Analyst Blogs

Huawei to acquire Nokia? Unlikely

Blog

June 19, 2013, 6:54 a.m.
Nick Spencer Senior Practice Director

Richard Yu, CEO of Huawei's consumer business group, has set the cat amongst the pigeons, by saying that Huawei were considering acquiring Nokia; “We are considering these sorts of acquisitions; maybe the combination has some synergies but depends on the willingness of Nokia. We are open-minded,” he stated during a launch event in London, UK, for Huawei's Ascend P6 smartphone.

Nokia’s share price jumped 11% on the news, but ABI considers this to be an unlikely event. Mr. Yu talked about “some synergies”, but these are not what they once were. Huawei’s main challenge (in common with most Chinese consumer electronics vendors) is a lack of brand equity, which means it struggles to sell high end devices. Yesterday’s launch of the Ascend P6 further re-iterated Huawei’s desire to be seen as more than a cheap feature phone provider. Mr Yu acknowledged that Huawei were known for cheap and basic “feature” phones, but will move towards only selling “smart” internet connected phones using its own brand name rather than selling “white label” versions through network operators/carriers.

As for these “synergies”; while not necessarily irredeemable, Nokia’s brand is currently yesterday’s brand (comments like “Do you remember the days when everyone had a Nokia” are not uncommon) and Nokia’s supply chain and distribution are no longer the powerhouse they once were and most importantly no improvement to Huawei’s supply chain. Nokia’s IP portfolio is valuable and would have an impact on Huawei’s cost to build, but I am unconvinced. Huawei’s lack of past acquisitions is further evidence to suggest this is an unlikely scenario.

I suspect the source of the comment is a little more prosaic. Simply Huawei is looking for publicity, due to the Ascend P6 launch and wanting  to make a statement of intent (i.e. we are the new coming brand/wave). The Financial Times stated “ Mr Yu’s bullish comments underline the company’s rapid progress in the mobile phone market and its ambitions to challenge Samsung and Apple for leadership of the smartphone market.” So mission accomplished in that regard. N.B. Lenovo did something very similar with BlackBerry in January.

An even simpler explanation, may be that Mr Yu was being quite free with his words and providing a few headaches for his PR team, as verbose chairmen and CEOs can do from time to time. The company were quick to quash speculation this morning.

ALU and Waterloo

Blog

June 14, 2013, 4 p.m.
Joe Hoffman Principal Analyst

Are you ready for the rhyme of history set for June 19?   There are too many coincidences for this to be a random event.  Consider (and Google it a bit) 

  • June 19, French Troops liberate the island of Elba in WWII.
  • Napoleon, Emperor of France was exiled on Elba until The Hundred Days of Napoleon
  • “Le petit caporal” though not the largest in stature, rose to high command
  • June 19, Michel Combes announces the return of Alcatel-Lucent from exile, and perhaps launch The Hundreds Days of Combes ?
  • Napoleon and Waterloo the Swedish pop hit – a hidden message, but not for ABBA!
  • All this has happened before, may happen again, but perhaps with a different outcome?

Maybe the above is a bit heavy on the tin-foil hat theory, but I do expect to hear something daring and bold from Monsieur Combes on June 19.  Even without mixing metaphors, I’m getting a bad feeling.  I suspect we are on the verge of a comeback and confrontation.  If things are to change for ALU, it should be a bold, disruptive and unexpected move on June 19.   

For a little more serious discussion: Alcatel-Lucent:  Get Scrappy, or else…

Get deep insights into the evolution of mobile broadband from ABI’s Telco Software, Optimization & Monetization research service.

Industrial Defender: An Innovative Player in a Niche Market

Blog

June 11, 2013, 11:11 a.m.
Michela Menting Senior Analyst

Critical infrastructure is getting smarter. Electric grids and oil platforms are leveraging IP connectivity, cellular and wireless sensor networks, commercial off-the-shelf software and open protocols to improve efficiency, cut costs and drive productivity. The invasion of information technologies (IT) into underlying industrial control systems (ICS) is well underway and the undisputed reign of operational technologies (OT) is at an end. The relationship between the two systems would ideally be convergent; yet at the moment, it is all but symbiotic. The threshold of acceptable loss is widely disparate. IT can accommodate delays, interruptions, recovery through rebooting; for OT, delays and system crashes are unacceptable, pen testing is disruptive at best. It is difficult to apply traditional IT security notions to legacy control systems; yet the requirements are exactly the same: availability, confidentiality, integrity. This conflict is driving the growth of a niche, emergent market in OT security. While the issues have been publicly (if somewhat obscurely) debated for over a decade, the slow, but determined changeover to smart ICS is prompting a growing interest in those vendors that can offer dedicated security for OT.

One of the companies at the forefront of this market is Industrial Defender. US-based and relatively small, Industrial Defender has been refining and tailoring OT security solutions since 2002. The company offers a turnkey solution called the automation systems manager that includes three primary components: security, compliance and change management. The advantage of being an early mover in the space means the company has had time to consolidate its experience across a number of automation environments, including ABB, Emerson, GE, Honeywell, Schneider, Siemens, and Rockwell, Invensys, Yokogawa, Elster, Itron, among a number of others. It has leveraged this experience to expand OEM certifications and strategic partnership with OT vendors. There is no doubt that the company has managed to invest itself convincingly in the space. Certainly with the growing awareness of advanced cyber threats, and the fear of tomorrow’s new Stuxnet, Industrial Defender is well positioned to retain a strong position in the market for OT security.

Apple’s iTunes Radio and iOS in the Car

Blog

June 11, 2013, 8:55 a.m.
Dominique Bonte Vice President and Practice Director

Apple recently announced a music streaming service which will be integrated with the iOS7's music application. The service will be free with audio and video advertisements. Ad-free iTunes Radio will cost $24.99 per year. It will be available for Apple TV, Mac, and iPhone. iTunes Radio features Siri voice integration, more than 200 stations, and track skipping. Apple has licensing deals in place with Universal Music, Warner Music, and Sony. iTunes Radio will be available in the fall 2013.

This will allow users using the native Apple streaming app instead of having to download additional apps. It is the natural and logical trend of embedding more and more features as standards services in smartphones which initially were only available as (paying) third party applications. Apple Maps was the first major example of this trend. iTunes Radio is the next one.

What makes all this very relevant to the connected car industry is Apple’s accompanying announcement that it will launch iOS in the Car in 2014 offering seamless integration with in-dash systems including controlling apps via the car display, steering wheel controls, and Siri Eyes Free. Applications include setting up phone calls, listening to music, messaging, and navigation and traffic information. Apple claims 12 car OEMs including Honda, Mercedes-Benz, Nissan, Ferrari, Chevrolet, Infiniti, Kia, Hyundai, Volvo, Acura, Opel and Jaguar will integrate iOS 7 in the Car in their vehicles by 2014.

With these announcements Apple has a clear answer to initiatives such as MirrorLink which brings the automotive and mobile industries together and agreeing on a common smartphone integration standard. By refusing to support MirrorLink, Apple made it clear from the beginning it was working on its own solution. While this is a blow for MirrorLink, at the same time it confirms and endorses the very concept the CCC stands for. For car OEMs it means they will have to support at least 2 different smartphone integration standards. The 2014 launch date gives Apple some much needed time to improve their mapping and navigation application.

Radio and Baseband and Servers [in the base station], Oh My!

Blog

May 28, 2013, 2:52 p.m.
Joe Hoffman Principal Analyst

NSN and Intel team up to push IT media functions into the base station with the NSN Radio Applications Cloud Server (RACS). This is another example of converging Telco and IT functions and points to Software Defined Networking gaining momentum.

With a server in the base station several considerations arise:

1. The Flexi Multiradio10 integration provides differentiated performance advantage.

2. A Multi-vendor network solution will require a server box instance without the intimate hardware integration.

3. For multi-vendor networks, one question that will arise is “why not a white-box?”

4. A server in the base station is part of the “data center without walls” (I borrow this phrase from Ciena).

5. This should evolve as part of an SDN network.

6. Where is the economic optimum location in the network – in the base station or near the base station in a local mini-data center?

The generally accepted direction of 4G is to move data closer to the subscriber for both performance reasons and to enable new revenue opportunities that come with the improved performance. The main challenges facing this particular instance concern SDN and the question of where – at the base station or in a local data center. The general approach directionally leads the industry evolution, and time will reveal the market’s embrace.

Dive Deeper with Coming to a Base Station near You: Intel Inside! , part of ABI’s Telco Software, Optimization & Monetization research service.

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