Convergence Plus
Thursday, January 17, 2019
Apple iPhone losing brand pull in India; 2018 worst in four years: Analysts

Apple iPhone losing brand pull in India; 2018 worst in four years: Analysts The Indian smartphone market has gone from around 80 million in 2014 when Apple shipped 1.5 million to now 2018 when the market is nearly 150 million and Apple is shipping around 1.6-1.7 million, or a market share of 1.2%, according to Counterpoint. Apple’s iPhone shipments in India last year are estimated to have shrunk by as much as half from a record level in 2017, its worst performance in the world’s fastest-growing smartphone market since 2014, adding to global woes that have forced the company to cut its revenue outlook.

While Hong Kong-based Counterpoint Technology Market Research projected Apple’s India shipments at 1.6-1.7 million in 2018, CyberMedia Research pegged them at roughly 2 million – both lower than 3.2 million in 2017. High prices were a drag for Apple, which was unable to compete with rivals including China’s OnePlus, which offer devices with better features at half or even a third of the cost of iPhones, analysts said.

Apple shipped about 400,000 iPhones in October-December, according to Neil Shah, research director at Counterpoint Research. In comparison, OnePlus, the leader in the premium segment, shipped an estimated 500,000 units.

“Apple had been rising every year until 2017… the 2018 shipments will be at the level of 2014-15, setting them three years back in a market that has grown 50% between 2014-15 and 2018,” he said.

India’s smartphone market almost doubled to 150 million units in 2018 from about 80 million in 2014. Comparatively, Apple’s shipments have risen to 1.6-1.7 million now – a market share of about 1.2% – compared with 1.5 million in 2014, according to Counterpoint.

Analysts said the slow growth can be attributed to intense competition and the $1,000 price tags of the new iPhone models, which failed to attract buyers even after offering EMI schemes, zero down-payment and cashback plans. Some offers on older models such as iPhone 8 and 8 Plus also didn’t work, said analysts. India added to Apple’s problems across the globe in 2018, specifically slowing economic growth in China, due to which the company lowered its revenue forecast for its fiscal first quarter ended December 29 to $84 billion. In November, it had pegged first-quarter revenue at between $89 billion and $93 billion.

Apple declined to comment to ET’s emailed queries.

Apple’s India business grew from $100-200 million a few years ago to over $2 billion in 2016 and flattened out after that, Apple CEO Tim Cook said in an interview to CNBC last week.

Apple still considers India an important market and has “more work to do,” Cook said in the interview, adding that it wants to get better results in the future. The Cupertino-based company wants to open its own stores in India and would like duties on its products to be cut.

“For Apple, 2018 has been a disastrous year in India… while Apple is still the favoured aspirational brand in India, it has definitely slipped. In comparison, the Android smartphone market in India is one that is thriving and full of innovation,” said Prabhu Ram, head-industry intelligence group at CyberMedia Research.

CMR anticipates an almost 45% decline on year in iPhone shipments in Q4 2018 and shipments of 2 million units for the full calendar year.

Counterpoint’s Shah said the stickiness factor for iPhones is reducing fast because phones have become a commodity.

“Chinese brands have 30-40% cheaper pricing than Apple. It doesn’t make sense to pay sky-high prices for a product that doesn’t have new features,” he said, adding that iPhones won’t even support 5G until 2020.

The prices of iPhones are shrinking its potential base, even among existing users who are due to replace their devices, according to techARC analyst Faisal Kawoosa.

Media reports said Apple may assemble its top-end iPhones in India through the local unit of Foxconn Technology Co. this year, a move that could result in cost savings that can be passed on to consumers.

“Local manufacturing won’t move the needle much since Indian consumers are happy with offerings by OnePlus,” Shah said, adding that Apple doesn’t want to lose brand equity in India and may not slash prices.

Navkendar Singh, associate research director at IDC India said that Apple seems to have taken a conscious decision to focus on value, and isn’t chasing volume in India. “They have realized that India is a big market but it is difficult to fight in India,” he said.

Singh said that the move can be seen as risk hedging against China given the ongoing trade-related US-China issues. “Besides, India could become the manufacturing destination for Apple in long term,” he added. (Source:ETTelecom)

After China, Actis planning to set up data centres in India

After China, Actis planning to set up data centres in IndiaActis is building the world’s largest non-governmental data centre outside Beijing and is eyeing similar opportunity in India amid implementation of RBI norms on data localization. Private equity firm Actis LLP is in talks with global information technology companies and retailers to set up data centres in India, said a senior company executive. Actis is building the world’s largest non-governmental data centre outside Beijing and is eyeing similar opportunity in India after implementation of RBI norms on data localization.

“The opportunity for real estate in Asia is fantastic. And if you look at here in India, as I said, both in the residential space and the office space with you know the top partners as the Tatas, Shapoorjis and Mahindras, what you can think about (is) data centres,” said Torbjorn Caesar, Actis senior partner.

Data localization refers to storing data on any device that is physically present within the borders of a country where the data is generated. Free flow of digital data, especially which can impact government operations, is restricted by some governments. Many try to protect and promote security across borders and, thus, encourage data localization.

Caesar, who chairs Actis’ executive committee, said data generated in India needs to be stored locally to comply with government rules, which means all cloud-based services will need a local data centre.

The data centre business will be handled by Standard Chartered Bank’s Principal Finance Real Estate business in Asia that Actis acquired recently and which has invested in China, India and South Korea.

“It will be under the real estate arm,” Caesar said in an interview to Mint last month.

RBI has asked payment firms to submit fortnightly updates on the progress made on storing data locally. A 6 April RBI circular said: “All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. This data should include the full end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction.” It added that for the overseas leg of a transaction, the data may be stored in the foreign country. Global digital payment firms such as Visa, American Express, Facebook, PayPal, Mastercard and Google are likely to be impacted by the Indian regulations.

Caesar said Actis is in talks with all big global IT firms but added that “we don’t want to mention some names as we are still in negotiations.” Actis, which invests solely in emerging markets, has committed $2.1 billion for India and has been operating in energy, financial services and real estate space. Of this, $950 million has been committed in the last 18 months.

The company has had a good run in India’s clean energy space. In the largest domestic clean energy deal, Actis sold in April this year Ostro Energy Pvt. Ltd to ReNew Power Ventures in at an enterprise value of $1.5 billion. Ostro Energy and Solenergi are among the energy platforms that Actis has created globally, following Globeleq Meso America in Central America, Zuma Energia in Mexico, Aela Energia in Chile and Atlantic Renovaveis in Brazil.

Caesar also spoke about the competitive advantage that the 500 board level, C suite personnel it has across its businesses that offers unique insight and competence to be leveraged across its portfolio.

“The bargaining power we have from the procurement point of view is strong,” he added.

Actis has $10 billion of projects under construction in growth markets and employs 116,500 employees in the businesses that it controls.(Source:Mint)

An artificial intelligence app that can ‘Mirrorsize’ apparel

An artificial intelligence app that can ‘Mirrorsize’ apparel Getting an apparel of your choice that fits right is a challenge, especially if it is ordered online. Studies show that nearly 30 per cent of online users drop out before a purchase, because of size and fit issues. Returns, post an online purchase due to sizing issues, range anywhere between 25 and 40 per cent. And this is where US-based tech start-up ‘Mirrorsize’ comes in with its artificial intelligence-enabled device agnostic body scanning app.

Launched on a trial basis earlier this month — on both Android and iOS platforms — the app takes 3D body scan to deliver “precise body measurements” on tablet PCs and smartphones.

While an individual user gets the right fit, for an apparel maker or e-tailer it could lead to increased sales, lesser returns and customer loyalty. For custom tailoring outfits, it is a chance to enhance their business opportunities and reach larger audiences.

No wonder then that Arup Chakraborty, Founder and CEO, Mirrorsize, wants to extend his offerings to brands, e-commerce companies and even bespoke players (custom tailoring outfits and start-ups). Currently, individual users and some bespoke players are using the app.

“We are in the process of filing patents. Once through, we will focus on the go to market strategy,” he told BusinessLine.

Mirrorsize has already developed two products: ‘Get Measured’ for custom-tailoring outfits; while ‘Size2Fit’ is targeted towards ready-made apparel makers. More additions in terms of product expansion are being planned.

Getting the idea
Chakraborty admits that he was on the look-out for custom tailoring, but was having fitting issues. Tailors would either ask him to be present in person at their shops or he used to send them his measurements. Size charts across e-tailers would confuse him. Even images used in ‘virtual trial rooms’ were not up to the mark. Thus, began his quest for “a solution”. During this time, he met a couple of professors from IIT-Delhi and, along with them, his company Mirrosize started developing the product.

“Measurements taken will be precise because of the use of AI (artificial intelligence). This apart, we will be a cost-effective solution provider,” Chakraborty said.

Monetisation, licensing
Monetisation plans are being worked at. “We may look at a click-based model for companies and brands. I am not much interested in charging individual users,” he added.

The company is already in discussions with at least seven to eight brands and custom-tailoring outfits (bespoke tailors) for licensing pacts. This means, an apparel maker will provide Mirrorsize with its brand specifications. A buyer will click on the ‘body measurement’ option on the apparel maker’s website or an online shopping site and get to know what size fits him/her the best.

Mirrorsize is also in talks to raise funds which, according to Chakraborty, should not be more than $5 million, as of now. Funds will be used for setting up a global sales and marketing team and to step up focus on R&D.(Source: The Hindu BusinessLine)

Finn co Zyfra’s Industrial IOT solutions for Indian firms

Finn co Zyfra’s Industrial IOT solutions for Indian firmsFinnish company Zyfra, which provides Artificial Intelligence-based solutions for heavy industries, foresees huge potential for industrial digitalisation in India.

The company’s Managing Director, Pavel Rastopshin, in a meeting with the representatives of companies in defence, aerospace, petrochemicals, metallurgy and mining sectors, said Zyfra’s machine- monitoring and manufacturing data collection (MDC) tool will allow manufacturers to increase industrial equipment efficiency.

The company is set to introduce the monitoring tool, MDC Plus, in the Indian market. “We have inked agreements with Indian Spudweb Technologies and Abcon Group for providing the tool in India. They, in turn, expect to sign over 15 contracts worth $2.5 million.”

“Our MDC tool will help track equipment operation, enhance production without considerable investment . This is a crucial task and the initial step towards Industrial Internet of Things (IIoT),” he said.

Precise control of the implemented technological process will further improve machine performance by 8-12 per cent,” said Andrey Lovygin, Director, International Business Development, Zyfra.

Founded in November 2017, ZYFRA currently operates in Bulgaria, Finland, apart from India and Russia. The company is connected to over 7,000 CNC machines. (Source: The Hindu BusinessLine)

Cloud computing’s rise taking a toll on HCL Tech, Wipro growth

Cloud computing’s rise taking a toll on HCL Tech, Wipro growthFor the first time, business growth from managing technology infrastructure of customers was less than half of the overall revenue at both HCL Technologies and Wipro in the past two years. The rise in cloud computing in the early years of this decade has started hurting the growth of some of the largest software services companies in India, as for the first time, business growth from managing technology infrastructure of customers was less than half of the overall revenue at both HCL Technologies Ltd and Wipro Ltd in the past two years.

This development portends an ominous sign for the country’s third and fourth largest software services companies and is in contrast to the performance of market leader Tata Consultancy Services Ltd (TCS), which maintains that it has not seen any cannibalization in revenue as more companies look to migrate workloads to the cloud. India’s $167 billion software services outsourcing industry generates much of the revenue from deploying software engineers for infrastructure maintenance services, or IMS, or to write and maintain code for applications (application development and maintenance) or even offer customer support (BPO).

Since the turn of the century, the IMS business for most companies has grown on a par with or faster than the company’s overall growth in revenue. Still, a bigger challenge for some companies such as HCL Technologies is that at least half of the total IMS revenue still comes from legacy work of establishing data centre business, even as most Fortune 1000 companies are looking to replace their own data centres with public cloud services. HCL Technologies, India’s third-largest software services provider, saw its IMS business grow 10.5% between April-June 2016 and April-June 2018, less than half of the pace of its overall growth, according to an analysis by Mint.

Ditto for Wipro. The Bengaluru-based firm saw its IMS business grow 3%, against overall revenue growth of 6.4% in the same period. “As most clients embrace cloud, we are seeing some softness in the infra business. About half of our total IMS business is data centre business,” HCL president and chief executive C. Vijayakumar said in an interview last week.

Both TCS and Infosys, the No. 1 and No. 2 IT services firms, respectively, have stopped disclosing revenue from service offerings, but Mumbai-based TCS maintains that it has historically stayed away from setting up data centres and maintaining only infrastructure needs of its clients.

“If you are in the business of setting up data centres and leveraging your balance sheet, then yes, when customers move to cloud, you’ll be affected,” TCS’s chief operating officer N. Ganapathy Subramaniam said earlier this month. “As long as you are not in the capex-driven business of data centres, it is actually a huge uptick and not cannibalization,” said Subramaniam. TCS, he said, has “generally stayed away from capital-intensive data centre business and our business through this is very, very small”.

“We don’t go and leverage our balance sheet to set up huge data centres. So when you are moving applications into the cloud, that whole application transformation, migration, building applications around it, is an add-on business,” said Subramaniam. An analyst at a Mumbai-based brokerage said “cloud is clearly impacting overall growth and this can be seen from weak organic growth for these companies”.

“There is more pain for the companies as overall digital revenue is still less than a third, while the business from data centres remains vulnerable,” said the analyst, who declined to be named.

The rise of Amazon Web Services (AWS), the cloud computing unit of Inc., and Microsoft Azure has led to most Fortune 1000 companies looking to move applications from servers stationed traditionally in their offices to a cloud computing platform. This has made most Indian firms stitch partnerships with these public cloud computing firms, but at the expense of letting go of money earned by offering thousands of engineers to work from a central facility that houses thousands of computers, which in turn was set up by software services companies.

Consequently, cloud computing firms are witnessing scorching growth: 12 years after it was founded in 2006, AWS is already bigger than India’s largest software services company, TCS, as AWS’s revenue totalled $21 billion (on trailing 12 months basis). (Source:Mint)

Wipro will start BPO operations in Mysuru by year-end: Pratap Simha

WiproInformation Technology major Wipro is expected to start its BPO operations here by the end of the year, giving IT and ITES (Information Technology-Enabled Services) operations a boost.

Information Technology major Wipro is expected to start its BPO operations here by the end of the year, giving IT and ITES (Information Technology-Enabled Services) operations a boost.

Speaking to reporters after inspecting the progress of work on the construction of a new building and incubation centre at the Software Technology Parks of India (STPI) premises here on Saturday, Mr. Simha said the proposed Wipro BPO would initially provide jobs to about 750 people. He said Wipro was launching BPO operations in Mysuru under the Centre’s India BPO Promotion Scheme.

The start of BPO operations by the company is expected to pave the way for the setting up of more such facilities, which will in turn create jobs. The proposed widening of the Bengaluru-Mysuru highway into a six-lane one with service roads is also expected to attract more IT and ITES players to Mysuru, which already houses IT majors such as Infosys, L&T, and Wipro. Meanwhile, work on the STPI building and incubation centre, which began in October 2016 at a cost of ₹24 crore on 2.36 acres, is expected to be completed in the next few months. The building is spread across 40,000 sq.ft, comprising ground plus two floors.

The state-of-the-art incubation centre, aimed at helping startups, has 75 to 85 seats in the fully-furnished section and 90 to 95 seats in the semi-furnished ready-to-occupy raw space. (Source: The Hindu)

NetApp Excellerator to focus on start-ups in Artificial Intelligence, data analytics space

NetApp Excellerator to focus on start-ups in Artificial Intelligence, data analytics spaceNetApp has launched its second batch of accelerator programme with a focus on B2B start-ups in the areas of AI, robotics and analytics as data-driven business models are beginning to find acceptance.

NetApp Excellerator, which was launched earlier this year, is an effort to help start-ups create market-ready products and solutions by providing access to the technology companies’ expertise, along with its ecosystem of partners and customers.

Additionally, the start-ups get a grant of $15,000, get access to NetApp’s technologies, co-working space, assistance in HR, and legal and tech support to those who finish the four-month programme. “We do not own any equity in these ventures. It is an equity-free grant and they get to keep their Intellectual Property (IP),” said Deepak Visweswaraiah, Senior Vice-President & Managing Director, NetApp India.

Tracking progress
Visweswaraiah said after a start-up graduates from the accelerator programme, NetApp tracks their progress through alumni programmes, events and alliance partnerships. “As alumni, they continue to have access to mentorship and go-to-market opportunities with NetApp, as well as access to other organisations and influential individuals in the ecosystem.”

Amongst the six start-ups that have gone through the exercise, Nanobi, a start-up that focusses on developing an analytics platform, offers services to prepare, analyse and visualise complex data, while eliminating the need for multiple technologies.
This helps their customers make meaningful decisions. Similarly, DataKen aids its customers who have large and complex IT infrastructure to maintain and run effectively.

“Through algorithms, we have automated the processes of monitoring IT hardware, software and help proactively in assessing the health of the IT networks,” said Suresh Kumar Gokarkonda, CEO, DataKen. One of the successful start-ups, which was a part of the NetApp accelerator programme is SigTuple, which digitises pathological slide images and runs cloud-based image processing for diagnosis in pathology labs. SigTuple was also a part of the Google Accelerator Programme in 2017.

Abhishek Purohit, co-founder and VP — Product Strategy and Partner Enablement, said that the connections and mentorship provided by companies like NetApp help understand enterprise customers better as they have worked with many multinational giants over time. (Source: The BusinessLine)

India aiming at equipping defence forces with Artificial Intelligence

India aiming at equipping defence forces with Artificial Intelligence"This multi-stakeholder group is looking at what are the kinds of requirements," Ajay Kumar said.
After Russia, China and US, India has decided to include Artificial Intelligence in its defence forces with an aim to enhance the operational preparedness of the armed forces.

Speaking to ANI, Ajay Kumar, Defence Secretary (Production), Ministry of Defence said that a task force has been set up under the chairmanship of Tata Sons chairman N. Chandrasekaran to finalise the specifics and framework of the project.

"Artificial Intelligence is going to influence everything in the future, our common lives also including it also going to affect the future warfare. Most of the major countries in the world are taking steps to ensure that their defence systems are fully empowered by the use of Artificial Intelligence. In India, we have also taken steps in this direction," Kumar said.

The project to equip defence forces with Artificial Intelligence, includes the representation from all defence forces or Defence Research and Development (DRDO) labs, government, BEL, experts, professionals and startups. "This multi-stakeholder group is looking at what are the kinds of requirements," Kumar said.

He further said that India has a fairly strong IT industry base which will become the biggest strength in terms of developing Artificial Intelligence capabilities.

"We need to work on a partnership model between industries and defence forces which should be different from a buyer-seller proposition," he added.

Artificial Intelligence, which along with robotics, internet and machine learning has been billed as the dawn of the fourth industrial revolution, is a system of computers or machines that have the ability to mirror human intelligence. This means, they can learn, reason and do the self-correction on its own.(Source: ETTelecom)

Smart City Mission: Tech giants showing interest in setting up smart city centres

Smart City Mission: Tech giants showing interest in setting up smart city centresGlobal technology giants, including Cisco, IBM, and Bosch, are showing keen interest to participate in setting up of smart city centres or integrated command and control system under the Centre’s flagship programme Smart City Mission, a senior official said today.

According to the housing and urban affairs ministry official, HP and Siemens are working to set up such a centre in Bhopal, while Bosch, Cisco, Efkon and Rolta are participating in the development of a ‘smart’ centre in Varanasi.<,/

Honeywell’s expertise would be used for Bhubaneshwar, while Schneider, Cisco and HP would help in setting up of such a centre in Naya Raipur, the official said. Leading Indian firms, including Larsen and Toubro, Shapoorji Pallonji Group, Bharat Electronics Ltd, Tech Mahindra, are also participating with global technology giants to set up Smart City Centres which are key to the mission, he said.
As many as 99 cities have been selected under the Modi government’s Smart City Mission. Each city will get Rs 500 crore to carry out the projects.

Tenders have been called for 55 cities for setting up such centres which would entail an investment of Rs 5,300 crore, while works worth Rs 2,950 crore has started in 23 cities, the official said. Smart centres in eight cities -- Ahmedabad, Vadodara, Surat, Pune, Nagpur, Rajkot, Visakhapatnam, and Kakinada -- have become operational, the official said.

These cities are monitoring various services at the centre which included solid waste collection, smart street lights and transit management system.

These centres also offer city-wide surveillance system to enable the administration and police department keep a watch on sensitive areas such as major traffic junctions and tourist places.(Source: The Hindu Businessline)

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