Showing posts with label Research. Show all posts
Showing posts with label Research. Show all posts

Thursday, February 15, 2018

The worldwide smartphone market stagnates

Smartphone sales figures from Q4 2017 are now mostly in and the reports confirm what many analysts suspected. The worldwide market for smartphones has stagnated and even begun to decline, perhaps because penetration rates in most countries have reached maximum levels, or perhaps because the replacement cycle is not nearly as fast as was once expected.

The smartphone sales trend is significant because it has been a leading predictor of bandwidth growth. Two years, if a mobile operator only had 25% of its subscribers using smartphones and enrolled in a 4G data plan, it was a sure bet that revenue and bandwidth growth would occur. Now, with most millennial customers packing a modern Android or iOS smartphone, it is not so certain that this growth will continue at the same pace. Bandwidth growth will come from usage and not simply millions of new smartphone users joining the network each month. This trend is playing out in the U.S., which reached 4G saturation much earlier, as well as China and India, which have been the big growth stories more recently.

Certainly, pricing for the flagship devices from Apple, Samsung, Google and LG has put off many consumers from upgrading their smartphones just on a whim. At the $900 to $1000 or more price range, device manufacturers are testing the limits of consumer budgets and many folks seem to be holding off.

Preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker indicates that indeed a contraction in the smartphone business occurred in 2017. IDC says smartphone vendors shipped a total of 403.5 million units during the fourth quarter of 2017 (4Q17), resulting in a 6.3% decline when compared to the 430.7 million units shipped in the final quarter of 2016. For the full year, the worldwide smartphone market saw a total of 1.472 billion units shipped, declining less than 1% from the 1.473 billion units shipped in 2016.



 "In the presence of ultra-high-end flagships, the still high-priced flagships from the previous generation seemed far more palatable to consumers in 2017," said Jitesh Ubrani, senior research analyst with IDC's Worldwide Mobile Device Trackers. "Many high-profile companies offered their widest product portfolio ever in hopes of capturing a greater audience. Meanwhile, brands outside the top 5 struggled to maintain momentum as value brands such as Honor, Vivo, Xiaomi, and OPPO offered incredible competition at the low end, and brands like Apple, Samsung, and Huawei maintained their stronghold on the high end."

IDC’s study also provides an update on the big brands:

Apple experienced a slight downturn from the previous holiday quarter as iPhone volumes reached 77.3 million units, a year-over-year decline of 1.3%. Although demand for the new higher priced iPhone X may not have been as strong as many expected, the overall iPhone lineup appealed to a wider range of consumers in both emerging and developed markets. Apple finished second for the full year in 2017 shipping 215.8 million units, up 0.2% from the 215.4 million units shipped in 2016. 

Samsung remained the overall leader in the worldwide smartphone market for 2017 despite losing out to Apple in the fourth quarter. The Korean giant shipped 74.1 million units in 4Q17, down 4.4% compared to the 77.5 million units from last year. Samsung finished the year with 317.3 million shipments, up 1.9% from the 311.4 million shipments in 2016. 

Huawei continues to hold the number three position despite intensified competition from growing Chinese players such as OPPO and Vivo. Huawei shipped 41.0 million units, down 9.7% from the 45.4 million shipped in the fourth quarter of 2016. The 2017 results look much better for the Chinese giant as the Honor brand helped pushed sales both inside and outside of China. Huawei shipped 153.1 million units, up 9.9% from the 139.3 million unit shipped in 2016. Recent aspirations for breaking into the U.S. market are on hold as both AT&T and Verizon recently cut ties to bring Huawei flagships to the U.S. 

Xiaomi managed to double its share to 7% from 3.3% during the holiday quarter last year. This comes as no surprise since the company has continued to focus on growth outside China, with India and Russia being two of its largest markets. The company has been expanding its number of Mi Stores and Mi Service Centers, with fast buildout coming in markets like Indonesia. In India, Xiaomi also launched Redmi Y-series in India and roped in Bollywood celebrity Katrina Kaif to endorse the selfie-centric smartphone series as its first product endorser. The Redmi 5A, which was launched at US$78, saw more than a million devices being sold within a month. 

OPPO dropped one place to the 5th position as the company shipped 27.4 million smartphones while managing to maintain 12% growth for the full year, amounting to 111.8 million smartphones. Like Xiaomi, OPPO has also managed to move beyond the domestic Chinese market and gain a foothold in other Asian countries like India, Indonesia, and Vietnam. In Indonesia, it launched the new F5 series in 4Q17 and also announced its partnership with AOV, a MOBA game. 

A second research report, from Strategy Analytics, found that global smartphone shipments tumbled 9 percent annually to reach 400 million units in Q4 2017. Strategy Analytics crowns Apple with a first place finish at 19% global marketshare, nudging Samsung into second position. Xiaomi continued its relentless rise, almost doubling smartphone shipments from a year ago.

Linda Sui, Director at Strategy Analytics, said, “The shrinkage in global smartphone shipments was caused by a collapse in the huge China market, where demand fell 16 percent annually due to longer replacement rates, fewer operator subsidies and a general lack of wow models. However, on a full-year basis, global smartphone shipments grew 1 percent and topped an impressive 1.5 billion units for the first time ever.”

 “OPPO shipped 29.5 million smartphones during Q4 2017, unmoved from 29.5 million units in Q4 2016. OPPO was growing smartphone shipments at a 99 percent annual rate a year ago, but its growth has now dropped to zero. The golden age for OPPO is coming to an end and it is facing serious competition from Xiaomi and others. Xiaomi soared 87 percent annually, taking fifth place with 27.8 million shipments, more than doubling its global smartphone marketshare to 7 percent in Q4 2017, up from 3 percent a year ago.”


Monday, January 29, 2018

Crehan: 400GbE to drive most data center Ethernet switch bandwidth by 2022

Expect to see initial shipments of 400 gigabit Ethernet (GbE) switches this year and look for exponential growth ahead. The 400 GbE technology will drive the majority of data center Ethernet switch bandwidth by 2022, according to a newly published Data Center Switch Long-Range Forecast Report from Crehan Research Inc.

“Beginning with high-density 100GbE systems, we entered a new era of much faster data center switch upgrades, and that trend is predicted to continue with 400GbE,” said Seamus Crehan, president of Crehan Research.  "With its expected market-leading price per gigabit and no foreseeable shortage of demand for higher-speed networking capacity in cloud data centers, 400GbE should surpass a million ports shipped in less time than it took 100GbE to reach that threshold.” 

In addition to a strong ramp of 400GbE, Crehan’s report predicts that: 

  • 400GbE data center switches will offer a bandwidth discount over lower speed switches during the initial year of shipments
  • 400GbE adoption will be further bolstered by the arrival of 100G-PAM4 SerDes, likely in the 2020 timeframe, thus reducing the number of lanes required to achieve 400GbE by half – from 8*50 to 4*100 – and further lessening the cost and power of these data center switches
  • 100GbE shipments will surpass 40GbE shipments during 2018, just three years after the initial shipments of high-density 100GbE data center switch systems
  • The overall market average selling price per port for data center switching will remain relatively stable, driven by the adoption of higher-speed switches 

Monday, January 15, 2018

Renewed growth in servers and Ethernet switching

There are renewed signs of strength in several key industry segments, including servers and switches.
You might think that all of the action is concentrated in public clouds and that the only vendors benefitting from this shift are white box vendors from Asia. But that is not what the Q3 2017 data shows. Certainly, the public cloud is growing by leaps and bounds and ODMs from China and Taiwan are shipping in ever greater volume.
However, a few of the top name brand server vendors, especially Dell, IBM and Cisco (to a lesser extent) are finding renewed growth beyond the handful of hyperscale public cloud projects. This seems to indicate that large corporate data centers are entering a refresh cycle. Intel continues to dominate this sector. Demand for x86 servers increased 20.4% in 3Q17 with $15.4 billion in revenues. Non-x86 servers grew 15.1% year over year to $1.5 billion.
IDC finds that vendor revenue in the worldwide server market increased 19.9% year over year to $17.0 billion in 3Q17.
Top 5 Companies, Worldwide Server Vendor Revenue, Market Share, and Growth, Third Quarter of 2017 (Revenues are in Millions)
Company


3Q17 Revenue


3Q17 Market Share


3Q16 Revenue


3Q16 Market Share


3Q17/3Q16 Revenue Growth
1. HPE / New H3C Group


$3,317.4


19.5%


$3,355.4


23.7%


-1.1%
2. Dell Inc


$3,070.4


18.1%


$2,226.7


15.7%


37.9%
3. IBM


$1,093.7


6.4%


$864.4


6.1%


26.5%
3. Cisco


$992.5


5.8%


$928.0


6.6%


6.9%
5. Lenovo


$861.2


5.1%


$985.0


7.0%


-12.6%
ODM Direct


$4,118.7


24.3%


$2,834.5


20.0%


45.3%
Others


$3,528.7


20.8%


$2,965.5


20.9%


19.0%
Total


$16,982.6


100.0%


$14,159.5


100.0%


19.9%
IDC's Worldwide Quarterly Server Tracker, November 2017

It is good to see this growth is shared by major geographies. IDC breaks down the growth rate as follows:
Server shipment revenue growth (yoy)
·         Asia/Pacific (excluding Japan and China) +30.6%
·         China +23.9%
·         Japan +8.5%
·         U.S. +19.7%
·         EMEA + 19.5%
·         Canada +14.5%
·         Latin America +2.4%.
Servers require switches, so it is not surprising to see this market segment growing in step with the server shipments.

Dell’Oro Group recently reported that Ethernet Switch – Layer 2+3 market revenue reached an all-time record in 3Q17, posting the highest year-over-year growth in five years. The positive results were driven by both campus switching and data centre switching. Cisco did will with its new Catalyst 9K switches and Intent-based networking paradigm. Arista did exceptionally well as evidenced by its most current quarterly financial report and despite the ongoing legal battle with Cisco.

“We are starting to see signs for recovery in the Campus Switching market,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “Softness in campus switching has been weighing on the Ethernet Switch market over the past two years. It has been outweighing strength in Data Center switching until now as Cisco and HPE captured most of the growth in North American and European campus switching markets during the quarter, while Chinese market remained dominated by Huawei and H3C,” stated Boujelbene.

IDC also reported a strong Q3 for the worldwide Ethernet switch market (Layer 2/3). The IDC figures show $6.75 billion in revenue in the third quarter of 2017 (3Q17), an increase of 7.4% year over year.

Sunday, December 3, 2017

MEF 3.0 - Looking to Expand the Community



Will MEF 3.0 help to expand the community beyond the Tier 1 Service Providers who have been the biggest backers of MEF to date?

Erin Dunne, Director of Research Service, Vertical Systems Group, comments on how the provisioning of automated, agile services presumes a deep ecosystem and common standards.

See video:  https://youtu.be/dZv7tIMoW0A


Wednesday, November 29, 2017

Ericsson’s Mobility Report finds 65% year-over-year growth in mobile data traffic

There are two must-read, vendor-led research market reports. The first is Cisco’s Visual Network Index series, including its mobility edition.  The second is the Ericsson Mobility Report, the latest edition of which was released earlier this week. Both companies base their reports on actual data traffic provided by their service provider customers worldwide. Both companies also extrapolate current trends to provide forecasts for several years into the future. In the past, it has been our view that the Ericsson predictions have tended to be on the conservative side, whereas the Cisco’s predictions have tended to be a bit rosier. 

For instance, in our view, Ericsson’s LTE forecast from several years back appeared predicted a long life for 3G networks in Europe. Mostly, this has turned out to be true, although it seemed that the early LTE success in the Japanese and the U.S. markets would be easily replicated in Western Europe.

This year, the Ericsson Mobility Report turned up one number that is anything but conservative:  on a global basis, in Q3 2017, data traffic grew around 10 percent quarter-on-quarter and around 65 percent year-on-year.  The volume of traffic of course always rises year-over-year, but it is significant that the growth rate has been rising even as smartphones have reached the saturation point in developed markets some time ago. The driving factor is video consumption on mobiles.


Ericsson finds that North America continues to have the highest usage of mobile data.Here traffic is expected to reach 7.1 GigaBytes (GB) per month per smartphone by the end of the year and increase to 48GB by the end of 2023. Western Europe has the second highest usage, with traffic set to reach 4.1GB by the end of 2017 and 28GB by the end of 2023.


But surely the global growth rate for mobile data consumption has been boosted by Reliance Jio’s attack on the Indian market with unlimited data. Ericsson calculates that average mobile data usage in India will reach 3.9GB per month per smartphone at the end of 2017 – and remember that Jio still has only a fraction of the Indian population as subcribers.  There are ten other major operators in the battle. The Ericsson forecast call for data traffic to reach18GB per month per smartphone in India in 2023.

Globally, Ericsson is predicting that total mobile data traffic for all devices is anticipated to increase by 8 times during the forecast period, reaching around 110EB per month by the end of 2023. 

Much more is online. The Ericsson Mobility Report is recommended reading for anyone tracking the development of the networking business.

Monday, November 27, 2017

MEF17: The SD-WAN market is opening up



SD-WAN is no longer a conversation just for network operators - the market is opening to a range of new customer experiences, says Mary Stanhope or iMarket2.  There are new opportunities for cloud providers, application providers, and IoT provider to offer SD-WAN to their users.

See video:  https://youtu.be/tF-MipHBE1Q


Sunday, November 26, 2017

MEF 3.0 - A Start for Carrier Interfaces



The MEF 3.0 is a great step in the right directions, says Mike Sapien, Chief Analyst, Ovum, but remember that it is just a first step for intercarrier interfaces.

See video:  https://youtu.be/Y10to_iC5JA


Wednesday, September 27, 2017

Global LTE connections reach 2.37 billion

The global migration from 3G to 4G continues to gather pace. Global LTE connections grew 59 percent from June 2016 to June 2017 reaching 2.37 billion, according to 5G Americas and Ovum, and now constitutes 30% of all cellular connections.

Some highlights:

  • North America achieved 327 million LTE subscriptions by the end of June 2017 with some of the highest penetration rates, most extensive coverage and largest market share for LTE in the world. 
  • Latin America nearly doubled LTE connections to 159 million from 81.5 million year-over-year at 2Q 2017 increasing by 95 percent.
  • New LTE deployments continue and as of mid-August TeleGeography (GlobalComm) reported 551 commercial LTE deployments worldwide, while 206 of those operators have already evolved to LTE-Advanced.
  • Worldwide, LTE is forecast to continue its momentum, reaching over 2.5 billion connections by the end of 2017, 3 billion in 2018 and 4.9 billion connections in 2022. 
  • 5G is expected to accumulate connections starting in 2019 and by 2022, it is forecast to have 389 million connections worldwide.
  • In Latin America, there are now 695 million total mobile wireless subscriptions, of which 159 million were LTE connections; 77.6 million new LTE connections added year-over-year from 2Q 2016.

See also