a week in wireless

Up in flames

Historically, there is evidence that Norse warriors were sometimes buried or sent off in a burning ship with a number of slave girls to accompany them to Valhalla. But to be fair to the Scandinavians, human sacrifice has never really been their thing, at least not recently. Still, when you’re a public company, rather than an invading tribe, sometimes these sacrifices have to be made — to appease the Gods of the stock market.

Late this week, Nokia’s executive vice president of sales, Colin Giles, was offered up to those very Gods. Or in the parlance of the 21st century: “After many years of travel, Giles has decided to leave the company to be closer to his family.”

With the departure of Giles, Nokia said it will restructure the sales organisation by “reducing a layer of sales management” to ensure greater customer focus. It appears this ‘layer’ of sales management was exclusively occupied by Colin Giles. And just like with onions, the more layers you peel off, the harder it is to hold back the tears.

The pyre was built in the wake of first quarter results in which the beleaguered Finnish handset vendor continued to fight a battle on three fronts – smartphones, mid tier and low end devices. Operating loss for the quarter topped €1.34bn, down from a profit of €439m in the same quarter last year and a loss of €954m in the fourth quarter of 2011. Net sales were down to €7.4bn, from €10.4bn a year ago.

CEO Stephen Elop, said: “We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges.”

What this means is the company is out of its depth. Sales in the smartphone space stood at just 12 million units in 1Q12, less than half of the 24.2 million it shipped in 1Q11. While the feature phone space sales fell from over 84 million in 1Q11 to 71 million units in 1Q12.

Malik Saadi, principal analyst at Informa Telecoms & Media blamed the poor performance in the feature phone space on the proliferation of the grey market goods and competition from China. Meanwhile, the adoption of Windows Phone as the primary OS has not yet paid off.

However, in the view of Tony Cripps, principal analyst with Ovum, there is little objectively wrong with many of the Nokia products competing with Apple, Samsung and Google/Android that greater customer awareness and a big budget marketing drive could not cure. “And European carriers need to do a great deal more to assist the underdogs if they aren’t to be the engineers of their own self-fulfilling prophecy of handing all power over their subscribers to the duopoly of Apple and Google,” said Cripps

Vodafone and Telefónica were seen this week to be making a bid to keep their power, by communicating to their handset suppliers that support for RCSe/Joyn is now a key criterion for devices to be included in their portfolios. Telefónica has not quite gone balls out, saying that if a device does not support Joyn, it will not be dropped from the range. But Vodafone is taking a harder stance, saying that devices that do not support RCS/Joyn will find it “very tough” to get into the operator’s handset portfolio.

It could still take two to three years before all of the devices available in a market where there is already a high penetration of smart-phones and where all of the mobile operators have launched RCSe, are Joyn-capable, said Pamela Clark-Dickson, analyst with Informa. Also, device manufacturers are yet to reveal their plans. Yes, nine of the top ten OEMs by global sales have officially stated their commitment to enabling RCSe, but Apple has not yet indicated that it will participate in the initiative and the vendor has traditionally held all the cards when dealing with carriers. How this plays out will be interesting to see.

In terms of features, likely launch services will be contact capability discovery; chat; and file or video sharing. Richer features like video calling (how many times has this service been pitched now?) will come later.

Or sooner, if Orange has anything to say about it. According to chief executive for Orange Business Services, Vivek Badrinath, the crucial difference of the firm’s latest crack at video calling, over previous iterations of the technology is that this time it’s cloud-based.

There you go, stick two hyped up visions together and you get a business model. Badrinath continues: “Video as such is become much more important in interaction. The fact that people watch short videos means that the taste for video communications has increased.”

Eh?! Unfortunately, Mr B, the Informer believes there is a crucial ingredient missing from your recipe here: Cats. People have an appetite for watching short videos of cats caught in situations that deflate their typically arrogant and superior attitude. That doesn’t prove their desire to use video for talking to other humans.

Apparently, the service performs best when a dedicated telepresence room is used as these offer uniform conditions that optimise lighting and audio, which enhance the meeting experience. So will these rooms be available direct from Orange in 106 countries as part of the running costs of between €400-€4000 per month.

It’s like some throwback to 50’s advertising propaganda. Just imagine: in the future, there will be one in every home, right next to the fallout shelter and the landing pad for the flying car. “Oh George, darling, are you in the Telepresence Room again? What are you doing in there? You’re not video calling with Leslie Grantham again, are you?”

The Informer read an interview with science fiction author Neal Stephenson this week, with whom many AWIW readers are no doubt familiar. He was struck by a comment from the writer, who is apparently worried that the dark and gloomy outlook prevalent in many works of science fiction is undermining the genre’s ability to inspire engineers. Stephenson now describes himself as a pessimist trying to become an optimist and said: “If every depiction of the future is grim…then it doesn’t create much of an incentive to building the future.” It would, however, make for less gripping reading if Snow Crash were set in a harmonious future free from the effects of anarcho-capitalism.

Trying to distribute the future in an altogether more palatable fashion, financial services provider Barclaycard is pushing contactless payments via the futuristic medium of a sticker.

Yep, in light of the complete lack of NFC or contactless infrastructure in place, the PayTag sticker allows Barclaycard customers to make payments with any mobile phone – or object they put the sticker on – by tapping the device to a reader at the point of sale.

Barclays made its entrance in the mobile money space in February this year with Pingit; a person-to-person service for sending and receiving money using mobile phone numbers but has long been a champion of contactless payment services. Although the PayTag is a one trick pony, it may well help embed the concept in the minds of consumers.

As long as it’s actually used that is. Orange’s director of contactless services warned this week that near-field communication technology may struggle to gain consumer acceptance if retailers and service providers do not harness it to provide compelling services to end users.

Vincent Barnaud, said that while there is a long term need for technologies such as NFC to be used for authentication, there is no guarantee that NFC will become the technology of choice. This is despite increasing momentum behind deployment of the technology. Orange Group made a commitment last year to sell 500,000 NFC handsets – an ambitious target given the dearth of NFC-enabled handsets on the market at the time. Although it met that target, Barnaud cautioned that this offers no assurances that NFC will become widely used, and retailers and service providers offering NFC-based services will be the ones responsible for its take-up.

There’s also competition concerns about early movers in the space. The European Commission’s competition watchdog this week opened an in-depth investigation into the proposed creation of a mobile wallet joint venture by UK carriers Vodafone, Telefónica and Everything Everywhere (T-Mobile and Orange). It seems likely competitive concerns were raised by the one UK operator absent from the joint venture, 3UK, which would find itself shut out of the party.

The Commission VP in charge of Competition policy, Joaquín Almunia, is looking at the venture under EU Merger Regulations and said that the Commission’s initial investigation revealed that the joint venture – known as Oscar – and its three parent companies may have the technical and commercial ability and incentive to block future competitors from offering their own mobile wallet services to customers in the UK, or to degrade the quality of these competing mobile wallets so that they become less attractive.

Almunia’s colleague, “Steely” Neelie Kroes, vice president of the EC’s Digital Agenda, was up on stage at a summit in Lyon this week, dangling a pair of handcuffs sent to her by the Free Software Foundation. No, this wasn’t Richard “RMS” Stallman showing his kinkier side, this was Kroes and the FSF moving to “get rid of digital handcuffs” to protect the “openness of the internet”.

Kroes wants to make it easier for public authorities to use open standards online and said that the EU is working on providing guidance to do that. “We can deliver choice, competition, innovation, opportunity, freedom and democratic accountability. Look at what we could do if we opened up public sectors and put their data online.” The Informer, sceptic that he is, foresees lots of embarrassing data privacy gaffes if this comes to pass.

And on the subject of future gazing, Vodafone Ireland has agreed to refund customers a total of €1.2m after overcharging them for premium calls over the past three years. The company was found to have overcharged prepaid mobile customers for calls to premium phone lines, such as psychic hotlines, during the period from December 2008 through to December 2011.

“I see into your future…you will lose some money. But then you will come into some money.”

Take care

The Informer

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