Haves and have-nots

By The Informer

You can tell when something that was once the purview of the rich has been made available to the unwashed masses, when the peddler of said product puts out TV ads goading people into buying its wares. The Informer was a little taken aback this week at the audacity of Apple’s latest ads for the iPhone. “If you don’t have an iPhone, you don’t have the App Store. So you don’t have the world’s largest selection of apps that are this easy to find and this easy to download right to your phone,” the voiceover says, as Steve Jobs thumbs his nose at the industry.

With Apple pushing the benefits of its tightly controlled ecosystem, the Informer wonders how well received, or ill timed, the announcement is from disruptive app store alternative, Appitalism, promising to free iOS apps from Apple’s clutches. Using a bit of trickery with the App Store gifting feature, Simon Buckingham’s marketplace has set up the App Concierge, which allows users to browse and pay for content in the iTunes App Store without leaving the Appitalism store. Once the purchase is complete, the consumer receives an SMS text message with a direct installation link for that app on their Apple device. So Appitalism is handling the browsing and automating the purchasing process for iOS content while keeping the eyeballs.

It’s a shrewd move and Buckingham says that the App Concierge has been designed as a stand-alone product for licensing to other third parties such as mobile network operators who might want their customers use their content portals and billing relationships for iOS apps.

Yes, both Apple and all of the app developers who work with iTunes and the App Store continue to receive the same economic terms as they always have and developers are paid in exactly the same way — through Apple. And Buckingham argues that the move benefits Apple as well, yet the Informer reckons Cupertino might not see it that way.

There may be further fisticuffs among the app shop keepers this month too, as a slip up at Amazon revealed that the forthcoming Amazon appstore boasts a number of exclusives, including Rovio’s Angry Birds Rio, and several apps that will be cheaper than in the Android Market. Amazon’s appstore is expected to open its doors late this month or early April.

Getting the rest of the Android news out of the way, Google is rumoured to be planning NFC payment trials in New York and San Francisco within the next four months. The word is that Google will pay for the installation of thousands of custom-built NFC-enabled Verifone terminals at merchants across both cities, while the Samsung Nexus S smartphone – the first Android device to ship with built-in NFC functionality – will play a key role in the trial.

In other NFC news, Spanish operators Telefónica, Vodafone and Orange will jointly develop a payment system for the market, with the three operators aiming to create a simplified and homogenous standard and avoid any fragmentation that may occur by working separately.

Leo Apotheker, the head honcho of Palm owner HP, has a similar dream. This week, Apotheker expanded on his plans to push the webOS platform by pre-installing it on every PC the vendor ships. As the world’s leading maker of PCs and printers by some margin, HP has the potential to deliver 100 million webOS-enabled devices a year into the marketplace. This growing installed base of devices provides a huge opportunity for HP to thrust webOS upon users and in tandem, build a robust developer community targeting both the consumer and enterprise segments.

The cloud is central to Apotheker’s strategy both on the desktop and the mobile. In HP’s view, a hybrid environment that combines traditional environments with private and public clouds will be the prevailing model for many large enterprises for a long time. Never one to miss a passing bandwagon, Apotheker also unveiled plans to build an open applications marketplace – a cloud services app store – that integrates consumer, enterprise and developer offerings. The platform will support multiple languages and will be open to third-parties. HP will vet applications for security and interoperability to facilitate an environment that is both trusted and open. A device-aware HP cloud will configure and send the appropriate services to the device that the customer is using, and connected devices will intuitively access services the customer needs, Apotheker said.

Moving on to duality of another sort now, and shareholders in Russian operator VimpelCom are taking another crack at the proposed $6bn merger with Wind Telecom. Despite strong opposition from major VimpelCom shareholder Telenor, more than 53 per cent of voters supported a deal that will see the creation of the world’s fifth largest mobile company by subscriber base.

Under the deal, the telecom assets of Egyptian billionaire Naguib Sawiris have been acquired, bringing with them a series of challenges, not least in Algeria, where the possiblity of nationalising Sawiris’ assets (including Orascom) will almost certainly bring about lengthy negotiations. Other speedbumps include the integration of holdings in 15 emerging markets as well as Canada and Italy, an ongoing legal battle with Telenor and a need to reduce debts.

Orange owner France Telecom is also trying its luck in Iraq, making good on rumours that have been circling since December by announcing plans to take a sizeable stake in Korek Telecom. France Telecom will form a joint venture with logistics company and investment partner Agility, which will take a 44 per cent stake in Korek. Agility will own 54 per cent of the JV and a 24 per cent indirect stake in the Iraqi firm, while France Telecom will own 46 per cent of the JV, and a 20 per cent indirect stake in Korek. In addition, France Telecom will have the opportunity to exercise an option in 2014 to increase its indirect stake in Korek Telecom to 27 per cent and, in the process, gain indirect control of the company, thereby consolidating Korek Telecom in its accounts. If this option is exercised, Agility will be able to sell part of its indirect stake in Korek Telecom to France Telecom.

Just across the border, the on-again-off-again sale of Zain’s Saudi Arabian operation looked a bit more solid, when the Kuwait-headquartered carrier accepted an offer, from a joint venture made up of Bahrain’s Batelco and Saudi Arabia’s Kingdom Holding Company (KHC). According to local press reports, Zain has accepted an offer of $950m for its 25 per cent stake in Saudi’s Zain KSA. If successful, the acquisition may put UAE operator Etisalat’s move to buy a large stake in Zain back on track. In order for the Etisalat deal to go ahead, Zain is required to offload its Saudi unit, as Etisalat also has a presence in the country via Mobily.

Nokia Siemens Networks’ bid to acquire Motorola’s wireless network assets is also in trouble, given the Chinese Anti-Monopoly Bureau’s (MOFCOM) reluctance to approve it. The planned deal, valued at $1.2bn, has been moving at a glacial pace since its inception in July last year, thanks to some strategic foot dragging on the part of the Chinese. NSN is now believed to be seeking to exclude Motorola’s GSM assets from the deal and lower the price accordingly in order to get the wheels moving again.

The delays are set against a backdrop of tit-for-tat conflicts between the Chinese state and industry and its Western counterparts. Huawei recently won an injunction in the US relating to the NSN sale, requiring proof that intellectual property it had licensed to Motorola would not transfer to NSN as part of the impending agreement. While Huawei itself was recently forced to withdraw from its acquisition of 3Leaf by the US Committee on Foreign Investment, prompting the firm’s chairman to write an open letter to US authorities challenging them to present proof that Huawei has links to Chinese military and intelligence services – accusations that have dogged the vendor as it seeks to build its business in the West.

Wrapping up the week’s news now and the Informer hears that Rupert Murdoch’s iPad-only newspaper, The Daily, is set to launch in the UK before July this year. Murdoch probably has a kindred spirit in Steve Jobs, and will no doubt be cheering the success of the walled garden. At the same time, the New York Times is setting up a pay wall that will see users charged different rates for access to its online content based on the type of device they use. Access via mobile devices is cheaper and if successful, the move could spur greater commitment to mobile content and help drive sales of smartphones and tablets.

Take care,

The Informer