Samsung’s Galaxy SIII

Industry Analyst Strategy Analytics has released estimates for the size of the Android smartphone market during the first quarter of 2013, declaring that Korean device vendor Samsung captured 95 per cent of profits from Android devices in the period.

Strategy Analytics puts global operating profits from the Android device market at $5.3bn for the quarter, with Samsung accounting for an astonishing $5.1bn of the total. In second place, fellow Korean player LG took three per cent of Android OP. Android itself accounted for 43 per cent of total smarpthone industry operating profit for the quarter, which Strategy Analytics estimated had hit $12.5bn.

“We believe Samsung generates more revenue and profit form the Android platform than Google does,” said Neil Mawston, executive director at Strategy Analytics. Samsung has strong market power and it may use this position to influence the future direction of the Android ecosystem. For example, Samsung could request first or exclusive updates of new software from Android before rival hardware vendors.

Sprint Nextel has blamed delays by equipment vendors stifling the rollout of its Network Vision project

US operator Sprint Nextel has blamed delays caused by equipment vendors for stifling the rollout of its Network Vision project, in a filing to the US Securities and Exchange Commission. As a result, the operator said that it had been forced to revise its plans to bring 12,000 multi-mode base stations on-air by the end of 2012, pushing the deadline back to 1Q13.

Ericsson, Alcatel-Lucent and Samsung all supply equipment to Sprint as part of its Network Vision project.

“The deployment of multi-mode technology is project managed by Sprint but dependent upon three primary OEMs, each of which has responsibility for a geographical territory across the United States,” Sprint explained in the filing.

“We have recently experienced delays with vendor execution, backhaul connectivity delays, shortages in equipment such as fiber cable and antennas, as well as other regulatory and environmental issues.”

The operator added that the delays have caused an increase in depreciation to existing Nextel and Sprint assets.

Sprint said it expects to recover from the delays and is still forecasting to have the majority of its sites on-air by the end of 2013. Its Network Vision LTE network deployment is now expected to be completed by the middle of 2014.

The LTE North America conference is taking place on the 21st-22nd November 2013, in Dallas, Texas, USA. Click here NOW to download a brochure for the event.

Expect Labs’ technology allows devices and applications to continuously pay attention to user behavior in order to better anticipate information that the user needs.

Telefónica, Intel and Samsung have invested undisclosed amounts in San Francisco start-up Expect Labs. The start-up is developing a platform to power a “new generation of intelligent digital assistants”, and has already benefitted from investments from Google and venture capital firm Greylock.

Expect Labs’ technology allows devices and applications to monitor to user behavior in order to better anticipate information that the user needs. According to the firm, its platform can model the context of user interactions in real-time, and proactively find information before the user needs to search for it.

Tracy Isacke, head of Telefónica Digital Ventures, said the operator group sees potential for Expect Labs’ technology across all areas of its business. She added that the firm’s investment opens the door to collaboration between Telefónica and Expect Labs’ technical teams.

Samsung’s Venture Investment Corporation (SVIC) added that it expects  to empower Expect Labs to enable new types of intelligent, voice-driven and context aware behavior across smartphones, tablets and smart TVs.

“Expect Labs has taken a unique approach to modeling context using sensor signals, such as GPS and audio, that are available in the new generation of computing devices, “ said Brannon Lacey, principal at SVIC  “We think this approach is an important step toward creating a new layer of application and device intelligence.”

And Intel’s global investment organisation, Intel Capital, added that it has been investing in making devices more intelligent and context-aware. It is now looking to help create new types of user interfaces driven by voice, touch, and gesture.

“In just a few years, we will live in a world where the connected devices all around us will know who we are, understand what we say, and be far more capable of interpreting our intentions and anticipating our needs, “ added Timothy Tuttle, Expect Labs CEO and founder.

That said, it was the first drop in a decade, the latest bump in the road for CEO Tim Cook, who was never going to have an easy time picking where Steve Jobs left off. Revenue was up, on the other hand, to $43.6bn, although the margin was down from 47.4 per cent to a wafer thin 37.5 per cent.

In a bid to keep the shareholders happy Apple announced plans to return $100bn to them by the end of 2015, by which time the firm will have repurchased $60bn of its own shares. It also increased its quarterly dividend by 15 per cent. The firm ended Q1 this year with $145bn in cash.

For the next quarter Apple expects revenues to slacken to somewhere between $33.5bn and $35.5bn with a margin between 36 and 37 per cent.

Meanwhile Apple’s biggest rival in the device space, Korea’s Samsung, grew profits by 42 per cent for the quarter, to $6.4bn, on revenues of $47.5bn. The firm’s IT and Mobile Communications business was the heavy hitter, contributing 62 per cent of revenues, with Samsung remaining coy on device shipments, saying only that sales of the SIII and Galaxy Note II were “sound”.  It warned that growth might weaken as the year unfolds.

“Although market uncertainties from the European crisis and the slow global economic recovery are still lingering, we expect to increase R&D spending for strengthening our competitiveness ahead of planned new product launches,” said Robert Yi, senior VP and head of investor relations.

“We may experience stiffer competition in the mobile business due to expansion of the mid- to low-end smartphone market while TV growth will continue to wane in developed markets.”

Samsung added that smartphone sales are expected to stay flat in the second quarter but will pick up again in the second half of the year.

Fortunately research outfit IDC was on hand to fill in some of the blanks. Samsung’s concerns over the creep of low-end smartphones seem well justified, with IDC reporting this week that smartphones out-shipped feature phones for the first time in the industry’s history during Q1 this year.

418.6 million devices were shipped in the quarter, of which 216.2 million were smartphones. That is a 41.6 per cent increase on the same period last year.

“In addition to smartphones displacing feature phones, the other major trend in the industry is the emergence of Chinese companies among the leading smartphone vendors,” said Ramon Llamas, research manager with IDC’s Mobile Phone team. “A year ago, it was common to see previous market leaders Nokia, BlackBerry (then Research In Motion), and HTC among the top five. While those companies have been in various stages of transformation since, Chinese vendors, including Huawei and ZTE as well as Coolpad and Lenovo, have made significant strides to capture new users with their respective Android smartphones.”

IDC put Samsung’s smartphone shipments at 70.7 million for the quarter, more than the combined totals of Apple, LG, Huawei and ZTE, which occupy the rest of the top five rankings.

Samsung wasn’t the only Korean going great guns this week (that’s not a reference to Kim Jung Un, by the way)  as SK Telecom announced that, just 21 months after launching its LTE service, it has passed the ten million subscriber mark. SKT took 37 months, by comparison, to hit the same milestone on its WCMDA network, it said, and LTE now accounts for 37 per cent of its total mobile subscriber base.

South Korea and Japan are about a year ahead of their nearest rivals in terms of LTE progression, according to Thorsten Robrecht, head of portfolio management at NSN, which is one of SKT’s network suppliers. The operator said that it will be introducing some LTE-Advanced features from September this year to improve the service and aims to sign up a further five million LTE subs by the end of this year. It’s ranging 25 LTE-capable smartphones, five tablets, two USB modems and an LTE-enabled camera.

Here in the UK we’re a smidgen off that pace. EE, the first and so far the only UK LTE operator, announced this week that it has 318,000 LTE subscribers. The operator, which reported quarterly revenues of £1.4bn, 5.4 per cent down on the same period last year, said that it signed up 166,000 new postpaid subs during the three month period and is on track to hit one million LTE subs by year’s end.

US operator Verizon is the subject of much speculation at the moment, with many in the industry clearly expecting it to make a muscular bid for the 45 per cent of Verizon Wireless that is currently held by the UK’s Vodafone. Reuters cited people “familiar with the matter” as revealing the US carrier’s intention to offer Vodafone $100bn for its stake.

Only time will tell us whether  this is indeed true, or whether the matter these people are familiar with is actually bovine and faecal in nature.

$100bn is big money and this week Verizon reported quartlery net profit of $1.95bn for 1Q13, a 16 per cent year on year increase on the $1.69bn generated in 1Q12. The firm’s first-quarter revenues hit $29.4bn, a 4.2 per cent increase on 1Q12.

The operator said earlier this year that following the introduction of its shared data plans it would switch from using average revenue per user (ARPU) to average revenue per account (ARPA) as an indicator. This increased by 6.9 per cent year on year to $150.27 per month, the firm said.

At the end of the first quarter, smartphones accounted for more than 61 per cent of the Verizon Wireless retail postpaid customer phone base, up from 58 per cent and Verizon Wireless saw total revenues rise 6.8 per cent year on year to $19.5bn.

The news was less rosy at TeliaSonera, which saw revenue fall by 4.5 per cent year on year to SEK24.5bn ($3.75bn) for 1Q13. Net profit dropped more modestly, by 0.3 per cent to SEK4.1bn. Over the period, the Swedish operator group also saw its customer base shrink by 800,000 customers.

“Our industry continues to go through a period of change where traditional business models are being challenged by new customer behaviour,” said acting president and CEO Per-Arne Blomquist.

Blomquist also warned that the group would have to take cost-cutting measures to get it back on track.

“In order to maintain our ability to invest in future growth, it is essential to manage our cost base in a prudent way. We have continued to put significant emphasis on implementing the efficiency measures initiated at the end of last year. There were effects within Mobility Services already in the quarter, while within Broadband Services they will come in the latter part of the year. We remain determined to bring total costs down by SEK2bn net over a two year period.”

And Mexico-headquartered América Móvil saw its net income fall by 17.4 per cent year on year to 26.87bn pesos ($2.34bn). First quarter revenues stood at 193bn pesos, which were up just 0.2 per cent higher than those of the prior year in Mexican peso terms, and 6.1 per cent up at constant exchange rates, according to the firm.

The group finished March with 328.2 million customers, a 7.4 per cent year on year increase. Of that number, 262.9 million customers were wireless subscribers, 30.3 million landline customers, 17.8 million broadband users and 17.2 million PayTV subscribers.

The firm’s mobile subscriber base rose 6.9 per cent year-on-year, most notably in Brazil, where 1.1 million subscribers got on board and in Mexico where it won 854,000 new subscribers. In the US, its Tracfone MVNO also gained 839,000 users, twice as many as the firm gained last year in the country.

Over on the infrastructure supply side, Ericsson’s first quarter profits fell year on year to SEK1.2bn $182m) from SEK8.8bn for the same period in 2012, largely due to the boost given to 1Q12 numbers by the firm’s exit from the Sony Ericsson device JV. While the vendor recorded a two per cent uptick in sales to SEK52bn it was hit by currency fluctuations and a disappointing performance from its network rollout business.

Sales in the Networks and Global Services units were up three and four per cent respectively, hitting SEK28.1bn and SEK 21.5bn. But Support Solutions, behind which Ericsson has been putting considerable weight in the last year, saw sales drop by 19 per cent to SEK2.4bn.

Managed and Professional Services held steady but the Global Services unit was pulled down by  the Network Rollout unit, which saw operating income drop by 73 per cent to a loss of SEK1.1bn. Ericsson CFO Jan Fryhammar described this as “nothing dramatic” and due to unforseen delays in LTE deployments, particularly in Latin America where Ericsson had “some idling resources,” he said.

Frykhammar said that, while there were positives in the top line, and in the profitability of the Networks division, he was concerned by Ericsson’s cashflow. “I will never be happy when the cashflow is negative,” he told Telecoms.com. “We have a tendency towards a strong finish on our operating cashflow but this time it was negative SEK3bn. That’s something we will work hard to improve going forward.”

North America and North East Asia remain the most important regions for Ericsson, given the advanced state of LTE deployments. Frykhammar said that one of its key North American LTE projects (presumably Verizon) had now “peaked” but that he expected high activity levels in the market to continue, shifting to capacity rather than coverage as the year goes on.

In North East Asia Ericsson’s most important upcoming project is the deployment of TD-LTE by China Mobile, although that operator’s retreat from GSM investment impacted on Ericsson’s first quarter, Frykhammar said.

While Ericsson’s core business will remain the provision of equipment and services to the world’s telecoms operators long into the future, the firm is looking to other sectors as operators endure turbulent times. Frykahmmar pointed towards contracts with shipping giant Maersk and energy supplier Eon as examples of important diversification, as well as its growing business in the media segment.

But the firm wants direct relationships with customers and, in pursuing them, could find itself at times in competition with its core customers. “We will expand into other customer bases,” said Fryhammar. “We want to do direct business, though; we don’t do indirect sales.”

Finally this week NASA sent three Android smartphones into space. The idea under investigation is that smartphones could be used as “the main flight avionics of a capable, yet very inexpensive, satellite,” NASA said. Given that the Informer’s G-Nex can be brought more or less to its knees by ten minutes’ of Solitaire, this seems something of a gamble.

Anyway, those Android devices are up there, watching you.

Take care

The Informer

Samsung Electronics has seen its quarterly net profit rise 42 per cent year on year

Korean manufacturer Samsung Electronics has seen its quarterly net profit rise 42 per cent year on year, for the first three months of 2013. The firm made KRW7.15tn ($6.4bn) in 1Q13, up from KRW5.15tn in the same period last year. Revenue for the quarter was also up KRW7.6tn year on year, reaching KRW52.87tn.

The news comes just days after rival Apple posted its first quarterly drop in profit in ten years, with the $9.5bn 2Q13 net profit marking a more than 18 per cent decline year on year. The firm sold 37.4 million iPhones in the quarter, while iPads sales reached 19.5 million.

Samsung’s IT and Mobile Communications (IM) division benefitted from strong smartphone sales coupled with reduced marketing expenses, the firm said.  The division generated revenues of KRW32.82tn in the quarter, marking a seven per cent increase on the previous quarter.

Samsung said it saw sound sales of its Galaxy S III and Galaxy Note II devices, but cautioned that in the second quarter of 2013, global demand for smartphones is forecast to dampen due to heightened competition.

“Although market uncertainties from the European crisis and the slow global economic recovery are still lingering, we expect to increase R&D spending for strengthening our competitiveness ahead of planned new product launches,” said Robert Yi, senior VP and head of investor relations.

“We may experience stiffer competition in the mobile business due to expansion of the mid- to low-end smartphone market while TV growth will continue to wane in developed markets.”

Samsung added that smartphone sales are expected to stay flat in the second quarter but will pick up again in the second half of the year.

The firm added that its Networks Business benefitted from a stable demand for LTE telecommunications equipment.

Samsung

How does this article affect your perception of Samsung? What is this?

Samsung is 100% positive

Total votes: 2

7 2 2 0002271d74 0

Quite what prompted the business to play such dirty tricks, the Informer does not know, but his suspicions are that it stems from insecurity. When the Informer was growing up, it was often the most popular, prettiest girl in the class or the alpha male sports star of the year who would begin rumours about the student they secretly felt most threatened by, in order to keep their social status intact.

Samsung said its Taiwanese operation displayed “insufficient understanding of [the firm’s] fundamental principles” and has vowed to “cease all marketing activities that involve the posting of anonymous comments”.

“We regret any inconvenience this incident may have caused. We will continue to reinforce education and training for our employees to prevent any future recurrence,” the firm added in a statement to the press.

The Informer wonders what happened to Samsung Taiwan’s marketing director as a result of this scandal, but imagines it’s a word that rhymes with ‘hired’ but means the opposite.

Over in the Middle East, UAE operator Du and Chinese kit vendor Huawei this week signed a Memorandum of Understanding (MoU), agreeing to exchange project management experiences, knowledge and research. The two will share best practice industry methodology, concepts, tools and techniques.

Wang Haitun, director at Huawei, said: “[The MoU] will facilitate a stronger relationship between our two companies as we work together to develop best practices that will be implemented in our respective project management offices for the benefit of the telecommunications industry.”

The news is not likely to be welcomed by Du’s rival Etisalat which has a MoU of its own with Huawei. In October 2011, Huawei agreed to work with Etisalat to help set the foundations for intensive internships. Senior officials from both firms worked together to tailor development of each trainee’s chosen career path. And just last month, Etisalat and Huawei signed a global consultancy services agreement, with Huawei’s business consulting team assisting the operator in developing the its mobile broadband services and its digital services portfolio.

With news of Huawei now getting into bed with its rival, the Informer can’t help but think Etisalat may have been put on its guard, unsure of whether the help it’s getting from Huawei is the same help going to Du. Then again, this model seems to work well enough in a managed services capacity.

But cast a look back to earlier this year, when at Mobile World Congress , Mozilla CEO Gary Kovacs defiantly declared that “the internet should not be controlled by any one or two companies,” and that, “we shouldn’t have one or two companies that approve every bit of content [on smartphones].” He added that Mozilla wants to “level the playing field”.

What he should have said was: “You guys can do what you want because I’m out of here.”

Rather than see the firm’s Firefox OS project through in a David vs Goliath type battle to overcome the dominance of Apple and Google in the Mobile OS space, Kovacs will instead be stepping down from his role later this year. In doing so, he is not only abandoning the Firefox OS project, but also the web browser project the firm is collaborating with Samsung on called Servo.

With Kovacs departing, Mozilla has decided to make wholesale changes to its workforce. Mitchell Baker, Mozilla CEO until 2008, has returned to the firm to become its executive chair. Jay Sullivan, previously SVP of products, has been appointed COO. Harvey Anderson has been appointed SVP business and legal affair, and Li Gong has been appointed SVP for mobile devices.

Fans of reality TV singing show The Voice will be familiar with one Jessie J who famously sings: It’s not about the money, money, money, to fans spending £60 to see her in concert. Turns out that the lady who likes to do it like a dude, is wrong, because this week has been all about the money, mobile money specifically.

One announcement this week saw payment processing firm Visa Europe introduce a service allowing consumers to make mobile payments across the region immediately and using any European currency.

Visa Europe’s Personal Payments service enables Visa credit, debit or prepaid card users to accept payments from another Visa cardholder without needing to share any account details. Customers need to register for the service and know either the mobile phone number or Visa card number of the person they are sending a payment to. They can then make payments using a smartphone app offered by the sender’s bank.

Visa Europe announced the launch of its Mobile Person-to-Person payments back in September 2011, but it wasn’t until last month that RBS and NatWest became the first banks to launch the service via their mobile banking apps. The payment provider said its personal payments system now has 17 “live and committed issuers” across Europe.

Meanwhile, M-Pesa has been fully launched in India by Vodafone India and local bank ICICI, following a pilot which began in November 2012. By launching the service in India, Vodafone hopes to help approximately 700 million Indian citizens who previously had no access to conventional banking.

The service will now be launched in eastern areas of India by more than 8,300 specially trained and authorised M-Pesa agents. It will be rolled out across the rest of India in a phased approach, said Vodafone.

And the mobile money news doesn’t stop there. Turkish operator Turkcell and SIM card and mobile security solutions provider Gemalto have each found themselves at the hearts of two mobile payment projects that promise to transform the transport and retail sectors in Turkey and the USA respectively.

Turkey’s Turkcell has integrated the country’s public transport card Urfakart into its mobile wallet solution. Now Turkcell Wallet users are able to make contactless payments for transport services in the Sanliurfa province using their mobile phones. In addition, they can check and top up their Urfakart balances without having to go to a payment point.

The operator has been somewhat of a pioneer in the mobile payments space. It launched its wallet solution in October last year, which works on both smartphones and feature phones, and supports contactless payments on NFC-enabled phones. It has also struck deals with the Turkish Football Federation (TFF) to sell match tickets to fans via their mobiles across the country, and with local bank Akbank to introduce an NFC-based mobile wallet service incorporating location-based elements.

Over in the US, the Merchant Customer Exchange – a body representing a group of retailers with the aim of setting up a standardised mobile commerce platform across the sector – has selected Gemalto to build its mobile wallet.

The MCX cited Gemalto’s expertise in mobile financial services and its track record of working with banks, governments, merchants and mobile operators as its reasons for selecting the firm.

The MCX wallet will be primarily barcode and cloud-based, the body said, and will run on Gemalto’s Allynis Mobile Payment platform.

In other news, this week, Finnish handset manufacturer Nokia published it financial results, in which it posted a €150m operating loss for 1Q13. The loss is a fraction of the €1.338bn the firm lost in the same quarter in 2012, however, net sales for the same period dropped 20 per cent year on year to €5.85bn from €7.35bn in 1Q12.

How long the firm can continue posting losses and see its revenue and market share erode is surely in question. Nokia sold 61.9 million devices in the quarter, 25 per cent fewer than the 82.7 million it sold in 1Q12 and saw sales drop year on year in every geographic region it operates in, with the exception of North America, which ironically is the company’s weakest traditional market.

CEO Stephen Elop is always keen to focus on silver linings every time Nokia’s results are published, but when the Informer takes a look back at what he said about them each quarter, it doesn’t make for comfortable reading:

“The actual sales results have been mixed. Establishing momentum in certain markets including the UK has been more challenging.” – April 19, 2012

“While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness.” – July 20, 2012

“We are determined to carefully manage our financial resources, improve our competitiveness, return our devices and services business to positive operating cash flow.” – Oct 19, 2012

“Our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges,” – April 19, 2013.

The Informer is hoping the Finnish firm can reverse its fortunes, just to see a smile on poor Elop’s face.

Now, there’s confident and then there’s downright audacious. US satellite TV provider Dish Network can be described as the latter.

In January, the TV player made an attempt to scupper the potential deal between US operator Sprint Nextel and Wimax operator Clearwire, and this week it went right for the source with a $25.5bn offer to merge with Sprint, which is already in advanced talks with Japan’s Softbank over a merger.

Dish claims its own $25.5bn proposal represents superior value to Sprint shareholders. The firm is offering Sprint shareholders $7.00 per share; $4.76 per share in cash and 0.05953 Dish shares per Sprint share, based upon Dish’s closing share price on Friday, April 12, 2013. Dish also said that its offer would give Sprint shareholders 32 per cent ownership in the combined Dish/Sprint entity. SoftBank is offering shareholders just 30 per cent interest in Sprint alone. According to Dish Network, its offer represents a 13 per cent premium to the value of the existing SoftBank proposal.

The Informer isn’t sure what has prompted Dish to make two offers so late in the day, but one thing is for sure, Softbank execs must be sat in their offices absolutely fuming at the antics of the satellite TV provider.

Meanwhile, Indian MNOs risk falling behind their counterparts in other Asian countries, , according to financial ratings agency Fitch Ratings. Over the next two years India’s operators plan to invest a significantly lower proportion of their revenues than operators in China, Indonesia and the Philippines, the agency said.

It believes the low level of investment is attributable to the weaker balance sheets of the Indian operators in comparison to other Asian carriers. According to Fitch, Indian operators’ balance sheets have become stretched due to intense competition and large spectrum payments between 2010 and 2012. It stated that Indian telcos have indicated that their capital expenditure will decline over the next two years, while it is set to increase in the three other countries.

And operator group France Telecom-Orange has said that its OTT communications app Libon will become Joyn-compatible and offer RCS services once it has deployed Joyn services across Europe.

The firm made the announcement as it launched Libon for Android devices. The service was launched for iOS devices in November 2012.The Android version is already available to Orange customers globally, downloadable from Google’s Play store, with the exception of the US where it will be launched next month.

Meanwhile, Spanish operator group Telefónica has completed a field trial of “flexible optical networking” technology, that it hopes could more than double its existing fibre capacity.

The trial, conducted on the operator’s live network in Spain, used technology supplied by kit vendor Alcatel-Lucent. The successful trial means that Telefónica España will be able to meet the growing capacity demand of its customers, according to the vendor. Alcatel-Lucent said that the trial is the first live network link running at 100Gbps, 200Gbps and 400Gbps speeds.

The technology allows Telefónica’s network to “operate at different combinations of line rate, reach, and spectrum width to provide the best balance between network performance and resource usage”, according to Alcatel-Lucent.

And Japanese vendor NEC has established a partnership with Portuguese incumbent operator Portugal Telecom that will see the two firms collaborate on SDN (software defined networking) and virtualisation technology for datacenters and carrier networks.

The two firms said that the agreement would “enable both companies to test and assess the commercial feasibility and benefits of SDN implementation for carrier datacenters”, adding that SDN and network virtualisation have “exceptional potential”.

As part of the programme the two will conduct a study into where SDN solutions might provide the most benefit within Portugal Telecom’s network infrastructure.

Internet hosting firm Rackspace is positioning itself as a supplier of cloud services to telcos and enterprises alike, as it seeks to integrate its own public cloud with service providers worldwide. As the OpenStack Summit kicked off in the US this week, Rackspace proposed to build and operate white label telco clouds within its own datacentre infrastructure.

The offering will be built on open source cloudcomputing software OpenStack, which is seen as an alternative self hosted platform to the likes of Amazon’s Web Services.

And Qatari consumers can now begin enjoying 4G services, as the country’s incumbent operator Ooredoo announced the launch of its LTE network. Ooredoo’s 4G service will initially be available via mifi and dongle devices, and the operator is currently working on making 4G available on smartphones in Qatar.

And finally, as much as we all love and rely on our smartphones, let’s face it, they can be a little annoying sometimes. That’s especially true when you forget to silence your smartphone in an important meeting, or even worse, during a court case. And that’s exactly what happened this week in a Michigan Court when a smartphone interrupted proceedings asking the owner for voice commands. The owner? Presiding Judge Raymond Voet. Consistent with his policy of fining such culprits for contempt, Judge Voet issued a fine to himself. As a first time offender, the judge only fined himself $25, but the Informer appreciates the gesture nonetheless.

And that’s about all for the week.

Take care,

The Informer

Samsung has admitted it paid students to post negative reviews about HTC handsets on websites in Taiwan

Samsung has admitted paying students to post scathing reviews about Taiwanese rival HTC handsets on websites in Taiwan.

Samsung said its Taiwanese operation displayed “insufficient understanding of [the firm’s] fundamental principles” and has vowed to “cease all marketing activities that involve the posting of anonymous comments”.

Earlier this week, Taiwan’s Fair Trade Commission (FTC) announced it would investigate the allegations. It said that the investigation could lead to penalties for false advertising and a potential fine of up to TW$25m ($834,000).

In a statement to the press, Samsung Electronics said it remains committed to engaging in “transparent and honest communications with consumers” as outlined in its online communications policy.

“The recent incident was unfortunate, and occurred due to insufficient understanding of these fundamental principles,” the firm added.

“Samsung Electronics Taiwan (SET) has ceased all marketing activities that involve the posting of anonymous comments, and will ensure that all SET online marketing activities will be fully compliant with the company’s Online Communications Credo,” the firm added.

“We regret any inconvenience this incident may have caused. We will continue to reinforce education and training for our employees to prevent any future recurrence.”

Samsung has issued a preliminary financial statement notifying shareholders that profits are set to rise by 53 per cent year on year

Ahead of its first-quarter earnings, South Korean handset manufacturer Samsung has issued a preliminary financial statement notifying shareholders that profits are set to rise by 53 per cent year on year.

The profit figure for the quarter will reach around SKW8.7tn ($7.7bn), the Korean firm said. Revenue for the quarter is expected to reach approximately SKW52tn. The company will post its final 1Q13 results on the April 26.

The Korean firm will be launching its flagship handset, the Galaxy S4, later this month and profits are expected to rise even further in the second-quarter as a result.

Last week, it was revealed that the handset firm is collaborating with open source software provider Mozilla on a web browser engine called Servo. The engine’s code is written in Rust, a systems language that has been in development for several years by Mozilla and a community of open source enthusiasts.

Last month, Samsung also appointed two more CEOs to join the current CEO Oh-Hyun Kwon in steering the company. The new appointments recognise the strong performance of Boo-keun Yoon and J.K. Shin, said Samsung. With Yoon as president of the division, Samsung’s TV business maintained and solidified its global leadership position, the firm said.

Mozilla is collaborating with Samsung on a web browser engine called Servo

Open source software player Mozilla has revealed it is collaborating with Samsung on a web browser engine called Servo.

The engine is Mozilla’s attempt to rebuild the web browser from the ground up on modern hardware, the firm said. It hopes to address the issues that cause security vulnerabilities when designing the platform. The engine’s code is written in Rust, a systems language that has been in development for several years by Mozilla and a community of open source enthusiasts.

The language is intended to fill many of the same niches that C++ has over the past decades, but is more secure than other programming languages, Mozilla said. Rust also has features that make it easier for programmers to extract more from multi-core chips, according to Mozilla.

“We are now pleased to announce with Samsung that together we are bringing both the Rust programming language and Servo, the experimental web browser engine, to Android and ARM,” said Brendan Eich, CTO at Mozilla.

“This is an exciting step in the evolution of both projects that will allow us to start deeper research with Servo on mobile. Samsung has already contributed an ARM backend to Rust and the build infrastructure necessary to cross-compile to Android, along with many other improvements.”

At Mobile World Congress this year, Mozilla showed off its new HTML5-based smartphone OS.

Telecom Italia CEO Franco Bernabé said that operators will “benefit from more control over the ecosystem while Cesar Alierta of Telefónica said that the new OS would “change the prevailing value chain”.

The Galaxy SIII: How much is it really worth?

US operator T-Mobile has revamped its retail offering, abolishing handset subsidies for premium devices in favour of an interest-free scheme that separates the cost of the device from the cost of network service. Annual  service contracts have also been withdrawn. The pricing overhaul is expected to be one of a number of announcements made by T-Mobile at a press event later on Tuesday, although the changes have already been made on the operator’s online retail portal.

Customers who want to buy Samsung’s flagship SIII smartphone will have to make a downpayment of $69.99 and 24 subsequent $20.00 payments. They can also opt to pay $549.99 for the device up front. On Verizon Wireless the SIII is available for $199.99 on a two-year contract, although Verizon’s online store suggests that price has been cut from $599.99.

Financing plans for devices are popular in a number of emerging markets, where consumers may have comparatively limited spending power. But in recent years there has been a trend towards financing plans in mature markets as well. Informa Telecoms & Media has identified 140 operators using such plans around the world.

Handset subsidy has long been viewed by operators in these markets as a cycle of dependency that needs to be broken. Historically operators have been wary of changing their stance for fear of losing customers to competitors that retain subsidies. But  an increasingly challenging economic environment coupled with regulatory pressure on longer-term contracts that allow subsidies to be recouped now seems to be changing the picture.

The gamble for operators is that cutting annual contracts, as T-Mobile has, might encourage greater churn among the crucial high-spending segment; the upside of device subsidy was greater operator control over the customer.

Samsung Electronics has announced that it has appointed two more CEOs to join the current CEO Oh-Hyun Kwon in steering the company.

The new appointments recognise the strong performance of Boo-keun Yoon and J.K. Shin, said Samsung. With Yoon as president of the division, Samsung’s TV business maintained and solidified its global leadership position, the firm said.

Under Shin’s role as president, Samsung’s mobile business posted significant growth and attained global number one position in smartphones in 2011 and in overall mobile phones in 2012.

Yoon will continue his role of overseeing the Consumer Electronics Division, which includes TV and appliance products. Shin will remain in charge of the IT & Mobile Communications Division.

“The new leadership structure will serve to clarify and enhance independent management of the two set divisions, as well as the independent management of the set and component businesses,” Samsung said in a statement.

The Galaxy S4

Informa Telecoms & Media believes that the soon-to-be-released Galaxy S4 will be an evolution rather than a revolution in the smartphone world – but it will still be enough for Samsung to maintain its number-one position in the market.

Samsung is announcing the fourth generation of its flagship Galaxy device today. Its form-factor and industrial design are expected to look almost the same as the Galaxy S3 but significant enhancements
in terms of performance are anticipated. In the current market, this is probably enough for Samsung, which already has a clear lead in terms of innovation.

The new device will strengthen Samsung’s position as the world’s number-one handset and smartphone vendor. It has been steadily building its reputation as the leading provider of Android smartphones since the launch of the first Galaxy S in 2010 and there’s no immediate possibility that this lead will suddenly collapse. The superior user experience of Galaxy S3 together with a large (nine-digit) marketing budget dedicated to promoting it has helped Samsung establish Galaxy as one of the most desirable brands in the mobile
market.

With the S4, Samsung will capitalize on the strength of the Galaxy brand in a similar fashion to Apple with its iPhone upgrades over the last four or five years. In fact, in many markets, sales of Galaxy smartphones have now caught up with – or are even outselling – iPhones, thanks to Samsung’s aggressive marketing and its incentivizing of operators and retailers to give more prominence to Galaxy S3 on their shelves than other
competing devices, including the iPhone. While investing massively in marketing the Galaxy brand, Samsung has also managed to secure a very good margin, thanks to the tight control it has over its hardware supply chain. In fact, about 50 per cent of the different device components are manufactured in-house, better than any other handset vendor.

However, while Samsung continues to increase its Galaxy shipments quite impressively, the company is undermining its own position in the broader ecosystem by giving Google a huge mobile platform from which to
influence consumers, application developers and advertisers. It is very difficult for Samsung to achieve that level of influence itself as long as it depends on Google to supply device software and key applications and services through Android. This is fine so long as Samsung is happy in the role as a vendor of huge volumes of devices. However, the lack of a powerful ecosystem of its own clearly positions the company lower down in the value chain than either Google or Apple.

Clearly Samsung will have to address this issue and differentiate itself from the generic Android ecosystem and bring more innovation to market. But the South Korean giant put the innovation barriers so high with the Galaxy S3 that it will be hard for it to come up with yet another revolutionary product just one year later. That’s why Informa believes that the Galaxy S4 will be nothing more than an evolutionary upgrade to the Galaxy S3 with no additional “wow” features, functionalities or UI capabilities.

There are two major areas Samsung should look at to differentiate future generations of Galaxy devices – creating a specific and differentiated Galaxy ecosystem and adapting the Galaxy proposition for the enterprise.

Looking at the first area, Samsung could create a Galaxy ecosystem and strengthen the “Galaxy Club” identity using a differentiated UI skin, home-screen customization, and exclusive applications and services that are different from those that typical Android devices offer.

And for the second, by featuring the newly-released KNOX/BYOD capabilities in Galaxy S4, Samsung could unlock opportunities in the business/enterprise segment: KNOX is the Samsung Mobile enterprise solution,
which is very similar to BlackBerry BES.

All the indications suggest that Samsung is addressing the enterprise issue and the Galaxy S4 could be the first device integrating these types of feature. If KNOX/BYOD capabilities are featured in the Galaxy
S4, it will the first time an Android device will be adapted to the enterprise market. So watch this space.

Visa recently also announced a managed mobile money solution targeted at mobile operators and financial institutions.

With its strong brand, Visa can help to drive the development of both the OTT and operator-led mobile payments market.

Informa Telecoms & Media believes that Visa can play a significant role in helping to drive the availability of NFC phones and deployment of NFC services by working with the operators, handset vendors and the financial institutions. So far, handset vendors have been slow at introducing NFC phones because most mobile operators have not yet deployed commercial NFC services.

Download the whitepaper

Samsung's Galaxy brand is "nearly a synonym for Android", Gartner said

The number of mobile phones sold globally has declined year on year for the first time since 2009, according to research revealed today. Gartner released figures for 2012 that showed 1.75 billion handsets were sold during the calendar year, a 1.7 per cent decline on 2011.

Smartphones continued to drive overall mobile phone sales, and the year finished well with smartphone sales reaching 207.7 million units, up 38.3 per cent from the same period of 2011.

Demand for feature phones remained weak with sales totaling 264.4 million units in the fourth quarter of 2012, down 19.3 percent year-on-year, and Gartner expects feature phone sales to continue to fall in 2013.

Anshul Gupta, principal research analyst at Gartner, blamed tough economic conditions, shifting consumer preferences and intense market competition for weakening in the mobile phone market.

He added that the race to become the number three smartphone manufacturer is wide open, with Apple and Samsung a long way ahead of the pack. The two firms together raised their worldwide smartphone market share to 52 percent from 46.4 percent in the third quarter of 2012, according to Gartner’s research.

Samsung ended the year in the number one position, in both worldwide smartphone sales and overall mobile phone sales and commanded over 42.5 per cent of the Android market globally, while the next Android manufacturer had just six per cent share.

“The Android brand is being overshadowed by Samsung’s brand with the Galaxy name nearly a synonym for Android phones in consumers’ mind share,” said Gupta.

“The success of Apple and Samsung is based on the strength of their brands as much as their actual products. Their direct competitors, including those with comparable products, struggle to achieve the same brand appreciation among consumers, who, in a tough economic environment, go for cheaper products over brand.”

In the fourth quarter of 2012 Chinese firm Huawei claimed the number three spot for the first time, Gartner said. The firm sold 27.2 million smartphones in 2012, up 73.8 per cent on 2011. Gartner said international markets are key for Huawei’s growth in 2013, as well as being able to improve its product mix to a higher tier.

Samsung is the retailers choice

According to the latest research from Informa Telecoms & Media, sales staff at leading UK retailers are more likely to recommend a Samsung device ahead of an Apple one despite Apple’s widespread marketing and advertising campaigns.

A “mystery shopper” survey conducted over the Christmas period across eight of the UK’s the leading retail stores revealed that Apple and Samsung were the most promoted brands while key smartphone makers like ZTE, Huawei, Motorola, LG and RIM had little or no presence on the high street.

The mystery shop showed that the most recommended Samsung handsets were the Galaxy SIII and the Galaxy Note II, despite having been on the market longer than the latest handsets from Apple, Nokia and HTC. However, most surprising was the way that, despite an in-store advertising campaign and recent product launch, Apple was recommended in only two stores, 3 and Phones 4 U, with both recommending the iPhone 5.

A key aim of the survey was to gauge whether displays and posters promoting vendor brands increased the likelihood of sales assistants recommending devices from the brands being advertised. Also assessed was the level of technical expertise and ability to communicate key features of the devices as demonstrated by the sale assistants in each store.

The sales assistants in most stores recommended one of Samsung’s handsets, showing the fruits of the vendors’ increased focus on its “hero” devices, such as the Galaxy Note II and the Galaxy SIII, though it is also likely that sales assistants see the Samsung devices as a safe bet to earn greater commissions.

These results echo a mystery shopper survey which was conducted last summer across five sales outlets located in the Silicon Valley, California area. The results from that survey revealed that the best-represented brands, in terms of prominent displays, were Samsung and HTC. When it came to mobile phones recommended by the sales assistants in the various stores, Samsung was by far the best-represented vendor, having recently released the much-anticipated Galaxy SIII. The UK mystery shopper survey shows that this device is still going strong. The iPhone, possibly the most well-known smartphone, was only promoted by a single sales assistant.

Samsung TV

Samsung’s CES 2013 press conference marked an important but subtle change in the rhetoric of the world’s largest TV panel manufacturer.

The Korean vendor promised a new world of possibilities in home entertainment this year, introducing a full line up of larger screen TVs, including its first 85-inch Ultra High Definition TV (UHD TV) and its flagship Smart TV, the F8000 LED TV.

The UHD TV offers four times the pixels available on existing 1080p resolution, to deliver greater detail with an audio experience to match through 120-watt array speakers built into the frame of the television.

While the F8000 LED TV is the first Samsung television to feature a quad-core processor and support for the high compression video codec, HEVC, which delivers double the video quality over the same bandwidth.

Each of Samsung’s newest televisions feature the company’s S-Recommendation with Voice Interaction technology which analyses a user’s viewing history and the popularity and release dates of TV programs and creates a personalised menu of on-air, on-demand and app content for each viewer. The interface is now capable of understanding full sentences and natural language, Samsung said.

Giles Cottle, Principal Analyst at Informa Telecoms & Media, said at the show that what Samsung and its peers have learnt is that it is not just content, but user experience, that will win the battle for the living room.

“Long gone are the days when adding the likes of Netflix et al to a Smart TV platform would get punters and pundits alike salivating – that low-hanging fruit is long gone. Hence the focus on the addition of HEVC -delivering consumers better video quality for the same bandwidth- and faster changing between apps and video content, ironically an area that TV operators have long touted with fast channel change. Expect the boundaries between the two to shrink further in the coming years.”

TV took a much lower profile at Sony’s press conference, with a focus on hardware not software.

The press announcement kicked off with an 84-inch 4K TV as well as smaller 55-inch and 65-inch 4K TVs at a “more accessible price range”.

But more interesting was the unveiling of the world’s first 4K video distribution service, which offers native 4K movies from Sony Pictures and other 4K content creators.

“Sony’s 56-inch, 4K OLED display got the first audible “ooh” of the day from the assembled crowd,” said Cottle from the show. “But Sony’s Smart TV strategy still appears muddled, but this cannot be helped by the fact that its forthcoming next generation PlayStation console has not launched yet, making the creation of a converged content platform across all of Sony’s multiple devices very difficult. Expect more focus on this area in 2014.”

Ericsson claims that Samsung refused to sign a license agreement on FRAND terms, despite two years of negotiations

As if facing legal action over patents from fellow handset manufacturers, such as Apple, was not enough, Korean firm Samsung is now facing action from the infrastructure market after Ericsson filed a patent infringement lawsuit against the company. The Swedish vendor claims that Samsung refused to sign a license agreement on fair, reasonable and non-discriminatory (FRAND) terms, despite two years of negotiations.

The lawsuit, filed in the United States, concerns both Ericsson’s patented technology that the vendor claims is essential to several networking standards and is used by Samsung’s products, as well as other Ericsson-patented inventions that are implemented in wireless and consumer electronics products.

Ericsson claimed that it has helped to create the mobile telephone system by contributing hundreds of its inventions to the standard in exchange for a fair royalty, adding that to date, the vendor has signed more than 100 license agreements with all major players in the industry.

Although Samsung previously licensed Ericsson’s patents in 2001 and renewed them in 2007, the Swedish firm claimed that those licenses have now expired.

“Ericsson has tried long and hard to amicably come to an agreement with Samsung and to sign a license agreement on FRAND terms. We have turned to litigation as a last resort,” said Kasim Alfalahi, chief intellectual property officer at Ericsson.

“The sharing of technology in the telecom industry is one of the main drivers behind this development. The telecom ecosystem builds on fair and reasonable terms that have created an attractive global mass market for mobility and broadband with Ericsson as a main contributor,” he added.

Consumption versus creation

With something like a Kindle or (in the future) a PSP Vita with embedded cellular (rather than the user-installed Mobile Broadband SIM that it has today), payment for data transport occurs on an ad-hoc basis – as and when someone buys a new book or game. The consumer is getting something new that they would have had to pay for anyway, and it just so happens that a portion of the cost goes towards the use of the cellular network to deliver it.

Conversely a camera is a be-all and end-all device. It is not a means to a greater end and has not traditionally been used as a vehicle for driving content consumption – or indeed to enable any other business model beyond the simple sale of the hardware itself. Connectivity in cameras has in essence just been a differentiator to sell more units.

But this is not the reason why Kindles and PSP Vitas contain cellular modems. For those devices it’s more about driving the sale of books and games. Just as today’s desktop printer manufacturers make their revenue from the recurrent sale of consumables like ink cartridges, rather than from the one-off sale of the hardware itself.

To wifi or not wifi

It is hard for camera manufacturers to justify to consumers why they should have to pay anything extra to transport their own user-generated content from one device to another. They might as well use a free alternative such as wifi, or a data cable, or by hot-swapping an SD card – especially when digital cameras encourage people to take so many more photos than they used to do with film cameras.

It is for this reason that wifi has been the only real wireless technology to make it into cameras – and even then only into a few. At CES in 2011 only one of the many digital cameras on display from the numerous manufacturers there had any embedded connectivity. Many of the vendors reasoned that if wifi is the most practical solution, then why go to the expense of embedding it at all when the user can just buy an eye-Fi wifi-enabled SD card?

Samsung has been the most active proponent of embedding connectivity and now has a whole range of wifi enabled cameras. It was also the first manufacturer to use wifi to link a digital camera to an Android phone. To thereby allow that phone to be used as a remote control, as a viewer for the pictures taken and as a tethered modem to upload them to the cloud.

Unique connectivity

In light of this, the act of joining a Galaxy S-series phone and a digital camera to create the Samsung Galaxy Camera was probably the next logical step for the manufacturer. However, one could claim that Nokia has already done just that with the 808 PureView, albeit by making a phone into a powerful camera, rather than by turning a camera into a phone!

The Samsung Galaxy Camera

Samsung isn’t the first to put an Android operating system into a camera either, Nikon did that a few weeks earlier with the Coolpix S800c. However industry observers have been quick to pick up on the fact that Nikon used Android 2.3 (Gingerbread), while Samsung has used the very latest Android 4.1 (Jelly Bean). But what is revolutionary about the Samsung Galaxy Camera is that is has been announced as featuring 3G+wifi and 4G+wifi connectivity combinations.

In a ground-breaking move the camera contains its own cellular modem and does not simply tether itself to a mobile phone for its wide-area connectivity. It will be interesting to see how Samsung bundles the service of the cellular connectivity. It appears that a user-installable mobile broadband SIM will be used, rather than an embedded SIM. But will the end user be left to choose their own wireless carrier, or will there be a preferred service provider as with Sony’s PSP Vita?

Samsung has launched the ATIV S, the first Windows Phone 8 handset

Beating Microsoft partner Nokia to the punch, Korean handset giant Samsung has unveiled the first Windows Phone 8 (WP8) handset. The ATIV S handset was showcased at the IFA 2012 consumer electronics trade show in Berlin. It has a 4.8in display and runs on a 1.5GHz dual-core Snapdragon processor.

Nokia and Microsoft announced a “broad strategic partnership” to build the Windows Phone ecosystem in February last year. At the time, Elop triumphantly declared: “Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale. It’s now a three-horse race.”

Under the terms of the partnership, Nokia committed to adopt Windows Phone as its principal smartphone platform to help drive the future of the platform. The two pledged to closely collaborate on joint marketing initiatives and a shared development roadmap for the future evolution of handsets.

While the deal suggests that Nokia would take the lead with WP8, Samsung instead appears to have muscled in on its territory, while also signalling its intent to ease its reliance on Google’s Android platform.

“By far the majority of Samsung’s smartphone sales have been Android devices, and there has been some scepticism to the extent they have committed to WP platform in the past,” said Tony Cripps, principal analyst in Ovum Telecoms’ devices and platforms group.

“Samsung has tended to take a multiplatform approach in the past and if they’re really behind the Windows OS, I’d expect to see more models from them in due course.”

Microsoft brushed off the idea that Nokia may have any concerns and told Telecoms.com that the Samsung handset is one of many WP8 handsets due to be launched in the near future.

“This is just the first in a big line-up of new hardware that’s coming with Windows Phone 8. Look for more news from our other partners in weeks and months to come,” said a Microsoft spokesperson.

Nokia had not responded to our request for comment at the time of publishing.

Samsung

How does this article affect your perception of Samsung? What is this?

Samsung is 100% positive

Total votes: 2

7 2 2 0002271d74 0

Microsoft

How does this article affect your perception of Microsoft? What is this?

Microsoft is 72.2% positive

Total votes: 93

57 80 93 dd33947dfb 0