Daily Insight: Mobile World Congress 2014 (Monday)

An Essential Guide to Announcements at Mobile World Congress


This is the second of our daily reports from Mobile World Congress 2014 in Barcelona.

Divided into six research areas, it contains a round-up of the show’s notable announcements followed by initial comment by our team of analysts.


Samsung unveils Galaxy S5 and Galaxy Gear Fit
CCS Insight: As smartphone innovation slows Samsung faces the same problems as its rivals. Even with features like LTE-Advanced and a “download booster”, the Galaxy S5 is unlikely to be perceived as radically different from other flagship devices. The Galaxy Gear Fit is attractive, especially its curved display. As one of the nicest wearables so far it will add glamour to the Galaxy S5. Pricing and bundling remain the critical ingredients to driving consumer adoption.

Nokia unveils low-end Nokia X family running Android
CCS Insight: The decision to use Android sits uncomfortably ahead of the purchase of Nokia’s handset unit by Microsoft. It acknowledges Asha’s challenges in competing with low-cost Android, and probably signals the end of the platform. It also reveals Windows Phone’s difficulties in scaling down to the low-cost smartphone segment. Microsoft inherits a complex platform strategy.

Nokia reveals Nokia 220 and Asha 230 budget handsets
CCS Insight: These devices address Nokia’s sub-€50 heartland where the Finnish manufacturer continues to drive substantial volumes. The Asha 230 is Nokia’s most keenly priced Asha product to date and targets a price where Asha can more effectively compete without coming up against a vast array of Android contenders. We believe Asha will largely shift focus to sub-€60 price points now the Nokia X family bridges the gap between Asha and Windows Phone.

Sony announces Z2 flagship smartphone, midrange Xperia M2 and Z2 Tablet
CCS Insight: Sony is making strong progress, although the Z2 phone and tablet follow a common theme of differing little from their predecessors. Sony is betting that the current design will still appeal to buyers and the accompanying bundles of films, music and books will distinguish them from rivals. Sony is following a successful CES 2014 with a strong presence at Mobile World Congress.

Sony showcases its SmartWear Experience for lifelogging
CCS Insight: Sony aims to blend activity tracking with its strengths in communications and entertainment. The core module can be worn as a wristband, necklace or attached to objects such as tennis rackets or training shoes. Sony will face strong competition from rivals including Samsung and LG, but it has now defined a wearables vision ensuring it is part of the race to grab share in this high-profile category. As a pioneer in wearables with its smartwatches, it must guarantee it does not lose its early advantage.

Lenovo announces S860, S850 and S660 phones and Yoga Tablet 10 HD+
CCS Insight: Lenovo’s new smartphones continue to sharpen the company’s portfolio for its core markets, predominantly in Asia; the Yoga Tablet 10 HD+ seeks to create demand outside the price-sensitive sweet spot for seven- and eight-inch Android tablets. Given Lenovo’s proposed acquisition of Motorola, we predict fundamental changes by next year’s Mobile World Congress, with a far greater focus on the premium segment for North America and Europe.

Yota releases a five-inch dual-display smartphone
CCS Insight: The YotaPhone is an example of some much-needed innovation in the smartphone space. The new device is a reworking of the original product with a focus on several features. However, the most significant step is the launch of a software development kit to bring third-party innovation to the dual-screen e-ink display concept.

HTC extends its midrange LTE smartphones with 4.7-inch Desire 610 and Desire 816
CCS Insight: HTC is acknowledging the intensity of the high-tier smartphone market. By moving into the midrange, it is ‎broadening its reach, but this is a notoriously tricky segment, particularly as the market has polarised to either end.

Alcatel OneTouch announces 13 new devices
CCS Insight: Alcatel has again used Mobile World Congress as the forum for a comprehensive portfolio update covering multiple prices and segments. This is an impressive range of new products that underlines its growing strength in entry-level smartphones and its determination to become a force in the mid-tier and spur adoption of LTE.

LG debuts G2 mini smartphone, G Pro 2 and three new L Series III devices
CCS Insight: LG has fought back to deliver a strong portfolio of Android smartphones since it orchestrated a rights issue in November 2011 to invest in smartphone research and development. These products underline LG’s growing strength at the high end and its commitment to use its higher-margin devices to drive scale and volume at lower price points.

ZTE unveils six-inch Grand Memo II LTE phablet
CCS Insight: ZTE continues to improve on the design, materials and finish of its products to compete with an abundance of sharply priced Android contenders. Nonetheless, differentiation is getting increasingly difficult in a hopelessly crowded market, meaning ZTE is likely to resort to price to find clear air for its LTE phablet.

Asus announces new additions to its product line-up
CCS Insight: Asus presented two new versions of its Fonepad 7 tablet (LTE and HSPA). The underwhelming hardware upgrade from the previous version and lack of support for Android 4.4 KitKat is disappointing. However, releasing an LTE version at a more affordable price is positive. It also follows a key theme of this year’s Mobile World Congress, with manufacturers releasing more cellular-connected tablets as they seek to stand out in the saturated Wi-Fi only tablet market.

Fujitsu announces plans for new tablet and smartphone
CCS Insight: Fujitsu’s prototype uses haptics to convey sensations that mimic slipperiness, bumpiness and roughness. The company claims this is the first technology of its kind. It should help to differentiate its products in a saturated tablet market. Fujitsu also announced plans to release a successor to its Stylistic S01 smartphone. It is likely to be an LTE device and will ship in wider European markets as Fujitsu looks to improve its efforts in mobile outside Japan.

Panasonic launches FZ-E1 and FZ-X1 ruggedized Toughpad devices
CCS Insight: This appears to contrast with Panasonic’s decision to exit the smartphone market. However, the Japanese manufacturer has decided to target a specific vertical opportunity with Windows 8 Embedded and Android 4.2.2 devices using existing assets.

Software Platforms

BlackBerry announces availability of BBM for Windows Phone and Nokia X platforms
CCS Insight: The decision to support Windows Phone and the new Nokia X platform (based on Android) so early in BBM’s life as an OS-agnostic solution underlines BlackBerry’s determination to grow BBM user numbers. This level of commitment is critical given the hypercompetitive nature of the messaging market and the investment now available to competitors like WhatsApp and Viber.


Operators discuss partnerships with Internet players during Keynote session
CCS Insight: Following a flurry of recent alliances (for example, VimpelCom and WhatsApp), operators were in broad agreement about the need to partner rather than compete with third-party providers. The success of services such as WhatsApp and KakaoTalk has led to a long-term decline in use of traditional services, primarily voice and SMS. This new behaviour reinforces our view of the need for operators to develop innovative tariffs and new business models to capitalise on opportunities from mobile data.

Operators again rail against regulation
CCS Insight: A recurrent theme at Mobile World Congress, operators again called for a regulatory framework to encourage greater investment to satisfy surging demand for data services. Once more, there were calls for a level playing-field for Internet players, which are not subject to local regulation.

European Commission launches Partnership for 5G research
CCS Insight: This public-private partnership aims to re-establish Europe’s position at the forefront of next-generation technology development having fallen behind leading Asian and North American markets in the deployment of LTE. The commitment of €1.4 billion of funding until 2020 will drive research and innovation, however CCS Insight sees China establishing the first significant connections over 5G, leaving Europe playing catch-up once again.

Apps and Media

Celltick showcases custom home screen for Deutsche Telekom
CCS Insight: This is an example of how an operator can work closely with a partner to provide a customised experience for users. We believe that a feature like this can deepen engagement while also allowing the operator to gain a better understanding of what users want. It can also act as a great marketing platform to target users with new products and services.

WhatsApp announces voice calling
CCS Insight: Given that many of WhatsApp’s rivals are already offering voice, the move is a natural next step for it. It presents a large opportunity for WhatsApp to connect people with voice as well as messaging; this will mean more heartache for operators as they lose revenue. Facebook has tried hard to work constructively with operators over the past five years; they are unlikely to trust it now.

RealNetworks relaunches as cloud video service
CCS Insight: RealNetworks has long struggled to maintain its relevance. In our view, its re-launch as “Dropbox for video” will also struggle to compete in an already crowded market.

Internet of Things

Philips and Ericsson to develop smart street lighting
CCS Insight: the product will combine LED lighting with mobile broadband connectivity to capitalise on rapidly growing urban populations and demand for mobile data and efficient lighting


Intel launches 64-bit Merrifield Atom, XMM 7260 modem and secures more Atom design deals
CCS Insight: Intel continues to makes steady progress and the announcement of its Category 6 LTE modem and progress with operator acceptances are significant. Nonetheless, Intel will be eagerly awaiting availability of its fully integrated SoFIA system-on-chip (SoC) to compete on a more-equal basis with other fabless ARM rivals.

Imagination Technologies releases its first IP Core based on PowerVR Raptor architecture
CCS Insight: The availability of Imagination’s Raptor image signal processor is a significant step forwards for Imagination Technologies and rounds out its PowerVR graphics capability. Although the company is facing significant competitive pressure from ARM’s Mali graphics architecture, it maintains a strong position in the premium segment.

Imagination Technologies partners with Actions Semiconductor to provide graphics for OWL chipsets
CCS Insight: This is an important partnership for Imagination Technologies. It demonstrates the company is taking the fight to ARM for design wins in more keenly priced devices where Mali gained considerable traction in 2013.

Broadcom announces low-power location chip for wearables
CCS Insight: This typifies Broadcom’s strength in connectivity solutions and highlights the opportunity it sees to push hard into wearables and a host of connected segments under the banner of the Internet of things. Location is a much-needed feature in wearable devices but highly problematic because of power consumption. An opportunity exists for early leadership.

Broadcom demonstrates Category 6 LTE
CCS Insight: Category 6 LTE is one of the lead themes of the show and Broadcom’s demonstration underlines its commitment to close the gap on Qualcomm, which is now on its fourth generation of LTE products.

Marvell announces ARM Cortex-A53 64-bit chip with Category 4 LTE
CCS Insight: Marvell has followed in the footsteps of Qualcomm and MediaTek in using ARM’s Cortex-A53 core to launch its first 64-bit SoC. The advent of a fully integrated LTE SoC with 64-bit CPU means Marvell will be in a position to compete with Broadcom, MediaTek, Qualcomm and others toward the end of 2014.

Nvidia secures design win with French manufacturer Wiko Mobile for Tegra 4i
CCS Insight: The fact that the company will be Nvidia’s first design win in Europe for Tegra 4i illustrates the challenge that Nvidia faces in the smartphone market. We maintain the view that Nvidia will struggle for further smartphone design wins given the capital demands of LTE and mounting competition.

Qualcomm launches 64-bit octa-core chipset with penta-mode LTE
CCS Insight: Qualcomm has sought to trump MediaTek’s MT6595 octa-core LTE SoC announcement with the unveiling of its own 64-bit product. The number of technologies integrated in this chipset, including CDMA, underlines the gap that the competition needs to close in rivalling Qualcomm.

Qualcomm and Ericsson demonstrate Category 6 LTE
CCS Insight: Like Broadcom and Intel, Qualcomm also used the event to showcase its LTE-Advanced, Category 6 solution. Although Qualcomm is set to experience a significant increase in competition in LTE by the end of 2014, carrier certifications for rival solutions will take time. We believe Qualcomm remains best-positioned for premium devices requiring high levels of technology integration and comprehensive frequency band support.