Google ups the ante with Europe by charging Android manufacturers for its mobile products

Under pressure to be seen to comply with an EU antitrust ruling, Google has indicated that the only way to do so is to start charging for what was previously given away.

Earlier this year Europe fined Google €4.3 billion for abusing its dominance in the smartphone OS market to force the bundling of its commercial products such as search onto every Android phone. The EC found this practice to be anticompetitive since it made it harder for any other apps to compete and this reduced consumer choice.

Accompanying its inevitable decision to appeal the fine, Google CEO Sundar Pichai insisted that the existence of Android has in fact led to more consumer choice, not less – an assertion proven by all the great Android devices you can buy. Regardless Google was given 90 days to comply with the ruling or face further fines, and we now know the nature of that compliance.

In a blog post Google VP of Platforms and Ecosystems Hiroshi Lockheimer detailed the concessions Google will be making in Europe while the appeals process is underway. In essence Google will now start charging any Android device OEM that ships into the EU for the use of its mobile apps. Furthermore it will charge separately for search and Chrome, since they’re the apps that seemed to upset the EC and, as a consequence, OEMs are free to muck about with Android itself if they want.

The justification given for this move is simple: Google needs to make up for the revenue it will lose by not being able to bundle its mobile apps with Android. “Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA. Android will remain free and open source,” said the blog.

An underlying strategy, however, may be to illustrate Google’s point about all the benefits consumers have derived from Android. By charging what it previously gave away for ‘free’ (while making loads of money via the traffic through its mobile apps, of course), Google is saying that the consequence of the EU’s ruling will be for everything to become more expensive.

This is ultimately a fight over Google’s underlying business model of given stuff away and then monetising its users. But the EC does have a point the use of a dominant position to stifle competition via forced bundling and, as the former head of Internet Explorer and Windows at Microsoft notes in the tweet below, has a strong tradition of challenging this sort of thing.

One final thing to consider against Google’s claim that, if it can’t insist all its other stuff comes bundled with Android, it has to seek direct compensation is the matter of China. Google apps have been unbundled from Android there for some time and Google doesn’t seem to be getting any compensation there. If it can do that in China, why can’t it do it elsewhere?

Mobile processing efficiency is key to sustaining secondary device market success

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Alan Bentley, President, Global Strategy at Blancco looks at the success of the secondary device market but warns against data security complacency.

The secondary smartphone market continues to grow, delivering new revenues and new opportunities to every one of its stakeholders. In fact, according to Counterpoint Research, the market for refurbished smartphones is now growing faster than for new smartphones. A staggering 140 million used devices have now been collected for redistribution. Last year, according to Persistence Market Research, the secondary device market was worth US$19 billion, and is set to more than double in size and reach a valuation of US$44 billion by 2026. That’s impressive scale for a process that started to keep used old devices out of landfill (which remains a critical focus for the secondary market today).

Big business, but time is money

From an operator perspective, the secondary device market is big business. Revenues extracted by unlocking the latent value of old devices is one of the few revenue streams available to them which continues to grow. This is a big deal given how hard new revenues are to come by, and the cannibalisation that has impacted many of their core service revenues from voice, data and messaging.

Operators and OEMs that manage device BuyBack processes, either directly or through partners, can, on average, extract between $100 and $300 per smartphone according to its model, age and condition at the point of upgrade. Realising optimal value depends on how efficiently an operator can process a used smartphone. It begins at the point of collection, goes through diagnosis, repair and refurbishment before being prepared for re-distribution. Put simply, with mobile device processing, time is money. The longer it takes to process a used smartphone, the more of its latent value it loses. Operators, OEMs and the third-party logistics providers that serve them both are all incentivised, therefore, to make marginal gains at every opportunity to protect optimal value.

Efficiency matters, but not as much as customer data integrity

Operators, OEMs and third-party logistics providers have fine tuned mobile processing. While the process from device collection to re-distribution is very involved, it is not unusual to be able to process several hundred devices each day. Typically, the process includes automated device testing, identifying key locks and determining device value. It then quickly and securely erases data stored on each device using properly scoped hardware and configuration, all in line with the necessary certification guidelines. Ideally, each device will then be given a certified tamper-proof audit trail, backed by a certification of data erasure.

With so much focus on operational efficiency, there will always be a temptation to dispense with some of these key steps. At present, the secondary device market is light on regulation. In North America, the leading global market for used smartphone collection, there are the R2 standards. These unite the leading carriers, OEMs and third-party logistics providers behind some common rules – but they are not a mandate, merely guidelines. In truth, pretty much every player in the secondary device ecosystem is R2 compliant – they have to be in order to do business with each other. However, R2 guidelines were not created with the collection and processing of used smartphones in mind, leaving many to consider their relevance and applicability to the larger, much more significant ecosystem that exists today. For example, R2 states that performing a ‘factory reset’ on a device is sufficient in ensuring all data is fully erased. In some cases this is true, in many others it isn’t.

Not a time for complacency

Without a common, mandated and regulated rule book for smartphone processing best-practice, the ecosystem will be subject to abuse and malicious attack. Let’s be clear, the secondary device market has functioned perfectly well up until now. R2 and other standards have done their job, consumer data has, in the main, been preserved. The current ecosystem is made up of multiple stakeholders, who collect devices from various touchpoints and redistribute them to many other parties. Since the speed of device processing is the only critical success factor, and as more and more devices flood the market, the chances of data breaches or issues related to data misuse will become more and more likely.

If operators or OEMs want a lesson in the damage caused by data breaches and the misuse of customer data, they need only look at Facebook. Operators have built a strong sense of trust with their customers – they have historically been reluctant to offer freemium services in return for customer data that can then be resold. This leaves them ideally placed to capitalise on this goodwill, create a raft of new offers and partnerships and target their customers with new digital services. This opportunity will only exist if they remain diligent to all threats and focused on the responsible management of customer data. The secondary device market remains an amazingly lucrative and exciting opportunity for everyone, but only if it retains full consumer confidence – confidence that is built on trust and data integrity.

 

alan-bentley (002)Alan Bentley is President, Global Strategy at Blancco. He joined the company in October 2016 as VP of Sales, EMEA and more recently, has taken on the role of President of Global Strategy. In this role, he is responsible for overseeing sales efforts globally. As an industry veteran, Alan is responsible for leading the sales teams to develop sustainable and scalable revenue growth. Since joining the company, Alan has worked closely with Blancco’s many customers and partners to implement data erasure solutions to mitigate security risks and ensure regulatory compliance. This gives him a unique insight into the market and business requirements driving the needs of today’s businesses.

Samsung launches its first phone based on the stripped-down Android Go platform

The world’s largest smartphone maker Samsung has unveiled the Galaxy J2 Core, its first phone built on Android Go for the entry smartphone segment.

Samsung is joining Nokia, Alcatel, Motorola, Asus, ZTE, etc. in addressing the entry segment smartphone segment, with the latest addition to its extremely diversified Galaxy series. Android Go, since it was introduced to 8.1 Oreo, has seen the product line-up slowly but surely growing, but the participation of Samsung is definitely a boost, bringing to the camp not only its expertise but also its brand clout.

The Samsung management is obviously happy with its efforts to address the entry segment and the first time smartphone owners. “The Galaxy J2 Core offers a complete smartphone experience, incorporating some of the key features available on high-end devices with improved battery, storage and performance that is particularly appealing to first time owners”, said Junho Park, Vice President of Global Product Planning, Mobile Communications Business at Samsung Electronics.

The J2 Core uses the same chassis as the J2 Pro, with same display size (5.0 inches) and resolution (540 x 960 pixels, or qHD), same cameras (8MP rear and 5MP front) though the Pro is equipped with a flash for the selfie camera. Both house battery of the same volume, and both support dual-SIM. The key difference is in computing power and memory size. The J2 Core uses Samsung’s own Exynos 7 chipset, and only has 1GB RAM and 8GB onboard memory (compared to the Pro’s 2GB RAM and 16GB memory).

Android Go has modified the standard Android to be run on lower hardware configurations including stripped-down Google applications designed to consume less memory and less data. However, the biggest problem with the Android ecosystem when it comes to Android Go is that not all applications have followed Google’s example, therefore the saving on memory and data does not go very far. In particular, quite a few applications, most social networks, for example, have disabled the option to be offloaded to run on external memory card, which means the onboard memory is still likely to run out pretty quickly. This will frustrate users, especially those first-time owners who may not be the most tech-savvy consumers.

Samsung does not disclose J2 Core’s retail price levels in the first two markets it will be made available.

Qualcomm launches a bunch of chips in China

Mobile chip giant Qualcomm used the first day of Mobile World Congress Shanghai 2018 to launch new chips for smartphones and watches.

Qualcomm has the market for third party smartphone SoCs sewn up at the premium end, but Chinese chip-maker Mediatek, among others, is giving it a run for its money in the middle and lower tiers. It’s presumably no coincidence, then, that Qualcomm chose this event to make its mass market chip announcements.

The Snapdragon 800 range is all about the premium tier, then we have 600s for the high tier and 400s for the mid tier. Qualcomm just announced the Snapdragon 632, 439 and 429, which will all be a bit better than their predecessors at things like performance, battery life, and that sort of thing.

“The introduction of Snapdragon 632, 439 and 429 builds off Qualcomm Technologies’ highest-selling mobile platforms and provides users with increased performance and power efficiency, superior graphics, AI capabilities and enhanced connectivity features,” said Kedar Kondap, VP of product management at Qualcomm. “We’re excited to offer these new platforms with enhanced features to our OEMs and consumers.”

The 632 SoC features a Kryo 250 CPU, an Adreno 506 GPU, the X9 LTE modem, and supports a 24MP camera. The 439 has an Adreno 505 GPU and the 429 has an Adreno 504 GPU. No branded CPU cores are detailed, which probably means they use off-the-shelf ARM cores. They support 21MP and 16MP cameras, respectively.

Qualcomm’s other announcement at the show was a new chip designed specifically for the kind of cheaper smart watch you might give to a child. The Snapdragon Wear 2500 Platform has features like extended battery life and low power location tracking so you can keep an eye on where your kids are. The platform also has an LTE modem and a special version of Android designed for kids.

“If you look at the targeted kid watch and tracker segment the growth in these designed-for-kids but highly capable devices, is very exciting, and customers are seeing wide spread global demand,” said Anthony Murray, GM of Voice, Music and Wearables at Qualcomm. “Qualcomm has helped to drive this fast expansion of 4G kid watches with its Snapdragon Wear 2100 platform and there are more than 10 devices commercially available today through retail and carriers,”

“With this next generation Snapdragon Wear 2500 platform, we are supporting new performance and features that customers will be able to use to create even more fun features and compelling use cases for these connected 4G kid watches and with our dedicated kid watch platform we aim to deliver a robust foundation that supports a rich and engaging experience for children.”

There is lots of talk about the whole platform and how great it is for this sort of thing. It supports limited camera, AI voice assistants and name-drops NXP NTC technology that can be handy for giving kids some limited digital wallet functionality. The marketing for these sorts of devices is understandably aimed at parents and talks about things like fitness tracking too. It’s not clear, however, how much traction there is for kid-oriented smart watches and for them to take off they would probably need to be pretty cheap.

Google admits ‘Allo is rubbish and looks to revamp Messages

After years of trying (and failing) to create its own messaging platform to compete with the OTTs, Google has herded together Android device manufacturers to create a new carrier-based service: Chat.

The idea here is simple. According to The Verge, Google will attempt to create a new messaging platform by evolving the already existing Android Messages, incorporating now common features such as read receipts, typing indicators, full-resolution images and video, and groups, based on a standard called the ‘Universal Profile for Rich Communication Services’. Google tried to compete with the likes of WhatsApp and Telegram with an OTT service, but now it has given up. And to be honest, improving the current messaging default on Android devices is a pretty sound idea.

What is worth noting is that this will not be a Google service, though the internet giant will take credit for harmonising the ecosystem. Strategically this is a very important development for the firm, it was one of the more vocal contributors to the new standard, as it looks to retain the strangle hold on the communications world. The key world here is harmonization, as this is the very reason OTT messaging platforms took off.

RCS was supposed to be the successor to SMS, though due to the inability of carriers or handset manufacturers to create compatible services based on the ‘standard’ it was a disaster. SMS was terrible, and the industry couldn’t come together to create an agreed path forward. The door was opened for the OTTs to offer a service which was designed with everyone in mind. With Chat, Google is seemingly hoping to correct mistakes of the past by creating a messaging platform which actually works for every Android user.

This is a modernization of the messaging service which is already on many Android devices as the default. Not only will it look like a modern messaging service, but messages will also be sent with your data plan. It puts the service in-line with the more popular platforms on the market, though end-to-end encryption will not be a feature. This might be a bit of an own-goal by Google, as recent events have shown the world is sensitive to privacy and security.

Whether Google is able to wrestle users away from the popular WhatsApp platform remains to be seen, though this is an announcement which is long overdue. Android Messages looks like a service which was designed for feature phones and no-one at Google could be bothered to update it. It’s boring, slow, clunky, uncreative and limited. When you look at how messaging platforms have evolved over the last couple of years, Android Messages reminds you of the sports superstar from school, who peaked at 16 and is attempting to live off past glories. It’s a bit sad more than anything else.

Alongside the introduction of now-common messaging features, Google will also introduce its virtual assistant to the platform and also GIF searches, explaining the acquisition of Tenor last month. GIFs are becoming an increasingly popular way to communicate, as younger generations continue to find new ways to avoid talking to each other. The company said it has more than 12 billion searches every month, which is likely to increase.

Despite the popularity of WhatsApp and Facebook Messenger, you have to remember Android Messages is a default service on the vast majority of Android devices in the market. It is a constant for Android users and presents a very useful opportunity for Google to regain control of the messaging world. The opportunity to be relevant has always been there, so we are quite surprised it has taken the internet giant this long to do anything about it. Why did it spend so much time trying to create something new, when it could evolve?

Another interesting area to consider is that while the OTTs apps are incredibly popular, there are still users out there who use SMS. Anil Sabharwal, who will be heading up the area, estimates 8 trillion SMS messages are sent every day. This is still a massive user base to care for, but we wonder whether the majority of these are based in developing markets. Reconverting the digitally-evolved markets much be a tricky task. Google will also have to think of a way to convert iLifers onto the platform, otherwise it is unlikely to be more than a footnote on the continued dominance of WhatsApp.

Right now Android users have nothing to think about. There is no need to download new apps, the service will be turned on inside the current Messages app dependent on each carrier, which Google hopes will be by the end of the year.

Huawei claims AI breakthrough, but will anyone care?

Huawei’s IFA keynote session was one perhaps many in the industry weren’t expecting, it actually said something interesting.

Most tradeshow presentations of this nature do not offer any revolutionary insight into the company or the future. They are traditionally full of clichés, PR soundbites and bold statements used to appease investors. But on the weekend, Huawei announced the launch of the Kirin 970 SoC, what it claims contains the first-ever Neural Processing Unit (NPU) for smartphones.

“As we look to the future of smartphones, we’re at the threshold of an exciting new era,” said Richard Yu, CEO of Huawei’s Consumer Business Group.

“Mobile AI = On-Device AI + Cloud AI. Huawei is committed to turning smart devices into intelligent devices by building end-to-end capabilities that support coordinated development of chips, devices, and the cloud.

“The ultimate goal is to provide a significantly better user experience. The Kirin 970 is the first in a series of new advances that will bring powerful AI features to our devices and take them beyond the competition.”

It’s not a complicated idea. To improve the performance of artificial intelligence applications on smartphones, move some of the intelligence onto the smartphones themselves. The cloud is an excellent platform for many AI experiences, but there is the risk of latency, stability, and privacy; keeping it local addresses some of these concerns.

As they say, the proof is in the pudding, should this NPU technology perform as Huawei hopes it would certainly give a leg-up in terms of AI performance on devices. Considering the anticipated role AI in our daily lives moving forward, it is certainly a good sign for a smartphone manufacturing which has been chomping up market share, chasing down Samsung and Apple at the top of the global leader board.

Another factor to consider is whether people are actually bothered. For the tech geeks out there, this will be a wonderful bit of news, but will the general public actually care? How many people actually use their virtual assistant right? We’re not too sure of the official numbers, but we would bet it is a smallish percentage.

Huawei has claimed the chip is 20-times faster than traditional processors on the market, supporting real-time image recognition, voice interaction, and intelligent photography. We haven’t heard any hugely vocal complaints that such features were too laggy at the moment, so maybe Huawei has fixed a problem which isn’t actually there.

When looking at the more complex, intelligence driven applications, this speed might well be needed. But these are not here yet. Mass market penetration is certainly nowhere near.

This is certainly a positive step forward, but the question remains as to whether there will be any relevance in the world of today. Huawei might have fixed tomorrow’s problem before the people of today have actually realized there is one. It’s very considerate of them, but we’re not too sure whether this will help them sell smartphones over the next couple of months.