Revenue growth "over by 2018" - Softbank slings $1.5bn into gaming - Google results. Telco 2.0 News Review
- Strategy & Finance: Revenue growth ends in 2018; EU, US smartphones saturate by 2016; Bernabé quits GSMA
- Disruptive Carriers: AT&T sells towers; VZW sets VoLTE and network strategy; Telekom Austria M2M platform; Softbank puts $1.5bn in gaming
- Smartphone Roundup: Amazon looks at HTC; being a BlackBerry customer; Firefox OS flies down to Rio
- Software: Olilla: Nokia didn't get software, got carriers; how Google controls Android; Oracle is no.2
- Content 2.0: Advertising & Attention: Google results, selling Facebook ads
- Cloud Computing: Google CAPEX; Microsoft fights the cloud price wars
- Voice 2.0: OnSIP lines up some more disruption; Tropo fail
- Privacy & Security: Snowden: it's France's turn now
Revenue growth to end in 2018; EU and US smartphones saturate by November 2015; Bernabé quits the GSMA
Ovum reckons that global mobile service revenue will fall for the first time ever in 2018. The problem is quite simply that ARPU will fall faster than the subscriber base grows. The only growth area is likely to be in Africa, which will pose its own challenges in terms of margin per user even if revenue is still growing. Now there's disruption for you.
At the same time, it's getting possible to forecast a date for the saturation of the market with smartphones with a modicum of certainty. Horace reaches for the analyst's best friend, the Bass diffusion curve, and fixes on November 2015 in both the EU and North America, with a total of 425 million users.
In other gloomy news, China Mobile's Q3s missed expectations, with net profit down 9%. That wasn't as bad as Mobistar, down 26%. And, after the KPN Foundation exercised its right to acquire a blocking position in KPN shares, Carlos Slim seems to have walked away from the deal.
Franco Bernabé, the Telecom Italia boss and GSMA chairman, is now neither of those things having resigned from the GSMA. He left the company earlier this month after the shareholders voted to sell more of it to Telefonica.
And here's an aggressive disruptor going after international and roaming call rates with a clever use of SIM Toolkit. Charming.
AT&T sells towers; VZW sets VoLTE and network strategy; Telekom Austria M2M platform; Softbank puts $1.5bn in gaming
AT&T is selling off towers, 9,700 of them, to Crown Castle for $4.85bn. More precisely, Crown Castle buys 600 of them up front and leases the rest for 28 years, at the end of which time they have an option to buy them out for $4.2bn. In the meantime, AT&T pays Crown Castle $1,900 a site a month for a guaranteed term of 10 years with the rent rising 2% annually. Crown reckons it can add at least one more tenant per tower on average.
Verizon Wireless, meanwhile, says it won't turn up VoLTE until "the first half of next year". More practically, they're waiting until their LTE coverage equals their CDMA 1xEV-DO coverage. They're also trying to stratify the network, moving their high-value postpaid customers to the LTE and progressively filling the 3G network with prepaid and wholesale.
While the UK's universal broadband project struggles to make any impact, EE is beginning to offer a fixed-wireless broadband product to rural customers stuck on long copper runs. Pricing is expected next month.
More names have been announced for the NBN strategic review, and a lot of them are Telstra old-timers.
The world market for M2M hardware modules is going to double by 2020, mostly driven by smart-meter deployments. At the moment, it's $532m and growing at a 12% CAGR.
Telekom Austria has a new M2M applications platform, a partnership with Austrian software company Microtronic Engineering.
And our old friend, the Softbank Samurai, is investing in a mobile/tablet gaming company. And this is no small-stakes sunday-for-monday press release project - he's putting down $1.5bn for 51% of Finnish games developer Supercell.
Amazon looks at HTC and HTC looks back; being a BlackBerry enterprise customer; iProducts; Firefox OS flies down to Rio
Amazon may be planning to launch a smartphone, to be manufactured by HTC. The Amazon phone has been heavily rumoured, of course, and in some ways the distinction between a Kindle Fire and a smartphone is just the screen size. For HTC, this would be a very welcome development - even if being a contract manufacturer is a step down, it would likely be a very big job and one that would keep the company in the game. That said, their previous partnership with a big Web brand, the HTC First "Facebook phone", was a damaging flop.
Here's a deep article on BlackBerry, the enterprise IT buyers who don't love it as much as they used to, and the problems of its strategic pivot to concentrate on the BES and its associated device management and network infrastructure. As with everything at BlackBerry, the new version of the BES which lets it support other manufacturers' devices was delayed, and a thicket of new competitors has sprung up. Further, Gartner doesn't seem to think MDM in general has much of a future.
Lenovo is apparently considering a bid for BlackBerry, again, and in the meantime they've done a tiny Android-based laptop to be going on with.
At the same time, they've altered the iPhone production mix, cutting back the 5C and adding more (lots more) 5S.
Even Apple's not perfect, of course. This week, MacBook Airs from 2012-2013 were the object of what amounts to a product recall. You are advised to run a software update that checks the serial number of the SSD, because a substantial number of the machines contain disks from a bad batch. If it fails, you're off to the Genius Bar for a replacement.
Also, the iPhone 5S accelerometer may be as much as 5 degrees off-level. Fortunately there's an app for that although this won't help if you used it as an artificial horizon.
Telefonica is preparing to launch Firefox OS into Brazil later this year. Here's an interview with their director of open Web services, Yotam Ben-Ami. Apparently 12% of their smartphone shipments in Venezuela are Firefox OS, and they claim a battery advantage of 20% over comparable Android devices.
Olilla: Nokia didn't get software, listened to operators; how Google controls Android; Oracle is no.2 in the world(sort of)
Jorma Ollila reflects on Nokia, and concludes that they made two fundamental mistakes - they didn't understand software, and they listened to the carriers too much. The first is rather like our Nokia vs. Apple analyst's note from 2010, the second is worryingly similar to recent BlackBerry news.
Here's an excellent discussion of the real dynamics of Android, starting from the important premise that "Android winning" doesn't necessarily mean "Google winning" even if charts like this one are unavoidably impressive:
Over time, rather than trying to "control Android", Google has instead switched its software development efforts to the closed-source pack of Google applications that come with it. This is also where the various agreements with carriers and with the Open Handset Alliance of vendors bite, and it explains why Samsung insists on shipping its own collection of basic apps like the calendar - in case they ever need to cut ties in a hurry. Interestingly, the company that is most committed to building alternatives to as many Google APIs as possible is...Amazon.
In other software news, Oracle claims its Q3 numbers make it the world's second-biggest software company. More specifically, IBM's Q3s make Oracle the world's second-biggest software company - they were rather poor, with the upshot that Oracle could tot up its software revenue and IBM's and make the announcement. IBM, of course, also makes money selling hardware, consultancy, and cloud services.
Github, builders of the world's favourite distributed version-control system, describe their radical "open allocation" strategy. It works very well for software developers developing software-development software for other software developers, as long as you've got really good software-development software, put it that way.
And the United States has just witnessed the highest-profile web application launch ever, healthcare.gov. This didn't go well. Businessweek looks at whether open-source software and methods might have helped.
Google results, selling Facebook ads
Google's Q3 results are in, and they're good - revenue was up 12% year on year, $14.89bn, of which $9.39bn was advertising. This breaks down to a mammoth 26% surge in paid clicks on adverts - i.e. volume - but an 8% drop in the cost-per-click, i.e. price, and all other things being equal, profit. Like everyone else, Google finds that mobile clicks are worth less than clicks from PCs, but this far they've managed to make this up by driving more traffic. Interestingly, revenues from Google Apps, Chromebook, and Play Store revenue-shares were up dramatically, 85% year-on-year, at $1.2bn or about 9% of Google revenues.
One of the ways Google is trying to generate more volume is selling Facebook ads, via integration between the DoubleClick Bid Manager and Facebook's FBX ad exchange.
Advertising with Facebook seems to be enormously more valuable if it gets served to iPhone users than Android users. That said, this isn't the case for e-commerce or gaming sites, which make up a very large proportion of the total. It's interesting, though, that there doesn't seem to be a corresponding price differential.
Kiip is a new mobile advertising startup that claims that it helps brands target ads to "moments" within a selection of 1,500 apps. Here's the video pitch.
Google CAPEX; Microsoft fights the cloud price wars
All this activity has hard physical consequences, of course, and Google is still building data centres. Data Center Knowledge points out that Google spent $2.29bn in Q3 on CAPEX, and that this is the second highest ever. The record was Q4 2010, at $2.5bn, but that was almost all down to the trophy acquisition of 111 8th Avenue in New York. This time, it's a broad-based upsurge of investment across the data centre portfolio.
Serious engineering, too. Here's an interview with the Googler behind a new book on optimising Web applications for speed.
Elsewhere in the cloud, Microsoft cut prices in Azure up to 22%, undercutting Amazon Web Services' latest round of price cuts. This is what is technically known as a price war, and anyone without either extensive differentiation or brutal scale is going to lose.
Apparently unfazed, AWS announced new features for its CloudFront CDN/caching product. CloudFront now supports the HTTP operations that cause writes, like POST and DELETE, as well as just read-only GETs, so you can use it to collect user input and deliver it to mission control as well as using it to distribute content from the centre to the edge.
They also added audio to Elastic Transcoder.
OnSIP lines up some more disruption; Tropo fail
OnSIP drops another voice disruption - they now offer both free browser-based video chat with WebRTC and also free voice calls via SIP-over-Websocket.
Tropo apologises for the outage and explains that its quality assurance team aren't based in the US and therefore expected phone numbers to be "normal" as it were.
WhatsApp's cryptography is still not OK.
Snowden: it's France's turn now
Edward Snowden reveals that the NSA collected very large quantities of call detail records, SMS messages, and possibly also recordings from France as recently as the end of 2012.
The French foreign ministry has summoned the US ambassador for a telling-off, but then, some time ago the French intelligence services themselves leaked that they were collecting enormous amounts of telecoms data. It is almost certain that the NSA got the data because the French shared it with them, so presumably the foreign minister will promise himself he won't do it again.
The deputy chairman of Huawei, barely able to believe his luck, announces that the company has never been asked to change any of its products in order to facilitate espionage.
Here's an OFCOM consultation on better location services for 999, which is going to be problematic in the current environment.
And the Iraqi government recently tried an unusual approach to industry regulation. When they wanted to impose a regulated price cut, they cut off internal access to the main cable landing station. Either fortunately or unfortunately, it looks like there's enough fibre into Iran and Kurdistan that this didn't work. (Kurdistan? But that isn't a country? Says who?)
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