a week in wireless

Cloud-based service?

What with its advertising slogan being “there’s an app for that” you might have thought that Apple’s App Store would be the place you’d find a mobile application dedicated to charting the progress (or lack thereof) being made by the volcanic ash cloud that has kept so many people far from home over the past week or so. But the app in question actually popped up in Nokia’s Ovi store, instead.

Essentially a travel news update service with a new skin, the app included information from National Air Traffic Services as well as airlines. It came a little late in the day, unfortunately, just as the airports were opening again and planes were disgorging weary, strung out travellers onto home soil.

Every cloud has a silver lining, they say. This one was supposed to have a purple lining, in the UK at least, as the ash was predicted to create spectacularly colourful sunsets. But the Informer didn’t see one. And just as there was no purple sunset, there’ll be no Orange Sunrise, thanks to ComCo, the Swiss competition commission, which has ruled against the proposed merger of France Telecom and TeleDanmark’s Swiss operations.

ComCo said the merger would create a company that was too dominant in the market, despite the fact that the two firms’ mobile subscriber base combined would stand at 3.5 million, more than two million short of market leader Swisscom, according to Informa Telecoms & Media estimates. The problem with the deal seems more likely to be that it would create a market with only two mobile carriers and regulators don’t really like duopolies.

And TeleDanmark doesn’t really like Switzerland, at least as a market to operate in. The merger proposal gave TDC the right to duck out through a sale of the 25 per cent stake it would have been left with after two years, and through an IPO of that stake after three years. For now, though, it looks as if the firm is stuck where it is.

France Telecom and TDC said in a statement that they were “disappointed and surprised” by ComCo’s decision. The firms continued: “The substantial commitments [we] had proposed to undertake would have benefited the Swiss consumer. Without this combination, Swisscom’s dominant position in the Swiss telecommunications market would be maintained.” It’s all about the consumer, of course. Or at least it’s about the consumer’s apparent enthusiasm for Swisscom.

Which is nothing compared with the consumer’s apparent enthusiasm for Apple’s iPhone. The Californian vendor sold enough iPhones worldwide in the first quarter of 2010 to give one each to every person in Switzerland with a million or so left over (to cover the ones that break). Apple shifted 8.75 million phones in the quarter, a year on year increase of 131 per cent, which helped boost profits for the quarter by 90 per cent to $3.07bn. 90 per cent!

Sales of Mac computers were also up, by 33 per cent, to 2.94 million units, although the trusty iPod, Apple’s breakthrough device for the mass market, dropped in popularity by one per cent, with 10.89 million units shipped. Given the functional overlap with the iPhone, it’s not that surprising that iPod sales might start to dwindle.

“We’re thrilled to report our best non-holiday quarter ever,” gushed CEO Steve Jobs. “We’ve launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year.”

One of these may well be the next generation iPhone. Pictures of a device reported to be a prototype of this product were posted online this week by Gizmodo, which said it had been left in a Californian bar by a well-refreshed Apple engineer. Presumably this man is now a former Apple engineer; Jobs doesn’t strike the Informer as the kind of man who would see the funny side of such drunken absent mindedness.

Rumours have been circulating this week that Apple might be poised to make a bid for silicon player ARM. Jobs is ARM’s biggest customer, but not the only one, so ARM would probably have some serious customer relationship management to do if it was bought by a firm that is giving established players a bit of a schooling. In other silicon news, STMicroelectronics reported a 40 per cent increase in revenue to $2.33bn, and a profit of $57m.

And Qualcomm was in the pink as well, with net profit of $774m, compared to a loss of $289m for Q1 last year, caused by the settlement of its lengthy legal battle with rival Broadcom.

Back to the phones themselves, though, and when you’re the biggest handset vendor in the world, 131 per cent increases in unit shipments like Apple posted will never be yours to shout about and Nokia’s 16 per cent increase was more modest. The firm shipped 107.8 million handsets during the first quarter, which contributed to a three per cent year on year increase in revenues to €9.5bn. CEO Olli-Pekka Kallasvuo trumpeted an increase in both revenue and operating profit but was forced to concede Nokia’s ongoing weaknesses in the top end of the handset market and tough times in the infrastructure game for its offspring Nokia Siemens Networks.

“In Q1, Nokia delivered both year-on-year net sales and operating profit growth. We continue to face tough competition with respect to the high end of our mobile device portfolio, as well as challenging market conditions on the infrastructure side,” he said. But he suggested that the firm was proving itself in the smartphone market: During the quarter, we also demonstrated our ability to deliver the Nokia smartphone experience to consumers on a global scale, with our smartphone shipments up by more than 50% year-on-year.”

That didn’t chime particularly well with the news that the firm’s latest range of smartphones, which it desperately needs to perform in the face of competition from Apple and the Android crowd, will be delivered later than originally anticipated. While the new range of Symbian phones will still be launched in Q2 this year (only just), shipments will not begin until Q3, the firm said. And you can bet that doesn’t mean July 1st.

Nokia has always had the scale of its business to fall back on, in particular the vast quantities of handsets it’s shipped at the low end. But the firm is feeling the pinch here as well. “Competitive pressures in the ultra-low to mid-range product price bands, particularly in certain Asian countries, adversely affected our mobile device volumes in the first quarter 2010,” the firm’s statement said. There’s some soul searching to be done there.

Over in Sweden, Ericsson put its results out this week as well, and had some glum news of its own. The firm reported a 30 per cent drop in profits for the first quarter, netting SEK1.3bn ($180m) for the three months to end March, compared to SEK1.8bn for the same period in 2009. CEO Hans Vestberg said a slowdown in infrastructure sales was partly to blame, and the firm was also impacted by ongoing restructuring costs.

The shift in Ericsson’s business to a more service-oriented offering was reflected in a three percent increase in Global Service revenues to SEK13.3bn, with managed services growing by 17 per cent to SEK4.9bn. Network sales, meanwhile, declined by 14 per cent to SEK24.7bn.

“The market conditions we saw in the second half of 2009 prevailed also in this quarter with mixed operator investment behavior across regions and markets,” said Vestberg. “Operators in a number of developing markets were still cautious with their investments which impacted Networks’ sales.”

Something else Ericsson released this week was a cellsite in a backpack. The Informer’s not seen one of these before and it’s pretty darn impressive. Weighing in at eight kilos, the backpack contains a fully operational GSM cell site that can be set up in 15 minutes flat, the firm said. It can be used as an extension to an existing network through a satellite link. Pretty neat.

Ericsson is one of the LTE suppliers to pioneer carrier TeliaSonera, which this week reported a year on year increase of six per cent for first quarter profit. CEO Lars Nyberg was particularly chuffed with revenue growth in Finland and Denmark thanks to increased data usage. The firm’s metropolitan LTE networks in Stockholm and Oslo will be extended to 25 Swedish and four Norwegian cities, Nyberg said. “Now is the time to selectively increase our investments in bandwidth,” he said, which is the kind of caution that’s keeping the likes of Ericsson on the rack.

Sticking with the LTE theme, Qatari operator Qtel has chosen NSN to upgrade its RAN kit and implement an all-IP backhaul solution ahead of an upgrade to the fourth generation. As an existing managed services provider, NSN was a bit of a shoe-in. The firm also announced this week that it had started production of LTE gear for use in the 800MHz range. Staying in the Middle East briefly, Saudi player STC has instructed Chinese vendor Huawei to deploy what it is claiming as the region’s largest pre-commercial LTE network.

Not too far away, Egyptian headquartered Orascom’s shares have ceased trading this morning in anticipation of a substantial announcement. Word is that it could involve the sale of the firm’s African portfolio to regional powerhouse MTN, which failed in its bid to merge with Bharti Airtel (which in turn, satisfied its lust for African property by gobbling up Zain’s business on the continent).

Finally, then, it just falls to the Informer to wish YouTube a happy fifth birthday. No doubt record labels, sports rights owners and sellers of sitcom DVD box sets will not be coming to the party.

Take care

The Informer

One comment

  1. Avatar Jacob 25/04/2010 @ 7:54 am

    what about more infromation on the ZTE’s Android-based Blade phone?

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