Telco 2.0 News Review
Telco 2.0 Top Stories
- Nokia: Nokia: we're not making money and we don't know what's going to happen
- Technology Disruptions: Microsoft Xbox: it's your new media centre
- Apple: iCloud announcement tonight, market cap passes MSFT + Intel
- Strategy & Finance: How Groupon's founders paid themselves $900 million
- Cloud Computing: Cloudmeister Vijay Gill, architect of Google's infrastructure, quits
[Ed: New 'Roadmap to Telco 2.0' strategy report available now here.]
Now that's what we call a profit warning: Nokia lowered its outlook for Q2 profitability in the Devices & Services division, basically to zero, and announced that it wasn't going to even try to forecast what might happen for the rest of the year. Both average selling prices and volumes are down. As a result, apparently, they're "investing to bring new capabilities to our Symbian smartphones", and they also have "increased confidence" that the Windows Phone 7 devices will be along in time for Christmas.
The contradiction is unescapable. Whatever they do with Symbian now, it's already been rendered irrelevant by the coming move to WP7, but oddly enough, this seems to be independent of how convinced anyone is by WP7-Nokia's prospects. Q2 results are scheduled for the 21st of July and it's a racing certainty they'll be horrible.
Exactly what might be left is discussed here - amazingly, the first WP7 device might not even be made by Nokia but by a third party OEM, which if true suggests something approaching panic.
Bloomberg BusinessWeek has a long piece on Stephen Elop here. Oddly, he's quoted as saying that Nokia's distribution and supply chain is a major strength - if the story about the WP7 phone being outsourced is true, this looks like something is seriously wrong operationally. Interestingly, Qualcomm CEO Paul Jacobs (of all people) sounds supportive. As usual, Nokia recovery stories focus on the low-cost phone line of business, which is fair enough until you remember that smartphones account for 50% of their sales by value.
Analysts are circling, peering into the smoke like drones over the Fukushima Daiichi reactor, trying to work out if the fuel rods are exposed yet. Ex-Nokian Horace Dediu wonders if Nokia's mobile phones business might sell for less than Skype and points out that vendors that dip into the red rarely recover. Sony Ericsson, Moto, and LG are just clinging on and Nokia is about to join them.
On the other hand, Andrew Orlowski thinks things are going just great, because Microsoft has managed to get a lot of internationalisation done on WP7. OK...
One of the salient points in the BusinessWeek piece is that Elop was given a presentation on the 6th of January on the development status of MeeGo and decided to kill it there and then. At their recent developer conference, the director of the Linux Foundation described it as an "unstoppable force", or rather he actually didn't - he described Linux in general as being such.
You do wonder exactly what happened in the integration process between Nokia's Maemo Linux and Intel's Moblin to set the project back so badly. After all, before the name MeeGo ever appeared, Nokia had already shipped a couple of tablets and a top-of-the-range smartphone, the N900, running on Maemo. There are quite a few hardcore geeks who still cherish them. The Maemo developer web site was always humming with activity and a lot of contrib code got written. But one of the bits of MeeGo that doesn't work is apparently the dialler - what happened to the entirely functional one from the N900? And the alpha tablet version of MeeGo that Telco 2.0 has stashed away is, well, a hell of a lot more alpha than the N900 it's also got stashed away.
Anyway, well, you can't really discuss Nokia without discussing Microsoft these days. Is Microsoft about to kill its second major platform of the year? The recent demo of a Windows 8 tablet interface reveals that Microsoft is now looking more at locally-stored HTML5-based widgets than apps written in either its .NET or Silverlight frameworks, to the horror of the .NET developers. The point is well made that MS has historically been good at developer tools (like C# and Visual Studio) and at (yawn) developers, developers, developers in general.
Scepticism about the shiny new thing is here. Further, it is reported that when the markets closed on Friday, Apple was worth more than the combined valuations of Microsoft and Intel. Check out an impressive list of embarrassing predictions of Apple's doom. (Sold to Philips?)
On the other hand, Microsoft's official blog boasts with good reason of the success of the Xbox and Kinect, and makes the excellent point that its role is growing from being a games console to being a media-centre system that people actually buy. This makes sense - games developers and console designers have to be utterly obsessive about user experience and user interfaces, because their fundamental product is fun.
Elsewhere, HTC has announced its new developer program. There's going to be a SDK for their various fancy additions on top of Android, and something called "HTCpro" to "help you build a mobile business". HTC's latest US smartphone, meanwhile, has been approved for use in part of the 800MHz band reserved for iDEN paging - it looks like, therefore, Sprint is planning to flip its 800s over to LTE.
Texas Instruments launched the latest of its OMAP mobile system-on-a-chip products. This one is a 1.8GHz monster (half the maximum clock speed of the laptop I'm writing this on). Inevitably it's using the ARM Cortex A9 architecture.
A court has forced Samsung to show Apple prototypes of its new devices.
Hewlett-Packard CEO Leo Apotheker has said that he's open to the idea of licensing their WebOS smartphone platform to other vendors. He was talking about niche players and business products, but when asked, he didn't rule out inviting a mass market manufacturer like HTC.
RIM is still gradually gaining user numbers but losing percentage share: Asymco Horace isn't optimistic, and makes the point that Microsoft Windows Phone is still actually shrinking in absolute terms.
Verizon Wireless has announced more feature phones and cut the price of its own-brand navigation service.
Apple, on the other side of the field, is apparently integrating location/geographic functionality into its iCal calendaring/groupware app and has hired a hacker who improved the iOS notifications interface.
And, of course, later today Steve Jobs will announce whatever iCloud turns out to be.
This, meanwhile, may be the single most irritating Apple-fan story you will ever read.
Everyone is expecting "iCloud" to be some sort of streaming music/cloud backup service. It's therefore high time to have a look at the network. GigaOm has a write-up of how things are getting on with the city of Chattanooga's public gigabit fibre network.
Telstra has flipped on its first LTE base stations, but it will have to argue with an indie ISP, Vividwireless, for the bragging rights as Australia's first LTE operator. They've installed the Chinese TD-LTE flavour, while Telstra went with the original FDD version. Anyway, the late bolter (to use an Australianism) is less likely to cover all the major city centres by the end of 2011 and you try getting TD-LTE roaming.
Technical details: Telstra is using the Ericsson RBS6000 base station and is looking at another upgrade to the backhaul network. No surprise there.
In the UK, BT and EverythingEverywhere are doing a six-month joint trial of 800MHz LTE in Cornwall. You do wonder if this might mean more cooperation down the line.
Computer Weekly is very pessimistic, however, about the prospects for more broadband in the UK and wonders if the whole policy framework since LLU has been wrong. It's a controversial point of view, but well worth thinking about. The comments are also punchy - "former BT Retail Videophone marketer"? Ouch...and if you think that was harsh, check out the link.
Syria's beleaguered regime reached into the dictator's toolbox and pulled out the fibre cutter on Friday, turning off the Internet to the entire country. Later on Friday they apparently had second thoughts and turned it back on. You wonder if they were inspired by Misery, the Drupal plugin that lets you torment troublemakers on your website by injecting spurious error messages into the pages they read. Jeff Atwood discusses its uses here.
Far from Syria, Groupon is preparing its IPO, which is set (if all goes well) to value a loss-making company at $15bn. Of course, all might not go well - who now remembers the fabulous World Online and its equally fabulous CEO Nina Brink? - and surely a flop would officially call the top of the tech market.
After all, Groupon last tapped the markets in January, when it passed round the hat and raised a billion dollars from a gang of...not white-shoe, that's hardly the style...white-iPad VC firms including Andreesen Horowitz and Kleiner Perkins. To be precise, that snagged some $946 million. According to the books, the company has some $209 million net cash. What happened to the rest? Well, it looks like the urgent business need for additional capital was letting the first lot of VC funds get out with their profits. Peter Kafka at AllThingsD has the full details, including exactly how much of that money has been paid out to the founders' wives.
He also points out that something similar happened in April, 2010 when Groupon slurped down $130 million of fresh funds and instantly paid out $120 million to its own directors, their womenfolk, and a select group of early investors. That would be a total of $930 million in venture capital funding that has passed straight through Groupon without touching the sides.
If that didn't affect your animal spirits, the $10m cheese sandwich might.
That may have been somewhat depressing. Cisco has its latest, skyscraping video traffic forecasts out. As you'd expect, they're forecasting masses more heavy video pouring onto the Internet.
At the same time, the Hollywood Reporter reports on warnings that young consumers are very likely to at least consider not having a pay-TV subscription, and also that Americans in general aren't getting paid any more and the price of TV is going up. Impressively brutal quote:
While Netflix, Hulu, YouTube and the like don't offer video services comparable with pay TV, "when faced with a choice of pay TV or a third meal, will some customers choose to make do with a back catalog or off-the-run TV shows and movies?," asked Moffett. "Of course they will."
On the other hand, TV-related products are likely to be some of the first to carry a certification for "Wi-Fi Direct", or ad hoc Wi-Fi as readers are more likely to know it.
Vijay Gill, chief of all Google's networks and data centres, has left the building - he's off to Microsoft, there to replace their chief packet pusher, who has himself moved on to run Facebook's infrastructure.
COLT has sold a chunk of its London 3 containerised data centre to Phoenix IT.
In other cloud, scaling, and infrastructure news, here are two fine essays on common anti-patterns in scalability. Here's a huge collection of papers on distributed systems design. And here's a good primer on CDN caching architecture from Dan Rayburn.
Truphone, something of an old friend, has extended its local-anywhere voice service to provide local-anywhere data service for £20 a month, so long as you're using an iPad for some reason.
HP has sold its videoconferencing unit to Polycom. Phil Wolff thinks it's a good idea.
Has a Russian hacker reverse-engineered the Skype protocol?
Call-trackers Freespee have released a major new version.
Safaricom's revenues from M-PESA are up 56%. Mobile phones probably still don't give you cancer. Vodafone probably doesn't give you revolutions. Sony probably does need to improve its security as another 1 million passwords go missing.