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Ring! Ring! Hot News, 28th January 2008

A very selective tech downturn: as the stock market tanked, Nokia reached its world-domination target of 40% total market share. They celebrated with a recreational acquisition, buying Norwegian mobile-Linux specialists Trolltech. This brings not only their Linux technology, but also their cross-platform development environment Qt on board; this is presumably a means of hedging against Google Android et al. The mobile development race continues.

Meanwhile, a closer look at the figures for handset market share suggests one thing. It’s not just that Nokia is doing well; Motorola is doing catastrophically.

From the end of 2006 to the end of 2007, they lost an enormous 10 percentage points of market share, which means that Samsung have now overtaken into second place. That’s a distant second, though; 14 per cent versus 40. Not surprisingly, the Q4 numbers were dire; revenues down 33 per cent and a $1.2bn loss for the devices business. The company was marginally in profit overall, but how long can they tolerate the handset side sucking the blood out of the enterprise, digital home, and networks operations — which actually had a reasonable quarter? Software has been Moto’s achilles heel, so time for a “back to basics”: pick an OS (not seven), write a better UI, and get it integrated with the PC and Web 2.0 online applications. Please.

Meanwhile, things at Palm aren’t great either; but then, it’s a long time since they were even tolerably average. The troubled PDA firm just shuttered its retail operation and axed 1200 staff in order to “concentrate on delivering its next-generation product”; why don’t they just open-source the old PalmOS?

Last week’s awful results at Sprint-Nextel resulted in a management bloodbath, with three C-level execs getting their cards. At the same time, AT&T announced impressive figures; net income was 51 cents a share on revenues that were almost double last year’s (although part of this is because the 2006 figures didn’t yet consolidate BellSouth). Sounds great — until you realise that if your profits increased by a little less than double when your revenues doubled, your margins actually fell. There is nowhere left to hide…

AT&T reckons it sold 2 million iPhones. Steve Jobs reckons he sold 4 million of the things; so where are they hiding? A rough guess is that O2 and Orange have got rid of maybe 600,000 in Europe; so that leaves quite a lot of ghosts. However, is it really that implausible that about a third of the first gadgets to be marketed direct-to-consumer in a PC-like model were sold to people who wanted the gadgets, not the service? Oh, and in completely unrelated news, a ‘jailbreak’ for the latest iPhone firmware is now out.

The chipset industry bathes in prosperity whilst the markets burn. Both Qualcomm and Texas Instruments saw roaring sales. In fact, what with good results from Apple and IBM the week before last, you might even be forgiven for thinking there wasn’t much wrong with the tech sector at all. Somebody must be buying all this stuff, right? Even a European ISP thinks it might make a profit this year; although we’ll believe that when we see it.

Speaking of ISPs and their business model, Time Warner, as widely reported, is experimenting with going back to metered access. Brough Turner has a modest proposal for an alternative so P2P applications can play nicely with your network: come up with a standard to make it easy for applications to find locally stored content and fetch it at an appropriate time. This exactly fits our view that telcos are in the logistics business for data.

Meanwhile, the 700MHz auction finishes the week on $3.7bn; does anyone else feel mixed horror and wonder that it’s so cheap?

Vodafone’s drive to buy growth in emerging markets may be on again; it looks like they may have an opportunity to take full control of Vodacom in South Africa as a side-deal to Oger’s offer for Telkom SA.

But don’t get your hopes up, if you’re a telco; the platform is being built, and not by you. Amazon last week announced a significant new plank in its emerging platform, DevPay, a payments and customer management API for businesses built on Amazon Web Services. Let’s round it up; you can now get sales and order fulfilment, call-handling through Mechanical Turk, database capacity, processing power, and payments from them as services. We’re not seeing anyone even getting close to this in the telcosphere; watch out for our upcoming platforms report. Similarly, but far less significantly, Facebook is offering a JavaScript library for Facebook applications outside Facebook, if you see what we mean; it’s a useful step, and one that leads away from “social networks are where your data goes to die”. In telcoland it’s coverage that wins, in webland it’s the reach of your relationship — and in both cases, the one with the best service distribution wins by default.

But it’s no DevPay. Neither is more bigger YouTube now. Remember — in Telco 2.0 the dosh in locked up in the enterprise market.

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Comments

Nice roundup. Still wondering how the Trolltech acquisition affects the Symbian platform. Will Nokia finally ditch it?

Maybe this is why we're not seeing any other Series-80 devices after the E90? And that didn't go too well either.

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