ADI INDRAYANTO FGD SCIENCE & TECHNOLOGY FORECASTING LP4 ITB INDONESIA ICT & ELECTRONICS INDUSTRY INDONESIA ICT MARKET OVERVIEW INDONESIA VS ASEAN COUNTRIES • Indonesia becomes the largest spender on IT in South East Asia ranked 19th globally, growth 15% CAGR to 2014 (Source: IDC) • IT spending $10.9 billion USD in 2011, • raise 18.3% to $12.9 billion USD for 2012, • and may reach $17.8 billion USD by 2016, • mostly on Hardware (80%) (Source: Global Business Guide Indonesia – 2013) ASEAN ICT SPENDING IN 2015 (SOURCE: IDC) ICT COMPETITIVENESS (SOURCE: THE GLOBAL COMPETITIVENESS REPORT 2012-2013, WORLD ECONOMIC FORUM) GLOBAL COMPETITIVE INDEX (SOURCE: THE GLOBAL COMPETITIVENESS REPORT 2012-2013, WORLD ECONOMIC FORUM) GLOBAL COMPETITIVE INDEX (SOURCE: THE GLOBAL COMPETITIVENESS REPORT 2012-2013, WORLD ECONOMIC FORUM) BROADBAND QUALITY (SOURCE: ITU 2012) INTERNET MARKET • Indonesia the 5th largest Internet market in Asia after China, Japan, India, and South Korea. • Internet users has grown from 2 million (2000) to more than 31 million (2010), and reach 55 million (2012). • Forecast in 2015 will be 125 million (baseline) or 150 million (optimistic), growth rate more than 30% in the next 5 years. (source: redwing-asia) INTERNET USERS BY 2015 (SOURCE: REDWING-ASIA) INTERNET USERS AGE GROUP • It is an emerging market, has younger audiences. • By 2011, 73% internet users are between 15 – 34 age groups, where 36% is women. It is only about 13% of total population. (source: comScore) • However, after 2011 the 25-50 age group has grown over the past two years. (source: redwing-asia) • The user base is relatively spread evenly across all age groups. • Potential growth is still very high. USERS DEMOGRAPHIC (SOURCE: NATIONAL STATISTICS AGENCY) More than 30 years span of demographic bonus MOBILE INTERNET • Mobile (wireless) infrastructure is more developed compare to fixed (wired) infrastructure, cover 90% of Indonesian’s population. • In 2010, there are more than 200 million mobile cellular subscriptions, and 15 million of them with broadband access. • 63% internet users have adopted mobile internet. • The highest level of mobile phone ownership is in 8 – 24 years old, with 80% penetration. • Indonesia among the highest ranks in the world for mobile browsing intensity (633 pages per month/person). (Source: Market Alert No. 2/2011 by MATRADE Jakarta) MOBILE USERS STATISTIC (SOURCE: MASTEL ICT OUTLOOK 2012) PRIMARY REASONS • Three primary reasons why mobile internet market is big in Indonesia: 1. Price Mobile (wireless) has many cheaper internet packages compare to wired broadband internet (mostly on corporate market). 2. Infrastructure Mobile infrastructure is more developed for last miles internet access, cover about 90% of populations, suitable for achipelago country with huge amount of islands (17.508 islands, only 6000 inhabited). Wired broadband is more concentrated in urban areas. Mobile penetration (9%) is higher than wired broadband internet (3%) (Source: AT Kearney & GSMA 2011) MOBILE PENETRATION (SOURCE: AT KEARNEY & GSMA 2011) MOBILE OPERATORS (SOURCE: TELKOM 2010) MOBILE FREQUENCY BANDS (SOURCE: DITJEND SDPPI KEMKOMINFO) PRIMARY REASONS • ... Three primary reasons ... : 3. Culture Indonesian spend about 17.2 online hours/month. Internet usages (% of internet users): 42% email; 39% reading newspapers; 29% searching information of products and services; 27% reading magazines; 23% chatting; 50% do online shopping, only1% spending their online time for shopping; 35 million has account in Facebook (2nd largest Facebook users in the world); 3rd highest number of tweets in the world. (Source: Market Alert No. 2/2011 by MATRADE Jakarta) INDONESIA MOBILE PHONES MARKET TRENDS CURRENT MARKET CONDITION • The Middle-lower Segment, in Second and Third tier cities, has long been the Biggest Market for Feature Phones, especially Local Brands • Feature Phones sold More Units, around 84 Percent of the Market • Local Brands, Cross and Mito, are the Top Five Mobile Phone Brands alongside Nokia, Samsung and Research in Motion (RIM) – (Source: IDC) • Most Local Brands were Manufactured in China LOCAL BRAND CROSS CASE • CROSS was Founded in 2008 • In Year 2012 Sales Grew Two-fold, in Runner-up Position after Nokia (the Third is Samsung, the Fourth is MITO, and the Fifth is Blackberry) • The Biggest Market is in Java (Jawa Island) with 55 Percent of Sales • Offered at least 45 Models of Featured Phones • Introduce 5 New Models every Month (Indonesians change their phones every 9 months on average) • Introduce 7 Android Smartphones with Price Less than $155 INDONESIAN CONSUMERS • 61 Percent of the Population is Middle Class (Source: BI) • 90 Million People will enter the Consumer Class, with an Annual Net Income of US$3,600 by 2030 (Source: McKinsey) • Population: 240 million, 55% under 30 years old • 96% of Indonesians Use Social Media • 12% of Global Tweets from Indonesia (Indonesia the 4th Largest Twitter Country in the World) • 87% Twitter Messages are sent via Mobile Phones • Indonesia is also the 4th Largest Facebook Country MARKET FACTS • • • • Connected mobile devices: 280 million 3G subscriptions: 30 milion Mobile phone ownership: 80% Smartphone Penetration: 24% • PC or Laptop Owners: 5% • Some of the Cheapest Mobile Tariffs in the World • 50% Mobile Sold Below $50, 85% Mobile Sold Below $100, 3% Mobile Sold Above $250 (Source: IDC) • Average Price of Mobile Sold: $90 • Market Circulation 3.5 million units phones per months (100 local brands) MARKET FACTS IMPORT HANDPHONE KONTRIBUSI DEFISIT NERACA PERDAGANGAN INDONESIA • Nilai Import Handphone Rp 29 Trilyun • 31% dari Total Defisit Neraca Perdagangan Indonesia Sebesar US$ 8 Milyar • 2013, Import HP Sebesar 15 Ton Unit (Source: Majalah ICT) MODEL EKOSISTEM INDUSTRI TIK INDUSTRI PERANGKAT, OPERATOR, HINGGA KONTEN STRUKTUR INDUSTRI TIK (SOURCE: MP3EI) Layer 0 • Content Industry • (digital publishing, e-comerce, animation, etc) Layer 1 • Software & Telematic Applications • (e-Gov, e-Health, e-Education, etc) Layer 2 • Internet Service Provider Layer 3 • Network (Infrastructure) Provider Layer 4 • Integration, Installation & Maintenance Layer 5 • ICT Devices Manufactures (OEM, ODM) Layer 6 • ICT Components Industry Layer 7 • Component Materials Industry INDUSTRI NETWORK & SERVICE PROVIDER (SOURCE: MP3EI) Layer 0 • Content Industry • (digital publishing, e-comerce, animation, etc) Layer 1 • Software & Telematic Applications • (e-Gov, e-Health, e-Education, etc) Layer 2 • Internet Service Provider Layer 3 • Network (Infrastructure) Provider Layer 4 • Integration, Installation & Maintenance Layer 5 • ICT Devices Manufactures (OEM, ODM) Layer 6 • ICT Components Industries Layer 7 • Component Materials Industries INDUSTRI SOFTWARE, APLIKASI & KONTEN (SOURCE: MP3EI) Layer 0 • Content Industry • (digital publishing, e-comerce, animation, etc) Layer 1 • Software & Telematic Applications • (e-Gov, e-Health, e-Education, etc) Layer 2 • Internet Service Provider Layer 3 • Network (Infrastructure) Provider Layer 4 • Integration, Installation & Maintenance Layer 5 • ICT Devices Manufactures (OEM, ODM) Layer 6 • ICT Components Industry Layer 7 • Component Materials Industry INDUSTRI PERANGKAT TELEMATIKA (SOURCE: MP3EI) Layer 0 • Content Industry • (digital publishing, e-comerce, animation, etc) Layer 1 • Software & Telematic Applications • (e-Gov, e-Health, e-Education, etc) Layer 2 • Internet Service Provider Layer 3 • Network (Infrastructure) Provider Layer 4 • Integration, Installation & Maintenance Layer 5 • ICT Devices Manufactures (OEM, ODM) Layer 6 • ICT Components Industry Layer 7 • Component Materials Industry VALUE CHAIN INDUSTRI ELEKTRONIKA EFEK DARI MODULARITY PRODUK VALUE CHAIN INDUSTRI PERANGKAT TIK (SOURCE: PUSAT MIKROELEKTRONIKA ITB) VALUE CHAIN INDUSTRI KOMPONEN (SOURCE: PUSAT MIKROELEKTRONIKA ITB) INDUSTRI KOMPONEN ENTRY BARRIER (SOURCE: PUSAT MIKROELEKTRONIKA ITB) VALUE CHAIN ODM/OEM (SOURCE: PUSAT MIKROELEKTRONIKA ITB) ODM/OEM ENTRY BARRIER (SOURCE: PUSAT MIKROELEKTRONIKA ITB) VALUE CHAIN MANUFAKTUR ELEKTRONIKA (SOURCE: PUSAT MIKROELEKTRONIKA ITB) MANUFAKTUR ENTRY BARRIER (SOURCE: PUSAT MIKROELEKTRONIKA ITB) PEMETAAN SDM - INDUSTRI TIK (SOURCE: MP3EI) PEMETAAN SDM - INDUSTRI TIK (SOURCE: MP3EI) VALUE CHAIN MODULARITY (SOURCE: GANGNES, ASSCHE, 2011) Horizontally Specialized Vertically Integrated VALUE CHAIN MODULARITY (SOURCE: PUSAT MIKROELEKTRONIKA ITB) VALUE CHAIN MODULARITY (SOURCE: PUSAT MIKROELEKTRONIKA ITB) CONTOH LEAD FIRMS (SOURCE: STURGEON & KAWAKAMI, 2010) No Segmen Pasar Jenis Produk Lead Firms 1 Komputer PC (dekstop, notebook, netbook), embedded computers IBM, Fujitsu, Siemens, HP, Dell, Apple, Acer, Lenovo 2 Peripheral Komputer Printer, Fax, Scanner, Mesin Photocopy HP, Xerox, Epson, Kodak, Cannon, Lexmark, Acer, Fujitsu, Sharp 3 Consumer electronics TV, Home HiFi, portable audio&video, game consoles, toys, musical equip., mobile phone handset Philips, Toshiba, Sony, Sharp, Apple, Nintendo, Microsoft, Samsung, LG, NEC, Matsushita, Hitachi, HTC, Politron 4 Networking Public & private communication network, internet, mobile phone infrastructure Alcatel, Nortel, Cisco, Motorola, Juniper, Huawei, Ericsson, Nokia CONTOH CONTRACT MANUFACTURER (SOURCE: STURGEON & KAWAKAMI, 2010) No Negara Jenis Service Contract Manufacturer 1 Taiwan, China EMS Foxconn (Hon Hai) 2 Taiwan, China ODM Quanta Computer 3 Taiwan, China ODM Compal Electronics 4 Canada EMS Celestica 5 US & Singapore EMS Flextronics 6 Japan EMS SIIX 7 Luxembourg EMS Elcoteq 8 Germany EMS Zollner Elektronik 9 Singapore EMS Beyonics 10 Singapore EMS Venture 11 Indonesia EMS SatNusa CONTOH PLATFORM LEADER (SOURCE: STURGEON & KAWAKAMI, 2010) No Segmen Pasar Jenis Produk Firms 1 Komputer Chipset PC dekstop, notebook, netbook INTEL 2 Komputer, Consumer Electronics PC desktop, tablet, portable audio & video, mobile phone handset APPLE 3 Audio & Video Chipset CD, DVD, DVR, HDTV MediaTEK NILAI TAMBAH DALAM VALUE CHAIN (SOURCE: MUDAMBI, 2008) Figure 5: The Smile of Value Creation Contract Manufacturer Platform Leader Lead Firms ADDED-VALUE PADA VALUE CHAIN INDUSTRI ELEKTRONIKA FENOMENA SHAN ZHAI – PELAJARAN DARI CHINA VALUE CHAIN MOBILE PHONES (SOURCE: DTI, 2012) GLOBAL MOBILE PHONE INDUSTRY VALUE 2010 (SOURCE: DTI, 2012) CONTOH BOM PHONES BB CURVE 8300 (SOURCE: DEDRICK, KRAEMER, LINDEN, 2010) Table A-3. Key Inputs in the RIM Curve 8300 Component Most Likely Supplier Company HQ Location Estimated Factory Price Price as % of total factory cost Gross Margin Est’d Value Capture Operating Margin Display Display Module Unknown Asia $11.68 11% 16% $1.87 0% Processors Baseband Chip Marvell Texas Instruments US $14.60 13% 48% $7.01 -4% US $1.88 2% 53% $1.00 25% Intel US $9.25 9% 52% $4.81 24% Processors Storage and memory Camera PCB Cellular Cellular Audio processor Flash and SDRAM multi-chip package Camera module STMicro Europe $8.50 8% 35% $2.98 -5% Main PCB AT&S Europe $5.17 5% 18% $0.93 9% RF Transceiver Freescale US $2.35 2% 33% $0.78 <0 Power Amplifier Freescale Bluetooth chip CSR Battery Battery Pack Unknown Keypad Keypad assembly Trackball mechanism Unknown Unknown EDGE royalties Various Bluetooth Trackball License US $1.75 2% 33% $0.58 <0 Europe $1.90 2% 47% $0.89 18% Japan (cell) $4.24 4% 16% $0.68 1% $1.71 2% 33% $0.56 $0.42 0% 33% $0.14 Various Sub-Total $5.00 $68.45 5% 63% 33% $1.65 Other parts $31.85 29% 33% $10.51 Estimated assembly and test $7.95 7% 5.0% $0.40 Estimated factory cost $108.25 100% Source: iSuppli (2007) and authors’ calculations. Note: Blank “Operating Margin” means the actual company was not known (gross margin is industry average) $34.77 0% PERBANDINGAN BOM 3 MEREK MOBILE PHONES (SOURCE: DEDRICK, KRAEMER, LINDEN, 2010) Table 1. Comparison of Inputs as Percentage of Factory Cost: Three Phones Motorola V3 "RAZR" Treo 650 CDMA RIM Curve 8300 2004 2004 2007 Display Processors Storage Memory Assembly Camera Cellular and Bluetooth chips 30% 10% 9% 2% 4% 5% 23% 16% 3% 5% 6% 3% 11% 13% 6% 4% 4% Cellular license 4% incl.in chip cost 5% Battery 3% 5% 4% PCBs 5% 5% 5% Enclosure 2% 2% 5% Keypad 6% 1% 2% 5% Not Applicable Year of introduction Software Not Applicable 9% 7% 8% Subtotal for key components 86% 82% 72% Hundreds of other components 14% 18% 28% 100% 100% 100% 640 1,040 585 TOTAL Total Parts S) providers. With a cluster of Shanzhai manufacturing players, a new product can be launched to et within 2 months, compared to 6-12 months of R & D requirement for international brands. Not on SHANZHAI MOBILE PHONE VALUE CHAIN omponent suppliers contribute specifically on the vertical dimension, but also those companies with R (SOURCE: DIGITIMES, 2009) ions are all linked together on a horizontal idimension as Fg ure 1 illustrates. Figure 1. Value chain of Shanzhai mobile phone Low overhead operation is also a key element. Normally, a mobile phone company invests in R&D, design, promotion, and channel expenses and this total cost is added onto the price of a mobile phone. I n general, the scale of a Shanzhai mobile phone company is around 20 employees and can be done with as few as 3 people. One is responsible for sourcing the solution and components, the second one works with outsourced factories, while the third person cooperates with channels on rebates. These are the main cost advantages of Shanzhai (SOURCE: DIGITIMES, 2009) mobile phone companies. BIAYA SHANZHAI VS MEREK INTERNASIONAL Table 2. Cost comparison of Shanzhai and international r ba nd mobile phones Item Shanzhai International Brand BOM Cost $37 $52 Logistic & Assembly $7 $9 Subtotal $44 $61 Markup from OEM $7 $21 FOB Price $51 $82 Gross Margin of OEM 14% 26% VAT $0 $21 Markup from Channel $47 $20 Retail Price $98 $123 Management Research Gross Margin of Channel 48% Australian Journal of Business and 16% Source: Digitimes (2009) Difference $15 $2 $17 $14 $31 12% $21 $27 $25 Vol.1 No.3 | June-2011 32% Market 3 RESEARCH METHODOLOGY 5 4 3.1 The Business Model Approach 3 Competitive strategy business model andValue proposition The research applies the framework of Chesbrough and Rosenbloom’s takes Beijing Tianyu 2 Nokia Communication Equipment Co. Ltd. (Tianyu) as the subject of the case study 1since Tianyu is given the title of Samsung ‘The King of Shanzhai’ in the industry and has the top market share 0among domestic mobile phone Tianyu manufacturers in mainland China. The study further compares Tianyu with Nokia, which has the highest Value networkmarket leader. By comparing Value chain handset market coverage globally and Samsung which is the second the business models of these 3 companies, we intend to find out how value is created and how they capture it. Cost and profit This research focuses on studying a firm’s business model and looks into value creation and the capture process. graph for three business models Further questions can query about what the definition and elementsFigure of 2.a A radar business model are, as well as STRATEGI PENINGKATAN NILAI TAMBAH BERGERAK DARI NILAI TAMBAH RENDAH KE NILAI TAMBAH TINGGI Using Portelligent teardown reports (Portelligent 2006, 2005b) , we compared the key parts in one model of Apple’s iPod (30GB Video iPod from 2005) and a Hewlett -Packard notebook computer (nc6230, also from 2005). Table 1 shows how the two systems compare in terms of theirCONTOH key inputs as a percentage of factory cost (the total of t he KOMPONEN inputs). PERSENTASI BIAYA 30 GB (SOURCE: DEDRICK, KRAEMER, LINDEN, 2008) IPOD Table 1. Comparison of Inputs as Percentage of Factory Cost: 30GB V ideo iPod and HP nc6230 notebook Software Video iPod Not Applicable HP nc6230 12% Storage 51% 13% Display 16% 16% Processors 9% 27% Assembly 5% 3% Battery 2% 5% Memory 4% 4% PCBs 2% 3% Enclosure 2% 1% Input Device(s)9 Subtotal for key components Hundreds of other components 1% 90% 10% 2% 86% 14% Table 2. Derivation of Apple’s Gross Margin on 30G Retail Price Distributor Discount (10%) Retailer Discount (15%) Sub-Total (estimated wholesale price) Factory Cost Remaining Balance (estimated Apple gross profit) Apple Gross Margin ($80/$224) Source: Authors’ calculations; see text. $299 ($30) ($45) $224 ($144) $80 36% Apple’s estimated gross profit on these units would be $ 36 percent of the $224 estimated wholesale price. As a corporate gross margin for all products in the year endin Apple’s corporate number reflects various iPod -related not included in our analysis, and also reflects margins fo TOTAL 100% 100% Total Parts 451 2,196 Note: iPod software was developed in-house by Apple so there is no software license fee in the bill of materials. Figure 4. Value capture in Video iPod and HP notebook as percent of wholesale price CONTOH MARGIN NILAI TAMBAH DEDRICK, KRAEMER, LINDEN, 2008) HP nc6230 notebook Video iPod(SOURCE: 30G e 4. Value capture in Video iPod and HP notebook as percent of wholesale price Video iPod 30G HP nc6230 notebook HP NC6230 Notebook Notes: Margins byIpod country refer to gross margins associated with inputs produced by firms headquartered in that Video 30 GB country (regardless of where the inputs were manufactured). COGS is cost of goods sold, including purchased inputs and direct labor. BERKEMBANG MELINGKUPI VALUE CHAIN LAIN (SOURCE: PUSAT MIKROELEKTRONIKA ITB) TEACHING FACTORY INTERAKSI DUNIA AKADEMIK & INDUSTRI Industri Komponen Perguruan Tinggi & Politeknik ODM Industri Komponen ODM/OEM TECHNO Industri PARK Perangkat Teaching Factory Electronics Manufacturing Service (EMS) PEMETAAN SDM - INDUSTRI TIK (SOURCE: MP3EI) NILAI TAMBAH DALAM VALUE CHAIN (SOURCE: MUDAMBI, 2008) Figure 5: The Smile of Value Creation Contract Manufacturer Platform Leader Lead Firms Pera n ITB KORIDOR EKONOMI – INDUSTRI TIK (SOURCE: PUSAT MIKROELEKTRONIKA ITB) INTERNATIONAL HUB – INDUSTRI TIK (SOURCE: PUSAT MIKROELEKTRONIKA ITB) KESIMPULAN & USULAN • Industri Elektronika Dunia Saat Ini Value Chain nya Terfragmentasi • Trend Pergerakan Industri Elektronika Dunia, untuk beberapa Value Chain nya, Bergerak ke Negara Berkembang Low Labours, Emerging Markets • Industri Elektronika Indonesia Tidak Bisa Lepas dari Value Chain Industri Elektronika Dunia • Industri Dalam Negeri (IDN) Indonesia masih Terisolasi dari Value Chain Industri Elektronika Dunia KESIMPULAN & USULAN • Pemerintah Indonesia Belum Memiliki Strategi untuk Mengembangkan Industri Elektronika • ITB WAJIB Membantu Pemerintah untuk Menyusun Strategi Pengembangan Industri Elektronika • ITB Sebaiknya bukan Hanya Kontribusi pada Pembentukan SDM dan Penguasan Sains & Teknologi saja Tetapi Juga perlu Kontribusi pada Penyusunan Kebijakan Industri Elektronika dan Pembentukan Value Chain Industri Elektronika di Indonesia KESIMPULAN & USULAN • Fokus Teknik Elektronika Umumnya Masih Pada Pengembangan SDM dari Sisi “Hardcore” Engineering (Tukang), Siapa Yang Memikirkan Industri Elektronika dan Kebijakan Industri Bidang Elektronika di Indonesia? • Kerjasama Multi-Disiplin di ITB Perlu DIPERKUAT • Ada Program Studi Multi-Disiplin yang Fokus pada Industri Elektronika dan Kebijakan Industri Elektronika THANK YOU PUSAT MIKROELEKTRONIKA ITB JL. 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