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Technology Stocks : Microsoft: The Devices and Consumer Segment
MSFT 453.55-0.3%Jul 12 4:00 PM EDT

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From: Eric L7/16/2015 3:47:35 PM
   of 154
Qualcomm/Microsoft/Windows 10 Mobile ...

Caveat: The source of the article below is DigiTimes. Sometimes they get it right but often they are in the right church but wrong pew, and sometimes no gold pans from their nuggets.

Note: Allwinner Technology is here and overview here:

>> Qualcomm, Inc. Partnering With Microsoft Corporation To Push Affordable Windows Phones

Qualcomm is planning to launch an ecosystem of entry-level smartphones next quarter

Martin Blanc
Bidness Etc
July 15, 2015

Qualcomm, Inc. (NASDAQ:QCOM) has had a disappointing year in the mobile market, with overheating issues in the high-end market and tough competition from MediaTek and Spreadtrum in the entry-level and mid-range chip segments. The ailing fortune of the chip supplier has caused inventory to stack up.

So, to prevent the sales malaise and maintain its market share, the company is planning to release a consortium of smartphones for $80 or under with Microsoft Corporation next quarter. According to Digitimes, Qualcomm has been cooperating closely with the software giant, while also aggressively pursuing a partnership with China-based Allwinner Technology to push affordable devices over the Windows Mobile 10 platform.

The move will be aimed at reinvigorating Qualcomm’s market share for entry-level handsets and tablets with phone functionality, where the latter is seen as the perfect way to widen its market base over other platforms. Qualcomm is planning to use Snapdragon 210 solution for the Windows Mobile 10 devices, which hugely benefits the chip giant since Microsoft doesn’t demand licensing fees for its operating system.

This could serve to reduce the overall price of executing a range of entry-level Windows phones, making them more price-competitive against modest Android-based smartphones. However, Qualcomm has been able to dominate the segment in the country, in light of an exponentially growing 4G LTE market in China since 2014.

The company’s premium designed solutions and effective planning reeled in various vendors from the country, subsequently giving the chip maker an upto 80% share in China’s 4G market. Allwinner on the other hand will implement Qualcomm’s 3G and 4G solutions to roll out numerous tablets with phone capabilities. Its high-end 4G processors will target Europe and the US, with a view to enter mass production by the third quarter.

The 3G solutions will target emerging markets where 4G is still catching on and consumers turn to 3G or 2G networks. Allwinner left the cellphone-tablet market after losing out on orders from MediaTek, and will take some time to rebuild the client partnerships and supply chain links to emerge as a long-term consumer electronics mainstay.

More importantly, Qualcomm will now be faced with the challenge of avoiding competition between its clients and Allwinner’s clients (which fall in the same product category), while competing against MediaTek’s surge in the space. For Qualcomm, another major problem surfaces in its bid to ease inventory, which is how well the market will react to a maverick OS like Windows Mobile.

The consumers especially are unaware of what Windows 10 will bring to the table. Despite a recently announced feature that will let users fire up Android-based apps for a limited time period, only time can tell whether Windows Mobile 10 can satiate consumer demands, and if it really is “the best thing to happen to Windows." # # #

>> Digitimes Research: Qualcomm to push inexpensive mobile device market with Microsoft and Allwinner solutions

Eric Lin
DIGITIMES Research: Taipei
14 July 2015

According to Digitimes Research's findings, Qualcomm's development in the high-end market is not stable in 2015 and facing MediaTek and Spreadtrum's fierce competition in the mid-range and entry-level segments, the chip supplier's shipment performance in China has been weakening, causing some of its application processors (APs) to see inventory buildup.

To digest the inventory and maintain its market share, Qualcomm has cooperated with Microsoft closely over the Windows Mobile 10 platform and is planning to release a solution for the fourth quarter, designed specifically for US$80 or even cheaper smartphones. Qualcomm also partnered with China-based Allwinner Technology to release a solution for the tablet with phone functionality, targeting Europe, the US and emerging markets and to enter mass production in the third quarter, Digitimes Research's findings showed.

China's 4G LTE market had surging growth in 2014. Qualcomm's solutions, thanks to their maturity and the company's well-managed roadmap, had strong demand from China vendors in the year and acquired close to 80% share in China's 4G market at the peak.

However, MediaTek and Spreadtrum's competitive 4G solutions plus the company's misoperation in the mid-range and high-end product lines have both caused Qualcomm to see declining market share since the beginning of 2015 despite the company's aggressive promotions on its advanced technologies such as carrier aggregation.

To maintain its market share, Qualcomm has aggressively cooperated with Allwinner to push Windows Mobile 10-based entry-level smartphones and tablets with phone functionality, looking to improve its shipment performance by expanding its market base via more broad partnerships over platforms.

Qualcomm is planning to use its MSM8909 entry-level solution for the Windows Mobile 10 platform and since vendors do not need to pay any licensing fees to Microsoft for using the operating system, the overall costs for the combination will be much more competitive compared to Android-based entry-level solutions and for the entry-level smartphone market that is gradually seeing less profitability, such a solution is rather attractive to vendors.

As for Qualcomm's partnership with Allwinner, Allwinner has currently decided to release several tablet with phone functionality solutions using Qualcomm's 4G/3G products. The high-end 4G solutions will target Europe and the US markets and in addition to white-box orders, the China-based player will also look to sell its solutions to telecom carriers.

The 3G solutions will target emerging markets. Since most emerging markets were still slow in establishing 4G stations, most consumers in the markets still mainly use 3G or even 2G networks. Allwinner is planning to compete against MediaTek and Spreadtrum for these markets with help from Qualcomm's products.

However, Qualcomm's strategies still have some potential risks. Windows Mobile 10 is a brand new operating system and consumers have no knowledge about it. Although the operating system features a runtime allowing it to operate Android-based apps, whether the system's interface is able to satisfy consumers' demand is still uncertain and need more time to observe.

As for Allwinner, since the China-based chip supplier had left the tablet with phone functionality market for a while after losing to MediaTek, the company will need to re-nurture its partnerships with clients and supply chain players in order to return to the market. Since Qualcomm also has some clients using its solutions for their tablet with phone functionality products, how to avoid competition between its clients and Allwinner's clients and jointly compete against MediaTek is also a major task for the two. # # #
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