Allview - Market Analysis PDF

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Analysis for the smartphone and telecom market in Romania

Analyzed company: ALLVIEW

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Contents

1.

2.

Market capacity and Market evolution...............................................................................3 1.1.

Romania’s Smartphone Market...................................................................................3

1.2.

Allview........................................................................................................................4

Market structure..................................................................................................................5 2.1.

Main customer segments of the product/service market.............................................5

2.2. Main characteristics of the buying and consumption behavior of each customer segment..................................................................................................................................5 3. 4.

Product/service supply........................................................................................................8 Marketing Channels..........................................................................................................10

5.

Prices and tariffs................................................................................................................11

6. Conclusions and recommendations for the companies acting on the analyzed Romanian market.......................................................................................................................................13 7.

References.........................................................................................................................15

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1. Market capacity and Market evolution • the number of potential consumers/users in 2013 (in order to determine the potential market) • the number of effective consumers/users in 2013 (in order to determine the effective market) • sales volume and sales value for the product/service … by geographical regions / administrative-territorial divisions / development regions (only one criteria will be used) in 2013 • structure of the sales volume and value in 2013, by territorial areas and interpretation of the situation • the evolution trend of the analyzed market (strong growth, growth, no change, decrease, strong decrease), taking into consideration the sales volume of the product(service) during the analyzed period • how can the evolution of the market in the year 2013 be explained taking into consideration the specific evolution of the number of consumers (users), of the product (service) and the intensity of the consumption of the product(service) over the previous year. • in 2013 over 2012, the product(service) market have developed: extensively ( how much), intensively (how much), crossed ( extensively and intensively, how much).

Mobile phones are by far the most pervasive consumer electronics devices globally. Total shipments grew from 8% in 2012 to 1.3 billion units as the world economy started to recover. Smartphones is the fastest growing segment with shipments increasing by almost 74% since 2010 and 295 million units. An increasing number of users are now discovering how smartphones can be used as personal computing devices enabling access to the mobile web and applications, besides texts and voice services. Wider availability of mid-tier and low cost smartphones, has already led to a decline in sales of mid and high-end feature phones. “Berg Insight” forecasts that shipments of smartphones will grow at an annual rate of 32%.

1.1.

Romania’s Smartphone Market

The smartphone market is one of the most dynamic segments in IT&C. Every other day, new products are announced, on different niches, a crazy evolution that started a few years ago. Nokia used the be the undisputed leader on the mobile phone and smartphone markets, up until 2010 – 2011. Their domination is now history and Samsung and Apple are the front runners of these market, they are followed by Huawei and Lenovo. Lenovo is having a spectacular rise, due mostly to the aquisition of Motorola at the beginning of the year and is expected to rise even more in the moths to follow, it is even speculated that in the next 2-3 years it will rise next to samsung on the smartphone market. The data the follows is taken from ”Strategy Analytics” and it regards the delivered phones, and not those sold online. A. 1. 2. 3. 4.

Top 4 smartphones sold in the first quarter of 2014 Samsung – 89 million units sold vs 69.4 million in the first quarter of 2013 Apple -43.7 million units sold vs 37.4 million in the first quarter of 2013 Huawei – 13.4 million units vs 10.1 million in the first quarter of 2013 Lenovo – 13.3 million units vs 8.4 million in the first quarter of 2013

B. 1. 2. 3. 4. 5.

Top 5 mobile phones sold in the first quarter of 2014 Samsung – 113 million untis sold vs 106.6 million in the first quarter of 2013 Nokia – 47 million units sold vs 61.9 million untis sold in the first quarter of 2013 Apple – 43.7 million units sold vs 37.4 million in the first quarter of 2013 LG – 16.4 million units vs 16.2 million in the first quarter of 2013 Huawei – 14.2 million units sold vs 11.6 million in the first quarter of 2013

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We can see that Nokia is having a dramatic fall from the top, because it cannot sell as many feature phones like it use to do in the past. The smartphones with Android fell in the low-cost category and the prices are usually below 100 euros. Therefore any smartphone with Android is more attractive than a classic mobile phone. Lenovo is catching up fast with its competitors and in time it might actually be a worthy opponent for Samsung. They succeeded to sell millions of units without having a well known smartphone like Galaxy s and Galaxy y from Samsung. BlackBerry, HTC and Sony have fallen of the radar in the smartphone market.

1.2.

Allview

Allview is a romanian company that produces and distributes Dual Sim mobile phone, tablets, noteboooks and other electronic devices. It is a recognized brand with a fast development due to the free pre-purchase and post-purchase services and features attached to their products, as well as the perks that a customer can enjoy by working with Allview; the Allview mobile phones make it possible for anybody to separate business life from personal life in terms of phone calls and text messages to various networks, all at low costs. It was created in 2002 under the name ”Visual Fan” si the headquarter in Brasov, Romania, and its main objective was to produce and sell electronics en-gross. Starting with April 2004 all the products were sold under the name of ”Allview”. In 2007 it started creating GPS systems as well. In the spring of 2008, after a doing some marketing research concerning the usage of mobile phones, the management department decided to value the potential of their strong team created over time by entering the Dual SIM smartphones market. The company started this project with two Dual SIM phones and now Allview sales 20 different models, every single one with different features that meet the requirements of several categories of consumers. In december 2010, Allview as the first romanian company that launched a PC tablet under the name ”AllDro”. Since then, the portfolio of products DroSeries which work with Android operating system, extended to 4 products: 2 PC tablets and 2 multimedia boxes. In 2011, Visual Fan won the the Prize for Excellence given by the Chamber of Commerce and Industry from Brasov county, based on Visual Fan’s ivolvement and investments made in research and development department in the past five years.

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2. Market structure • Main customer segments of the product/service market • Segments will be defined based on the following criteria: socio-demographic, economic, psychographic and behavioral. These segmentation criteria are for orientation purposes only. If other criteria apply, please specify them. • The use of all the above mentioned criteria is not compulsory. • Main characteristics of the buying and consumption behavior of each customer segment

2.1.

Main customer segments of the product/service market

Romania’s mobile telecoms market is evolving under the weight of competition and technological change. Implementation of EU Directives has opened the telecoms market to competition and implemented a regulatory framework designed to foster effective competition.

2.2.

Main characteristics of the buying and consumption behavior of each customer segment

Table 1 - Customer segments in Romania

Index/ share

Prodigies Tribals Personals Pragmatists Browsers Occasionals Talkers (5% share) (13% share) (15% share) (18% share) (24% share) (11% share) (13% share)

Primary operating systems

Android (49%) iOS (24%)

Android (46%) iOS (45%)

Android (50%) iOS (28%)

Android (48%) iOS (41%)

Android (57%) iOS (27%)

Android (54%) iOS (30%)

Android (65%) iOS (19%)

Visit social media at least once a day

67%

84%

36%

45%

37%

34%

17%

Use smartphone to find local deals

63%

59%

25%

41%

18%

12%

3%

Top indexing smartphone apps

Chrome

Facebook

Yahoo! Mail

Chrome

Mozilla

Safari

Facebook

Top indexing media properties

YouTube

Twitter

9gag

YouTube

tumblr

Instagram

YouTube

Experian Marketing Services has released a report segmenting Romania smartphone owners into 7 groups, ranging from the hyper-connected “prodigies” (who make up 5% of 5

the smartphone population) to the low-usage “talkers” (who make up 13% of users and tend to skew older). Each group is unique in its own right, presenting marketers with different opportunities to target and engage them. Several of the top-indexing categories for each segment of the smartphone population can be found in the above chart. Below is a summary of some other details concerning each of these groups. Prodigies (5%) Some 57% of these smartphone owners say they need to be connected to the internet all day, and 72% access the internet more from their mobile devices than from their computers. Interestingly, these super-connected smartphone owners are 52% more likely than the average to use a non-Android, iOS or Blackberry operating system. Prodigies’ smartphone use doesn’t drop off overnight nearly as much as the other segments, per Experian. Perhaps they really want to be connected all day – and all night? Prodigies are almost 10 times more likely than the smartphone owner to be interested in receiving ads on their smartphones and close to 6 times more likely to buy products they see advertised on social media. Tribals (13%) These individuals are “hyperconnected and device agnostic”, and tend to prefer all sorts of media platforms, over-indexing the average smartphone owner in 9 of 10 platforms measured (with newspapers being the sole exception). They’re 51% more likely than the average smartphone user to own an iPhone. Tribals primarily differ from the other groups in their heavy use of social media (see above chart); despite accounting for 13% of the smartphone population, they represent 20% of those who use Facebook, Foursquare and Pinterest apps. More than 6 in 10 follow their favorite companies on social media and a comparable amount see social as a platform for recommending products and companies. As for shopping, this group is the most likely to engage in showrooming, but with their affinity for visual social platforms, can be marketed to on the basis of products rather than just pricing. Personals (15%) Personals are less likely to use social media than Prodigies and Tribals, instead preferring to connect directly with their friends. This group is also more likely to use a Blackberry device and to use messaging apps such as BBM and WhatsApp that don’t accrue mobile service charges. Despite being a segment primarily composed of consumers under the age of 35, this group is 45% less likely than all smartphone owners to often post or comment to social media sites. They are receptive to mobile advertising – being 2.3 times more likely than average to be interested in receiving ads on their phones, and 60% more likely to say they’d buy products advertised on their phones.

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Pragmatists (18%) Some 86% of Pragmatists use their smartphones as their primary device for accessing the internet from home, being more likely to use their phones than their laptops or PCs to do so. As one might expect, they can be found performing a range of productivity-related tasks on their devices, ranging from banking and paying bills to getting news and paying for coffee. 3 in 4 say their smartphone helps them get work done wherever and whenever they want. This group isn’t so receptive to advertising, though: they’re less likely than average to buy items they see advertised on social media or on their phones. Browsers (24%) The largest group, these smartphone owners are new to their devices and just starting to discover the advanced features they offer. These individuals are more likely to use their devices as they do their PCs, meaning that they use browsers more than apps. Only 3% of Browsers report being likely to purchase products they see advertised on social media sites; fewer would buy based on a mobile ad. A relatively small 9% say their phone is an expression of their identity. Primetime TV and magazines are good bets to reach this group. Occasionals (11%) Occasionals have some of the lowest usage rates, mostly making phone calls and checking the weather on their phones. Given their light usage, marketers should use mobile more for branding, as Occasionals will likely ignore ads served to them on their phones. This group over-indexes in its use of PCs at work and at home, and are also more active readers of newspapers. Talkers (13%) These tend to be older consumers, with 40% of this group aged 55 and older. They mostly use their smartphones just for emergencies, preferring the landline for other phone calls. Experian notes that this group stands out in its use of video messaging – being the most likely to make video calls. That’s likely due to them keeping in touch with children and grandchildren. This group enjoys print newspapers and magazines such as AARP and Consumer Reports, and should be marketed to on mobile only as a supplement to traditional media campaigns. They’re the most likely of the various groups to own an Android phone (65%), but only 23% go online from their phone.

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3. Product/service supply 

The main suppliers (producers and distributors) of the product(services) on the analyzed market - who are they, what are their sales and the market shares for 2013, short presentation of their marketing strategy

The Romanian company Allview is both a manufacturer and a distributor of Dual SIM smartphones, tablets, notebooks and various electronic products, with ten years of experience in this industry. Allview already sells its own products (more than 20 models of smartphones with various features) in many countries through several successful partnerships concluded in previous years. As a provider they operate correctly - they comply with the legal requirements and offer products suitable for each market. Allview has a distribution network that consists of seven countries including: Romania, Germany, Holland, Moldavia, Bulgaria, Slovakia and Spain. In the Romanian market, this distribution network consists of several retailers such as Germanos, Emag, Altex, Domo, Flanco, Selgros, Media Galaxy, CEL, evoMAG, etc. Even though Allview is a young company with a fresh perspective, innovative technology and low cost products, having established a good network of distribution, it has not the advantage of a strong and powerful brand name. Therefore, they cannot penetrate easily the market of the smartphones, which is still dominated by the giants of this industry (Samsung, Apple, Nokia).

The company representatives have declared that the free market is the main sales channel for their products and their performance regarding sale and distribution is outstanding for such a young company. On the smartphone segment, Allview owns 9-10% of the Romanian market in 2013, despite the eager competition. On the other hand, focusing on the local market of tablet PCs, valued at 600,000 units in 2013, Allview has sold successfully 110,000 tablets, meaning 20% market shares in the same year. In 2012, Allview business registered 7.7 million, nearly four times higher than in 2011, when it reported revenues of 2.1 million €. In the first nine months of 2013, the company had a turnover of 15 million and a profit of 1.8 million €; tablets and smartphones generate the highest sales for the company and their contribution to revenue is approximately equal.

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Furthermore, Allview’s mission is to make an improvement in the standard of living by developing innovative products with as many features as possible. Also, they aim to exceed their customers’ expectations by establishing a balance between price and quality for their products. In order to promote themselves and to increase brand awareness for their products, Allview is constantly improving its marketing strategies; the company creates, implements and coordinates several creative advertising campaigns, conceives presentations, articles for the website, newsletters and brochures on various topics related to their products, offers sponsorships for several contests, activities coordinated by non-governmental organizations or by public institutions. In a nutshell, Allview is trying to maintain a good relationship with their customers, with their partners and also with the mass-media; they monitor the company’s image through questionnaires, surveys, tests, etc.

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4. Marketing Channels • •

types of channels (in terms of length, width, depth), main types of operators within each channel share of each type of channel in the overall sales volume and value

Allview started locally in Romania, but through the years they became known in other countries as well, mostly due to their successful partnerships. Allview participated at most important meeting dedicated to modern technology, Mobile World Congress Barcelona 2013, which was held on the 25th – 28th of February 2013 and they also participated at one of the most important events dedicated to technology ”CeBIT Hannover” which took place in March of 2013. Due to the fact that Allview was invited to participate in these technology fairs, it states that they started to make a name for themselves and not just in Romania, but in Europe as well. These two fairs are recognized worldwide and the fact that Allview participated, gave them the opportunity to establish themselves as one of the rising to the top brands. They promoted themselves very well and they barely cracked the surface of their potential. In Romania the brand Allview is promoted by our mobile phone operators, ”Vodafone”, ”Orange” and ”Cosmote”. In all their stores you will be able to find Allview products, mostly mobile phones and tablets. The TV multimedia boxes and other products are distributed through Electronic stores like ”Altex”, ”Domo”, ”Germanos” etc. Allview promoted themselves very well, through the use of internet advertisements and also TV commercials. They are the leading Romanian brand on the technology market, and mostly becau...