2018 Ups and Downs on the Mobile Roller Coaster

Who will look back on 2018 as being a landmark year and who will be glad it’s all over and hoping 2019 will be kinder to them? Azenby is having a go at picking the winners and losers in 2018 in the mobile world. Let us know if you agree with our findings.

Apple

Having brought us the $1,000 smartphone, we can assume that Apple have discovered the outer boundaries of our mobile device spend! Overtaken by Huawei in smartphone sales and facing import bans on older iPhone models, Apple have had an unusually mixed year. It was also a year when their halo slipped, and they had to admit to slowing down our iPhones to improve battery performance. Trouble is, they didn’t want us to know they were doing it. Still this didn’t stop them becoming the first ever company with £1tn market capitlisation and the Apple Watch finally started to find some wrists. And then there is Siri of course. Make your own decision on where that sits on the roller coaster ride.

5G

Surely its been a great year for 5G. Not a week goes by when one mobile operator or another isn’t shouting from the mast tops about a 1Gbps 5G trial. At Azenby we can see the difference between a trial and a commercial deployment, devices in the shop being one big clue! The other rather important prerequisite to launching 5G is of course a bit of backward compatibility with 4G (and 3G and 2G). At Azenby we wondered out loud about the wisdom of continuous backward compatibility in developing new technologies, but we lost that argument. We’ll try again when 6G comes along. With this in my mind we couldn’t help but be fascinated by the comments of Balazs Bertenyi, Chairman 3GPP TSG RA, when he said “3GPP RAN has put extreme focus on ensuring the stability and compatibility of these specifications that are to be used for the first 5G deployments. Consequently, work on components for the ‘late drop’ that address additional architecture options to aid migration from LTE to 5G have been slightly delayed.”

The big question is; has 5G arrived in 2018 or not?  Yes and No is the answer, but nearer No than Yes. In the Middle East we have seen commercial fixed wireless services launched using a 5G radio interface and in the USA, two operators have brought 5G data only products to the market. None of these are full-on 5G mobility services with backward compatibility to LTE and at Azenby we are holding back our award for the world’s first true 5G commercial launch until we see this criterion met.

The consequence of this focus on pure 5G first deployments over legacy support is, we understand, a further delay of three months or more (we bet more) on freezing Release 15. We think 3G could well be a big casualty in the 5G race. One less legacy technology to support will be appealing for both operators and vendors alike and at Azenby we think it’s the big chop for 3G. And good riddance to it, complicated, flaky, useless standard that it is. It won’t be lamented.

Lawyers

A great year for lawyers. When is it never a great year for lawyers! Apple and Qualcomm slug out patent law suits in the US, China, Germany and the UK with Qualcomm asking for $1bn in damages in the US alone. Qualcomm says Apple is a mind boggling $7bn behind in its royalty payments (that’s a very big cheque to be stuck in the post) so the £1bn damages may just be the tip of the iceberg. Apple lawyers counter sue, and you can’t help feeling that lawyers will be the only winners out of all this. They should at least be able to afford one of those thousand buck iPhones. At Azenby we wonder what the Qualcomm’s actions do to their sales pitch. One can’t help but feel that a customer would have to think long and hard about the risks of themselves of being on the end of one of these writs. (Note to San Diego, Azenby is not knowingly infringing any of your 17,000 patents). What we really want to see from Qualcomm is the Snapdragon 855 processor, a perquisite for 5G. We’d rather be talking about that than law suits!

Huawei

If ever a company had a mixed year! Forging ahead in sales of mobile infrastructure, announcing over twenty 5G network deals, test casing 5G, selling more devices than Apple. So, a great year for Huawei on the face of it. Except that, well, the western world is ganging up on it. Banning orders and threats of banning orders from the USA, Australia, New Zealand, Japan, Germany and now the UK, have put a bit of a downer on 2018 for the Guangdong giant, not to mention the arrest of its CFO Meng Wanzhou, for allegedly breaking sanctions. We don’t sit in judgement here at Azenby but we would humbly suggest to our friends in China that if they took IP Title a little more seriously, then perhaps they would get a better press.

ZTE

One could argue that Huawei had it easy in comparison to ZTE. The US Government banned all sales from ZTE and imposed sanctions on the company which resulted in a complete shutdown of operations. ZTE breached previous conditions on where it sold US technology and paid a heavy price. $1bn dollars to be precise and a commitment to change out its entire board. Its back up and running now but took a heavy blow in 2018.

M&A

2018 was a continuation of the mania around M&A deals. Qualcomm held a central role here as well, firstly having their sale to Broadcom ‘Trumped’ only then to see its own acquisition of NXP crushed again by US regulators. One deal that finally did get the go ahead was the tie up between Sprint and T-Mobile US, bring the number of major competitors from four to three in this huge market. Talking of T-Mobile, their Netherland venture also got the merge with Tele 2 over the EU competition hurdles. Probably the biggest mobile operator merger of the year though, certainly in market size terms, was the formation of Vodafone Idea in India. Like T-Mobile, Vodafone has been busy in 2018 as well as it also tries to get the go ahead for its takeover of Liberty Global in Germany and beyond. At Azenby we are not at all surprised by any of this as we have long been strong advocates of the need for operators to share infrastructure. Merging companies together is the most extreme form of this of course, but even simple RAN sharing has the potential to radically transform MNOs business performance and their balance sheets.

Blockchain

2018 hasn’t been kind to Blockchain and Crypto currencies. Unless of course you are drug baron or money launderer. At Azenby, we indulge in neither practice, so we waited to see the more legitimate benefits unfold. We searched and search and struggled to see the gold shoots its many proponents have promised. We are not alone. The US Agency for International Development has conducted a study of forty projects where blockchain was supposed to make services more efficient found a success rate of zero. Add to that that one of Blockchain’s darling Crypto currencies, the Bitcoin, has shrunk in market value to the tune of $180bn since the beginning of the year, one might think that the Blockchain Emperor has no clothes.

The year of the hack

It was a good year for hackers. It seems hackers don’t need to try so hard these days to steal personal data. At Azenby, we take the need for proper IT and Network security very seriously, but it seems we are in a shrinking camp. Far too many of the reported ‘hacks’, involved very poor husbandry of customer data. Those of us who chose security for a lifetime career, were proved right once again, and the lessons of the past are still not being learnt. As we have seen, data theft often involves the theft of personal information. This is very serious of course because this is the sort of data that could be used to clone identities. In many cases of reported hacks, the security procedures being employed by organisations have been woefully inadequate. Amongst those just being very careless with customer data were Marriott Hotels, British Airway, Eurostar, FIFA, Google+, Butlins, Exactis, Strava (showing the sensitive military sites where there were keen fitness people), amongst what is sadly, a very long list indeed.

Facebook were fined £500,000, the maximum allowed, by the UK Information Commissioner’s Office in the wake of the Cambridge Analytica scandal. This case was worrying because this was not a hack but Facebook allowing access to third parties data without the owners consent. Indeed, the lines of data protection have become blurred for those media companies whose business model is based on selling personal data to advertisers and other bidders. .

Facebook

Talking of Facebook, they have for so long been racing the upside of the rollercoaster and achieving unheralded heights that it seemed rather inevitable that the once over the top of the big riser it might be quite a descent with no brakes. So many of Facebooks much reported and discussed woes in 2018 have been self-inflicted and quite how deep the wounds are only time will tell. Its imaginative accounting practices and its ability to pay less tax then a market stall holder, means it was short of goodwill and credit once the tide turned and 2018 does seem to have been a bit of gamechanger for the hitherto unstoppable monster harvester of data. And what with data being its prime commodity, its big revenue earner and its only real asset, one would have felt that they might have taken better care of it in 2018. Having started the year promising to help us all make more friends, it has ended it being rather friendless.

We don’t have the space, time or the inclination to list all the trials and tribulations that beset Facebook in 2018 but just of the top of our heads we can bring to mind; being clueless on what constituted fake news, providing a platform for Russian meddling in elections, allowing Cambridge Analytica to access data from some 87 million users, the struggles to understand what GDPR actually means, the CEO facing the European Parliament and not facing the UK Parliament, the lawsuit from Six4Three, giving access to personal data to 60 device manufacturers – without our permission of course, the  “security update” that exposed the data of 50 million users , the private photo’s leak that exposed up to 6.8 million people’s private photos…………….. Wow, this is a long short list!

At Azenby we fully expect now to be included in operation Opposition Research but at least we are in good company. At Azenby we won’t be worrying about data leaks from our own Facebook page. We are far too wise for that! We can only conclude that Facebook win the prize for being on the big downer on the 2018 roller coaster.

And the winner is……………..

Let’s finish on a positive note and decide on who we think has had the best of 2018. In terms of news domination, SoftBank were streets ahead. Now a conglomerate with ownership stakes in ARM, Boston Dynamics, Sprint, Alibaba, Yahoo Japan, Brightstar, Uber, Snapdeal, Brain, Fanatics, Nvidia, Slack, WeWork, Compass to name but a few, it has plenty of platforms to work with. Yes, it’s true that SoftBank are much bigger than just mobile but their interest in mobile related companies and their approach to the mobile industry is setting new benchmarks for MNOs to try and follow. SoftBank also runs the Vision Fund of course which is now reputed to be the world’s largest technology fund. SoftBank announced deal after deal in 2018 across geographies and in diverse industries. If what we read is correct, it invested in 35 rounds, totaling over $30 billion. We feel sure at Azenby that it is only a matter of time before Vision Fund knock on our door, but we want to make it clear that that had absolutely nothing to do with our choice of Softbank as the winner in 2018.

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