Facebook – Dial M.

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Facebook is making the right moves to become an ecosystem.

  • Facebook’s intentions to become a fully-fledged ecosystem have come into sharper relief with the launch of its own personal digital assistant, Facebook M.
  • Facebook M will appear inside Messenger as a contact that is permanently on line and is there to fulfil requests and answer queries.
  • The main difference between Facebook M and Google Now, Siri and Cortana is that it is part artificial intelligence and part human.
  • This makes Facebook M a cross between the established digital assistants and concierge services like Taskrabbit which use humans to fulfil the requests.
  • The problem with humans is that while they can ensure that any request is fulfilled, it is an expensive service to provide.
  • Facebook’s aim is to move as much of this as possible into artificial intelligence but even with humans on board I think that it is facing an uphill battle for three reasons:
    • First: Machine learning. Facebook is a personal data and communication company and while it does employ a degree of machine learning it is not in Google’s class.
    • Consequently, it is unlikely to be able to provide better responses to queries and know what it is that the user is really after than Google Now.
    • I suspect that both Apple and Cortana will show better machine learning sitting behind them than Facebook M.
    • Second: integration. Facebook relies on the platforms of others to deliver its service and experience to users.
    • This means that it will not have the same kind of access to other apps and services that will be required to make the service best in class.
    • For example, because Microsoft and Google own many more Digital Life services, they can ensure that their assistants have better access to those services than competitors.
    • Hence, it is quite possible that without its own services (outside of social networking) that Facebook will struggle to keep up with others.
    • Third: Ease of access. Facebook M will, for now, only exist inside the messenger client.
    • This means that the user will have to unlock the device, click on Messenger, click the M user and then put in his query or request.
    • Siri, Cortana and Google Now can all be accessed simply by talking to a locked device on standby.
    • This access is again possible because the companies behind these services all have complete or significant control of the platforms upon which the service is offered.
    • Ease of access has long been known to be a key factor in how much an app or service gets used.
  • The net result is that in this current form, Facebook M still needs a lot of work, greater automation and integration into the ecosystem if it is to really take on the other three.
  • However, this is yet another sign that Facebook has grasped how important it is for its long term outlook to have a wider range of Digital Life services beyond just social networking.
  • Facebook M joins gaming (see here) as new services that break Facebook out from just being an app and usher it into the world of the ecosystem.
  • This move further distances Facebook from Twitter which is still wondering it needs to do to break free of the stagnation that now besets it.
  • I would choose Facebook over Twitter without hesitation and am even warming up to Facebook despite its lofty valuation.

Amazon – Digital Phoenix

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Amazon App store and Silk could have great value for those in need.

  • Signals coming from Silicon Valley and Seattle indicate that the brutal device market may have claimed yet another victim.
  • For the first time in its 11 year history, Lab 126 (Amazon’s hardware division) appears to shedding engineers.
  • The extent of the cutbacks is not clear but I expect that Amazon has decided to cut back on both the Kindle Fire and Fire phone product lines.
  • This makes sense because the Fire phone was an unmitigated disaster and shipments of Kindle Fire tablets are now well below 1m per quarter.
  • The Kindle Fire is a product sold at cost so that Amazon can make money on the content sold through the device.
  • However, it appears that neither volumes of the device nor sales of content through the device have been large enough to make this strategy economically viable.
  • The result was inevitable and I suspect that we have seen the last of the tablet and the phone.
  • However, I believe that the Echo will live on as this is a different proposition, sits in the home and leverages off Amazon’s world leading position as a cloud computing provider.
  • Taking this with its other home products, it looks as if the Amazon hardware is evolving towards the home but there still remains a substantial opportunity in the ecosystem.
  • The main reason for this is the Amazon app. store which in my opinion is by far the best alternative to Google Play for those that do not want to be forced to play by Google’s rules.
  • In order to have Google Play on a device, the handset maker must also provide front and centre access to all of Google’s other Digital Life services.
  • Furthermore, Google is slowly tightening the noose and I am certain that it will end up taking complete control of the software leaving the device maker doing nothing except hardware.
  • On RFM’s equivalency measure, the Amazon app store offers 74% of the experience available on iOS making it a very viable alternative to Google Play.
  • Furthermore, Amazon also has the Silk browser which is based on open source Chromium but has been optimised for mobile devices.
  • These assets combined with Amazon’s content consumption assets through Amazon Prime, make up the beginnings of an ecosystem.
  • With the retrenchment of Lab 126 into the home, most of these assets may be put out to pasture to wither and die.
  • However, there is an opportunity for anyone seeking to develop an ecosystem to make use of these assets in conjunction with Amazon.
  • Using the Amazon app store will pretty much fix one of the biggest problems of not going with Google while the other assets could be tailored to get an ecosystem up and running much more quickly than starting from scratch.
  • I have long been of the opinion that the Amazon ecosystem is one that would have a greater chance of success sitting on the devices of others (see here).
  • The likes of HTC, LG, Lenovo, Huawei, ZTE, Sony and so on all need to escape from Google’s iron grip and a tie up with Amazon to utilise these assets looks like a viable way to achieve that end.
  • Staying with Google means being a commodity with all of the value accruing to Google rather than to the device manufacturer.
  • As I result, I think that one has to ship around double the volume of the next competitor to make more than 2-4% EBIT margins, which is something that only Samsung is currently able to do.
  • There is very little hope for the Android handset makers and this is one of the few outs that they have left.
  • I would be on the first plane to Seattle.

Apple Auto – Silly season

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The car makers can still win the battle for the digital car.

  • The seasonal news vacuum has left space for speculation as to whether Apple will manufacture a car to surface once again.
  • This time it has been driven by the news that a senior engineer from Tesla has jumped ship to join Apple.
  • This follows a number of other recent hires from the automotive industry for Project Titan.
  • This has triggered speculation that Apple is working on building a car but I still believe that this makes no sense and that Apple is really only looking at producing a head unit or infotainment system.
  • There are two reasons for this.
    • First. The engineers that Apple has hired are mostly those that specialise in autonomous driving, advanced R&D and quality control.
    • These functions and AI that drives them is very likely to end up sitting in the infotainment unit rather than anywhere else in the auto.
    • Second. Apple typically makes around 40% gross margins on the hardware that it sells and to start making cars would probably have a devastating effect on its gross margins.
    • This is because the auto industry is just not that profitable and in many cases car companies make far more money on the financing surrounding a car purchase than from the vehicle itself.
    • Consequently, I think that it will prove impossible for Apple to make 40% gross margins on engines, brake pads and wheels.
  • However, making an infotainment unit comes with a big risk.
  • The next generation of infotainment going into a car will require full integration into the car’s systems so that advanced monitoring and even autonomous driving will be possible.
  • This will require the co-operation of the automakers as all of the critical interfaces are completely proprietary.
  • Without their co-operation, any infotainment unit produced by Apple will be little more than an iPad glued to a dashboard.
  • This is where the automakers have to tread very carefully.
  • They must allow users to bring the Digital Life services that they know and love on their smartphones into the car with them in an easy to fun use way but at the same time they must maintain control over the infotainment unit.
  • If they leave a hole in the dashboard to plug an Apple unit into, then they will have lost what will become one of the biggest differentiators going forward.
  • In this instance they will become more like the long suffering Android handset makers.
  • Furthermore, the automakers must also show solidarity in keeping Apple out of their systems because if one of them lets Apple in and the users love it, then the game will very likely already have been lost.
  • One only has to look at how Apple has decimated the brands of the US mobile operators for evidence of that.
  • I suspect that Apple is still quite far away from having something ready to launch but the automakers are going to have to move quickly and in an area that is way outside of their comfort zone: software.
  • It is time they study history so that its repetition can be avoided.

Digital Assistants – Intelligence community.

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Google out front but hampered with its issues.

  • Google and Microsoft are lining up with Apple for the battle of the digital personal assistants but even in its current predicament, Google has a massive advantage.
  • Microsoft has just launched a beta version of its assistant, Cortana, for Android while Google is aiming to get its new service Now on Tap (see here) onto devices as soon as it can.
  • iOS 9 will see improvements to Siri to make it more intelligent and better able to correctly respond to questions and requests.
  • The ideal digital assistant is one that can anticipate what it is that one needs and present it without being asked.
  • It should also be able to understand the context of every question that the user asks and return the right information or carry out simple tasks.
  • These ideals are very far from becoming even close to a reality but I am certain that the solution lies in advanced machine learning.
  • When it comes to machine learning, Google is far ahead of both of its competitors and this shows through clearly when all three are asked a series of questions and gauged on which provided complete answers. (see here).
  • Not surprisingly Google Now fared meaningfully better (88% complete answers) than either Siri (53%) or Cortana (40%).
  • There is far more to a great digital assistant than just answering questions, but when it comes to the other aspects of these products, machine learning is still at its heart keeping Google way out front.
  • Unfortunately, Google is struggling with a number of issues that will limit its ability to keep Google Now far ahead of its competitors unless it moves fast.
    • First. Its latest innovation Now on Tap (see here) which has the potential to meaningfully improve Google’s data collection, requires Android M to work.
    • Google’s inability to update the software on its devices means that it could be 2017 or 2018 before Android M will be mainstream (see here).
    • Second. Many of the core team who developed Google Now have left the company after their creation was folded into the core search business against their wishes.
    • Their stock options going sideways for a year also did not help.
  • These two issues are likely to delay Google’s roll out of improvements to Google Now to users, giving Cortana and Siri time to catch up.
  • Cortana on Android is another move by Microsoft to make its ecosystem operating system agnostic, aiming instead to encourage users to like and spend time with its services.
  • This is exactly the right strategy for Microsoft to become an ecosystem company but critically it must make its Digital Life services, fun, intelligent, easy to use, useful and integrated.
  • Many of them are very far from this ideal today, indicating that there is still and awful lot of work ahead.
  • Both Microsoft and Apple have a chance to catch Google while it gets its house in order but they will have to act now.
  • I still prefer Microsoft over both Google or Apple in the ecosystem as the market is expecting much less from it meaning that there is significant upside should it succeed.
  • Success in the ecosystem is already table stakes for an investment in both Google and Apple.

China Ecosystem – All is fair in love and war

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Fight over taxis shows how the Chinese ecosystem war will be fought.

  • Since the merger of Didi Dache and Kuaidi Dache, (Didi Kuaidi) the Chinese online taxi hailing market has been a two horse race.
  • Furthermore, the degree to which these services are already being used is a strong indication of how important the Chinese market is in this segment.
  • Although Didi Kuaidi now controls 78% of the market, Chinese cities account for 5 out of 10 of Uber’s busiest cities globally when considering bookings made.
  • This strongly demonstrates how important the Chinese market already is and why almost every digital company in the world wants a piece of it.
  • However, it is pretty clear that the Chinese clearly would prefer the Chinese market to consist of Chinese services provided by Chinese companies for Chinese users.
  • With around 900m smartphone users by the end of the next year, the Chinese market is easily big enough to be completely self-contained with no real foreign presence.
  • The one exception is Apple and although the Chinese are trying to replicate its success through Xiaomi or LeTV, Apple’s popularity in China is yet to take a hit.
  • The opposite is true for Digital Life services.
  • Here, Chinese companies have successfully reproduced everything that has been successful elsewhere.
  • They have also added localisation making them more appealing to the domestic users.
  • Furthermore, the decks are further stacked against foreign companies as they often depend to some degree on local companies to reach users.
  • Uber is no exception as it has been relying heavily on Tencent’s WeChat’s to offer its service to 600m users.
  • WeChat started as a chat app. but is now used to access a whole range of services including taxis.
  • Since the creation of Didi Kuaidi, Uber’s access to WeChat has been curtailed via a series of policy violations and technical glitches meaning that Uber is now effectively blocked from WeChat.
  • This means that Uber will have to reach the users directly which is why I suspect that it intends to spend $1bn in China this year.
  • This is a clear demonstration of how important the ecosystem is and how important it is to ensure that users want to spend their Digital Lives within one’s own ecosystem.
  • This is how I expect that battle for Chinese ecosystem to be played out across every sector.
  • Those that already have a large and engaged ecosystem will be in pole position to push new services to their users with a good chance that they will see rapid uptake.
  • Those without an ecosystem will have to start from scratch, meaning price cuts to draw users, heavy marketing and probably, huge losses in the early stages.
  • This is why I do not see the fragile alliance between Alibaba and Tencent in taxis spreading to other aspects of Digital Life as I suspect that this alliance was created to combat the very real threat of Uber in the Chinese market.
  • Outside of that, I see Alibaba, Tencent, Baidu, Xiaomi and potentially China Mobile as rivals all vying to entice users to spend more and more of their Digital Lives with them.
  • This means that they will attempt to include only their own Digital Life services and apps within their ecosystems shutting the rest out just as they appear to have done with Uber.
  • The Chinese market is big enough for 3 to be very successful meaning that there is likely to be failure and consolidation for those that don’t make it.
  • Xiaomi is currently in a strong position at home but I think that its lack of cash flow will mean that it will not have the resources to really take on its much more cash generative competitors.
  • Uber also has a fight on its hands but its easy access to capital will make continuing the struggle easier.

 

Xiaomi – Toys and eye candy

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MIUI 7 launch demonstrates limitations outside of China.

  • Xiaomi has launched the next version of its user experience MIUI but the lack of discussion around its ecosystem reinforces the view that it has very little outside of China.
  • New Delhi was the location of the launch which meant that all of the announcements had to be relevant to English speaking users.
  • This is why I suspect that Xiaomi’s Digital Life services and ecosystem ambitions were nowhere to be seen.
  • This is the clearest sign yet that Xiaomi’s ecosystem is only relevant in the Chinese market raising the question of how it intends to compete in the rest of the world.
  • The launch of MIUI 7 made it very clear that, for the moment, Xiaomi intends to do this by competing in the user interface as this is where the focus of the upgrade has clearly been placed.
  • There has also been a heavy focus on India as Xiaomi is very much driven by its community of which 65% of the English speaking part originates from India.
  • The main new features of MIUI 7 are:
    • A series of new themes that have been very carefully designed with matching colours and textures.
    • The ability to select simple games that can be run on the lock screen.
    • Daily lock screen. This is a collection of photos that Xiaomi has licenced exclusively and automatically appear on the lock screen each day.
    • App start time has been optimised to make it faster but the difference was so small that a slow motion camera had to be used to demonstrate the difference.
    • Battery life has been improved but in the demonstration, the capacities of the batteries in the competing devices were 5% and 10% less, rendering the test meaningless.
    • Child Mode to prevent children from deleting apps or accidently running up huge bills.
    • Showtime which is a really fun feature that allows a user to record a video and then when a contact is called, the receiver sees that video on the lock screen.
    • Specifically for non-Chinese users (India):
      • Visual IVR. This shows automated telephone system menus on the screen to allow selection of the options without having to wait for the audio prompt. 50 Indian companies signed up.
      • Data Saver. This is a function that channels all the device’s data through Opera Max resulting in up to a 50% saving on data usage.
      • Incremental improvements to SMS messaging to deal with the handling of system messages and one-time passwords.
  • Overall MIUI 7 offers incremental upgrades that both bring it into line with competitors as well as adds some frivolous innovations designed to appeal to users in emerging markets.
  • This will help with differentiation outside of China which is one of the biggest challenges that the company faces.
  • Its Chinese ecosystem has little relevance to users who are not Chinese, which is why for devices outside of China, it has been forced to use the Google ecosystem.
  • This means that Xiaomi users will be using Google’s Digital Life services resulting in users being part of Google’s ecosystem rather than Xiaomi’s.
  • The profitability of Apple and Google clearly indicates that it is the ecosystem where the money is being made these days, raising the question of how Xiaomi will manage that outside of China.
  • Consequently, I remain concerned that the UI tweaks shown in MIUI 7 will not be enough to really drive user preference when it comes to purchasing a Xiaomi device leaving Xiaomi as a commodity outside of China.
  • To justify a $45bn valuation, Xiaomi needs to be earning decent margins on its devices which is far from the case today.
  • Inside China it also has a fight on its hands as Baidu, Tencent, Alibaba and China Mobile are also all vying to be ecosystem players in a market that I think is big enough for three to be successful.
  • Xiaomi has first mover advantage, but its recent loss of momentum needs to be reversed if it is to overcome its potent opposition it in its home market.
  • I suspect it will be a very long time before Xiaomi goes public.

BlackBerry – Horrible hybrid.

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More experimentation produces no improvement. 

  • Yet another experiment that looks almost certain to fail, should begin to hammer home the reality that BlackBerry has no future in hardware.
  • This time BlackBerry has taken a regular Android device and fitted it with a slide out keyboard which is expected to launch to the four major US operators in November (see here).
  • All of the indications are that this will be a Google Android device meaning that BlackBerry will be forced to put the core Google ecosystem services in the foreground with its own services being relegated to the background.
  • In effect BlackBerry would be launching a commodity device with a hardware innovation that the smartphone buying market clearly no longer cares about.
  • The real value in BlackBerry is in its highly secured email service, its device management service (BlackBerry Enterprise Server) and its overall reputation for enterprise class security.
  • A large number of tests and hacks have shown that Android is extremely insecure meaning that in the best instance BlackBerry is putting its reputation for security at risk.
  • Furthermore, I very much doubt that this device will be anything more than an oddity as users are now very accustomed to typing on touch screens and don’t really require physical keyboards anymore.
  • I think that experiments like this and the Passport clearly indicate that BlackBerry should stop making hardware and instead focus on BES as a highly secure system for the mobilisation of enterprise data.
  • The provision of secure mobilisation is very competitive with MobileIron, AirWatch, Microsoft and Good all with offerings but it is a segment where BlackBerry is differentiated.
  • Furthermore, I still believe that it has far more installations of its server than any of the others (except Microsoft) and this is a customer base that BlackBerry should be focused on making the most of.
  • I suspect that the problem is that giving up in hardware will put a 40% dent in the revenue of the company which is likely to be poorly received even if profits go up as a result.
  • BlackBerry began life as a software company and really only started making hardware because it could not convince anyone to include its technology on their devices.
  • That need is now long gone and I think that investors would be best served by recognising that fact and focusing on exclusively on software and services.
  • Until it does, I think that good news from software will continue to be marred by bad news in hardware and that the stock will continue to underperform.
  • I would prefer Microsoft, Samsung or Google to BlackBerry.

Mobile Modularity – Rules of the road.

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A modular device is far harder than it sounds. 

  • Google is continuing to struggle with Project Ara underlining the fact that making a mobile device that is modular is much more difficult than one would think.
  • Google was planning on launching its modular device in Puerto Rico this year but that has now been placed on hold as the market pilot is being “re-routed”.
  • This may have something to do with the new move to be more cost conscious as I continue to believe that Project Ara will be another financial black hole like Google +.
  • There are several others all trying this idea such as Puzzlephone, Vsenn and Fonkraft all of whom I understand are having difficulties.
  • Fonkraft mysteriously had its Indiegogo campaign pulled as it was deemed “too risky”.
  • I suspect that this means that it Indiegogo concluded that Fonkraft had no hope of fulfilling its promises of meeting the price point of $100 while remaining solvent.
  • The reason for these problems is simple.
  • Making a modular device is extremely difficult because modularity adds a new series of requirements and constraints.
  • A modular device is a phone, tablet or other device where individual components such as the screen, camera, CPU, battery, memory can be removed by the user and replaced by others with a different specification.
  • This is a great idea in theory but getting it to work in practice has flummoxed the mobile device industry for over 10 years.
  • This is because there some fundamental limitations inherent to the design that have yet to be overcome.
  • These are:
    1. Each module requires an individual case and a connector. These take up space, making the resulting device bulkier and less sleek-looking than a normal device.
    2. Each swappable component has to remain distinct from all the others. Integrating components together is a tried and tested method of cost and size reduction meaning that a modular device has always been more expensive to make.
    3. Every swappable component has to be tested with every other in every possible configuration to ensure that they all work together properly. This means that testing and certification is much more onerous meaningfully increasing development costs.
  • In every instance to date, this has resulted in a bulky, ugly device that has a lower specification and higher price than its competition.
  • Consequently, it comes as no surprise that all of these devices to date have been failures.
  • I see nothing in Project Ara that would lead me to believe that it will be any different and I suspect that this is the real reason behind the delay / rethink.
  • I think that for a modular device to work, the end product must fulfil four rules of the road. These are:
    1. It must be the same size and weight as competing products.
    2. It must make no compromises in terms of styling,
    3. It must offer the same functionality as competing products.
    4. It must come at the same price point.
  • If all three of these can be fulfilled then there is a real chance of success as the user is being offered something new without having to make any compromises.
  • I have yet to see anything that comes close to fulfilling those four rules meaning that this segment remains wide open.
  • I suspect that it will be one of the larger players that is well financed, has a track record in hardware design and has money for marketing that eventually cracks it.

Samsung – Bones of phones.

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There’s nothing wrong with being a component company. 

  • The latest flagship devices continue to show very clearly where Samsung’s future lies and it is not in being a highflying phone maker.
  • Samsung has launched two new devices, Galaxy Note 5 and the Galaxy 6 edge+.
  • The Note 5 is the next version of the popular phablet and in that guise continues to have dedicated software geared towards productivity and an integrated stylus.
  • The Galaxy s6 edge+ is a larger version of the s6 edge with a 5.7” display compared to the original s6 edge at 5.1”.
  • This puts the s6 edge + almost exactly in line with the iPhone 6+ which has a 5.5” screen.
  • Other than that there is very little to say about these devices other than both of them are the most powerful, nicest looking Android devices in the market today.
  • Both of these devices are differentiated by the components that go into them rather than any particular function that they may be able to carry out.
  • In almost every instance, the components that provide that differentiation are in house from Samsung and are not yet available on any other device.
  • However, this is no longer enough as the real money in the mobile industry is made in the ecosystem where Apple and Google are making more than 100% of industry profits between them.
  • After a short, but sharp, battle with Google over the ecosystem (see here), Samsung has retreated meaning that it can only now differentiate itself through hardware.
  • This differentiation combined with a substantial volume advantage over its closes rival is enough to allow Samsung to earn 11-12% EBIT margins on Android phones but no more.
  • The real collapse in Samsung’s fortunes occurred in Q3 14A meaning that the tough year over year comparisons have now in the past.
  • Q3 15E will be compared to one of the worst quarters that Samsung has had for many years meaning that there should be no negative headlines.
  • Furthermore, Samsung’s components business (Device Solutions) continues to go from strength to strength and I think that this will be the engine of growth from here on.
  • Growth is going to be far lower than it has been in the past, but both expectations and the share price are also now far lower than in its heyday.
  • Consequently, the outlook for Samsung is really now about the supply of components to other manufacturers which is something that Samsung knows how to do really well.
  • There is a risk of a further collapse in handset margins but at the moment its volumes are still so much bigger than anyone else’s in Android that this is unlikely to happen any time soon.
  • Samsung is still very cheap and unloved and I think that the worst is already behind it.
  • I have been very negative on Samsung for the last 18 months, but I think that a time is approaching when it could offer value for investors once again.

Lenovo Q1 16A – White knuckle ride.

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One to watch but its scary ride right now.  

  • Lenovo reported disappointing Q1 16A results as the weak PC and aggressive smartphone competition market triggered weak sales and OPEX declines could not keep up.
  • Q1 16A revenues / EBIT were $10.76bn / $96m compared to estimates of $11.85bn / $157m.
  • Despite the revenue weakness gross margins were steady at 15.4% compared to 15.6% in Q4 15A which were also above consensus expectations of 14.8%.
  • Despite the PC market related weakness, Lenovo managed to gain share without cutting prices moving into clear leadership with 20.6% market share ahead of HP on 18.9%.
  • Lenovo also gained slightly in the tablet market to 5.6% share but struggled in smartphones where share fell to 4.4% from 5.5% in Q4 15A and 7.6% in Q1 15A.
  • This was largely due to severe competition in the Chinese market as well as an increasingly difficult environment in Brazil and Latin America where Motorola has historically been quite strong.
  • Mobile did most of the damage to EBIT as a $292m loss (-13.8%) was recorded compared to -7.7% in Q4 15A.
  • The PC business remained healthy despite the weaker revenues posting margins of 5.5%.
  • As a result, Lenovo is speeding up its reorganisation with another 3,200 positions to go, mostly at Motorola, which should be completed within the next three months.
  • This should deliver savings of $650m in H2 16E ($325m per quarter) and return the overall group to low single digit profitability and positive cash generation.
  • Once it has returned to this position it will then be better placed to consider its long term future.
  • The PC business is looking good because if it can distance itself further from the No 2 player it will increasingly be able to earn better margins as a result of its scale advantage.
  • Action is needed in mobile as Lenovo wants to become a strong number three in the market and is facing off against a resurgent Huawei which picked up 310bp of smartphone market in the last quarter alone.
  • How much Huawei had to give up in terms of margins to gain that share is not clear but I suspect that profitability in Huawei’s consumer segment has taken a heavy hit.
  • The key here is for Lenovo to make the most of Motorola.
  • It has a good brand is some markets and its products are reasonably distinctive from those offered by its peers.
  • If it can really streamline its operations and still maintain a distinctive look and feel, then it has a chance, but the market share losses need to stop now.
  • I am predisposed to like Lenovo as it has a pretty solid management team that is well versed in selling commoditised products and dealing with the ravages of competition.
  • Furthermore, I think that it has understood how the world of consumer electronics is evolving towards the ecosystem.
  • The shares are down 48% since May even though its fundamental position remains reasonably steady.
  • This is another one to watch carefully from the side-lines as at the moment it’s a white knuckle ride.