a week in wireless


A Pre-destined response

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If it isn’t a truism of market research that people will say anything for a free Kit Kat, then it bloomin’ well should be; that’s the Informer’s take, anyway. This was reinforced earlier in the week when some research was announced by TNS that suggested the UK launch of the Palm Pre today would outshine the debut of the Apple iPhone.

TNS interviewed more than 1,000 UK adults, with a remarkable 26 per cent apparently responding that they would “definitely or probably” buy the Palm Pre when it became available. Only 16 per cent gave the same response for the iPhone two years back. Both figures were one per cent higher when the sample was cut to include only O2 subscribers.

Now, the Informer has no reason whatsoever to doubt the veracity of TNS’ reporting. What he’s not so sure about is the reliability of peoples’ responses. After all, most human beings lie instinctively. Nope, you’d need access to their internal dialogues before you could be certain of their credibility.

So, while the market researcher is saying:

“Ok, so thanks for coming. The Palm Pre is a new smarthphone being launched shortly by O2 and what we want to know is whether or not you’re interested in owning it?”

Your average researchee is (definitely or probably) thinking:

“Oh bloody hell, why did I agree to this. They’ve put the Kit Kats right in the middle of the table, so I can’t reach them without stretching across this bloke next to me. Hmm, he smells a bit like gravy. What’s that chap up there saying about palms? Would I like to buy a palm tree? Oh, a Palm Pre. Some new mobile phone? I’m not due an upgrade for another 12 months anyway. And what’s a Pre? Pre’s a prefix, surely. It’s not a word in its own right. Pre… what, exactly? Prehistoric? Premenstrual? Predetermined? I don’t believe in fate. Sod it, right I’m going for the Kit Kats.”

At which point the researcher reiterates the question and the researchee says:

“Eh? Oh, yes definitely or probably, for sure.”

And, when you think about it, “Definitely or probably” is a fairly broad range. If everyone that ticked that box was at the “probably” end of that range then “Definitely or probably” could quite reasonably be interpreted as: “Possibly not”.

So there you have it, folks. 26 per cent of Britons will “Possibly not” be buying the Palm Pre.

The Palm Pre has more weight resting on its shoulders than Atlas himself, it seems to the Informer. The poor thing’s being propelled through the crowds and into the ring, backslapped all the way by grinning punters whipped into a frenzy of expectation that this little phone from Palm is going to floor the Apple champ with one punch.

Nothing’s impossible, of course, but it’s a mighty big ask. In its favour is the fact that O2 is offering it for nothing, having splurged the last of its subsidy budget on the unit. On the downside is the grim truth that Palm is not the aspirational brand that Apple was ahead of the iPhone launch.

O2 UK ought also to be concerned that its network, in the part of central London where the Informer slaves away, cringing ‘neath the bellowed threats of his superiors, doesn’t appear to be working properly, and hasn’t been for some time. Given that central London will no doubt be one of the geographic target markets for the Pre, this isn’t good news. Calls aren’t getting through, both inbound and out, the network isn’t responding despite indications that connections are strong and text messages are arriving hours late. Handy!

Yesterday evening, in a public house after work where this problem continued, the Informer and a chum were set upon by a short, Finnish gentleman in an advanced state of refreshment. Chum made the mistake of revealing that he knows a smattering of Finnish, and as a result we briefly became this man’s best friend.

As far as we could work out from his heavily accented, limited English, further restricted by the sheer volume of alcohol he had evidently consumed, his plan after closing time was to walk round London all night, keeping dehydration at bay with three large carrier bags full of bottled sparkling water until he could begin boozing again the next day. He indicated that, in the course of a week, he would be taking this peculiar show on tour to Amsterdam, Berlin and Barcelona.

We speculated that he might be someone important from Nokia, given the quarterly loss the firm had just reported, driven by the write-down it had to make this week on struggling equipment arm Nokia Siemens Networks.

Nokia posted a loss of €559m for the quarter, having written NSN down by €908m. At €6.9bn, device and services sales were down 20 per cent (although up five per cent sequentially), with shipments down eight per cent year on year to 108.5 and also up five per cent quarter on quarter. NSN sales were down 21 per cent year on year and 14 per cent sequentially at €2.8bn.

Perhaps, somewhere in London, as this is being written, a Finnish man with an Eiger-sized hangover is trying to explain to some pigeons that it’s not easy extracting profits from – and driving synergies in – a company formed from two culturally disparate competitors. Two turkeys, as the Informer was once memorably told by a Nokia employee dismissing the prospects of Sony Ericsson, do not make an eagle. Hubris?

Maybe, but accurate nonetheless. Sony Ericsson’s woes continued apace this week, with the firm staying firmly in the doldrums, albeit slightly on the up. Net loss for the quarter was €164m, compared to €25m for the same period last year. Sequentially there was improvement, however, with enough leaks being plugged to improve on Q2’s loss of €213m.

The sequential improvement was reflected in shipments, with a slight increase quarter on quarter to 14.1 million. Year on year, though, there was a precipitous drop; 45 per cent from 25.7 million.

If you were wondering where the power is in the industry and wanted to take financial results as an indicator, then Google’s performance is not great news for traditional mobile players. Profit for Q3 exceeded past records at $1.64bn from revenues of $4.38bn, leading CEO Eric Scmidt to pronounce the worst of the recession over. Schmidt also indicated that the firm is set to embark on a serious spending spree, making acquisitions both large and small. Take that, mobile industry! However, it’s probably safe to say that some of the firm’s focus will be on mobile, where Google’s Android platform is gathering momentum. “Mobile is a high-growth business for us already with 30 per cent quarter-over-quarter growth in mobile searches in the third quarter,” Schmidt said.

Also reaffirming its presence in the space this week was Cisco, with the $2.9bn purchase of IP and multimedia infrastructure vendor Starent Networks. Starent provides multimedia intelligence platforms for core network functions and services on any 2.5G, 3G, and 4G network between the radio and the packet core networks. With an increasing focus on mobile internet, Starent has been picking up deals for 4G networks of late, including Verizon’s LTE rollout in the US and Freedom4’s WiMAX deployment in the UK.

When the deal is completed, Starent will become Cisco’s new Mobile Internet Technology Group and will be headed up by Starent’s president and CEO Ashraf Dahod.

Meanwhile Russian carrier MTS and Nordic-Baltic player TeliaSonera have also been on the spend this week. Russian investment house Sistema said Tuesday that it has sold its 50.91 per cent stake in leading Moscow fixed line broadband provider Comstar UTS to MTS, which is the leading Russian mobile carrier. The firm will pay $1.32bn of the stake.

Comstar is Moscow’s leading ADSL broadband service provider, providing voice, data, internet, and pay TV, but the firm has a fixed WiMAX strategy too. Sistema is also the controlling shareholder in MTS, owning 52.8 per cent of the operator.

Across the Gulf of Bothnia, Nordic carrier TeliaSonera has taken control of Lithuanian service provider Teo, after increasing its ownership to 68.08 per cent. As it seeks to boost stakes in what it describes as ‘core holdings’, the carrier has also extended its holding in Estonian provider Eesti Telekom to 97.58 per cent.

Now, for some time the data forecast has been cloudy. The use of cloud computing as a storage solution is becoming increasingly popular and, this week, Vodafone made its first foray into the digital nimbus. On Tuesday the firm announced a strategic partnership with Decho to launch a range of cloud computing services starting with Vodafone PC Backup.

Decho, a subsidiary of storage firm EMC, specialises in online content backup and the first Vodafone branded service will enable customers to securely back up work-related or personal digital content from their computer to a remotely hosted site.

Once a customer has backed-up their digital content they will always be able to access it, even if their primary device is lost, stolen or otherwise unavailable. Using a web-based interface, Vodafone customers will also be able to transfer their content to other devices.

That’s the theory. But for some customers of T-Mobile’s US operation this week, the cloud has been obscuring views of personal information, rather than enabling them. The carriers’ Sidekick users were told this week that much of their personal content had been irretrievably lost following a server glitch. Sidekick data services provider Danger, a subsidiary of Microsoft, was moved to issue an apology.

“Regrettably, based on Microsoft/Danger’s latest recovery assessment of their systems, we must now inform you that personal information stored on your device – such as contacts, calendar entries, to-do lists or photos – that is no longer on your Sidekick almost certainly has been lost as a result of a server failure at Microsoft/Danger,” the service providers said.

The snafu suggested that cloud computing is not as infallible as its enthusiastic supporters believe. Analysts have said that cloud computing will evolve to gradually fill more and more computing service needs, but there are still reservations at present. On Monday, Gartner analyst Thomas Bittman warned that cloud computing services still suffer from “service level requirements that can’t always be met, glaring security holes exist, [and] regulatory compliance requirements haven’t caught up with technological capability.”

T-Mobile pulled the Sidekick from its shelves, which was probably unnecessary as the debacle was hardly likely to inspire a surge in sales. Later in the week, though Microsoft popped up with a silver lining, announcing that it had recovered most of the lost data. So is now guilty simply of generating a great deal of needless frustration.  Hardly new territory.

While we’re on the weather theme, you may remember that Research In Motion’s Blackberry Storm product was something of a disappointment when originally launched a year or so ago. An imperfect Storm, you might say. The touch interface was terribly clunky, with a mechanical display that sunk into the casing when pressed. Anyway, it’s been relaunched this week, with a new SurePress solution based on an electronic system that requires less physical pressure, as well as supporting multi-key actions.

The Storm 2 will be released through collaborations with Vodafone (UK, Ireland, Germany, Netherlands and Spain as well as France, Italy and South Africa in time for Christmas) and Verizon Wireless (US).

And that’s about the size of it this week.

Take care,

The Informer


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