Apple bags $52 billion with more to come at Xmas

What do you get when you sell more iPhones, iPads and Macs than ever, as well as the highest ever number of subscribers for your services products? A massive pile of cash, that’s what.

Apple might not have done anything especially innovative or ground breaking for a while, but that doesn’t seem to have stopped it cult-like customers flooding to Apple stores around the world and handing over obscene amounts of cash. And this might only be the tip of the ice berg; Christmas is around the corner and that only means one thing for Apple.

“We’re happy to report a very strong finish to a great fiscal 2017, with record fourth quarter revenue, year-over-year growth for all our product categories, and our best quarter ever for Services,” said Tim Cook, Apple’s CEO.

“With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product line-up, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.”

$52.6 billion in total revenues, an increase of 12% from the same period in 2016. The iPhone brought in $28.8 billion, iPads generated $4.8bn and Macs bagged $7.1 billion. The services division accounted for $8.5 billion, and even sales of the iPad were up. The money made from any one of these individual products would be on par with many of the world’s largest tech companies; leading the planets largest flock of sheep is big business.

And it’s only going to get bigger.

Over the next three months the team expect revenues between $84 billion and $87 billion, gross margin between 38% and 38.5% and operating expenses between $7.65 billion and $7.75 billion. In short, it is going to continue to cultivate some of the most loyal brand enthusiasts and continue to make a ridiculous amount of cash.

“This was our biggest year ever in most parts of the world with all-time record revenue in the United States, Western Europe, Japan, Korea, the Middle East, Africa, Central and Eastern Europe and Asia,” beamed Cook.

But what to look forward to over the next couple of years?

Apple has seemingly reset the standard on how much to charge for phones. Don’t expect the price to drop now the team has demonstrated you can charge that much and the iZombies will continue to flood the ‘genius’ bar. Services is a big area, arguably the main growth engine for the future, and the team claim to be on target to deliver $50 billion in revenue by 2020. Smartwatches will continue to be an area which the team tries to crack. And augmented reality is going to be big.

“The reason I’m so excited about AR is I view that it amplifies human performance instead of isolates humans,” said Cook.

“ I see things that the consumer’s going to love because it’s going to change shopping. I see things that consumers will love on the gaming side and the entertainment side. I see business-related AR apps as well. They’re going to be great for productivity and between small and large business. And I see apps that makes me want to go back to K-12 again and repeat my schooling.”

Nokia and Huawei go toe-to-toe at 2017 Global Telecoms Awards

The 2017 Glotel Awards winners featured a battle for top spot between networking vendors Nokia and Huawei, while Korea was heavily represented among the operators.

A top night out was had by all at the new Glotels venue of 8 Northumberland Avenue in the West End of London. Entertainment was provided by Comedian Patrick Kielty and it’s probably safe to say there are a few sore heads this morning, not least that of your correspondent.

The full winners list is below, but a highlight of the competition was a close-fought contest between Nokia and Huawei, with the former edging the latter to in the Telecoms Transformation category and those roles reversed as Huawei grabbed the IoT Initiative of the year award. A strong showing from Korean operators KT and SK Telecom showed what a good job that country is doing in leading from the front as we enter the 5G era.

2017 Global Telecoms Awards winners

 

Advancing the road to 5G

Winner: KT – Pyeongchang 5G

Honourable mention: China Mobile and Huawei – 3GPP-Oriented 5G End-to-End Trial System

 

AI Initiative of the year

Winner: Nokia Networks – AI-driven Network Operations

Honourable mention: Vodafone UK – AI Tobi

 

Best Digital Transformation Project

Winner: CBNL, VSAT System and the City of Rzeszów – The Metropolitan Telecommunication

Honourable mention: ZTEsoft – ‘Eagle’ Project at Join Experience

 

Best Marketing Campaign

Winner: Turkcell – Shake & Win

 

BSS Transformation Excellence

Winner: Vlocity – Telus business services

Honourable mention: Openet – Real-Time-Offer Manager

 

Connected Cars

Winner: Cisco Jasper – Control Center 7.0 for Connected Cars

Honourable mention: PCCW Solutions – Smart Parking and Charging

 

Connecting the Unconnected

Winner: Telenor Pakistan – Empowering societies in remote areas of Pakistan

Honourable mention: Huawei Technologies – RuralStar

 

Customer Experience Excellence

Winner: EE – Network Status Checker

Honourable mention: Singtel – One Singtel Experience

 

Digital Content Services of the Year

Winner: China Mobile Yunnan & Huawei Technologies – Video RBT

 

Fixed Network Evolution

Winner: KT – GiGA Wire 2.0

Honourable mention: JT Group – JT Fibre – Jersey Network

 

Ground-breaking Virtualization Initiative

Winner: SK Telecom – T-MANO

Honourable mention: NetNumber – TITAN Platform

 

IoT Initiative of the Year

Winner: Huawei – OceanConnect IoT Platform

Honourable mention: Nokia Networks – Worldwide IoT network grid (WING)

 

Managed Services Innovation of the Year

Winner: Amdocs – Amdocs Intelligent Operations

Honourable mention: P.I. Works and Türk Telekom – C-SON Powered Managed Services

 

Mobile Money Mastery

Winner: Mahindra Comviva and Airtel Tanzania – Airtel Money ‘Tap Tap’ powered by mobiquity Money

Honourable mention: PCCW Global – Tap&Go

 

Most Innovative Cloud Service

Winner: Colt Technology Services – DCA On Demand

Honourable mention: Red Hat & T-Systems – T-Systems AppAgile on Red Hat OpenShift Container Platform

 

OSS Innovation

Joint Winner: Netcracker – NEC/Netcracker Hybrid Operations Management

Joint Winner: ZTEsoft – ZSmart eHomeService solution in China Telecom

 

Security Solution of the Year

Winner: Evolved Intelligence – SS7 Signalling Firewall

Honourable mention: Nominum – N2 Secure Business

 

Telecoms Transformation

Winner: Nokia Networks – FP4 routing silicon

Honourable mention: China Telecom and Huawei Technologies – Lab as a service

 

TV/Video Innovation

Winner: Huawei – Envision Hybrid Video solution

Softbank falls into the arms of another after DT issues

After reports of a breakdown in talks between Softbank and Deutsche Telekom over the Sprint/T-Mobile US merger, it didn’t take long for the Japanese telco to find someone else to party with.

When we first heard about the breakup rumours we speculated one would be out partying and one would be crying into ice cream in typical Bridget Jones style. According to the New York Post, DT is binging on Ben and Jerry’s while Softbank in flirting with Charter.

Sources have said the Japanese telco is ‘definitely’ in talks with Charter Communications for a new tie up. This would appear to be a rekindling with an old flame, as the rumour mill has already circulated such rumours in recent months. That said, it wouldn’t surprise many people as something certainly needs to change at Sprint.

Having surrendered its number three position in the US telco space to T-Mobile US, Sprint has continued its downward spiral. It is a telco which has never really been in a position to challenge Verizon and AT&T at the top of the table, and in recent months it really look capable of tackling John Legere and his T-Mobile cronies either. As mentioned before, something needs to change and a tie-up with Charter would certainly shake things up a bit.

The rumours certainly shine a light on Charter’s promiscuous side, though to date there has been little more than whispers about any consolidation. Sources have previously claimed Charter was given the option to acquire Sprint, a claim which is denied by Softbank CEO Masayoshi Son, and on the flipside, Verizon bid $350 to $400 a share for Charter.

While these are nothing more than rumours at the moment, the murmurs might help get the DT talks back on track. DT is certainly in the position of power in the negotiations with Softbank, Sprint needs change more than T-Mobile US does, however this might give the Germans a bit of a reality check.

Perhaps the fear of missing out on such a deal will soften the demands of DT who are after a controlling share in any merged Sprint/T-Mobile entity. Softbank found issue with these demands, which is apparently the reason for the breakdown.

Now we are not suggesting the rumours originated in any particular office, and we certainly wouldn’t suggest they come from offices in Tokyo, but such whispers might have a way of working out for Softbank in the strategic acquisition game.

We’ll let you make your mind up about Virgin Media’s numbers

If you listen to the Virgin Media team, it would appear to be a pretty positive quarter, but not all the numbers are heading in the right direction.

The team reported a 15% lift in revenue generating units, but how many of these are convergent customers is less clear. For full disclosure, 92,000 net additions of RGUs is the official line, but how many of these are bundled services to individual customers we were not able to figure out.

In terms of the financials, total revenues across the UK and Ireland stood at £1.236 billion, a slight increase from the same period in 2016, while operating income more than halved year-on-year to  £36.6 million.

The total number of broadband customers in the UK and Ireland now stands at 5.451 million, with video at 4.119 million customers and mobile at 3.019 million. The total number of RGUs throughout the group is 14.3 million, with the average customer taking 2.45 services from Virgin Media, a slight dip from 12 months ago, but still pretty good when compared to other telcos in the UK. Of those who have a bundled offer, 62.3% are in the triple-play bracket.

Of the 5.451 million broadband customers, Virgin Media claims 64% are now taking speeds of 100+ Mbps, compared to 51% in same period of 2016. It is unknown how many of these customers actually achieve the speeds promised by the telco, but your correspondent (a VM customer) would not be counted as one of those who do.

On the mobile side of things, there were very mixed fortunes. The most lucrative postpaid side of the business attracted an additional 15,000 customers, though these gains were offset by losing 31,000 on the prepaid side. Postpaid might be more attractive, but this is not a favourable ratio.

Good, bad or ugly, we’ll let you make up your mind.

How AI-powered chatbots will transform healthcare

Digital health revolves around the integration of traditional healthcare systems and newer technologies to improve efficiency, value for money and ultimately patient outcomes. Electronic Health Records (EHR) have been a big part of this evolution, promising universal access to key elements of a patient's medical history.

As many nations have now adopted EHRs, the debate has moved on to what can be done with this data. Interoperability and analytics have become important requirements of healthcare IT systems. Improving access to healthcare and the convenience of that access has become a key goal.

As these new IT systems develop, disruptive technologies are now being utilized as part of the digital health landscape. Leading the charge for this disruption is Artificial Intelligence (AI) and chatbots.

Digital health market development

According to the latest worldwide market study by Juniper Research, the annual cost savings derived from the adoption of chatbots in healthcare will reach $3.6 billion globally by 2022 -- that's up from an estimated $2.8 million in 2017.

This market growth will average 320 percent per year, as AI powered chatbots will drive improved customer experiences for healthcare patients across the globe.

According to the Juniper assessment, using sophisticated chatbot systems, patients will be able to access services more quickly and easily, improving access to care and reducing pressure on overworked healthcare systems by ensuring more efficient interactions.

The new research found that despite trials by, for example, the UK's National Health Service, chatbot deployment will likely be dominated by Far East and China over the next five years.

Over half of the annual savings realized by chatbots will be attributable to this Asia-Pacific region in 2022. Owing to the varied quality of care in countries such as China, chatbots will be useful for directing patients to appropriate services, which in turn will drive adoption.

The research predicted that chatbots - when used to triage patients - would have a dramatic impact on healthcare efficiency. Juniper urged service providers to focus on overcoming the current poor level of interoperability of many healthcare IT systems in order to enable chatbots to unlock the full benefits. Additionally, it cited data security as critical towards maintaining patient trust.

Outlook for healthcare chatbot adoption

Additionally, the research found that chatbots face substantial challenges in developed healthcare systems, such as those in the U.S. and UK markets. Systems at a mature stage of development are generally more conservative in introducing new technology than others, often resulting in inefficient care.

Juniper believes that this conservatism will most likely slow chatbot adoption relative to emerging markets, such as China and India, where small-scale technology deployments are already occurring.

Orange Bank is now up and running

We’ve been waiting for a while, but the virtual doors to Orange’s banking proposition are now wide open.

It hasn’t been easy, but the team got there eventually. It might be a few weeks late, but that won’t matter much if the euros start to pile up. The financial services market is fiercely competitive, but Orange has a solid brand position in its domestic market, and it has been constantly referencing its successful Money proposition in Africa and the Middle East.

Whether this experience counts for anything remains to be seen, France is a very different marketplace after all and the team are taking on some monstrous businesses, but the signs are relatively positive for the moment.

“With Orange Bank, this is an important new chapter in our history: Orange is now also a bank,” said Stéphane Richard, CEO of Orange.

“A 100% mobile-based bank that is dedicated to providing an incomparable user experience. A bank that combines the best innovations available on the market today into a single offer. A bank that will listen to its customers and constantly enrich its offer and its features to meet their expectations. In short, a bank with the customer at its heart. I am particularly pleased that our customers can discover and benefit from it today.”

The only way Orange was going to make this venture a success was by doing something disruptive, and it seems to be on the right track. The bank account is free, which doesn’t count for much in the UK but it does in France, it’s open 24/7 and has digital elements such as a virtual assistant for those who want to head that direction.

It is also one of the first propositions which is mobile first, and we can tell you from experience it is a relatively good offering. Last year, we were given a demo of how the platform works, and to be fair, it is a lot more responsive and smoother than the traditional bank’s mobile applications.

Another interesting but desperately simple feature is the idea of real-time balances. Unlike your bank account right now, when you make a payment or transfer, it will appear immediately. It doesn’t matter when or where, you will always know exactly how much is in your account. This might sound overly simple, but there aren’t many other products which can offer this as default.

We’ve been quite impressed with Orange over the last couple of months, and this is one of the reasons. This is a telco which is doing something different and proactively trying to manage the challenges. Most of the telcos around Europe are watching their business slip into utilization, but Orange is chasing new markets and creating products which are designed for the digital economy. For the telcos who are out there and struggling to adapt to the new status quo, perhaps they should have a look at Paris for some inspiration.

Ambition is of course no guarantee of success, but to change fortunes you have to do something different. Some telcos are burying their head and waiting for the connected sandstorm to pass, whereas some as going out in search of the oasis.

Tech giants’ profits hit by exceptional circumstances

Qualcomm’s numbers took a hit from its dispute with Apple, while Facebook says investing in security to prevent abuse will impact profits.

The ongoing aggro between Qualcomm and Apple was bound to feature prominently in the former’s earnings announcement. The analyst call was dominated by the issue as the equity world tried to get a better sense of how the matter was going to play out, not only with Apple but with Qualcomm’s entire licensing business model.

This was made all the more inevitable by Qualcomm’s refusal to directly mention the matter in its headline canned comments. “We continue to see strong growth trends for global 3G/4G device shipments and are focused on protecting the established value of our technologies and inventions,” said Steve Mollenkopf, CEO of Qualcomm. “We are leading the industry to 5G and are well positioned with our product and technology leadership to continue our expansion into many exciting new product categories, such as automotive, mobile computing, networking and the Internet of Things.”

As you can see from the first table below, all Qualcomm’s headline numbers were all down year-on-year, with profits especially going down the toilet. It should be noted that Qualcomm booked a $778 million charge for its Korean fine in this quarter. The second table indicates that while the main tech business (QCT) is still doing well, the licensing business (QTL) is letting the team down somewhat.

Qualcomm q3 2017 table 1

Qualcomm q3 2017 table 2

Over at Facebook it’s all about abuse of the platform, especially by those with a hidden political agenda, these days. The tech news has been dominated by stories of shady Russian interests buying social media ads first to influence the last US general election, then stoking FUD about the President, with the apparent aim of dicking about with the US electoral system just for a laugh.

By far the most influential social media platform is, of course, Facebook, and it has come under a lot of pressure to take ownership of this problem, as well as contemporary ill-defined social media offenses like fake news and hate speech. It looks like the defence that it’s a platform rather than a publisher isn’t holding water anymore, so Facebook is sensibly trying to be seen to be more proactive.

“Our community continues to grow and our business is doing well,” said Mark Zuckerberg, Facebook CEO. “But none of that matters if our services are used in ways that don’t bring people closer together. We’re serious about preventing abuse on our platforms. We’re investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits.”

It’s a shame that Zuck decided to end on such a false dichotomy as Facebook’s profits are clearly derived from its community. It is the unfortunate nature of the shareholder system that most companies feel they have to constantly increase profits for fear of their share price declining if they don’t. But sometimes short term profits have to take a hit in order to safeguard the long-term prosperity of the company.

Amazon is a great example of this strategy paying enormous dividends (only metaphorically). The fact that both Qualcomm’s and Facebook’s shares were up at close of play indicates that the markets are being grown up about exceptional challenges faced by both of these companies. After all, they are still making loads of money, with Facebook almost doubling its net income for the quarter to $4.7 billion.

BT tries to find a way through the content maze

BT is a business under a bit of pressure right now, and the latest quarterly figures won’t do much to ease the headache developing in CEO Gavin Patterson’s office.

From a financial perspective, total revenues are down 1% to £5.949 million, while profit before tax stood at £666 million and basic earnings per share down 7% to 5.3 pence. None of these numbers are going to make investors particularly happy, which might have a few BT executives sweating. The new Chairman Jan du Plessis, a man known to be a bit of a tough cookie, is about, and it wouldn’t be a massive surprise if we saw a few changes over the next couple of months.

That said, the performance of the overall business shouldn’t be the biggest concern of Patterson and his cronies. Sure, the number of mobile subscribers is lower now than it was 12 months ago, but broadband subscriptions are up, as are ARPU’s across the board. Where the team should be a bit more concerned is around the content business.

“More than double consumer line losses is a worry and TV net additions was extremely disappointing,” said CCS Insight’s Paolo Pescatore.

“More so in in light of the new European football season given the huge focus on sports and TV services. Despite its strong assets, the company is struggling to cross sell more services into its existing subscriber base. Marc Allera (who will take over as the CEO of the new consumer business) faces some tough decisions with the integration of the consumer units and the forthcoming Premier League rights auction.”

Over the course of the last three months the TV business adding 7,000 subscriptions. Now when you put 7,000 people in a room, you won’t have much space left over, but in the context of a challenger content business, such small gains will not be well received.

This is an area which was a bet a couple of years ago and it was an initial success. BT decided to step up the game and challenge Sky in the football world, which was seen by some as a sensible move and by others as suicidal. To be a major player in the UK sporting world, you have to have football. BT spent big, securing the Champions League and the Premier League. It was supposed to be the rise to the top, the chance to usurp Sky.

Having outbid Sky for the Champions League (a deal worth £1.18 billion), BT then paid £960 million for 42 Premier League games a season. That is a lot of money, for some pretty low returns this quarter. Whenever you get a new boss into the office you want to do your best to impress; with these figures, senior guys in the BT offices have some very good reasons to be worried. The football bet does not seem to be paying off.

Perhaps more worryingly is the future of football. BT could argue it has laid the foundation for future growth, but it will have to dig deeper into the bank account to retain the rights. While Sky is very likely to put up some stringent competition, rumours are the OTTs are looking into some sort of global distribution deal as well. Increased competition, fragmentation and cost to play are not trends the BT team will want to see bed in.

But this is only the tip of the iceberg. BT is facing some serious issues all over the place. While its sporting platform is pretty good, to make further waves it is going to have to up the ante on the number of games it has, while also making an assault on Sky’s dominance on Sunday programming. Pescatore thinks this could be a game-changer for the sporting landscape, but it might end up costing an extra £1 billion. You have to wonder where this money is going to come from.

Elsewhere in the content business there needs to be further consolidation as the team are currently supporting two competing platforms in EE TV and BT TV. Work is also needed outside sport, as the overall content platform is sub-standard compared to Sky. There is more to video than sport, and a relatively solid position in the sports market does not seem to be translating elsewhere. BT needs to start spending in other genres if it wants to be considered a real content player alongside the likes of Sky and the OTTs.

Looking at the threats in the sport world, it isn’t just the powerful OTTs where the worry is, smaller companies such as The Perform Group, which owns the DAZN platform, are starting to make waves. Pescatore highlighted to us DAZN is doing a great job of sweeping up various rights and is providing a pretty comprehensive alternative to what we would consider the traditional channels.

Overall it is a bit of a glorious mess, and this seems to be translating over the convergence side of things as well. This quarter the team has said the average number of services held by each customer is 2.01. This is up from 1.95 12 months ago, but progress has been very slow. BT has all the assets for an effective quad-play, but nothing has come to fruition to date. This is another area where the team need to spend money.

The to-do list is starting to get quite big, and the bills are starting to look quite expensive. You have to wonder where BT is going to get all this cash to make content and convergence work.

Telcos switch to prioritising 4G availability over speed

The latest OpenSignal report indicates that global telecoms operators have begun to prioritise 4G availability over speed.

Operators first boasted of their 4G download speeds even when their coverage was poor. As past reports from OpenSignal have shown, these speeds have increased over the years and the ability to boast of faster speeds than competitors appeared to be the priority for operators.

However, according to the latest report, download speeds have stopped increasing in top-performing markets.

In the last six months, the average 4G download speed has increased to just 16.6 Mbps from 16.2 Mbps. In fact, the number of countries averaging 4G speeds greater than 20 Mbps has actually fallen, rather than increased.

Focus on 4G availability

OpenSignal uses real user devices for its research. Rather than 4G coverage, the firm instead focuses on 4G availability — a more accurate metric that measures the number of instances when customers can connect to a 4G network.

4G availability scores reached above 70 percent in 50 of the 77 countries that OpenSignal tracks. This is compared to 33 countries six months ago.

“That means 4G users in those 50 countries were able to latch onto an LTE signal in more than 7 our every 10 attempts. It’s a sign that 4G has reached maturity in many more countries,” OpenSignal said.

OpenSignal’s results indicate operators are stopping the fight over speed and now look to further increase the ability for users to access their 4G network.

This will likely continue over the next couple of years before the boasts of download speeds becomes a priority once again during their rollouts of 5G.

You can find the full report here.

Do you think operators are prioritising 4G availability? Let us know in the comments.

A warning to the digital newcomers

We’ve all been told that digital is the way forward, and this is one of the truest statements you will ever read, but newcomers beware; the digital world can be as destructive as it is fruitful.

Amongst all the presentations at Light Reading’s OSS in the Era of SDN & NFV, one comment stood out to us in particular. It was from Accanto Systems’ Brian Naughton and it was a short but an insightful one; “there is a risk of putting radio on TV”.

Naughton was on a panel looking at cloud native networks in OSS transformation projects, but it did get us thinking about the idea on a wider scale; are the telcos and traditional businesses thinking hard enough about this digital trend.

What Naughton is actually talking about is whether the digital newcomers are using the technology properly. Radio certainly works on TV, and there will be people who use it, but what is the point in moving radio content from the radio to the TV? It works perfectly well on its traditional home, and is likely to be a waste of money. If you are not talking advantage of the features which TV offers you, why bother to move it to another platform? Surely the capital and operating expenditures tied to the transition would out weight the benefits of capturing a new audience through the additional channel?

This could be likened to some moves into digital. It might make sense to someone to move a product or a process into the world of digital, but if you are doing the same thing, you’re kind of missing the point. This might not be an issue as a standalone example, but bundle together a couple of dozen and you have an organization which will eventually fall behind those who are using digital to its full potential.

The risk here is that newcomers aren’t thinking about digital in the right way. Digital creates new opportunities to create new products and new ways to engage (and ultimately monetize) your customer. Not everything which works in the analogue world, will translate into a success into the digital world. Or it might for a short spell, but before too long someone who has grasped the full potential of digital has a bright idea and screws your business.

To illustrate that point, let’s use a real world example. Encyclopaedia Britannia. For those who grew up before the mass market penetration of computers, Encyclopaedia Britannia was a collection of books for reference. For those who were brought up in the 90s, Encyclopaedia Britannia was a collection of CDs which could do exactly the same thing.

Prior to the introduction of the internet, this was a very viable business model, one which survived the transition from book to CD. But it couldn’t survive the internet. With the world wide web can Wikipedia, a free source of information. And that was the end of Encyclopaedia Britannia.

Many businesses today will think that simply digitizing a product or making it mobile friendly will be enough to cope with the connected economy, but it won’t be long before a clever young person comes along offering the same product for free, because they’ve figured out another way to monetize it. All of a sudden industries are disrupted, business models destroyed and companies devastated.

Another phrase which applies quite well is ‘if you digitize a sh*t process, all you have a sh*t digital process’. It isn’t exactly the same rhetoric which Naughton or we were leading to but, it is built along similar lines.

The worry here is that disruption comes before you realize it, and before you have a chance to react to it. For those who are simply doing digital, be warned. If you are not doing something new, you will become old news. Just ask the guys at Encyclopaedia Britannia.