BlackBerry, NSN, Free, PRISM, Skype, AltaVista: Telco 2.0 News Review
- Smartphone Roundup: BlackBerry Q1s; are we facing an inventory crisis?
- Broadband Connectivity: Nokia buys Siemens out of NSN; Free femtocells are free; Google's new protocol
- Personal Data: Not-mysterious German company helps spooks; AWS denies PRISM very strongly; Dr. Fang retires
- Voice 2.0: Skype: we did it for scalability
- Cloud Computing: Oracle & Salesforce together in the cloud
- Valley Roundup: AltaVista is no more; RIP James Martin and Evi Nemeth
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BlackBerry Q1s; are we facing an inventory crisis?
BlackBerry's Q1s are out, the first results with the BB10 devices. Device shipments and revenues were both up, but the company made a small loss. Although shipments were up by 800,000 units, this was less than consensus estimates. (Interestingly, the estimates were based on the expectation that BB would push more stock into the channel, so the analysts were apparently disappointed that they hadn't exaggerated the figures as much as they hoped.)
The proportion of its sales that were accounted for by hardware, rather than BlackBerry services or software licences, was up sharply - even though Thorsten Heins was keen to talk up the enterprise, software-heavy side of the business.
In the light of that chart, you might not be surprised that the Playbook won't now be getting BB10.
In Europe, Android is surging ahead. Android devices got 70% of smartphone sales in the top 5 European markets during Q2. Interestingly, BlackBerry, which did well in Europe for years, and to a lesser extent Samsung are losing out to Sony's Xperia line. There's more at Businessweek, which points out that in general, Apple iDevices don't sell anywhere near as well outside the US as they do at home. Ironically, one of the reasons is that European carriers aren't as willing to subsidise them as North American ones...how times change.
That said, Samsung can always shift its weight onto its other foot as chip maker and key supplier to Apple. Although Apple has signed a contract to get some chips from Taiwan Semiconductor, they don't deliver until 2014 and it's taken almost three years to get as far as signing, as Apple hasn't been satisfied with their quality control. Interestingly, Apple also considered buying a stake in the company, but the Taiwanese were unwilling to become quite so dependent on them.
The heart of the matter may just be the macroeconomy, though. Tero Kuittinen at Forbes points out that Apple, Nokia, and Qualcomm shares have all been weak, BlackBerry's Q1s were disappointing...and about 20% of flagship smartphone sales are in Western Europe. The European economy is still terrible, and retail sales in general are showing it. That would, of course, suggest that US-heavy Apple would come out of this rather well and the Android vendors would take the hit. (After all, you can get a clone of the Nexus 7 for $50 less now.)
Kuittinen argues that the upshot might be that vendors are left stuck with huge inventories, as in 2001 or 2008. The experience of 2008, of course, thoroughly destabilised Nokia and gutted the mid-market. If that's so, perhaps BlackBerry was wise not to stuff the pipeline as much as Wall Street expected?
Nokia buys Siemens out of NSN; Free femtocells are free; Google's new network protocol
Nokia, for its part, has rediscovered infrastructure as a line of business and is buying out Siemens's stake in Nokia Siemens Networks for $2.2bn (and Siemens is vendor-financing $500m of that). Since Q2 2012, the operation has been profitable and has hacked out a good chunk of the LTE infrastructure market; buying it brings €200m-ish of quarterly EBIT and more importantly the status of indispensable supplier to numerous operators.
Saudi Mobily, for example, has just signed up for $650m of financing for equipment, split between Ericsson and NSN.
Qatari interests are looking at investing in Telecom Italia's fixed-line operation once it's spun off. The key issue is apparently how much of a stake TI needs to keep in the fixed operator.
Free subscribers who have the latest Freebox Revolution CPE device can now add a femtocell to it, by plugging a module into the spare expansion slot. New Freeboxes will ship with it, and it's free to the existing base if they pay for the shipping. All the CPE deployed since 2010 can accept the upgrade. This may very soon make Free Mobile the world's biggest femtocell deployment, and make a dent in the €2bn annual roaming charge they pay to Orange.
Neotel, South Africa's second fixed-line operator, is up for sale, again. Both Vodacom and MTN are possible buyers.
Cellular Systems, a UK company which built O2's LTE test network, has lost the Cornerstone joint venture between Vodafone and O2 as a customer, and as a result, it's gone bust.
There's an interesting presentation at the 3G & 4G Wireless Blog about EE's backhaul and internal architecture for LTE.
3UK, meanwhile, have revived the idea of a bundle where the user chooses how much of each product they want. PAYG users pay 3p a minute for calls, 2p for texts, and 1p a MB for data. Also, the credit doesn't have an expiry date.
Croatia joined the European Union this week. How noughties of them. As a result, roaming charges immediately came rattling down, with data prices going from €6 a MB to 45 cents a MB. That said, the deadline for the EU's Alternative Roaming Provider project is fast approaching and nobody seems to be much interested - but then, if roaming rates are coming down, the potential for such a business is inevitably reduced.
T-Mobile USA has acquired some more spectrum. Australia reverted to its backup prime minister this week, and as a result, they have a new Minister of Broadband. Telstra, meanwhile, nudged up its line rental charges. I saw yer.
Google's favourite satellite operator, O3b Networks, has launched its first group of four French-built and French-financed satellites from French Guiana, on a Russian rocket.
And having tried to revolutionise networking with SPDY, Google tries again with QUIC, a new network protocol that again aims for more speed, but also for end-to-end encryption, forward error correction rather than retransmission as a reliability mechanism, and better congestion control. Some things about it could be described as "like SCTP, over UDP" but there's more to it than that.
Perhaps the most telling part of the design document is just how much work in it is about getting around NATs and middleboxes that try to be..."helpful".
Not-very-mysterious German company helps spooks; AWS denies PRISM very strongly indeed; exit Dr. Fang
A cynic might say that the end-to-end encryption in QUIC will guarantee that only Google and the NSA can see your data. Edward Snowden was still stuck in the airport this week, but it didn't prevent another wave of revelations. It turns out that the NSA is taking traffic in Germany on a large scale, with the cooperation of a company described as follows:
which is active in the US and has access to information that crisscrosses America. At the same time, this company, by virtue of its contacts, offers "unique access to other telecoms and (Internet service providers)."
The story speaks of "major Internet hubs in southern and western Germany", which must mean the DECIX Internet exchange outside Frankfurt. We do not think it will be hard to guess which company is meant, and theorise that there's going to be a hell of a row.
One huge US Internet player that has so far never been mentioned in any of Snowden's leaks is Amazon Web Services. We're not the only ones to notice this. French enterprise customers have been demanding to know more, and last week, AWS convened a meeting of major customers in Paris to deny it more thoroughly.
Adam Selipsky, an AWS VP, went so far as to promise that AWS would inform any customer who was the subject of a demand for information before taking action, in order to give them the opportunity to contest it in the courts. This is an unexpectedly strong statement.
Perhaps they have their reasons. Fang Bingxing, the president of Beijing University of Posts & Telecoms and the architect of the Great Firewall, has been forced to retire due to ill health. Public reaction was not exactly "Get well soon".
Meanwhile, Netcraft analyses which Web browsers and servers have implemented the state of the art in SSL encryption.
"Open source genuine advantage", anyone?
Skype: we did it for scalability
Skype principal architect Matthew Kaufman said this week that the company had already begun moving towards a more client-server architecture before the Microsoft acquisition, in order to address scalability problems rather than to respond to demands for surveillance data.
This was driven by the increasing numbers of mobile devices, often on questionable networks, constrained by power supply, and running operating systems that restrict background apps quite seriously, taking part in the Skype cloud, and the problem that the key "supernodes" were almost exclusively Windows machines, so major Microsoft patch days tended to cause trouble. It's a fascinating insight into the problems of a really big distributed system.
Chris Kranky blogs back from WebRTC Expo, and makes the interesting point that companies like Xirsys (we'd add Crocodile) are surprisingly important, providing things like TURN support. About 40% of calls on Vonage's mobile client need TURN to work around mobile operators' NAT, port-blocking, and "helpful" middleboxes. Although it's an IETF standard, until very recently when it got included in WebRTC, nobody used it, so now there's a scramble to provide it.
Phono, Voxeo's browser phone lib, has updated to include DTLS encryption, Opus audio, and to catch up with Firefox 22's WebRTC support.
And unified comms in the cloud is a fast growing service, with 8x8 Comms in the lead, says Telegeography.
But Vodafone's One Net is a unified communications product, and it's arguably delivered from the cloud. And that has twice as many subscribers again.
Oracle & Salesforce together in the cloud
Oracle and Salesforce have signed a nine-year partnership in cloud computing. As a result, Oracle will sell Salesforce.com to its enterprise customers, while Salesforce will standardise on Oracle databases, Java, and their flavour of Linux. At the same time, you'll be able to run Oracle in Microsoft Azure. Will Heroku keep using AWS, then?
Yelp explains how they scaled up their analytics, using Amazon's Elastic MapReduce. This chart is rather insightful about cloud pricing:
The plot compares the cost of on-demand - i.e. what most people would identify as cloud - computing with Amazon's reserved instances, a product that behaves like a dedicated server. As your demands increase, on-demand cloud flexibility becomes an increasingly expensive privilege.
And Cisco announces its "application-centric networking" approach to the data centre.
AltaVista is no more; RIP James Martin and Evi Nemeth
Yahoo! has carried out a Google-like product cull - the details are here, but the stand-out is that AltaVista, one of the very first Web search engines and probably the best before Google came along, simply because it was the first to take on the sheer scale of the Web.
Danny Sullivan at SearchEngineLand has a detailed eulogy, much of which rings true with our own memories of the early Web.
People who wanted search, who came to you for it, eventually went over to Google. It's what I termed at the time to be the "Google-AltaVista X," which looked like this:
AltaVista provided search, period, not a portal, not an ad opportunity, not a curated directory. The best summary would be to say that AltaVista was what Google decided to be. The best question is whether Google is still that.
Sometimes, Google does still come up with something deeply cool. If you're planning an adventure, they might lend you a backpack of panoramic cameras controlled by an Android phone so your journey will appear in Google Maps.
Everyone in mobile wants to get into payments. What if the payments people got into mobile instead? Vocalink, the company that runs the UK's bank transfer infrastructure, is having a crack. Hackers, meanwhile, are going after SMS transaction authorisations on Android devices. And one payments app lands $25m in VC funding, despite everything about it being a secret.
This may not even be the week's worst startup investment - try this one, which could be summed up as $6m for someone's Pinterest page. It's a great way to remember the glory years of AltaVista.