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Apple vs Amazon in TV, Softbank, Smartphone Volumes, Euro M&A: Telco 2.0 News Review

Apple vs Amazon Prime; Apple, 3rd STB maker; TiVo Q2; Ad bubble; exit Facebook Notify

Why won’t Apple let you watch Amazon Prime video on your Apple TV? Why won’t Amazon sell you an Apple TV? Well, it’s because Apple wants its full 30 per cent App Store commission on any Amazon sales on their platform, and Jeff Bezos won’t have it. This is important, as the Apple TV is creeping up on the market - Apple is now the third set-top vendor after Arris and Technicolor, selling about 10 million boxes a year.

An icon of the business, TiVo, is gradually turning itself into a software licensing company, but the transition is difficult as the margins on hardware were rather nice, something Apple knows in its bones. That said, it’s still selling well to cable operators.

Rovi, the company that’s buying TiVo, is both suing Comcast over patents it claims are violated by the X1, and also being countersued.

ETSI is opening a working group on convergence between mobile and broadcast networks.

The latest bidder for Yahoo! turns out to be….Twitter, although not so much that the CEO bothered to attend the meeting.

Here’s an interesting presentation on the state of the digital advertising market. It’s pretty bad, and very telling that VC funding is sharply down while M&A activity is up - in other words, there’s a dash for the exits. New sources of investment include telcos. Now, is that a contrarian masterstroke, or are they showing up just in time for the VC industry to unload its bad investments on them?

Facebook’s Notify app, which was meant to bring you push notifications from 70-odd major businesses, is being shut down. It therefore joins a long history of abandoned Facebook projects, as this long read on Facebook vs Google Plus points out.

Publishers are worrying that Facebook might have made a change to the news feed algorithm, as measures of reach from the feed are sharply down.

Softbank sells Alibaba stock to fund Sprint; US FBB growth, in cable; IPv6 explains it all

Does anyone else think Softbank is getting overcommitted to its Sprint deal? Here’s the latest solution to Sprint’s financing needs: sell the Alibaba stake, or at least a big chunk of it. 4.2% of China’s biggest e-commerce platform is up for grabs, valued at $7.9bn. At current rates, that would cover four years of Sprint’s losses. Softbank says they’ll use it to reduce debt, but seeing as Softbank is a major creditor of Sprint’s, reducing the combined group’s debt amounts to much the same thing. They intend to cling onto the rest of the Alibaba stake; Jack Ma will stay on the Softbank board and Masayoshi Son on the Alibaba one. But you do wonder if they might not be tempted to make a move when the next spectrum auction, horrible net-adds quarter, or heavy debt rollover comes around.

Analysts Gabelli & Co reckon they might even be tempted to sell a whole lot of Alibaba stock and buy T-Mobile, like they should have done in the first place. Alternatively, and perhaps more likely, they see potential for a mobile-cable deal, with one of Comcast or New Charter making an offer. The latter would be more palatable from a regulatory point of view. Or we could have another go-round of DISH trying to buy a mobile operator.

Speaking of DISH, the 3GPP has signed off using their 2GHz spectrum for mobile, and they’ve assigned all of it for downlink. Now they just need some devices, infrastructure, and a business model for mobile TV.

Strategy Analytics reckons there is no sign of fixed-mobile substitution in US broadband, but all the growth in fixed is coming from the cablecos, with Comcast and New Charter sharing 91% of total net-adds. US fixed broadband is now 62% cable. We’ve previously published this research note about Triple Play in the USA, and this one about gigabit cable.

For its part, T-Mobile’s latest big announcement is planned for this evening. In the run-in, they’ve announced more 700MHz rollout, talked up WiFi calling, and introduced a new pre-paid SIM only plan for tourists. (It looks like good value - 1000 minutes of US voice, open slather international texts, 2GB of data, and 200MB of free data roaming for side trips, over three weeks for $30.)

AT&T is increasingly focused on prepaid, and it’s just signed up another 3,400 shops to sell Cricket Wireless service.

And here’s an absolutely critical blog post from Akamai. Measurements taken from their CDN show that moving to IPv6 gives a latency boost of between 10 and 20%, and an even greater reduction in the long right tail of high-latency events. The effect is concentrated in wireless, on the top 10 Web sites, and is more marked among Apple users - to put it another way, it’s concentrated on the retail postpaid smartphone users and the big applications everyone cares about. Guess which US wireless operators have the most IPv6 adoption?

IPv6 1-thumb-600xauto-5025.pngIt’s also worth knowing that T-Mobile is IPv6-only, 100% IPv6, for Android users. This may well be why they did better than any other US operator on our MobiNEX metrics, and why they keep crushing it.

Smartphone sales; OEMs’ panic hunt for volume; MS getting out, opening up HoloLens OS; Intel “leader in 5G”

Both IDC and Strategy Analytics have been staring into the scrying-glass this week. And the result is: don’t count on much smartphone volume growth. IDC revised its prediction for 2016 down from 5.7% to 3.1%, SA down from 7% to 4%. Interestingly, Android is expected to gain market share while this happens., The big problem appears to be China. Also, IDC expects a drop of almost 10% in tablet shipments.

So, obviously the moment for a new entrant into the Chinese OEM market. Indian Android-maker Micromax says it’s keen to expand internationally and China is the first target. Meanwhile, Xiaomi is telling anyone who’ll listen that its plan to survive the end of hyper-growth in China is to go international. The OEM space looks crowded as hell, no?

Microsoft can’t get out of the smartphone business fast enough. It’s just sold - not licensed, outright sold - 1500 mobile-related patents to Xiaomi, which has also agreed to ship the MS Office and Skype apps on its devices. This saves Xiaomi potential bother with the courts, and of course it gets Microsoft a nice chunk of Chinese distribution. There’s no mention of a price.

It looks like the constant drum-banging for Windows 10 is working - adoption is up sharply. That said, the Edge browser isn’t doing anywhere near as well. Meanwhile, the company has decided to make the operating system for the HoloLens available for third party manufacturers and developers.

If you take one of those Cricket Wireless prepaid plans, you might well get one of these Lumia 650 phones. PhoneScoop’s review is positive but you’d surely wonder how long MS will support them.

Estimates of WLAN infrastructure shipments suggest that 802.11ac Wave 2 technology is being adopted rapidly, more like 4G than 3G. Intel does a lot of this stuff, and there is a lot of commonality with 5G, so perhaps that’s why CEO Brian Krzanich says “we are the leaders in 5G”?

After last week’s Nokia announcement of a network-in-a-rucksack, Vodafone UK and Ericsson are deploying “suitcase-sized” 4G nodes in London.

And the third regularly scheduled update to the new Vivaldi web browser is here, letting you define your own gesture commands.

ARM in the data centre; Q1 server sales; OpenSwitch; Ciena Q2; Salesforce moves into AWS EC2; EBay water cooling

ARM Holdings’ CEO, Simon Segars, thinks it is going to break through in the server/data centre market in the next two years. It has about 1 per cent at the moment, but there is feverish activity around ARM-based servers and both Google and Qualcomm are interested. Also, Alibaba is spending $1bn with NVIDIA on ARM-based machines. Making an impact on the cloud is important for ARM if the reduced smartphone forecasts are true.

That said, IDC reports a 3.6% decline in server sales for Q1, the first for two years. Hyper-scale Web companies didn’t spend as much as expected, while nobody wanted a new mainframe (!) ahead of a refresh of IBM’s system-z product line.

OpenSwitch, the open-source project to develop an operating system for data-centre switches that HPE, Intel, Broadcom, Arista Networks, VMWare and others began last year, has been accepted as an official Linux Foundation project. They may also have LinkedIn as a customer; the company is evaluating it as part of their open-source switch project.

IEEE 802 has started the next round of Ethernet standards projects. They aim to develop physical layer specs for 25, 50, 100, and 200Gbps Ethernet, and increase the range of the existing 25Gbps.

AT&T is hoping that its SDN capability will help it compete for business Ethernet customers with the cablecos. It’s also given a bit more detail about the ECOMP open-source SDN and NFV platform, and is very pleased with the way Domain 2.0 has scared the vendors.

Ciena saw growth of 30-40 per cent after it signed up 15 more telcos in Q2. It says Verizon is buying a lot of 100Gbps optical kit and the revenue from that will flow later in the year.

Salesforce has dropped $2.8bn buying e-commerce SaaS provider, Demandware. It plugs a hole in the product line, but it also means they paid 7.3x Demandware’s annual revenues. Toppy! Meanwhile, Salesforce is moving the bulk of its operations into Amazon Web Services’ cloud.

Microsoft is looking at restructuring its sales operation to move more cloud.

An interesting contrast between clouds. Facebook has, like a lot of companies, been concentrating on more and more low-end, low-power microservers and highly distributed applications. EBay, on the other hand, is using extremely power-dense racks, and cooling them with water, using a system developed by Dell.

Orange walks away from consolidation; mobile/cable still on; Vivendi buys telco, says it doesn’t want to be a telco

Gervais Pellissier, CEO of Orange Europe, says he’s given up on European consolidation after the Euregulators’ ban on 3UK/O2. He’s also keen to play down 5G and play up the other kind of fixed-mobile convergence, i.e. carrying the heavy traffic on FTTH and WiFi.

That said, perhaps there’s scope for some excitement around mobile/cable mergers? Reuters covers John Malone’s visit to Europe, and points out that he likes the idea of a Vodafone-Liberty Global deal, but doesn’t at all like the fact Vodafone would probably end up in charge and Vodafone shareholders wouldn’t accept him trying to control the combined company with a small personal stake via a funky capital structure.

Vincent Bolloré, CEO of Vivendi, has just bought a telco, Telecom Italia, appointed four of his execs to its board, and forced out the CEO. However, he says, he doesn’t want to be an operator and sees it as part of a content strategy. OK then.

The European Union’s vice-president for growth, Jyrki Katainen, says the union must speed up its procedures for standardisation, notably in 5G. The project will report back in 2019.

OFCOM has done a survey of LTE-A performance in London. Results are no surprise - EE’s doing best, O2 worst, and 3UK seems to have some sort of magic for YouTube HD streams.

The next UK spectrum auction, covering the 2.3 and 3.4GHz bands, is coming up and 3UK is worrying that BT/EE will end up with even more spectrum than it already has. As a result, they want OFCOM to do something. We cover the issue in some detail here.

Although BT is a mobile operator now, it’s keeping the BT Mobile MVNO, and it has new tariffs here.

Here’s something frankly bizarre. BT Openreach customers in Chelsea are going to see significantly worse service, as their copper line runs are about to get longer. The reason is that the Chelsea telephone exchange site is worth too much money, and BT wants to cash it in. The lines will be rerouted from the pavement chambers outside to South Kensington exchange, hence the longer copper.

Perhaps that’s why the manufacturing industry lobby thinks Openreach should be carved out of BT and even nationalised, in a “Network Rail” model.

VK loses 100 megausers of data; Ubiquiti WiFi worm; Facebook third-party ads; CableOne and FICO scoring

Russian Facebook-clone VKontakte has lost its whole user database to hackers, who are selling 100 million out of the 171 million accounts for the princely sum of one bitcoin, or $580.

An Internet worm is attacking Ubiquiti Networks’ AirOS WiFi routers, targeting a file upload vulnerability that lets it overwrite the administrator username and password. Whole wireless ISPs have been taken down. The vuln was patched last year, so anyone who has Ubiquiti kit in their network really ought to update now.

You can log into the Mitsubishi Outlander car over its own WiFi, and the WiFi key is in the owner’s manual. Having done so, you can unlock the car and disable the alarm.

Weird story: professor denies having said Facebook listens to nearby conversations, rumour goes viral anyway.

Policemen really like Google’s location history feature. If you turned it on, that is.

Facebook wants to start showing its own ads on third-party websites, so things you say on Facebook will follow you around the Web. You can turn it off here. Meanwhile, it turns out to be surprisingly easy to disguise the real target of a link in a Facebook ad, and an obvious attack vector for all sorts of mischief.

Here’s another example of why you should care about privacy. It turns out US cable operator Cable One tried to reduce its bad debt provision by classifying its customers by credit score and offering some of them deliberately awful customer service. Harold Feld points out that although this is just about legal, the proposed FCC Broadband Privacy rules would ban it. Even though Cable One doesn’t disclose the information to anyone else (that we know of), it’s still discriminatory (and creepy).

Tor developer, and key Snowden supporter, Jacob “ioerror” Applebaum, faces grave allegations of sexual harassment.

It turns out British parliamentarians’ e-mail is routinely read by GCHQ, in violation of the so-called Wilson doctrine.

And Huawei’s Chief Privacy Officer (we didn’t know either) is worried about the Internet of Things.

Nest CEO out; cellular IoT forecasts down to 1.5bn; new French LPWAN operator

Nest Labs CEO and founder, Tony Fadell, is leaving, two years after the Google acquisition. He is replaced by Marwan Fawaz, former CTO of Charter and EVP of Home at Motorola Mobility. Meanwhile, the smart hubs made by Revolvr, a company they acquired in 2014, are going to be deliberately shut off and the users aren’t happy.

Ericsson’s Mobility Report is out, and the mourning continues for the vision of 50bn connected devices by 2020. They’re now only forecasting 1.5bn cellular connected devices, and 14.5bn on LPWANs, WiFi, and the like. Strategy Analytics, meanwhile, which seems to have been clearing the publishing queue this week, says it expects the IoT to reach 11% of the total world IT spend by 2025, for a market size of $550bn (implying world IT spend of $3.5tn).

LoRa platform Actility has a new CEO, while Sigfox is deploying in its 19th country, Finland.

Qowisio is a French IoT network operator that covers devices for €0.10/mo, compared to typical numbers closer to €3/mo for cellular options. The technical solution is a choice of LoRa or a different ultra-narrowband radio. They claim to have built 29 private IoT networks with 100,000 sensors.

French regulators are holding a consultation on opening up new low-band spectrum for LPWAN applications. At this rate they might need it!

China Mobile and China Unicom are both doing large-scale trials of NB-IoT, apparently using the GSM/PCS bands.

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