May — said he’s aiming to quadruple tablet-chip sales to 40 million this year and processors from his company will make their way into devices costing less than $100. To speed adoption, Intel will provide tablet makers with subsidies — what it calls “contra revenue” — to make the cost of its chips competitive. That will cut into profitability this year.

Kathy Gill, a spokeswoman for Intel, said the company is “absolutely accelerating” its roadmap for its Atom line of low-power, low-cost processors for phones, tablets and budget laptops.

…

New Chips

Qualcomm has already responded to the demand for lower-cost devices made in China with new chips, said Cristiano Amon, the head of the company’s chip division.

The adoption of a faster wireless-data technology called long-term evolution, or LTE, particularly by No. 1 wireless carrier China Mobile Ltd., will open the door for Qualcomm, the San Diego-based company says. While other companies including Intel, MediaTek and Broadcom Corp. (BRCM) have announced LTE-capable chips, Qualcomm has been in the market for more than two years and has 100 percent market share in devices that have integrated modems, according to IDC.

Qualcomm’s Edge

Qualcomm’s advantage in LTE modem chips will be tough to beat. Unlike for stand-alone processors, there’s no source of off-the-shelf modem designs [there is, however, highly advanced semiconductor IP on the market with CEVA as the lead vendor in that space which is dating back to CEVA Introduces Low Power, Multi-Mode LTE-Advanced Reference Architecture for the New CEVA-XC4000 DSP Architecture Framework [press release, Feb 21, 2012] – you can find more about that in The future of the semiconductor IP ecosystem post of mine], and building one takes years of experience, testing and qualification work with phone-service providers, according to Will Strauss, an analyst at Mesa, Arizona-based Forward Concepts Co.

In processors, “everybody can get in, thanks to ARM and the ease of implementing your own applications processor. They’ve lowered the bar,” Strauss said. At the same time, “the barrier for entry for LTE modems is still very, very high.”

The articles end, however, with a kind of gloomy outlook for the leadiong Western chipmakers:

I would be much more sceptical about the Western SoC vendors’ capabilities to withstand the onslaught of Chinese SoC vendors (including MediaTek). Even the “lack of modem technology” argument given above applies only to a limited degree as: See more in: Chinese smartphone brands to conquer the global market? [‘Experiencing the Cloud’, March 18, 2014]

Still, Chinese companies have created an obstacle that their more established rivals may struggle to overcome, said Jim McGregor, an analyst at Tirias Research. While the volumes are huge in China and emerging markets, the devices’ low prices leave little room for profits — particularly for companies like Qualcomm and Intel that have shareholders who are accustomed to wide margins, he said.

“We are not just talking about a billion here, but several billion units,” McGregor said. “It’s foolish to avoid that kind of market. The problem is with a publicly traded company, it’s against their instincts to go for it.”

This is preparing the ground for launching new overall business positioning as well as new cross-platform Microsoft strategy(IMHO) with Microsoft’s CEO may unveil Office for iPad on March 27: source [Reuters, March 17, 2014]

Investors for years have urged Microsoft to adapt Office for mobile devices from Apple and Google Inc, rather than shackling it to Windows as PC sales decline. But the Redmond, Washington-based software giant has been reluctant to undermine its other lucrative franchise, its PC operating software.

Microsoft gives up some $2.5 billion a year in revenue by keeping Office off the iPad, which has now sold almost 200 million units, analysts estimate.

Tech blog Re/code first reported news of Nadella’s event. Microsoft said in an invitation to reporters that Nadella will discuss “news related to the intersection of cloud and mobile“ but declined to comment on the specifics of the CEO’s appearance.

Microsoft has had iPad and iPhone versions of Office primed for several months now, sources told Reuters, but the company has dallied on their release due to internal divisions, among other things.

Although Nadella is expected to discuss his thinking in depth next week, the company has already signaled that it will adopt a more liberal attitude toward putting its software on different platforms.

Microsoft said earlier on Monday that it would make OneNote, its note-taking software, available on Mac, a move interpreted by observers as a shot against Evernote, the popular note-taking application that has both Mac and Android compatibility.

Aside from Evernote, Microsoft also faces budding challenges from startups that have released mobile-friendly alternatives to Word, Excel and Powerpoint.

The Evernote related action is already making the central Microsoft message really powerful: “Office 365 and OneNote has made me so much more efficient that I’m able to do a lot more”: Making Faster, Better Decisions (Extended Version) [officevideos YouTube channel, March 17, 2014]

OneNote now on Mac, free everywhere, and service powered [Office Blogs, March 17, 2014]

– David Rasmussen, Partner Group Program Manager (on behalf of the whole OneNote team who worked hard to bring you this)

When we started OneNote we set out to revolutionize the way people capture, annotate, and recall all the ideas, thoughts, snippets and plans in their life. As many of you have attested, OneNote is the ultimate extension for your brain, but it’s not complete if it’s not instantly available everywhere. We’ve already made a lot of progress in that direction with our mobile, tablet and online web experiences. But there was still a gap. People frequently asked us for OneNote on Mac, and for more ways to capture content.

[Check out the new OneNote for iPad, iPhone and Android [July 1, 2013]]

[iPhone: OneNote for iPhone Version 2.1.5: since Dec 10, 2013]

[iPad: OneNote for iPad Version 2.1.5: since Dec 10, 2013]

[Android: OneNote in Google play since Jan 8, 2014 as described in OneNote for Android update: Do more in less time [Dec 30, 2013]]

[Web: OneNote Online [on One Drive] since January 28, 2014 as per Use OneNote anywhere with the OneNote Web App]

Today we’re excited to complete that story with three major developments:

1. OneNote for Mac is available for the first time and for free. With this, OneNote is now available on all the platforms you care about: PC, Mac, Windows tablets, Windows Phone, iPad, iPhone, Android and the Web. And they’re always in sync.
2. OneNote is now free everywhere including the Windows PC desktop and Mac version because we want everyone to be able to use it. Premium features are available to paid customers.
3. The OneNote service now provides a cloud API enabling any application to connect to it. This makes it easier than ever to capture ideas, information and inspirations from more applications and more places straight into OneNote, including:

• OneNote Clipper for saving web pages to OneNote
• me@onenote.com for emailing notes to OneNote
• Office Lens for capturing documents and whiteboards with your Windows Phone
• Sending blog and news articles [from the web] to OneNote from Feedly, News360 and Weave
• Easy document scanning to OneNote with Brother, Doxie Go, Epson, and Neat [scanners]
• Writing notes with pen and paper and sending them to OneNote with Livescribe
• Mobile document scanning to OneNote with Genius Scan and JotNot [smartphone apps]
• Having your physical notebooks scanned into OneNote with Mod Notebooks
• Connecting your world to OneNote with IFTTT

Go to www.onenote.com to get OneNote for free for your Mac, PC or other devices, and try out the new OneNote service connected experiences.

OneNote: No Limits [officevideos YouTube channel, March 17, 2014]

Mac users have made it loud and clear that you want the first class note-taking experience of OneNote on your Macs. Actually… really, really clear. We got LOTS of direct mails, forum posts, and tweets like these:

• “Now, @msonenote needs to release the OS X version of OneNote and my life will be complete :)”
• “Dear Microsoft – the new web OneNote is nice. A native Mac version would be better. By this afternoon please, I have work to do.”
• “I own a Mac and I LOVE OneNote so for me having OneNote on my Mac would just rock my world.”
• “I desperately want OneNote on my new Mac… I use OneNote on VMware Fusion… There is nothing remotely like it for Mac… I have just spent a week looking for anything that comes close.”

Okay, we got the message. Rocking worlds and making lives complete is a pretty high bar, and we’re sorry we missed your afternoon deadline, but we’ve been working away, and we’re excited to bring it to you today. And if you’re a Mac user who didn’t already know about OneNote, check out Introducing OneNote for Mac or just get started now by downloadingOneNote for Mac from the Mac App Store to see what your fellow Mac users are so excited about.

People love OneNote 2013 on Windows. We want this awesome experience to be available to anybody, so we’ve created a free version! It’s designed for personal and school use, it’s totally ad-free and there’s no limit on how long you can use it because it’s not just a trial. For Office 365 and Office 2013 customers, we have premium features like SharePoint support, version history, Outlook integration and so on, but all the core OneNote application capabilities are available in the free version.

Everything you create in the free PC and Mac clients are synced to OneDrive, so you can access them from your phone and tablet too. Your Microsoft Account gives you 7GB of free storage with no monthly upload limit, so there’s plenty of room for everything you want to remember.

If you have an older version of OneNote or haven’t yet had a chance to use OneNote on your PC, get OneNote 2013 today at www.onenote.com.

OneNote service: Bringing OneNote to the apps you care about

OneNote is more than just syncing your content across all your devices. It’s now a hub for the applications and experiences you care about. By making it easy to send anything from any application to OneNote, it’s one more step towards becoming your digital memory. We’ve built some new experiences for this and we’ve worked with a bunch of partners to integrate it with their applications as well.

OneNote Clipper: The new OneNote Clipper lets you capture any web page in one click. The page is automatically put in your OneNote Quick Notes. It is available for Internet Explorer, Chrome, Firefox and Mac Safari.

Send email to OneNote: Send a mail to me@onenote.com and we’ll save it into your OneNote Quick Notes. Forward a receipt from your inbox or send a web link from your phone to me@onenote.com.

Office Lens: Office Lens is a Windows Phone app that’s like having a scanner in your pocket. Take a picture of a whiteboard, document, business card, or anything. Office Lens will enhance the image and put it into your OneNote Quick Notes. We’ll recognize the text so you can search for your scans.

Partner apps and devices: We want to make it easy to remember things from anywhere, not just Microsoft apps. So we’ve been working with several key partners to let you do that. You can use these great apps and devices to get anything into OneNote today: Brother, Doxie Go, Epson, Feedly, Genius Scan, IFTTT, JotNot, Livescribe, Mod Notebook, News360 and Weave. Check them all out at www.onenote.com/apps

We also have several more exciting partner experiences coming soon including Neat. If you’d like to make your app, device or service work with OneNote, visit our developer portal at http://dev.onenote.com or check out the OneNote Dev Blog.

Learn more, ask questions

Along with these exciting releases we have some great free events this week.

• OneNote for Mac 15-minute Webinar: Join Doug Thomas online to learn why OneNote rocks, how to use OneNote for Mac and have some fun. There will be Q&A with the team as well. You can join us for the OneNote for Mac Webinar on March 18 at 9:00am PST or you can watch the recording afterwards.
• OneNote Twitter Q&A with Joe Block: We will be asking Joe Block, play-by-play broadcaster for the Milwaukee Brewers, about the upcoming baseball season, March Madness, and how he uses OneNote to track it all. To join us on Twitter follow@msonenote or @joe_block. The Q&A will start on March 18 at 9:30am PST.
• OneNote reddit IAMA: If you still have questions for the OneNote team about OneNote, today’s announcements, our favorite color or anything at all – this is for you. Head on over to reddit on March 19 at 9:00am PST and ask the OneNote team anything!

It’s going to just keep getting better

Today is a huge step forward for OneNote. We’ve made it easier to use OneNote no matter what platform you’re on, and easier than ever to send anything into OneNote. But we’re not stopping here. We’re continually improving OneNote across our applications and service, and working with partners so you can take note of anything and keep it in your digital memory.

Go to www.onenote.com to get OneNote on all your devices and let us know what you think.

Introducing OneNote for Mac [by OneNote Team on Office Blogs, March 17, 2014]

Today we announced three major OneNote developments, including the first version of OneNote for Mac. We are very excited and proud to deliver this to you today.

We’ve seen the countless requests for a Mac client of OneNote, and we’ve been hard at work to deliver it. We’ve been counting the days to finally share with you that OneNote for Mac is now available and you can download it from the App Store for free today!

While you’re downloading the app, check out this video of OneNote for Mac.

Introducing OneNote for Mac [officevideos YouTube channel, March 17, 2014]

OneNote is your place to jot down your ideas, capture your collection of web clippings and research, plan your trips and events, check your to-dos and shopping lists and share your notes with friends and co-workers. It’s a single place to collect your thoughts and ideas, as well as an easy and fun way to stay organized.

Here are some of the main highlights of why we think you are going to love OneNote for Mac.

Create your notes as you wish

Similar to other Office for Mac applications, OneNote for Mac has the Ribbon user interface with a variety of options for formatting and styling your notes. Your notes can be styled however you like. You can choose that special font and color you like to use for your notes, or emphasize important content with bold, underline or highlights.

Sometimes notes contain lists. Whether it’s an invitees list for a party, or the checklist you use for traveling, you can manage your lists using multiple levels of bullets and numbering, and with quick shortcut keys you can re-order, strikethrough, format and more. In addition, if you want to remember, flag or track specific items, you can choose from over 20 styles of tags, such as a To Do tag to check off completed items.

A picture is worth a thousand words, so we make it easy for you to insert pictures in your notes and place them anywhere on your page. And when your notes are best organized in a table, you can easily do so with a variety of table formatting options, such as cell shading colors.

One of the unique characteristics of a page in OneNote is that it’s an infinite canvas where you can lay out different note containers with different content types anywhere you like on the page.

Familiar notebook experience

Your notes are structured in each OneNote notebook with sections and pages similar to paper notebooks. You can create a separate notebook for each of the different projects or aspects of your life, such as work, family, school and travel notebooks.

For instance, you can set up a travel notebook with a section for each of your upcoming trips. Each section can contain multiple pages for itinerary information, such as hotel research, flight options, sights to see and places to eat.

To help you easily find your notes and stay organized, you can re-arrange your notebook as you like, including dragging the pages and sections to change their order or location. And you can apply a color theme to sections to identify them at a glance.

Rest assured, you don’t have to remember where you placed each note. You can very quickly find any text, page, section or notebook by using search options.

Share your notes with others

Whether you’re working on a school project or planning an event with friends, OneNote for Mac enables you to collaborate with others on the same notebook. It syncs changes to and from OneDrive seamlessly and fast so that you can see everyone else’s edits and they can see yours. We make it easy for you to identify the changes made in your shared notebook by displaying the names of the different authors next to their edits.

Or, if you want to just share a specific page in your notebook you can simply email that page to others.

Your notes on all your favorite devices

We know how important it is for you to access your notes on all of your devices and for your notes to look exactly the same as you created them. Add a recipe to OneNote on your Mac, and you can view it on your iPhone in the grocery store. Research and plan a trip on your Mac at home and then easily access those same notes on your iPad during your trip.

All those notes you create on OneNote for Mac are synced to OneDrive and available to you on all your other OneNote clients, including OneNote for Windows desktop, Windows Store, Windows Phone, iPhone, iPad, Android and OneNote Online.

These are only some of the highlights of OneNote for Mac—there’s so much more included in this version that we think you’ll enjoy. OneNote for Mac is compatible with Mac OS X 10.9 and above and you can download it for free from the App Store today. You can also visithttp://www.onenote.com to access all the different OneNote apps including a few exciting OneNote services available today that will enhance your web capturing experience on OneNote for Mac.

And this is just the beginning. We hope you enjoy this first version of OneNote for Mac and encourage you to keep the comments, ratings and feedback coming to help us make future OneNote updates even better.

OneNote Clipper: Clip the web, right to OneNote [by OneNote Team on Office Blogs, March 17, 2014]

Today we announced three major OneNote developments, including the OneNote Clipper, the easiest way to save anything on the web to OneNote with just one click. Think of it as your camera for the web, snapshotting any webpage you see directly into OneNote.

Researching for a big trip? Gathering recipes for an upcoming party? Collecting inspiration for a home makeover? The OneNote Clipper can help you do all of this quickly and easily. Watch the video below to see it in action.

OneNote Clipper: clip the web, right to OneNote [officevideos YouTube channel, March 17, 2014]

Try out the OneNote Clipper now

To get started, use any major browser to visit www.onenote.com/clipper and follow the instructions to add the purple Clip to OneNote button to your Favorites bar. Congratulations, now you’re all set to start clipping the web to OneNote!

To clip, just browse to any webpage and click the Clip to OneNote button.

Once signed in, you’ll see the actual OneNote Clipper. The Clipper will let you know that it’s sending the page to OneNote, and when it’s finished, you can click the OneNote logo to immediately view your clip in OneNote Online.

All of your clips are saved to the Quick Notes section of your default notebook on OneDrive — automatically accessible and fully searchable on all your devices.

We hope you enjoy the OneNote Clipper. Please let us know in the comments if you have any feedback, we would love to hear from you. Happy clipping!

Email your notes into OneNote with me@onenote.com [by OneNote Team on Office Blogs, March 17, 2014]

Today we announced three major OneNote developments, including me@onenote.com.

One of our goals is to make it easy to get content into OneNote, no matter where you are or what app you’re using. me@onenote.com is a big step towards that goal.  Now, you can use any ‘Email this’ button to send content to OneNote.

Email to OneNote is a great way to forward receipts, travel itineraries or documents that you want to keep track of from your mailbox. If you’re on the run and want to send yourself a quick to do, it’s hard to get faster than writing up a quick mail. Or, if you’re in an app, and want to remember what you’re seeing, you can do so quickly by sharing via email.

me@onenote.com: email anything to OneNote [officevideos YouTube channel, March 17, 2014]

Try it out now

To get set up just visit the email settings page and select the addresses from which you would like OneNote to accept emailed content. You can also add any email addresses that are not already associated with your Microsoft account by using the link at the bottom of the settings page. If you don’t remember any of that, just send an email to me@onenote.com and we will email back with instructions.

Now you’re ready to email content to OneNote quickly and easily! Please let us know in the comments if you have any feedback, we would love to hear from you.

Office Lens: A OneNote scanner for your pocket[by OneNote Team on Office Blogs, March 17, 2014]

Today we announced three major OneNote developments, including Office Lens, a neat new app in the Windows Phone Store.

Office Lens is an app that’s like having a scanner in your pocket. You can use it to take pictures of things like business cards, restaurant menus, notes on whiteboards or blackboards — anything you want to keep on hand. But unlike loose sticky notes, business cards or sketches on lunch napkins, you won’t lose track of your ideas when you capture them with Office Lens. Even things like children’s artwork is fair game. Snap a picture of that one-of-a-kind card your child made and it’ll be at your fingertips whenever you’d like to see it.

Office Lens trims, enhances and makes pictures readable. Weird angles are straightened, shadows are cleaned up and the images are automatically synced to OneNote, so you can get to them on all your devices.

When your picture includes printed text, such as a poster or business card, OneNote on a PC can recognize the text with optical character recognition (OCR) so you can search for words in the image — and you can edit the text, or copy and paste it into apps like email and documents.

Office Lens has three modes, or settings, that help make your captures look their best:

• With Whiteboard mode, glare and shadows disappear.
• With Document mode, text is clear and easy to read.
• With Photo mode, you can take pictures of people and scenery.

Office Lens: Before and after

If you already have pictures on your phone, you can edit them in Office Lens and clean them up too. See how it works in the video below.

Office Lens: a OneNote scanner for your pocket [officevideos YouTube channel, March 17, 2014]

Office Lens is free in the Windows Phone Store. Install it and try it out today.

Try Office Lens Now!

Please let us know in the comments or in the app store if you have any feedback. We would love to hear from you.

OneNote Featured Apps [OneNote site by Microsoft, March 17, 2014]

Get more out of OneNote with these apps and devices.

Brother [scanner] + OneNote: Better Together [officevideos YouTube channel, March 17, 2014]

Doxie [scanner] + OneNote: Better Together [officevideos YouTube channel, March 17, 2014]

Brother Web Connection Your Brother machine (MFP/Document scanner) can scan images and upload them to OneNote and OneDrive directly without going through a PC. Get Started	Doxie Mobile Scanners Doxie is a new kind of paper scanner that’s rechargeable, so you can scan documents anywhere – no computer required. Just charge it up and turn it on, wherever you are – insert your paper, receipts, and photos to scan, archive, and share. Doxie scans anywhere, then syncs to OneNote for access to all your scanned documents, on all your devices Get Started	Email to OneNote Capture the things that are important to you while you are on the go by emailing them directly to your notebook! Send documents, notes, itineraries, and so much more to me@onenote.com and we will put them into your OneNote notebook, where you can access them from all of your devices. Get Started
Epson Document Capture Pro Document Capture Pro allows you to easily scan documents, edit pages, save files, and transfer data to the applications scanned with Epson scanners such as the Workforce® DS-560 and others. What’s more, users can scan to OneNote with one touch, to easily access documents from multiple devices or share with others. Workforce® DS-560	Feedly Feedly focuses on making reading the web a little faster, better. The Feedly OneNote integration makes it easy for people to save great articles they found in their Feedly reader into their OneNote notebook. Web	Genius Scan Genius Scan is a scanner in your pocket. It enables you digitize paper documents, create PDF files and immediately store them in OneNote. iOS     Android
IFTTT IFTTT lets you create powerful connections with one simple statement – if this then that. Use the OneNote Channel on IFTTT to create and share recipes that automatically create pages, sync content, and connect over 80 other products and services. iOS  Web	JotNot Scanner JotNot converts your iPhone into a portable multipage scanner. You can use JotNot to scan documents, receipts, whiteboards, business cards and notes into an electronic format.?JotNot now offers direct integration with Microsoft’s OneNote platform, so you can quickly and easily backup and organize your scans using your OneNote account. iOS	Livescribe 3 Smartpen With the Livescribe 3 smartpen and Livescribe+ app, simply write on paper and watch everything appear instantly on your mobile device, where you can tag, search and convert your notes to text. You can send everything to OneNote so your handwritten notes and sketches are integrated with the rest of your important information. iOS
Mod Notebooks Mod notebooks are physical notebooks that are scanned, digitized and backed up to the cloud once completed. Each page of completed notebooks can be synced to OneNote and saved forever.? Get Started	NeatConnect NeatConnect transforms paper piles into digital documents and sends them straight to OneNote – without a computer. From any room in your house, or any spot in the office, NeatConnect’s Wi-Fi compatibility and touchscreen interface make scanning to OneNote fast and easy so you can save time, taking organization and productivity to whole new levels. Coming soon!	News360 News360 is a free personalized news app that learns what you like and gets smarter the more you use it. With more than 100,000+ sources, there is always something interesting to read, and you can save your favorite stories directly to OneNote with a tap of a button. Android   iOS   Windows   Windows Phone
Office Lens Office Lens is like having a scanner in your pocket. Never miss notes on a whiteboard or blackboard, and never look for misplaced documents or business cards, missing receipts or stray sticky notes again! Office Lens makes your pictures magically readable and re-useable. Capture content right into OneNote with automatic trimming and clean up. Windows Phone	OneNote Clipper The OneNote Clipper lets you save webpages from your browser into your OneNote notebooks. In just one click, it helps you capture things quickly and remember more in your life. Web	Weave News Reader Your news, personalized. Get the free Weave News Reader app for Windows 8 and start saving your favorite news articles to OneNote today! Windows   Windows Phone

Feedly + OneNote: Better Together [officevideos YouTube channel, March 17, 2014]

Genius Scan + OneNote: Better Together [officevideos YouTube channel, March 17, 2014]

Livescribe [smart pen] + OneNote: Better Together [officevideos YouTube channel, March 17, 2014]

Weave + OneNote: Better Together [officevideos YouTube channel, March 17, 2014]

• Is Android Becoming the New Windows?
• Tablets to Outsell PCs Worldwide by 2015
• Android Blows Past iOS in Global Tablet Market
• Android To Retain Big Lead In Maturing Smartphone Market
• The Price Gap Between iOS and Android Is Widening
• In Just 2 Years, Google And Facebook Have Come To Control 75% Of All Mobile Advertising

Note: In addition keep in mind at least the fact that Bloomberg (Businessweek) legitimizes Allwinner and Rockchip as challengers to Intel and Qualcomm via the tablet space, as well as Spreadtrum in the smartphone space [‘Experiencing the Cloud’, March 18, 2014]. More facts of such kind:
- Alibaba gets Tango for its push into the U.S. and the whole Western world [‘Experiencing the Cloud’, March 20, 2014]
- Chinese smartphone brands to conquer the global market? [‘Experiencing the Cloud’, March 18, 2014]
- MediaTek is repositioning itself with the new MT6732 and MT6752 SoCs for the “super-mid market” just being born, plus new wearable technologies for wPANs and IoT are added for the new premium MT6595 SoC [‘Experiencing the Cloud’, March 4, 2014]
- To watch Alisher Usmanov (Алишер Усманов) [‘Experiencing the Cloud’, March 22, 2014]
- Device businesses should have a China-based independent headquarter at least for Asia/Pacific if they want to succeed [‘Experiencing the Cloud’, Jan 28, 2014]
- 2014 will be the last year of making sufficient changes for Microsoft’s smartphone and tablet strategies, and those changes should be radical if the company wants to succeed with its devices and services strategy [‘Experiencing the Cloud’, Jan 17, 2014]
- The tablet market in Q1-Q3’13: It was mainly shaped by white-box vendors while Samsung was quite successfully attacking both Apple and the white-box vendors with triple digit growth both worldwide and in Mainland China [‘Experiencing the Cloud’, Nov 14, 2013]
- Leading PC vendors of the past: Go enterprise or die! [‘Experiencing the Cloud’, Nov 7, 2013]
- The question mark over Wintel’s future will hang in the air for two more years [‘Experiencing the Cloud’, Sept 15, 2013]

• Is Android Becoming the New Windows?
• Tablets to Outsell PCs Worldwide by 2015
• Android Blows Past iOS in Global Tablet Market
• Android To Retain Big Lead In Maturing Smartphone Market
• The Price Gap Between iOS and Android Is Widening
• In Just 2 Years, Google And Facebook Have Come To Control 75% Of All Mobile Advertising

All supported by facts and well researched forecasts by IDC, Gartner and eMarketer.

Source: Is Android Becoming the New Windows? [Statista, Jan 9, 2014]

Source: Tablets to Outsell PCs Worldwide by 2015 [Statista, Mach 1, 2014]

Source: Android Blows Past iOS in Global Tablet Market [Statista, Mach 3, 2014]

Source: Android To Retain Big Lead In Maturing Smartphone Market [Statista, Mach 4, 2014]

Source: The Price Gap Between iOS and Android Is Widening [Statista, Feb 14, 2014]

Source: In Just 2 Years, Google And Facebook Have Come To Control 75% Of All Mobile Advertising [Business Insider India, March 21, 2014]

In the last two years, Facebook and Google have gone from a position of merely being two big, fast-growing players in mobile advertising to dominating it completely. Combined, they have cornered 75.2% of the entire mobile market in 2013, according to new data by eMarketer.

In 2014, Google alone is expected to be roughly as big as all other companies combined, as this chart of mobile ad revenues from Statista shows.

“new data by eMarketer”:
Driven by Facebook and Google, Mobile Ad Market Soars 105% in 2013 [eMarketer, March 19, 2014]

Mobile ad spending on pace to reach $31.45 billion this year

Last year, global mobile ad spending increased 105.0% to total $17.96 billion, according to new figures from eMarketer. In 2014, mobile is on pace to rise another 75.1% to $31.45 billion, accounting for nearly one-quarter of total digital ad spending worldwide.

Facebook and Google accounted for a majority of mobile ad market growth worldwide last year. Combined, the two companies saw net mobile ad revenues increase by $6.92 billion, claiming 75.2% of the additional $9.2 billion that went toward mobile in 2013. The two companies are consolidating their places at the top of the market, accounting for more than two-thirds of mobile ad spending last year—a figure that will increase slightly this year, according to eMarketer.

Facebook in particular is gaining significant market share. In 2012, the social network accounted for just 5.4% of the global advertising market. In 2013, that share increased to 17.5%, and eMarketer predicts it will rise again this year to 21.7%. Google still owns a plurality of the mobile advertising market worldwide, taking a portion of nearly 50% in 2013, but the rapid growth of Facebook will cause the search giant’s share to drop to 46.8% in 2014, eMarketer estimates.

The rapid pace at which mobile has taken over the company’s ad revenue share indicates Facebook’s mobile future. In 2012, only 11% of Facebook’s net ad revenues worldwide came from mobile, and last year, that figure jumped to 45.1%. In 2014, eMarketer estimates that mobile will account for 63.4% of Facebook’s net digital ad revenues. Mobile accounted for 23.1% of Google’s net ad revenues worldwide in 2013, and eMarketer estimates this share will increase to 33.8% this year.

OR Microsoft is going against Android and Apple with a vastly updated Windows/Windows Phone 8.1 for $0 royalty fee on smartphones and tablets with screens under 9”, integrated Windows desktop experience (upcoming in the next update), capability of creating Universal Windows apps accross the whole Windows family (demonstrated with the Modern version of the Office upcoming later), an open-source cross-platform WinJS framework, the first true digital assistant for phones (Cortana), showing that for TVs, as well as planning for IoT devices.

Update: the expectation was somewhat higher:
although was met when looking back to Nadella’s March 27 Office for iPad announcement:

The essence of the Day 1 keynote:

Microsoft Build 2014 keynote in seven minutes [The Verge YouTube channel, April 2, 2014]

The Full Day 1 Keynote record on Channel 9: 2 hours, 59 minutes, 13 seconds or a YouTube copy of that from MicrosoftEurope:

Terry Myerson: Executive Vice President, Operating Sy stems group

• Making your creativity come to life
• Using public translation APIs to translate everything said here

Joe Belfiore (~ 1 hour): Corporate Vice President, Operating Systems group
==> Full transcript

• Running PC, tablet and phone within the Operating Systems group

Windows Phone is the world’s most personal phone

• 2 additional partners: Micromax and Prestigio (working with Qualcomm and Longcheer)
• Windows Phone 8.1: ==> Made more personal
  - new Action Center
  - new lock screen APIs
  - option to choose a high density tile layout with custom background as well … even on a small screen
  

  Microsoft Build 2014 8.1 Update Personalized Digital Assistant named CORTANA

  Cortana Microsoft Build 2014 8.1 Update Personalized Digital Assistant named Cortana Microsoft VP Joe Belfiore unveils 2 new phones with hardware partners Micromax and Prestigio using Windows Phone 8.1

  Windows Phone gets even more personal Microsoft unveiled Windows Phone 8.1 and introduced Cortana, the world’s first truly personal digital assistant with a persona inspired by a much-loved “Halo” character. Powered by Bing, Cortana gets to know you and gets better over time by asking questions based on your behavior and checking in with you before she assumes you’re interested in something. She detects and monitors the stuff you care about, looks out for you throughout the day, and helps filter out the noise so you can focus on what matters to you. Other new features that make Windows Phone 8.1 smartphones even more personal include Action Center, which complements Live Tiles by showing new activities and notifications at a glance; and Senses, a suite of features that takes the work out of managing data use, storage space and battery life. Windows Phone 8.1 also makes it easier for IT professionals to manage devices and for professionals to connect to essential business apps and services with features such as simplified device enrollment, a built-in mobile device management client, S/MIME for encrypted mail and VPN support. Windows Phone 8.1 will start rolling out to current Windows Phone 8 users over the coming months. It will also come pre-installed on new phones starting this month. Cortana will launch shortly in the U.S. as a beta, in the U.K. and China in the second half of 2014, and in other countries in 2015. Registered developers can update their phones to Windows Phone 8.1 as part of the developer program later this month.

  - working long for one a half year on (video): Cortana (launching as a Beta, in order to learn with linguistic & search things) – a digital assistance for Windows Phone; powered by Bing (knows the whole Internet); learns about you …; also replaces the search function for you …; can be extended via 3d party apps; giving Cortana a notebook in order to put the user in contact with Cortana; about the people matter most to you; about the places you use to frequent; has permission to read all e-mail on the phone in order to prompt pro-actively the owner on …; good with the calendar too; … example queries via voice …; works with typing as well; reminders; only Cortana can do: people reminders …; new version of Skype; starting apps for you via Cortana (like Hulu, even yommunicating with like for Facebook);
  ==> The first true digital assistant for phones
  ==> The Ultimate Assistant: Halo’s Cortana Coming to Windows Phone

  ==> Searching for something more personal
  ==> Bing at Build 2014: More Helpful, Personal and Intelligent/
  ==> Introducing the New Skype for Windows Phone 8.1 and Improved Skype for Windows 8.1

• Consumers can choose for their device:
  
  - VPN, S/MIME support, MDM capabilities, … many, many more hosted capabilities
  ==> The right choice for business
  ==> Building the Mobile Workplace with Windows and Windows Phone
• Apps from the Store: … store experience more engaged for you …, new version of Calendar … with other views
• Improved basic performance: … WiFi Sense to connect to automatically when sensed … even securely share with friends automatically (no need to tell the WiFi password); … from ordinary phone call to a video call, even for RCS apps as well; Word Flow [Keyboard] typing … world’s fastest typing on the smartphone (the previous record was Samsung Galaxy …); focus on settings; IE11 with a bunch of new features
• to consumers rolling out in next few months
• on very new phones late April

==> Announcing an updated version of Internet Explorer 11 for Windows and introducing IE11 for Windows Phone 8.1

==> Windows & Windows Phone 8.1 – Better Together

Windows 8.1 Update

• boot straight to the desktop
• going automatically to enterprise mode

• mouse and keyboard experience of Windows, e.g. enhanced taskbar to work with Windows Store apps: no different swithching mode for Modern apps and desktop apps; PC settings tile on Start Screen; right click context menu …; power user … on Start Screen; pre-pinning the Windows Store to the taskbar to make it mouse and kleyboard friendly; new apps pin to the Start Screen or the taskbar …
• starting April 8
• [The update also enables Microsoft’s hardware partners to deliver low-cost machines that require only 1 GB of RAM and 16GB HDD. On Intel’s Bay Trail Cost Reduced options.]

Windows 8.1 Update: easier to use, runs great on more devices Continuing its commitment to deliver improvements through regular updates, Microsoft also announced Windows 8.1 Update, which includes improvements that provide more of what people love about Windows across more devices: quicker access to what’s important, a more familiar and consistent experience across touch and non-touch devices, and more ways to discover great apps. Key features of the update include user interface improvements for mouse and keyboard users, the ability to access the taskbar from any screen and pin Windows Store apps to the taskbar alongside desktop apps and favorite websites, and performance and compatibility enhancements to Internet Explorer 11. These improvements provide faster, more direct access to the things customers care most about, so activities such as powering down, searching the Web and switching between apps are easier than ever. Navigating with the mouse and keyboard will feel more familiar and intuitive because there’s more consistency with where controls are and how they work. Specific to the enterprise, Windows 8.1 Update offers improved Internet Explorer 8 compatibility on Internet Explorer 11, extends mobile device management functionality, and eases deployment with increased predictability for new operating systems and line-of-business apps by leveraging familiar management tools. Current Windows 8.1 customers will receive the Windows 8.1 Update for free through Windows Update, while Windows 8 customers will receive the update free through the Windows Store, beginning April 8, 2014.*

David Treadwell: Corporate Vice President, Operating Systems group
==> Full transcript

• about things for developers

Microsoft’s Universal Windows App Allows Devs To Create For Any Platform [Pureinfotech, published on April 3, 2014]

Microsoft announces universal Windows apps, which simply means that apps created for the Windows platform will now run on all platforms including PCs, tablets, phones, and Xbox One.

Universal Windows apps:
==> Windows Runtime comes to phones

…

…

• Update for Visual Studio 2013 for universal Windows apps: demo
  ==> Visual Studio 2013 Update 2 RC: Windows Phone 8.1 Tools, Shared Projects and Universal Windows Apps
• Streamline the Windows Store experience across …
• Modern (touch-first) version of Office: demo … also showing the same binary working on the phone
• hundreds of new features added for Windows Phone 8.1 based on developers’ and customers’ requests

Windows developer platform: easily build innovative apps, reach more people Microsoft also announced enhancements in the way developers can build applications that target the full range of Windows devices using Visual Studio 2013 Update 2 Release Candidate. Among other new capabilities, with the introduction of universal projects, developers are able to create apps that can be easily optimized to take full advantage of Windows devices. Developers of all types can draw upon their existing skills to deliver shared experiences for Windows Phone 8.1 and Windows 8.1 Update. Universal projects allow developers to use approximately 90 percent of the same code, a single packaging system, and a common user interface to target apps for phones, tablets and PCs. To improve the developer experience on Windows, Microsoft announced updates to Windows Store to improve app discoverability and monetization, as well as easier shopping for end users with improved search, more personal recommendations and better merchandising. In addition, later this week, Microsoft will release the next version of Windows App Studio, a Web-based tool for non-developers that enables the creation of universal Windows apps in a single project. To help developers build innovative apps for Windows using a natural user interface, Microsoft detailed plans for Kinect for Windows v2, coming this summer, with a new sensor and SDK that will enable developers to create Windows Store apps, with the Kinect sensor, for the first time. The Kinect for Windows v2 sensor offers more precision, responsiveness and intuitive capabilities. Developers and partner companies, such as Reflexion Health and Freak’n Genius, are already doing great things through the Kinect for Windows v2 developer preview program.

• DEMO of the above

Windows enabling cross-platform apps:

frameworks, libraries, tools and services for Universal Windows apps

- Web GL
- Cutting Edge video playback etc.

- announcing: making WinJS cross-platform
- open-source via GitHub
==> MS Open Tech Open Sources WinJS, Part of the Windows App Platform

• DEMO My

==> Announcing New Microsoft Advertising SDKs, Tools to Help Devs Do More and Earn More with Apps

Terry Myerson:
==> Full transcript

• Now about the TV … no better television than Xbox
• going to enable Universal Windows apps running on Xbox
• DEMO

• bringing Kinect to PC ==> Kinect 2.0 for Windows with greatly improved SDK, not just for games
• non-gaming Kinect apps: video

• Kinect: this is the future
  ==> Windows Store app development is coming to Kinect for Windows
• Graphics: on Xbox One phenomenal ==> Xbox graphics platform to make available for everyone ==> bringing into DirectX 12 

• DEMO

Internet of Things (IoT):

• Windows ported to ARM
• Now Intel Quark (i.e. x86 for IoT)
• Windows for IoT will be available for $0

Windows desktop:

• Universal Windows apps to run in a window
• New Start Menu: live tiles combined
• what is shown here is just for start to improve the Windows desktop

• (upcoming in the next update of Windows)

Pricing:

Making Windows devices more affordable Microsoft is evolving its Windows business model to enable partners to offer lower-cost devices in the highly competitive smartphone, tablet and PC categories. Microsoft will offer to hardware partners $0 Windows with services including a one-year subscription to Office 365. With Windows 8.1 Update hardware partners can also more easily build lower-cost machines — such as devices with 1 GB of RAM and a 16GB hard disk drive — without sacrificing the experience customers expect. The combination of new efficiencies and innovations from Microsoft hardware partners means customers will be able to choose from a wider range of Windows devices, particularly budget-friendly notebooks and tablets.

Additional information from Terry Myerson’s Thoughts on Day 1 of Build 2014 [Blogging Windows, April 2, 2014] post:

I wanted to use this post to share some thoughts from what I said in the keynote:

1. We believe in our ecosystem of device manufacturers and devs (developers, developers, developers!), and that their creativity has incredible potential to change the world – and we want to help them do that.

2. We believe in the Internet of Things, and that as the devices get smaller, the cloud gets bigger.

3. We believe in natural user interfaces, and the power of things like voice and gesture to transform how users will interact with their devices and apps in the coming years.

…

Today we announced that the Windows 8.1 Update will support Intel’s Bay Trail Cost Reduced options, along with 1GB RAM and 16 GB storage configurations which are popular on entry level tablets and notebooks. We’re also working with Intel on enablement programs that make it easy for their partners to onboard new Windows devices quickly, much as we are with Qualcomm.

…

We showed Windows running on an Intel Quark chip. It’s a processor the size of a pencil eraser that is running a full version of Windows, enabling developers to use all their Windows knowledge and skills to create new and exciting devices and experiences. When we are ready to ship Windows for the Internet of Things, we will make that available for zero dollars to encourage creation of these new devices and experiences in this new and exciting category.

…

Finally, I previewed some work we are doing for the next iteration of Windows, which builds on the journey we began with Windows 8 just over a year ago as well as the releases we’ve done since then. In particular, I showed some early thinking on how the user experience in Windows will evolve in a way that will help developers’ apps make their way to users across devices and form factors.

We set out to do this is a thoughtful way – one where we could enable more productivity for customers working in desktop mode, while building smart bridges to the new modern user experience and ensuring customers can get access to all your great apps in the Windows Store no matter where they are in the experience, or which device type they’re on.

As I said today, these are glimpses of our roadmap, with a particular focus on the parts of our roadmap that are most relevant to our developer partners. We’ll continue to invest in these and many other areas to build a great platform and experiences for developers, customers and partners and you’ll hear more from us when this work is closer to being ready to ship out to the world.

Stephen Elop (still Nokia, but soon Microsoft):
==> Full transcript

• Lumia 520 the best selling smartphone in the world: will have WP 8.1
• WP 8.1 for all other existing Lumias
• The next-generation of Lumia devices:
  - Lumia 930: flagship for WP 8.1, with unprecendented images and video, Creative Studio app grealy updated, new/updated Living Images app, fantastic cinema video experiences (4 microphones included), all MS services well integrated, 2.2 GHz Snapdragon 800 SoC, from June starting in Europe, with more more than 100 operators
  - Lumia 630: 4.5” ClearBlack display, 3G dual-SIM as well (different tiles for each SIM),  designed for hyper-social people, Cortana is also available, SensoreCore introduced for health and fitness apps … Lumia services (HERE maps, etc.), 1.5GHz Snapdragon 400 quadcore, from May starting in Asia, $159 single SIM
  - Lumia 635: 4.5” ClearBlack display, 4G LTE, …, 1.5GHz Snapdragon 400 quadcore, from May starting in Asia

• Two new SDKs:
  - Imaging SDK 1.2
  - new SensoreCore SDK to create motion based apps

Satya Nadella: CEO
==> Full transcript

• developer roots of Microsoft
• Q&A via the DPE collection made before the conference
• Why build for Windows if one develops for Android? –> innovating in every dimension … you will see a progress in a rapid pace … pretty unique pieces, e.g. bring end-users, IT profs and devs together … create a developer opportunity accross the Windows family expanding … we are betting on this platform ourselves

• Plans for easy development accross platforms? –> David Treadwell part … the only platform with APIs on every platform amd native, managed and the web … working w/ PhoneGap, Unity e.t.c. …
• What MS is doing to compete against Apple and Google in the tablet space? –> tablets accross all prices ranges … innovate with Surface to make the most productive table … what is the role of a tablet in the device family … consistency of user experience
• Approach to UX design now and in 5 years with Microsoft? –> we have fantastic people for UX … see inspiration for other platforms … Cortana … modern apps to mouse and … Bill Buxton about natural UI … the broadest range of input modes today
• How to design for the cloud, and how MS is supporting that? –> Scott Guthrie tomorrow … data-tier built for scale-out and other consideration long taken into account, Service Bus etc. … lot of focus on tools, samples that truely take advantage of the cloud
• Different APIs released for different products? –> Windows Universal apps is the first step in the direction of bring great consistency for developers … consistency of semantics for these APIs
• What’s the plan with latency as we are moving and more apps to the cloud? –> build robustness … data center build-up throughout the world … great effort to enable apps to run in a true distributed way
• How MS can better support start-ups? –> BizSpark program with 70K start-ups … seed fundings and accellerators throughout the world
• The vision for Microsoft going forward? –> Drive in this world of mobile first, cloud first … interactions of differnt kinds getting digitized … create platforms .. build the best experiences
• Plans to becoma a Master CEO? –> … 2514 … watch Scott Guthrie keynote tomorrow

Cortana (yes!) and Many, Many Other Great Features coming in Windows Phone 8.1 [by  Joe Belfiore on Windows Phone Blog, April 2, 2014]

Whew, what a day! What a week! I’ve just gotten off the stage at Build in front of 5,000 of our beloved developers talking about the future of the Windows platform. And now I’m here to tell YOU about the stuff we’ve been working on to delight all our Windows Phone users and fans!

During my time on stage, I went over what’s next for Windows PCs, tablets, and phones with two major updates: Windows Phone 8.1 and the Windows 8.1 Update. Both releases bring a lot of new features for consumers and businesses alike, built from the feedback we’ve heard from customers along the way. We’ve also continued to invest in our partners, enabling lots of great new phones, tablets, laptops and PCs for you to choose from in the months ahead.

Windows 8.1 Update: Focused on Mouse/Keyboard

For PCs and tablets, we’ve made improvements in Windows 8.1 that will noticeably improve the experience when you’re using a PC without a touch-screen. We’ve made commands easier to find with mouse/keyboard, we’ve made switching between apps—especially Windows Store apps—much easier with mouse/keyboard… and we’ve made it easier to find new apps to install.

To learn more about the update to Windows 8.1 for your PC and tablets, head on over to the Windows Experience Blog and read Brandon’s post. What I really want to cover in detail here is…

Windows Phone 8.1: More Personal, Smarter, and even a “World Record Holder”!

If you’re a Windows Phone user, you already know that we set out to create an experience that puts you and the things you care about most front and center. As a result, we believe Windows Phone is the world’s most personal smartphone… and with Windows Phone 8.1, we’ve added a BUNCH of new features that make your smartphone even more a reflection of your personality and desires.

Want to experience it all in one giant demo? Then watch this marathon 15-minute video. Else… read on!

The world’s most personal smartphone just got more personal. Watch the innovations of Windows Phone 8.1 come alive.

Start screen: Make the Live Tiles Yours

We want your Windows Phone Start screen to genuinely reflect your personality and the people and things you care about—so we are making it even more customizable!

 

In 2013, we added a third column on devices for 5-inch screen or larger devices, like the Lumia 1520, to enable more stuff to show up on the screen. People really liked this so we are enabling this on all screen sizes in Windows Phone 8.1. Pin away! We’ve also added the ability to customize your Start background with a favorite picture or one of the options we’ve provided, which will make many of the tiles on your Start screen become clear so you can see the background you selected as you scroll up and down.

Lock screen: Lots of new “themes” to choose from!

The Lock screen is the very first thing you – or your friends—see when you grab your phone, and in Windows Phone 8.1 we’re providing a new app that lets you set a wide range of interesting “Lock Screen Themes” which show all kinds of different visuals and animations. Make it yours…

Cortana: Your PERSONAL Digital Assistant

Of everything we’re announcing today, I’m most excited to introduce you to the world’s first truly personal digital assistant, now on Windows Phone. We were inspired by the popular character from Halo who served as a brilliant AI and a deeply personal digital assistant to Master Chief… so we called her Cortana.

Powered by Bing, Cortana is the only digital assistant that gets to know you, builds a relationship that you can trust, and gets better over time by asking questions based on your behavior and checking in with you before she assumes you’re interested in something. She detects and monitors the stuff you care about, looks out for you throughout the day, and helps filter out the noise so you can focus on what matters to you. Cortana will launch shortly here in the U.S. first as a “beta,” and then will launch in the US, the U.K. and China in the second half of 2014 with other countries to follow afterwards into 2015.

 

In Windows Phone 8.1, you get to Cortana by either a Live Tile on your Start screen or by pressing the search button on your device. This will take you to Cortana Home. To interact with Cortana, you can either speak or type—if you’re in a meeting, just type and Cortana won’t talk out loud. But if you ask her a spoken question, she’ll answer verbally and even carry on a natural conversation.

When you interact with Cortana for the VERY first time, she will start learning things about you… like your name, how to pronounce it, and ask for some personal interests.

Once she’s learned a bit about you, Cortana’s home populates with information that is curated just for you. You’ll see things like flight information she’s found from your email confirmations, weather, the latest news, and even traffic information once she learns your commute routine, such as from work and home.

To develop Cortana, we talked to a number of real personal assistants. One technique these assistants spoke about was keeping track of the interests and preferences of their bosses in a notebook. We thought… what a great idea! So all the stuff Cortana curates for you is stored in Cortana’s Notebook. This information enables Cortana to be proactive and helpful throughout the day. For example, she’ll let me know if my upcoming flight back to Seattle is on time and, if I choose, will even pop-up to recommend what time I should leave for the airport based on traffic. Cortana can also manage your phone when you don’t want to be disturbed by setting quiet hours where she will silence any notifications, in-coming calls, and texts. Cortana understands the “inner circle” of people-closest-to-you, and she can let them break through at any time during quiet hours. And Cortana is the only digital assistant that lets you setup people reminders. You can have Cortana remind you that your buddy owes you $20 the next time you talk to him. And ALL of these interests and preferences are under YOUR CONTROL via Cortana’s notebook.

What’s more, because Cortana is powered by Bing, some of the interests in Cortana’s Notebook will light up on Bing.comwhen you sign in on the web. Bing.com will give you access to the things Cortana tracks for you, like your weather, stocks, news, and flights.

We’ve also designed Cortana to be able to interact with 3rd Party Appsinstalled on your phone. You can ask Cortana to help you make a video call in Skype, watch a TV show in Hulu Plus, look up a news feed on Facebook or send a tweet using the Twitter app – all of which we demoed during this morning’s keynote.

And finally, Cortana isn’t just a dry computer returning search results. Just as she has in the game Halo, Windows Phone’s Cortana has a bit of personality. But you’ll have to talk to her yourself to see what I mean by that. Or… I bet you’ll be able to find some videos on the web pretty soon to see what I mean.

We think you’re going to really love having Cortana as your personal assistant!

A Whole Slew of New Delighters

Action Center: Live Tiles are a great way to “glance and go,” and now we’ve added Action Center to enable you to see notifications from ANY app – pinned or not—and to give you a customizable way to quickly access the settings you care about most, like Wi-Fi, Flight Mode, Bluetooth and Rotation Lock.

Word Flow Keyboard: The keyboard in Windows Phone is smart enough to learn your writing style and even knows the names of people in your contacts for faster typing. Best of all, our new Word Flow Keyboard lets you glide your fingers over the keys to type INCREDIBLY quickly… a kid was able to BREAK THE OFFICIAL WORLD RECORD previously held by the Swype keyboard on a Samsung Galaxy S4 using Word Flow by 8 seconds!

Skype:The new Skype app for Windows Phone 8.1 brings the best of Skype on a smartphone. It’s integrated with the Phone dialer, so if you’re on a call you can quickly and easily “upgrade” your ordinary phone call to a Skype video call at the tap of a button! And… the new Skype app is designed to work seamlessly with Cortana so you can use Cortana to setup your calls within Skype.

Calendar:The new Calendar has been redesigned to add a new week view which lots of people have been asking for and it has many nice touches—like panning right to get to the next day or week or month! What’s more, it looks a lot like Outlook on your Windows PC… e.g., the weather is integrated at the top – just like in Outlook.

Music, Video, Podcasts: We’ve made a ton of improvements to these experiences, which are now split out as separate apps and all of which can be updated via the Store. In Music, you can edit your playlists and manage your cloud collection really easily and effectively. Video makes it possible to buy or rent videos from Xbox Music, and Podcasts now lets you subscribe to any RSS feed AND provides a Bing-powered podcast search for every country where Windows Phone is available. Oh… and we’ve improved the phone volume control by including separate sliders for your ringer/notifications and for your apps and media. Just the way you asked for it!

People Hub, Email and Accounts: The People Hub has higher-fidelity feeds for your social network content (large photos!) and it connects directly to 3rd-party social networking apps so that you can have easy access to all the full functionality of the 3rd party apps once they are installed. Email now supports S/MIME secure email, and we’ve broadened our support for different account types, now including iCloud.

Photos & Camera: The Photos experience now jumps directly to your most recent photos and shows as collections automatically organized, in a view grouped by date and location. Online photo albums are now supported via app-extensibility, so 3rd parties can plug in their services. In the Camera, we’ve updated the UI and added “burst mode” photography that lets you capture exactly the perfect moment—just like on Windows 8.1.

Data Sense, Wi-Fi Sense, Storage Sense, and Battery Saver:We’ve added a number of features in Windows Phone 8.1 that are designed to help you get the most out of your data allowance, battery life and storage.

 

Data Sense lets you track how much data usage you use in a given month and will give you a breakdown of usage by app so you can see which app is using the most of your data. As you near your data limit, Data Sense will more aggressively offload data to Wi-Fi and limit cellular usage… and in 8.1 there’s a new “high savings” mode that cranks up the compression of images as you browse the web so you can browse even farther using less data than WP8.

Wi-Fi Sense will automatically connect you to free public hotspots it finds to help you save cellular data. And, if you’d like, you can opt-in to automatically and securely enable your friends and contacts to auto-connect to your home Wi-Fi, so they can use the internet connection at your house without hassling you for the password and typing it in manually. If you turn off Wi-Fi in Wi-Fi Sense, you can have Cortana automatically turn it back on when you reach one of your favorite places as identified in Cortana.

We’re introducing Storage Sense to help you get the most out of the memory and storage on your phone. It will help you manage content you have on an SD memory card if your device supports those. You can also move content – like apps, music, photos – between the storage built in to your device and an SD memory card.

And Battery Saver gives you a clear breakdown of how apps are using your battery so you can make more informed usage decisions. With “automatic mode” enabled, it can dramatically extend your battery life.

Windows and Windows Phone Together

Your Microsoft Accountallows Windows and Windows Phone to work together in amazing ways. Windows Phone 8.1 furthers the integration between phone and PC. If you change your theme color, that change will sync across all your Windows devices. If you buy an in-app purchase in some of the newer apps written for Windows Phone and Windows 8.1, the purchase works on your phone AND your PC. And other settings like your home Wi-Fi password will also sync.

Ever wanted to project your phone screen onto a PC, TV set or projector? We’ve added support for that as well—connect your Windows Phone to a compatible PC using a USB cable and you can run an application on the PC to show the phone screen. Some of the forthcoming new phones will also support wireless Miracast display to compatible TVs and other devices.

And finally with Internet Explorer 11 for Windows Phone, you will be able to see all the open tabs you have on all your Windows devices and all your Favorites too. Plus the new Internet Explorer gives you InPrivate browsing, password caching, and a super-handy reading mode.

Great for Business Users and IT Managers

Windows has long been the choice for the enterprise and professionals. Windows Phone fits easily and seamlessly into a corporate ecosystem making it easier to work when you are on the go. Last year, PC Magazine’s readers selected Nokia Lumia/Windows Phones as the Business Choice Award for smartphonesby scoring them the highest in end-user satisfaction.

With Windows Phone 8.1, we’re making it even easier for IT professionals to manage devices and for professionals to connect to essential business apps and services with features such as customizable MDM enrollment, support for loads more MDM policies, LOB application & certificate management, S/MIME and VPN support. Stay tuned for a detailed blog post later today on the Windows for your Business Blog that covers all the key features for businesses.

Sounds Great! When Can I Get It? And on which phones?

Windows Phone 8.1 will start rolling out to existing Windows Phone 8 users and will come pre-installed on new phones, including the Lumia 630 and 635 and Lumia 930announced by Nokia today, in the coming months. If you want to try out Windows Phone 8.1 and you are a registered developer, you can update your phone as part of the Developer Preview Program in the first part of April.

We are very proud of the progress we are making with Windows Phone. Industry analyst IDC proclaimed Windows Phone the fastest growing smartphone platform in 2013, and we think the future is even brighter. At Mobile World Congress, we announced our commitment to growing the number of device partners making Windows Phones, and were proud to welcome nine new partners to the Windows Phone ecosystem. Today we announced two more partners – Prestigio in Europe and Micromax in India – to further ensure that individuals around the world will have access to the amazing experience that only Windows Phone delivers consistently across all price points.

We know we have lots more to do – for developers, for business customers, and for consumers. Today’s announcements at Build were all about taking the next steps – making it easier than ever to build great devices and write great apps for Windows, and enabling a new generation of cool experiences for customers that show the power of designing around people, delivering truly personal computing, and helping us all to get more out of the technology in our lives.

Tags: Windows phone, Build 2014, Word Flow Keyboard, Battery Saver, Start screen, Email, camera roll, Windows Phone 8.1, Xbox Video,Enterprise, Announcement, inprivate, Action Center, Photos, Windows 8.1, Business, Devices, VPN, Cortana, Platform, skype, Xbox Music,Lock Screen, Windows 8.1 Update, podcasts, People Hub, calendar, Microsoft Accounbt, Windows, Live Tiles, Internet Explorer 11, Nokia, Wi-Fi Sense, Data Sense, Storage Sense

Windows 8.1 Update – important refinements to the Windows experience [ by  Brandon LeBlanc on Windows Experience Blog, April 2, 2014]

As Joe mentioned here, today we’re announcing two important updates to the Windows platform: Windows Phone 8.1 andWindows 8.1 Update. With these updates, we continue to refine and improve Windows based on feedback from customers to deliver ongoing value to all their Windows devices. Joe’s post goes into detail on all the awesomeness that’s in Windows Phone 8.1(Cortana is rad – trust me!) but also gives some great context around our new engineering culture in the Operating Systems Group now that we’re in this mobile-first, cloud-first world. It also underscores how we are moving more quickly to improve the Windows experience for customers. In this post, I wanted to share a little bit more about the update for Windows 8.1 and Windows RT 8.1.

With the current generation of Windows, we made a pretty big bet on touch and mobility. Along with building on top of the strong foundation in Windows 7, we also introduced a brand new approach to the Windows user experience that brought touch to the forefront. Since the original introduction of Window 8 in 2012, we have been continuously refining the experience, and we are making steady progress. More than 40 percent of Windows PCs at big box retailers, like Windows Stores Only at Best Buy, this past holiday season were touch-enabled – up from only 4 percent a year ago. As Joe recently said at Mobile World Congress, customer satisfaction for a device running Windows 8 with touch is actually higher than it was for a PC running Windows 7 without touch. We believe deeply in the notion that delivering a compelling personal and modern experience across all the devices that matter in your life should not mean sacrificing familiarity. Windows 8 and 8.1 were first steps, and we continue to make refinements based on customer and partner feedback.

Last fall, less than a year after we shipped Windows 8, we released Windows 8.1- bringing a large set of customer-driven improvements including the return of the Start button, tutorials, more personalization options, the ability to boot to desktop, improvements to multi-tasking, and more. Today marks the next step as we release a new update for your Windows experience.

The Windows 8.1 Update delivers a collection of refinements designed to give people a more familiar and convenient experience across touch, keyboard and mouse inputs. It also brings improvements for business customers, really accelerates opportunity for developers, and enables device makers to offer lower cost devices.

See what’s new with Windows 8.1 in the latest update, including easier mouse and keyboard functions, a new taskbar, and Bing’s improved Smart Search!

Easier access to your favorite apps and key controls:

On the Start screen, on select devices you will now find Power and Search buttons at the upper-right corner next to your account picture. You can now more quickly shut down your PC if you need to and do a search right from the Start screen.

If you like using the desktop, you will be happy to know that select devices will now boot to desktop as the default setting. And on your taskbar, you can now pin both desktop apps and apps from the Windows Store as well as your favorite websites. You can now pin any app you want to the taskbar so you can open or switch between apps right from the desktop. I’ve got some of my favorite apps like Xbox Music, Skype, Facebook, Flipboard, and Mint pinned to my taskbar. You can also access the taskbar from anywhere when you’re using a mouse; you can see the taskbar on any screen by moving your mouse to the bottom edge of your screen. Just click on any of the apps pinned to your taskbar to open or switch to them.

More familiar mouse and keyboard options:

We’ve made it so your mouse works more consistently anywhere in Windows. If you move your mouse to the top of the screen when using a Windows Store app, you will see the familiar Close and Minimize buttons. And as I mentioned above, when you move your mouse to the bottom of the screen in a Windows Store app, the taskbar comes up.

On the Start screen, if you right-click on an app tile, you will get a context menu next to the app tile that shows you what you can do with the tile, like unpin from Start, pin to the taskbar, change the tile size or even uninstall the app. Right-clicking on an app tile on the Start screen works just like right-clicking on something on the desktop.

Simpler way to find new apps:

After installing the update, you’ll find the Windows Store is now pinned to the taskbar by default so you can easily discover new apps (yes, you can unpin it if you don’t want it there).

And after installing new apps, you’ll notice a message at the lower-left corner of the Start screen that points you to the Apps view so you can see what you recently just installed.

Seamless browsing on all devices:

With today’s update, Internet Explorer 11 adapts your browsing experience by detecting your Windows device and input type – whether an 8-inch touch tablet in portrait mode or a 24-inch desktop with mouse and keyboard. The web is still front-and-center but new design enhancements make your browsing experience feel like it was made just for your device – like the number of tabs on-screen, the size of the fonts and menus. You can also now control when the browser remains on-screen or hides away for full-screen browsing. Check out 22tracksto see these updates in action.

Improvements for business customers: We are introducing several key improvements for businesses such as Enterprise Mode Internet Explorer (EMIE) and extended Mobile Device Management (MDM). EMIE enables Internet Explorer 8 compatibility on Internet Explorer 11 so companies can run existing web-based apps seamlessly on Windows 8.1 devices. And with extended MDM, we are introducing additional policy settings that can be managed with whatever MDM solution an enterprise chooses including whitelisting or blacklisting Windows Store apps and websites. Look for a blog post later today on the Windows for your Business Blog that discusses these in greater detail and a post on the Springboard Series Blogon deployment guidance for the Windows 8.1 Update.

New low cost devices:With the Windows 8.1 Update, we have enabled our hardware partners to build lower cost devices for Windows such as devices with only 1GB RAM and 16GB of storage that provide customers with the experience they expect from a Windows device without sacrificing performance.

We have made the Windows 8.1 Update available today for MSDN subscribers, and will begin to roll it out for free to Windows 8.1 and Windows RT 8.1 customers via Windows Update next Tuesday April 8th. For the majority of folks, they will receive the update automatically. If you are still on Windows 8, you can get the Windows 8.1 Update via the Windows Store on April 8th as well.

NOTE: The Windows 8.1 Update will be KB2919355 for those of you interested.

We’re really excited to get this update out to everyone! Moving forward, we’ll continue to deliver improvements through regular updates like this one to Windows, allowing us to respond more quickly to customer feedback as your needs change.

Tags: Windows 8, Keyboard, Start screen, Windows Store, Windows 8.1, search, Apps, Windows 8.1 Update, Windows, Update, Pinning,Taskbar, Mouse

Extending platform commonality through universal Windows apps [by  Kevin Gallo on Building Apps for Windows, April 2, 2014]

Today during our BUILD conference in San Francisco we unveiled the latest Windows software for phones, tablets, and PCs. Windows Phone 8.1 further establishes Windows Phone as the world’s most personal smartphone, with an even more engaging Start screen, the fastest keyboard on the market, thanks to Word Flow, and of course Cortana – the only personal digital assistant built around you. We also shared Windows 8.1 Update features such as UI improvements for mouse and keyboard users, the ability to pin Windows Store apps to the taskbar, and Internet Explorer compatibility enhancements. These OS features, and a new wave of devices that consumers will love, open up new opportunities for developers.

With this release of the Windows developer platform we set out to accomplish three major goals: 1) Reach customers across phones, tablets, and PCs; 2) Deliver innovation that supports developer investments; 3) Make cross-platform technology easier and more capable.

Reaching customers across phones, tablets, and PCs

Windows Phone 8 brought the same core set of operating system components used by Windows 8 to the modern UI of Windows Phone. Today we’re taking an even bigger step with Windows Phone 8.1 and Windows 8.1 Update by empowering developers to create universal Windows apps for a common Windows runtime.

Since universal Windows apps run on the same Windows runtime, developers have a common way of building and architecting apps for phones, tablets and PCs; from how they handle suspend and resume and do background processing, to the way they manage in-app security.

To help developers create universal Windows apps for Windows 8.1 and Windows Phone 8.1, we’ve announced the release of Visual Studio 2013 Update 2 RC. In addition to enhanced productivity and collaboration features, Visual Studio 2013 Update 2 RC includes Shared Projects that allow developers to create an app that is easily tailored to render a contextually appropriate experience across Windows phones, tablets and PCs. Get the tools now!

Innovation that supports developer investments

We’ve designed Windows for the long term, to address developers’ needs today, while respecting prior investments. We do this with one familiar toolset based on Visual Studio 2013, with support for C#, C++, JavaScript, XAML, DirectX, and HTML. The tools and technology stacks already used by hundreds of thousands of developers extend app development across Windows devices. Developers who have built apps for Windows 8.1 will find it fairly easy to reuse their work and bring tailored experiences to Windows Phone 8.1. Windows Phone 8 developers can use the same code, and also access new features, when they develop for Windows Phone 8.1.

Windows now also offers an expansive set of common APIs for everything from displaying notification toasts to accessing the file system and device capabilities. With Windows Phone 8.1, we are adding a wide array of new features including support for Bluetooth LE to connect to devices, Action Center extensibility to more effectively connect with users, triggers to ensure battery-friendly multitasking, VPN so end users can connect to their workplace, and many more.

Even Cortana delivers developer extensibility. Cortana brings a significant evolution of the speech technology developed by Windows and Bing, which first appeared in Windows Phone 8. In Windows Phone 8.1 we expose new enhancements to the Speech API that developers can use to integrate their apps with the Cortana family of services. Developers can now leverage speech recognition and voice commands to denote a series of actions triggered by heuristically derived scenarios that are surfaced through the Cortana speech recognition service. Fewer steps and more types of natural verbal exchanges open more apps. All of this is delivered through a simple API so developers who use Windows Phone 8 speech features today can plug into Cortana with little additional effort.

Developers are interacting with tablets and Windows computers in new ways as well. Kinect for Windows v2 will be released this summer. Soon developers can start building Kinect apps for Windows Store and publish or commercially deploy Kinect apps and solutions.

We’re also improving the way people find and use apps, as well as increasing monetization options and providing a more consistent Store experience across devices and markets. Developers can choose to link apps among phones, tablets and PCs so when a user downloads an app on one device they can install it on all of their Windows devices, increasing usage and engagement. Windows 8.1 Update brings the Store icon and pinned apps to the taskbar on the desktop. Developers are also getting more ways to market and monetize apps, such as common price tiers that bring the popular $0.99 and $1.29 price point to PCs, and updated advertising SDKs that support more rich media standards for better fill rates.

Also, by popular demand, we’ll soon be piloting a program through which developers can directly respond to app reviews to address potential confusion or other issues that may be hurting their ratings. These are just a few of the new Windows Store features being detailed this week during BUILD. Todd Brix will share much more detail about what’s new in Windows Store later today.

Make cross-platform technology easier and more capable

We’ve also been working for developers who may not already be on the Windows platform by supporting a mix of languages, runtimes, frameworks, and protocols that run across devices. Middleware partners like Unity have helped developers bring thousands of titles to the Windows Store. In a newly released beta version, Unity is delivering support for Windows Phone 8.1, including universal Windows apps.

Microsoft Open Technologies also works with various open source communities to contribute code to popular C++ frameworks and optimize them for Windows devices. For example, Windows Store supports Cocos2D-X, openFrameworks, OpenCV, Cinder, and Ogre3D apps. Box2D and Bullet also have joined the Windows Store. jQuery now fully supports Windows Runtime, so web developers can build Windows 8 apps reusing their existing code and skills. Developers who use HTML5 to build cross-platform apps for iOS and Android with tools like Apache Cordova will find it easy to port their apps to Windows.

In fact, we’re taking a much more pragmatic approach to the web in general. We know that HTML is a critical cross-platform technology. Windows Phone 8.1 brings the same powerful hardware-accelerated IE11 HTML engine in Windows 8.1 to the phone. We’ve made great strides in extending IE to developers by focusing on open standards. Now we want to focus even more on interoperability. We already support WebGL and other technologies, such as media streaming extensions for adaptive streaming scenarios.

Today we’re also announcing that Microsoft Open Technologies has brought the Windows Library for JavaScript (WinJS) cross-platform apps and is open sourcing it under the Apache 2.0 license. Find the source code on GitHub. Use this powerful Windows development framework to build high-quality web apps across a variety of browsers and devices beyond Windows, including Chrome, Firefox, Android, and iOS.

Where we go from here

We’re enabling universal Windows apps for a common Windows runtime today, and we know we have more work to do, including expanding the range of devices running universal Windows apps so developers can reach more customers in more places, from Xbox One and the Internet of Things scenarios, to millions more desktop Windows users. We also continue to strive to make the app development, submission, and management process faster and easier. In the coming weeks and months, you’ll see additional updates to the Windows platform – including tools and Store – all designed to deliver even better experiences and enable greater opportunity for our developer community.

Tags: phone, PC, Tablet

Gary Busey Meets Amazon Fire TV [amazon YouTube channel, April 2, 2014]

Amazon unveils the FireTV [CNETTV YouTube channel, April 2, 2014]

with no big stock market enthusiasm (I would say “business as usual” reaction):

Analyst commentary: Amazon Unveils Video-Streaming Device ‘Fire TV’ [WSJDigitalNetwork YouTube channel, April 2, 2014]

Introducing Amazon Fire TV: The Easiest Way to Watch Netflix, Prime Instant Video, Hulu Plus, WatchESPN, and More on Your Big-Screen TV [Amazon press release, April 2, 2014]

Powerful performance with 3x the processing power, 4x the memory, dedicated GPU, and dual-band, dual-antenna Wi-Fi

Say it, watch it—use voice search to instantly find movies, TV shows, and more

New ASAP feature predicts which movies and TV episodes you’ll want to watch and prepares them for playback before you even hit play

Huge, open ecosystem of entertainment—choose from over 200,000 movies and TV episodes

Plus, Fire TV comes with access to games from EA, Disney, Gameloft, Mojang, 2K, Amazon Game Studios, and more

My insert here: Amazon announces Fire TV, its own set top box: 90 Seconds on The Verge [The Verge YouTube channel, April 2, 2014]

SEATTLE–(BUSINESS WIRE)–Apr. 2, 2014– (NASDAQ:AMZN)—Kindle revolutionized reading by making it possible to think of a book and be reading it in less than 60 seconds. Kindle Fire put the world’s largest selection of movies, TV shows, songs, apps, games, books, audiobooks, and magazines in the palm of your hand. In each case, Amazonintegrates the hardware, software, and the content into an easy-to-use, seamless, end-to-end service for customers. Today, Amazon is excited to unveil its newest innovation—Fire TV, a tiny box that plugs into your HDTV for easy and instant access to Netflix, Prime Instant Video, Hulu Plus, WatchESPN, SHOWTIME, low-cost video rentals, and much more. Fire TV also brings photos, music, and games to the living room. Meet Amazon Fire TV at www.amazon.com/FireTV.

“Tiny box, huge specs, tons of content, incredible price—people are going to love Fire TV,” said Jeff Bezos, Amazon.com Founder and CEO. “Voice search that actually works means no more typing on an alphabet grid. Our exclusive new ASAP feature predicts the shows you’ll want to watch and gets them ready to stream instantly. And our open approach gives you not just Amazon Instant Video and Prime Instant Video, but also Netflix, Hulu Plus, and more. On Fire TV you can watch Alpha House and House of Cards.”

Related information:

Prime (+Netflix comparison): Amazon may hike Prime cost as earnings disappoint and further challenges lay ahead of the company for which it needs to adjust its business model and expand its operations [‘Experiencing the Cloud’, Jan 31, 2014]

1. Cable and satellite video market (U.S. only)
2. Pay-TV market (cable and satellite, IPTV, terrestrial)
3. The overall TV market (home video, on demand video, linear TV)
4. IPTV—AT&T U-verse TV and Verizon FiOS video in particular
5. OTT (Over-the-top content)
within the Microsoft’s integrated solution for streaming video and Live TV providers on all devices, plus the upcoming live-action and “shared experience” TV of its own on Xbox [‘Experiencing the Cloud’, Feb 3, 2014] which also contains:
6.   Microsoft’s live TV solution on Xbox
7.   Preliminary information on the upcoming products from Xbox Entertainment Studios
8.   Xbox Music and Xbox Video services for other devices

Amazon’s move into overall leadership: Kindle Fire HDX with Snapdragon 800, “revolutionary on-device tech support” (Mayday), enterprise and productivity capable Fire OS 3.0 forked from Android 4.2.2 etc. PLUS a significantly enhanced, new Kindle Fire HD for a much lower, $139 price [‘Experiencing the Cloud’, Sept 27, 2013]

My insert here: Hands On with Amazon Fire TV [TechCrunch YouTube channel, April 2, 2014]

Amazon Fire TV features:

• Voice search that actually works—simply speak the name of a movie, TV show, actor, director, or genre into the remote, and you’re done. No more hunting and pecking in an alphabet grid.
• All the content—instant access to Netflix, Prime Instant Video, Hulu Plus, WatchESPN, YouTube, and more, plus the largest selection of videos for rent and purchase—over 200,000 movies and TV episodes from Amazon Instant Video. Plus, listen to music with Amazon MP3, Pandora, iHeartRadio, TuneIn, and more.
• Powerful performance in a tiny form factor—quad-core processor with over 3x the processing power of Apple TV, Chromecast, or Roku 3, a dedicated GPU, plus 4x the memory of Apple TV, Chromecast, or Roku 3 for exceptional speed and fluidity. Delivers stunning 1080p HD video and immersive Dolby Digital Plus surround sound. All of this comes in an incredibly small package—Fire TV is 0.7” thin and comes with a simple and sleek remote control with a built-in microphone.
• Simple and easy to use—arrives pre-registered so you can start watching immediately out of the box.
• An exclusive new feature called ASAP (Advanced Streaming and Prediction) predicts which movies and TV episodes you’ll want to watch and buffers them for playback before you even hit play—instant start.
• High-quality, low-cost gaming—games like Minecraft, Monsters University, The Game of Life, The Walking Dead, NBA2K14, Asphalt 8, Riptide GP2, Despicable Me: Minion Rush, and more. The average price of paid games on Fire TV is $1.85. Play using your Fire TV remote, the Fire TV app for smartphones and tablets, or the optional Fire game controller.
• Amazon FreeTime revolutionizes parental controls—parents can choose what their kids see and set time limits for types of content and times of day—no more negotiating for one more show before bedtime. Customers who subscribe to FreeTime Unlimited—Amazon’s all-you-can-eat content subscription designed for kids ages 3 to 8—will get unlimited access to thousands of movies and TV shows.
• X-Ray for movies, TV shows, and music—see information about cast and crew, trivia, goofs, and synchronized lyrics.
• See all of your photos and personal videos come alive on your big-screen TV—seamless integration with Amazon’s Cloud Drive.

Simple and Easy to Use, with Powerful Performance

Powerful Quad-Core Processor and Graphics Engine

Fire TV features a world-class quad-core processor with 3x the processing power of Apple TV, Chromecast, or Roku 3, and a dedicated Adreno 320 graphics engine that processes 57 billion floating point instructions per second, for lightning-fast graphics and excellent fluidity. Fire TV comes with 2GB of memory, 4x the memory of Apple TV, Chromecast, or Roku 3, so content loads faster and games run smoother.

New Amazon Fire TV powered by Snapdragon 600 processor [Qualcomm Snapdragon Blog, April 2, 2014] Amongst popcorn aromas and home-theatre decor, today, Amazon announced Fire TV: a streaming set top box that aims to deliver just about every video streaming service in a compact, powerful package. Addressing the media at today’s announcement in New York, Amazon.com’s Peter Larsen, Vice President of Kindle, identified three problems with today’s internet-enabled set-top boxes—search, performance, and a closed ecosystem—and detailed how Fire TV solves them. Granted, search and content ecosystems are well within the purview of Amazon. But performance? That’s where Qualcomm® Snapdragon™ processors come in. Sporting a Snapdragon 600 processor with quad-core CPU, the Fire TV has all the base capabilities you expect from a device that lives in your living room: Full HD 1080p streaming video, 7.1 Dolby Digital Plus surround sound, and a lighting-fast, ultra-stable dual-antenna Wi-Fi connection. With three times the processing power of other set-top boxes, the Fire TV features silky-smooth menu navigation and content browsing. And utilizing the additional performance on tap, Amazon have introduced ASAP (Advanced Streaming and Prediction), which automatically predicts, buffers, and stores the shows you want to watch—all you need to do is hit play, and they instantly start. But this is Amazon, the everything store. And the Fire TV is the everything box. Foremost of which is the new voice search. Just press a button on your remote, and the Fire TV can find John Malkovich’s entire body of work at the utterance of his name, or get Team Umizoomi up and streaming almost as fast as you children can yell “Umizoomi.” In addition to the massive library of movies and TV shows available through just about every video streaming service on the planet; the dedicated Qualcomm Adreno GPU opens up the Fire TV to the gaming world. Available today are staples such Minecraft, The Walking Dead, NBA2K14 and more than 100 other games. In addition, the GPU will power Amazon’s first foray into video games: Sev Zero. Additionally there’s Second Screen—allowing users to mirror music, movies, and photos from their Kindle Fire HDX (also powered by Snapdragon processors) to their TV. And unlike the set-top boxes that came before, Fire TV will feature X-Ray: A second screen experience, powered by IMDb, that provides viewers with relevant information—such as cast and crew bios, soundtrack credits, trivia, character backstories, and more—as their movie or show plays. Currently, X-Ray is available for Kindle Fire HDX users, with support for iPhone and iPad later this year. Amazon’s Fire TV is available now for $99.

Streams in High Definition 1080p with Dolby Digital Plus Surround Sound

With dual-band, dual-antenna Wi-Fi, Fire TV streams in up to full-HD 1080p and supports HDMI and optical audio-out, enabling up to 7.1 Dolby Digital Plus surround sound.

Simple and Easy to Use

Fire TV comes automatically pre-registered so you can immediately get started. No complicated set-up, no hassle—just plug it in and start watching. All of your previously purchased movies and TV shows from Amazon, as well as personalized recommendations and your Watchlist, will be there waiting for you when you turn on Fire TV.

Designed to Disappear

Fire TV is designed to disappear. It is 0.7” thin, so it is easy to hide, and is silent even when running the most demanding applications.

Fire TV Remote

Fire TV’s remote is small, simple, and intuitive, with familiar controls. Search, browse, play, pause, and add titles to your Watchlist with ease. The Fire TV remote uses Bluetooth so there is no “line of sight” required, which means no reaching or struggling to aim your signal at a tiny target—store your Fire TV in a cabinet or behind the TV.

Voice Search that Actually Works

Gone are the days of searching for a movie or TV show by left-left-down-right-ing through an on-screen alphabet grid using your remote. Simply speak the name of a movie, TV show, actor, director, genre, app, or game into the remote, and the results will appear instantly. Voice search leverages the search data and expertise of Amazon.com and IMDb, and is optimized to understand Amazon’s video, app, and game catalog.

The Best Video Experience

Movies and TV Shows from Netflix, Prime Instant Video, Hulu Plus, and More

Fire TV comes with instant access to all of the most popular subscription video services, including Netflix, Prime Instant Video, Hulu Plus, WatchESPN, VEVO, SHOWTIME, Crackle, YouTube, and more, with additional services like WWE Network, MLB.TV, WATCH Disney Channel, WATCH ABC, and Twitch coming soon.

Prime Instant Video, with Exclusives and Original Shows

Fire TV is seamlessly integrated with Prime Instant Video, Amazon’s subscription streaming service. With tens of thousands of movies and TV episodes, Prime Instant Video is the exclusive premium subscription streaming home for thousands of hours of video, including shows like Downton Abbey, The Americans, Workaholics, Justified, 24, Hannibal, Dora the Explorer, SpongeBob, and more. Prime Instant Video also includes shows from Amazon Studios, the original TV production arm of Amazon, such as Alpha House from Pulitzer-Prize winner Garry Trudeau and starring John Goodman, which debuted last year and quickly became the most watched show on Amazon since its release. Alpha House is now in production for its second season, and Amazon recently greenlighted six new shows, including The After, Bosch, Mozart in the Jungle, and Transparent, which will be available starting later this year.

The Largest Selection of Videos for Rent or Purchase

Rent or purchase over 200,000 movies and TV episodes from Amazon Instant Video, which has the world’s largest selection of videos to rent or buy, including new releases and blockbusters. Amazon is the only nationwide video service that offers rental and purchase, as well as a subscription streaming service, so you can find everything you want in one place—catch up on past seasons of popular TV shows with Prime Instant Video before purchasing the most recent episode of the show as it’s released.

Find the Lowest Price—Even if it’s Not from Amazon

Just like on Amazon.com, Fire TV integrates viewing options on a single page so you can always choose the lowest price. This is available starting with Hulu Plus, Amazon Instant Video, and Prime Instant Video, and will expand to other content providers so you’ll see all of your options in one place.

ASAP

You shouldn’t have to wait 10 seconds for a video to buffer after you press “Play”—it should start immediately. Based on your Watchlist and recommendations, the new ASAP (Advanced Streaming and Prediction) feature predicts which movies and TV episodes you’ll want to watch and prepares them for playback before you even hit play. This feature is smart—it is personalized based on your viewing habits and adapts as those habits change. The caching predictions get better over time, so ASAP will continuously improve as you use Fire TV.

Fling TV Shows and Movies with Second Screen

Fling Amazon TV shows and movies from your phone or tablet to your Fire TV using Second Screen. This turns your TV into the primary screen and frees up your phone or tablet to provide playback controls, a customized display for X-Ray, or simply a place to email, browse the web, and more, while you watch a movie. Second Screen is available on Kindle Fire HDX and will be available later this year from your iPhone or iPad. You can also wirelessly mirror your tablet display to your Fire TV with Kindle Fire, as well as other Miracast-enabled phones or tablets starting later this year. Fire TV supports standards like DIAL, so app developers can enable multi-screen experiences based on open technologies.

X-Ray for Movies and TV Shows, Powered by IMDb

Using Second Screen on your Fire HDX and later this year on your iPhone or iPad, you can see X-Ray information as your movie or TV show plays on Fire TV. With X-Ray you can see information about cast and crew, the names of songs as they play, as well as a list of all music in the movie or TV show, trivia items in context with the action on the screen, and character backstories so you can easily remind yourself of the character’s history. X-Ray is exclusive to Amazon and is powered by IMDb.

Amazon FreeTime—Revolutionary Parental Controls

Now you don’t have to worry about what your kids are watching on the TV—with FreeTime, a parent creates profiles for each child and selects the content they can see. Parents can create time limits based on type of content or time of day. When in FreeTime, the background color and fonts change to a kid-friendly design. Kids only see titles that have been selected by their parents for them, and those who can’t yet read can navigate visually to content based on favorite characters or topics—for example “Dora the Explorer,” “Princesses,” or “Thomas and Friends.” Parents who have already set up profiles and approved content on Kindle Fire tablets will find the settings are automatically synchronized on Fire TV, making it simple and seamless to get started.

Customers who subscribe to FreeTime Unlimited—Amazon’s all-you-can-eat content subscription designed just for kids ages 3 to 8—will get unlimited access to thousands of movies and TV shows. FreeTime Unlimited is available for Prime members to enjoy for a monthly price of $2.99 per child or $6.99 per family. Customers who are not yet Prime members can subscribe to FreeTime Unlimited for a monthly price of $4.99 per child or$9.99 per family. Amazon FreeTime and FreeTime Unlimited will be available on Fire TV starting next month.

Your Photos on the Big Screen

Fire TV makes it easy to view your photos and personal videos on your TV. You can set up and play slide shows, find specific photos, and choose your favorite album for the screen-saver on Fire TV. Photos or videos you take on your phone or tablet can be automatically uploaded to Amazon Cloud Drive, so they appear on your Fire TV within seconds.

Music in Your Living Room

Music from Pandora, Amazon MP3, iHeartRadio, and More

With Fire TV, you can listen to music from popular streaming services like Pandora, iHeartRadio, and TuneIn, and watch music videos from VEVO. Starting next month, you can also listen to your full collection of music through Amazon Cloud Player. Simply upload your music or purchase from Amazon and it will be stored automatically in your Cloud Player and available on Fire TV as well as on your phone or tablet.

X-Ray for Music

Lyrics display and scroll line-by-line automatically as the song plays, so you can follow along with songs. X-Ray for Music will be available starting next month.

Bonus—Great Games at Low Prices

Games from Top Developers

Amazon worked with game developers like EA, Disney, Gameloft, Ubisoft, Telltale, Mojang, 2K, and Sega to bring their games to Fire TV. Games available starting today include customer favorites like Minecraft, Monsters University, The Game of Life, The Walking Dead, NBA2K14, Asphalt 8, Riptide GP2, Despicable Me: Minion Rush, and more. Over 100 games are available starting today and optimized for Fire TV, with thousands of additional games coming next month with the Fire TV app, which brings controls for touch-enabled games. These are great games for such a small box and at such surprisingly low prices—the average price of paid games is $1.85.

Fire TV also comes with access to Sev Zero, a new game built exclusively for Fire TV by Amazon Game Studios. Sev Zero is $6.99 and is available for free when you purchase the Fire game controller. Learn more: www.amazon.com/pr/SevZero.

Fire TV runs the latest version of Fire OS “Mojito,” which is based on Android, so it’s simple for developers to port their services and games over to Fire TV.

Choose How to Play—Remote, Game Controller, or App

In addition to using the Fire TV remote and the Fire TV app available starting next month, you can also choose the Amazon Fire game controller, which enables more high-intensity and complex gaming with dual analog sticks and a complete assortment of controls. Simple and comfortable to use for hours, the Fire game controller pairs with Fire TV via Bluetooth. The Fire game controller also intelligently manages power by automatically going to sleep when not in use, and waking at a touch of a button, so you get up to 55 hours of gaming on a pair of AA batteries. You can pair multiple game controllers with a Fire TV so the whole family can play together in the same room. The integrated GameCircle button gives you instant access to leaderboards, achievements and friends with a simple touch of a button from any GameCircle enabled game. The Fire game controller can also be used as a remote, with fast forward, rewind, play and pause, so you can control all your movies and music on Fire TV. The Fire game controller is available today for $39.99, and comes with a free copy of Sev Zero and 1,000 Amazon Coins (a $10 value) for purchasing games.

The Features You Expect from Amazon

Fire TV is not a gadget—it’s a seamlessly integrated service that brings together the features customers expect from Amazon, including:

• Whispersync—Amazon’s Whispersync technology saves and synchronizes your video and music library across all of your devices. Start watching a movie on your Kindle Fire or iPhone, and when you get home, pick up where you left off on your Fire TV. For games that support Whispersync, your place in the game will also sync across devices so you can always pick up where you left off.
• Watch on over 300 devices—When you buy a movie or TV show on Amazon, you can watch it on over 300 devices.
• Worry-Free Archive—Automatically backs up your Amazon digital content in the cloud so you never need to worry about losing your collection.
• Top-Rated, World-Class Customer Service—When a customer shops on Amazon, buys a Fire TV, or buys digital content from Amazon, they know that they are also getting Amazon’s world class customer service. Customers with a Kindle Fire HDX can also use the Mayday button to receive free, live, on-device tech support.
• Free Month of Amazon Prime—Amazon continues to invest hundreds of millions of dollars to bring Prime members new movies, TV shows, and books to enjoy at no additional cost. Prime members enjoy unlimited, commercial-free, instant streaming of tens of thousands of movies and TV episodes with Prime Instant Video. Eligible customers get a free 30-day trial of Amazon Prime when they purchase Fire TV.

Pricing & Availability

Fire TV is available starting today for just $99—order at www.amazon.com/FireTV.

Eligible customers get a free 30-day trial of Netflix and Amazon Prime when they purchase Fire TV.

Images of Fire TV are available at www.amazon.com/pr/devicesandcontent.

Snapdragon 600 processor specs [Qualcomm product page, March 25, 2014]

CPU	28nm LP quad core Krait 300 CPU at up to 1.9GHz per core LP-DDR3 memory for high performance and low latency
GPU	Speed enhanced Adreno 320 GPU delivers over 300% increase in graphics processing performance1 Support for advanced graphic and compute APIs, including OpenGL ES 3.0, DirectX, OpenCL, Renderscript Compute and FlexRender™2
Power Management	Energy efficient LP process and dynamic GPU clock and voltage scaling Asynchronous Multi-Processing (aSMP) dynamic CPU power control for power-optimized performance Qualcomm Quick Charge 1.0 integrated for up to 40% faster battery charging
DSP	Hexagon, QDSP6 Hexagon DSP enables ultra-low power operation for a variety of applications like music playback, enhanced audio effects, computer vision processing and still and video image enhancements
USB	USB 2.0
Bluetooth	BT4.0 + Integrated digital core
Display	Enjoy your photos, videos and games on large, high-resolution display devices (up to 2048×1536) and even on 1080p external displays
WiFi	802.11ac3 Wi-Fi for peak Wi-Fi performance + Integrated digital core3 Publicly demonstrated to 280 Mbps UDP
GPS	IZAT™ location technology features GNSS for accurate auto and pedestrian navigation and Indoor Location capabilities for advanced location-based services
Video/Audio	Capture and playback video at 1080p HD HD multichannel sound with DTS-HD and Dolby Digital Plus
Camera	Up to 21 Megapixel, stereoscopic 3D Take high-resolution, 3D photos with 21 Megapixel stereoscopic camera support
Process Technology	28nm LP

¹ Compared to its predecessor, Adreno 305

² FlexRender is designed to help the Adreno GPU boost speed and save power by dynamically switching between drawing pixels in direct or deferred rendering mode

³ Available only in select processors

Snapdragon 600 processors include the following part numbers: 8064T, 8064M

This is my conclusion after the two sections of analysis presented below:

I. China-based white-box tablet and smartphone vendors were shaping the 2013 global device market which will even more so in 2014

II. Asia is following different patterns of mobile use than the United States – the case of China and South Korea

The single, most forceful evidence for all of the above is the extraordinary presentation of Hugo Barra, Vice President, Xiaomi Global & Loic Le Meur, LeWeb Founders- LeWeb’13 Paris - [LeWebYouTube channel, Dec 11, 2013]

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I. China-based white-box tablet vendors and smartphone vendors were shaping the 2013 global device market which will even more so in 2014

My analysis of the smartphone market in general was first presented in the Device businesses should have a China-based independent headquarter at least for Asia/Pacific if they want to succeed [‘Experiencing the Cloud’, Jan 28, 2014] and then it was already updated by the recent Chinese smartphone brands to conquer the global market? [‘Experiencing the Cloud’, March 18, 2014] post of mine.

As a Q4’13 update to The tablet market in Q1-Q3’13: It was mainly shaped by white-box vendors while Samsung was quite successfully attacking both Apple and the white-box vendors with triple digit growth both worldwide and in Mainland China [‘Experiencing the Cloud’, Nov 14, 2013] post of mine I should first add here the following analysis:

Note that the white-box tablet shipments from China were estimated by company data and Credit Suisse estimates as 7% and 10% higher: 2012: 58M (vs. 54.4M here), 2013: 98M (vs. 89.1M here) (as per the “Figure 30” chart in this blog below). As you see here and later on the conclusion of the Q1-Q3’13 analysis for the tablet market, represented by the title of the previous post will hold for the whole CY2013 as well. The only remarkable change is the sudden jump in Apple iPad sales in Q4, both worldwide and in China. This is, however, only attributed to Q4 introduction of the new iPad Air which was much anticipated for months, thus postponement of new purchases and the peak when it was available. So, for the whole year, my conclusion still holds true,

Note that the 2013 tablet market in China was 17.2M as per the above data, while the 2013 worldwide tablet market was 219.5M per IDC, and 255M according to company data and Credit Suisse estimates (as per the “Figure 30” chart in this blog below). So China was just 7.8% or 6.4% of the worldwide tablet market, while China shipped significantly more, 38.4% of the worldwide tablet market by the Chinese white-box vendors only (the last one according to company data and Credit Suisse estimates). This is 5.5% higher than the share of China-based smartphone vendors in the global 2013 smartphone shipments (32.9%, according to DIGITIMES Research—see well below), although in tablet space only Lenovo was a significant player, while in smartphones Huawei, ZTE, Coolpad and TCL were also signicant ones (being actually in the global Top 10). In addition a much higher portion of that was shipped internally:  about 50% according to company data and Credit Suisse estimates (as per the “Figure 25” chart in this blog below), while for tablets 3M local brand tablets were shipped (as per Analysys International, see the above chart) against 98M of white-box tablets only (as per company data and Credit Suisse estimates), i.e. around 3%. Even taking the DIGITIMES Research’ 54.4M white-box tablet shipment data as the basis, this number will only climb to around 5.5%.

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Then I need to add here some external analysis as well, for both the smartphone and tablet markets:

From Taiwan Display IC Sector [Credit Suisse Equity research, March 12, 2014]

[p. 10] … We are … seeing entry level tablet shifting from 7″ to 8″ with higher resolutions given the competition from large size smartphone (Phablet). Tablet brands also plan to introduce over 10″ models for more commercial applications. …

China smartphone will continue to proliferate

Credit Suisse Global Research team estimates global smartphone shipment growth of 18% CAGR in 2013-2016E, while China build smartphone shipment (domestic and export) will see 29% CAGR in 2013-16E. For 2014, we forecast total China smartphone DDI [Display Driver IC] demand of 650-700mn units, up 33-36% YoY, and panel resolution to see faster migration on aggressive pricing and less capacity constraint …

[p. 10] Tablet unit demand still solid in 2014 post strong 2013

Tablet set shipment growth is expected to slow down in 2014 (34% YoY) after a strong 57% YoY growth in 2013 and 107% YoY growth in 2012. However, we believe Chinese tablet makers (brand and whitebox) … will outgrow the industry thanks to further cost reduction …

[p. 11] We estimate there will be limited growth for high-end or branded tablets in 2014, with the exception of Samsung (60% YoY growth). We believe the overall tablet demand will be driven by the Chinese, such as Lenovo and whitebox makers.

[2011: 73M*, 2012: 163M, 2013: 255M, 2014E: 342M]
* Samsung’s own data: 2010: 1.5M, 2011: 5.8M, 2012: 16.6M
** Note that the white-box tablet shipments were estimated by DIGITIMES Research as lower: 2012: 54.4M (vs. 58M here), 2013: 89.1M (vs. 98M here)
(as per the 1st chart in this blog above)

2014 China smartphone market and industry – Forecast and analysis [DIGITIMES Research, March 24, 2014]

Digitimes Research expects demand in the domestic China market to reach 422 million smartphones in 2014, with 278 million units contributed by China-based smartphone vendors. The continued expansion by international vendors Samsung and Apple will push up their sales to almost 144 million units, accounting for nearly 4% growth from 2013. As competition in the local market heats up, China-based vendors are turning to overseas markets in order to maintain their shipment volumes, especially taking an aggressive approach to penetrating emerging markets, which hold higher barriers for overseas vendors to enter.

The outlook for the 2014 China domestic smartphone market is that fewer local brands will remain to compete in the market. With the general enhancement of software-hardware specifications in 2013, brand-building and channel management have become the key to sustainability. Vendors without the advantage of substantial product differentiation will face the challenge of being eliminated in the short term. On the other hand, local vendors need to deal with inventories with discretion to counter the vigorous attacks initiated by international vendors in the domestic market.

In terms of the China smartphone industry, Digitimes Research expects global shipments of China-based smartphone vendors to reach 412 million units in 2014, a 30.7% increase from 2013. Overseas shipments will account for about 126 million units. While shipments to mature markets are expected to grow on a small scale, shipments to emerging markets are expected to expand at strong rates, mainly due to the low base they are starting from.

In the forecast for shipments from different vendors in 2014, Lenovo and Huawei are expected to reach 50 million units. Huawei has been engaged in overseas markets for a long time so its export portion outweighs Lenovo’s. ZTE’s and CoolPad‘s shipments are expected to reach 35.5 million units. TCL [Alcatel] has shown a significant growth in exports with shipments expected to exceed 26 million units in 2014, ranking No. 5 on the list. Second-tier vendors Gionee and Xiaomi are expected to ship 20 million units.

Digitimes Research: China smartphone shipments to decline slightly in 1Q14 [DIGITIMES Research, Feb 7, 2014]

China-based handset companies are expected to see their shipments of smartphones decline lightly in the first quarter of 2014, after combined shipments posted a 13% sequential growth in the previous quarter, according to Digitimes Research.

Efforts by brand vendors to clear out entry-level models in previous quarters and increased overseas shipments by Huawei, ZTE and TCL contributed to shipment gains the fourth quarter of 2013.

Additionally, first- and second-tier vendors also launched a number of new models in the fourth quarter to meet demand during the year-end buying season, ramping up total shipments in the quarter.

For all of 2013, China-based handset makers shipped a total of 314 million smartphones, increasing 62.4% from a year earlier, Digitimes Research said.

Second-tier vendors, including Xiaomi Technology, TCL, Oppo Mobile and Gionee managed to ship over 15 million smartphones in 2013.

Digitimes Research: Global smartphone shipments to top 1.24 billion units in 2014 [DIGITIMES Research, Jan 14, 2014]

Global smartphone shipments are expected to top 1.24 billion units in 2014, with Samsung Electronics, Apple, LG Electronics, Sony Mobile Communications, Lenovo, Huawei, Microsoft, ZTE, Coolpad and TCL serving as top-10 vendors, according to Digitimes Research.

Apple may see its shipments double in 2014 largely due to increased shipments to China and Japan as it will benefit from its cooperation with the largest telecom operators in the two countries, said Digitimes Research.

The growth rate for Samsung will be limited in 2014 as its sales in the US, China and Japan will be depressed by growing popularity of iPhones.

China-based Lenovo, Huawei and Coolpad are expected to step up their efforts to boost sales in overseas markets after being enlisted among the top-10 vendors due to higher shipment volumes in the home market in China.

However, TCL and ZTE will continue to ship smartphones to overseas markets mainly, but will also strengthen sales in China, with domestic sales to account for less than 50% of their total shipments in 2014, commented Digitimes Research.

2014 global smartphone market forecast [DIGITIMES Research, Jan 7, 2014]

In 2014, smartphones are expected to continue penetrating rapidly into emerging markets such as Russia, India, Indonesia and Latin America, while China’s smartphone shipments will see weakened on-year growth in the year, but still enormous volume. This report will provide in-depth analyses to forecast whether global smartphone shipments in 2014 will maintain a growth similar to that of 2013 and what the global shipment scale will reach in 2014.

Within the top-10 smartphone vendors in 2013, four of them are from China and in 2014 more China-based vendors are expected to enter the top 10. This report will also analyze which China-based vendors will have the best chance to become parts of the top-tier players.

How Microsoft’s acquisition of Nokia’s handset business will affect Windows Phone products’ shipment growth in 2014 and shake Android and iOS’ domination in the smartphone market, as well as the possibility of Amazon and Facebook joining the smartphone competition in 2014 and their potential influence to the market will also be analyzed within the report.

Digitimes Research: Global smartphone shipments to reach 1.24 billion in 2014 [DIGITIMES Research, Nov 25, 2013]

Global smartphone shipments are expected to reach about 1.24 billion in 2014, up 30% on year [i.e. 954M in 2013], according to Digitimes Research.

The increase in growth is expected to be driven by demand in Russia, India, Indonesia and Latin America countries.

Digitimes Research believes that Samsung Electronics will lead the way in shipments followed by Apple, LG Electronics, Sony, Lenovo, Huawei Device, Microsoft, ZTE, Coolpad and TCL [Alcatel].

Android and IOS operating systems are expected to be used in about 93% of the devices shipped in 2014, added Digitimes Research.

Global tablet market – 4Q 2013 [DIGITIMES Research, March 24, 2014]

Global tablet shipments grew 25% sequentially and 29.8% on year to reach 78.45 million units in the fourth quarter of 2013 benefiting mainly by economic recoveries of Europe and North America, which relatively boosted demand during the year-end holidays.

Digitimes Research: Global tablet shipments in 1Q14 to drop over 20% sequentially [DIGITIMES Research, Jan 27, 2014]

An estimated 62.14 million tablets will ship globally in the first quarter of 2014, decreasing 20.8% on quarter but increasing 10.9% on year, according to Digitimes Research.

iPads will account for 29% of shipments, brand models launched by vendors other than Apple for 36.7%, and models launched by white-box vendors for 34.3%, Digitimes Research indicated.

Of brand tablet shipments in particular, Android-based models will take up 50.5%, iOS-based 44.1% and Windows-based 5.4%. 7.9-inch models will account for 24.8% of the shipments, followed by 7-inch models with 20.2%, 9-inch models with 19.6%, 10-inch models with 18.3% and 8-inch models with 15.3%. In terms of touch solutions, GFF will account for 47.8% of shipments, GF2 for 42.9%, OGS for 5.3%, GG for 2.7% and G1F for 1.3%.

Among vendors, Apple will have the largest global market share at 29%, followed by Samsung Electronics with 23.1%, Lenovo 4.7%, Asustek Computer 2.7%, Amazon 1%, Acer 1%, Microsoft 0.9%, Dell 0.8%, Google 0.5% and Hewlett-Packard 0.5%.

Taiwan-based ODMs/OEMs will ship 22.5 million tablets in the quarter, taking up 55.1% of total brand model shipments. Foxconn Electronics will account for 51.7% of shipments, Pegatron 34.8%, Compal Electronics 5.1%, Wistron 4.3% and Quanta Computer 4.1%.

Digitimes Research: Global tablet shipments in 4Q13 estimated at 78.45 million units [DIGITIMES Research, Jan 24, 2014]

There were an estimated 78.45 million tablets shipped globally in the fourth quarter of 2013, increasing 25% on quarter and by 29.8% on year, according to Digitimes Research.

iPads accounted for 29.7% of shipments, brand models launched by vendors other than Apple for 36.6%, and models launched by white-box vendors for 33.8%, Digitimes Research indicated. Android-based models took up 51.2% of the shipments, iOS-based 44.9% and Windows-based 3.9%. 7-inch models accounted for 31% of the shipments, followed by 9-inch models with 25.4%, 7.9-inch models with 19.7%, 10-inch models with 15.8% and 8-inch models with 7.6%. In terms of touch solutions, GF2 accounted for 41.5% of shipments, GFF for 38.6%, OGS for 9.8% and GG for 9.5%.

Among vendors, Apple had the largest global market share at 29.7%, followed by Samsung Electronics with 17.4%, Amazon 5.4%, Lenovo 4.2%, Asustek Computer 2.8%, Google 1.4%, Acer 1%, Dell 0.8% and Hewlett-Packard 0.5%.

Taiwan-based ODMs/OEMs shipped 32.8 million tablets in the fourth quarter, with Foxconn Electronics accounting for 52.7%, Pegatron 24.4%, Compal Electronics 12%, Quanta Computer 6.6% and Wistron 4.2%.

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II. Asia is following different patterns of mobile use than the United States – the case of China and South Korea

The Post-PC Era: Is the U.S. losing its grip on the software industry? [Flurry Blog, Aug 29, 2013]

Just five years ago, PCs reigned supreme and so did the US software industry. In 2008, U.S. companies produced an estimated 65% of all PC software units sold on a worldwide basis.

In only half a decade, smartphones, tablets, and perhaps most importantly, apps, have changed the nature of the software industry. In this post we look at where apps are being developed and used and discuss the implications of that for the Post-PC Era software industry.

More Apps Are Now Being Created Outside The U.S. Than Inside The U.S.

… By June of this year only 36% of the apps we measure were made in the U.S.A. …

…

U.S. Made Apps Still Dominate App Engagement, But Their Share Is Slipping

Of course, some apps enjoy much greater use than others, so we next considered how the picture changes if apps are weighted by total time, which takes into account both user numbers and engagement. Once time is taken into account, things look considerably better for the U.S., suggesting that, on average, user numbers or engagement are greater for apps made in the U.S. than for apps created elsewhere. That makes sense given the size of the U.S. population, the fact that it was an app pioneer country, and the number of English speakers in other countries who might be able to use U.S.-made apps without any localization. Nonetheless, even the weighted percentage of apps made in the U.S.A. has dropped in the past year.

Use of Local Apps Is Strong In China

This should not lull U.S. app developers into a false sense of security however. That becomes evident from examining where the apps used by people in particular countries are made. That’s what the chart below does, starting with the United States. Nearly sixty percent (59%) of the time U.S. users spend in apps is spent in apps developed domestically, meaning that more than 40% of the app time of U.S. consumers is already spent in apps developed in other countries.

And while U.S. made apps are used elsewhere, unsurprisingly, people in many other countries spend a significant amount of their app time in apps developed in their home countries. For example, 13% of the time spent in apps in the UK is spent in apps made in the UK and 8% of the time spent in apps in Brazil is spent in apps made in Brazil. But as is so often the case, it’s China where things get really interesting. Nearly two-thirds of the time spent in apps in China is spent in apps made in China. U.S. made apps only account for 16% of total time spent in apps in China. The size and growth rate of the Chinese app market imply that the worldwide share of time spent in apps that are produced in the U.S. can be expected to contract further.

China Report: Device and App Trends in the #1 Mobile Market [Flurry Blog, July 23, 2013]

In June of this year Flurry Analytics measured 261,333,271 active smartphones and tablets in China. That represented a whopping 24% of the entire worldwide connected device installed base measured by Flurry.
…
Smartphones and tablets are not just about fun and games in China. Compared to iOS device owners elsewhere, the average time Chinese owners spend using Books, Newsstand, Utility, and Productivity apps is greater than the rest of the world (1.8x, 1.7x, 2.3x, and 2.1x respectively). On average Chinese owners of Android devices spend more than seven times as much time in Finance apps (7.4x) than Android owners elsewhere spend in Finance apps, but they also spend more time in Entertainment apps (1.7x).

The South Korea Report: Device and App Trends in The First Saturated Device Market [Flurry Blog, Oct 14, 2013]

In August of this year Flurry Analytics measured 33,527,534 active smartphones and tablets in South Korea. While that was only 2.8% of the entire worldwide connected device installed base Flurry measures, South Korea is an important market for connected devices for several reasons. First, it is the first connected device market in the world to approach saturation. Second, it is Samsung’s home market, and largely as a consequence of that, more of the devices in use there are manufactured by domestic firms than is the case for any other country. Finally, it is home to more phablet fans than anywhere else.
…
Social networking accounts for a significant share of app activity in South Korea, as it does in many other countries. Tool apps are used heavily by South Korean Android users, and entertainment apps capture a lot of time spent in iOS apps.

Compared to app users elsewhere, South Koreans over-index on Entertainment apps on iOS and several Android app categories (Media / Video, Photography, Lifestyle, Shopping, and Tools).
…
Given that South Korea’s rapid period of connected device growth was ushered in by the phablet, it is perhaps not surprising that it continues to surpass the rest of the world in its preference for that form factor. As shown below, in a worldwide sample of 97,963 iOS and Android devices, only 7% were phablets, but for South Korea that percentage was 41%. The appeal of phablets in South Korea appears to suppress the tablet market there. Worldwide, 19% of the devices in our sample were tablets compared to only 5% in South Korea.

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Worldwide:

Size Matters for Connected Devices. Phablets Don’t. [Flurry Blog, April 1, 2013]

… For this study, we focused on the top 200 device models, as measured by active users in Flurry’s system, which represent more than 80% of all usage. Doing so, five groups emerged based on screen size:

1. Small phones (e.g., most Blackberries), 3.5” or under screens
2. Medium phones (e.g., iPhone), between 3.5” – 4.9” screens
3. Phablets (e.g., Galaxy Note), 5.0” – 6.9” screens
4. Small Tablets (e.g., Kindle Fire), 7.0” – 8.4” screens
5. Full-size tablets (e.g., the iPad), 8.5” or greater screens
…
The ‘Is it a phone or is it a tablet’ devices otherwise known as phablets have attracted interest, but currently command a relatively small share (2%) of the device installed base, and their share of active users and sessions is also relatively small.
…
Android owns the phablet market and also has the greatest proportion of devices using small tablets. iOS has the greatest share of active devices using large tablets.
…
… notice that nearly a third of time spent playing games take places on larger devices, namely full-sized tablet, small tablets and phablets. And while they command consumer time spent, they represented only 15% of device models in use in February and 21% of individual connected devices. These differences are statistically significant.

Studying books and videos, it’s somewhat surprising that tablets, which possess larger screens, do not see a larger proportion of time spent. An explanation for the high concentration in time spent in smartphones could be that consumers watch videos from their smartphones on-the-go (e.g., commuting to work on public transit), whereas they opt for a bigger screen to watch video (e.g., computer or TV) when at work or home. We expect that tablets may represent a greater share of time spent in book and video apps in the future as tablet ownership expands and tablet owners branch out into more types of apps.
…
From our study, consumers most prefer and use apps on medium-sized smartphones such as the Samsung Galaxy smartphones and full-sized tablets like the iPad.  In particular, smaller smartphones under-index in terms of app usage compared to the proportion of the installed base they represent, and would suggest they are not worth developers’ support.
…

Mobile Use Grows 115% in 2013, Propelled by Messaging Apps [Flurry Blog, Jan 13, 2014]

… the segment that showed the most dramatic growth [worldwide] in 2013 was Messaging (Social and Photo sharing included). The growth in that segment should not come as a surprise to many, given the attention that messaging apps such as WhatsApp, WeChat, KakaoTalk, LINE, Facebook Messenger and SnapChat have received in the press. What is surprising, however, is that the rate of growth (tripling usage year-over-year) dramatically outpaced other popular categories. This type of growth could explain the high valuation Facebook has allegedly put on SnapChat, or Facebook’s rush to add direct messaging in Instagram, an app frequented by teens.
…
Another explosive growth year in mobile has passed. On December 31^st, 2013 at 11:59 pm, Flurry Analytics tracked a record 4.7 Billion app sessions in a single day, for a total of 1.126 Trillion sessions for the whole year. Those are some very, very big numbers. …

The Truth About Cats and Dogs: Smartphone vs Tablet Usage Differences [Flurry Blog, Oct 29, 2012]

… Taking a snapshot in September 2012 from Flurry Analytics, that totaled more than 6 billion application sessions across approximately 500 million smart devices, Flurry provides a comprehensive comparison between smartphones and tablets, spanning age, gender, time of day usage, category usage and engagement metrics.  For age and gender comparisons, Flurry leverages a panel of more than 30 million consumers who have opted-in to share demographic data. …

…

The chart below compares the time spent across app categories between smartphones and tablets.   At a high level, consumers spend more time using tablets for media and entertainment, including Games (67%), Entertainment (9%) and News (2%) categories which account for nearly four-fifths of consumption on tablets.  Smartphones claim a higher proportion of communication and task-oriented activities with Social Networking (24%), Utilities (17%), Health & Fitness (3%) and Lifestyle (3%) commanding nearly half of all usage on smartphones.  Games are the most popular category on both form factors with 67% of time spent using games on tablets and 39% of time spent using games on smartphones.  Further reinforcing that tablets are “media machines” is the fact that consumers spend 71% more of their time using games on tablets than they spend doing so on smartphones.

Indie Game Makers Dominate iOS and Android [Flurry Blog, March 6, 2012]

For the first two months of 2012, Flurry Analytics measured that more than half of all end user sessions were spent in games. Across January and February, Flurry observed sessions across a sample of more than 64 billion applications sessions across more than 500 million iOS and Android devices.

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United States:

Apps Solidify Leadership Six Years into the Mobile Revolution [Flurry Blog, April 1, 2014]

Last year, on the eve of the fifth anniversary of the mobile revolution, Flurry issued its five-year report on the mobile industry. In that report we analyzed time-spent on mobile devices by the average US consumer. We have run the same analysis, using data collected between January and March of 2014, and found some interesting shifts that we are sharing in this report
…
The chart below on the left takes a closer look at app categories. Comparing  them to last year, gaming apps maintained their leadership position at 32% of time spent. Social and messaging applications, including Facebook, increased share from 24% to 28%. Entertainement (including YouTube) and Utility applications maintained their positions at 8% each, while productivity apps saw their share double from 2% to 4% of the overall time spent.

Flurry Five-Year Report: It’s an App World. The Web Just Lives in It
[Flurry Blog, April 3, 2013]

… On the five-year anniversary of launching Flurry Analytics, we took some time to reflect on the industry and share some insights. First, we studied the time U.S. consumers spend between mobile apps and mobile browsers, as well as within mobile app categories. Let’s take a look. …

Mobile App Usage [in U.S.] Further Dominates Web, Spurred by Facebook [Flurry Blog, Jan 9, 2012]

The chart compares how daily interactive consumption has changed over the last 18 months between the web (both desktop and mobile web) and mobile native apps.  For the web, shown in green, we built a model using publicly available data from comScore and Alexa.  For mobile application usage, shown in blue, we used Flurry Analytics data, which tracks anonymous sessions across more than 140,000 applications.  We estimate this accounts for approximately one third of all mobile application activity, which we scaled-up accordingly for this analysis.
…
With mobile app usage soaring, Flurry additionally studied which categories most occupy consumers’ time.  The results are shown in the pie chart below.

Further considering that Flurry does not track Facebook usage, the Social Networking category is actually larger.  Combined, from just what Flurry can see, these two categories control a whopping 79% of consumers’ total app time.  This breakdown in usage reveals Facebook’s inherent popularity as the leading social network, as well as how important controlling the game category is for all platform providers.  As we drill down into the category data, consumers use these two categories more frequently, and for longer average session lengths, compared to other categories.

The stock market is over-optimistic about that: Intel tablets could cure [stock] market conditions [Saxo TV - TradingFloor.com YouTube channel, April 16, 2014]

I am—nevertheless—highly sceptical about that as Allwinner to continue the No. 1 position on Android tablet application processor market with the new UltraOcta A80 SoC optimized for premium devices, without the premium cost, also made universal accross other devices (TV box, notebook, smart TV, All-in-one and digital signage), and operating systems (ChromeOS, Smart TV, Windows, Ubuntu and Firefox OS) [‘USD 99 Allwinner’ blog, April 16, 2014]. My skepticism is also based on The lost U.S. grip on the mobile computing market, including not only the device business, but software development and patterns of use in general [‘Experiencing the Cloud’, April 14, 2014].

You can judge all that for yourself as the background and my analysis behind Intel’s tablet strategy could be found in the following sections of this post below:

1. Intel is desperate to cheat when comparing its current tablet performance based on Clover Trail+ against much lower priced and lesser frequency ARM Cortex-A9 tablets from brand vendors.
2. Intel’s Krzanich is betting on sacrificing “contra revenue” dollars for Q2-Q4 2014 tablet market with Bay Trail-based tablets, while hoping to level the playing field with its TSMC produced SoFIA SoCs for the 2015 tablet market.

To understand the technical and business development aspects behind that strategy read my previous posts as well:
- Intel CTE initiative: Bay Trail-Entry V0 (Z3735E and Z3735D) SoCs are shipping next week in $129 Onda (昂达) V819i Android tablets—Bay Trail-Entry V2.1 (Z3735G and Z3735F) SoCs might ship in $60+ Windows 8.1 tablets from Emdoor Digital (亿道) in the 3d quarter [‘Experiencing the Cloud’, April 11, 2014]
- IDF14 Shenzhen: Intel is levelling the Wintel playing field with Android-ARM by introducing new competitive Windows tablet price points from $99 – $129 [‘Experiencing the Cloud’, April 4, 2014]
- The long awaited Windows 8.1 breakthrough opportunity with the new Intel “Bay Trail-T”, “Bay Trail-M” and “Bay Trail-D” SoCs? [‘Experiencing the Cloud’, Sept 14, 2013]

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1. Intel is desperate to cheat when comparing its current tablet performance based on Clover Trail+ against much lower priced and lesser frequency ARM Cortex-A9 tablets from brand vendors.

For an Intel Clover Trail+ (pre-Bay Trail-T) tablet: A Four-Tablet Comparison: Intel vs. Competition [IREPRockLegend YouTube channel, April 16, 2014]

But Intel is cheating here, especially by being at least 2 times more expensive than the others (all the below prices are “best retail ones”), even discounting the 3G call capability:

1. $300 (but has 3G call capability as well): Asus Fonepad 7 (Intel Atom Processor Z2560 (2 Clover Trail+ cores/4 threads, 1MB Cache, 1.60 GHz) since Q2’13)
   (++Review Asus Fonepad 7 ME372CG Tablet [Notebookcheck.net, Nov 13, 2013)
2. $119: Amazon Kindle Fire [7”] HD* (TI OMAP 4460 Processor (2 Cortex-A9 cores, 1.20 GHz))
   [* Intel is cheating even more here as the 2nd generation figured in the above test has been replaced half a year ago by a 3d generation 7” Kindle Fire HD tablet which contains the TI OMAP 4470 with 2 Cortex-A9 cores, 1.5 GHz.]
3. $160: Samsung Galaxy Tab 3 7” (ARM Cortex A9 Processor (2 Cortex-A9 cores, 1.2 GHz) )
4. $139: Lenovo IdeaTab A1000 (ARM v7 Cortex A9 Processor (MediaTek 8317, Dual Core 1.2 GHz) )

The same cheating is in another new Intel video: A Three-Tablet Comparison: Intel vs. Competition [IREPRockLegend YouTube channel, April 16, 2014] where the $140 Dell Venue 7 16GB, having the same Z2560 CloverTrail+ processors goes against the same 2nd generation Amazon Kindle Fire [7”] HD and the also same Samsung Galaxy Tab 3 7”:

And finally the cheating in the 3d new video is even more inexcusable: Tablets with Intel Inside® vs. the Competition: Samsung as here the $305 Samsung Galaxy Tab 3 10.1” tablet with the same 1.6 Ghz Z2560 (and list price of is compared with the $200 Samsung Galaxy Tab 2 10.1” having just a 1 GHz Cortex-A9 dual core processor:

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2. Intel’s Krzanich is betting on sacrificing “contra revenue” dollars for Q2-Q4 2014 tablet market with Bay-Trail-based tablets, while hoping to level the playing field with TSMC produced SoFIA SoCs for the 2015 tablet market

What is contra revenue? [Accounting Tools, March 5, 2013]

Contra revenue is a deduction from the gross revenue reported by a business, which results in net revenue.

Contra revenue transactions are recorded in one or more contra revenue accounts, which usually have a debit balance (as opposed to the credit balance in the typical revenue account). There are three commonly used contra revenue accounts, which are:

• Sales returns. Contains either an allowance for returned goods, or the actual amount of revenue deduction attributable to returned goods.
• Sales allowances. Contains either an allowance for reductions in the price of a product that has minor defects, or the actual amount of the allowance attributable to specific sales.
• Sales discounts. Contains the amount of sales discounts given to customers, which is usually a discount given in exchange for early payments by customers.

…

Intel aggressively promoting tablet CPUs in China [DIGITIMES, April 14, 2014]

Intel has resorted to an aggressive pricing strategy to promote sales of its tablet-use processors, particularly in China, a move which apparently will take on Qualcomm and MediaTek, while ramping up its market share, according to industry sources.

Prices of Intel’s mainstream quad-core tablet CPUs have dropped to below US$5, which are almost on par with those offered by China-based chipset suppliers such as Rockchip Electronics and Allwinner Technology and even below those available from Nvidia, Qualcomm and MediaTek, said the sources.

Consequently, the number of Intel-based tablets is likely to expand in a great proportion as more and more China-based brand and white-box tablet vendors are expected to use Intel’s tablet CPUs to develop new products, the sources revealed.

Intel’s new policy also focuses on deepening its relationship with the supply chain in China, highlighting by its recent announcement of establishing an Intel Smart Device Innovation Center in Shenzhen and a US$100 million Intel Capital China Smart Device Innovation Fund, commented the sources.

To encourage China-based tablet makers to use Intel’s CPUs, the chipset vendor is offering assistance in terms of design, technology and marketing, the sources indicated.

Intel’s offerings will be particularly attractive to white-box tablet makers as they can optimize low-priced chipsets and advanced technologies to roll out competitive models for the entry-level segment, added the sources.

Intel aims to ship 40 million tablet CPUs in 2014, including entry-level Bay Trail family and SoFIA 3G platform products, the sources noted.

Intel Beats on Bottom Line, Misses Revenue Expectations for Q1 Results [TheStreet YouTube channel, April 15, 2014]

From Intel Reports First-Quarter Revenue of $12.8 Billion Operating Income of $2.5 Billion, up 1 Percent Year-over-Year [news release, April 15, 2014]

Mobile and Communications Group revenue of $156 million, down 52 percent sequentially and down 61 percent year-over-year.

From Intel’s CEO Discusses Q1 2014 Results – Earnings Call Transcript [Seeking Alpha, April 15, 2014] ragarding the tablet strategy which is carried out by the Mobile and Communications Group:

Brian M. Krzanich – CEO: … We set an aggressive goal of shipping 40 million tablet SOCs this year. And I’m happy to say we’ve tallied more than 90 designs on Android and Windows and shipped 5 million units in the first quarter, placing us squarely on track to that goal.
…
We demonstrated SoFIA, our first integrated apps processor and baseband, after adding it to the roadmap late last year. We’re on track to ship the 3G solution to OEMs in Q4 2014, with the LTE version following in the first half of 2015.
…
We also shipped our first Quark SoCs for the Internet of Things and announced an upgrade of Edison to the Silvermont Atom architecture. Edison is on track to ship this summer.

And in the Technology and Manufacturing Group, who’ve worked to advance Moore’s Law as foundational to our long-term success, we began production on our 14-nanometer process technology and remain on track to launch Broadwell in the second half of the year.

And the foundry team extended our collaboration with Altera to the development of multi-dye devices that take advantage of our world-class package and assembly capabilities and Altera’s leading-edge programmable logic.

…

Stacy J. Smith – EVP and CFO: … The Mobile and Communications Group is down 61% from a year ago. The underlying dynamics are consistent with what we shared at the investor meeting last November.

We’re seeing a decline in our feature phone and 2G/3G multi-[com] [ph] business, as we’re in the midst of a transition to integrated LTE solutions. In addition, the ramp in tablet volume is being offset by an increase in contra revenue dollars.
…
We’re winning designs and ramping our tablet volume rapidly and we have design wins in LTE that will result in a second half revenue ramp.
…
Let me even back up and give you — again restate the strategy of what we’re doing here. … what we’re doing is we’re taking Bay Trail, which is a product really designed for the PC market, and we made the decision to take it broadly across different segments of the tablet market this year.

It brings along with it, at least over the course of 2014, a higher bill of materials. And that’s independent from the SOC cost. It’s the power management subsystem, it’s the motherboard that it goes on, it’s the memory solution, those kinds of things. And so, we’re providing some contra revenue to offset that bill of material delta over the course of 2014.

Now, as we said, we’re doing value engineering with our customers and our partners. And so we’re bringing down that bill of material over the course of 2014 independent of any changes to our SOC. …

Brian M. Krzanich – CEO: … We have a series of improvements. They have already started to kick-in in some cases around our power management systems, the number of layers in our motherboards, the memory system integration. All of those things we’ve worked on and actually have started to see the advantages already in our costs.

Stacy J. Smith – EVP and CFO: So, I think on a like dollars per unit, it comes down pretty dramatically over the course of 2014. And it should be relatively small, if at all, as we get into 2015. And it’s, again, the enablement we’re doing around the bill of materials.

And then we also have new products coming into the marketplace, like SoFIA, that’s targeted at the low end, and then in 2015 you’ll see Broxton, which is an SOC more for the mid-range to high-range of the market coming into our product portfolio.

So, the combination of all of that gives us a better cost structure with our own products and a better cost structure overall with the bill of materials as we enter 2015 and then work through 2015.
…
We’ll have significant unit growth in tablets. But remember that contra revenue isn’t just a gross margin impact; it’s actually a subtraction from revenue. And so that will mute the revenue growth for the segment because you have that negative as we get into the back half and ship more tablets. …

C.J. Muse – ISI Group: In terms of integrated LTE, you’ve talked about when we’ll first see that. But curious when you expect to bring that in house at Intel.

Brian M. Krzanich – CEO: We’ll bring that in on our 14-nanometer process either late 2015 or early 2016. We’re still battling back and forth on how fast we can bring it in and at what impacts that has. 14-nanometer is the technology there.

Blaine Curtis – Barclays Capital: … Maybe actually follows up on CJ’s prior question. The MPG business that you’re now breaking out, it’s pretty clear it’s losing $3 billion, $3.5 billion. How do you think about this business?

Obviously you’re trying to ramp the product set you are a bit behind. You’re entering from the low end and that pricing seems quite tough. You’re facing some subsidies that you have to do on the tablet side.

Are there some milestones that you look at to get this business back profitable? Or maybe would you consider this strategic enough that you would consider continuing to run this as a loss?

Brian M. Krzanich – CEO: So, you asked several questions in there, so let me start to pars it apart. Absolutely this is a strategic business, so let’s just start with that. We think this is critical and we said this in our prepared statements. It’s critical from 2 in 1 devices down through the Internet of Things.

You look across the connectivity requirements there; more and more of the devices are requiring integrated connectivity, whether it be LTE, 3G, Wi-Fi, Bluetooth and all of these connectivities are becoming more and more required.

We don’t go into these businesses thinking that we’re going to lose money. We believe we have a roadmap to get to profitability in that business. The milestones that I look at — and so I’ll give you those for yourself to look at, we have the 7160, the current LTE version out there. We’re the second in LTE. We have the 7260 launch this quarter. I think that’s a critical there.

Again, we’re closing the gap with our competition. We’re bringing out leading edge Cat 6 capability with carrier aggregation. That’s a critical milestone. That puts — that closes the gap and puts us firmly in the LTE capability.

The next one is SoFIA. If you look at the SoFIAs at the end of this year with 3G integration and then a big first half of next year with LTE integration. Remember those products weren’t even on our roadmap six or seven months ago. So, that shows that we’re acting quickly integrating and bringing those products to production.

Then after that is, as Stacy said earlier, Broxton, which is our internal 14-nanometer product. That’s targeted towards the mid to high level. And as we bring that into the second half of 2015 and into 2016, there will be various levels of integration on that.

So, when I look across this, those are the milestones I look at, because those are what drive that along with just the basic cost reduction capabilities we talked about for this year as we get out of this contra revenue into 2015. Those products then place us firmly in leadership capability from the low end to the high end with integration. And those are the milestones to me that will lead to profitability long-term.

Stacy J. Smith – EVP and CFO: And I’ll just add to that, I think you left it off because it was so obvious, but the 40 million tablets is one of the things I see Brian just laser focused on. And as we’ve talked about before, it gets us into the 15% to 20% range of the total tablet market.

It gives us a big enough footprint that we start to see people developing on our architectures. It becomes a self-sustaining ecosystem as we’re bringing these other products to the marketplace. So, don’t lose sight of that one, Blaine.

Stacy Rasgon – Sanford C. Bernstein & Co: I wanted to dig a little bit into the mobile and wireless group. So, you’ve talked a bit about having I guess developing leadership products, leadership position in order to drive profitability. We’re looking at this right now, though. So, we had the business fall more than 50% sequentially.

You have your 7160 which is shipping but apparently it’s not really driving much volume. We have the 7260 which is forthcoming, but we really haven’t heard much about design wins. And you launched at Mobile World Congress without really saying very much there.

We have SoFIA coming, which absolutely is integrated, but it’s being made at TSMC for the next few years which means you lose any potential benefits from your own process technology. And you would seem to be well behind what the market leaders are shipping in terms of 4G.

Just what should we be looking for and over what timeframe should we be looking for, for the ramp? I guess what I’m asking is, how can we get confidence that we’re going to actually see the revenue ramp that is built into the short-term expectations for this year and then going forward, to make sure that you can actually get a profitable business, which obviously would be driving quite a bit of upside to where the models are today?

Brian M. Krzanich – CEO: Remember, the 7160, we gave you a series of products that it’s shipping in. And on the 7260, which will qualify this quarter, we gave you a list of OEM partners that have committed to that platform. So, we’re fairly confident that the ramp in the second half of this year will continue on that product. And it is a leadership product.

SoFIA, you’re right, is built at TSMC. We went for speed and integration. And it was simply quicker to get to market with a competitive product from both a price and performance. We actually believe that the IA core will give us better performance than the competition. And the competition is at that same node at TSMC. And it’s 3G at the end of this year and LTE in the first half of next year.

We then told you that in the second half of next year — and again, we’re debating whether it’s the second half or the first quarter of 2016, but we’ll move all of that internal on to 14-nanometers. And it’s really based on other products that we have moving in at that time and just overall resources all right.

We had a lot going on — the ramp of Broadwell, the ramp of Skylake in the second half of next year, plus bringing these products inside. But I’m very confident that when you do that, plus you add in Broxton, which is targeted towards the mid to high range and again is integrated with leading-edge LTE.

And don’t forget we have a roadmap of LTE products beyond the 7260 that continue the level of carrier aggregation and product leadership. We’re fairly confident that we can continue to grow this business and turn it profitable over that time.

Stacy J. Smith – EVP and CFO: And let me just comment on the question about the long-term profitability. It sounds basic, but it really stems from our manufacturing leadership. If we’re two years ahead of the rest of the industry, and extending it gives us the ability that, as we target our products into the right space from a power standpoint, we will have power advantage or performance advantage and a cost advantage.

That really is our strategy playing out. You’re seeing the first products hitting that theme over the course of this year and into early next year. Bay Trail is a really good product. For the high end of the market, you’ll see products coming into the market that are more targeted at the mid-range and lower end of the market next year. But that’s how the strategy plays out.

I’d say for 2015, I would expect to see reduction in the loss. Not profitability, but a reduction in the loss will feel pretty good when we get there and then we’ll keep driving towards the long-term profitability goal.

Stacy Rasgon – Sanford C. Bernstein & Co:  I’d like to drill in a bit more. I’m actually into the tablet efforts now. So, we’re obviously subsidizing. And I get the idea of reducing BOM cost in order to make up for the deficiencies with the idea being that you can drive improved product set down the road.

But at the same time, if you look at the tablet market, where it is today, you’re obviously not going to be going after Apple any time soon. Maybe there’s a little bit of volume at Samsung. But I mean if you take those guys out, 75% of what’s left is systems that are $250 and below, where your competitors are shipping quad-core chips for much less than $10.

I’m curious to know what kind of economics and pricing you see from that market long-term. And are the — I guess the total revenue pool and profit pool that’s available, even if you were to succeed at your goals, why does that make it a worthwhile effort to actually go after? Or is this simply, as you said, strategic? Is this an attempt to limit further penetration of tablets into the core market?

Brian M. Krzanich – CEO: You’ve asked a question that has multiple questions built into it. But let’s start with what we told you was we’ve got multiple OEM partners building tablets and phones on our products. And we gave you Asus and Dell and Lenovo and Samsung on those products.

If you look at the tablet business overall, it’s broken up into a series of segments. And you’re right; there is a large percentage of them that are $250 and below. Products like SoFIA are specifically designed for that segment.

And our dual-core SoFIA already performs quite well against quad-core systems. As we move into next year, we’ll bring quad-core SoFIA-based products out, as well. And so we believe that we can stay very cost competitive and have a performance leadership.

Remember, Intel has two assets. We have our silicon technology, but we also have our architecture. And one of the things an OEM gets when they build with Intel technology is that they can go into any OS and they can build a single platform and move that on to Chrome, on to Android, on to Windows. And that’s a very unique capability that we provide to OEMs for flexibility.

So, we believe with a product like SoFIA, as we bring that into the market next year, we can absolutely compete in those spaces and make money. You’re probably not going to make as much revenue dollars and as much margin dollars as the PC business, but we think this is still critical. And it’s critical for a variety of reasons. Part of it is simply the scale. You want to have those units. You want to have a presence in all areas of computing.

And the second one is developer attention. You want developers creating new products, doing innovation on your architecture. This is a space that’s got innovation. We are going to bring some of that innovation to this market. You’re going to see some tablets as you go into the end of this year.

We showed them at CES, some of the highlights where you have 3D cameras, you have perceptual computing capabilities for gaming. All of those kinds of things can change the tablet market, along with the PC market.

So, we believe that we can bring a lot of the innovation that we do in the PC down into the tablet space. And again, that keeps the developers developing and interested in our platform. I think for all of those reasons, we want to be in this space and we will be in this space from now on.

Stacy J. Smith – EVP and CFO: That was very complete, but we don’t fear the low end of the market. You look at how we played out in PCs. You can drive a lot of unit growth by participating in PCs now that are $199 to $250. We can have the cost structure because of our manufacturing lead to participate nicely there. And you see that as markets mature, they also segment.

And so we have look, you look at our PC business, we have great demand and profitability in core I7s and it spans down to Bay Trail at the Atom segment of the market. So, it’s a misconception to think that we only want to play at the high end. Our manufacturing leadership can give us the cost structure to play profitably at the low end, as well.

…

Mark Lipacis – Jefferies: Brian, when you talk about the 40 million unit bogey on tablets this year, could you go through the taxonomy of that a little bit? To what extent do you think this is Windows versus Android? And what’s the class of product you think will represent the mode or the mean? Like where do you think your sweet spot is going to be this year on tablets?

Brian M. Krzanich – CEO: Our mix of OSs reflects pretty much what you see in the marketplace. So, I think, depending on how you look at it, it’s probably something on the order of 90% Android, 80% Android, 10% to 20% Windows.

Our percentages look very much like the marketplace. So, if Windows continues to grow and gain traction I think our percentage would just align directly to that. So, you can — don’t separate what we ship from what’s basically in the marketplace. We’re leadership capability on all of the OSs now.

As far as what is the price point, again, it reflects fairly close to what the marketplace is. You see us in systems below $100 now. The majority of the systems are say $125 to $250, somewhere in there. And then you see us in some of the upper end systems, $250 to $400. And so — but the majority is in that — I’d call it, $125 to probably $250 range.

Mark Lipacis – Jefferies: And then as a follow-up, did you discuss, do you expect to have the Android tablets ramping in volume this quarter? Are we going to be — should we expect to see the Bay Trail Android products at Computex this year? When do we really see the material ramp in the Android products?

Brian M. Krzanich – CEO: Sure, absolutely. You can go out to the store today and buy an Android — in fact, I’d love you to go buy one of the 40 million we’ll sell. But, yes, you can buy Android. It continues to ramp through this quarter. At Computex, we’ll show a series of Android and Windows-based tablets. And they just continue to ramp through this year. But they’re on shelves today. I saw them in the store this weekend.

Stacy J. Smith – EVP and CFO: The majority of the 5 million units, for example, are Android. Just as Brian said, it more or less follows the distribution between Windows and Android.

Quartely Highlights (from Earnings Call Slides):

Cloud momentum helps drive Q3 results

• Outstanding momentum and results in our cloud services; total Commercial Cloud revenue more than doubled again this quarter
• Office 365 Home currently has 4.4 million subscribers, adding nearly one million new users this quarter
• Windows remained the platform of choice for business users, with double-digit increases in both Windows OEM Pro and Windows Volume Licensing revenue
• With focus on spend prioritization, we grew our operating expenses only 2%, contributing to solid earnings growth

Microsoft CEO offer bright future [‘Saxo TV - TradingFloor.com’ YouTube channel, April 25, 2014]

Willing to change, that was the message new Microsoft CEO Satya Nadella was pushing as the firm released third quarter earnings.

Microsoft beat Wall Street analysts’ expectations, driving the company’s stock price up 3 percent on Thursday after earnings were released. Growth came from the company’s surface tablet sales and commercial business sector, according to Norman Young, Senior Equity Analyst at Morningstar. Results were also aided by a less severe decline in the PC industry.

Young believes the company has already demonstrated continued growth for the fourth quarter and remains optimistic about the company’s new direction.

Nadella is shifting the traditionally PC focused company towards more mobile and cloud based technology. On the quarterly call with Wall Street he said, “What you can expect of Microsoft is courage in the face of reality; we will approach our future with a challenger mindset; we will be bold in our innovation.” Analysts are excited about the company’s future trajectory as he continues to push Microsoft’s business into the mobile and cloud computing world.

The company’s stock has increased 8 percent since Nadella assumed the role of CEO in February.

From Earnings Release FY14 Q3 [April 24, 2014]

“This quarter’s results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world. We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth,” said Satya Nadella, chief executive officer at Microsoft. “We are focused on executing rapidly and delivering bold, innovative products that people love to use.”

…

Devices and Consumer revenue grew 12% to $8.30 billion.

• Windows OEM revenue grew 4%, driven by strong 19% growth in Windows OEM Pro revenue.
• Office 365 Home now has 4.4 million subscribers, adding nearly 1 million subscribers in just three months.
• Microsoft sold in 2.0 million Xbox console units, including 1.2 million Xbox One consoles.
• Surface revenue grew over 50% to approximately $500 million.
• Bing U.S. search share grew to 18.6% and search advertising revenue grew 38%.

Commercial revenue grew 7% to $12.23 billion.

• Office 365 revenue grew over 100%, and commercial seats nearly doubled, demonstrating strong enterprise momentum for Microsoft’s cloud productivity solutions.
• Azure revenue grew over 150%, and the company has announced more than 40 new features that make the Azure platform more attractive to cloud application developers.
• Windows volume licensing revenue grew 11%, as business customers continue to make Windows their platform of choice.
• Lync, SharePoint, and Exchange, our productivity server offerings, collectively grew double-digits.

From Microsoft’s CEO Discusses F3Q 2014 Results – Earnings Call Transcript [Seeking Alpha, April 25, 2014]

From the prepared comments: “This quarter we continued our rapid cadence of innovation and announced a range of new services and features in three key areas – data, cloud, and mobility. SQL Server 2014 helps improve overall performance, and with Power BI, provides an end-to-end solution from data to analytics. Microsoft Azure preview portal provides a fully integrated cloud experience. The Enterprise Mobility Suite provides IT with a comprehensive cloud solution to support bring-your-own-device scenarios. These offerings help businesses convert big data into ambient intelligence, developers more efficiently build and run cloud solutions, and IT manage enterprise mobility with ease.”

Satya Nadella – Chief Executive Officer:

As I have told our employees, our industry does not respect tradition, it only respects innovation. This applies to us and everyone else. When I think about our industry over the next 5, 10 years, I see a world where computing is more ubiquitous and all experiences are powered by ambient intelligence. Silicon, hardware systems and software will co-evolve together and give birth to a variety of new form factors. Nearly everything we do will become more digitized, our interactions with other people, with machines and between machines. The ability to reason over and draw insights from everything that’s been digitized will improve the fidelity of our daily experiences and interactions. This is the mobile-first and cloud-first world. It’s a rich canvas for innovation and a great growth opportunity for Microsoft across all our customer segments.

To thrive we will continue to zero in on the things customers really value and Microsoft can uniquely deliver. We want to build products that people love to use. And as a result, you will see us increasingly focus on usage as the leading indicator of long-term success.

…

• advancing Office, Windows and our data platform
• continue to invest in our cloud capabilities including Office 365 and Azure in the fast growing SaaS and cloud platform markets
• ensuring that our cloud services are available across all device platforms that people use
• delivering a cloud for everyone on every device
• have bold plans to move Windows forward:
  - investing and innovating in every dimension from form-factor to software experiences to price
  - Windows platform is unique in how it brings together consistent end user experiences across small to large screens, broadest platform opportunity for developers and control and assurance for IT
  - enhance our device capabilities with the addition of Nokia’s talented people and their depth in mobile technologies
• our vision is about being going boldly into this mobile-first, cloud-first world

…

So this mobile-first cloud-first thing is a pretty deep thing for us. When we say mobile-first, in fact what we mean by that is mobility first. We think about users and their experiences spanning a variety of devices. So it’s not about any one form factor that may have some share position today, but as we look to the future, what are the set of experiences across devices, some ours and some not ours that we can power through experiences that we can create uniquely. …

… When you think about mobility first, that means you need to have really deep understanding of all the mobile scenarios for everything from how communications happen, how meetings occur. And those require us to build new capability. We will do some of this organically, some of it inorganically.

A good example of this is what we have done with Nokia. So we will – obviously we are looking forward to that team joining us building on the capability and then execution, even in the last three weeks or so we have announced a bunch of things where we talked about this one cloud for everyone and every device. We talked about how our data platform is going to enable this data culture, which is in fact fundamentally changing how Microsoft itself works.

We always talked about what it means to think about Windows, especially with the launch of this universal Windows application model. How different it is now to think about Windows as one family, which was not true before, but now we have a very different way to think about it.

…

[Re: Microsoft transition to more of a subscription business]

The way I look at it … we are well on our way to making that transition, in terms of moving from pure licenses to long-term contracts and as well as subscription business model. So when you talked about Platform-as-a-Service if you look at our commercial cloud it’s made up of the platform itself which is Azure. We also have a SaaS business in Office 365.

Now, one of the things that we want to make sure we look at is each of the constituent parts because the margin profile on each one of these things is going to different. The infrastructure elements right now in particular is going to have different economics versus some of the per-user applications in a SaaS mode have. It’s the blending of all of that that matters and the growth of that matters to us the most in this time where I think there is just a couple of us really playing in this market. I mean this is gold rush time in some sense of being able to capitalize on the opportunity.

And when it comes to that we have some of the best, the broadest SaaS solution and the broadest platform solution and that combination of those assets doesn’t come often. So what we are very focused on is how do we make sure we get our customer aggressively into this, having them use our service, be successful with it. And then there will be a blended set of margins across even just our cloud. And what matters to me in the long run is the magnitude of profit we generate given a lot of categories are going to be merged as this transition happens. And we have to be able to actively participate in it and drive profit growth.

…

From the prepared comments: “Office Commercial revenue was up 6%, driven by Office 365 as customers transitioned to our cloud productivity services. Office 365 revenue grew over 100%, and seats nearly doubled as well. Our productivity server offerings continue to perform well, with Lync, SharePoint, and Exchange, collectively growing double-digits.”

… to me the Office 365 growth is in fact driving our enterprise infrastructure growth which is driving Azure growth and that cycle to me is most exciting. So that’s one of the reasons why I want to have to keep indexing on the usage of all of this and the growth numbers you see is a reflection of that.

[Background from him in the call:] Office 365 I am really, really excited about what’s happening there, which is to me this is the core engine that’s driving a lot of our cloud adoption and you see it in the numbers and Amy will talk more about the numbers. But one of the fundamental things its also doing is it’s actually a SaaS application and it’s also an architecture for enterprises. And one of the most salient things we announced when we talked about the cloud for everyone and every device and we talked about Office 365 having now iPad apps, we also launched something called the enterprise mobility suite which is perhaps one of the most strategic things during that day that we announced which was that we now have a consistent and deep platform for identity management which by the way gets bootstrapped every time Office 365 users sign up, device management and data protection, which is really what every enterprise customer needs in a mobile-first world, in a world where you have SaaS application adoption and you have BYOD or bring your own devices happening.

…

[Re #1: about the new world in terms of more usage and more software driven rather than device driven, and the reengagement with the developer community in that world]

Developers are very, very important to us. If you’re in the platform business which we’re on both on the device side as well as on the cloud side, developers and their ability to create new value props and new applications on them is sort of likes itself. I would say couple of things.
…
… on the cloud side, in fact one of the most strategic APIs is the Office API. If you think about building an application for iOS, if you want single sign-on for any enterprise application, it’s the Azure AD single sign-on. That’s one of the things that we showed at Build, which is how to take advantage of list data in Sharepoint, contact information in Exchange, Azure active directory information for log-on. And those are the APIs that are very, very powerful APIs and unique to us. And they expand the opportunity for developers to reach into the enterprises. And then of course Azure is a full platform, which is very attractive to developers. So that gives you a flavor for how important developers are and what your opportunities are.

…

From the prepared comments: “Devices and Consumer Other revenue grew 18% to $1.95 billion, driven by search advertising and our Office 365 Home service. Search revenue grew 38%, offset by display [advertising] revenue which declined 24% this quarter. Gross margin grew 26% to $541 million. The combined revenue from Office 365 Home and Office Consumer, reported in the Devices & Consumer Licensing segment, grew 28%. … Office Consumer revenue increased 15% due to higher attach and strong sales in Japan, where we saw customers accelerate some purchases ahead of a national sales tax increase. Excluding that estimated impact, Office still outpaced the underlying consumer PC market.”

[Re: how you could potentially make what has been traditionally a unit model with Windows OEM revenue into something potentially more recurring in nature?]

… the thing I would add is this transition from one time let’s say licenses or device purchases to what is a recurring stream. You see that in a variety of different ways. You have back end subscriptions, in our case, there will be Office 365, there is advertising, there is the app store itself. So these are all things that attach to a device. And so we are definitely going to look to make sure that the value prop that we put together is going to be holistic in its nature and the monetization itself will be holistic and it will increase with the usage of the device across these services. And so that’s the approach we will take.

From the prepared comments: “Zero dollar licensing for sub 9-inch devices helps grow share and creates new opportunities to deliver our services, with minimal short term revenue impact”

[Re: the recent decision to offer Windows for free for sub 9-inch devices and its impact of Microsoft share in that arena, about Windows pricing in general, the kind of play in different market segmentations, and how Windows pricing is evolving]

Overall, the way I want us to look at Windows going forward is what does it mean to have the broadest device family and ecosystem? Because at the end of the day it’s about the users and developer opportunity we create for the entirety of the family. That’s going to define the health of the ecosystem. So, to me, it matters that we approach the various segments that we now participate with Windows, because that’s what has happened. Fundamentally, we participated in the PC market. Now we are in a market that’s much bigger than the PC market. We continue to have healthy share, healthy pricing and in fact growth as we mentioned in the enterprise adoption of Windows.

And that’s we plan to in fact add more value, more management, more security, especially as things are changing in those segments. Given BYOD and software security issues, we want to be able to reinforce that core value, but then when it comes to new opportunities from wearables to internet of things, we want to be able to participate on all of this with our Windows offering, with our tools around it. And we want to be able to price by category. And that’s effectively what we did. We looked at what it makes – made sense for us to do on tablets and phones below 9 inches and we felt that the price there needed to be changed. We have monetization vehicles on the back end for those. And that’s how we are going to approach each one of these opportunities, because in a world of ubiquitous computing, we want Windows to be ubiquitous. That doesn’t mean its one price, one business model for all of that. And it’s actually a market expansion opportunity and that’s the way we are going to go execute on it.

From the prepared comments: “Our universal app development platform is a big step towards enabling developers to engage users across PCs, tablets, and phones with a common set of APIs”

[Re #2: about the new world in terms of more usage and more software driven rather than device driven, and the reengagement with the developer community in that world]

Developers are very, very important to us. If you’re in the platform business which we’re on both on the device side as well as on the cloud side, developers and their ability to create new value props and new applications on them is sort of likes itself. I would say couple of things.

One is the announcements we made at Build on the device side is really our breakthrough worked for us which is we’re the only device platform today that has this notion of building universal apps with fantastic tooling around them. So that means you can target multiple of our devices and have common code across all of them. And this notion of having a Windows universal application help developers leverage them core asset, which is their core asset across this expanded opportunity is huge. There was this one user experience change that Terry Myerson talked about at Build, which expands the ability for anyone who puts up application in Windows Store to be now discovered across even the billion plus PC installed base. And so that’s I think a fantastic opportunity to developers and we are doing everything to make that opportunity clear and recruit developers to do more with Windows. And in that context, we will also support cross platforms. So this has been one of the things that we have done is the relationship with Unity. We have tooling that allows you to have this core library that’s portable. You can bring your code asset. In fact, we are the only client platform that has the abstractions available for the different languages and so on.

From the prepared comments: “Server product revenue grew 10%, driven by demand for our data platform, infrastructure and management offerings, and Azure.”

• “SQL Server revenue grew more than 15%, and continued to outpace the data platform market; we continue to gain share in mission critical workloads”
• “Windows Server Premium and System Center revenue showed continued strength from increased virtualization share and demand for hybrid infrastructure”

[Re: about the factors that have enabled Microsoft to continue growing server business well above its peers, and whether that kind of 10% ish growth is sustainable over fiscal 2015]

It’s a pretty exciting change that’s happening, obviously it’s that part of the business is performing very well for a while now, but quite frankly it’s fundamentally changing. One of the questions I often get asked is hey how did Windows server and the hypervisor underneath it becomes so good so soon. You’ve been at it for a long time but there seems to have something fundamentally changed I mean we’ve grown a lot of share recently, the product is more capable than it ever was, the rate of change is different and for one reason alone which is we use it to run Azure. So the fact that we use our servers to run our cloud makes our servers more competitive for other people to build their own cloud.

So it’s the same trend that’s accelerating us on both sides. The other thing that’s happening is when we sell our server products they for most part are just not isolated anymore. They come with automatic cloud tiering. SQL server is a great example. We just launched a new version of SQL which is by far the best release of SQL in terms of its features like it’s exploitation of in-memory. It’s the first product in the database world that has in-memory for all the three workloads of databases, OLTP, data warehousing and BI. But more importantly it automatically gives you high availability which means a lot to every CIO and every enterprise deployment by actually tiering to the cloud.

From the prepared comments: “Commercial Other revenue grew 31%, to $1.90 billion, driven by Commercial Cloud revenue which exceeded our guidance as customers transitioned to our cloud solutions faster than expected; Gross margin increased 80% as we realized margin expansion through engineering efficiencies and continued scale benefits; Enterprise services revenue grew 8%”

So those kinds of feature innovation which is pretty boundary less for us is breakthrough work. It’s not something that somebody who has been a traditional competitor of ours can do if you’re not even a first class producer of a public cloud service. So I think that we’re in a very unique place. Our ability to deliver this hybrid value proposition and be in a position, where we not only run a cloud service at scale, but we also provide the infrastructure underneath it as the server products to others. That’s what’s driving the growth. The shape of that growth and so on will change over time, but I feel very, very bullish about our ability to continue this innovation.

In the information made officially available for this transition (see below) there are no answers for that question. It only becomes clear that the new Microsoft Devices Group under formation needs to be put into much more efficient organisation, with significantly better strategic setup than any of its constituent parts were before. This would be not an easy task as this group will “oversee an expanded devices business that includes Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories”.

The stock market, so far, was positive about this:

Source: Google Financse – Yahoo Finance – MSN Money

The real explanations for that optimism are not related to the acquisition itself at all. Instead to the more and more visible signs of  “Microsoft 2.0” which will end the “Microsoft 1.0” era of “loss of business focus” and “morphing into a different company, whose focus may be different from selling low margin mid and low end mobile phones, mostly in very competitive markets”. The speculation is that the upcoming “Microsoft 2.0 is about MICROSOFT on every device”  instead of “Microsoft 1.0 which was about Windows on every computer”. There is even an overall consensus that the nominally $7.2 billion Nokia acquisition will be soon quite easily written off (as well as other unpaid previous strategic investments), as in fact that costed to Microsoft only $4.5 billion in reality.

Note here as well that my findings last week are quite well proving the above line of thoughts: Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers [‘Experiencing the Cloud’, April 25, 2014].

So before the Nokia Devices and Services transition information released officially, read the below stock market expert opinion:

Microsoft Completes Nokia’s Acquisition: Expect A Significant Write-Off, Mitigated By A Tax Advantage [Paolo Gorgo on Seeking Alpha, April 28, 2014]

…

While we believe that Microsoft will have a hard time digesting and turning around an unprofitable division like Nokia’s handset business, having to deal with three different operating systems (Microsoft’s own WinPhone, Asha and now even a forked version of Android that powers Nokia’s new X range), and operating in a very competitive sector where only Samsung (OTC:SSNLF) and Apple (AAPL) can now turn a profit, we are fully aware that only time will tell investors if a happy ending out of Nokia’s acquisition is possible.

Some recent moves, however, following Microsoft’s CEO transition may indicate that the climate that lead to the Nokia’s acquisition has already changed, and allow for some educated guesses about what we estimate as the most probable outcome.

Microsoft 1.0 morphing into Microsoft 2.0

John Kirk recently wrote one of the most interesting analysis of Microsoft’s business model, and how it may be evolving:

Microsoft 1.0 had one of the most successful business models of all time. But no matter how successful Microsoft became, management seemingly could not abide the thought of any other technology company sharing the spotlight of success.

1. If a competitor was being successful with customers Microsoft wasn’t addressing, Microsoft had to have those customers as well.
2. If a competitor was being successful in a market where Microsoft didn’t compete, Microsoft felt compelled to compete there as well.
3. Most damning of all, if a competitor’s success could be attributed to its business model, Microsoft felt compelled to assimilate that business model and make it their own.

Microsoft wasn’t setting their own agenda. Instead, they were letting the successes of their competitor’s set the agenda.

The analysis goes on describing how Microsoft behaved in relations to Apple’s iPod success, and how it failed trying to win that market (do you remember Zune?).

In the mobile market, Microsoft tried once more to copy Apple’s strategy, becoming an integrated hardware/software producer through the Nokia acquisition.

A failed attempt, already: no one, for example, would expect Apple to license its iOS free of charge to other OEMs in an attempt to create a sustainable ecosystem.

Time to try analyze Microsoft’s new CEO, Satya Nadella, first moves, and what they may mean related to the Nokia acquisition.

Nadella cuts Windows umbilical cord

The launch of Word, Excel and Powerpoint in the Apple App Store, ahead of the Windows platform, was a clear indication that Nadella may be pursuing a different strategy from Ballmer:

The move was anticipated, pragmatic (given the contrasting installed bases of the two tablets, especially in enterprises), and only relates to one product on one device. But it was just about as symbolic as a gesture could be, reinforcing the promises which Nadella made on his accession to the throne – to put mobile and cloud strategies at the heart of Microsoft’s growth plan.

The Office for iPad announcement makes all this explicit, though it also raises new questions – particularly, whether Nadella is less sold than Ballmer on the idea of creating an integrated hardware/software platform, Apple-style, for mobile, post-PC and cloud-attached devices.

Back to John Kirk’s analysis, we’d like to highlight one of his forecasts for Microsoft 2.0 we completely agree with:

Unprofitable strategies (like Windows RT, the Surface tablet, Windows Phone 8, buying Nokia, moving to a functional organization) will be undone. This will take some doing but the process has already begun.

In other words (with our note added in brackets and Italic):

Microsoft 1.0 was about Windows on every computer. Microsoft 2.0 is about MICROSOFT on every computer. [we would probably use the word "device" instead of computer to underline a post-PC era]

Another write off, soon? A definitive “probably”, although Microsoft investors shouldn’t be too worried

A quick look at some recent Microsoft write offs, mostly due to acquisitions / entries into unknown territories that were not completely successful (some numbers are missing for attempts like Zune, etc. that did not technically require a write-off):

We do believe that Nokia might soon become Microsoft’s next big write off, as the Redmond company morphs into a different company, whose focus may be different from selling low margin mid and low end mobile phones, mostly in very competitive markets .

The way the deal was structured, however, will probably mitigate the negative impact for Microsoft investors.

Kudos to Robert Cringely for his bright use of lateral thinking at the time the Nokia acquisition was announced:

I don’t think Nokia has to succeed in order for Microsoft to consider the acquisition a success.

So why, then, did Microsoft buy Nokia? The stated reason is to better compete with Android and iOS, furthering Ballmer’s new devices and services strategy, but I think that game is already lost and this has more to do with finance than phones.

Microsoft, like Apple and a lot of other companies, has a problem with profits trapped overseas where they avoid for awhile U.S. taxation. The big companies have been pushing for a tax holiday or at least a deal of some sort with the IRS but it isn’t happening. So Apple, sitting on $140+ billion has to borrow $17 billion to buy back shares and pay dividends because so much of its cash is tied-up overseas. But not Microsoft, which just bought Nokia – a foreign company – with some of its overseas cash. Redmond said so today. That makes the real price of Nokia not $7 billion but more like $4.5 billion, because it’s all pre-tax money.

So what does that make Microsoft’s acquisition of Nokia?

Money laundering.

Calling the Nokia acquisition money laundering may probably be a stretch, but as many analysts noticed when the deal was announced, the real “cost” to Microsoft is less that the number reported, because of the use of overseas funds.

Add to this that a write-off can be positively seen as a creative “NOL generating” financial operation for a very profitable company, and you get to our point: as Microsoft’s new strategies, which may include de-emphasizing the device and services reorganization, become clearer, Nokia may represent the last bad news generated by “Microsoft 1.0″ loss of business focus, and a not-too-expensive price to pay for Microsoft investors while moving to a better focused Microsoft 2.0.

---

Nokia Devices and Services transition information released officially

Microsoft officially welcomes the Nokia Devices and Services business [press release, April 25, 2014]

Microsoft and the Nokia Devices and Services business are coming together as one to deliver a family of devices and services that will delight consumers and empower businesses.

Microsoft CEO Satya Nadella (left) and executive vice president of Microsoft Devices Group Stephen Elop share a moment as the deal that brings together Microsoft and the Nokia Devices and Services business closes today.

Microsoft Corp. announced it has completed its acquisition of the Nokia Devices and Services business. The acquisition has been approved by Nokia shareholders and by governmental regulatory agencies around the world. The completion of the acquisition marks the first step in bringing these two organizations together as one team.

“Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation,” said Microsoft CEO Satya Nadella. “Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world.”

Reporting to Nadella is former Nokia President and CEO Stephen Elop, who will serve as executive vice president of the Microsoft Devices Group, overseeing an expanded devices business that includes Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories. Microsoft welcomes personnel with deep industry experience in more than 130 sites across 50 countries worldwide, including several factories that design, develop, manufacture, market and sell a broad portfolio of innovative smart devices, mobile phones and services. As part of the transaction, Microsoft will honor all existing Nokia customer warranties for existing devices, beginning April 25, 2014.

Windows Phone is the fastest-growing ecosystem in the smartphone market, and its portfolio of award-winning devices continues to expand. In the fourth quarter of 2013, according to IDC, Windows Phone reinforced its position as a top three smartphone operating system and was the fastest-growing platform among the leading operating systems with 91 percent year-over-year gain.[1] Furthermore, with the Nokia mobile phone business, Microsoft will target the affordable mobile devices market, a $50 billion annual opportunity,[2] delivering the first mobile experience to the next billion people while introducing Microsoft services to new customers around the world.

Microsoft will continue to deliver new value and opportunity, and it will work closely with a range of hardware partners, developers, operators, distributors and retailers, providing platforms, tools, applications and services that enable them to make exceptional devices. With a deeper understanding of hardware and software working as one, the company will strengthen and grow demand for Windows devices overall.

As with any multinational agreement of this size, scale and complexity, Microsoft and Nokia have made adjustments to the deal throughout the close preparation process. As announced previously, Microsoft will not acquire the factory in Masan, South Korea, and the factory in Chennai, India, will stay with Nokia due to the tax liens on Nokia’s assets in India that prevent transfer. As a result, Microsoft will welcome approximately 25,000 transferring employees from around the world.

More information about Microsoft’s expanded family of devices and services is available here.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Microsoft refers to Microsoft Corp. and its affiliates, including Microsoft Mobile Oy*, a subsidiary of Microsoft. Microsoft Mobile Oy develops, manufactures and distributes Lumia, Asha and Nokia X mobile phones and other devices.

1 IDC Worldwide Quarterly Mobile Phone Tracker, February 2014

2 Strategy Analytics Inc.

* Oy being a Finnish abbreviation of Osakeyhtiö which translates to Limited company ala Wikipedia

From Nokia Corporation Interim Report for Q1 2014 [April 29, 2014]

DISCONTINUED OPERATIONS

The following table sets forth a summary of the results for discontinued operations, for the periods indicated, as well as the year-on-year and sequential growth rates.

Note: The –16.9% operating margin for the discontinued operations in Q1/2014 means a loss of $452 million (EUR 326 million). That is huge, considering even that in the previous Q4/2013 quarter the loss was “only” $274 million (EUR 197.6 million), as with that the ongoing annual loss rate could be estimated close to $1.5 billion.

Net Sales

The year-on-year and sequential declines in discontinued operations net sales in the first quarter 2014 were primarily due to lower Mobile Phones net sales and, to a lesser extent, lower Smart Devices net sales. 

On both a year-on-year and sequential basis, our Mobile Phones net sales were affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio. Our Smart Devices net sales were affected by competitive industry dynamics including the strong momentum of competing smartphone platforms.

On both a year-on-year and sequential basis, discontinued operations unit volumes declined in the first quarter 2014. The year-on-year decline in discontinued operations unit volumes was due to lower Mobile Phones unit volumes, partially offset by higher Smart Devices unit volumes. Sequentially, the decline in discontinued operations unit volumes was primarily due to lower Mobile Phones unit volumes and, to a lesser extent, lower Smart Devices unit volumes.

Discontinued operations Average Selling Price (ASP) declined on both a year-on-year and sequential basis in the first quarter 2014. The year-on-year and sequential declines in discontinued operations ASP were due to lower ASPs for both Smart Devices and Mobile Phones.

Discontinued operations ended the first quarter 2014 within our normal 4 to 6 week channel inventory range

Non-IFRS Gross Margin

The year-on-year decline in discontinued operations non-IFRS gross margin in the first quarter 2014 was primarily due to lower Smart Devices gross margin and, to a lesser extent, lower Mobile Phones gross margin. Compared to the first quarter 2013, Smart Devices non-IFRS gross margin was negatively impacted by the absence of the reversal of approximately EUR 50 million of previously recognized inventory related allowances for our Windows Phone 7-based Lumia products which benefitted Smart Devices non-IFRS gross margin in the first quarter 2013 as well as approximately EUR 20 million of allowances related to excess components in the first quarter 2014. Compared to the first quarter 2013, Mobile Phones non-IFRS gross margin in the first quarter 2014 benefitted from lower warranty costs, mainly offset by the negative affect of approximately EUR 40 million of allowances related to excess components.

On a sequential basis, the decline in discontinued operations non-IFRS gross margin in the first quarter 2014 was primarily due to lower Mobile Phones gross margin and, to a lesser extent, lower Smart Devices gross margin. On a sequential basis, Smart Devices non-IFRS gross margin in the first quarter 2014 benefitted from the absence of approximately EUR 50 million of net allowances related to excess component inventory, future purchase commitments and an inventory revaluation that negatively impacted Smart Devices non-IFRS gross margin in the fourth quarter 2013, partially offset by approximately EUR 20 million of allowances related to excess components in the first quarter 2014. Compared to the previous quarter, Mobile Phones non-IFRS gross margin in the first quarter 2014 benefitted from lower warranty costs, mainly offset by the negative affect of approximately EUR 40 million of allowances related to excess components.

Non-IFRS Operating Expenses

On both a year-on-year and sequential basis, the decline in discontinued operations non-IFRS operating expenses in the first quarter 2014 was due to lower operating expenses in both Mobile Phones and Smart Devices.

Non-IFRS Operating Profit

The year-on-year decline in discontinued operations non-IFRS operating profit in the first quarter 2014 was primarily due to lower Smart Devices and Mobile Phones non-IFRS operating profit. On a sequential basis, the decline in discontinued operations non-IFRS operating profit in the first quarter 2014 was due to lower Mobile Phones non-IFRS operating profit, partially offset by higher Smart Devices non-IFRS operating profit.

Discontinued operations non-IFRS other income and expenses was an expense of EUR 22 million in the first quarter 2014, compared to an expense of EUR 18 million in the first quarter 2013 and an expense of EUR 9 million in the fourth quarter 2013.

Operating Profit

The year-on-year decline in discontinued operations operating profit in the first quarter 2014 was primarily due to lower Smart Devices and Mobile Phones operating profit. On a sequential basis, the decline in discontinued operations operating profit in the first quarter 2014 was due to lower Mobile Phones operating profit, partially offset by higher Smart Devices operating profit.

Discontinued operations other income and expenses was an expense of EUR 32 million in the first quarter 2014, compared to an expense of EUR 65 million in the first quarter 2013 and an expense of EUR 15 million in the fourth quarter 2013. On a year-on-year basis discontinued operations other income and expenses was a lower expense primarily due to lower restructuring charges.

From #1: Conversations LIVE: Ask me anything with Stephen Elop [Conversations : now part of Microsoft, April 28, 2014]

Earlier today we hosted a live Q&A session with Stephen Elop on his first day as the Executive Vice President of the Microsoft Devices Group.

Re: You’re so cool killed Nokia …Thanks to you, Meego, Symbian, Meltemi buried …Once you get it all comes back to haunt

I know that there is a lot of emotion around some of the hard decisions that we had to make. Back in late 2010 and 2011, we carefully assessed the state of the internal Nokia operating system efforts. Unfortunately, we could not see a way that Symbian could be brought to a competitive level with, for example, the iPhone that had shipped THREE years earlier! And the Meego effort was significantly delayed and did not have the promise of a broad enough portfolio soon enough. We had to make a forceful decision to give Nokia the chance to compete again.

Re: You have [been] bashed very harshly with your efforts to take Nokia to Microsoft, have been awarded as Trojan in online discussions and comments. Do you take any effect of all this on your work/decision?

As a result of the work that we have done, we have transformed Nokia into a stronger company with NSN, HERE and Advanced Technologies. At the same time, our Devices and Services business has a new opportunity within a stronger Microsoft. As for the Trojan horse thing, i have only ever worked on behalf of and for the benefit of Nokia shareholders while at Nokia. Additionally, all fundamental business and strategy decisions were made with the support and approval of the Nokia board of directors, of which I was a member.

Re: Don’t you think the decision of jumping the burning platform was significantly delayed by Nokia? Do you think MSFT will be in the state of competing Android any time soon?

It’s hard to comment on what came before, but I do know that the “burning platform” galvanized the mindset of thousands of employees with the recognition that we faced a critical situation. We brought urgency into the organization and within 6 months we produced our first two Windows Phone devices. This was faster than we had ever gone before and marked the beginning of our cultural change.

Now, we’re one Microsoft: open letter from Stephen Elop [Conversations : now part of Microsoft, April 25, 2014]

Today we are announcing that the acquisition of substantially all of the Nokia Devices and Services business by Microsoft has reached completion, following approval by Nokia shareholders and regulatory authorities.

Six months ago, we announced our plans to bring the best of Microsoft and Nokia Devices and Services business together. Today is an exciting day as we join the Microsoft family, and take the first, yet important, step in our long-term journey.

At our core, we are passionate about building technology that will change the world. From the early vision of Microsoft of placing a PC in every home and on every desk, to Nokia connecting billions of people through mobile devices, we have empowered generations. But we could not have achieved any of this without our fans around the world.

Your support has created strong momentum for Nokia Lumia smartphones and they continue to grow in popularity around the world. Last year alone, the awards, accolades and fan-generated rave reviews offered proof of the growing number of champions for our phones and tablets.

And we are committed to continuing our support for feature phones, the Asha family, and the Nokia X family of devices, announced at the Mobile World Congress in February.

Whether you want to read more, capture more, watch more, listen more or get more done, Nokia mobile devices have been and are your go-to choice.

As Microsoft and Nokia Devices and Services come together as an expanded family, we will unify our passion, dedication and commitment to bringing you the best of what our joint technologies have to offer.

Together, we can connect and empower people with one experience for everything in their life in a world where it is mobile first and cloud first.

From today onwards, the possibilities are endless. As now, we’re one!

Stephen

From #2: Conversations LIVE: Ask me anything with Stephen Elop [Conversations : now part of Microsoft, April 28, 2014]

Microsoft Mobile Oy is a legal construct that was created to facilitate the merger. It is not a brand that will be seen by consumers. The Nokia brand is available to Microsoft to use for its mobile phones products for a period of time, but Nokia as a brand will not be used for long going forward for smartphones. Work is underway to select the go forward smartphone brand.

Re: Will Microsoft keep up the innovation and pace that Nokia has set with the line of Lumia devices?

I think we can go even further than that. By combining with MSFT, we will each be able to innovate together in ways that we could not as separate companies. Lots of good things ahead.

Re: Why did you not make the 1020 with a better photo processing like in the original 808 dedicated image processor?

Great question because it highlights the benefits of the acquisition of Nokia. The 1020 is consistently rated as one of the best camera phones. But, we could have gone further if the engineering teams between MSFT and Nokia were not in separate companies. As we come together, innovation will be able to move faster.

Re: As the Executive VP of MS Devices how do you see the future of the integration and cloud utilization between Windows, Windows Phone and Xbox devices going. What would you like to see happen?

I think that people are looking for and deserve a consistent and continuous experience across their different devices and platforms. A good example of this today is Onedrive, where i have consistent access to my stuff across all of my devices. Same thing with Skype.

Re: How about Nokia X future after acquisition?

Microsoft acquired the mobile phones business, inclusive of Nokia X, to help connect the next billion people to Microsoft’s services. Nokia X uses the MSFT cloud, not Google’s. This is a great opportunity to connect new customers to Skype, outlook.com and Onedrive for the first time. We’ve already seen tens of thousands of new subscribers on MSFT services.

Re: When will we get the first Microsoft branded Smartphone?

Now that we are One company, the marketing and product folks will lay in the plans for the shift to a consistent brand. While we are not ready to share precise details, i can assure you that it will not be the “Nokia Lumia 1020 with Windows Phone on the AT&T LTE Network” … too many words! That somehow doesn’t roll off the tongue…

Re: What is going to happen to Nokia Mixradio, Nokia TV, Nokia Camera apps and other Nokia apps in Lumia phones. Are they gonna disappear. Which one, Nokia or Microsoft, is going to continue developing and updating them?

We have been building a lot of app’s that have been specific to Lumia, but now those people and efforts will transfer to MSFT. We believe that these types of capabilities are critical to differentiation, so you will see these themes continue.

Re: Do you think that Nokia with Android is a good idea?

When we made the decision to focus on Windows Phone back in 2011, we were very concerned that a decision to pursue Android would put us on a collision course with Samsung, who already had established a head of steam around Android. That was the right decision, as we have seen virtually all other OEMs from those days pushed to the side. Today, we are using AOSP to attack a specific market opportunity, but we are being thoughtful to do it in a way that accrues benefit to Microsoft and to Lumia.

Re: How are other smartphone manufacturers encouraged to produce or keep producing Windows Phone devices? I can imagine they fear that a lot of Windows Phone APIs will be available for Microsoft Devices only.

Really good question. It is GOOD for Microsoft to encourage other OEMs to also build WP devices, and there have been some announcements in this direction recently. Our intent is for the Microsoft Devices Group to “make the market” so that others can participate, so we will be doing things to facilitate other OEMs as much as possible.

Re: One of Nokia’s strengths is its truly global presence, moreso in emerging markets. I believe it responds faster than Microsoft in this regard. Can we expect better localization in these markets in terms of services?

Both Nokia and Microsoft are global companies, but it turns out that our strengths are complementary. We have great strength in emerging markets while Microsoft has more strength in developed markets. I think this will work well together.

Re: What is the future of innovation/new technologies worked at Nokia R&D dep. as solar charging (wyps) or radio waves charging on Lumia? Will be a move of these project (and others) to Microsoft R&D to allow future innovation just like Nokia did through the years?

When I first started at Nokia, i characterized the “landscape of unpolished gems” when looking at all the great R&D within Nokia. Now, combined with Microsoft, that landscape is even broader, which is very exciting for all of us. So, stay tuned to lots of innovation ahead.

Re: As a blogger and long-time time Nokia fan, Nokia Connects (WOMWorld) have been helpful, appreciative to us in many ways particularly in providing review products and services of Nokia. Unlike Nokia Connects, Microsoft Social team is aloof and uncaring. I would to like know the future of Nokia Connects and Nokia Conversations because both are important to us especially to the fans, evangelists.

Today we are part of Microsoft, and Conversations is with us (actually, sitting right next to me!). And this will continue. I strongly believe in an open and transparent dialogue, and am proud that the team made Nokia Conversations one of the most influential company and technology blogs in the world.

Everything just became a lot #MoreColorful [Conversations : now part of Microsoft, April 28, 2014]

What does color mean to you? Does it spark emotion? Does it invoke taste? Does it change your mood? Do you express yourself through color?

Color runs through our devices; it’s part of our DNA. From the bright and bold Nokia X family to the metallic-fused Lumia 930, our colors draw attention and make heads turn. It’s what sets us apart from our competitors and what many of you love about our design ethos.

We’re not like everybody else. Are you?

Not Like Everybody Else [Nokia YouTube channel, April 28, 2014]

Today, everything just became a lot more colorful. You can read more about Nokia Devices and Services coming together with Microsoft here. Soundtrack: The Kinks, ‘Not Like Everybody Else’.

Our journey begins [Conversations : now part of Microsoft, April 25, 2014]

Today is a big, new and exciting day for us. We are announcing that the acquisition of substantially all of the Nokia Devices and Services business by Microsoft has reached completion, following approval by Nokia shareholders and regulatory authorities.

For our readers here on Conversations and our fans across the world, today is a beginning of something new. But we’re happy to report that many of those things that matter to you most will stay the same.

As Microsoft, we will continue to produce, sell and support the phones and devices you have come to love, including our award-winning Lumia and Asha ranges, feature phones and the Nokia X family of devices.

The hardware engineering and design talent that produced world-leading devices under Nokia ownership will continue to set the mark for new mobile experiences and innovation.

And the software innovation continues too. The unique imaging, music and location experiences that are such a valuable part of our devices will continue to be developed, supported and enhanced.  Software updates and the continued growth of our app and device ecosystems are now more important than ever.

Importantly for existing customers, we will bring you right along with us. Your device warranty is completely unaffected by this change and the same world-class customer service and support teams will continue to look after your devices. You can still get all the help and support through the usual channels: online support, contact centers and local Nokia Care points.

And we’ll continue to take good care of your personal data – our commitment to your privacy remains paramount.

Your friends at Conversations will still be here, too, along with the social channels you follow. The Conversations blog and discussions forums, together with country-specific Facebook pages and Twitter accounts will continue to offer news and information about our devices and services, run by the same people and teams now at Microsoft.

Nokia’s global Facebook, Twitter, LinkedIn and YouTube accounts, as well as Nokia Finland’s Facebook and Twitter accounts, will have news and updates both from Nokia as a company and about Nokia-branded devices and services from Microsoft.

So today, most things will remain the same.

But today is also an exciting day for us, and a historic day for the industry. And none of this would be possible if it weren’t for you – our readers and fans across the world. We have experienced many things together and we hope you join us on this exciting journey too!

This is the essence of Microsoft Fiscal Year 2014 Fourth Quarter Earnings Conference Call(see also the Press Release and Download Files) for me, as the new, extremely encouraging, overall setup of Microsoft in strategic terms (the below table is mine based on what Satya Nadella told on the conference call):

These are extremely encouraging strategic advancements vis–à–vis previously publicized ones here in the following, Microsoft related posts of mine:

• Microsoft Surface Pro 3 is the ultimate tablet product from Microsoft. What the market response will be? [this same blog, May 21, 2014]
• What Microsoft will do with the Nokia Devices and Services now taken over, but currently producing a yearly loss rate of as much as $1.5 billion? [this same blog, April 29, 2014]
• Microsoft BUILD 2014 Day 2: “rebranding” to Microsoft Azure and moving toward a comprehensive set of fully-integrated backend services [this same blog, April 27, 2014]
• Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers [this same blog, April 25, 2014]
• Intel’s desperate attempt to establish a sizeable foothold on the tablet market until its 14nm manufacturing leadership could provide a profitable position for the company in 2016 [this same blog, April 27, 2014]
• Intel CTE initiative: Bay Trail-Entry V0 (Z3735E and Z3735D) SoCs are shipping next week in $129 Onda (昂达) V819i Android tablets—Bay Trail-Entry V2.1 (Z3735G and Z3735F) SoCs might ship in $60+ Windows 8.1 tablets from Emdoor Digital (亿道) in the 3d quarter [this same blog, April 11, 2014]
• Enhanced cloud-based content delivery services to anyone, on any device – from Microsoft (Microsoft Azure Media Services) and its solution partners [this same blog, April 8, 2014]
• Microsoft BUILD 2014 Day 1: new and exciting stuff for MS developers [this same blog, April 5, 2014]
• IDF14 Shenzhen: Intel is levelling the Wintel playing field with Android-ARM by introducing new competitive Windows tablet price points from $99 – $129 [this same blog, April 4, 2014]
• Microsoft BUILD 2014 Day 1: consistency and superiority accross the whole Windows family extended now to TVs and IoT devices as well—$0 royalty licensing program for OEM and ODM partners in sub 9” phone and tablet space [this same blog, April 2, 2014]
• An upcoming new era: personalised, pro-active search and discovery experiences for Office 365 (Oslo) [this same blog, April 2, 2014]
• OneNote is available now on every platform (+free!!) and supported by cloud services API for application and device builders [this same blog, March 18, 2014]
• View from Redmond via Tim O’Brien, GM, Platform Strategy at Microsoft [this same blog, Feb 21, 2014]
• “Cloud first”: the origins and the current meaning [this same blog, Feb 18, 2014]
• “Mobile first”: the origins and the current meaning [this same blog, Feb 18, 2014]
• Microsoft’s half-baked cloud computing strategy (H1’FY14) [this same blog, Feb 17, 2014]
• The first “post-Ballmer” offering launched: with Power BI for Office 365 everyone can analyze, visualize and share data in the cloud [this same blog, Feb 10, 2014]
• John W. Thompson, Chairman of the Board of Microsoft: the least recognized person in the radical two-men shakeup of the uppermost leadership [this same blog, Feb 6, 2014]
• The extraordinary attempt by Nokia/Microsoft to crack the U.S. market in terms of volumes with Nokia Lumia 521 (with 4G/LTE) and Nokia Lumia 520 [this same blog, Jan 18, 2014]
• 2014 will be the last year of making sufficient changes for Microsoft’s smartphone and tablet strategies, and those changes should be radical if the company wants to succeed with its devices and services strategy [this same blog, Jan 17, 2014]
• Will, with disappearing old guard, Satya Nadella break up the Microsoft behemoth soon enough, if any? [this same blog, Feb 5, 2014]
• Microsoft products for the Cloud OS [this same blog, Dec 18, 2013]
• Satya Nadella’s (?the next Microsoft CEO?) next ten years’ vision of “digitizing everything”, Microsoft opportunities and challenges seen by him with that, and the case of Big Data [this same blog, Dec 13, 2013]
• Leading PC vendors of the past: Go enterprise or die! [this same blog, Nov 7, 2013]
• Microsoft could be acquired in years to come by Amazon? The joke of the day, or a certain possibility (among other ones)? [this same blog, Sept 16, 2013]
• The question mark over Wintel’s future will hang in the air for two more years [this same blog, Sept 15, 2013]
• The long awaited Windows 8.1 breakthrough opportunity with the new Intel “Bay Trail-T”, “Bay Trail-M” and “Bay Trail-D” SoCs? [this same blog, Sept 14, 2013]
• How the device play will unfold in the new Microsoft organization? [this same blog, July 14, 2013]
• Microsoft reorg for delivering/supporting high-value experiences/activities [this same blog, July 11, 2013]
• Microsoft partners empowered with ‘cloud first’, high-value and next-gen experiences for big data, enterprise social, and mobility on wide variety of Windows devices and Windows Server + Windows Azure + Visual Studio as the platform [this same blog, July 10, 2013]
• Windows Azure becoming an unbeatable offering on the cloud computing market [this same blog, June 28, 2013]
• Proper Oracle Java, Database and WebLogic support in Windows Azure including pay-per-use licensing via Microsoft + the same Oracle software supported on Microsoft Hyper-V as well [this same blog, June 25, 2013]
• “Cloud first” from Microsoft is ready to change enterprise computing in all of its facets [this same blog, June 4, 2013]

I see, however, particularly challenging the continuation of the Lumia story with the above strategy, as with the previous, combined Ballmer/Elop(Nokia) strategy the results were extremely weak:

Worthwhile to include here the videos Bloomberg was publishing simultaneously with Microsoft Fourth Quarter Earnings Conference Call:

Inside Microsoft’s Secret Surface Labs [Bloomberg News, July 22, 2014]

Will Microsoft Kinect Be a Medical Game-Changer? [Bloomberg News, July 22, 2014]

Why Microsoft Puts GPS In Meat For Alligators [Bloomberg News, July 22, 2014]

To this it is important to add: How Pier 1 is using the Microsoft Cloud to build a better relationship with their customers [Microsoft Server and Cloud YouTube channel, July 21, 2014]

as well as:
Microsoft Surface Pro 3 vs. MacBook Air 13″ 2014 [CNET YouTube channel, July 21, 2014]

Surface Pro 3 vs. MacBook Air (2014) [CTNtechnologynews YouTube channel, July 1, 2014]

In addition here are some explanatory quotes (for the new overall setup of Microsoft) worth to include here from the Q&A part of Microsoft’s (MSFT) CEO Satya Nadella on Q4 2014 Results – Earnings Call Transcript [Seeking Alpha, Jul. 22, 2014 10:59 PM ET]

…

Mark Moerdler – Sanford Bernstein

Thank you. And Amy one quick question, we saw a significant acceleration this quarter in cloud revenue, or I guess Amy or Satya. You saw acceleration in cloud revenue year-over-year what’s – is this Office for the iPad, is this Azure, what’s driving the acceleration and how long do you think we can keep this going?

Amy Hood

Mark, I will take it and if Satya wants to add, obviously, he should do that. In general, I wouldn’t point to one product area. It was across Office 365, Azure and even CRM online. I think some of the important dynamics that you could point to particularly in Office 365; I really think over the course of the year, we saw an acceleration in moving the product down the market into increasing what we would call the mid-market and even small business at a pace. That’s a particular place I would tie back to some of the things Satya mentioned in the answer to your first question.

Improvements to analytics, improvements to understanding the use scenarios, improving the product in real-time, understanding trial ease of use, ease of sign-up all of these things actually can afford us the ability to go to different categories, go to different geos into different segments. And in addition, I think what you will see more as we initially moved many of our customers to Office 365, it came on one workload. And I think what we’ve increasingly seen is our ability to add more workloads and sell the entirety of the suite through that process. I also mentioned in Azure, our increased ability to sell some of these higher value services. So while, I can speak broadly but all of them, I think I would generally think about the strength of being both completion of our product suite ability to enter new segments and ability to sell new workloads.

Satya Nadella

The only thing I would add is it’s the combination of our SaaS like Dynamics in Office 365, a public cloud offering in Azure. But also our private and hybrid cloud infrastructure which also benefits, because they run on our servers, cloud runs on our servers. So it’s that combination which makes us both unique and reinforcing. And the best example is what we are doing with Azure active directory, the fact that somebody gets on-boarded to Office 365 means that tenant information is in Azure AD that fact that the tenant information is in Azure AD is what makes EMS or our Enterprise Mobility Suite more attractive to a customer manager iOS, Android or Windows devices. That network effect is really now helping us a lot across all of our cloud efforts.

…

Keith Weiss – Morgan Stanley

Excellent, thank you for the question and a very nice quarter. First, I think to talk a little bit about the growth strategy of Nokia, you guys look to cut expenses pretty aggressively there, but this is – particularly smartphones is a very competitive marketplace, can you tell us a little bit about sort of the strategy to how you actually start to gain share with Lumia on a going forward basis? And may be give us an idea of what levels of share or what levels of kind unit volumes are you going to need to hit to get to that breakeven in FY16?

Satya Nadella

Let me start and Amy you can even add. So overall, we are very focused on I would say thinking about mobility share across the entire Windows family. I already talked about in my remarks about how mobility for us even goes beyond devices, but for this specific question I would even say that, we want to think about mobility not just one form factor of a mobile device because I think that’s where the ultimate price is.

But that said, we are even year-over-year basis seen increased volume for Lumia, it’s coming at the low end in the entry smartphone market and we are pleased with it. It’s come in many markets we now have over 10% that’s the first market I would sort of say that we need to track country-by-country. And the key places where we are going to differentiate is looking at productivity scenarios or the digital work and life scenario that we can light up on our phone in unique ways.

When I can take my Office Lens App use the camera on the phone take a picture of anything and have it automatically OCR recognized and into OneNote in searchable fashion that’s the unique scenario. What we have done with Surface and PPI shows us the way that there is a lot more we can do with phones by broadly thinking about productivity. So this is not about just a Word or Excel on your phone, it is about thinking about Cortana and Office Lens and those kinds of scenarios in compelling ways. And that’s what at the end of the day is going to drive our differentiation and higher end Lumia phones.

Amy Hood

And Keith to answer your specific question, regarding FY16, I think we’ve made the difficult choices to get the cost base to a place where we can deliver, on the exact scenario Satya as outlined, and we do assume that we continue to grow our units through the year and into 2016 in order to get to breakeven.

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Rick Sherlund – Nomura

Thanks. I’m wondering if you could talk about the Office for a moment. I’m curious whether you think we’ve seen the worst for Office here with the consumer fall off. In Office 365 growth in margins expanding their – just sort of if you can look through the dynamics and give us a sense, do you think you are actually turned the corner there and we may be seeing the worse in terms of Office growth and margins?

Satya Nadella

Rick, let me just start qualitatively in terms of how I view Office, the category and how it relates to productivity broadly and then I’ll have Amy even specifically talk about margins and what we are seeing in terms of I’m assuming Office renewals is that probably the question. First of all, I believe the category that Office is in, which is productivity broadly for people, the group as well as organization is something that we are investing significantly and seeing significant growth in.

On one end you have new things that we are doing like Cortana. This is for individuals on new form factors like the phones where it’s not about anything that application, but an intelligent agent that knows everything about my calendar, everything about my life and tries to help me with my everyday task.

On the other end, it’s something like Delve which is a completely new tool that’s taking some – what is enterprise search and making it more like the Facebook news feed where it has a graph of all my artifacts, all my people, all my group and uses that graph to give me relevant information and discover. Same thing with Power Q&A and Power BI, it’s a part of Office 365. So we have a pretty expansive view of how we look at Office and what it can do. So that’s the growth strategy and now specifically on Office renewals.

Amy Hood

And I would say in general, let me make two comments. In terms of Office on the consumer side between what we sold on prem as well as the Home and Personal we feel quite good with attach continuing to grow and increasing the value prop. So I think that’s to address the consumer portion.

On the commercial portion, we actually saw Office grow as you said this quarter; I think the broader definition that Satya spoke to the Office value prop and we continued to see Office renewed in our enterprise agreement. So in general, I think I feel like we’re in a growth phase for that franchise.

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Walter Pritchard – Citigroup

Hi, thanks. Satya, I wanted to ask you about two statements that you made, one around responsibly making the market for Windows Phone, just kind of following on Keith’s question here. And that’s a – it’s a really competitive market it feels like ultimately you need to be a very, very meaningful share player in that market to have value for developer to leverage the universal apps that you’re talking about in terms of presentations you’ve given and build in and so forth.

And I’m trying to understand how you can do both of those things once and in terms of responsibly making the market for Windows Phone, it feels difficult given your nearest competitors there are doing things that you might argue or irresponsible in terms of making their market given that they monetize it in different ways?

Satya Nadella

Yes. One of beauties of universal Windows app is, it aggregates for the first time for us all of our Windows volume. The fact that even what is an app that runs with a mouse and keyboard on the desktop can be in the store and you can have the same app run in the touch-first on a mobile-first way gives developers the entire volume of Windows which is 300 plus million units as opposed to just our 4% share of mobile in the U.S. or 10% in some country.

So that’s really the reason why we are actively making sure that universal Windows apps is available and developers are taking advantage of it, we have great tooling. Because that’s the way we are going to be able to create the broadest opportunity to your very point about developers getting an ROI for building to Windows. For that’s how I think we will do it in a responsible way.

Heather Bellini – Goldman Sachs

Great. Thank you so much for your time. I wanted to ask a question about – Satya your comments about combining the next version of Windows and to one for all devices and just wondering if you look out, I mean you’ve got kind of different SKU segmentations right now, you’ve got enterprise, you’ve got consumer less than 9 inches for free, the offering that you mentioned earlier that you recently announced. How do we think about when you come out with this one version for all devices, how do you see this changing kind of the go-to-market and also kind of a traditional SKU segmentation and pricing that we’ve seen in the past?

Satya Nadella

Yes. My statement Heather was more to do with just even the engineering approach. The reality is that we actually did not have one Windows; we had multiple Windows operating systems inside of Microsoft. We had one for phone, one for tablets and PCs, one for Xbox, one for even embedded. So we had many, many of these efforts. So now we have one team with the layered architecture that enables us to in fact one for developers bring that collective opportunity with one store, one commerce system, one discoverability mechanism. It also allows us to scale the UI across all screen sizes; it allows us to create this notion of universal Windows apps and being coherent there.

So that’s what more I was referencing and our SKU strategy will remain by segment, we will have multiple SKUs for enterprises, we will have for OEM, we will have for end-users. And so we will – be disclosing and talking about our SKUs as we get further along, but this my statement was more to do with how we are bringing teams together to approach Windows as one ecosystem very differently than we ourselves have done in the past.

Ed Maguire – CLSA

Hi, good afternoon. Satya you made some comments about harmonizing some of the different products across consumer and enterprise and I was curious what your approach is to viewing your different hardware offerings both in phone and with Surface, how you’re go-to-market may change around that and also since you decided to make the operating system for sub 9-inch devices free, how you see the value proposition and your ability to monetize that user base evolving over time?

Satya Nadella

Yes. The statement I made about bringing together our productivity applications across work and life is to really reflect the notion of dual use because when I think about productivity it doesn’t separate out what I use as a tool for communication with my family and what I use to collaborate at work. So that’s why having this one team that thinks about outlook.com as well as Exchange helps us think about those dual use. Same thing with files and OneDrive and OneDrive for business because we want to have the software have the smart about separating out the state carrying about IT control and data protection while me as an end user get to have the experiences that I want. That’s how we are thinking about harmonizing those digital life and work experiences.

On the hardware side, we would continue to build hardware that fits with these experiences if I understand your question right, which is how will be differentiate our first party hardware, we will build first party hardware that’s creating category, a good example is what we have done with Surface Pro 3. And in other places where we have really changed the Windows business model to encourage a plethora of OEMs to build great hardware and we are seeing that in fact in this holiday season, I think you will see a lot of value notebooks, you will see clamshells. So we will have the full price range of our hardware offering enabled by this new windows business model.

And I think the last part was how will we monetize? Of course, we will again have a combination, we will have our OEM monetization and some of these new business models are about monetizing on the backend with Bing integration as well as our services attached and that’s the reason fundamentally why we have these zero-priced Windows SKUs today.

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