USB4 specification unveiled, featuring Intel Thunderbolt 3

The next generation USB standard will be based on Intel’s Thunderbolt protocols, as well as be backward compatible with earlier generations of USB.

Intel earlier announced that its upcoming 10nm processor will be the first to integrate Thunderbolt 3, and it has already been supported by both Windows 10 and macOS. According to the latest announcements from both Intel and the industry association and standardisation body USB Promoter Group, Intel has made the Thunderbolt 3 specifications available for royalty free use by the industry.

“Releasing the Thunderbolt protocol specification is a significant milestone for making today’s simplest and most versatile port available to everyone,” said Jason Ziller, General Manager, Client Connectivity Division at Intel. “By collaborating with the USB Promoter Group, we’re opening the doors for innovation across a wide range of devices and increasing compatibility to deliver better experiences to consumers.”

The USB community is obviously happy to see that the move from Intel will likely avoid the branching of the next generation USB standards. “The primary goal of USB is to deliver the best user experience combining data, display and power delivery over a user-friendly and robust cable and connector solution,” said Brad Saunders, USB Promoter Group Chairman.

The key advantages of USB 4 include:

  • High speed: up to 40 Gbps operation, which will double the 20 Gbps speed of USB 3.2 and Thunderbolt 2, or more than 80 times faster than the USB 2.0 speed of 480 Mbps;
  • Multi-channel data communication: enabling multiple simultaneous data and display protocols
  • Backward compatibility: USB4 will be compatible with USB 3.2, USB 2.0, and Thunderbolt 3

“The USB 4 solution specifically tailors bus operation to further enhance this experience by optimizing the blend of data and display over a single connection and enabling the further doubling of performance,” added USB Promoter Group’s Saunders.

After making the Thunderbolt specs public, Intel’s role will expand to industry wide testing, auditing and certification.

The USB4 interface is likely to continue with the USB Type-C standard, which will save more real estate for computer OEMs, if they can replace most of the legacy ports. When it comes to mobile devices, the co-existence of different standards of USB connections for charging and for data transmission has been a source of consumer frustration as well as a key contributor to electronics wastes. Apple has also been notorious for going its own way with cable standards, though recently there has been rumour that the next iPhone might ditch Lightning for USB Type-C connection.

The USB4 specifications will be published around mid-2019, according to the USB Promoter Group announcement.

Microsoft Azure casts its eye towards Quantum computing

Microsoft has announced the formation of its Quantum Network in an effort to develop the world’s first scalable quantum computer and quantum applications.

The Network, which was announced during Microsoft’s Startup Summit, is a community which brings together various universities, suppliers, enterprise organisations and start-ups to grow this futuristic segment. It might seem like an unconceivable concept right now, but CEO Satya Nadella has seemingly developed a culture which will not allow Microsoft to sit still, a problem which brought about the dark days of the noughties.

“The Microsoft Quantum Network is our commitment to establishing the partnerships required to build the quantum workforce and the quantum economy,” said Todd Holmdahl, Corporate VP of Azure Hardware Systems Group at Microsoft (pictured). “We believe both are vital to solving some of the world’s toughest problems.”

Of course, Microsoft is not the only competitor in the race to create scalable quantum computing services and products. IBM Q was one of the first industry initiatives to focus on the segment, while Google has created its own division known as AI Quantum. AWS has hinted it will be getting involved before too long, praising the National Quantum Initiative Act in a blog post, though nothing official has emerged just yet. And it’s not just the tech superpowers, Bleximo and ColdQuanta are two companies which received seed funding in 2018.

A classical computer has a memory made up of bits, where each bit is represented by either a one or a zero, however quantum computing maintains a sequence of qubits, which can represent a one, a zero, or any quantum superposition of those two qubit states. The simplest way of explaining this is by imagining a sphere.

In classical computing, a bit can be represented by the poles of the sphere, with zero representing the south pole and one representing the north, but in Quantum computing, any point of the sphere can be used to represent any point. This is achieved through a concept called superposition, which means ‘Qbits’ can be represented by a one or a zero, or both at the same time. For example, two qubits in a single superposition could represent four different scenarios.

Although this is an incredibly simplistic description of the science, it will allow computers to store, analyse and transfer information significantly more efficiently. Each year, the volume of data we consume is growing astronomically, driving the need for such computational power.

While this does sound incredibly beneficial for the world, what is worth noting is this is a segment in its very early days. Progress has been made in creating these supercomputers, though it is far from being perfected, and scalability is nothing more than a distant dream right now. The main problem, aside from incredibly difficult science, seems to be maintaining stability of the machines. Incredibly cold temperatures are needed, while even slight vibrations can cause disruptions.

Eventually, quantum computers will be able to solve complex mathematics problems at speeds which are inconceivable in today’s world. This will become increasingly important in areas such as security, with end-to-end encryption technologies reliant on the concept of it being impossible to solve equations in an efficient enough manner. Should nefarious individuals get their hands on the technology, the currently unbreakable codes would be vulnerable.

Just to demonstrate the power of quantum computing, back in 2015, Google announced it had developed a supercomputer which was more than more than 108 times faster than what was considered classical computing at the time. Computational power has increased in the four years since, but the sheer chasm between classical and quantum is clear.

It might sound like a risk, but on the other hand, cryptography could benefit from this technology significantly. Quantum-based cryptographic systems would be much more secure than what we would consider the norm.

This euphoria will not replace classical computing, as there will always be simplistic usecases such as spreadsheets or email for example, but there are hordes of more complex scenarios which could benefit from quantum computing. The sciences could hugely benefit, as well as more everyday usecases such as scheduling flight runway activities at airports.

Of course, for any of the futuristic ideas to be considered there needs to be scalability. This is one of the main objectives of this Microsoft, bringing quantum computing to the masses quicker than competitors. The technology might sound decades off, but as Bill Gates said; “most overestimate what they can do in one year and underestimate what they can do in ten”.

Telefónica and Microsoft team-up to own connected ecosystem

Every telco is attempting to figure out how to survive in the newly-defined digital world and Telefónica’s approach looks to be one of the most interesting attempts yet.

Speaking at Mobile World Congress in Barcelona, Telefónica CEO Jose Maria Alvarez-Pallete was joined on stage by Microsoft CEO Satya Nadella to preach the promise of its ‘fourth platform’ and the power of digital assistant ‘Aura’ as a play to capture the fortunes of tomorrow’s digital ecosystem. Many are attempting to realise the glories of the connected economy, but this approach, leaning on the ‘gated community’ lessons of the OTTs looks to be one of the most encouraging yet.

“We decided cognitive intelligence was an amazing new opportunity,” said Alvarez-Pallete. “It is a new wave of interaction with our customers.”

The idea, which has been in the making for the last two years, is a relatively simple one on the surface. Build an effective digital assistant (tick), an intuitive interface (tick), a network designed for intelligence (tick) and open all this up to third parties (the next tick). It is remarkably similar to the ‘gated community’ model which has been championed by the likes of Facebook.

Although there are services and products which will be designed by Telefónica, there are more intelligent ways to monetize the consumer. The digital assistant and ‘Movistar Living App’ help Telefónica own the relationship with the consumer, but by opening the gates of this cultivated community Telefónica can monetize the relationships and (in-directly) the services which are build on top of its own intelligent network.

rhdr

However, for this idea to work the services have to be captivating and innovative. Telefonica must give customers a reason to use ‘Aura’ and the ‘Movistar Living App’ as the focal point of their own connected world. Effectively, Telefonica will have to go head-to-head with the likes of AWS and Google who are also trying to own this relationship with their own digital assistants. This is where Microsoft will be able to help.

Under Nadella, Microsoft has been reborn as a new company. After a brief fall from grace, the now cloud-defined business is fast becoming one of the most innovative players in the market, and part of this is built on its own AI platform and cognitive intelligence offerings. If Telefonica is going to go toe-to-toe with some very innovative players and own the connected ecosystem, the power of Azure (machine learning research, speech recognition etc.) will be critical to this success.

Another crucially important factor to success here will be earning, and maintaining, customer trust. Facebook succeeded so forcefully in the first few years because no-one questioned the data-sharing business model. Perhaps this was because no-one could understand these concepts, but the world has changed. Privacy is a priority for consumers, and Telefonica will have to prove it is serious about keeping personal information safe and managing the relationships with third-parties responsibly. Without this trust, Telefonica’s drive towards evolution with fail and the business will be nothing more than a dumb pipe.

rhdr

What is worth noting is that the strategy is off to the best possible start. Aura has been launched in six different countries, across 30 channels and has developed more than 1000 different usecases. By the end of 2019, these numbers will have improved to 9, 50 and 1500 respectively. The ambition and the growth potential is certainly there.

Owning the ecosystem which is fast developing behind the connected economy, including the smart home, is an opportunity which looked to be lost for the telcos. With the likes of AWS and Google seemingly wrestling control away with their own smart speakers and integrated personal assistants, it might have been a case of another missed opportunity due to inaction. Telefonica is looking to right this wrong however.

Europe pats US internet giants on the head for being good censors

In just the third year of the EU’s Orwellian online speech purge it looks like the major platforms are largely submitting to its will.

The EU Code of Conduct on countering illegal hatespeech online has been going since 2016 as “an effort to respond to the proliferation of racist and xenophobic hate speech online.” The EU seemed to have decided that if you stop people saying horrid things online then you’ll also stop them having horrid thoughts and doing horrid things.

To implement this theory the EU needed the cooperation of the major platforms run by Facebook, Microsoft, Twitter and Google. It will have done the usual thing of threatening vindictive regulatory action if they didn’t comply so sensibly they have. They are now assessing 89% of content flagged as hatespeech within 24 hours and removing 72% of it.

Definitions of hatespeech seem to be pretty consistent across the EU, which is presumably no coincidence. Here’s the European Commission’s one:

Certain forms of conduct as outlined below, are punishable as criminal offences:

  • public incitement to violence or hatred directed against a group of persons or a member of such a group defined on the basis of race, colour, descent, religion or belief, or national or ethnic origin;
  • the above-mentioned offence when carried out by the public dissemination or distribution of tracts, pictures or other material;
  • publicly condoning, denying or grossly trivialising crimes of genocide, crimes against humanity and war crimes as defined in the Statute of the International Criminal Court (Articles 6, 7 and 8) and crimes defined in Article 6 of the Charter of the International Military Tribunal, when the conduct is carried out in a manner likely to incite violence or hatred against such a group or a member of such a group.

Instigating, aiding or abetting in the commission of the above offences is also punishable.

With regard to these offences listed, EU countries must ensure that they are punishable by:

  • effective, proportionate and dissuasive penalties;
  • a term of imprisonment of a maximum of at least one year.

With regard to legal persons, the penalties must be effective, proportionate and dissuasive and must consist of criminal or non-criminal fines. In addition, legal persons may be punished by:

  • exclusion from entitlement to public benefits or aid;
  • temporary or permanent disqualification from the practice or commercial activities;
  • being placed under judicial supervision;
  • a judicial winding-up order.

The initiation of investigations or prosecutions of racist and xenophobic offences must not depend on a victim’s report or accusation.

Hate crime

In all cases, racist or xenophobic motivation shall be considered to be an aggravating circumstance or, alternatively, the courts must be empowered to take such motivation into consideration when determining the penalties to be applied.

If you couldn’t be bothered to read all that, the TL;DR is that you can’t say horrid things online if race, nationality, belief, etc comes into it, or even join in if someone else does. If you do all sorts of punishments will be inflicted on you, including a year in prison (as maximum of at least one year? That doesn’t make sense). The victim of such hatespeech doesn’t even need to have accused you of anything and the court reserves the right to determine your motivation for doing stuff.

“Today’s evaluation shows that cooperation with companies and civil society brings results,” said Andrus Ansip, Vice-President for the Digital Single Market. “Companies are now assessing 89% of flagged content within 24 hours, and promptly act to remove it when necessary. This is more than twice as much as compared to 2016. More importantly, the Code works because it respects freedom of expression. The internet is a place people go to share their views and find out information at the click of a button. Nobody should feel unsafe or threatened due to illegal hateful content remaining online.”

“Illegal hate speech online is not only a crime, it represents a threat to free speech and democratic engagement,” said Vĕra Jourová, Commissioner for Justice, Consumers and Gender Equality. “In May 2016, I initiated the Code of conduct on online hatespeech, because we urgently needed to do something about this phenomenon. Today, after two and a half years, we can say that we found the right approach and established a standard throughout Europe on how to tackle this serious issue, while fully protecting freedom of speech.”

Those statements are perfectly Orwellian, insisting as they do that censorship is free speech. The really chilling thing is that they clearly believe that imposing broad and vague restrictions on online speech is vital to protect the freedom of nice, compliant non-hateful people. The EC even had the gall to berate the platforms for not offering enough feedback to those it censors. This could easily be resolved with a blanket statement along the lines of “We’re just following orders.”

As you can see from the tweet below extracted from the full report, the types of things that qualify as hatespeech have increased since the above definition was written. This kind of mission creep is made all the more inevitable by the complicity of Silicon Valley and complete absence of dissenting media, so there’s every reason to assume the definition of hatespeech will continue to expand indefinitely.

 

Microsoft to make the gaming experience device-agnostic

Microsoft is about to launch a cross-platform developer kit which will allow the Xbox service, and content on the platform, to be integrated Android, iOS and Switch devices.

Although the firm has not announced the developer kit just yet, an overview of its keynote session at the Game Developers Conference in San Francisco next month details the plans. There have been rumours of Microsoft making such a move to broaden and deepen the gaming experience, though this seems to have made the reports official.

“Now Xbox Live is about to get much bigger,” the conference blurb states. “Xbox Live is expanding from 400M gaming devices and a reach to over 68M active players to over 2B devices with the release of our new cross-platform XDK.

“Get a first look at the SDK to enable game developers to connect players between iOS, Android, and Switch in addition to Xbox and any game in the Microsoft Store on Windows PCs.”

Back in October, Microsoft launched Project xCloud, an initiative to extend the reach of the Xbox platform on more devices and screens. This would appear to be the first step towards delivering on the promise of consistent gaming everywhere.

Although gaming has become much more prominent in recent months, this is perhaps more of a plug for the over-arching cloud computing business than it is for the Xbox brand. Taking the Xbox brand onto multiple devices moves the emphasis from hardware into the cloud. Perhaps it would be more accurate to state Microsoft does not care where or what content you are playing, as long as its Microsoft cloud kit which is powering the experience.

Another interesting factor to this snippet of information is it is yet another incremental step towards linking up all the various siloes in the digital world.

With saved passwords, using social media for online authentication and the free flow of personal data through intermediaries, all the internet giants are very keen to ensure each of the siloes throughout the digital economy are linked together. Google is starting to get very good at it, while others are certainly spreading their influence. There is money to be made in connecting the mobile experience to the same laptop user.

Perhaps this also demonstrates another step towards making the smartphone redundant?

Although restricted to gaming for the moment, Microsoft is demonstrating an online profile can follow a user around anywhere. Maybe this could be extended to the entirety of the smartphone and then onto the user’s whole digital profile. With biometric authentication improving, screens could soon become ‘universal interfaces’, with any user loading up his profile in a fraction of a second.

Of course, the communications aspect of the devices would have to be embedded elsewhere, perhaps in connected earphones, and AR glasses would have to take off on-the-go entertainment, but who knows what the digital world will look like in a few years’ time.

Q4 2018 earnings roundup: Facebook, Qualcomm and Microsoft

It’s that time of the quarter when all the earnings announcements come at once, so here’s a brief look at three US tech heavy-hitters.

Facebook is never too far from the headlines, but this is attention investors won’t be too disappointed in receiving. Facebook’s quarterly figures suggest that while the world might disagree with its ethics, morals and basic decency, we just can’t stop telling people about the snow or posting pictures of a deconstructed Shoreditch coffee.

Over the last three months, total revenues stood at $16.9 billion, a 30% year-on-year jump, while net income jumped 61% to $6.8 billion. We might not trust Facebook, but we can’t stop using it.

Daily Active Users were 1.52 billion on average for December 2018, an increase of 9% year-over-year, while Monthly Active Users were 2.32 billion as of December 31, another 9% increase. Facebook estimates 2.7 billion people now use Facebook, Instagram, WhatsApp, or Messenger, while 2 billion use at least one of the services once a day.

“Going into 2019, we’re focused on four priorities: first, continue making progress on the major social issues facing the Internet and our company; second, build new experiences that meaningfully improve people’s lives today and set the stage for even bigger improvements in the future; third, keep building our business by supporting the millions of businesses, mostly small businesses, that rely on our services to grow and create jobs; then fourth, communicate more transparently about what we’re doing and the role our services play in the world. And I want to take a minute talk about each of these,” CEO Mark Zuckerberg said during the earnings call.

Qualcomm is another company which is never too far away from the headlines, but for quite different reasons.

The last quarter proved to be another which saw the legal battle with Apple take another incremental step forward, but this does not seem to have weighed too heavily on the business. Over the last three months, the chipmaker beat market expectations and signed a new interim patent contract with Huawei Technologies.

The deal with Huawei is perhaps an important one as it lessons the strain placed on the over-worked Qualcomm legal team. Under the new deal, Huawei will pay $150 million per quarter for three quarters, providing a bit of breathing room as the pair look to rectify a licensing dispute. Qualcomm believes this is less than it is owed but indicated this is progress.

In terms of the figures, the last quarter brought in $4.8 billion, a decline of 20% year-on-year, though net income stood at $1.1 billion. Forecasts for the next quarter see the company offering a range of $4.4 billion and $5.2 billion, meeting analysts’ estimate of $4.80 billion, with the market reacting positively to the news. Revenues might be down, but there is a lot of potential on the horizon.

Finally, onto Microsoft, the only one of this trio which seems to have a positive reputation across the wold.

Satya Nadella might not be the most rock n’ roll CEO on the technology scene right now, but you certainly can’t argue with the results he delivers. Microsoft had another positive three-month period, with the Intelligent Cloud business claiming the plaudits.

“Our strong commercial cloud results reflect our deep and growing partnerships with leading companies in every industry including retail, financial services, and healthcare,” said Nadella. “We are delivering differentiated value across the cloud and edge as we work to earn customer trust every day.”

Total revenues increased 12% to $32.5 billion, while the boost to operating income was 18% as the bean counters revelled in $10.3 billion. Looking at the individual business units, revenues in Productivity and Business Processes was $10.1 billion, up 13% year-on-year, Intelligent Cloud jumped 20% to $9.4 billion and More Personal Computing was up 7% to $13 billion.

You might not want to go clubbing with Nadella, but if he carries on this trajectory he’ll never have to buy a drink again.

Who’s got the stones to buy Netflix?

Apple, Disney, Microsoft or Apple; one of the biggest questions which has circled the technology industry over the last couple of years is who could possibly acquire Netflix?

The streaming giant, Wall Street’s darling, has almost constantly been talked up as an acquisition target. However, another year has passed and it’s another year where no-one managed to capture the content beast. You have to start to wonder whether it will ever happen, but here we’re going to have a look at who might be in the running.

Netflix numbersWith subscriptions totalling more than 148 million, 2018 revenues exceeding $15.7 billion and operating income up to $1.6 billion, Netflix would certainly be a useful addition to any company. However, with market capitalisation now roughly $143 billion and debt which would make your eyes water, an acquisition would be a scary prospect for almost everyone.

First and foremost, let’s have a look at some of the players who might have been in the equation, but alas, no more.

Disney has been a rumoured acquirer for almost as long as Netflix existed. This is an incredibly successful company, but no-one is immune to the shift tides of the global economy and consumer behaviour. Getting in on the internet craze is something which should be considered critical to Disney, and Netflix would have given them a direct-to-consumer channel. However, there was always a feeling Disney would develop its own proposition organically and this turned out to be the case.

AT&T is another company which might have been in the fray, but its Time Warner acquisition satisfied the content needs of the business. All telcos are searching to get in on the content cash, developing converged offerings, and AT&T is a company which certainly has a big bank account. As mentioned above, the acquisition of Time Warner completes rules this business out.

There are of course others who might have been interested in acquiring the streaming giant, but for various reasons they would not be considered today. Either it would be way too expensive, wouldn’t fit into the company’s objectives or there is already a streaming service present. But now onto the interesting stuff, who could be in the running.

Microsoft logo

Microsoft

From doom to gloom, CEO Satya Nadella has certainly turned fortunes around at Microsoft. Only a few years ago, Microsoft was a shadow of its former self as the declining PC industry hit home hard. A disastrous venture into the world of smartphones was a slight detour but under the cloud-orientated leadership of Nadella, Microsoft is back as a lean, mean tech heavyweight.

Alongside the cloud computing business, Microsoft has also successfully lead the Xbox brand into the digital era. Not only is the platform increasingly evolving into an online gaming landscape, but it also lends itself well to sit alongside the Netflix business. If Microsoft wants to compete with Amazon across the entire digital ecosystem, both consumer and enterprise, it will need to expand the business into more consumer channels.

For Netflix, this might be an interesting tie up as well. Netflix is a business which operates through a single revenue stream at the moment, entertainment, and might be keen to look at new avenues. Gaming and eSports are two segments which align well with Netflix, opening up some interesting synergies with Microsoft’s consumer business.

“Microsoft is at a crossroads,” said independent telco, media and tech analyst Paolo Pescatore. “Its rivals have made big moves in video and it needs to follow suit. The acquisition addresses this and complements its efforts with Xbox. The move also strengthens its growing aspirations in the cloud with Azure, firmly positioning itself against Amazon with AWS and Prime video.”

However, while this is a company which could potentially afford to buy Netflix, you have to wonder whether it actually will. The Netflix culture does not necessarily align with Microsoft, and while diversification into new channels is always attractive, it might be considered too much of a distraction from the cloud computing mission. Nadella has already stated he is targeting the edge computing and AI segments, and considering the bounties on offer there, why bother entertaining an expensive distraction.

Apple Store on 5th Avenue, New York City

Apple

Apple is another company which has billions floating in free cash and assets which could be used to leverage any transaction. It is also a company which has struggled to make any effective mark on the content world, excluding iTunes success. With Netflix, Apple could purchase a very successful brand, broadening the horizons of the business.

The last couple of months have shown Apple is not immune to the dampened smartphone trends. Sales are not roaring the same way they were during yesteryear, perhaps because there has been so little innovation in the segment for years. The last genuine disruption for devices probably came from Apple a decade ago when it ditched the keyboard. Arguably everything else has just been incremental change, while prices are sky-rocketing; the consumer feels abused.

To compensate for the slowdown, CEO Tim Cook has been talking up the software and services business unit. While this has been successful, it seems not enough for investors. Netflix would offer a perfect opportunity for Apple to diversify and tap into the recurring revenues pot which everyone wants to grab.

However, Netflix is a service for anyone and everyone. Apple has traditionally tied services into Apple devices. At CES, we saw the firm expand into openness with new partnerships, but this might be a step too far. Another condemning argument is Apple generally likes to build business organically, or at least acquire to bolster existing products. This would stomp all over this concept.

Alibaba Logo

Alibaba

A Chinese company which has been tearing up trees in the domestic market but struggled to impose itself on the international space, Alibaba has been hoping to replicate the Huawei playbook to dominate the world, but no-where near as successfully.

Perhaps an internationally renowned business is exactly what Alibaba needs to establish itself on the international space. But what is worth noting is this relationship could head the other direction as well; Netflix wouldn’t mind capitalising on the Chinese market.

As with any international business a local business partner is needed to trade in China. Alibaba, with its broad reach across the vast country, could prove to be a very interesting playmate. With Netflix’s Eastern ambitions and Alibaba’s Western dreams, there certainly is dovetail potential.

However, it is very difficult to believe the current US political administration would entertain this idea. Aside from aggression and antagonistic actions, the White House has form in blocking acquisitions which would benefit China, see Broadcom’s attempted acquisition of Qualcomm. This is a completely different argument and segment but considering the escalating trade war between the US and China, it is hard to see any tie up between these two internet giants.

Google Logo

Google

If you’re going to talk about a monstrous acquisition in Silicon Valley, it’s difficult not to mention Google. This is one of the most influential and successful businesses on the planet with cash to burn. And there might just be interest in acquiring Netflix.

Time and time again, Google has shown it is not scared of spending money, a prime example of this is the acquisition of YouTube for $1.65 billion. This might seem like pocket change today, but back in 2006 this was big cash. It seemed like a ridiculous bet for years, but who is laughing now?

The issue with YouTube is the business model. Its advertiser led, open to all and recently there have been some PR blunders with the advert/content alignment. Some content companies have actively avoided the platform, while attempts to create a subscription business have been unsuccessful. This is where Netflix could fit in.

“Google has made numerous failed attempts to crack the paid online video landscape,” said Pescatore. “Content and media owners no longer want to devalue their prized assets by giving it away on YouTube. Acquiring Netflix gives Google a sizeable subscriber base and greater credibility with content and media owners.”

Where there is an opportunity to make money, Google is not scared about big cash outlays. Yes, Netflix is a massive purchase, and there is a lot of debt to consider, but Google is an adventurous and bold enough company to make this work.

However, you have to question whether the US competition authorities would allow two of the largest content platforms to be owned by the same company. There might not necessarily be any direct overlap, but this is a lot of influence to have in one place. Authorities don’t generally like this idea.

Verizon Logo

Verizon

Could Verizon borrow a page from the AT&T playbook and go big on a content acquisition? Perhaps it will struggle to justify the expense to investors, but this one might make sense.

Verizon has been attempting to force its way into the diversification game and so far, it has been a disaster. While AT&T bought Game of Thrones, Verizon went after Yahoo to challenge the likes of Google and Facebook for advertising dollars. A couple of data breaches later, the content and media vision looks like a shambles. Hindsight is always 20/20 but this was a terrible decision.

However, with a 5G rollout to consider, fixed broadband ambitions and burnt fingers from the last content acquisition, you have to wonder whether the team has the stomach to take on such a massive task. Verizon as a business is nothing like Netflix and despite the attractive recurring revenues and value-add opportunities, the integration would be a nightmare. The headache might not be worth the reward.

You also have to wonder whether the telco would be scared off by some of the bold decisions made from a content perspective. Telcos on the whole are quite risk-adverse organizations, something which Netflix certainly isn’t. How many people would have taken a risk and funded content like Stranger Things? And with the release of Bandersnatch, Netflix is entering the new domain of interactive content. You have to be brave and accept considerable risk to make such bets work; we can’t see Verizon adopting this mentality.

Softbank Logo

Softbank Vision Fund

Another with telco heritage, but this is a completely different story.

A couple of years back, Softbank CEO Masayoshi Son had a ridiculous idea which was mocked by many. The creation of a $100 billion investment fund which he would manage seemed unimaginable, but he found the backers, made it profitable and then started up a second-one.

Son is a man to knows how to make money and has the right connections to raise funds for future wonderful ideas. Buying Netflix might sound like an absurd idea, but this is one place we could really see it working.

However, the issue here is the business itself. While Son might be interested in digital ventures which are capable of making profits, the aim of the funds have mainly been directed towards artificial intelligence. Even if Son and his team have bought into other business segments, they are more enterprise orientated. There are smaller bets which have been directed towards the consumer market, but would require an investment on another level.

Tencent Logo

Tencent

Another Chinese company which has big ambitions on the global stage.

This is a business which has been incredibly successful in the Chinese market and used assets effectively in the international markets as well. The purchase of both Epic Games and Supercell have spread the influence of the business further across the world and numerous quarterly results have shown just how strong Tencent’s credentials are in the digital economy.

Tencent would most likely be able to raise the funds to purchase the monster Netflix, while the gaming and entertainment portfolio would work well alongside the streaming brand. Cross selling would be an option, as would embedding more varied content on different platforms. It could be a match made in heaven.

However, you have to bear in mind this is a Chinese company and the political climate is not necessarily in the frame to consider such as transaction. Like Alibaba, Tencent might be viewed as too close to the Chinese government.

No-one

This is an option which is looking increasingly likely. Not only will the business cost a huge amount of money, perhaps a 30-40% premium on market capitalisation, the acquirer will also have to swallow all the debt built-up over the years. There will also have to be enough cash to fuel the content ambitions of Netflix, it reportedly spend $7.5 billion on content last year.

Finally, the acquirer would also have to convince Netflix CEO Reed Hastings, as well as the shareholders, that selling up is the best option.

“If I was a shareholder or Reed Hastings, I’d be wondering whether it is better to be owned by someone else or just carry on what we’re doing now,” said Ed Barton, Practise Lead at Ovum.

“These guys are going down in business school history for what they have done with Netflix already, do they need to sell out to someone else?”

Netflix is growing very quickly and now bringing in some notable profits. The most interesting thing about this business is the potential as well. The US market might be highly saturated, but the international potential is massive. Many countries around the world, most notably in Asia, are just beginning to experience the Netflix euphoria meaning the growth ceiling is still years away.

What this international potential offers Netflix is time, time to explore new opportunities, convergence and diversification. Any business with a single revenue stream, Netflix is solely reliant on subscriptions, sits in a precarious position, but with international growth filling the coffers the team have time to organically create new business streams.

Ultimately, Hastings and his management team have to ask themselves a simple question; is it better to control our own fate or answer to someone else for a bumper payday? We suspect Hastings’ bank account is already bursting and this is a man who is driven by ambition, the need to be the biggest and best, breaking boundaries and creating the unthinkable.

Most of these suitors will probably be thinking they should have acquired Netflix years ago, when the price was a bit more palatable, but would they have been able to drive the same success as Hastings has done flying solo? We suspect not.

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.

Microsoft suggests FCC is telling Porky Pai’s

New Microsoft research suggests the digital divide in the US is much more prominent than any of the politicians, who are supposedly fixing the problem, would let you believe.

The digital divide is one of the most active political ping-pong balls in recent years, with US politicians seemingly using the desirability of bufferless cat videos to gain support in some of the country’s poorest communities. If you believe what the FCC has been telling the media, this disparity has been getting smaller, though it is still large.

The Microsoft research suggests very little or no progress is being made and the FCC is misleading US citizens.

Looking at the statistics, the FCC claims the digital divide currently stands at 22 million across the US. The threshold seems to be what many would consider basic broadband speeds. With so much of the world become digitized it is critical every person is not only granted access to new opportunities, but also allowed to continue using basic services (such as banking) which are increasingly moving into the digital world.

Looking at the Microsoft research, the team is suggesting around half of US citizens, 162 million, are not using the internet at broadband speeds. The difference between the two numbers is quite staggering, and while it does question to competence at the FCC, the answer might be a bit simpler; it’s all a game of politics.

When looking at the figures it is important to understand the FCC estimates on the digital divide are based on those individuals who can theoretically access the internet. There might be various other reasons why they do not, price for example, but these factors do not seem to be considered. Why you might ask? We suspect it is not politically convenient.

If you look at the last US election campaign trail, the idea of the digital divide was a hot topic. Both President Trump and the Democrat candidate Hillary Clinton suggested tackling the issue would be a high priority for their administrations, buying favour in communities which could (and eventually did) turn the tide in the election.

The FCC is a body which is funded via the pockets of the tax payer, therefore it does have to demonstrate it is fulfilling the objectives set out before it. Holding telcos accountable to theoretically offering broadband access is a much simpler job than ensuring these business price it at a cost which would be deemed accessible.

The Microsoft research is based on those who are using the internet at speeds which would be deemed relevant to broadband. Slow broadband could be deemed as bad a no broadband in some cases, with websites timing out or taking so long to load little could be achieved. With this in mind, stories about kids making use of McDonalds wifi to do homework start to make sense.

As you can see from the graph below, wired technologies do generally take a lot longer to reach 100%, especially in a country which is as vast and varied as the US, though broadband has been sluggish in recent years.

Broadband Adoption

But before you start to congratulate Microsoft too much, you must take into account its position is also political, or perhaps PR-drowned is more accurate. One of Microsoft’s more prominent CSR (Corporate Social Responsibility) initiatives is closing the digital divide. If the problem is much worse than people originally imagined, the corporation coming in to help looks much more glorious.

On both side of the coin you have to take the claims with a pinch of salt. The FCC will continue to make bold statements on progress to ensure favourable light is shed on the Trump administration at a time where the White House will be starting to consider the next election, while Microsoft has a lot to gain commercially through the Airband Initiative, a five-year commitment to bring broadband access to two million unserved US citizens living in rural communities.

Microsoft is not wrong, and we suspect the way it is judging the digital divide is more accurate (usage vs. theoretical accessibility), but it always worth remembering there is always something to gain.

Xiaomi the difference: Chinese smart device maker vows to disrupt UK market

Xiaomi launched Mi 8 Pro, the first time it has unveiled new products outside of Greater China, a sign of its ambition to expand in more mature markets.

At a Hollywoodian event (as almost all smartphone launches are nowadays) in Barbican Centre on Thursday, Xiaomi became the latest Chinese smartphone maker to introduce their latest products in London, following recent launches by Huawei and OnePlus. The company unveiled Mi 8 Pro, an upgrade version of its Mi 8 model launched earlier in China.

After registering impressive growth in India and other markets in Asia, as well as consolidating its position in China, Xiaomi, like some other Chinese brands, is eyeing the mature markets for new growth. Western Europe is an attractive option as the market is not flooded with hundreds of smartphone brands as in India and China, and there is a sizeable open market that is easier for new brands to set a foot in instead of having to crack the carrier market as in the US.

“Today we witness a new chapter in Xiaomi’s global expansion journey, underpinned by our global ambitions. We are thrilled to make great strides by announcing our arrival in the UK,” said Wang Xiang, Senior Vice President of Xiaomi Corporation.” By bringing a range of our amazing products at honest pricing we want to offer more choices and let everyone in the UK enjoy a connected simple life through our innovative technology.”

The newly launched Mi 8Pro and its predecessor share exactly the same hardware and software, powered by Qualcomm’s Snapdragon 845 CPU, 6.21” AMOLED display (yes, need to go to the second decimal digit), 8GB RAM and 128GB onboard memory,12MP+12MP AI dual camera on the back, and 20MP selfie camera, Dual 4G SIM, Dual frequency GPS (to minimise coverage dead zones, like near tall buildings), infra-red facial recognition (to unlock with facial ID in the dark).

On the software side, Xiaomi overlayed a light MIUI skin on top of the latest Android release, plus a couple of its own preloaded apps (browser, messaging, etc.). Presumably the main point is not how many people will use its apps but rather to gather usage data. The Xiaomi executives did stress the number of active MIUI users in the world and in Europe (its products are already being sold in Spain, Italy, and France). It has also preloaded a MS Office suite, one of the first offers Microsoft made to the Android ecosystem back in 2016.

Under the spotlight was its photography technologies including the so-called “4-in-1” super-pixel, that is combining 4 pixels into 1 to take in more light, therefore to capture more details even in low light environment. Also being boasted is the speed the phone focuses (using the so-called Double Pixel Auto Focus, DPAF, technology, demonstrated in a video as faster than both the iPhone XS and the Samsung S9+). Nowadays, no presentation of smartphone cameras is complete without talking AI, and Xiaomi is no exception. The main talking point here was on the analytics capability to separate foreground from background, making post-shot processing easier.

The only genuine upgrade the Mi 8 Pro offers over the Mi 8 looks to be the fingerprint reader. It is at the back of the phone on the Mi 8, but is upgraded to on-screen reader on the Mi 8 Pro.

All the bells and whistles aside, what Xiaomi most wanted is to stand out in two areas: design and price. It is clearly successful in one, maybe less so in the other. Xiaomi claimed to go down the minimalist route for its design, claiming that it was inspired by the exhibits at the Helsinki Design Museum. It even got the director of the museum to go on video to endorse an earlier product. But what it got to show its innovative design on the new product is a transparent back-cover where the upper part of the inside of the phone is visible. But to those of us old enough to remember the 1990s, this is more a retro than inno. Swatch’s Skeleton series, anyone?

Xiaomi Mi 8 Pro_Front resized Xiaomi Mi 8 Pro_back resized

But when it comes to pricing the strategy is much bolder and more likely to succeed. Xiaomi broke through in the device market in China in 2011 by offering smartphones with decent specs at a very affordable price. This strategy has carried them through ups and downs all the way to London. The Mi 8 Pro will be retailed at £499.99. This is vastly lower than other smartphones with comparable hardware specs. Xiaomi is clearly targeted at the so-called “affordable premium” segment.

On the distribution side, Xiaomi started in China exclusively using online distribution channels. There have been followers with mixed success, but at the same Xiaomi is also diversifying to brick-and-mortar retail outlets in markets like India, Malaysia. Xiaomi also aims at a mixed channel strategy in the UK, it opens its own online shopping channel, getting online and offline channel partners (Amazon, Currys, Carphone Warehouse, Argo, John Lewis, etc.) on board, as well as opening its own authorised retailer in southwest London on 18 November. It also tied a partnership with 3UK, though Xiaomi executives would not tell more details of the terms or the packages 3 plans to offer.

Also introduced to the UK market at the event are a smart wristband (Mi Band 3, main feature being its display larger than previous generations) and an electric scooter, to deliver the “ecosystem” story—the executive stressed Xiaomi is more than a smartphone company. On display in the experience area were also smart speakers, set-top boxes, smart kettle, and smart scale.

Our overall feeling is that, the Mi 8 Pro smartphone is decent but not fantastic. However the price point Xiaomi sets it on is disruptive. This strategy has worked for the company in China and other Asian and European market, taking them to commendable market positions and financial success. It may stand a chance.

Xiaomi event pic2