From February 22 to 25, Barcelona will be the center of the business world. Do not expect a specific industry focus but expect announcements impacting any industry: from payments to automotive. Why? Because “mobile is everything”.
In the world of CMOS semiconductor process, the fundamental heartbeat that drives the continuing evolution of all the devices and computers we use and governs at a fundamantal level hte services we can layer on top of them is the continual shrinkage of the transistors we build upon, and we are used to the regular cadence of miniaturization, generally led by Intel, as we progress from one generation to the next. 32nm logic is so old-fashioned, 22nm parts are in volume production across the entire CPU spectrum, 14 nm parts have started to appear, and the rumor mill is active with reports of initial shipments of 10 nm parts in mid-2016. But there is a collective nervousness about the transition to 7 nm, the next step in the industry process roadmap, with industry leader Intel commenting at the recent 2015 International Solid State Circuit conference that it may have to move away from conventional silicon materials for the transition to 7 nm parts, and that there were many obstacles to mass production beyond the 10 nm threshold.
But there are other players in the game, and some of them are anxious to demonstrate that Intel may not have the commanding lead that many observers assume they have. In a surprise move that hints at the future of some of its own products and that will certainly galvanize both partners and competitors, IBM, discounted by many as a spent force in the semiconductor world with its recent divestiture of its manufacturing business, has just made a real jaw-dropper of an announcement – the existence of working 7nm semiconductors.
Samsung launched its business offerings at CeBIT 2015. Samsung Business is a new brand and combines Samsung’s Knox for security and enterprise mobility management, Smart Signage, and printing. Samsung Business offers industry-specific solutions for retail, education, hospitality, transportation, healthcare, and financial services.
In retail, Samsung offers digital mirror and video wall devices. School Solution integrates its mobile devices with interactive learning tools. Its Smart Hotel Solution offers premium in-room experience and information bulletin touchscreens. The Preventive Mobile Cardiac Rehabilitation solution enables real-time monitoring of chronic conditions. For financial services, Samsung provides secure document handling and printing services. And its transportation solution provides real-time information and analysis of data. My main takeaways:
Samsung Business is a good first step toward catering to businesses. Samsung has enormous potential to leverage its existing consumer device expertise and experiences, especially in the B2B2C space. Samsung is right to opt for an open and collaborative Internet of Things (IoT) ecosystem to overcome the challenges of platform compatibility, data analysis, and security. Samsung has a long track record in focusing on user experience. This should help it deliver high-quality and intuitive-to-use business solutions.
Samsung’s sector solutions are still rather basic. At this stage, Samsung is right to focus on a handful of offerings that it is familiar with and can deliver with high quality. However, Samsung will need to drill down deeper into business processes and business models to become successful in the emerging world of IoT longer term.
I remember the first time I attended 3GSM in Cannes: It was primarily a B2B telecoms trade show and centered on DVB-H, WiMAX, and other technology-centric acronyms. Fast-forward 11 years, and Mobile World Congress (MWC) will be the center of the business world for a couple of days (March 2 to 5). Some things don’t change: We will continue to hear too much about technology. Simply ignore the hype, especially around 5G; it will have no impact at all on your marketing strategy for the next five years!
However, the list of keynote speakers is a good indication of what MWC has become: a priority event for leaders willing to transform their businesses. The CEOs of Facebook, Renault-Nissan, SAP, MasterCard, and BBVA will be speaking, and more than 4,500 CEOs will be among the 85,000 attendees (only 25% of which are from operators). It is fascinating to see how mobile has changed the world in the past 10 years — not just in the way that we live and communicate but also in terms of disrupting every business. I strongly believe that mobile will have a bigger impact than the PC or Web revolutions. Why?
First, mobile is the fastest and most ubiquitous technology ever to spread globally. People in Asia and Africa are skipping the PC Internet and going direct to mobile phones; they’re the ultimate convergent device and often the only way to reach people in rural areas. As Andreessen Horowitz's Benedict Evans put it, mobile is “eating the world”. It has already cannibalized several markets, such as cameras, video recorders, and GPS, and is now disrupting entire industries, changing the game for payments, health, and education, especially in emerging countries. Second, mobile is the bridge to the physical world. It is not just another “subdigital” channel. This alone has a huge impact on business models. Last, mobile is a catalyst for business transformation.
Will the iPhone 6, to be announced on September 9, have NFC and a Sapphire Crystal display?
What about the new Samsung Galaxy Note 4, to be announced at Unpacked on September 3? And will the new Nokia Lumia 730 (a.k.a Superman), to be announced on September 4, have a 5-Megapixel rear-facing camera?
As my colleague Frank Gillett puts it, “Samsung's challenge is to establish an enduring relationship with customers, rather than being an interchangeable Android device maker – and it will take more than a new Galaxy Note to do that.”
Instead of launching their new flagship device at a separate event like last year, Samsung decided to leverage Mobile World Congress to cast a shadow on some other devices’ announcements. Expectations have been high in the past two weeks about what Samsung could announce. And while the atmosphere was not as crazy and irrational as for an Apple announcement, you could still feel today in Barcelona that expectations have been raised for the new smartphone sales leader.
As I pointed out in my post two weeks ago on what to expect at MWC, the Barcelona trade show is strongly biased on hardware specs. No exception to the rule here. The Samsung Galaxy S5 looks very promising on that front: faster, thinner, better battery and camera, etc. What’s more differentiating here is the positioning of the S5 as a fitness phone. It comes with a growing range of smart wearables, such as the Gear Fit – a fitness wristband with a curved screen – with a nice design. This is a way for Samsung to better engage users, especially when used in conjunction with new services like the enhanced S Health 3.0. It offers more tools to help people stay fit and well – providing a comprehensive personal fitness tracker to help users monitor and manage their behavior, along with additional tools including a pedometer, diet and exercise records, and a new, built-in heart rate monitor. Galaxy S5 users can further customize their experience with an enriched third-party app ecosystem and the ability to pair with next-generation Gear products for real-time fitness coaching.
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News out today confirms that Sony has indeed sold off its Vaio PC arm, ending 17 years in the personal computer business. And that CEO Kazuo Hirai has also decided to separate the TV division into a standalone unit in order to better heal it. Although he insists for now that Sony has no plans to sell that division, it would be foolish of the company not to consider any good offers. If there are any.
Because really, who would want that business? It has lost nearly $8 billion in the last 10 years and has been rapidly losing share to Samsung and LG and is about to get attacked by Chinese TV makers eager to have more influence in the US and other Western markets. I saw a very impressive offering from Hisense, TCL, and Haier at this year’s CES and expect them to make inroads against the more expensive panels from Sony, Panasonic, and Sharp, all of which have struggled to keep up.
The deal between Apple and China Mobile has been a long time coming, with lots of folks disappointed it didn’t happen in September when the latest iPhones were announced. China Mobile is the world’s largest mobile phone operator, with 760 million subscribers. That’s more than 1 in 7 of all people alive, and, as my friend Charlie has reminded me, more than 6 times the number of the largest US carrier, Verizon Wireless, or 3 times the size of AT&T and Verizon combined.
Though Bryan Wang in our Beijing office points out that Apple’s iPhone offerings are very expensive by China standards, starting at about $740 unsubsidized, he also reports that there is lots of interest among China Mobile subscribers. With this deal, we’ll finally find out how far Apple can get in China without offering products that match the prices of market leaders Samsung, Lenovo, and Huawei, or innovator Xiaomi. Based on Forrester survey data, we estimate that Apple sold over 16.8 million iPhones in mainland China in the four quarters ending September, 2013. We estimate that Apple will be able to sell 17 million new iPhones to China Mobile users in the first 12 months – that’s on the low side of public estimates we’ve seen ranging from 15 to 30 million. So Apple will boost global iPhone sales – and iPhone revenues – by over 10%.
After waiting so long, why is China Mobile interested in the iPhone? Because they’re concerned about losing their best customers, which are some of China's most valuable ones, to China Telecom and China Unicom. And China Mobile is just launching the first 4G network in China, and Forrester believes it will have at least a 6 month head start before other operators begin adding 4G. The iPhone 5s and 5c give China Mobile showcase products to show off the power of their 4G network.
Let’s step back to January 2007. Do you remember what your job was at that time? I was already an industry analyst covering mobility, and at that time, the space was less fascinating to cover. Back in January 2007, Google had acquired YouTube for $1.65 billion only a couple of months before. Android did not exist. The iPhone did not exist. Twitter did not exist. Facebook was only a couple of months old as an open public website. Nokia had a market valuation of around $120 billion, and its share of the global smartphone market was above 45%. BlackBerry – then the leader in enterprise mobility solutions – had initiated a move in the consumer space with the BlackBerry Pearl.
Less than seven years later, Google has activated more than 1 billion Android devices, and Apple will soon pass the 700 million iOS devices mark. YouTube now has more than one billion users globally and generates 40% of its traffic from mobile devices. Facebook has 1.2 billion users and generates 41% of its ad revenues from smartphones and tablets (it could even reach 50% in Q3 2013; Facebook discloses its financial results on October 30). Twitter has more than 230 million users and generates more than 70% of its revenue via mobile.
Today, Samsung places much greater strategic emphasis on its enterprise business, which is now a “top three priority” globally for the company. Symbolizing this new commitment to enterprise customers, on June 11th Samsung openeda new Executive Briefing Center (EBC) in its Ridgefield Park, NJ office. The EBC offers enterprise customers and Samsung’s many partners an opportunity to experience Samsung’s vertically-optimized enterprise offerings in context.
I attended the opening, which enjoyed executive-level support from the President and CEO of Samsung Electronics North America Yangkyu (Y.K) Kim, President of Samsung Electronics America Tim Baxter, and Senior Vice President, Samsung Enterprise Business Tod Pike. I also spent an hour learning more about the Samsung value proposition for enterprise customers from Tod, including the excerpted Q&A below.
Samsung’s Enterprise Business Division focuses on a vertical strategy that includes Education, Healthcare, Retail, Financial Services, and Hospitality... and which isn’t just about devices, though their product offerings in hospitality TVs, notebook and tablet PCs, virtualization, wireless printers, and digital signage play a prominent role. Samsung also brings together enterprise-savvy partners like Crestron and Nuance Communications – along with numerous systems integrators and other channel partners – to deliver software, content, and services along with those devices.