Smart moves

Jay Srage, Qualcomm’s SVP and president for MEA and South East Asia talks to Comm. about the company’s prospects in the region, and why it has been so successful in converting the mobile broadband opportunity

Srage was appointed to oversee Qualcomm’s activities in South East Asia earlier this year Pic 1 - 3. Jay Srage - President MEACA & SEA Qualcomm (853x1280)

Qualcomm as an international corporation is in rude health. It reported a one-third rise in its fiscal Q4 revenues to the end of September, and nearly the same for its operating profits as the company continues to benefit from surging smartphone sales.

Revenues rose by 33 per cent to US$6.48 billion, while operating profits rose by 29 per cent to US$1.59 billion.

R&D expenses increased 23 per cent primarily due to an increase in costs to develop CDMA-based 3G, OFDMA-based LTE and other technologies for integrated circuit and related software products and to expand the intellectual property portfolio.

MSM chip shipments were 190 million units, up 35 per cent year-on-year and 10 per cent sequentially.

Net profit was up by 18 per cent to US$1.5 billion.

For the full-year to end-September, Qualcomm reported record revenues of US$24.87 billion, up 30 per cent year-on-year.

In the Middle East, Qualcomm’s president, Jay Srage says the company is not waiting for growth in the telecom sector to happen, but rather, is stimulating it. He sees the key role being played by Qualcomm in the region as steering the ecosystem to maturity.

“I assumed responsibility for South East Asia earlier this year, and that is primarily because the Middle East and South East Asia share many of the same fundamentals when it comes to the mobile telecom sector,” Srage said. In both geographies Qualcomm is seeking openness from national governments to drive the sector forward, and from within the industry Qualcomm is helping brands to emerge and is helping them develop,” he added.

Srage cited the example of Chinese device manufacturers wanting to work outside of China, and countries within South East Asia becoming a prime geography for them to make a large impression on. Research recently circulated by the market intelligence firm, International Data Corporation (IDC), for example, noted that the smartphone sector globally grew at an impressive38.8 per cent year-on-year in the third quarter of 2013, and indicated that Chinese technology provider Huawei had moved to become the world’s third largest smartphone brand.

According to research firm Strategy Analytics, Huawei shipped 12.7 million smartphones in Q313 while IDC estimated that number at closer to 12.5 million. Either way, while Huawei continued to rely on Asia Pacific for the bulk of its shipments, strong headway into Europe, the Middle East, and Africa also added considerably to its shipment volumes.

Huawei has achieved ambitious growth of its consumer device brand over recent years, and according to Strategy Analytics the manufacturer’s global smartphone shipments grew 67 per cent year-on-year from 7.6 million in Q312.

In the Middle East, Huawei has also made significant strides over the last year by forging strategic alliances with leading telecom operators and distribution partners in the UAE, Saudi Arabia, Kuwait and Oman, underscoring the company’s drive to increasing its overall visibility in the consumer space. Par1270924

Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam are the countries from where the next wave of economic growth globally is expected to be concentrated

One key difference noted between the Middle East and South East Asia markets by Srage is that in the latter region, local mobile applications are much more relevant than they are in the former region, with locally developed handset brands such as the Philippine’s Cherry Mobile and Thailand’s I-Mobile growing successfully.

Philippine device manufacturer Cherry Mobile only launched as a mobile device brand in 2009, with a range of just four devices. In the few years since that introduction the manufacturer has gone on to make a real mark on the entry-level market and now counts more than 100 handsets, making it the leading dual SIM brand in the Philippines.

“In emerging markets and in particular in Africa, there is a US$100 price sensitivity for smartphones, a price that is the entry point to many of what are known as the ‘next eleven’ (N11)markets,” Srage said. The ‘next eleven’ markets refer to Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam; from where the next wave of economic growth globally is expected to be concentrated.

“In Africa, there is a good deal of 3G optimisation taking place, with operator groups such as Orange having just commenced that,” Srage said. “Services, however, can be fragmented on the continent and Qualcomm is trying to help with that. We have 1,000 developers signed up in Africa, and a further 350 in the Middle East.”

Srage believes his region of responsibility is going through an organic growth phase in which new services are being introduced more often, and the overall market is expanding. Qualcomm’s Snapdragon 400 mid-range chipset with LTE, for example, is assisting in this expansion as it helps reduce the cost of smartphones featuring the chipset to the US$150-200 price point.

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