Companies & Sectors
Amazon turns the heat on Apple with Fire

The litmus test of the newly-acquired market presence for Fire will come in the next two quarters as Amazon faces off against the arrival of Windows 8 tablets and the much anticipated iPad3

Apple might be beginning to feel the heat from Amazon, with the first signs of real competition emerging from the brisk sales of Amazon Fire in the final quarter of 2011. Amazon seems to be leveraging its well-oiled logistics machine and competitive pricing to finally mount a credible threat to the crushing dominance of Apple in the tablet market. The Seattle-based e-commerce giant shipped 3.9 million units during the fourth quarter of 2011 to garner an impressive 14.3% market share as per a recent study by IHS iSuppli. The stellar debut of Fire helped Amazon leapfrog a host of competitors who have collectively struggled to compete with Apple’s iPad since its launch in April 2010. If the trend holds, we could see the emergence of a first real threat to Apple’s incredible dominance of the tablet market.

 
However, it must be acknowledged that Apple’s iPad shipments faced a certain degree of cannibalisation from the iPhone 4S (37 million units in Q4) and the anticipation of a third version of the tablet later this year. In all Apple sold 40.5 million tablets in 2011, up 168% over the 15.1 million units in 2010, helping expand the fast-growing market. Amazon (6%) sneaked into third place, just behind Samsung which held on to second position for the year with sales of its Tab touching 6.1 million units for a 9% share in the market.

Another impressive development has been the emergence of Barnes & Noble’s Nook which managed to ship 3.25 million units in the year, for a 5% market share. The relative success of Fire and Nook point to the consolidation of value priced tablets as a credible form of competition to the dominant ways of Apple.

Clearly, aggressive pricing has enabled Amazon and Barnes & Noble to play a disruptive hand and upset the calculations of the market. First, they forced competitors such as Samsung, RIM (Research In Motion) and Motorola to slash prices—even forcing some to resort to fire sales to dispose inventory. Second, they leveraged a growing ecosystem of free to use apps to lure the price sensitive customer by offering them an alternative that was priced well.

On the evidence available thus far, one may suggest that Fire and Nook have caused more damage in the Android space more than the iOS market. A true picture will only emerge by the third quarter of 2012—during this time, the intensely competitive tablet market is set to experience the arrival of iPad3, Windows 8-based tablets and an increase in tablets on the ARM architecture.

While many analysts believe Windows 8 could help vendors mount a fresh challenge to Apple, the evolution of ARM into the tablet product will enable disruptive pricing strategies. “Although several processor architectures could be used to power tablet SoCs, the rich software ecosystem of the ARM architecture built around smartphones is proving to be a key differentiating factor," said Jim McGregor, Chief Technology Strategist for In-Stat.

In an earlier report this January, iSuppli swam against the tide to express optimism that Nokia is set to revive itself and catalyse the rise of Windows phones. They suggested that driven by instruments such as the Lumia 900, Windows phones would succeed in displacing the iPhone from its position by 2015. If a similar trend were to take play in the tablet space as well, 2012 could be a watershed year for the lucrative tablet market.

With a slew of launches planned for the rest of the year, these are interesting times for the market. All eyes will remain fixed on the space to see if the disruptive influence of Fire and Nook can continue to hold centre-stage and build on the momentum of their debut. The litmus test of the newly-acquired market presence for Fire will come in the next two quarters as Amazon faces off against the arrival of Windows 8 tablets and the much anticipated iPad3.

It is game on in the tablet market and 2012 could turn out to be year when the market finally starts mounting a credible challenge to the monumental dominance of Apple.

 

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BlackBerry finally sets up server in Mumbai

After much controversy, BlackBerry has finally set up its server in Mumbai following intense pressure from the government to provide a mechanism for lawful interception of its messenger services and Nokia has been asked to follow suit

New Delhi: After much controversy, BlackBerry has finally set up its server in Mumbai following intense pressure from the government to provide a mechanism for lawful interception of its messenger services and Nokia has been asked to follow suit, reports PTI.

During a high-level meeting at the home ministry recently, officials of the security agencies were informed that Canada-based Research in Motion has installed the servers in Mumbai.

The servers have been inspected by a team of officers and permission for direct linkage for lawful interception was expected to be issued shortly, a presentation made at the meeting held in the office of the home secretary said.

About the Nokia Push Mail, the Department of Telecom (DoT) also prescribed a similar policy as in the case adopted by the BlackBerry, the presentation said.

The government and BlackBerry manufacturers were in a logjam over its services in India as security agencies had raised a red flag over its operations citing non availability of method to intercept its messenger service and enterprise mail.

However, there was a climb-down by the government on intercepting mail sent through BlackBerry Enterprise Services (BES) which decrypts the messages and sends it to the email server of the service provider where it remains stored in decrypted form. Then the message is pushed to the BlackBerry device in encrypted form.

DoT secretary informed that currently there are about 5000 enterprise servers for BES. Director Intelligence Bureau Nehchal Sandhu noted that these are communications between the employees of the enterprise only and, therefore, are not of "high concern" for security or Intelligence agencies.

"However, it was decided to obtain list and location of the servers from telecom service providers," the presentation said.

RIM representatives had explained that BlackBerry mobile device sends the encrypted email which is sent to BES located with the service provider.

The government had said the onus of giving access to security agencies to monitor the information on these smart phones lies with the service providers.

According to the licensing conditions, the service providers are liable to put in a mechanism to allow security agencies to intercept any conversation or message of any subscriber whenever required.

As telecom service providers like Airtel, Vodafone, RCom, the Tatas and the government-run BSNL and MTNL are offering BlackBerry services, it is the responsibility of these operators to ensure that the security agencies get access to all services they offer.

RIM has its operations in 175 countries.

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First all India retail inflation data tomorrow

Welcoming the new index, experts said it will take time, may be few years, before the CPI will replace WPI as benchmark for the government decision making and RBI's monetary policy

New Delhi: Starting Tuesday the government will release the nation-wide Consumer Price Index (CPI) on a monthly basis for better reflection of retail price movement and to help the Reserve Bank of India (RBI) take effective monetary policy steps to deal with inflation, reports PTI.

The new CPI, according to experts, will eventually replace the Wholesale Price Index (WPI) for policy actions to deal with the price situation.

The monthly CPI will be in addition to the three retail price indices-for agricultural labourers, rural labourers and industrial workers-prepared by the ministry of labour.

The new data will be prepared by the ministry of statistics and programme implementation (MOSPI).

"CPI uses defined basket of goods and services that represents purchasing pattern of a particular household. Since this is driven from the consumption side, it provides a relatively realistic view on how consumers are affected," Deloitte, Haskins & Sells director Anis Chakravarty said.

He said that for these reasons a reliable indication of demand side pressures and inflation is received from utilising CPI as a measure.

Welcoming the new index, experts said it will take time, may be few years, before the CPI will replace WPI as benchmark for the government decision making and RBI's monetary policy.

WPI, as per Mr Chakravarty, "poorly reflects the cost of living because it does not focus on the prices at which the consumer is purchasing the goods".

The WPI measures the price changes from the production side and not from the consumption side and hence it provides a skewed picture, he added.

Globally also the consumer price index is taken as the main benchmark.

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