Devices Archives - Recon Analytics

Posted on October 25, 2023December 12, 2023 by Roger Entner

The launch of a new iPhone is still the most significant event in the wireless year. When consumers prepare to get their next iPhone, they are also undertaking a major financial decision and are often using that opportunity to evaluate new mobile service provider options. The different wireless carriers are engaging in different strategies for retaining and attracting customers who are getting a new iPhone. AT&T is offering the same deals for new and existing customers with almost every plan. T-Mobile requires customers to either add a line, upgrade their plan or be on their most expensive plan. Verizon is targeting only their best customers and new customers with the best offers.

The results are telling: AT&T’s John Stankey said during AT&T’s Q3 earnings call that AT&T “saw the strongest iPhone preorders we’ve had in many years.” Meanwhile, Verizon’s Hans Vestberg said during Verizon’s Q3 earnings call that “we continue to see muted upgrade levels.” T-Mobile’s Mike Sievert said customers don’t feel they need to take advantage of the device upgrades.

We can see in near real time how the respective carrier strategies materialize in the marketplace. We collected around 30,000 respondents between the iPhone 15 launch and last weekend, giving us faster and more in-depth data on what is happening than anyone else. Based on our data ending, 10/22/23 AT&T has the most iPhone 15 upgrades of any carrier despite being the smallest of the nationwide mobile network operators (MNO). Followed by T-Mobile, who had the lowest upgrade rate in the industry but it’s iPhone sales were buoyed by the highest net adds. They were trailed by Verizon, who is the largest MNO, with the second lowest upgrade rate and the lowest net adds. As one would expect, Xfinity and Spectrum are trailing the MNOs as they are offering significantly less generous device promotions.

iPhone Model Distribution by Carrier
Mobile Make Model	AT&T	T-Mobile	Verizon	Xfinity / Comcast	Spectrum / Charter	Other	Total
iPhone 15	3%	4%	6%	<1%	1%	1%	16%
iPhone 15 Plus	3%	1%	3%	<1%	<1%	<1%	8%
iPhone 15 Pro	11%	10%	8%	2%	<1%	1%	33%
iPhone 15 Pro Max	15%	14%	10%	1%	1%	2%	43%
Total	33%	29%	27%	4%	3%	5%	100%
Source: Recon Analytics Device Pulse

The premium iPhone is becoming a super-premium product. We can see this with the heavy skew towards the iPhone 15 Pro and Pro Max, Apple’s most premium products. More than three quarters of all iPhone 15s are the two premium versions of the iPhone, with the Pro Max outselling the Pro. This shows the pricing power that Apple possesses as the cheapest iPhone 15 Pro Max was $100 more expensive than the iPhone 14 Pro Max but received a storage upgrade.

Posted on February 24, 2021March 3, 2021 by Roger Entner

In recent years, the FTC raised concerns that Qualcomm’s patent portfolio and unbiased licensing scheme would prevent other companies from manufacturing and selling 5G chipsets, leading to an anti-trust lawsuit that concluded in November 2019. However, the prediction has not borne out. Currently, there are two companies, Qualcomm and MediaTek, that sell 5G chipsets to the device ecosphere at large, two captive suppliers who make their own 5G chipsets for internal consumption, and one company that is creating its own new 5G chipset also for internal consumption.

The mobile chipset business has a series of players with different objectives. Companies like Qualcomm and MediaTek provide mobile chipsets to device manufacturers and serve the vital function of ecosphere enablers. Without them, the plethora of devices and choices consumers enjoy when it comes to smartphones would not be possible. Another set of companies are making mobile chipsets only for themselves to create a competitive advantage in the marketplace. Apple and Samsung fall into this camp. Huawei is potentially a hybrid case as it was previously only providing its own handset group with chipsets, but now also provides them to a Chinese state-led consortium that purchased the Honor handset line.

	Customer	Modem	Integrated SoC	Stand-alone Application Processor	RF Frontend
Qualcomm	Ecosphere	Yes	Yes	No	Yes
MediaTek	Ecosphere	No	Yes	No	No
Huawei	Divested divisions	Yes	Yes	Discontinued	No
Samsung	Captive	Yes	Yes	No	No
Apple	Captive	Future	Future	Yes	No
Intel (sold to Apple)	Ecosphere	Yes	No	Aborted	No

Currently, Qualcomm provides high-quality Systems on Chip (SOC) that are integrating multiple components, ranging from baseband, AI, graphics, camera, to CPU into one chip to anyone interested in them. Qualcomm was the first company to offer 5G chipsets with the first devices hitting the market at the end of 2019. MediaTek is offering a similar, but less advanced and less integrated product line to device manufacturers looking for low-level to medium-level chipsets. By the middle of 2020, MediaTek’s chipsets were powering a broad portfolio of handsets.

Intel, another ecosphere provider, sold its mobile chip business to Apple in December 2019, nine years after it entered the mobile chip market by buying a division of Infineon. Intel’s motivation to buy Infineon was that Infineon was the sole provider of modems to Apple. Reportedly during the negotiations between Intel and Infineon, then-Intel CEO Otellini sought reassurances from then-Apple CEO Steve Jobs that Apple would continue to use Infineon products after the Intel acquisition as Otellini recognized the importance of Apple as a customer for its chipsets. During the nine years after the Infineon acquisition, Intel’s mobile chipset division’s fate was intricately linked to Apple as Intel struggled to find other customers in the mobile device manufacturer ecosphere. In a nutshell, Intel was unable to compete with Qualcomm on quality like RF performance and SoC integration and was unwilling to compete with MediaTek as it had a more integrated solution and Intel did not. Intel ultimately threw in the towel on the heels of Apple and Qualcomm settling their lawsuit and agreeing to a six-plus two-year licensing and multiyear chipset supply agreement.

Huawei through its HiSilicon subsidiary has developed and used its own 5G chipsets and has integrated them into its own devices. While the Huawei chipsets are not as integrated and small as Qualcomm’s, Huawei’s engineers have found ways to integrate the chipsets into its devices. It is using Qualcomm, Skyworks and Qorvo, all from the US, for its RF front-end. Huawei’s role in the mobile world got a lot more interesting as it has sold its Honor-brand device division to a Chinese state-led consortium of more than three dozen companies as Huawei experienced a lot of pressure on its devices sales due to American sanctions. Reportedly, Huawei is also considering selling its Mate and P-line device groups in the hope that American sanctions will not follow to the new owners of the device businesses. Up until now, Huawei is not selling its HiSilicon chipsets to other companies, other than the group of Huawei dealers that acquired the Honor-brand device division, as a competitive weapon in order to keep their best technology capitive. In 2019, during the trade tensions between the US and China over Huawei, the company offered to license its 5G intellectual property to American companies to alleviate any spying concerns, but no deal has emerged until to date. If Huawei is divesting its entire device portfolio Huawei might either also divest its HiSilicon division with it or become an ecosphere provider for other handset manufacturers. The direction of Huawei’s HiSilicon business will be quite telling of the size of the Chinese walls between Huawei and its divested handset businesses as well as other handset vendors.

Samsung has been producing its own Exynos modems and mobile processors, and has also purchased mobile chipsets from Qualcomm. Samsung’s new 5G devices, including its S20 5G flagship smartphone, is shipping either with the Exynos or Qualcomm Snapdragon chipset. Samsung sells the Qualcomm variant in the US, China, and most recently South Korea, and its Exynos variant in the rest of the world. Benchmarking has shown that the Qualcomm chipset version regularly outperform the Exynos one and that Samsung uses the Qualcomm variant in the most competitive markets to close the gap against Apple’s iPhone.

In 2008, Apple with its computer heritage bought P.A. Semi, a processor development company specializing in highly power-efficient designs, to build its own ARM-based processors for iPhones, iPads, and similar devices. Apple’s ARM processors are now the fastest CPUs in the market and will start powering Apple Mac computers starting in 2021. Apple sourced its baseband chipset first from Infineon, then post-acquisition from Intel, then a few years later from Qualcomm, then dual-sourced from Intel and Qualcomm, and most recently in 2019, signed an agreement to return to Qualcomm. In 2019, Apple also bought Intel’s baseband chipset business and ~~has~~ started hiring more wireless engineers in San Diego, Qualcomm’s home market. Considering Apple’s track record it is quite logical that Apple is going to try to replicate its successful ARM processor endeavor in modems, and internally source its 5G mobile chipsets when the Qualcomm agreement expires. The Qualcomm agreement gives Apple breathing room to pour its resources into an area that is a key differentiator between mobile devices.

These successful 5G chipset endeavors demonstrate that Qualcomm’s patent portfolio and licensing policy do not present a significant barrier to innovation. Qualcomm’s licensing rates have not changed since it first started licensing CDMA in the 1990s, while its portfolio has grown substantially, facilitating continued innovation that has made the United States a leader in international telecommunications on a fair, reasonable, and non-discriminatory basis. As silicon merchants to the industry, Qualcomm and Mediatek’s participation in chipset development creates choice and opportunity for many mobile device manufacturers to have a chipset that meets their needs and budgets exponentially increases the range of consumer choices without infringing on the ability of other companies to enter the market.

Posted on January 21, 2021January 21, 2021 by Roger Entner

When Nvidia announced that it was in the process of buying Arm from Softbank, many analysts and industry observers were exuberant about how it would transform the semiconductor industry by combining the leading data center Artificial Intelligence (AI) CPU company with the leading device AI processor architecture company. While some see the potential advantages that Nvidia would gain by owning ARM, it is also important to look at the risks that the merger poses for the ecosphere at large and the course of innovation.

An understanding of the particular business model and its interplay highlights the importance of the proposed merger. Nvidia became the industry leader in data center AI almost by accident. Nvidia became the largest graphics provider by combining strong hardware with frequently updated software drivers. Unlike its competitors, Nvidia’s drivers constantly improved not only the newest graphics cards but also past generation graphics cards with new drivers that made the graphics cards faster. This extended the useful life of graphics cards but, more importantly, it also created a superior value proposition and, therefore, customer loyalty. The software also added flexibility as Nvidia realized that the same application that makes graphics processing on PCs efficient and powerful – parallel processing – is also suitable for other heavy computing workloads like bitcoin mining and AI tasks. This opened up a large new market as its competitors could not follow due to the lack of suitable software capabilities. This made Nvidia the market leader in both PC graphics cards and data center AI computation with the same underlying hardware and software. Nvidia further expanded its lead by adding an parallel computing platform and application programming interface (API) to its graphics cards that has laid the foundation for Nvidia’s strong performance and leading market share in AI.

ARM, on the other hand, does not sell hardware or software. Rather, it licenses its ARM intellectual property to chip manufacturers, who then build processors based on the designs. ARM is so successful that virtually all mobile devices use ARM-based CPUs. Apple, which has used ARM-based processors in the iPhone since inception is now also switching their computer processors from Intel to ARM-based internally built CPUs. The ARM processor designs are now so capable and focused on low power usage that they have become a credible threat to Intel, AMD, and Via Technology’s x86-based CPUs. Apple’s move to eliminate x86 architecture from their SKUs is a watershed moment, in that solves a platform development issue by allowing developers to natively design data center apps on their Macs. Consequently, it is only a matter of time before ARM processor designs show up in data centers.

This inevitability highlights one of the major differences between ARM and Nvidia’s business model. ARM makes money by creating processor designs and selling them to as many companies that want to build processors as possible. Nvidia’s business model, on the other hand, is to create its own processor designs, turn them into hardware, and then sell an integrated solution to its customers. It is hard to overstate how diametrically different the business models are and hard to imagine how one could reconcile these two business models in the same company.

Currently, device AI and data center AI are innovating and competing around what kind of tasks are computed and whether the work is done on the device or at the data center or both. This type of innovative competition is the prerequisite for positive long-term outcomes as the marketplace decides what is the best distribution of effort and which technology should win out. With this competition in full swing, it is hard to see how a company CEO can reconcile this battle of the business models within a company. Even more so, the idea that one division of the New Nvidia, ARM, could sell to Nvidia’s competitors, for example, in the datacenter or automotive industry and make them more competitive is just not credible, especially for such a vigorous competitor as Nvidia. It would also not be palatable to shareholders for long. The concept of neutrality that is core to ARM’s business would go straight out of the window. Nvidia wouldn’t even have to be overt about it. The company could tip the scales of innovation towards the core data center AI business by simply underinvesting in the ARM business, or in industries it chooses to deprioritize in favor of the datacenter. It would also be extremely difficult to prove what would be underinvesting when Nvidia simply maintained current R&D spend rather than increasing it, as another owner might do as they see the AI business as a significant growth opportunity rather than a threat as Nvidia might see it.

It is hard to overestimate the importance of ARM to mobile devices and increasingly to general purpose computing – with more than 130 billion processors made as of the end of 2019. If ARM is somehow impeded from freely innovating as it has, the pace of global innovation could very well slow down. The insidious thing about such an innovative slow down would be that it would be hard to quantify and impossible to rectify.

The proposed acquisition of ARM by Nvidia also comes at a time of heightened anti-trust activity. Attorney Generals of several states have accused Facebook of predatory conduct. New York Attorney General Letitia James said that Facebook used its market position “to crush smaller rivals and snuff out competition, all at the expense of everyday users.” The type of anti-competitive conduct that was cited as basis for the anti-trust lawsuit against Facebook was also that of predatory acquisitions to lessen the threat of competitive pressure by innovative companies that might become a threat to the core business of Facebook.

The parallels are eerie and plain to see. The acquisition of ARM by Nvidia is all too similar to Facebook’s acquisitions of Instagram and WhatsApp in that both allow the purchasing entity to hedge their growth strategy regardless of customer preferences while potentially stifling innovation. And while Facebook was in the driver’s seat, it could take advantage of customer preferences. Whereas in some countries and customer segments the core Facebook brand is seen as uncool and old, Instagram is seen as novel and different than Facebook. From Facebook’s perspective, the strategy keeps the customer in-house.

The new focus by both States and the federal government, Republicans and Democrats alike, on potentially innovation-inhibiting acquisitions, highlighted by their lawsuits looking at past acquisitions as in Facebook’s and Google’s case, make it inevitable that new mergers will receive the same scrutiny. It is likely that regulators will come to the conclusion that the proposed acquisition of ARM by Nvidia looks and feels like an act that is meant to take control of the engine that fuels the most credible competitors to Nvidia’s core business just as it and its customers expands into the AI segment and are becoming likely threats to Nvidia. In a different time, regardless of administration, this merger would have been waved through, but it would be surprising if that would be the case in 2021 or 2022.

Posted on January 21, 2021March 3, 2021 by Roger Entner

Posted on August 17, 2020 by Roger Entner

Stay-at-home orders, school closings, and social distancing have raised the issue of the digital divide in the United States. While the availability and affordability of connectivity is important, owning a device to access the internet is equally important. Broadband without a device is even less useful than a device without a network. A government program that tries to close to digital divide needs to pay attention to where a digital device gap does and does not exist.

Nielsen just published its Total Audience Report 2020 which also provides insights on device ownership by race. This allows us to glean important insights from the data and how it should inform policy makers, as there are similarities and significant differences when it comes to device ownership.

	Total	Black	Hispanic	Asian	White
	Mar’19	Mar’20	Mar’19	Mar’20	Mar’19	Mar’20	Mar’19	Mar’20	Mar’19	Mar’20
DVD/Blue-Ray Player	62%	57%	54%	47%	52%	45%	47%	44%	65%	60%
DVR	55%	52%	52%	49%	49%	45%	44%	42%	56%	53%
Smart TV	45%	52%	42%	51%	54%	61%	57%	65%	45%	51%
Internet Connected Device	40%	47%	41%	48%	42%	48%	58%	62%	39%	47%
Game Console	43%	40%	43%	42%	54%	52%	50%	46%	41%	39%
Computer	79%	78%	68%	68%	72%	72%	89%	89%	82%	80%
Smartphone	92%	93%	93%	95%	97%	97%	97%	97%	91%	93%
Tablet	64%	63%	57%	55%	63%	61%	74%	72%	65%	64%
Internet-enabled TV-Connected Devices	71%	76%	69%	75%	78%	82%	86%	90%	70%	75%
Subscription video on-demand	69%	74%	63%	70%	73%	77%	81%	84%	70%	74%

Source: Nielsen Total Audience Report 2020 – https://www.nielsen.com/us/en/insights/article/2020/marketers-its-time-to-engage-asian-american-consumers/

The most owned device in the United States is the smartphone. Ninety-three percent of all Americans own one. Contrary to common stereotypes, there is no significant difference when it comes to smartphone ownership – mobile is colorblind. White Americans are actually the laggards with 93% ownership when it comes to smartphone ownership as Blacks (95%), Hispanics (97%) and Asians (97%) are all reporting higher smartphone ownership. The high ownership is driven by the significant utility of smartphones – the Swiss Army Knives of the connected world. It fits in your pocket, allows people to talk, text and use the internet, and is readily financed through mobile operators or device manufacturers, bringing down the cost of the device to a manageable monthly installment.

Text Box: We need to make the ownership of computers and tablets as color blind as the ownership of smartphones Where we are seeing substantial differences is in computer and tablet ownership. As of March 2020, an average of 78% of Americans owned a computer. Eighty-nine percent of Asian Americans own a computer, followed by 80% of whites, but only 68% of Blacks. Similarly, 63% of Americans own a tablet. Again, Asian Americans have the highest device ownership with 72%, followed by white Americans with 64%, but only 55% of Black Americans own a tablet. Tablet and Computers are essential to closing the homework gap and, even more importantly, the testing gap. Unless every child and student has access and is able to participate in online learning and testing, the progress and grades for every child in the class cannot be counted in their official school record. This makes universal access critical for all, regardless of income and access. We need to make the ownership of computers and tablets as color blind as the ownership of smartphones.

While smartphone ownership has increased from March 2019 to March 2020, computer and tablet ownership has declined, together with ownership of other, increasingly obsolete technology hardware like Blue-Ray DVD Players, DVRs, and game consoles.

Blue-Ray DVD players and VCRs have been supplanted by video-on-demand services, which have seen a significant increase in adoption. Game consoles have also suffered from the shift to mobile gaming on smartphones and the lack of the introduction of new consoles. Both the Microsoft Xbox and the Sony Playstation 4 are seven years old and technologically obsolete, with both devices receiving a next-generation model at the end of 2020. Computers, including laptops, as well as tablets have also been struggling as they have been lacking the sorts of new features that have consumers chomping at their bits to buy a new one.

Text Box: If the government is serious in bringing the high-tech device supply chain back to the United States, it can require that the devices are being manufactured in the United States and have a proportion of the component come from the United States as well so that the stimulus money actually stimulates the US economy. Any stimulus plan that is genuinely interested in closing the digital divide and the resulting homework and testing gaps needs to address the device gap as well. Broadband networks without the right devices are like one-handed clapping. To improve learning and to raise and broaden the standard of digital economy skills, every student should have a device that can access broadband networks. If a student’s family cannot afford such a device, the government should provide aid to acquire one. If the government is serious in bringing the high-tech device supply chain back to the United States, it can require that the devices are being manufactured in the United States and have a proportion of the component come from the United States as well so that the stimulus money actually stimulates the US economy.

The proliferation of 5G launches offers a significant opportunity for the government to stimulate innovation akin to President Franklin D. Roosevelt’s Arsenal of Freedom initiative or the space program’s myriad of spin-off innovations that have made our lives better.

5G-capable devices should be at the core of such a program with both x86 and ARM processors. American companies like Intel, AMD, and Qualcomm would provide the technology that is at the heart of these devices – the processor – and sell them to any device manufacturer. Apple would build ARM processors for its own devices. Such a device stimulus plan could be the important accelerant for ARM processors in computers and laptops. ARM processors are at the heart of smartphone and tablets as ARM processors are very energy and heat efficient, but they only slowly make an entry into the computer world as their compute power is approaching and in some cases overtaking x86 processors. Qualcomm together with Microsoft has launched an ARM laptop and Apple is rumored to use its A-series processors in upcoming MacBooks. China’s Huawei has designed its entire AI, called Ascend, and a general computer program called Kunpeng on ARM technology and plans to build an entire ecosphere around it with a $1.5 billion investment over the next five years. The United States should at least be able to match a similar kind of investment to make sure it does not fall behind if there is a significant shift to ARM computing.

With the country on the brink of a slow and painful recovery from the pandemic, the time is now for Congress to direct money where it will have the biggest economic and societal impact. Right now, closing the digital divide and the homework gaps is precisely such an opportunity. Enabling more Americans to afford an Internet-capable device is critical to the country’s recovery, and one of the fastest ways to give a voice to more black and brown Americans who are otherwise being left out of the country’s economic and other successes.

Posted on July 22, 2019 by Roger Entner

If you missed our analyst call on Wednesday with Roger Entner, Peter Rysavy and Avi Greengart you can listen in now! Topics discussed included 5G network deployment, the future of smartphones in a 5G world, cloud computing, use cases for artificial intelligence, and more!

What to Listen For:

“Even though the opportunity to connect to 5G today is limited – it’s amazing that we can connect to 5G at all. Because when we started working on the standards we weren’t expecting any deployment until 2020. So we’re actually a year ahead of schedule which is remarkable for the complexity.” – Peter Rysavy, Rysavy Research

On the benefit of advancements in AI and AR technology: “If you’re trying to wire up an airplane, having a heads up display where it can show you how to wire up the airplane in real time, with overlays of what you’re seeing and what you should be seeing…the return on investment is crazy high. It’s so high in fact, that in that particular use case, Boeing and Airbus are willing to develop these systems in-house, building their own custom software, in some cases building their own custom hardware.” – Avi Greengart, Techsponential

“Another topic that’s going to be really interesting is the whole convergence issue of telecommunications with content…70% of wireless usage is video, and so video becomes more and more important and some of the more obscure things that nobody paid attention to will become much more prevalent. For example, the STELAR re-authorization.” – Roger Entner, Recon Analytics

Have Questions? Head to Twitter and Chat With Us:

Host Roger Entner: @RogerEntner
Peter Rysavy: @peter_rysavy
Avi Greengart: @greengart

Posted on April 25, 2019April 25, 2019 by Roger Entner

Working 5G
We are at the dawn of a new generation with 5th Generation networks launching. As with every new technology some launches are smoother and others are rougher. Since we are all doubting Thomas’s, we travel to the places where these networks are actually up to see with our own eyes if they work. During the first week of April, I was in Dallas to check on the status of AT&T’s 5G launch. Since smartphones with integrated 5G have not been launched yet, we tested AT&T’s network with their Netgear 5G hotspot. I done tests at approximately 50 meters, approximately 100 meters, approximately 200 meters, and tried to determine the cell edge to check the state of current technology.
For consistency purposes, I used Ookla’s Speedtest for all tests. To give you a benchmark, my Verizon FiOS fiber internet connection is 879 Mbit/sec at 1ms latency connecting to the Starry server in Boston. My AT&T Wireless LTE service on an iPhone X Model A1865 (Qualcomm chip version) in Boston was tested with 89 Mbit/sec and 58 ms latency connecting to the AT&T Wireless server in New York. Considering Boston is 215 miles from New York, we should deduct about 1 ms from the LTE connection speed time as light travels with 186 miles per millisecond to have a real apple to apples comparison. The 5G test in Dallas was to the server in Dallas.
I performed several tests at 50m, 100m, 200m and to determine the cell edge. The mmWave antenna is the little box to the upper right of the regular cellular antennas over the RREAF letters.

100m out from antenna

200m out from antenna

At 50 meters / 150 feet the speed was 1320 mbit/s at 24 ms latency, at 100 meters / 300 feet the speed was still at 1199 mbit/s and 23 ms latency. Going out to 200 meters / 600 feet, the speed dropped to 762 mbit/s but latency was at 18 ms.

At these speeds WiFi becomes the gating factor if you are using it as a hotspot. Even at 200 meters / 600 feet download speeds came close to my fiber connection at home and is at the level where the bottleneck is the connection to the website and not the connection to the consumer device. These are impressive speeds, especially this early in the 5G life cycle and deployment.
As I went further out to the cell edge, the signal finally gave out at approximately 250 meters. With the antenna being a small little block at the top right of the picture below, just above the hall, left from the trees.

Currently, the signal and thereby speeds drop off rather quickly beyond 200 meters / 600 feet, which shouldn’t be surprising considering AT&T uses 39 GHz for 5G. Operators that use lower frequencies should have large cells in the same conditions, simply due to the law of physics.
In a nutshell, 5G works and the speeds are actually better than what a lot of people expect. The good news is that performance will improve from the base line tested here as carriers and vendors learn more and improve software and deployment. Considering that in urban deployments, cell sites are usually spaced at 100 to 200 meter, 300 to 600 feet anyway, we can expect robust speeds from 5G without a dramatic increase in capex for a basic layer of 5G. This increases the time to deployment and reduces cost as existing infrastructure and backhaul is being used. When we get to a more robust deployment with limited line of sight and when the network gets more loaded, we will need to support it with more small cells. From a regulatory perspective, this gives us a little bit of time to stream line the US siting policies so that our 5G deployment does not fall behind that of China and other countries with fewer rules and regulations on where to deploy small sites.
Also, the limitations on the number and placement of 5G antennas on devices plays a significant role . Based on FCC filings the Motorola 5G addon has four antennas with a 7 centimeters (cm) or roughly 3 inches proximity sensor. When something comes within the 7 cm of an antenna the antenna shuts off. With 7 cm it is quite possible that somebody’s hand is within 7 cm of all four antennas and with it turns all four antennas off. Can’t wait for another press event about talking about holding the phone in the wrong way. Also it seems like Verizon or Motorola chose a technology indicator that only changes when in an active 5G session causing the indicator to change often which caused the confusion. These problems can be overcome with more antennas and proximity sensors that have a more precise proximity sensor.

Posted on June 4, 2018June 4, 2018 by Roger Entner

Mobile Operating System (OS) providers like Google and Apple and device manufacturers like Samsung aren’t the only ones who can stick apps on the homepage of your mobile device. Others can too if the device manufacturer or OS provider plays ball. Some consumers find it helpful to have another app at their disposal, others call it bloatware and try to get rid of it as quickly as they can. At the beginning of May 2018, Verizon’s Oath business and Samsung announced a deal that will put Oath’s Newsroom app, Yahoo Sports, Yahoo Finance and Go90 mobile video apps preloaded on all Verizon flagship Samsung Galaxy S9 and S9+ phones. The deal also provides for native ads which blur the line between content and advertising on Oath’s apps and Samsung’s Galaxy app. In exchange, Verizon’s Oath and Samsung will share advertising revenues.

The Business Driver
With their partnership, Verizon and Samsung are attempting to raise their apps from the black hole that is typical app discovery to the forefront of the customer’s attention. This is similar to Verizon’s brandware program where it offers marketers to place their apps on Android smartphones sold in Verizon retail stores for somewhere between $1 and $2 per device. Why carriers and device manufacturers are pre-installing apps for subscribers is clear, even if their strategy is misguided: It’s additional revenues that are almost pure profit. Especially handset manufacturers are working with razor sharp margins. For app developers it is a much more difficult decision. They have to pay for the pre-loading if the customer uses the app or just deletes it.

The Problem: Ongoing Use and Uniqueness
Successful apps must conquer awareness, device installation, first use, and, finally, regular use. While preloading the Oath apps on Android certainly creates awareness of the app and forces device installation – it does little for first use and absolutely nothing to create sustained use.
More importantly, these apps are also not that unique. Pre-installing the same old types of apps people are familiar with, and likely have replacements for, is not going to help create sustained use. When we look at the different apps that Verizon is pre-downloading on the Galaxy S9 and S9+, it’s a decidedly mixed bag. The inclusion of Go90 in the lineup has been seen by critics as the proof point that all we have is bloatware. Rarely was an app more hyped and publicized than Go90, and rarely did an app flop harder. Yes, the other three apps Yahoo Finance, Yahoo Sports and Oath’s Newsroom are highly rated give access to top publishers and are popular without being preloaded, but it’s a stretch to say that they’re unique. Installing apps that aren’t unique result in what we’ve already seen in media coverage of this announcement: Bloatware.

Preloaded apps on Android smartphone leads you to two possible and not mutually exclusive possibilities: One is that the app discovery process is fundamentally broken and even great apps are not being found by consumers. Neither the Apple App Store nor Google play have an even half-way decent content discovery process. The other is that some app developers have a greater marketing budget than resources to develop a great app. Pushing suboptimal apps to unsuspecting customers is doubling down on a losing proposition. Instead of dying a silent death in obscurity, the apps and their developers get skewered by consumers and the press alike. Not all publicity is good publicity.
But “pre-installs” won’t be bloatware if they provide real value. Take Siri for example – no one complained about Siri being pre-installed. It was unique, cool, and better. No – not everyone uses Siri, but no one would argue that she wasn’t unique and cutting-edge when first pre-installed – and if you still don’t like it you can make it disappear in a folder. The route Samsung is taking with Bixby fits into this mold somewhat, but Bixby has a lot of kinks to work out before we can put it in the same class as Siri.

Better Matters
What continues to surprise me is that companies who have an impact on the customer experience are not trying different routes. If we really believe that better matters, why aren’t they pushing boundaries farther? The goal is to drive ongoing use and consumption of content on mobile devices, and do it in unique ways that consumers might value.

A quick review of what’s happening on Android Phones shows four unique solutions carriers and OEMs should investigate:
• Lock Screen Solutions replace default lock screen experience with content/ads (e.g., Unlockd, start by Celltick)
• Launchers permanently replace the default android user interface (e.g., Evie Labs, Aviate)
• Dynamic first screen solutions when there’s relevant content, make it available as the first thing seen AFTER unlock (e.g., Mobile Posse)
• Web Portals integrate content into the default homepage of mobile browsers (e.g., Synacor and Airfind)

It’s time for carriers to get aggressive and understand that the also-ran solutions like the Oath/Samsun aren’t going to excite consumers. Metrics do show that these alternate approaches have been well adopted by customer segments and, in many cases, drive greater usage. Being cautious and worried that an alternate approach will alienate users is holding them back from coming up with cutting edge solutions that still would work for a good segment of their subscriber bases. Not everything has to be a one size fits all solution – these innovative solutions can all be positioned as cool new tech subscribers can use if they like it. And if they don’t, that’s ok too – after all, some people don’t want to use Siri or Alexa either because of security concerns.

The Other Announcement
The other news in the announcement are mobile native ads. They do not stand out but are designed to fit into the regular content flow. The only difference between articles and the native ad is that the source is identified as “sponsored by” instead of just the source. They are much harder to distinguish from regular ads that are designed to stand out and with a catchy headline can get more click. The Mobile Marketing Association claims in its Mobile Native Ad Format document that native ads have higher engagement. Considering how new mobile native ads are relatively new, we don’t know how consumers will react when they click on a native ad when they thought they clicked on non-paid content.
Mobile Operating System (OS) providers like Google and Apple and device manufacturers like Samsung aren’t the only ones who can stick apps on the homepage of your mobile device. Others can too if the device manufacturer or OS provider plays ball. Some consumers find it helpful to have another app at their disposal, others call it bloatware and try to get rid of it as quickly as they can.
At the beginning of May 2018, Verizon’s Oath business and Samsung announced a deal that will put Oath’s Newsroom app, Yahoo Sports, Yahoo Finance and Go90 mobile video apps preloaded on all Verizon flagship Samsung Galaxy S9 and S9+ phones. The deal also provides for native ads which blur the line between content and advertising on Oath’s apps and Samsung’s Galaxy app. In exchange, Verizon’s Oath and Samsung will share advertising revenues.

Posted on October 13, 2016September 11, 2019 by Roger Entner

By now a three screen strategy is a must for anyone in the business of media consumption. It’s certainly one of the ways broadband providers are participating in the market place. Some see three screens – TV, mobile, digital – as the objective, but they don’t realize that three screens is just an intermediary step to full market engagement. Ultimately, broadband providers are going to pursue a five-screen solution, and advertisers will pursue a six-screen solution (advertisers see outdoor signage as an additional screen).

The first additional screen – the 4^th screen – is in the autonomous car. Once we have autonomous cars, in all likelihood autonomous electric cars, the up to 46 minutes per day[i] we spend in a car will be a new peak period of intense mobile data usage. Suddenly, mobile connectivity that was mostly about streaming video to keep the kids quiet in the backset will transmit and receive massive amounts of information to keep the car running smoothly, avoid traffic and accidents, adjust engine functions and more. It’s called datamotives. That it is the logic behind Apple’s electric vehicles (EV) initiative and its focus on autonomous driving. The Americans aren’t the only ones thinking like this. The Chinese company Le Eco is active with two EVs and likely enter the market with a more comprehensive vision than anyone else on how the five screens will fit together. While Tesla is the clear leader in EVs, it needs to partner to match the complete system integration for end-to-end solutions.

The second additional screen – the 5^th screen – is Virtual Reality (VR) and even more importantly for mobile, Augmented Reality (AR.) While anyone who has tried VR with an Oculus Rift or HTC Vive gets it and appreciates who it transforms home entertainment, the use cases for the customer equipment are unclear outside of protected spaces. VR’s strength to replace reality with a virtual one is also its weakness as it makes the wearer oblivious to the real world. Good luck crossing that street with it. Augmented reality on the other hand is the perfect overlay of a virtual information canvas on the real world. Anyone how has a newer car with HUD display instinctively gets it. The HUD display superimposes automobile speed, directions and station names when you switch radio stations on the windschield reducing distractions while driving. There is no more need to take the eye off the road because all the car displays all the info on a single screen. Once you drive a car with HUD AR, it is quite noticeable when you drive a car without it and you have a little surge of joy when back in the car with the augmented reality. While we see a sputtering start with Google Glass, the success of Pokemon Go is lowering the barrier for other companies to enter the AR space. Google Glass was ahead of its time – especially socially – by being an engineer’s answer to the problem. Releasing it before it was ready was probably not a great idea, especially with how transformational such a product can be. The AR glasses dramatically raised awareness of the technology and, as with every revolutionary technology, there was both excitement at the prospect – and fear – of what we can do with it.

While interweaving what we see in the real world with a series of data sources to create positive outcomes ranging from restaurant reviews over city guides making you a native in any city to facial recognition overlays for law enforcement to capture a criminal on the run. At the same time we need to recognize the additional creepiness of someone with video recording capability in a public bathroom. I am a strong believer that we will overcome the creepiness through a combination of personal etiquette (yes, I still believe in it) to a significant endeavor to make, for example bathrooms, non-recordable areas through beacons.

The positive argument for AR is so overwhelming that it’s a miracle we needed Pokemon Go to raise awareness again. Augmented reality is a little bit (at least for people not growing up with one) like owning a cell phone. When you never had one, you ask yourself what the fuss is all about. Once you had it for a short while you wonder how you ever lived without it. The key is the hardware form factor: HUD display in a car? Awesome. Glasses (hopefully less intrusive)? Awesome. Holding your phone up like an aiming device? Not so awesome. Companies like Google, Facebook through Oculus, HTC, Samsung and Le Eco that have already made strides in VR are well positioned for AR success. Apple could enter the space using the same thought-process that lead them to make the Apple Watch.

The burgeoning trend of separating electronics from the screen has become a significant driver for the television ecosphere as it allows treating the screen and especially the sound bar as separately upgradable. The sound bar will evolve to become the home of all the intelligence around the TV, a Roku, Apple TV, or Chromecast with sound capability. Suddenly, the barrier of entry and success for non-screen companies has been lower and makes it easier to disrupt this space. While there will hardware differentiation around the speakers – as some want better speakers than others – and more or less powerful computing capabilities, the true differentiation comes through the software on the sound bar as we are entering a software centric world.

While the TV world is currently stuck in a 10- to 20-year replacement cycle, the dislocation of consumer equipment from electronics especially allows the evolved sound bar to be updated a lot more quickly. Companies such as Apple, with its integrated software, hardware and Beats audio capabilities or Le Eco through its acquisition of VIZIO, the number one player in sound bars in the United States, are especially well positioned, but we should also not forget Samsung.

The shift to five screens will expand and disrupt the traditional business model of advertising companies, consumer media/communications equipment, and content and network providers. Integrated content delivery companies of all sizes have an opportunity to participate in shaping this expanded but more integrated world. The emergence of the five screen world is a rebuke of the viewpoint that innovation has left the network provider universe. The market trend for engaging consumers in more broadband is unmistakably focused on pushing content to and from five screens. Companies that successfully serve all five screens across the consumer universe will see their businesses expand and revenues rise.

[i] AAA, American Driving Survey, April 2015. https://www.aaafoundation.org/sites/default/files/2015AmericanDrivingSurveyFS.pdf

Posted on July 14, 2015 by Roger Entner

They say a picture is worth a thousand words. If that’s the case, then the Twitter header image for Microsoft CEO Satya Nadella demonstrates that perfectly. Just look at Nadella’s tortured smile then try to make sense of the picture in the header. It resembles some kind of hellish, hopelessly complex landscape that maybe someone at Microsoft understands and loves. But, for a company that wants to solve problems, it’s the wrong way to start. Nonetheless, it does provide the perfect illustration of what is and isn’t happening at Microsoft.

The decimation of its handset business is just the latest symptom of the fundamental lack of clarity when it comes to Microsoft’s role in the world. For a company that says it’s “mobile first” the 7,800 layoffs are a striking admission of the utter failure of its mobile strategy. This moves essentially shuts the door on all but a few remaining Microsoft employees in Finland.

It is a classical “the emperor has no clothes” moment.

Nokia’s fate was sealed when mobile devices started doing more than “connect people.” With its life on the line, the organization could not find a new reason to exist in the significantly changed—and still changing—world. Microsoft’s fate will be similarly sealed if it cannot provide a clear vision and an elegant implementation of its vision of how consumers will use technology—from “mobile first” over nomadic laptops and stationary desktops.

As the consumer reemerges as the focal point of technological innovation, Microsoft seems to be hopelessly stuck in an antiquated, we-do-it-this-way-so-like-it-or-lump-it, corporate-centric approach.

During briefings, when I asked Microsoft how it plans to differentiate its products and services from Apple’s and those of the Android ecosphere, company representatives consistently replied unflinchingly with, “We make consumers more productive.” I was taken aback. “No, seriously, how will you differentiate?” I followed up. The reply? “Seriously, we’ll lead with making the consumer more productive.” I remain flabbergasted by the wide disconnect between how consumers think, what they want, and what Microsoft plans to force for them—especially from a company that surveys the living daylight out of consumers. How many consumers have ever woken up in the morning and declared they want to be 2.3% more productive today through the use of Microsoft products and services. You might sell a CIO on that, but definitely not a consumer. The lack of vision and understanding of what “mobile first” actually means beyond the tag line that an 8-year old could recite at a school play will turn off CIOs even more so.

Looking at it in hindsight, the handset group never had a chance as a full portfolio device manufacturer. The lack of a clear and concise vision at Nokia was replaced with an empty shell around the “mobile first” term. Mobile devices produced by the handset group have been very good devices—competitive with or even superior to devices that have significantly outsold them.

The lack of success for Microsoft in mobile is not because the division didn’t know how to make excellent devices. Rather, it comes from the lack of a compelling, holistic value proposition. Why would someone buy into the Microsoft ecosphere when they have so many choices? The company’s lack of a value proposition is glaringly apparent in the most competitive and newest segment (which, of course, cares the least about incumbency power): Mobile. The retrenchment into a core device team that creates fewer phones, but is hampered by a lack of corporate focus, will merely reduce the mobile price tag of a poorly defined overall corporate strategy.

Microsoft needs to realize that this “mobile first” world requires that its pace of innovation and attention to detail accelerate to mobile speeds company-wide.

That means it must produce new releases annually. Poor product releases like Windows 8—the equivalent of panicky software jambalaya, packed with reactionary knee-jerk features and devoid of attention to detail—cause a staggering amount of damage.

It would be okay for Microsoft to have a conceptual and executional meltdown once a decade. But Microsoft manages to do this with every other release of Microsoft Windows. Windows 10 looks like a good release. But let’s have a look back: Windows 8 was just plain bad, Windows 7 was good, Vista was abominable, Windows XP was good, and consumers responded to Windows ME with a resounding “not me!”

History repeats itself if you look further back. To add insult to injury, the average upgrade cycle is 30 months, which means that unless you are forced to use a bad OS because it’s the only one that comes with your new computer, or if you just can’t take it anymore and switch, you have to wait 5 years for an innovative step forward. Why not just save a lot of money and aggravation and just skip over other release and pour the resources into the successful update? No wonder Apple has taken so much market share from Microsoft with this two steps forward one step back product release cycle. The only saving grace for Microsoft is its huge imbedded base and the lack of a serious competitor in the business market.

But if the only reason why people purchase your product is that they have always purchased it and there is no viable alternative, one shouldn’t be surprised if there a competitor emerges. An initial stream businesses are already migrating toward Apple and if Apple shows some love and care, the stream will turn into a raging torrent. As Apple is on its path to integrate the user experience across hardware platforms, its success in mobile is expanding its beachhead in laptops and desktops, where it is continuously increasing market share, despite offering only computers $899 and above.

The most pertinent lesson is close to home: It took only a few years for Nokia to go from 50% global market share to 2%. Now Microsoft’s handset group faces the unenviable task of explaining to other handset manufacturers why they should build more Windows Phone devices, even as Microsoft pulls back in spectacular fashion.

Microsoft will fail if it continues to be a confused conglomeration of businesses units with terrible track records getting their products to work together. It would be a good start if all of their products and services would come together and work seamlessly across hardware platforms. That very fact would make the lives of their custome

Posted on February 10, 2015 by Roger Entner

In 2014, roughly 143 million mobile phones were sold in the United States, approximately 90% of them smartphones. This is a decline of 25 million phones from 2013 when approximately 168 million phones were sold – and only half of them were smartphones. The decline in phone sales is predominately due to the rise of equipment financing plans, compounded by slower new subscriber additions. At the same time, consumers’ phone purchase habits have changed significantly. A growing number of American consumers delay their phone upgrades to take advantage of the lower monthly service prices carriers offer to consumers who wait to upgrade phones at the end of their two-year contracts.

Consumers who are purchasing replacement phones are focusing on newer, higher priced devices. Even though device sales declined by 15% year-over-year, device revenues increased by about 5%. In the short term, this flight to higher priced devices increases revenues and profitability for mobile carriers, but longer-term the trend is negative, as it takes longer for new devices to permeate the network. Device manufactures are cheering the higher revenues as the market has shifted heavily towards higher priced smartphones. Now that smartphones make up 90% of handsets sold, device manufactures can no longer cannibalize feature phones for significant revenue upside. We expect device sales to fall by 5% to 136 million in 2015 and to fall again by 4% to 131 million in 2016.

With device sales and new subscriber additions declining, the impact on the handset replacement cycle has been significant. Handset replacement has abruptly slowed to the lowest rate since we began calculating the metric. The introduction of Equipment Installment Plans (EIP) has made a significant impact on the handset replacement cycle by extending it to 26.5 months in 2014, an increase of 4.1 months compared to the previous year.

Handset replacement cycle 2014 - Replacement Cycle

Americans typically upgraded their phone at three points in time: Roughly every year when a new generation device was launched; approximately every two years when the contract expired, causing customers to either change operators or became eligible for subsidized prices; or whenever their phones became obsolescent or stopped working. With the rise of EIP plans that incentivize both rapid upgrades every year and delayed phone upgrades through discounted service pricing, consumers have eschewed the traditional two-year service plan upgrade cycle.

Handset replacement cycle 2014 - When do people replace their device

The percentage of devices being replaced every year increased from 45% in 2013 to 49% in 2014, while the percentage of devices that replaced obsolete devices sky rocketed from 15% in 2013 to 35% in 2014. The percentage of devices being replaced at the traditional two year time point fell from 40% in 2013 to 16% in 2014, while they represented slightly more than 50% of replaced devices from 2010 to 2012. As As Americans bifurcate their purchasing behavior, we are observing the beginning of a capabilities gap between Americans who upgrade their phone every year and those who upgrade it when the device becomes obsolete or breaks.

The handset replacement cycle measures how often existing customers are upgrading their phones. It is an important measure of how close the average consumer’s device is to the technical state–of-the-art. Whereas most consumers used to upgrade after two years, today’s market sees an interesting dichotomy: Nearly half of consumers upgrade every year, but more than a third keep their devices until they become obsolete. A longer handset replacement cycle will have several ramifications on innovation throughout the mobile ecosystem:

Less innovation in applications: Application capabilities may be artificially restrained, as developers deal with an average consumer who is less able to take advantage of new technologies that improve the utility of the device and service. The introduction of EIP has created an earthquake-like, tectonic shift in when Americans are upgrading their mobile phones. Software developers face a new dilemma, as they must nowgrapple with the fact that a large percentage of smartphones in use won’t be able to run their new cutting edge apps. In order to run on the largest number of devices possible, some developers won’t build the latest-and-greatest capabilities into their apps, thereby slowing the pace of innovation in the mobile space.
Less competition from smaller handset providers. Most handset manufacturers – who are already struggling to remain profitable – will be under pressure to cut their research budgets as revenues decline, therefore reducing the amount of effort dedicated to making the next generation smartphones even better. Smaller handset providers are going to be disproportionally hit, making their devices less competitive compared to larger handset providers — leading to a shakeout.
Spectrum crunch in major markets. The spectrum crunch in major markets will be worse than otherwise as older devices cannot access new spectrum bands as they are lacking the necessary electronics for it. Device capabilities determine which network capabilities the phone can access. A six year old iPhone 3G will achieve download speeds of 2 Mbps with its first generation WCDMA chipsets, whereas a new iPhone 6 will be able to download the same content 25 times faster due to its new 4G LTE capabilities able to access newly licensed spectrum. As fewer people upgrade their devices, the pace with which consumers can use new unused parts of the networks on new spectrum slows down and consumers are stuck on congested legacy spectrum. This engineering reality is particularly important as mobile operators are currently spending more than $45 billion on new spectrum.
Delayed transition to next-generation services. The monumental transition to VoLTE — and therefore to a more efficient use of spectrum, with significantly better voice quality — will be slowed by an embedded base of older devices.

To be sure, despite the bifurcated market and all the problems caused by it, some positive developments could still increase revenue for manufacturers:

Speed boosts. Faster speeds mean access to better and more content and higher profits for web retailers and carriers alike. The faster the download speeds a device can support, the better the user experience as the consumer does not have to wait for video content to be buffered or web sites to be loaded. According to Akamai, a one second delay in page load results in a 7% decline of purchase conversion.
More power. Access to more advanced screens and processors allow more appealing graphics and more powerful applications to run on your phone. This begets more usage and more consumption of content which in turn generates more revenue and profits for multiple entities across the mobile broadband value chain.
Better batteries. Newer battery technology allows phones to run longer allowing them to be used to do more for a longer period of time. This too impacts the virtuous cycle of more use begets more revenues and profits.

Unfortunately, those longer-term developments could be largely offset in the short term by the slowed innovation and cramped spectrum caused by delayed handset replacement.

Who are short-term and long-term winners and losers in this change?

US Consumers: Short-term winner, long-term loser.
Consumers get $20 per month more in their pocket for waiting to upgrade their phone. In the longer term, consumers will have fewer choices and delayed mobile phone innovations and fewer new apps taking advantage of new hardware features than they would have in a higher volume scenario with more device manufacturers.
The US (app) economy: Short-term winner, long-term loser.
While an approximately $12 billion per year (50 million devices times $20 per month) in additional stimulus for other the rest of the economy is helping boost restaurant sales and reducing consumer debt, the economy will feel the long-term negative impact. As consumers and businesses alike are tempted to delay an upgrade, the beneficial impact between mobile and productivity in the US will weaken as new services that save us money, improve our lives, and make the economy more efficient take longer to be implemented. One especially poignant example is mobile payments. ApplePay is revolutionizing mobile payment with high attachment rates because people with the new iPhone 6 can take advantage of ApplePay. People who delay cannot, creating a barrier to adoption. The same is true for NFC (or not) enabled devices for other mobile payment platforms like PayPal or Google wallet.
Device manufacturers: Short-term winner, long-term loser.
Device manufacturers benefitted handsomely as smartphones as a proportion of handset sales increased from roughly 50% in 2013 to 90% in 2014 and profits surged. In 2015 and onwards, profits will fall as the number of devices will continue to decline
T-Mobile: Short-term big winner, long-term loser.
T-Mobile successfully reshaped the mobile industry through the introduction of its EIP, and has grown faster than all other carriers combined. At the same time, roughly 30% of its new customers did not buy a new handset, but brought their own. As a result, the handset base is aging and cannot take advantage of new bands like 700 MHz and VoLTE. The introduction of SCORE! has to be seen in the context that T-Mobile wants to speed up the handset replacement cycle, and is willing to incur a modest subsidy.
AT&T: Short-term winner, long-term loser.
AT&T followed T-Mobile aggressively into the brave new EIP world. AT&T has been able to defend its base against lower priced T-Mobile and other operators who offer EIP financial benefits as device subsidy expenditures have declined significantly. AT&T will face the same problems as T-Mobile as the device universe of its customers ages.
Verizon: Short-term neutral, long-term neutral.
Verizon is holding on as tightly as it can to the status quo, while offering customers who want it an option to do EIP. In the short term, Verizon benefits less than T-Mobile and AT&T from the changes, but will also not suffer as much from a lengthened handset replacement cycle.
Sprint: Short-term loser, long-term winner.
Sprint, like every other company, dabbles in EIP offers, but only Sprint with its 24-month handset leasing program has a viable plan in place to keep the device upgrade cycle in place and reap the benefits from a customer base with newer devices.