Convergence Plus
Thursday, January 17, 2019
Samsung readies for next round of battle with Xiaomi with online exclusive affordable phones

Samsung readies for next round of battle with Xiaomi with online exclusive affordable phonesSamsung’s new M-series of smartphones will be targeted at ‘millennials’ that are flocking to ecommerce platforms to buy smartphones, a customer segment that has played a major role in helping Xiaomi outpace its rival over the last year or so. Samsung is planning an aggressive bid to get back its lost throne from Xiaomi by planning three online-exclusive devices in the sub-Rs 10,000 to Rs 20,000 range, marking a renewed ecommerce push by the Korean major in a price segment dominated by its Chinese rival.

Samsung’s new M-series of smartphones will be targeted at ‘millennials’ that are flocking to ecommerce platforms to buy smartphones, a customer segment that has played a major role in helping Xiaomi outpace its rival over the last year or so.

“The new series is designed around India’s millennial consumers. We expect to double up our online business. That's a significant jump in our online part,” Asim Warsi, senior vice president with Samsung India, told ET.

He added that Samsung will continue to focus on its offline channel where it is deeply established. “That doesn't change per se. The move is about focusing more on the consumers.”

Asked about the recent tightening of the FDI rules in the ecommerce policy, which, among other points, seeks to effectively bring pricing parity between online and offline channels, Warsi said, “Our business approach will conform to the new policy.”

Xiaomi has managed to maintain a steady lead over Samsung for over a year now, and had a 27.3% market share to its rival’s 22.6%, buoyed by a nearly 50% share in the online space and rapid expansion in its brick-and-mortar channel as well, in the July-September period, as per IDC.

Asked if the latest series will help the company drive volumes and get more market share, Warsi said: “market share is a by-product of various actions and business efforts that go in.”

He added that Samsung finished the October-December 2018 quarter with 40% market share by value, as per the GFK data, with a “healthy growth over the previous year”.

Neil Shah, research director, devices and ecosystems at Counterpoint Research, however, was skeptical about Samsung’s chances to break Xiaomi’s hold on the ecommerce space, saying the Korean company is a year late with this series, since the online average selling prices have moved beyond Rs 10,000.

“This new series would have done well for Samsung in the offline channel, which contributes to around 80% of its India handset sales…Samsung’s only chance in the online channel is if they match the pricing and specification of players like Xiaomi to offer better value for money,” Shah said, adding that it could bundle accessories and services.

Samsung, on its part, is pulling out all stops with this new series, introducing a 5000 Mah battery in a device for the very first time, packed with fast charging. One of the three devices will also come with a three-camera setup.(Source:ETTelecom)

Infosys reports 30% drop in Q3 net

Infosys reports 30% drop in Q3 netCountry’s second-largest software exporter, however, cheers with guidance, buyback. In a seasonally weak quarter, Infosys has revised its guidance upwards on the back of continued billion dollar worth deals and growth of the digital business. However, it has reported a 30 per cent drop in net profit to ₹3,609 crore due to a one-time hit on its Panaya and Skava acquisitions.

India’s second-largest software exporter gave a revenue guidance of 8.5-9 per cent, higher than the 6-8 per cent guidance which it had issued at the beginning of 2019 fiscal. Infosys also reported a 20.3 per cent growth in revenues to ₹21,400 crore on a year-on-year basis, which beat expectations of the street for the second consecutive quarter.

As expected, the company’s board cleared a buyback of equity shares worth ₹8,260 crore, the second in as many years, at a price not exceeding ₹800 per share. A special dividend of ₹4 per share has also been announced.

“We seem to be in a good position as our services are finding increased relevance among clients and I am happy I had a strong first year,” said Salil Parekh, CEO and MD.

Plans for Panaya, Skava
While the revenues and guidance were positives, Infosys saw a big dip in profits on a yearly basis, due to a one-time hit on the Skava and Panaya acquisitions and persistently high sub-contracting costs.

The company, under the assets held for sale section, said that on de-classification, it has recognised additional depreciation and amoritisation expenses of $12 million and a reduction of $65 million in the value of Skava.

“We plan to repurpose Skava’s micro services based business and refocus on Panaya’s suite of products,” said Parekh.

BusinessLine was the first to report about Infosys’ plans to leverage Panaya and Skava’s licences and thereby keep them under its own fold.

Industry analysts said that this dip is largely due to increasing investments that the company is making to hire locals as stricter visa curbs in the US and other geographies are forcing IT companies to hire locally.

According to Harit Shah, Senior Research Analyst –IT, Reliance Securities, higher guidance and robust deal wins signify improving revenue visibility, even as cost pressures reflect on margins.

While Infosys has retained its operating margin guidance in the range of 22-24 per cent, at the end of Q3, margins were at 22.6 per cent, the lowest in the last six quarters. In the third quarter, Infosys also bagged large deals worth $1.57 billion.

Sanjeev Hota, AVP Research at Sharekhan by BNP Paribas, said that the increase in revenue guidance and better exit rate for fiscal 2019 provide comfort on double-digit growth in the next fiscal. (Source: The Hindubusiness Line)

Apple inks deal with Samsung to distribute iTunes shows on TVs

Apple inks deal with Samsung to distribute iTunes shows on TVsSamsung Electronics Co Ltd said on Sunday that it will add an app to its smart televisions in the coming months to let owners watch content bought on Apple Inc's iTunes service, a possible first sign Apple is looking to distribute its forthcoming television service on devices made by others.

The deal is part of an ongoing strategy shift for Apple, which is facing weak hardware sales in China and a saturated global smart phone market where users are hanging on to their old iPhones longer than ever, hammering its biggest business.

As a result, Apple is increasingly leaning on its services segment, which includes businesses such as iCloud storage in addition to its music, television and movie content businesses.

It has announced several high-profile deals for original television content, including a forthcoming show with Oprah Winfrey, but has not yet said how it plans to distribute that content or when its service will launch.

The Samsung deal could be a step toward Apple distributing content to devices made by others. Apple makes a device called Apple TV that connects to a full television set, but has never produced a full set itself.

Under the deal unveiled on Sunday, Samsung will add an app to its televisions that lets users browse and play their existing iTunes movies and television shows as well as purchase or rent new content. Samsung also said it would add Apple's AirPlay 2 software that will allow iPhone owners to stream content from their device to Samsung televisions.

Many existing deals between content companies and smart television makers involve the content companies paying television makers for the right to appear on their devices. Apple and Samsung both declined to comment on whether Apple is paying any fees or a percentage of sales made on the televisions under the new deal.

The impact of iTunes landing on Samsung movies will be muted for now. Since late 2017, consumers who purchased movies through iTunes have been able to watch them on any device, including Samsung televisions, that supported the Movies Anywhere consortium.

Films from Warner Bros, Walt Disney, Universal, Sony and Fox purchased through iTunes, Amazon, Google Play and Vudu could be viewed on the respective apps and devices and TVs that support the apps.

The Samsung deal is the second time in recent months in which Apple has made a pact with another technology company to land its services on their devices. In November, it said its Apple Music streaming service would be made available on Amazon's Echo smart speakers, despite Apple selling its own line of HomePod speakers that compete directly with Echo speakers. (The HinduBusiness Line)

China's Huawei launches server chipset as it taps new growth channels

China's Huawei launches server chipset as it taps new growth channelsHuawei Technologies Co Ltd on Monday launched a new chipset for use in servers, at a time when China is pushing to enhance its chip-making capabilities and reduce its heavy reliance on imports, especially from the United States. HuaweiTechnologies Co Ltd on Monday launched a new chipset for use in servers, at a time when China is pushing to enhance its chip-making capabilities and reduce its heavy reliance on imports, especially from the United States.

Huawei, which derives the bulk of its revenue from selling telecommunications equipment and smartphones, is seeking growth avenues in cloud computing and enterprise services as its equipment business comes under increased scrutiny in the West wary of Chinese government influence over the firm. Huawei has repeatedly denied any such influence.

Chinese firms are also seeking to minimise the impact of a trade dispute which has seen China and the United States slap tariffs on each other's technology imports.

For Huawei, the launch of the chipset - called the Kunpeng 920 and designed by subsidiary HiSilicon - boosts its credentials as a semiconductor designer.

The Shenzhen-based company already makes the Kirin series of smartphone chips used in its high-end phones, and the Ascend series of chipsets for artificial intelligence computing launched in October.

It said its latest 7 nanometre, 64-core central processing unit (CPU) would provide much higher computing performance for data centres and slash power consumption. It is based on the architecture of British chip design firm ARM - owned by Japan's SoftBank Group Corp - which is seeking to challenge the dominance in server CPUs of U.S. maker Intel Corp.

Huawei aims to "drive the development of the ARM ecosystem", said Chief Marketing Officer William Xu. He said the chip has "unique advantages in performance and power consumption".

Xu also said Huawei will continue its "long-term strategic partnership" with Intel.

Huawei on Monday also released its TaiShan series of servers powered by the new chipset, built for big data, distributed storage and ARM native applications.

The firm founded chip designer HiSilicon in 2004 to help reduce its reliance on imports.

In modem chips, Huawei internally sources 54 percent of those in its own devices, with 22 percent coming from Qualcomm Inc and the remainder from elsewhere, showed evidence presented at an antitrust trial for Qualcomm. (ETtelecom)

Micromax strengthens international play, to foray into South Africa

Micromax strengthens international play, to foray into South AfricaThe company is also looking at expanding its range of consumer durable products like television sets and smart accessories to Russia and Middle East. Handset maker Micromax is foraying into the South African market as it looks to further bolster its international operations, which it expects to contribute as much as 20 per cent to its overall revenues by next fiscal. The company is also looking at expanding its range of consumer durable products like television sets and smart accessories to Russia and Middle East.

Micromax, which is facing intense competition from Samsung and Chinese players like Xiaomi, Oppo and Vivo, among others, in the Indian market, operates in Russia, Middle East, Nepal, Bangladesh and Sri Lanka.

"We will soon enter the South Africa market and have partnered Vodafone there. There is a big opportunity there, about 8 million devices a month," Micromax co-founder Vikas Jain told .

He added the company has already introduced its consumer electronics in the SAARC region and is looking at extending the range to Russia and Middle East markets.

"Exports now is about 11 per cent of our revenues. We expect this to grow to 17-18 per cent or even 20 per cent next fiscal," he said.

Once a dominant player in the Indian handset market, Micromax began to struggle as Chinese brands like Oppo, Vivo and Xiaomi began to rise in popularity among Indian consumers.

Helped by a Rs 1,500-crore order from the Chhattisgarh government, that it carried out with telecom operator Reliance Jio, Micromax made it back to the top five tally of smartphone players in the third quarter of this year.

India is one of the world's largest smartphone markets and growing steadily. Smartphone shipments in India touched an all-time high of 42.6 million units in the July-September 2018 quarter, registering a year-on-year growth of 9.1 per cent, according to research firm IDC.

Xiaomi led the smartphone tally with shipments of 11.7 million units and 27.3 per cent market share, followed by Samsung (9.6 million units, 22.6 per cent share), Vivo (4.5 million units, 10.5 per cent share), Micromax (2.9 million units, 6.9 per cent share) and Oppo (2.9 million units, 6.7 per cent share).

Micromax plans to launch more smartphones in the coming weeks to strengthen its position in the Indian market. (Source:ETTelecom)

Facebook adds $9 b to share buyback programme

Facebook adds $9 b to share buyback programmeFacebook said on Friday it would add $9 billion to its stock buyback program, which could scoop up shares pummelled over the past few months by privacy scandals and a slump on Wall Street. In a regulatory filing, the leading social network said it added to a $15 billion share repurchase program began in 2017.

Facebook shares have slid more than 30 per cent in the past few months amid heightened scrutiny of the company and a bruising stock market.

The repurchase program “does not have an expiration date,” the filing said, adding that shares may be repurchased on the open market or through privately negotiated transactions.

Facebook has become the world’s biggest social network with more than two billion users, but has drawn scrutiny in the US and elsewhere over privacy practices and manipulation of its platform.

The Facebook application has fallen out of favour among young audiences in the US, according to surveys, but its Instagram image-sharing application has taken up some of that slack.

Facebook also operates the WhatsApp and Messenger applications, each with more than a billion users, and sells Oculus virtual reality gear. This year it launched a video chat device called Portal. (Source: The Hindu BusinessLine)

RIL creates 7 units for telecom, content business

RIL creates 7 units for telecom, content businessThe creation of the subsidiaries will make it easier for RIL to manage risks and raise funds, says an analyst. Reliance Industries Ltd (RIL), which bought stakes in Den and Hathway cable networks in October, has created seven subsidiaries to handle its fast-growing telecom and content businesses, a senior company official said.

These subsidiaries are Jio Content Distribution Holdings, Jio Internet Distribution Holdings, Jio Television Distribution Holdings, Jio Cable and Broadband Holdings, Jio Futuristic Digital Holdings, Jio Digital Distribution Holdings and Jio Digital Cableco Pvt. Ltd, the official said on condition of anonymity. “These subsidiaries would undertake the businesses of broadcasting, broadband internet, wireless, data and hosting services to business and residential retail customers, cable services distribution, voice over internet protocol and video on demand, among others,” the official added.

RIL did not respond to emailed queries.

Analysts said the newly set-up companies would help RIL efficiently manage the various segments of its telecom and content businesses.

“RIL prefers creating subsidiaries for its various businesses. It is easier to manage, distribute risks and raise funds through RIL’s backing,” said an analyst with a Mumbai-based brokerage. “Besides, if the company wants to amalgamate these subsidiaries later, it can be done, too.”

RIL had in October invested ₹2,290 crore for a 66% stake in Den Networks Ltd and ₹2,940 crore for a 51.3% stake in Hathway Cable and Datacom Ltd. The deals would not only allow RIL to expand to 1,100 cities and target 50 million homes with its faster broadband services, but also reduce the cost of reaching out to customers, in addition to helping Jio GigaFiber achieve last-mile connectivity.

The subsidiaries would also set up or promote ventures relating to entertainment, e-commerce, telecom, internet, manufacture of telecom equipment or information technology-enabled service industry among others.

RIL has a policy for determining a material subsidiary for the company when its income or net worth exceeds 20% of the consolidated income or net worth, respectively of the company.

According to RIL’s annual report for 2017-18, the company liquidated or amalgamated 26 subsidiaries. RIL is parent to 84 Indian and 42 foreign subsidiaries. It also has 25 Indian and seven foreign companies as associates and 20 Indian and five foreign companies as joint ventures. (Source: Mint)

74% Indians believe their skills are in demand: LinkedIn study

74% Indians believe their skills are in demand: LinkedIn studyExpressing strong desire for entrepreneurship, India is the most confident amongst nine countries surveyed by LinkedIn recently in achieving career advancement. Some 74 per cent Indians believe their skills are very much in demand in today’s job market, according to the study, while 68 per cent Indians feel that their skills are easily transferable to other industries.

Much like the rest of APAC, the study found Indians consider career advancement as their main opportunity, with the high confidence (at 77 per cent) indicative of the high-potential jobs market in India.

The entrepreneurship spirit in India, fuelled by the government’s start-up schemes and campaigns, also came through among top opportunities expressed by people in the study.

In India, the third largest start-up economy in the world, starting one’s own business (at 13 per cent) is seen as one of the top three opportunities on the LinkedIn Opportunity Index. People in other developing economies, like Indonesia (at 34 per cent) and the Philippines (at 29 per cent), also expressed a strong desire for entrepreneurship.

The study showed India taking the second spot on the Index behind Indonesia, among markets that are more confident in gaining access to and pursuing opportunities.

However, more developed markets such as Japan, Hong Kong and Australia trailed on the Index, as people in these markets expressed concerns over economic outlook, and generally felt more cautious about their chances of achieving success with opportunities relevant to them.

Apart from studying India’s perception of opportunity, the study also looked at obstacles. Quality of education emerged as a chief concern for India (15 per cent), with people relying heavily on education to base a career decision (84 per cent), highest amongst all APAC countries, the study showed.

The research surveyed more than 11,000 respondents in nine markets in the Asia Pacific region — India, Australia, Chinese Mainland, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, and Singapore.

Olivier Legrand, Managing Director, Asia Pacific, LinkedIn, said in a statement: “The growing workforce in the region (APAC) is a key asset that, if harnessed effectively, is going to continue to drive the economies. Over time, by tracking people’s perception of opportunity and the barriers they face, we hope we can continue to facilitate more of a balance between demand and supply in the opportunity marketplace.” (Source: The Hindu BusinessLine)

We will continue to invest, strengthen our operations in Nordics: HCL

We will continue to invest, strengthen our operations in Nordics: HCL IT services major HCL Technologies will continue to invest significantly in the Nordics region as it expands its headcount and delivery capabilities to further strengthen its position in the region. Nordics region, which comprises Denmark, Finland, Iceland, Sweden, Norway, and the territories of the Aland Islands and the Faroe Islands, is the largest market for HCL Technologies in the European region.

"HCL has been present in the Nordics region for 10 years now and have over 1,600 employees in the region and 12 delivery centres. We have over 50 large-scale clients, including four out of the six Fortune Global 500 companies in the region. We will continue to invest in this market that is the largest for us in the European region," HCL Technologies EVP Nordic and DACH Head Pankaj Tagra told PTI.

He added that the company has opened a new office at HCL's Nordics headquarters in Central Stockholm.

Europe accounted for 26.8 per cent of HCL Technologies' revenues for the quarter ended September 2018, growing 3.5 per cent year-on-year. Americas contributed 65.8 per cent and Rest of the World accounted for 7.4 per cent of the revenues in the said quarter. The company doesn't disclose country-specific revenues.

Other markets in Europe for HCL include the UK an Ireland, DACH (Germany, Austria and Switzerland), France and Benelux (Belgium, the Netherlands, and Luxembourg).

"Built on the back of long-term strategic engagements, the Nordic region has transformed into a major growth engine. There is strong demand across sectors like manufacturing, services, telecom, oil and gas, and banking, financial services and insurance," he said.

Tagra added that there is also a strong demand for new-age technologies like automation, cybersecurity, design thinking and artificial intelligence.

Tagra expressed confidence in the Nordics region continuing to be the top market in the European region in the coming years as well. In Europe, HCL employs more than 10,000 people and serves over 200 European clients. (Source: Economic Times)

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