Netflix doubles profit but Wall Street not very happy

Netflix has increased its annual revenues by 35% and doubled profits over the course of 2018, but that didn’t prevent a 3.8% share price drop in overnight trading.

Total revenue across the 12-month period stood at $15.7 billion, though growth does seem to be slowing. Year-on-year revenue increases for the final three months were 27.4%, with 21.4% for the first quarter of 2019, though this compares to 40.4%, 40.3% and 34% in Q1, Q2 and Q3 respectively. However, when you consider the size, scale and breadth of Netflix nowadays this should hardly be considered surprising.

“For 20 years, we’ve been trying to please our members and it’s really the same focus year-after-year,” said CEO Reed Hastings during the earnings call.

“We’ve got all these ways to try to figure out, which shows work best, which product features work best, we’re a learning organization and it’s the same virtuous cycle, improve the service for our members. We grow. That gives us more money to invest. So, it’s the same things we’ve always been doing at just greater scale.”

This is perhaps the reason Netflix has succeeded in such a glorious manner where others have succumbed to mediocrity or failure. Investments have been massive to build out the breadth of content, while the team has not been afraid to alter its business or invest in content which others might snub. Bird Box is a classic example of a movie some might dismiss, whereas we find it difficult many competitors would have given the greenlight to the original Stranger Things pitch.

On the content side of things, investments over the last twelve months totalled $7.5 billion and Hastings promises this will increase in 2019. Perhaps we will not see the same growth trajectory, as despite the ambitions of the team, another objective for Netflix pays homage to the investors on Wall Street. Operating margin increased to 10% during 2018, up from 4% a couple of years back, though the team plan on upping this to 13% across 2019.

Content is where Netflix has crowned itself king over the last few years, aggressively pursuing a varied and deep port-folio, though it will be pushing the envelope further with interactive story-telling.

“I would just say there’s been a few false starts on interactive storytelling in the last couple of decades,” said Chief Content Officer, Ted Sarandos. “And I would tell you that this one has got storyteller salivating about the possibilities.

“So we’ve been talking to a lot of folks about it and we’re trying to figure it out too meaning is it novel, does it fit so perfectly in the Black Mirror world that it doesn’t – it isn’t a great indicator for how to do it, but we’ve got a hunch that it works across all kinds of storytelling and some of the greatest storytellers in the world are excited to dig into it.”

The team are attempting to figure out what works and what doesn’t for the interactive-story segment, but this is one of the reasons why people are attracted to Netflix. The team are exploring what is capable, brushing the dust away from the niche corners and experimenting with experience. They aren’t afraid of doing something new, and the audience is reacting well the this.

Looking at the numbers, Netflix added 8.8 million paid subscribers over the final three months of 2018, 1.5 million in the US and 7.3 million internationally, taking the total number of net additions to 29 million across the year. This compares to 22 million across 2017, while the team exceeded all forecasts.

However, this is where the problem lies for Netflix; can it continue to succeed when it is not diversifying its revenues?

According to independent telco, tech and media Analyst Paolo Pescatore, the Netflix team need to consider new avenues if they are to continue the exciting growth which we have seen over the last couple of years. New ideas are needed, partnerships with telcos is one but we’ll come back to that in a minute, some of which might be branching out into new segments.

This is perhaps most apparent in the US market, as while there is still potentially room for growth, this is a space which is currently saturated with more offerings lurking on the horizon. Over the next couple of months, Disney and AT&T are going to launching new streaming services, while T-Mobile US have been promising its own version for what seems like years. If Netflix is to continue to grow revenues, it needs to appeal to additional users, while also adding bolt on services to the core platform.

What could these bolt-on services look like remains to be seen, though Pescatore thinks a sensible route for the firm to take would be into gaming and eSports. These are two blossoming segments, as you can see from the Entertainment Retailers Association statistics here, which lend themselves well to the Netflix platform and business model. Another area could be music streaming, though as this market is dominating by Spotify and iTunes, as well one with low margins, it might not be considered an attractive diversification.

The other area which might is proving to be a success for the business are partnerships with telcos.

“It’s sort of been this March from integration on devices and just makes that a point to engage with the service to doing things like billing, on behalf of or we do billing integration,” said Greg Peters, Chief Product Officer.

“And now the latest sort of iteration that we’re working with is, is bundling model, right. And so, we’re early on in that process, but I would say we’re quite excited by the results that we’re seeing.”

This is a relatively small acquisition channel in comparison to others, but it is opening up the brand to new markets in the international space, a key long-term objective, and allowing the team to engage previously unreachable customers. This is an area which we should expect to grow and flourish.

The partnerships side of the business is one which might also add to the revenue streams and depth of content. Pescatore feels this is another area where Netflix can generate more revenue, as the team could potentially offer additional third-party content, hosting on its platform for users to rent or purchase. Referral fees could be an interesting way to raise some cash and Netflix certainly has the relationships with the right people.

Netflix has long been the darling of Wall Street, but it might not be for much longer. The streaming video segment is becoming increasingly congested, while the astronomical growth Netflix has experienced might come to a glass ceiling over the next couple of years. The businesses revenues are reliant on how quickly the customer base grows; such a narrow focus is not healthy. Everyone else is driving towards diversification, and Netflix will need to make sure it considers it sooner rather than later.

As Nielsen reports shift away from cable TV Netflix announces biggest price hike

A recent Nielsen report on the evolution of US TV viewing habits reveals a 48% increase in the number of households switching entirely to over the air access.

16 million US homes – 14% of households – are now OTA-only, up from just 9% of households 8 years ago. This constituency is split into older viewers (6.6m) looking to save a few bucks by settling for the good, old broadcast antenna option, and younger SVOD (subscription video on demand) subscribers (9.4m), who get everything they need from services like Netflix and therefore see no need to pay for cable.

A significant characteristic of this latter category is a move away from the traditional TV to viewing on mobile devices. These smaller screens tend to lend themselves to solitary viewing rather than the more communal TV experience, something that is greatly facilitated by the on-demand nature of these services.

Nielsen OTA chart

Coinciding with the publication of this report is the announcement from Netflix of its biggest ever price rise in the US. The SVOD giant has been investing more than ever on original programming and has such a massive installed base that it seems to have decided it’s time to start thinking about justifying its massive valuation.

“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members,” a Netflix spokesperson said in a somewhat redundant statement to Light Reading.

“For many users, Netflix is an indispensable video services,” said Tech, Media & Telco Analyst Paolo Pescatore. “There will not be much backlash (for now). This is certainly one way to increase revenue significantly. It needs to focus on financials as well as subscriber growth. Netflix is following the traditional pay TV model of increasing prices annually. Expect other countries to increase prices over coming months.”

Anecdotally linear TV viewing seems to be a dying phenomenon. Even when families congregate around the living room TV they’re just as likely to watch a DVD or streamed box set and, if this correspondent’s experience is anything to go by, people prefer to do their own thing on tablets. Netflix is currently the boss of that sector so it’s probably free to keep raising prices for a while yet.

The connected car takes pole position at CES

With the glitz and glamour of Las Vegas, it perhaps shouldn’t come as much of a surprise the connected car is stealing the headlines at the 2019 Consumer Electronics Show (CES).

Starting with Audi, pairing up with Disney the team has unveiled an in-car VR entertainment system which adapts the content to the movements of the car. The game itself is called ‘Marvel’s Avengers: Rocket’s Rescue Run’ and is based on the journey itself. If the car turns right or accelerates the spaceship in the experience does the same.

While Audi is the parent company, the open platform has been brought to the market through subsidy Holoride. Audi will license the technology to the start-up, which will be made available to all carmakers and content developers in the future.

“Creative minds will use our platform to come up with fascinating worlds that turn the journey from A to B into a real adventure,” said Nils Wollny, Head of Digital Business at Audi, and future the CEO of Holoride. “We can only develop this new entertainment segment by adopting a cooperative, open approach for vehicle, device and content producers.”

Moving across to the mapping side of the connected vehicle, Intel’s Mobileye announced a new agreement with UK mapping agency Ordnance Survey. Although this might not be the most exciting aspect of the connected car space, it is perhaps the most crucial; without the relevant location data, the OS is pretty much useless.

While this data will certainly supplement the Intel offering for the connected car space, Mobileye and Ordnance Survey will use the data to create new customized solutions derived from the location intelligence, to help companies realise the riches promised through the city segment.

“One key, and common, learning is that detailed and accurate geospatial data is a must for the success of these projects,” said Neil Ackroyd, Ordnance Survey CEO. “We envisage this new rich data to be key to how vehicles, infrastructure, people and more will communicate in the digital age. Our partnership with Mobileye further enhances our commitment to supporting Britain as a world-leading center for digital and tech excellence.”

For chipmaker Qualcomm there’s been no rest to check out the shows. While Audi, Ducati and Ford have all been using its tech to run various demos across the show, the team has also teamed up with Amazon’s Alexa to demonstrate in-car artificial intelligence.

“The vision behind Qualcomm Technologies’ automotive solutions is to continuously improve and expand the realm of possibilities for in-car experiences while delivering unparalleled safety-conscious solutions,” said Nakul Duggal, SVP of Product Management, Qualcomm.

“Leveraging Amazon’s natural language processing technology, along with services like Amazon Music, Prime Video, Fire TV and Audible, allows us to offer an exclusive, interactive in-car experience for both the drivers and passengers to leverage the latest innovations in a natural, intuitive way.”

The demonstration makes use of Qualcomm’s Smart Audio Platform to include immersive natural language instructions involving in-vehicle navigation, points of interest outside the car and multimedia services which users will use every day at home with Alexa.

“Our vision is for Alexa to be available anywhere customers want to interact with her, whether they’re at home, in the office or on the go,” said Ned Curic, VP of Alexa Auto at Amazon.

This is of course not the only bit of news featuring Amazon this week, as the team announced a partnership with navigation firm Here yesterday. The tie in gives the Here platform a smarter, voice UI and gives Alexa a useful little foray into the connected car segment, an area Google’s virtual assistant has got a little bit of a head-start in.

Finally, AT&T and Toyota Motor North America announced they will enable 4G LTE connectivity for various Toyota and Lexus cars and trucks across the US, starting at the end of the year. As part of the deal, owners of the relevant vehicles will also receive unlimited data plans from AT&T, while the vehicle will also become a wifi hotspot.

“Cars are the ultimate mobile device. Working with Toyota and KDDI we will bring the benefits of connectivity to millions of consumers,” said Chris Penrose, President of IoT Solutions at AT&T.

“This new technology deepens our relationship with Toyota. And we couldn’t be happier to continue working with them. We’re both founding members of the American Center for Mobility testing facility for connected and automated vehicles, where we will help deliver the future of connectivity.”

iChief’s Samsung tie up is long overdue

The first (proper) week in January always promises a deluge of stories from CES and one opening gambit is a content-based partnership between Samsung and Apple, which should probably have happened much sooner.

Beginning in the Spring, new Samsung Smart TV models will offer iTunes Movies & TV Shows and Apple AirPlay 2 support for Apple customers, while 2018 models will also be made compatible via firmware update. iCultists with Samsung TVs can access their existing iTunes library and browse the iTunes Store to buy or rent new content, while Apple content will also work with Samsung’s Smart TV Services, such as Universal Guide, Bixby and Search.

The iTunes Movies & TV Shows app will feature on Samsung Smart TVs in more than 100 countries, while AirPlay 2 support will be available on Samsung Smart TVs in 190 countries.

On the surface this could be a very positive partnership for Apple and Samsung, both of whom have struggled to make a significant impact when searching for diversified revenues.

“Fascinating move as both companies have struggled to make strides in services,” said independent tech and telco analyst Paolo Pescatore. “Arguably it is a smart strategic move for both companies which underlines the need for companies to work more closely together. Samsung has made numerous failed moved in video services while Apple is still seeking to crack the TV landscape.”

Looking at Apple to begin with, this is a move which should have perhaps happened a while back. Stagnation trends in the devices and hardware segments will not have surprised anyone in the Apple business, this is the reason why CEO Tim Cook has been emphasising gains in the software and services business units so proudly, but it is now abundantly clear the ‘us versus everyone else’ mentality which made Apple great will not work outside its traditional stomping ground.

Apple has seemingly long-defied trends in the technology world by swimming against the ‘open’ euphoria. This mentality dates back to its stubborn but brilliant founder Steve Jobs, who constantly resisted the idea of openness, instead tightly integrated Apple within Apple, creating a closed ecosystem which forces iLifers to buy more Apple products. Back during a 2010 earnings call, Jobs stated “open systems don’t always win”.

When Apple was creating wonderful products, with each new release offering a brilliant new feature, this was enough to ensure the loyalty of customers despite the closed nature of the Apple business. However, innovation in the hardware segment has stalled and the closed mentality does not work in the software and services world. What some proof? Have a look at the profit warning last week.

The profit warning was the first one released by Apple in 15 years, and despite progress being made in the software and services segment, the gains could not compensate for the downturn. Although Cook pointed the finger of blame at a slowing Chinese economy, the team could not convince enough consumers to buy the ludicrously priced flagship devices in other territories either. This is a wider trend in the hardware segment, consumers are extending the lifecycle of current devices, while some are leaning towards second-hand models, but the software and services unit could not fill the $5 billion hole created.

To make the content business work, Apple will have to become a more open company, adopting the culture which it has resisted for so many years, and in Samsung it has an interesting partner.

In Samsung, Apple has found something which its own smart TVs cannot deliver; scale. According to market research firm NPD, Samsung is the leader in the US premium smart TV market (August report), holding 34% market share. Considering just over 43% of Apple’s revenue comes from the Americas, this is potential a very positive catapult to secure additional services revenues from customers. And this is before we’ve even started talking about the other territories.

Samsung is another business which has struggled to make headway with alternative revenue streams, though its prominent position in the premium home electronics space offers an excellent opportunity for the aggregator business model. When looking for new money each business has to decide where it can add value to the ecosystem; sometimes it is offering new products in parallel segments, but occasionally it means helping other businesses achieve their ambitions. Embracing openness could be an excellent move here.

If Apple wants to make any meaningful impact on the software and services industry, it will have to move away from the closed mentality which brought it success in the Jobs era and embrace the idea of collaboration. It will certainly be difficult to redirect such a massive supertanker, but one thing is clear; the faltering hardware segment, as it currently stands, will not support Apple’s indulgent ambitions.

We’re all excited about VR but don’t forget about normal gaming

The gaming segment of the entertainment industry is one which is often overlooked, but it is quickly turning into an incredibly profitable one which could be a pain for the telcos.

The Entertainment Retailers Association (ERA) has compiled the figures for the various segments across the last 12 months in the UK, and to say than digital is taking over would be the understatement of the year (albeit we’re only three days in).

Driven by the adoption of services such as Netflix and Amazon, as well as streaming games through mobile and PC devices, digital accounted for roughly 76% of entertainment sales value in 2018. Looking at the broader segments, digital generated 80.1% of games revenues, 72.3% of video and 71.3% of music.

“On a market level these figures are a stunning testament to the investment and innovation of digital services who have transformed the fortunes of an entertainment industry many had thought was doomed by the internet and piracy,” said ERA CEO Kim Bayley.

Starting with music, streaming subscription revenues accounted for £829.1 million, an increase of 37%, compared to the £383.2 million generated in physical sales and £122.6 million in downloads. For video, streaming revenues increased by 26% to £1.6 billion, while both the physical rental and purchase market unsurprisingly declined.

Looking at the gaming side of things, digital sales grew an impressive 12.5% to £3.8 billion, while the physical gaming market declining 11.4% to £1.8 billion. Gaming now accounts for just over 51% of the three segments in the entertainment world, doubling in revenues since 2007.

“The games industry has been incredibly effective in taking advantage of the potential of digital technology to offer new and compelling forms of entertainment,” said Bayley. “Despite being the youngest of our three sectors, it is now by far the biggest.”

While this is a niche in the world of telecommunications, it is certainly one which is worth keeping an eye on. On the traditional gaming side, the content is becoming much larger and more immersive, with more of a focus on real-time online gaming against other players around the world. This in itself has the potential to cause stress to the network, but also grounds for irritated customers; buffering will not be accepted here.

The other growing sub-segment here is mobile gaming. The launch of Niantic’s Pokémon Go demonstrated the potential of mobile gaming when done correctly, and with data becoming cheaper every single day, more consumers will be encouraged to play these games on the go. Just to emphasise this point, research from Tappable last September claims 42% of gamers now consider smartphones to be their first choice for gaming, mostly down to the convenience of the devices.

Gaming is often an aspect of the connectivity ecosystem which is overlooked, but it is increasingly becoming more prominent in the lives of consumers. It is certainly an area which should be taken into consideration moving forward.

T-Mobile US won’t be rushed on TV proposition

The T-Mobile US TV launch has been anticipated for some time now, but we’ll have to wait until at least mid-2019 for this dream to become a reality.

After closing the Layer3 acquisition at the beginning of this year, it was assumed T-Mobile US would sharply enter the TV market with another ‘Uncarrier’ move. These disruptive plays have formed the foundation of T-Mobile US’ rise through the ranks in recent years, luring customers away from the still dominant duo of AT&T and Verizon.

But for those who were eagerly anticipating the launch of a TV service, don’t hold your breath. The launch has been kicked back, with no concrete commitments made. Why? Because CEO John Legere has high standards.

According to Bloomberg, people working on the project have suggested the wild-eyed CEO has set the bar so high, the team are struggling to meet expectations. This is not necessarily a bad thing and demonstrates Legere has the patience to produce a good product instead of being rushed to market due to the pressure of other players.

The first moments of life for this product could be the beginning and the end. Such is the competition in the ‘cord-cutter’ space, bringing a poor product to market could result in the venture failing before it has even started. If T-Mobile US wants to make a splash in this pond, he’ll have to meet consumer expectations, most of whom are dissatisfied at the moment.

While cable has had a place in the hearts of consumers for years, this trend is ending with the cord-cutting generation of today. Digital alternatives are wanted by the consumer, though with expensive and sub-standard options on the market as it stands, there is the opportunity for disruption. This is a perfect storm for Legere and the magenta army, but only if the proposition is right.

It’ll have to be cheap enough to attract interest, expensive enough to allow for future content investment, stylish enough to meet the visual and experience demands of the digital natives and have the content depth to attract a broad range of customers. This is a complicated equation to get right, but the rewards are potentially massive. We’re pleasantly surprised the team is taking its time and getting the proposition right.

Another factor to consider is the increased competitive threat from Disney. Disney has already shown its intention to go toe-to-toe with Netflix on the content battlefield, though should this entertainment heavyweight get its own OTT service right upon launch next year, the content gains for everyone else will get considerably smaller.

With a host of services already on the market, and more to come in 2019, T-Mobile US will have to make this Uncarrier move perfect if it wants to cash in on the content bonanza. Consumers are fickle and un-loyal enough to mean late-comers to the market can make a splash, so don’t expect Legere to be rushed with this challenge to the status quo.

Going under the hood of Qualcomm Snapdragon 855: plenty to like

More details of Qualcomm’s first 5G chipset have been released, bringing all-round improvements, and a 5G chipset for PCs was also announced.

On the first day of its annual Snapdragon Technology Summit, Qualcomm announced its 5G chipset for mobile devices, the Snapdragon 855, but released limited specs. On the following two days more details were disclosed. An SoC for 5G-connected PCs, the Snapdragon 8cx was also unveiled.

In addition to the X50 modem for 5G connectivity (on both mmWave and sub-6GHz frequencies) and X24 modem (to provide LTE connectivity), at the centre of the Snapdragon 855 is ARM’s new flagship Cortex A76 CPU, marketed by Qualcomm as Kryo 485. It contains 8 cores with the single core top performance at 2.84 GHz. Qualcomm claims the 855 is 45% faster than its predecessor 845, though it did not specify what exactly this refers to. More importantly for Qualcomm, the top speed is 9% faster than the Kirin 980 from HiSilicon (a Huawei subsidiary), another 7-nanometre implementation of the ARM Cortex A76.

Also included in the 855 is the new Adreno 640 GPU rendering graphics. Qualcomm has focused 855’s marketing messages on gaming performance, and the GPU is at the core to deliver it. Qualcomm claims the new GPU will enable true HDR gaming, as well as support the HDR10+ and Dolby Vision formats. Together with the display IP, the Adreno 640 GPU will support 120fps gaming as well as smooth 8K 360-degree video playback. Another feature highlighted is the support for Physically Based Rendering in graphics, which will help improve VR and AR experience, including more accurate lighting physics and material interactions, for example more life-like surface texture, or material-on-material audio interaction.

The key new feature on Snapdragon’s Hexagon 690 DSP is that it now includes a dedicated Machine Learning (ML) inferencing engine in the new “tensor accelerator”. The Hexagon 690 also doubles the number of HVX vector pipelines over its predecessors the Hexagon 680 and 685, to include four 1024b vector pipelines. The doubled computing power and the dedicated ML engine combined are expected to improve the Snapdragon 855’s AI capability by a big margin.

The integrated new Spectra 380 image signalling processor (ISP) will both improve the Snapdragon’s capability to deepen acceleration and to save power consumption when processing images. Qualcomm believes the new ISP will only consume a quarter of the power as its predecessor for image object classification, object segmentation, depth sensing (at 60 FPS), augmented reality body tracking, and image stabilisation.

On the OEM collaboration side, in addition to Samsung, on day 2 of the event we also saw Pete Lau, the CEO of Chinese smartphone maker OnePlus come to the stage to endorse the new 5G chipset and vow to be the “first to feature” the Snapdragon 855. Separately, the British mobile operator EE announced that it will range a OnePlus 5G smartphone in the first half of 2019.

On the same day, thousands of miles away, more Chinese smartphone OEMs including Xiaomi, OPPO, Vivo, and ZTE (in addition to OnePlus) also embraced the new Snapdragon chipset at the China Mobile Global Partner Conference in Guangzhou, southern China. China Mobile will also launch a customer premise equipment (CPE), likely a fixed wireless access modem, using the same platform.

Back in Hawaii, on day 3 of the Snapdragon Tech Summit, Qualcomm launched a new chipset for PC: the Snapdragon 8cx (“c” for computer, “x” for eXtreme). This is Qualcomm’s third iteration of chipset for PC, built on ARM v8.1 (a variant of Cortex A76). Similar to the Snapdragon 855, the 8cx also has the X24 integrated cellular modem with for LTE connectivity, and the X50 modem with 5G connectivity can be paired with it. The CPU also has eight cores, with a top speed of 2.75 GHz. The new Adreno 680 GPU is said to process graphics twice as fast as the GPU in the previous generation ARM for Windows chipset (Snapdragon 850) but 60% more efficient in power consumption.

Perhaps the most meaningful change is its memory architecture. The Snapdragon 8cx will have a 128-bit wide interface, enabling it to provide native support for much more software and applications, including Windows 10 Enterprise and Office 365, which clearly is a sales pitch to the corporate IT departments.

Unlike the OEM support garnered by Snapdragon 855, there was no public endorsement by PC makers yet. Lenovo did come to the stage but was only talking about its Yoga 2-in-1 notebooks that have used earlier generations of Snapdragon chipsets for Windows on ARM. On the other hand, Qualcomm does not position Snapdragon 8cx as a replacement for the 850 but rather as a higher end contemporary, with 850 mainly targeted at a niche consumer market.

In general, this year’s Snapdragon Tech Summit has delivered more step change with the new product launches. More concrete industry support was also on show, indicating that, depending on how fast and extensive 5G is to be rolled out, we may start seeing true 5G smartphones in the first half of next year. We may need to wait a bit longer before a reasonable line-up of always-on 5G connected PCs can hit the market.

Bose joins the connected craze

Premium audio brand Bose has become the latest business to attempt to cash in on the promised, but yet to be realised, riches of the augmented and virtual reality world.

The new product, Frames, is claimed to have the ‘protection and style of premium sunglasses’, and ‘the functionality and performance of wireless headphones’, with the team positioning the product as the world’s first audio augmented reality platform.

“Bose Frames are both revolutionary and practical,” said Mehul Trivedi, Director of Bose Frames. “They look and act like classic sunglasses – until you turn them on. And then you’re connected to your phone, contacts, the web, and all its audible content, just like headphones. There’s nothing else like them – they’re a breakthrough you have to see, wear, and hear to believe.”

An acoustic package is set in each arm’s interior to produce discreet sound for the user. For touch and voice control, a microphone and multi-function button are embedded on the right temple for power and pairing, while also allowing the user to interact with Siri and Google Assistant, make calls and commands, or to pause and skip songs. For example, when paired with the user’s phone, Google Maps can rely directions, while the glasses can also rely information about whatever the user is looking at.

After shipping 10,000 pairs of the glasses to AR developers in 2018, the product is now available for pre-order, at a reasonable $199, with consignments to be made in the New Year. One of the questions many in the industry has been asking is whether the AR and VR will emerge from the niches and penetrate the mainstream market; with a well-known and respected consumer electronics brand pushing the case, the segment has a genuine opportunity.

While the industry has struggled to date, new research from IDC suggests there has been a bit of a rally over the last three months. Over the last quarter, IDC estimates shipments for VR headsets reached 1.9 million units, up 8.2% compared to Q3 in 2017. More competitive pricing and a broader number of options are credited for the boost, with Facebook’s Oculus Go and Xiaomi’s Mi VR (the same product branded for local markets) proving to be the most popular standalone products by a wide margin.

“The VR market is finally starting to come into its own,” said Jitesh of IDC. “On the consumer front, the combination of lower prices and increased content is beginning to resonate with users. Meanwhile, commercial adoption is also on the rise for a range of use cases, including training, design, and showcasing.”

With Bose entering the market, new momentum could be generated.

While the likes of Xiaomi and Facebook have brand awareness around the world, this reputation is not tied into consumer electronics and hardware. This might be an issue for mass market penetration for AR and VR devices, as consumers are generally quite fickle. They buy from companies and brands which they trust. Bose making moves in this market not only opens the segment up to new audiences but validates the technology in the eyes of the consumer.

It is too early to suggest AR and VR have made it, but the more companies like Bose who join the craze, the more normalised the products become in the eyes of the consumer. Trends are certainly heading in the right direction for a sluggish segment which is yet to gain genuine traction in the world.

AT&T suggests Dish and DoJ are collaborating

With AT&T’s WarnerMedia and Dish arguing over a distribution deal, one AT&T executive has suggested Dish and the Department of Justice are collaborating to reverse the green light on the Time Warner acquisition.

The conspiracy theory is hitting new highs here. AT&T is effectively accusing Dish of actively working to create a no-deal situation in negotiations with WarnerMedia over rights to air HBO content. Although having HBO and Cinemax channels go dark on the Dish service would have a negative impact on business, it does coincidentally work well for the Justice Departments case appeal against the Time Warner merger.

WarnerMedia have been in negotiations over the right to air content, with it claiming it offered to extend the previous contract while negotiating but Dish declined. As a result, HBO content has disappeared from the Dish service.

“Dish’s proposals and actions made it clear they never intended to seriously negotiate an agreement,” said Simon Sutton, HBO President and Chief Revenue Officer, in a statement to Reuters.

With the appeal based on the grounds the AT&T acquisition of Time Warner would offer it undue control and influence in the industry, stagnant negotiations certainly add credibility to the objections from the Department of Justice. Manipulating the playing field however, as AT&T is accusing Dish of, is a serious no-no when it comes to the courts.

“This behaviour, unfortunately, is consistent with what the Department of Justice predicted would result from the merger,” said a representative of the Department of Justice. “We are hopeful the Court of Appeals will correct the errors of the District Court.”

“The Department of Justice collaborated closely with Dish in its unsuccessful lawsuit to block our merger,” WarnerMedia responded. “That collaboration continues to this day with Dish’s tactical decision to drop HBO – not the other way around. DOJ failed to prove its claims about HBO at trial and then abandoned them on appeal.”

The $85 billion acquisition of Time Warner proved to be a messy affair for AT&T. While some would have expected some resistance from the industry, the objections of President Trump seems to have encouraged the Department of Justice to chase down every lead, and make life as difficult as possible. The Department of Justice’s appeal against the approval of the deal, is effectively built on the assumption Judge Richard Leon didn’t know what he was talking about.

Publicity stunt? Monopolistic ambition? Nefarious schemes? Whatever the basis of this story, more fuel has been added onto one of the longest running sagas in the telco industry.