Tag Archives: Apple

Not Just Another G’: Apple’s Intel Purchase Underscores the Sprint to 5G

31 Jul

5G - https://depositphotos.com/188095512/stock-photo-businessman-using-5g-network-with.htmlEarlier this summer, Intel announced that some 8,500 patent assets (i.e., issued patents and pending patent applications) would be auctioned. Approximately 6,000 assets related to 3G, 4G, and 5G cellular standards, while 1,700 assets relate to wireless implementation of cellular standards. According to initial reports from IAM, Intel was hoping to sell these patents separately from the smartphone modem business, although they were open to the possibility that a prospective buyer might seek to acquire both the patent assets and Intel’s smartphone modem business.

Shortly after the Intel patent assets were announced as available for sale, Intel abruptly took the assets off the market in favor of negotiating with a single interested suitor. Very quickly, news broke that the negotiations with that unidentified suitor were quite advanced, suggesting that the Intel auction announcement was nothing more than a negotiating ploy to get the unidentified suitor back to the table and for the suitor to realize that they could lose the patent assets if they did not play their hand correctly and misidentified the leverage involved in the negotiation.

It has recently come to light that the unidentified suitor for the Intel patent assets was none other than Apple, just as IAM has predicted in its initial reporting. So, now we know that Apple will buy the majority of Intel’s modem business, including the patent assets, for $1 billion.

A Likely Ploy

While not to take anything away from the IAM prediction, Intel’s suggestion that it was their preference not to sell the modem business unit, and only the patent assets, substantially reduced the number of possible suitors to a small handful of entities that could have the capital to pull off such a deal, and who would not need the business unit. The deal would be too big for a patent troll, and it would be too big for many of the smaller 5G industry innovators. That left Ericsson, Nokia, and Huawei as obvious possibilities, and Apple, given it has been known that they wish to enter the modem marketplace and would need patent assets for defensive purposes in order to do so.

Another indication that the Intel patent auction announcement was a negotiating ploy is the speed with which this $1 billion deal came into being. From announcement of the patent assets being available to private negotiations and the assets being at least temporarily off the market to being sold to Apple, the deal took no more than a matter of weeks to conclude. Therefore, it can be said with great certainty that the deal has been in the works for many months, if not longer.

The move is a good one from a strategy perspective, said Kim Chotkowski, Vice President and Head of Licensing Strategy and Operations for InterDigital, Inc. during IPWatchdog’s webinar, “Examining Apple’s Blockbuster Purchase of Intel’s Modem Business for $1 Billion” earlier today. “It helps with business certainty and control and helps to reduce reliance on external partners,” Chotkowski said. The widely held assumption is that the 5G technology and talent associated with the Intel assets Apple has acquired are what drove the sale, although the questions remains as to whether Intel’s technology is really developed enough to be of value. “It will be interesting to see what Apple can really make of it,” said William Mansfield, Head of Consulting and Customer Success for LexisNexis PatentSight, who also participated in the webinar. He added: “They tried to use Intel chips to wean themselves off Qualcomm and that wasn’t successful. 5G is what everyone’s driving toward but whether Intel has the right assets is a question; they have a lot of work to achieve that still.”

Apple Has Its Work Cut Out

Mansfield provided data (see below) that shows Apple’s purchase of the Intel assets will bump it up into the mid-range of competitive players in the telecoms space. This is key as those players vie to be first in the race to roll out 5G technologies, which Chotkowski and Mansfield said will not be the typical jump from one G to the next. The 5G market is estimated to be $2.2 trillion when fully rolled out said Chotkowski, and the speeds and connectivity it will make possible will be light years ahead of the current standard. “[Apple is] getting a seat at the table now, but it’s still one of the minor players. It has its work cut out. It will be interesting to see if they can pull it off,” Mansfield said.

The LexisNexis PatentSight data also showed that Intel’s portfolio development has leveled out somewhat in the last two years (see below), so whether Apple can revitalize it remains to be seen.  Chotkowski, Mansfield and IPWatchdog CEO Gene Quinn all agreed that, as standards develop around 5G, patent quality will be paramount over quantity. While Apple’s purchase bumps up its quality indicator slightly according to PatentSight, Qualcomm still remains far in the lead for size and quality, with Interdigital at the top for quality. Mansfield explained that the PatentSight metric for quality is the multiplication of an asset’s technological relevance by the number of economies/ markets in which it’s protected.

Not Your Average G

Chotkowski estimated that 5G development will overtake LTE/ 4G within the next couple of years and agreed with Quinn that full deployment of 5G technologies to consumers should happen by 2021. All panelists agreed that now is the time to get in the game.

“If you’re not paying attention to 5G you really need to because it’s not just another G,” Quinn said. “The speed it’s going to enable will be otherworldly once fully deployed and everyone starts using it. You have catching up to do if you’re not already involved.”

Chotkowski added: “The 5G market is such an open opportunity, there’s no clear path for anyone, but [Apple’s decision to] acquire all of that information and utilize it internally is going to be worth it. 5G is the way of the future and will be disruptive, so if you want to get involved, do it now.”

Source: https://www.ipwatchdog.com/2019/07/30/not-just-another-g-apples-intel-purchase-underscores-race-5g/id=111751/

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Mobile Fourth Wave: The Evolution of the Next Trillion Dollars

2 Sep
2001
Smartphone image copyright Nik Merkulov 

We are entering the golden age of mobile. Mobile has become the most critical tool to enhance productivity and drive human ingenuity and technological growth. And the global mobile market will reach $1.65 trillion in revenue this year. Over the next decade, that revenue number will more than double. If we segment the sources of this revenue, there will be a drastic shift over the course of the next 10 years. During the last decade, voice accounted for over 55 percent of the total revenue, data access 17 percent, and the over-the-top and digital services a mere three percent. Over the next decade, we expect mobile digital services to be the leading revenue-generating category for the industry, with approximately 30 percent of the total revenue. Voice will represent less than 21 percent.

There is already a significant shift in revenue structures for many players. The traditional revenue curves of voice and messaging are declining in most markets. Mobile data access, while still in its infancy in many markets, is starting to face significant margin pressure. As such, the industry has to invest in building a healthy ecosystem on the back of the fourth wave — the OTT and digital services. The revenue generated on the fourth wave is going to be massive, but much more distributed than the previous curves. It will end up being a multi-trillion-dollar market in a matter of a decade — growing much faster and scaling to much greater heights than previous revenue curves.

Vodafone, one of the biggest mobile operators in the world, recently reported that in each of its 21 markets, voice and messaging declined (YOY). In some markets, like Italy, even the data access segment suffered negative growth. However, what was more disturbing was that the increase in access revenue didn’t negate the decline in voice and messaging revenue in any market. The net revenue declined in every single market, no matter which geography it belonged to. The net effect was that the overall revenue declined by nine percent, despite data access revenue growing by eight percent, because the overall voice and messaging revenue streams suffered double-digit losses. Once the access revenue started to decline (and it is already happening to some of the operators), these companies will have to take some drastic measures to attain growth. The investment and a clear strategy on the fourth wave will become even more urgent. They will have to find a way to become Digital Lifestyle Solution Providers.

revgrowthcurve

So, what is the mobile fourth wave, and who are the dominant players today? The fourth wave is not a single entity or a functional block like voice, messaging or data access, but is made up of dozens of new application areas, some of which have not even been dreamt up yet. As such, this portfolio of services requires a different skill set for both development and monetization. Another key difference in the competitive landscape is that the biggest competitors for these services (depending on the region) might not be another operator but the Internet players who are well funded, nimble and very ambitious. The services range from horizontal offerings such as mobile cloud; commerce and payments; security; analytics; and risk management to mobile being tightly integrated with the vertical industries such as retail, health, education, auto, home, energy and media. Mobile will change every vertical from the ground up, and that’s what will define the mobile fourth wave.

In the past, the Top 10 players by revenue were always mobile operators. If we take a look at the Top 10 players by revenue on the fourth wave, there are only five operators on the list. The Internet players like Apple, Google, Amazon, Starbucks and eBay are generating more revenue on this curve than some of the incumbent players. However, some of the operators like AT&T, KDDI, NTT DoCoMo, Telefonica and Verizon have been investing steadily on the fourth curve for some time. The two Japanese operators on the list have even started to report the digital revenue in their financials.

Just as data represents 50 percent or more of their overall revenue, we expect that, for some of these operators, digital will represent more than 50 percent of their data revenue within five years. Relatively smaller operators like Sprint, Turkcell, SingTel and Telstra are also investing in new service areas that will change how operators see their opportunities, competition and revenue streams.

topplayers

This shift to digital has larger implications, as well. Countries with archaic labor laws that don’t afford companies the flexibility needed to be digital players are going to be at a disadvantage. It is one thing to have figured out the strategy and the areas to invest in, and it is completely another to execute with the focus and tenacity of an upstart. If companies are not able to assemble the right talents to pursue the virgin markets, someone else will. Such players will see decline in their revenues and become targets for M&A. Some of this is already evident in the European markets, which are also plagued by economic woes. Regulators will have a tough task ahead of them in evaluating some unconventional M&As in the coming years.

The shift to digital will also have an impact on the rest of the ecosystem. The infrastructure providers will have to develop expertise in services that can be sold in partnership with the operators. Device OEMs without a credible digital-services portfolio will find it hard to compete just on product or on price. The Internet players will have to form alliances to find distribution and scale. The emergence of the fourth wave is good news for startups. Instead of just looking toward Google or Apple, the exit route now includes the operator landscape, as well. In fact, some of the operators have been making strategic acquisitions in specific segments over the last few years — Telefonica acquired AxisMed, Brazil’s largest chronic-care management company; Verizon acquired Hughes Telematics; and SingTel acquired Amobee.

For any telecom operator looking to enter the digital realm, the strategic options and road map are fairly clear. First, it has to solidify and protect its core business and assets. A great broadband network is the table stakes to be considered a player in the digital ecosystem. Depending on the financial condition of the operator, the non-core assets should be slowly spun off or sold to potential buyers so that the company can squarely focus on preserving the core and on launching the digital business with full force. The digital business requires a portfolio management approach that requires a completely different mindset and skillset to navigate the competitive landscape.

The first three revenue growth curves have served the industry well, but now it is time for the industry to refocus its energies on the fourth curve that will completely redefine the mobile industry, its players and the revenue opportunities. Several new players will start to emerge that will create new revenue from applications and services that transform every industry vertical that contributes significantly to the global GDP. As players like Apple and Google continue to lead, mobile operators will have to regroup, collaborate and refocus to become digital players.

There will be hardly any vertical that is not transformed by the confluence of mobile broadband, cloud services and applications. In fact, the very notion of computing has changed drastically. The use of tablets and smartphones instead of PCs has altered the computing ecosystem. Players and enterprises who aren’t gearing up for this enormous opportunity will get assimilated.

The future of mobile is not just about the platform, but about what’s built on the platform. It is very clear that the winners will be defined by how they react to the fourth wave that will shape mobile industry’s next trillion dollars.

Source: http://allthingsd.com/20130826/mobile-fourth-wave-the-evolution-of-the-next-trillion-dollars/?mod=atd_homepage_carousel&utm_source=Triggermail&utm_medium=email&utm_term=Mobile+Insights&utm_campaign=Post+Blast+%28sai%29%3A+Where+Will+The+Next+%241+Trillion+In+Mobile+Come+From%3F

Femtocell hack reveals mobile phones’ calls, texts and photos

22 Jul

An increasingly popular technology for extending cell-phone coverage ranges had a major security hole that went undetected for years, through which an attacker could eavesdrop on everything a target did on their phone, according to new research released on Monday.

The research brings to light previously unknown vulnerabilities in some models of femtocells, devices that mobile network operators use to bring wireless service to low-coverage zones. The compact boxes, which are typically as small as a standard cable modem, can be deployed in hard-to-reach spots like the top of an apartment building or a home in the mountains. Femtocells are also referred to as “network extenders,” and analysts project that as many as 50 million of them will be in use by 2014.

In a demonstration for CNNMoney, researchers at iSEC Partners, who discovered the security hole, covertly recorded one of our phone conversations and played it back for us. They were also able to record our browsing history, text messages, and even view pictures we sent from one smartphone to another by hacking the network extender.

“We see everything that your phone would send to a cell phone tower: phone calls, text messages, picture messages, mobile Web surfing,” said iSEC Partners senior security consultant Tom Ritter.

ISEC discovered the security flaw a year ago and contacted the affected vendors, who quickly began working on a fix. Though iSEC focused its research on femtocells operating on Verizon’s 3G CDMA network, the company believes similar holes could exist on other network extenders.

A Verizon (VZ, Fortune 500) spokesman said the problem has been repaired in all of the femtocells it is currently using. ISEC used a modified femtocell that did not receive a patch to the security flaw.

“The demonstration CNN saw was for an identified issue that was fixed earlier this year on all network extender devices,” the company said in a written statement. “The fix prevents the network extender from being compromised in the same manner.”

Verizon said it has not received any customer complaints about the security glitch.

Samsung, the company that manufactures Verizon’s network extenders, also issued a statement saying the problem has been fixed. ISEC plans to show off more details of its hack later this month at the Black Hat and Def Con security conferences in Las Vegas.

Security researchers say these kinds of flaws are inevitable. As new technologies get more powerful, though, the risks get bigger.

“Once you first saw this product was available, you said, ‘If there are any vulnerabilities, it’ll be really bad,” hacker Chris Wysopal, the chief technology officer for security software maker Veracode.

When he learned about femotcells, he says he immediately thought: “Somebody’s bound to break this.”

ISEC, which specializes in security research, says the attack it pioneered doesn’t require very sophisticated hacking.

“You do need some level of technical skills, but people are learning those skills in college,” Ritter said. “Breaking into one of these devices, or a device like this, is within the realm of people working at home.”

Since it would be impractical for a passer by to randomly hack your femtocell, this exploit is more in the realm of hypothetical than likely — even before the security patch went out. But femtocells and other “small cell” technologies are increasingly being deployed in businesses, homes, malls, stadiums and other public areas. If security flaws exist, it’s important that the manufacturers are made aware of them.

Security pros say that using encryption apps like Wickr, Cellcrypt, Redphone and TextSecure can help users looking for a more secure connection. But researchers at iSEC have resigned themselves to the idea that nothing is confidential.

“You should assume that everything you’re saying is being intercepted,” said Doug DePerry, one of the company’s senior consultants. “That is a bit of a defeatist opinion, but sometimes that has to be the way it is.” To top of page

NFC: Not just for mobile payments anymore

21 Jan

More companies embraced the close-range connectivity technology at the Consumer Electronics Show. How they’re using NFC may surprise you.

LG demos NFC technology in appliances at the Consumer Electronics Show in Las Vegas. (Credit: Sarah Tew/CNET)

Move over, mobile payments. NFC is finding other ways to make itself useful.

In fact, paying for items with one’s phone seems to be the least common use for the close-range connectivity technology right now, at least based on gadgets unveiled at the Consumer Electronics Show. Rather, essentially all products using NFC shown at the recent confab employed the technology in one of two ways: To set up a sort of digital handshake between a mobile device and another gadget or as a way to share information between products with just a tap.

“NFC really simplifies things,” Scott McGregor, CEO of connectivity chipmaker Broadcom, told CNET at CES. “The most advanced technology is stifled if it’s not easy to use. … NFC plays a very valuable role in simplifying user interfaces for consumer products.”

NFC is short for near-field communication, a chip technology that allows devices to transfer small amounts of data between each other. Both devices must contain NFC chips and must be closer than an inch to connect. Typically, NFC works by tapping the two devices together to securely exchange data such as credit card information, train tickets, coupons, press releases, and more.

NFC has long been hailed as the technology to bring mobile payments, or the idea of waving your phone in front of a cash register to purchase a good, closer to reality. However, the mobile payments trend has been slow to take off, and it continues to face many hurdles for adoption. While the technological issues have largely been resolved, there just aren’t that many stores and point-of-sales terminals equipped with NFC for widespread use.

But at CES, NFC popped up in nearly everything imaginable (just not at cash registers). Along with the usual devices, like smartphones, there were speakers, cameras, televisions, refrigerators, business cards, and numerous other items. Some companies, such as Panasonic, have even added NFC to rice cookers and other usual items.

Sony introduced speakers with NFC technology at CES. – (Credit: Sarah Tew/CNET)

NFC is already becoming a familiar spec in smartphones. Aside from mobile payments, many handset vendors have been using NFC technology as a way to differentiate their products from rivals, particularly the iPhone. Apple is the most notable NFC holdout, though it’s widely expected to incorporate the technology into future devices.

Samsung, meanwhile, has been one of the biggest companies pushing the technology. It has released several ads that show what users can do with NFC (like sharing videos by tapping two Galaxy S3 phones together), and it also has slammed the iPhone 5 for its lack of sharing capabilities. At CES, the company unveiled speakers that use NFC to pair a phone to the device. Content is then streamed via Bluetooth.

And Sony included NFC in nearly all of its products shown at CES, including TVs, smartphones, remotes, and speakers. The company, which dubbed the technology “One Touch,” said during its press conference that it offers more NFC-enabled products than any other electronics maker in the world. Sony noted the technology would ease media transfer and streaming among phones, tablets, TVs, and audio devices by establishing a link between them just by touching the devices to one another.

“Customers are asking for easy, seamless ways to be able to access and transfer their personal content,” Brian Siegel, Sony vice president of marketing, told CNET at CES. “We’ve been talking about it collectively for a long time, and it’s been this combo of wireless and wired solutions. NFC and Sony’s One Touch, we believe, is the easiest solution ever brought to market.”

Panasonic unveiled a couple cameras with the technology, and LG also incorporated NFC into its electronics, as well as its appliances such as washing machines, vacuums, and refrigerators. In the case of appliances, people will be able to pair their smartphones with the product and then control it remotely, like turning on the washing machine while still in the office.

NFC has many benefits over other connectivity technology. Most important, it allows users to bypass all the steps required to set up something like Bluetooth. Just think about how long pairing a phone to a Bluetooth speaker takes. You have to discover the device, enter passwords, etc. For less tech savvy users, simply getting two devices to talk to each other can be daunting. With NFC, it’s one tap and the items are paired.

It can even be used to get information from a poster or other non-electronic device by installing passive NFC tags in the item. Unlike NFC readers, which are used in smartphones and other electronic devices, the passive tags don’t need batteries, and they’re very cheap, costing only pennies. An NFC-enabled smartphone is able to decipher the information on the tag by sending energy to it to power it up and receive the data.

Caesars Entertainment, owner of eight hotels and casinos in Las Vegas, is making use of such technology. It installed more than 4,500 interactive Samsung TecTiles in its resorts, allowing anyone with an NFC-enabled device to tap the various TecTiles for information such as game tutorials, show times, restaurant menus, and ticket purchases.

“People are talking about putting them in virtually every consumer device,” Henry Samueli, Broadcom co-founder and board chairman, told CNET at CES. “You could walk through your grocery store, and something you buy for a couple dollars could have a tag. That would be useful for stores for inventory control and things like that, and for the consumer, it’s a fast way of exchanging information.”

The Panasonic Lumix TS5 features NFC capabilities.

(Credit: Panasonic)

By getting NFC into more devices, companies are easing consumers into the idea of using the technology, which should help when (if) mobile payments take off. Because NFC is a secure technology, it’s still seen as an ideal way to handle mobile transactions.”NFC was very present at CES, but it had nothing to do with payments,” Gartner analyst Carolina Milanesi said. “It’s smart because you’re getting consumers familiar with the technology so when mobile payments is ready and the ecosystem ready, they’ll feel comfortable with it.”

Of course, NFC isn’t perfect. Because the technology requires two devices to be very close to each other, it won’t be replacing Bluetooth or Wi-Fi anytime soon. Those longer-range connectivity technologies will still be required for streaming content. Also, in the early days of NFC, it was hard to figure out where to tap to make the connection.

In addition, while NFC technology itself is a standard, not all NFC products work together. That’s because companies incorporate their own software into the systems, limiting what devices the products work with. That helps create brand loyalty (if you have a Samsung phone and want to stream content to your TV, it’s easier to also own a Samsung television), but it also limits what consumers are actually able to do with their products.

Market watchers say that should change as industry groups and companies agree on a standard. And in time, NFC might actually show up in the majority of consumer electronics.

“Right now you see Samsung commercials where you tap a Galaxy S3 with another and you’re exchanging videos.” Gartner analyst Mark Hung said. “That’s great, but try doing that with a Nokia phone. All these other companies also have NFC, but interoperability leaves much to be desired. I expect that to be sorted out this year.”

Samsung handed out wristbands with NFC technology at its CES press conference.

(Credit: James Martin/CNET)

Here are some products that use NFC (Note: not all of these were announced at CES):

  • Virtual press kits and business cards — Various execs and companies used NFC as a fast way to share their contact information and press releases. All people meeting them had to do was tap their NFC-enabled phone (sorry, iPhone users) to the item, typically a wristband or business card, to access the information. Samsung, for example, handed NFC-enabled wristbands to all attendees at its press conference, and Sharp gave out business cards embedded with its press release.
  • Information points such as posters — Caesars Entertainment, owner of eight hotels and casinos in Las Vegas, installed more than 4,500 interactive Samsung TecTiles in its resorts. Anyone with an NFC-enabled device will be able to tap the various TecTiles for information such as game tutorials, show times, restaurant menus, and ticket purchases.
  • Speakers — NFC is typically used in these devices to pair a smartphone to a speaker. The music is not actually streamed to the system via NFC but is shared through Bluetooth. Samsung and Sony were two notable companies with NFC speakers.
  • Headphones — The function is much like wireless speakers. Users tap their phone to the headphones to allow pairing for the transfer of music. Sony also makes these.
  • Boomboxes and other music playersSony, again.
  • Cameras — At least two cameras introduced at CES included NFC capabilities: The Panasonic Lumix ZS30 and the Panasonic Lumix TS5. Along with built-in Wi-Fi, the cameras should enable “the widest range of remote shooting options, remote viewing, and instant sharing on social networks.”
  • TVsLG and Sony were a couple big companies showing off NFC-enabled TVs at CES. Like with audio devices, NFC is used to pair a phone to the TV by tapping the two together.
  • Remote controls — In this instance, users tap their phones to their remote instead of their TV to pair the device to the television. Sony is one company doing this.
  • AppliancesLG showcased a slew of washers, dryers, ovens, refrigerators, and vacuums with NFC technology. After pairing the appliance with a phone, users can program their products from afar, such as turning on a washing machine while still in the office.
  • Other weird kitchen itemsPanasonic’s Asian operations have made an NFC-enabled rice cooker and a steam microwave oven. Users can search for recipes and program cooking instructions using their smartphones.
  • ComputersHP’s SpectreOne all-in-one desktop PC, announced in September, incorporates NFC technology, which it calls HP TouchZone. Via a sensor built into the base of the unit, users can log into the SpectreOne or transfer files to it by simply swiping a smartphone or another device equipped with NFC. HP’s Envy 14 Spectre ultrabook also includes NFC, as does Sony’s Vaio Tap 20 mobile desktop PC.
  • Smart meters for utility companies — Landis+Gyr in late 2011 said it was working with NXP Semiconductor on energy management products with integrated NFC.
  • Digital bubble gum machine — Digital advertising agency Razorfish last July developed a high-tech prototype version of the gum ball machine that allows users to download digital content like apps and movies to their NFC-enabled phone for a small fee.
  • Heart monitor — Impak Health, a joint venture between Swedish chipmaker Cypak and U.S.-based Meridian Health, developed the RhythmTrak heart monitor. The product tracks certain heart-related data, which can then be downloaded or sent to a clinician by placing it next to an NFC-enabled phone.
  • Wii U — It’s not really clear how NFC will be used in this Nintendo console, but it may allow users to do things like add new characters to games.
  • Cars — An NFC-enabled smartphone will be able to unlock Hyundai cars by 2015.

LTE Devices: Embedded vs Removable UICC

4 Jan
LTE standards require devices to use Universal Integrated Circuit Cards (UICC) otherwise known as SIMs (Subscriber Identity Modules from GSM days) to authenticate to the network.Physical SIM Form Factors

So this is all well and good from an intentions standpoint as theoretically it allows end users to switch UICC modules into multiple devices and have any one of those devices attach to the LTE network as our device. Unfortunately this is not the case in practice though. See example:

iphone_vs_sg3_Simm

For the US market, The iPhone 5 supports a REMOVABLE micro UICC where as the Samsung Galaxy 3 uses an EMBEDDED UICC.

This is hogwash for people like me that want the flexibility to change devices to suit my needs (for example, changing to an iPhone when visiting my Samsung buddies or using the SG3 in meeting s in Cupertino etc…)

So there is a standard here but it’s not a standard. On the one hand it’s good for me, Joe Six Pack, to have a removable UICC so I can switch devices at my whim, or when one gets broken or stolen etc.. however on the other hand I can see where embedded devices like picture frames and alarm systems might be better off with an embedded UICC. Oh yeah, it’s a tad more difficult to steal and use an embedded UICC LTE device but it’s not impossible, so that is an advantage for embedded. 

Now when this gets resolved, by hopefully every UE supporting a removable UICC, then we will have to go hammer on Apple and other manufacturers to use the latest QCOM/Broadcom etc… RF components to build us a single device that traverses multiple networks. (no more ATT SKU vs VZW SKU.) Because with a single devices and a removable UICC, we can be VERY HAPPY CONSUMERS, with CHOICES that can hold operators accountable for their choices. 

Source: http://www.sonlte.com/2013/01/03/lte-devices-embedded-vs-removable-uicc/

Digital platform strategy: how Google, Apple and Amazon keep winning

28 Sep
Summary: Telcos traditionally think of every new service as a profitable   new revenue source, and create services in silos with little thought for the   total customer experience and overall creation of value. In contrast, the big   internet and tech players typically build their future offerings as part of   an integrated strategy to raise the overall value of their platforms. This   extract from ‘A Practical Guide to Implementing   Telco 2.0’ shows key lessons for telcos. (September 2012).

From isolated innovations to an integrated platform

For the last six years, STL Partners has been working with telcos and their partners on the development of a new telecoms business model – ‘Telco 2.0’. We have undertaken a significant amount of research into what Telco 2.0 could look like and explored in ‘The 2-Sided Telecoms Market Opportunity’ and ‘The Roadmap to New Telco 2.0 Business Models’, and other key research, how telcos can:

Defend and grow their core business by developing their voice and messaging and broadband services, as well as serve their customers better through the responsible use of customer data.

Find new value sources including entertainment and content, apps and app stores, enterprise services, M2M and embedded mobility, advertising and marketing, money and payments and cloud services.

Learn from and work with internet giants such as Google, Apple, Facebook and Amazon.

We have now published Part 1 of A Practical Guide to Implementing Telco 2.0 which focuses principally on how to implement Telco 2.0. It gathers some of the techniques and lessons that STL Partners has been deploying with clients that are now implementing Telco 2.0.

The following edited extract, available in full to members of the Executive Briefing Service, explains the danger of considering each of the six Telco 2.0 opportunity areas as a separate value source by exploring the platform strategies of the internet players such as Google, Apple, Facebook, Amazon and Microsoft. It illustrates how some areas lose money and how this ‘loss-lead’ approach makes sense as long as the overall value of the platform rises, and concludes that telcos must think about opportunities in an integrated ‘joined up’ way.

Telcos’ strategic environment is tough

In a tough global economy, with many telco markets rapidly reaching maturity, and facing competition from so-called ‘Over-The-Top’ (OTT) communications services, telcos face some difficult trading conditions.

In Euro telcos: fiddling while the platform burns? we shared an early sight of forecasts we’re working on of core services revenues, showing a fairly pessimistic snapshot of long term revenue decline (in this instance, based on UK revenues). In research conducted for the strategy report Dealing with the ‘Disruptors’: Google, Apple, Facebook, Microsoft/Skype and Amazon we found that many industry senior execs believe that a major cause of the revenue decline were so-called ‘Over-The-Top’ (OTT) players.

Figure 1 – The predicted impact of ‘OTT’ players on telcos’ core business

Source: Dealing with the ‘Disruptors’: Google, Apple, Facebook, Microsoft/Skype and Amazon

Against this tough background, most telco CEOs appreciate that they cannot just cut their businesses to growth (or even maintenance for some) – they need new sources of value creation.

(NB. The concept of ‘Telco 2.0’ is not confined to the potential growth areas, but about enabling the telco business model to adapt and survive overall, as described in detail in Telco 2.0: Killing Ten Misleading Myths and The Roadmap to New Telco 2.0 Business Models.)

Figure 2 – Generic telco strategies

Source: A Practical Guide to Implementing Telco 2.0

In this article we focus on new service strategies, and the six coloured columns on the right of the chart above refer to the six Telco 2.0 Opportunity Areas, which as a reminder are:

Extending and enhancing existing core services – voice, messaging, data, content – to deliver more value to customers.

Developing bespoke communications and IT solutions for specific vertical industries.

Leveraging infrastructure more effectively to improve the customer experience (offer greater speed and responsiveness) while reducing cost (offloading traffic onto cheaper networks) and generating new revenue (‘onloading’ traffic from more expensive networks).

Distributing existing products and services via new channels and to new customers such as embedding voice and other communications services within enterprise business processes or bundling connectivity in with consumer products (this includes some M2M applications).

Deploying assets including identity and authentication capabilities and customer data to both improve customers’ experience of existing core services and develop valuable new enabling services for third-party enterprises and consumers.

Developing products and services that are largely own brand ‘OTT’ – independent of the network.

Current telco approach: silos of growth

As we have also illustrated previously, there are many new services within the six Telco 2.0 opportunity areas which can generate value for telcos.

Figure 3 – Examples of the six Telco 2.0 Opportunity Types

Source: The Roadmap to New Telco 2.0 Business Models

But it is highly unlikely that every service, even if ‘successful’ in terms of becoming big and popular, will directly generate revenue. Indeed, some services should be designed from the outset to be free and loss-making for the telco. Why? Because by doing this the telco can generate more value in other areas. Google does this with free search for consumers – it makes more money from advertisers owing to high search volumes.

Many telco managers simply do not appreciate this point. In telcos, each and every service tends to evaluated independently and if it does not meet stringent business case benchmarks, it is not progressed. This tends to lead to some creative use of pricing and volume assumptions in many business cases to ensure that services get over the hurdle.

To see why this is misguided, it is helpful to think of current and future telco services as part of a digital value chain (as in Figure 4 below). There are devices, operating systems and applications (first segment of the value chain) that use data connectivity (second segment) for a range of applications and services such as advertising and marketing, the sale of physical goods and digital content, making payments and delivering enterprise solutions. Voice and messaging too is increasingly become another data service and this is set to increase as IP networks become end-to-end on fixed and mobile.

As already noted, each of the telco opportunity areas contain services that can be offered in different segments of the value chain:

Voice and messaging are the traditional Core Services and digital content is the area into which many telcos have sought to extend.

Vertical Industry Solutions seek to mash-up data and voice and messaging with enterprise IT systems to develop bespoke services.

In Infrastructure Services, telcos will seek to make their data networks and voice and messaging capabilities available to other telcos on a wholesale basis.

Data and voice and messaging, as well as enterprise applications will similarly be made available to businesses seeking to integrate them into their core offerings in Embedded Communications.

Telcos are seeking to leverage their customer data and media inventory to offer advertising and marketing solutions and their authentication and collection capabilities to deliver payment services as Third-party Business Enablers.

Finally, software skills will be required to offer a range of digital solutions similar to those from the OTT players in Own-brand OTT Services.

Essentially, telcos can theoretically offer a one-stop shop for consumers and enterprises across the digital value chain. The challenge at the moment is that telcos think of each service, and each stage of the value chain, as a profitable new revenue source. Services are thus created in silos with little thought given to the customer experience across the value chain and, importantly, to the creation of value across all stages of the chain.

As Figure 4 shows, telcos see opportunities for value creation in every single value chain segment (although not every opportunity area covers every segment).

Figure 4 – Telcos see opportunities to create value in every value chain segment

Source: A Practical Guide to Implementing Telco 2.0

1.            Devices, OS, apps & software have been placed in brackets because the handset subsidies that telcos offer for devices could be construed as a source of profitable revenue or as an enabler of data and voice and messaging revenues depending how they are priced and accounted for.

Why does it matter that telcos are seeking to generate profitable growth in each segment of the value chain? After all, profit for shareholders is the ultimate goal. The problem with this strategy stems from the integrated platform strategies of the internet players – and the challenges of competing with them.

To read the note in full, including the following sections detailing support for the analysis…

From isolated innovations to an integrated platform

Telcos’ strategic environment is tough

Current telco approach: silos of growth

The integrated platforms of the internet co-opetition

Conclusions – key lessons for telcos

…and the following figures…

Figure 1 – The predicted impact of ‘OTT’ players on telcos’ core business

Figure 2 – Generic telco strategies

Figure 3 – Examples of the six Telco 2.0 Opportunity Types

Figure 4 – Telcos see opportunities to create value in every value chain segment

Figure 5 – Internet giants are pursuing platform strategies

Figure 6 – Time is running out for telcos

Source: http://www.telco2research.com/articles/EB_telco-2-digital-platform-strategy-how-google-apple-and-amazon-keep-winning

Mindspeed Set For LTE Speed

26 Sep

The wait is finally over and the highly anticipated iPhone 5 is here. Once again Apple, Inc. (AAPL) appears to have a hit on its hands as consumers around the world lined up to buy the iPhone 5. It promises to deliver the Internet at even faster speeds as it now comes equipped with LTE capability. LTE is the name of the next cellular network, (previously known as 4G) and it is 10 times faster than 3G. The iPhone 5 signals the arrival of the LTE network. For carriers the benefits of LTE are that by moving data faster, they can move it more efficiently and thereby get more out of the spectrum they own. The problem is that none of the carriers are ready for LTE. In order for the carriers to provide complete LTE coverage they will need to build out their networks. With spectrum bandwidth limited they will need to incorporate small cell wireless base stations into their networks.

I have identified one company in the small cell wireless base station market that stands to gain by this network build out. The company is Mindspeed Technologies, Inc. (MSPD) which is a fabless chip design company headquartered in Newport Beach, California. With its roots as part of Rockwell’s Semiconductor division, it was spun off as a wholly owned subsidiary of Conexant in 1999 and later launched as a standalone public company in 2003, listed on NASDAQ as MSPD.

The company designs and sells a wide range of silicon chips for network infrastructure of the wired and wireless communications industry.

Small cell wireless LTE is no longer a niche technology as it is now being deployed and has become an integral part of the major carrier’s network plans. There are currently 5 types of small cell base stations that Mindspeed provides SoC’s for. The indoor base stations are about the size of a router and can be placed in any room. The outdoor base stations are small boxes that can be placed on the sides of buildings or on top of lamp posts.

Mindspeed has deep relationships with the OEMs. Mindspeed now has 28 design wins for its systems-on-a-chip products. OEMs such as Nokia (NOK), Ericsson (ERIC) and Alcatel-Lucent (ALU) do not make it easy to win approval and each and every design win has been a two year series of excessive tests and hurdles. This challenging approval process creates a high barrier to entry product.

One of the reasons that I believe we will see the rapid introduction of these base stations is that the carrier’s LTE networks have a problem with coverage and capacity. More customers want access inside their homes, lack of home coverage is the now the number one reason for customer churn. Indoor base stations will fix this coverage hole. Data loads are increasing exponentially and without anything being done, bandwidth capacity will be exceeded. Passing data from the wireless networks onto the base stations will remove pressure from the network.

On a side note, when AT&T introduced the first iPhone its networks could not handle the increase in data usage. With the iPhone 5 about to unleash another explosion in data usage, carriers want to avoid the embarrassment and damage to reputation that AT&T suffered on that occasion.

In light of these upcoming trends, here are 8 Reasons to own Mindspeed:

  • On September 12th,      Mindspeed pre-announced      and raised revenue forecasts for the 4th quarter from $33.5-$35.5 million      to $35-$36 million on the early ramp of its LTE SoC business.
  • Nine out of 10 of the      largest US and European carriers (by revenue) have announced      plans to include small cell LTE in their networks.
  • The Total Available Market      (TAM) for small cell LTE is estimated      to be $1 billion by 2016. With its Pico chip having a 70% market share;      even if MSPD saw market share drop to 30% they would still generate      revenues of $300 million which would be double current sales.
  • Informa predicts      there will be 62.4 million small cell base stations in use in 2016, there      are currently only 3.2 million. Once again this could cause MSPD revenues      to grow exponentially.
  • MSPD has 28 SoC design wins, including three in the last quarter, one      of which was a new tier 1 European OEM.
  • MSPD is working closely      with South Korean carriers SK Telecom and Contela in developing small cell      LTE. South Korea is the world leader in LTE adoption and we will see      deployment of LTE small cells in the December quarter.
  • MSPD recently signed      an agreement with China Mobile Research Institute to develop and deploy a      small cell network in China.
  • Management team was      recently strengthened      by the addition of Stephen Ananias from Broadcom (BRCM) as CFO.      Already we have seen expenses cut by 13% last quarter and he is getting      the company lean and mean as they are poised for 5 year growth run with      LTE.

If we look at the daily chart we can see that MSPD appears to have put in a bottom at $2.30. It recently broke resistance at $3 and is now forming a bullish flag pattern. The resolution of this pattern should see MSPD break through the 200 day moving average at $4.32 on its way to $6.

If we now take a look at the weekly chart for a longer term view, we can see that it has made a nice move off the bottom and appears to be in the beginning stages of a bullish flag pattern. Over the next year I would expect MSPD to continue trading higher and I think we will see $7 medium term and then a new high at $10.

Fundamentals:

Shares Outstanding: 48 million

Cash: $55 million

Revenue est FY13(Sept): $155 million

Revenue est FY14(Sept): $180 million

Book Value: $2.05 per share

Price to 2014 est revenue: 0.95

Price to Book Value: 1.68

I believe that Mindspeed sits in front of a strong 5 year secular growth trend for high speed wireless access. Mindspeed has a high barrier to entry System on a Chip (SoC) technology that will make it a pure play as we see an explosion of data usage on mobile devices demanding high speed wireless access. The company has a valuation metric of 0.95 times revenues due to poor macro conditions in Europe. However, the company just reported its first revenue increase in over 1 year. I see this as the start of a company that can trade at pure play metrics which means MSPD could be trading at two times its $155 million in sales by year end. It will be in the December quarter that we will see SK Telecom deploy small base stations. I think MSPD could see a 3-4 multiple of overall sales as the market for high speed data via small base stations ramps. A multiple of 3x 2014 estimate of 180 million equals $10 – $15 per share. The upside is too great here in relation to the downside as the iPhone5 sold 5 million units in its first weekend and networks race to build out their networks over the next 5 years to accommodate the consumer demand. I’m buying my Mindspeed as fast as consumers want their iPhone 5.

Source: http://seekingalpha.com/article/887521-mindspeed-set-for-lte-speed  September 25, 2012 | Josh Franklin |

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