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Small Indian cities fuel smartphone sales; global consumer spend on digi content to rise: IDC
NEW DELHI: Non-metro Indian cities, mainly those in Tier 2 and 3 (population between 20,000-100,000), have fuelled growth in smartphone sales during the festive season between August and October, according to International Data Corporation (IDC), which said total sales in such cities grew 23.3 per cent over the previous month as per Monthly City Level Smartphone tracker.
In another forecast, IDC said global consumer spending on digital devices, services and content will reach $3.4 trillion in 2020, rising 4.7 per cent annually from 2015. The global forecast is from a newly launched research program, Consumer Spending Priorities: Tech and Services, which provides a holistic view of consumer spending across all goods and services.
Meanwhile, Retail Asia, quoting IDC data relating to Indian smartphone sales, said the growth was largely due to vendors focusing on new affordable launches, higher spending on marketing and innovative payment options. IDC India senior market analyst Upasana Joshi said the key four months from July to October 2016 made up more than 40 per cent of annual smartphone sales. The festive season in India started in August with Independence Day and ran until Diwali in October.
“Multiple sales by all major e-commerce players in October with their high-decibel marketing, attractive payment options, and exchange offers also helped in growing the market. The top 8 to 10 cities of India constitute the major portion of online sales, leaving a yawning gap between these markets and the still largely untapped smaller towns,” Joshi was quoted as having said.
Joshi, who disclosed that China-based players contributed significantly to the growth at the offline retail counters while continuing to dominate the online channel, said, “These vendors collectively accounted for more than 40 per cent market share in the top 30 cities during Diwali month, primarily driven by 4G enabled handsets. Oppo and Vivo continue to shake the traditional line up of Indian vendors with their superior build quality, massive marketing investments in the offline channel.”
Global Digital Spending on Content To Rise By 2020
Coming to market research firm’s latest data on global digital spending by consumers, IDC said the share of consumer digital spending on devices will fall from 28 per cent in 2015 to only 22 per cent by 2020, but consumer spending on digital content will rise at a 12.6 per cent annual clip, according to the CSP, a twice-annual pivot table. Digital services, however, will maintain its 61 per cent share of consumer digital spending by growing 4.9 per cent annually.
According to IDC, a global provider of market intelligence, advisory services, and events for the IT, telecommunications, and consumer technology markets, while total consumer digital spending is going up, the nature of spend is changing. For example, just as consumers shift spending towards digital content, consumers worldwide are moving digital spending towards online media and away from entertainment devices.
Consumer spending on online media will grow 12.6 per cent from 2015 to 2020, while spending on digital communications devices and services will grow at a mere 1.6 per cent annual rate as consumer spending on voice services, both fixed and mobile, declines in absolute terms from 2015 to 2020.
“Clearly the value of the devices is derived primarily as conduits for the content and services that they transport and the applications that they enable,” said Jonathan Gaw, research manager for IDC’s Consumer Spending Priorities: Tech and Services program.
Much of the change in consumer spending categories is driven by regions outside of the United States, where the shift among spending categories continues but is largely complete and the share of spending by solution type is largely stable, IDC said, adding that in developing countries, however, consumer spending on digital content and services vs. devices, is still gaining, while online media spending also increases in wallet share.
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Bill Ackman’s Pershing Square makes $64 billion bid to acquire Universal Music Group
Ackman pitches NYSE relisting plan as UMG board weighs unsolicited offer
The hedge fund has proposed a business combination that values UMG at €30.40 per share, representing a hefty 78 per cent premium to its current trading price. The offer includes €9.4 billion in cash alongside stock in a newly formed entity, with shareholders set to receive €5.05 per share in cash and 0.77 shares in the new company for each UMG share they hold.
Under the proposal, UMG would merge with Pershing Square SPARC Holdings Ltd and re-emerge as a Nevada-based entity listed on the New York Stock Exchange. The move is designed to boost investor visibility and potentially secure inclusion in major indices such as the S&P 500.
Pershing Square Capital Management ceo Bill Ackman argued that while UMG’s operational performance remains strong, its market valuation has lagged due to external factors. “UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business,” Ackman said, pointing to concerns ranging from shareholder overhang to delayed US listing plans.
Ackman also flagged what he sees as untapped potential in UMG’s balance sheet and a lack of clear capital allocation strategy. He added that the market has not fully recognised the value of UMG’s €2.7 billion stake in Spotify, alongside gaps in investor communication.
The proposed transaction would also result in the cancellation of around 17 per cent of UMG’s outstanding shares, while maintaining its investment-grade balance sheet. Pershing Square has said it will fully backstop the equity financing, with debt commitments secured at signing. The deal is targeted for completion by the end of the year.
UMG, however, has struck a measured tone. The company confirmed that its board has received the non-binding proposal and will review it with advisers. It reiterated confidence in its current strategy and leadership under Lucian Grainge, signalling no immediate shift in stance.
The proposal comes at a time when global music companies are navigating evolving investor expectations, streaming economics and capital allocation pressures. For Pershing Square, the bet is clear: sharpen the financial story, relist in the US, and let the music play louder in the markets.
Whether UMG’s board is ready to change the tune remains to be seen, but the spotlight on its valuation just got a lot brighter.
