The number of commercial 5G devices almost tripled in Q2 – GSA

The latest data from the Global mobile Suppliers Association show the number of 5G devices being launched worldwide is accelerating rapidly.

If you take at look at the GSA data from the end of March only 19 vendors had announced forthcoming 5G devices, with 33 models officially confirmed. These numbers have now significantly increased, with the latest data showing 39 vendors have now announced upcoming devices and the number of officially confirmed devices has now nearly tripled, standing around 90.

Looking in depth at the recent data also provided by GSA, 28% of the 90 officially confirmed devices are phones (the number standing at 25). On top of that GSA found 23 CPR devices, 23 modules, seven hotspots with assorted dongles, routers and drones comprising the chasing pack. The devices contained 5G chipsets from just four vendors – Qualcomm, Mediatek, Samsung and Huawei, with Intel no longer in the game.

As expected, smartphone vendors have jumped on 5G for various marketing campaigns. The most conspicuous of these is Samsung, which released  the Galaxy S10 5G first in Korea on earlier this year and then in the UK on June the 7th . The S10, due to its 5G compatibility, has a wider array of VR and AR functions than other 4G phones. This new way to experience VR and AR is critical as it will reach further out towards the younger generations who enjoy mobile gaming or more specifically games like Pokémon GO and the more recent Harry Potter: Wizards Unite that heavily rely on the use of AR.

This latest batch of data from the GSA indicates the device ecosystem is fully ramping up its 5G output. How much of this is purely speculative rather than responding to specific demand is still unclear, but we should get the first lots of 5G device sales data before long, which will clarify things.

Samsung profit is halved, company guidance warns

Samsung, the world’s largest smartphone and memory chip maker, warned the market its quarterly profit would drop by 56%, prior to the official result announcement later this month.

Samsung Electronics told the market that the operating profit generated in the quarter ending 30 June amounted to KRW 6.5 trillion ($5.55 billion), which would be a 4% sequential improvement on Q1 this year, but would represent a 56% drop from the same quarter a year ago. The total revenue is expected to be around KRW 56 trillion ($47.8 billion), a 7% sequential growth, but 4% year-on-year decline. The continued depressed profitability (operating margin almost unchanged from last quarter at 12%, compared with 25% a year ago) indicates Samsung’s main business has not turned the corner.

The semiconductor sector, where Samsung has generated the highest profit among all of its business units, remains weak. Last month investment analysts from the private fund Evercore reported that the inventory of memory chips by downstream device makers continued to be at excessively high level, therefore the investors did not see the sector recover before 2020.

The IT & Mobile communication unit, which has generated the highest revenue for Samsung, is still in trouble. Samsung has braced intensive competition particularly from the Chinese competitors, and its Galaxy S10 series have not been able to turn its fortune. The troubled launch of the Fold version of S10, which had been slated for Q2, has still yet to happen. A new Unpacked event has just been announced for August, but is likely to unveil its new tablet, the Galaxy Note 10, to consider the stylus featured on the event invitation.

When faced with pressure on profit, companies often turn to control cost. That looks to be what Samsung has been doing. A few days ago The Economic Times of India reported that Samsung will cut 1,000 jobs from the company’s smartphone functions. This is after 150 jobs are already gone in Samsung’s telecom infrastructure team.

Samsung dropped in the deep-end for Aussie smartphone lies

The Australian Competition and Consumer Commission has opened up legal proceedings against Samsung suggesting it made false, misleading and deceptive claims over water resistance.

The claim from Samsung is a relatively simple one; S10 devices are IP68 water resistance, meaning the devices are good for up to 1.5 metres for a period of 30 minutes. Advertising for the S10 also depict a number of different scenarios from swimming pools to the beach, suggesting the device performs effectively in different environments.

The ACCC believes Samsung did not test or know of testing to substantiate these claims, and therefore mislead Australian consumers through more than 300 advertisements.

“The ACCC alleges Samsung’s advertisements falsely and misleadingly represented Galaxy phones would be suitable for use in, or for exposure to, all types of water, including in ocean water and swimming pools, and would not be affected by such exposure to water for the life of the phone, when this was not the case,” said ACCC Chair Rod Sims.

“Samsung itself has acknowledged that water resistance is an important factor influencing Australian consumer decisions when they choose what mobile phone to purchase.

“Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage. Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers.”

Samsung Pool

Interestingly enough, Samsung seems to have dug itself into a whole with this one. Despite suggesting to the consumer on billboards, social media and TV advertising, a statement on its website confirms the images are misleading:

not advised for beach or pool use.

Interestingly enough, phones which had been advertised as water resistant were sold at a higher price. This is all well and good is you fancy taking your phone into the bath but don’t plan on living any form of Australian stereotype; no beaches and no pools for Samsung users.

Unfortunately for those who believe the advertising and don’t have the eagle eyes to spot small print on websites, Samsung also denied warranty claims for phones which were damaged when used in water.

Despite the fact Samsung has clearly misled consumers about the performance of S10 devices in non-fresh water, the firm is standing by its marketing and plans to fight the case. This is a slightly tricky area however, as there is some flexibility build into advertising rules. No-one expects to get a burger which matches the images on McDonald’s adverts, but this exaggeration is accepted.

Samsung might be able to squeeze out of this situation and consumers might continue to be lied to. That said, people should be able to put their phone down for a couple of minutes if they fancy a dip.

Samsung surfboard

DT, Carphone Warehouse and Elisa show their 5G FOMO

The 5G hard launches are coming thick and fast, which is causing fear of missing out for some in the telecoms game.

Today’s big announcement comes from Vodafone UK, on which more from us later. BT has also got involved and now Deutsche Telekom, Carphone Warehouse and Elisa have all rushed out press releases to make sure nobody thinks they’re off the pace.

DT hasn’t hard launched anything yet, but has chosen to detail at considerable length how profound its plans to do so are. Today’s announcement is the start of DT’s 5G network rollout in Germany. Berlin and Bonn will be first, followed by Darmstadt, Hamburg, Leipzig, and Munich and by the end of 2020 DT expects Germany’s 20 largest cities to be 5Ged up.

“We punched our ticket for a 5G future with the spectrum auction,” said Dirk Wössner, MD of Telekom Deutschland. “Our goal now is to get 5G to the streets, to our customers, as quickly as possible. Nearly three-quarters of our antenna locations in Germany are connected with optical fiber – we’re now building on that… At the same time, we need a clear regulatory framework and pragmatism from the authorities – particularly when it comes to questions regarding regional spectrum, local roaming, allocation of the auction proceeds, and the approval procedures – which takes far too long in Germany.”

Despite not having activated 5G anywhere yet DT is generously offering its subscribers to pay for it anyway. You can shell out €900 for a Samsung Galaxy S10 5G as well as a 5G tariff and when DT gets its act together you can be among the first people to get access to its 5G. “Telekom is 5G ready and offers the first 5G devices with suitable rate plans for everyone who wants to be there from the start,” said Michael Hagspihl, MD for Consumers at Telekom Deutschland.

In the UK Carphone Warehouse has joined the 5G pre-order party by announcing the availability of a few 5G smartphones. The ubiquitous Samsung Galaxy S10 5G will cost you £1099 SIM-free and is available today. We’re told the Oppo Reno 5G is also available today but you can’t can’t get it online for some reason. The Xiaomi Mi MIX 3, OnePlus 7 Pro 5G and LG V50 ThinQ will all be available for pre-order tomorrow.

“Retailing the largest range of the newly announced 5G compatible phones means those looking to upgrade to the new offering will have the biggest choice in terms of device and networks to best suit their needs across an impressive range of smartphones, deals and trade-in offers,” said John Coleman, Director of Connectivity at Carphone Warehouse.

Lastly Finnish operator Elisa is proud to announce it was the seller of the first 5G phone bought in any Nordic country. The lucky punter was one Harri Hellström, who strolled into Elisa Kulma in Helsinki unaware of how his life was about to change. Moments later, amid streamers and rapturous applause, Hellström was handed his phone by Elisa CEO Veli-Matti Mattila and held aloft by exuberant Elisa staff.

“I have always been into cutting-edge technology, and I have often been among the first to buy new devices,” said Hellström, once he had composed himself. “I feel wonderful about having the first 5G phone in the Nordic countries. I travel a lot in Finland and abroad, and I often rely on my mobile device for communication on the road. This is why fast connections are essential.” Words so fitting they could almost have been written by Elisa itself.

“Demand for 5G devices and subscriptions will increase as network coverage expands,” said Antti Ihanainen, VP of Elisa’s consumer subscription business. “5G will revolutionise the way we use mobile devices beyond anything we have seen during previous technological evolutions. Fully utilising the benefits of a 5G network requires the use of 5G devices, which means demand will inevitably rise. We are continuously developing innovative 5G services and exploring ways of utilising 5G technology.”

As more operators around the world activate 5G networks and get to bang on about how much better life is for their subscribers as a consequence, the FOMO for those operators that have yet to get involved will increase. If those subscribers start openly wondering what the fuss is all about once they start using 5G, however, being late to the game might not be such a bad thing.

Apple CEO triggered by reports of design decline

When Apple’s famous head of design decided to call it a day last week, there was widespread speculation around what may have caused such a move.

The most Juicy gossip came from the Wall Street Journal, which wrote a piece contending that Jony Ive started the process of clearing off long ago and that it was motivated, at least in part, by CEO Tim Cook’s relative disinterest in the design process. This in turn demoralised Ive who, according to the account, became an increasingly distant figure at Apple Towers.

Tim Cook has always been known as an operations specialist with a particular talent for managing an efficient supply chain. Since he took over from the more creative, mercurial Apple founder Steve Jobs in 2011, these talents have ensured the company has gone from strength to strength in terms of revenue and profitability, but there has always been speculation that this has come at the expense of innovation.

That last truly disruptive move from Apple came with the launch of the iPad in 2010, but it looks like Ive was hoping the Apple Watch launch in 2015 would be a similar inflection point. While Apple has flogged quite a few of them and doubtless trousered a pile of cash in the process, there’s very little that differentiates the Apple Watch from its competitors and the category itself has failed to set the technology world on fire.

So it’s easy to see why a narrative that contends innovation at Apple is being suffocated with him in charge might trouble Cook somewhat, which seems to be confirmed by his response to the WSJ piece. Uncharacteristically he publicly took issue with the story via a statement sent to NBC News, in which he asserted it was at odds with his own perception.

“The story is absurd,” wrote Cook. “A lot of the reporting, and certainly the conclusions, just don’t match with reality. At a base level, it shows a lack of understanding about how the design team works and how Apple works. It distorts relationships, decisions and events to the point that we just don’t recognize the company it claims to describe.”

Grizzled Journalists soon recognised this as the kind of non-specific denial companies often send out when they want to cast doubt on the legitimacy of a story without calling out any specific inaccuracies. Cook is essentially saying he disagrees with the conclusions but then he would, wouldn’t he?

Ive’s departure doesn’t seem to have done Apple’s share price any harm, but it does increase the pressure on the company to prove it can still be a consumer technology trailblazer without him. While Apple hasn’t shown much evidence of this for a while, that lack of differentiation was largely put down to the maturity of the smartphone form factor and the openness of the component supply chain. If Apple still hasn’t invented anything revolutionary in a few years’ time, people now might pin the blame on Cook.

Apple’s design chief decides to call it a day

Jony Ive, Apple’s Chief Design Officer, has announced that he is leaving the company at the end of the year and will set up LoveFrom, his own creative business, with Apple as its first client.

Sir Jonathan “Jony” Ive has been instrumental in giving the world a string of iconic Apple products over the last two decades. Among them the most influential ones should be the iPod, which turned the recorded music industry upside down, the iPhone, which redefined what mobile handsets are and do, and the iPad, which practically created the tablet market. In addition, he was also behind the Mac computers and the Apple Watch, the success of which has been more muted.

Ive stressed that his departure from the company does not mean he will stop working with Apple. “While I will not be an [Apple] employee, I will still be very involved — I hope for many, many years to come,” Ive told the Financial Times in an interview. “This just seems like a natural and gentle time to make this change.” Tim Cook, Apple’s CEO, believed the company would continue the success of the Ive era, and was looking forward to the collaboration with Ive’s new venture. “We get to continue with the same team that we’ve had for a long time and have the pleasure of continuing to work with Jony,” Cook told the FT. “I can’t imagine a better result.” Apple will not announce a successor to fill Ive’s CDO position immediately. Instead, the managers of the design teams will report to Jeff Williams, Apple’s COO.

Ive’s decision to leave should not appear to have come out of the blue to those that have followed the industry, and the company, closely. He was the late Steve Jobs’ closest ally and, among other things, had been an active presence at product debuts, through video links. After Jobs passed away this patterned continued, up to the point when the Apple Watch was launched. Ive would appear at the events on pre-recorded videos, unveiling the products, in particular talking about the details. That has not happened since. In a 2015 feature by the New Yorker magazine, Ive said he had been “deeply tired”. In May that year he was appointed CDO, a position that would rid him of the day-to-day responsibilities to run the design team.

More recently it appears Ive has expand his interest beyond sleek consumer products. For example, his team were heavily involved in designing Apple’s new headquarters. This is also a vision he gives his new business. “There are products that we have been working on for a number of years,” Ive told the FT. “I’m beyond excited that I get to continue working on those, and there are some new projects as well that I’ll get to develop and contribute to.” He also denied that the weakened appeal of the iPhone, which has not been helped by the trade war with China, is a contributing factor to his decision. To tell from his reduced involvement in products over the last few years, the decision seems to have been long in the making.

Before he was knighted for “services to design and enterprise” by the Queen in 2012, Ive had already been hailed by Stephen Fry as one of the two Englishmen alive to have the most profound impact on people’s lives. The other, according to Fry, is Sir Tim Berners-Lee, the inventor of the World Wide Web.

KaiOS gains Orange support in African drive

Orange has come out in support of KaiOS Technologies, as the telco contributed to the $50 million raised in total during its Series B funding round led by Cathay Innovation.

The cash itself will be used to fuel expansion of the feature phone operating system into new markets, introducing new features and further expanding the KaiOS developer community. To date, there are currently more than 100 million devices running on KaiOS, with a footprint in 100 countries.

“Our mission is to open up new possibilities for individuals, organizations, and society by bringing mobile connectivity to the billions of people without internet in emerging markets, as well as providing those in established markets with an alternative to smartphones,” said Sebastien Codeville, CEO of KaiOS Technologies.

Aside from fuelling an alternative to Google’s Android OS, the partnership between is also geared towards improving accessibility from a device perspective.

“Today the two main barriers to internet access are the lack of infrastructure, for which Orange is investing one billion euros per year, and the cost of the device,” said Alioune Ndiaye, CEO Orange Middle East & Africa.

“As part of our effort to overcome this second barrier, I am very pleased to have this opportunity to develop our partnership with Kai through a direct investment. Providing our customers with access to affordable devices is a crucial step in our ambition to democratise access to the Internet in Africa.”

During Mobile World Congress this year, Kai and Orange launched Sanza, a smart feature phone which incorporated voice-recognition, extended battery life and popular apps as the main features. However, most importantly, the device is sold for as little as $20.

As Ndiaye points out above, accessibility in terms of infrastructure and devices is an issue across the African continent fuelling the ever-expanding digital divide. Africa is a profitable region for Orange, but to grow these profits the telco will have to ensure the internet is accessible to the millions of people who aren’t surfing the digital highways today.

Huawei UK tries to calm fears about Android support

The news that Google may stop supporting Android on Huawei phones has inevitably hit their sales. But in the UK at least Huawei is fighting back.

The US state is pressuring any company that wants to stay on its good side to sever all business ties with Huawei, which it has decided is an abject security risk due to its presumed obedience to the Chinese state. A month ago it emerged that Google had bowed to this pressure and was suspending some dealings with Huawei, which raised the prospect of Huawei smartphones no longer receiving updates or security support for their Android operating systems.

Understandably this is likely to have a profound effect on Huawei smartphone sales as who would want to buy a phone, however powerful and shiny, with compromised software? Huawei’s UK consumer group has moved to address these concerns with a new website called ‘Huawei Answers’, which is set up in an FAQ style, designed to address consumer concerns about its phones by debunking rumours.

The main concern most prospective Huawei smartphone punters will have is whether or not their devices will be updated to the latest version of Android when it becomes available. “Our most popular current devices, including the P30 series, will be able to access Android Q,” announces Huawei Answers in its preamble, before tackling other ‘common points of confusion’. You might as well see the lot here.

RUMOUR #1 – Huawei smartphones and tablets will no longer get software or security updates.

Ongoing security and software updates will continue to be provided to keep all Huawei smartphones and tablets secure and up-to-date.

RUMOUR #2 – Android will be automatically uninstalled from Huawei smartphones and tablets.

Android will not be automatically uninstalled from Huawei smartphones and tablets. We continue to work closely with our partners to ensure our consumers can always enjoy the best possible experience.

RUMOUR #3 – Huawei users will not be able to download or use apps like WhatsApp, Facebook or Instagram.

For all Huawei smartphones and tablets, WhatsApp, Facebook, and Instagram apps can be downloaded and used as normal.

RUMOUR #4 – Windows will no longer work on Huawei PCs.

We can confirm that Huawei devices with Microsoft software will be upgraded and supported

RUMOUR #5 – If you reset your Huawei smartphone or tablet, you will lose access permanently to Android Services and Google Apps.

If you reset your Huawei smartphone or tablet to factory settings, Android Services and Google Apps can still be downloaded and used as normal.

RUMOUR #6 – The current situation impacts the warranty on Huawei smartphones and tablets.

Nothing has changed. Huawei provides after-sales service as before, in accordance with the existing warranty policy.

RUMOUR #7 – Huawei smartphones & tablets will offer reduced functionality.

All Huawei smartphones & tablets will continue to function as they currently do.

RUMOUR #8 – Huawei will no longer sell smartphones.

Huawei will continue to sell smartphones. Furthermore, we will continue to invest in research and development to deliver leading innovation and the best possible smartphone experience.

RUMOUR #9 – The P30 & the P30 Pro won’t get access to Android Q.

We are confident that our most popular devices, including the P30 series, will be able to access Android Q. We have been working with third parties for many months to ensure devices will be able to receive Android Q updates. Technical preparations and testing has already begun for over 17 devices. In fact our Mate 20 Pro has already been given approval to receive Android Q as and when it is released by Google.

Here is the list of the  products we have submitted to upgrade to Android Q

P30 Pro

P30

Mate 20

Mate 20 Pro

PORSCHE DESIGN Mate 20 RS

P30 lite

P smart 2019

P smart+ 2019

P smart Z

Mate 20 X

Mate 20 X (5G)

P20 Pro

P20

Mate 10 Pro

PORSCHE DESIGN Mate 10

Mate 10

Mate 20 Lite

It’s a game effort but, just as with broader concerns about security, Huawei is still asking people to take its word for this stuff. The use of hedging language such as ‘we continue to work closely’ and ‘we are confident that’ probably doesn’t help either.

This initiative is reminiscent of the Huawei Facts Twitter account, which also exists to present the company in a positive light. It recently revealed that, in spite of all this argie-bargie, Huawei has already shifted 100 million smartphone units this year. It managed over 200 million in the whole 2018 but it wouldn’t be surprising to see it fall short of that number this year as second half shipments fall off a cliff due to the above concerns.

Apple considering a Chinese exit amid international tensions

It seems Apple does not consider itself immune from collateral damage, as whispers about a China exit are becoming louder and more plentiful.

For China, and those Chinese citizens who are dependent on Apple for their livelihood, the news will come as a shock, but this is a development which some have been expected for a while. According to the Nikkei Asian Review, Apple is considering moving 15-30% of its production capacity out of China.

This is a trend which we are starting to see pretty much everywhere. Supply chain management is a very difficult aspect of an international business, and while it might have looked attractive to take advantage of cheap labour in developing markets during yesteryear, it seems a concentration of operations is getting Apple executives twitchy today.

The quoted sources are suggesting diversification of the supply chain is a sensible way to manage some tensions floating back and forth across the Pacific Ocean.

In terms of the clues this development was on the horizon, it is worth looking back a couple of weeks. Foxconn executives have already said 25% of production is already located outside of China, and there is enough capacity to meet the demands of Apple as a customer should tensions have a negative impact on the Apple business. This appeared to be a largely unprompted statement, but perhaps the conversations were already happening behind closed doors.

What is also worth noting is that Foxconn certainly has some incentive to bend to the will of Apple executives; if it doesn’t have the capacity, a smart idea might be to spend some cash buying a company outside of China sharpish. Although not confirmed, Apple supposedly accounts for roughly half of Foxconn total revenues. If Apple wants to move production capacity out of China, Foxconn should quickly learn the moves to the new dance.

For the Chinese employees in the supply chain, this will be a very worrying time. Five million workers rely on Apple’s presence in the country, with Apple only employing 10,000 directly. Interestingly enough, there are now more named suppliers in China than in the US (41 Chinese firms vs. 37 US suppliers). What is worth noting is that China will remain the centre of Apple’s supply chain for the foreseeable future; shifting such a complex and monstrous operation would take a considerable amount of time, investment and planning.

Other countries would of course want to woo Apple, but China is a very attractive base for the iLeader. Not only does it have the necessary infrastructure, it has the skilled workers in place. 90% of Apple’s products are currently manufactured in China and replicating this successful operation will not easily be done elsewhere.

Although this would be a precautionary move from Apple, the threat is genuine. Huawei and ZTE have already shown there are heavy consequences if supply chains are too concentrated in a single market, and due to the aggressive actions of the White House it would surprise few to see retaliation from the Chinese Government.

On the supply chain side of things, Apple has been making other efforts to shift around operations. The firm has been working to move the production of some premium handsets to India in an effort to avoid the 20% import duties in the country. Apple has continued to struggle in India, partly due to the price conscious nature of consumers. Anything which can be done to reduce the price of handsets will be explored to improve market share.

Whatever your thoughts of President Donald Trump, you cannot argue the Oval Office is having a much more profound impact on the technology industry than previous administrations. Perhaps his actions will lead the Chinese semiconductor market grow, while the manufacturing and assembly operations will be spread into other Asian markets. Another couple of years and the segment could almost look unrecognisable.