Confidential Smart Phone Market Review Prepared by: NewMomentum, Inc. Q4/2011 page| 1
Mar 21, 2016
Confidential
Smart Phone Market Review
Prepared by:
NewMomentum, Inc.
Q4/2011
page| 1
Confidential
Contents
Objectives of Market Review
Methodology
Key Findings
General Market Summary
Suspect Market Summary
Conclusions
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Confidential
Objectives of Market Review
Explore global online markets for the presence of potential
illicit seller activities across 5 popular smart phone brands.
Measure the size and distribution of the problem across
brands and regions. Identify areas at significant risk of
counterfeiting and/or diversion.
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Confidential
MonitorProcess
DataMeasureResults
Methodology
SelectProducts
� 5 brands� 23 products
�Standalone phones; not phone and plan bundles offered through legitimate carriers
� 17 online marketplaces
� 1 month of monitoring
� Filter, label, and classify collected data
� Apply risk indices based on business rules to identify� Potential
suspect sellers� Potential
suspect listings
� Overall market summary
� Suspect market summary
� Breakdown by manufacturer, region, suspect classification
eBayAlibaba任何人 無處Amazon
Taobao
mercadolibre
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Confidential
Key Findings
• Internet monitoring revealed over 25K listings of the subject products
offered for sale by over 11K sellers
• Total available sales volume reported was over $33 billion (calculated as quantity
offered for sale X price in the listing)
• Potential sales volume was over $8 billion even after adjusting for “outliers” by
capping maximum quantity per listing at 100K units
• Significant discounts were offered by the 11K sellers
• 23% of the sellers offered products at a 31% to 45% discount
• 22% of the sellers offered products at a 46% to 60% discount
• Discounts varied largely by region
• APAC showed the highest level of discounting with 64% of the sellers offering
products at >30% discount
• EMEA showed the lowest level of discounting with only 24% of the sellers offering
products at >30% discount and 23% actually selling above list price
• APAC represented over 50% of the listings found
• Taobao was by far the biggest source of listings with more than 12K of the 25K
product offerings
• Over 8K sellers (76%) have significant risk indicators
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General Market Summary
Confidential
General Market Summary
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5,101
4,657
2,199
1,050 757
Number of Sellers
Brand A
Brand B
Brand C
Brand D
Brand E
Total Unique* Sellers: 11,016
* Sellers can represent multiple brands
Total Number of Listings: 25,759
12,706
6,856
3,328
1,835 1,034
Number of Listings
Brand A
Brand B
Brand C
Brand D
Brand E
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General Market Summary
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Total Reported Available
Sales Volume: $33.8 billion
$29,005,406,014
$3,601,750,173
$926,953,165
$28,284,830 $248,571,516
Reported Available Sales VolumeBrand A
Brand B
Brand C
Brand D
Brand E
$3,912,433,001
$3,301,114,161
$759,751,075
$28,284,830 $248,571,516
Adjusted* Available Sales Volume
Brand A
Brand B
Brand C
Brand D
Brand E
Total Adjusted Available
Sales Volume: $8.3 billion
* maximum quantity per listing capped
at 100K units
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Top Ten Products
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$- $500,000,000 $1,000,000,000 $1,500,000,000 $2,000,000,000 $2,500,000,000
Brand C Product 2
Brand A Product 6
Brand A Product 5
Brand C Product 1
Brand A Product 4
Brand A Product 3
Brand B Product 2
Brand A Product 2
Brand A Product 1
Brand B Product 1
$131,747,130
$160,182,552
$245,277,898
$448,453,683
$551,784,024
$766,218,837
$826,594,208
$875,741,300
$1,313,228,391
$2,474,519,953
Confidential
Region Breakdown
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0%
10%
20%
30%
40%
50%
60%
Americas APAC EMEA
31%
56%
14%
0%
10%
20%
30%
40%
50%
60%
70%
Americas APAC EMEA
18%
62%
20%
Americas 3,379
APAC 6,143
EMEA 1,494
Total 11,016
# of Sellers by Region
Americas 4,537
APAC 16,012
EMEA 5,210
Total 25,759
# of Listings by Region
Confidential
Top Ten Marketplaces Based on # of Listings
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432
432
982
1,039
1,288
1,319
1,407
1,663
4,009
12,720
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000
ALIBABA
HC360
MERCADOLIBREAR
ALIEXPRESS
MERCADOLIBREMX
MERCADOLIBREBR
PAIPAI
AMAZON
FUDZILLA
TAOBAO
Number of Listings
Confidential
Discount Levels
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Discounts offered by the 11,016 monitored sellers
1,013
sellers
1,152
sellers
1,908
sellers
2,519
sellers
2,441
sellers
1,251
sellers
732
sellers
0%
5%
10%
15%
20%
25%
Selling abovelist
Discount < 15% Discount 15% -30%
Discount 31% -45%
Discount 46%to 60%
Discount > 60% No priceavailable
9%
10%
17%
23%22%
11%
7%
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Suspect Market Summary
Confidential
Suspect Indicators
Suspect Listings: Listings Risk Index (LRI)
• Points awarded to each listing for potentially negative indicators
• Higher score equals higher probability of illicit listing
Suspect Sellers: Seller Risk Index (SRI)
• The sum of the LRI scores for all listings for a specific seller
• Higher score equals higher probability of suspect seller
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Indicator Points Awarded
Quantity Available = 1,000 to 10,000 units 5
Quantity Available >= 10,000 units 8
Product Offered at Discount > 40% 10
Listing on Known High Risk Marketplace 8
Listing Indicates Phone is “Unlocked” 5
Seller Claims to Be a Manufacturer 5
High Risk Selling Location or Port 5
Listing Indicates Product Copy or Replica 9
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-
2,000
4,000
6,000
8,000
10,000
12,000
0 - 5 6 - 10 11-15 16-20 Over 20
10,081 10,705
2,738
1,699
536
Nu
mb
er
of
Lis
tin
gs
Listing Score Range
# of Listings
Suspect Listings Summary
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Higher ranked listings are
more likely illicit
Distribution of 25,759
collected listings by
listing score
Indicator Points Awarded # of Listings # of Sellers
Quantity Available = 1,000 to 10,000 units 5 2,627 1,248
Quantity Available >= 10,000 units 8 410 221
Product Offered at Discount > 40% 10 4,318 2,885
Listing on Known High Risk Marketplace 8 12,720 5,085
Listing Indicates Phone is “Unlocked” 5 2,039 1,088
Seller Claims to Be a Manufacturer 5 297 85
High Risk Selling Location or Port 5 507 187
Listing Indicates Product Copy or Replica 9 65 29
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Higher ranked sellers pose
greater potential risk
Suspect Sellers: Seller Risk Index (SRI)
• The sum of the LRI scores for all listings for a specific seller
• Higher score equals higher probability of suspect seller
Suspect Sellers Summary
Distribution of 11,016
unique sellers by SRI
score
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 Over 100
4,741
2,455 2,591
886
167 176
Nu
mb
er
of
Sellers
SRI Score Range
# of Sellers
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0
50
100
150
200
250
300
350
400
450
500
0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 Over100
Brand A Product 2 / Sales Volume Rank #3
0
100
200
300
400
500
600
700
0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 Over100
Brand A Product 1 / Sales Volume Rank #2
Suspects by Product
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These Brand A products carry the greatest risk for illicit sales
0
100
200
300
400
500
600
700
800
0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 Over 100
Brand B Product 1 / Sales Volume Rank #1
0
200
400
600
800
1000
1200
1400
1600
0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 Over100
Brand B Product 2 / Sales Volume Rank #4
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Top 10 Suspects for Brand A
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Highest-Ranked Seller Info
Seller Detail
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Top 10 Listings
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Listing Detail
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Conclusions
• Illicit activity in the smartphone arena is very high
• Crosses regions, marketplaces, and brands
• Recommend each brand enacts a proactive program to protect their IP
• Online monitoring to provide a view into counterfeit, gray market and
reseller infraction activity
• Authentication tools to verify whether the products listed for sale are yours
• Track and trace tools to know where your product exited authorized
channels
• Continued monitoring to measure the impact of authentication solutions
and identify enforcement needs
• Recommend each brand enacts a program of ongoing investigation
and enforcement actions
• Test buys, seller company profiling, raids
• Cease and desist letters and DMCA letters to unauthorized sellers or others
infringing on your brand
• Auction site de-listings, ISP take down notices, ad de-listings
• Engagement of IP counsel for criminal and civil litigation
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Confidential
Contact Information
Pam Passaretti
CEO
(415) 710-4466
Holger Hoppe
CTO
(707) 349-5515
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