“Get rich or die tryin’,” is the motto coined by rapper Curtis “50 (“fiddy”) Cent” Jackson and subsequently linked to rap culture worldwide. This week another famous rapper and producer, Dr Dre, became the richest of the rich – to the tune of $3bn – and is still very much alive.

May 30, 2014

9 Min Read
An Apple a day don’t keep the Dr away

By The Informer

“Get rich or die tryin’,” is the motto coined by rapper Curtis “50 (“fiddy”) Cent” Jackson and subsequently linked to rap culture worldwide. This week another famous rapper and producer, Dr Dre, became the richest of the rich – to the tune of $3bn – and is still very much alive.

As the man himself sang “mother******* act like they forgot about Dre,” and if they did, they were very much reminded of his presence as he sold his premium headphone business BeatsElectronics and accompanying music streaming service Beats Music to Apple for $2.6bn up front and an additional kicker of $400m.

Both Dre and Beats co-founder, Jimmy Iovine, who is also chairman of InterscopeGeffenA&M Records, will also become Apple employees. The Informer wonders whether the Dr will immediately be given a position of seniority or whether he will have to work his way up through the ranks from an intern role, maybe doing a couple of months behind the Genius Bar. The Dr will see you now.

It’s an interesting move for Apple but even more so for Beats, which has had a less successful tie up in the same sector before. A partnership with handset firm HTC reached a crashing finale in September 2013, when the headphone maker bought back the remaining 25 per cent of its shares owned by the Taiwanese firm for $265m. The partnership was a poor deal for HTC, which bought 50.1 per cent of Beats in 2011 for $300m and sold half of that back in 2012 for $150m.

So the soap opera is told and unfolds, I suppose it’s old partner but the beat goes on (da da dum da dum da da).

Perhaps showing he can still splash the cash as well as Tim Cook, ex-nemesis and ex-Microsoft chief Steve Ballmer popped up in the news today having dropped $2bn on NBA basketball team the LA Clippers.

If you’ve been following the news, previous team owner Donald Sterling, who purchased the team in 1981 for $12.5m, was recently caught shooting his mouth in a racist manner, prompting the need to find a new owner of the team. Rimshot!

The news has resurfaced that Japanese firm Softbank is looking to score a three pointer by acquiring T-Mobile USA from Deutsche Telekom. News reports suggest the two companies are hammering out a deal behind closed doors but such rumours have been rife for sometime in the wake of Softbank’s acquisition of Sprint last year.

Although T-Mobile USA claimed to have taken “virtually all of the industry phone growth” in 1Q14 winning market share from its competitors and reporting total net subscriber additions of 2.4 million, the operator still recorded a $154m loss in the quarter, compared to a $106m profit in the same quarter last year.

It’s understood Softbank met with banks in April to make financial arrangements for its latest offer but of course, regulatory approval is not a given even though the merger of T-Mobile USA and Sprint would still leave it in (a stronger) third place behind AT&T and Verizon.

In other acquisition news, the Competition Commission has cleared of the acquisition of TelefónicaIreland by Hutchison3G but with conditions that show that the Commission is still desperate to maintain network-based competition.

Last year, HutchisonWhampoa, which operates the 3 brand in Europe, announced that it is to buy Telefónica’s Irish mobile operation O2 for €780m, with a further €70m payable if a number of agreed financial targets are hit. The deal takes 3 from a relatively distant fourth place in the Irish market to second position, behind Vodafone.

Hutch has offered a package facilitating the market entry of two MVNOs, with an option for one MVNO to morph into a mobile network operator by subsequently purchasing spectrum from the merged entity.

Stefan Zehle, CEO of ColeagoConsulting, reckons Hutch probably has the first MVNO customer lined up, or else the acquisition cannot go ahead and the likely candidate is UPC, which is one of the few telecoms providers in Ireland with a large enough customer base to be comfortable to take on the fixed cost associated with becoming an MVNO under these terms.

However, Zehle warns, it is highly unlikely that the MVNO would want to become an MNO with all the cost implications as well as the daunting prospect of participating in future spectrum auctions to stay competitive. Therefore, just like in Austria, Zehle believes Hutch played it well by making a spectrum divestment offer that is unlikely to be taken up. “The Commission does not get it: In mature markets new network based market entry does not make sense. Consolidation is the name of the game for the European mobile industry,” he said.

There was some MVNO action going on back in the US, as specialist mobile entertainment and streaming music firm RokMobile unveiled plans to launch an LTE MVNO in the US in June.

Bolstered by access to 20 million on demand audio tracks, Rok said it would provide a nationwide LTE network strengthened by an ‘Always Best Connected’ user experience that enables customers to consume data-intensive services over wifi or cellular connections automatically, depending on which is most suitable at the time.

To deliver the offering, the company has tapped up Californian player Devicescape, which curates and automates amenity wifi networks into an international virtual carrier wifi network comprised of more than 20 million quality controlled hotspots pulled from more than 315 million global access points.

In some rare lunar news this week a demonstration carried out by researchers at NASA and MIT used four separate telescopes based in New Mexico to send a signal via laser to a receiver mounted on a satellite orbiting the moon.

The team made history when the Lunar Laser Communication Demonstration (LLCD) transmitted data over the 384,633 kilometers between the moon and Earth at a download rate of 622Mbps. They also transmitted data from the Earth to the moon at 19.44Mbps. So imagine hooking a lunar wifi hotspot onto the end of that.

From the moon to Men in Black, as Finnish network vendor Nokia announced the launch of a dedicated security unit at the beginning of next month that it claims will create “additional value” for operators and “make security a positive differentiator”. The new unit will be part of the Mobile Broadband division of Nokia’s Networks business.

Nokia cited a recent survey it conducted into customer acquisition and retention, from which it concluded that 75 per cent of end users consider security to be an operator responsibility. The firm said that “a significant portion” of mobile subscriber would be likely to churn from one operator to another in the face of security problems and that end users are prepared to pay a premium for enhanced security.

On the subject of premiums, a report written by two lawyers from US intellectual property firm WilmerHale in Washington with input from Intel’s legal officer, Ann Armstrong, in a personal capacity, claims that royalty demands on smartphones are currently so high they risk destroying profitability in the industry.

The authors based their research on a hypothetical smartphone selling for $400 and estimated that the potential patent royalties for such a device would exceed $120, making licensing fees on a par with the cost of components.

Sticking with components and security for a moment, US chip shop Broadcom has begun sampling a secure processor designed for a wide range of endpoint applications catering to the Internet of Things (IoT).

The StrataGX BCM58300 incorporates a high performance ARM Cortex A9 processor running up to 1.25GHz and BroadSAFE Security strong hardware-based protection. Good to know if you remember that the SANSInstitute recently reported the discovery of the first malware compiled specifically for ARM-based connected devices including connected DVRs, which are typically found in security cameras.

Might be worth bearing in mind for Orange too, which unveiled a smart plug, remotely controlled by SMS or an application via web, tablet, or mobile that allows users to remotely control electrical devices like air conditioning or space heaters. It also allows them to monitor power consumption and set timers to switch devices on and off.

My Plug 2 can alert customers of power outages via SMS and is available to all mobile phone customers, regardless of their provider for €95 with no contract and includes three years of SMS service.

Existing service after less than a year however is Christopher Fry, Twitter’s senior vice president for engineering, who revealed he is stepping down and moving to an advisory role, effective immediately, with no explanation for the resignation.

Twitter has appointed Alexander Roetter, vice president for engineering, as Fry’s successor. Roetter is understood to have led engineering efforts on Twitter’s advertising products.

There was a fair bit of engineering going on in the core as Japanese carrier NTTDocomo, which recently announce plans to trial 5G, tapped up Alcatel-Lucent, Cisco and NEC to successfully virtualise the Evolved Packet Core (EPC) in joint verification tests to support the functions required for Network Functions Virtualization (NFV).

The aim is to enable faster delivery of new telecom services and boost performance by applying virtualization technology to EPC software that takes on LTE data communication functions. The companies checked the platform’s performance during a breakdown in hardware functions, when a backup structure was quickly and automatically constructed using different hardware in order to sustain stable data communications.

“NFV is highly expected to bring changes in the ecosystem of network industries,” said Seizo Onoe, executive VP and CTO at Docomo. “Nonetheless, unless there’s a high degree of collaboration between players, this would end up being a pie in the sky.”

Earlier this month, Docomo farmed out trial contracts to several big infrastructure vendors, including NEC, in order to pilot 5G mobile network technologies, promising data rates of 10Gbps.

Ericsson, Nokia, NEC, Alcatel-Lucent, Samsung and Fujitsu have all been selected to work on a 5G proof of concept system, using the 15GHz frequency band for the air interface as well as exploring the potential of millimetre wave technology at the 70GHz spectrum band.

In related news Software defined networking (SDN) specialist Cyan announced a collaboration with Telefónica and Linux developer RedHat to develop an NFV architecture optimised for communications service providers.

Using the Red Hat Enterprise Linux OpenStack platform, Cyan’s Blue Planet SDN toolkit will be designed to orchestrate the deterministic placement of virtual network functions in the server infrastructure to maximize performance.

And just last night the ICT solutions arm of NTT, NTTCom, launched what it says is the first suite of cloud services that enterprise customers can activate themselves and pay for on a per-usage basis. NTT Com said the new services will enable enterprises to eliminate lengthy contract tie-ins, and establish new offices or short-term project support with minimal fuss.

The services are built on an NFV platform developed by VirtelaTechnologyServices, which NTT Com acquired in January this year, and will be launched commercially in July.

“While many industry experts and service providers have long been speaking about the potential of NFV, we are excited to become the first service providers to commercialize NFV-enabled services on a global scale,” said Takashi Ooi, VP for Enterprise Network Service at NTT Com.

Allowing customers to access and manage their services through an SDN-enabled portal, said NTT Com, would mean service deployment times could be cut from months to minutes and configuration changes from weeks to real time.

And that’s about the size of it for this week.

Take care

The Informer

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