On this special Mobile World Congress edition of FTP, Futurum Tech Podcast, 5G connected vehicles, folding phones and HoloLens 2, all the winners and losers in Barcelona except these were all the winners. Excel’s slick, new android trick, did China steal flexible screen technology from Samsung, the end of Amazon dash buttons. Thoughts on the AT&T Time Warner merger, and will Apple get into the 5G and folding phone games before it’s too late? This and more coming up on FTP.
Our Main Dive
Mobile World Congress is the tech industry’s premier event for mobile technology. At this year’s MWC19 we saw some great products – here’s our rundown of the top tech that caught our eye.
Our Fast Five
We dig into the week’s interesting and noteworthy news:
- Our latest 5G Research Study
- Microsoft’s new Excel photo feature
- Amazon’s new low-cost grocery play
- Samsung’s issue with China and IP theft
- The death of Amazon Dash
It’s the US DoJ vs Appeals Court – who wins in the battle over AT&T’s acquisition of TimeWarner.
Crystal Ball: Future-um Predictions and Guesses
Is Apple too late to the game with 5G devices?
Fred McClimans: Welcome to this edition of FTP, the Futurum Tech Podcast. I’m Fred McClimans, your host for this edition. Joining me today fresh from Mobile World Congress, MWC ’19, Dan Newman and Olivier Blanchard. Gentlemen, welcome to this show.
Daniel Newman: Back with a little jet lag here in the states. Although Olivier, I think he took a trip to the south of France.
Olivier Blanchard: I took a detour.
Daniel Newman: If he cuts out at any time it’s because he’s lying on the beach in the South of France. It’s only like us but he’s enjoying his life a little more than we are, Fred.
Fred McClimans: Yeah. Well I tell you, in our business, jet lag is just part of the trade I suppose. So before we get into this edition, where we’ll be talking about MWC ’19, getting an update on that. All the winners and losers that we saw at the show, I do want to remind everybody that the Futurum Tech Podcast is for entertainment and informational purposes only. We will talk about a number of companies. We may talk about equities. But we are not making any stock recommendations. And with that, Dan and Olivier, MWC ’19, quick give me your impressions of the show. How did it differ from Mobile World Congress in years past? Dan?
Daniel Newman: Well, last year was sort of the false start for 5G. It was a big topic, a lot of people came into it knowing it would be a big topic but weren’t really sure just how close we were to seeing some mainstream. So there was a lot of speculation, lot of announcements. But really, this was the year for 5G. So as we get into the show, we’ll talk a lot about some of the other things that we saw. But when it comes to is 5G real, the answer is yes. Will there be phones lit up with 5G this year? The answer is yes. Is the standard built and complete and agreed upon by the companies, the OEMs, the builders, the innovators in the space? The answer is yes.
So overall, we really did have the year of 5G. And like I said, some other really cool things but that dominated the show. The signage, what people were talking about, what they were reporting about.
Fred McClimans: Olivier?
Olivier Blanchard: Yeah. Everything was 5G. Basically if you were selling ice cream at MWC this year, you had a 5G sticker on your ice cream stand. So yeah. I didn’t go last year but two years ago, I think, the big focus was still in this AR, mixed reality, augmented reality, virtual reality kind of tangent of mobile. It seemed like that’s where things were going, that this kind of transition that Dan always talks about from looking down to your device to wearing it on your face and being to interact with the world in front of you as opposed to hunched over.
And this year, things kind of took a break away from that. The biggest focus was absolutely 5G connectivity and basically the future of connectivity of all connected device. One thing that was very apparent is that mobility now is no longer limited to phones and phone accessories, but mobility is being injected into everything. From vehicles to smart homes. That connectivity isn’t even necessarily mobile. It transcends mobility. It’s the connectivity of everything, whether it’s a mobile device that you wear that’s in your pocket, that’s on your face, that you’re driving or that you’re actually just sitting in, it’s all connected and it’s all mobile.
Fred McClimans: That brings up sort of an interesting question here. In the past when mobile technology, mobile phones is a great example, when they first hit in the marketplace, there was a distinct difference between landline use, you had your phone on your desk, you had a speakerphone perhaps, and this mobile device that could go with you anywhere. At this point however, when we talk about mobile, there are a lot of things that are kind of mobile but they’re just more not connected to a wired line. So we see all sorts of devices, and maybe this kind of blurs over into some of the IOT space and things like IOT enabled refrigerators. When we talk mobile, we’re really talking about devices perhaps that they’re not wired to anything in specific.
Because a lot of the feature’s kind of blur. In fact, look at the capabilities of an Amazon Alexa versus your mobile phone with Alexa. There’s lots of varies of crossover there and a lot of areas of dual functionality. Facebook’s in home device, kind of similar. It kind of blurs that line. It’s definitely not a mobile device but it looks, acts, and feels in many ways. Did you see any of that at at show as well?
Olivier Blanchard: In a way, yes there is. But if you take a step back and you kind of look at some of the big announcements this year and what we were really talking about, there’s a subtext here of connectivity that kind of transcends mobile and mobility. So you can almost see where Mobile World Congress, in the next few years, could be rebranded Connected World Congress, right? Which you heard it here first and yeah, I want my trademark checks. But you have 3G, you have 4G, you have 5G now, you have Bluetooth, you have Wi-fi 6, which is the new standard of Wi-fi that’s going to give us blistering speeds.
You have these last mile connected solutions to bring 5G speeds into the home as well. I think that the way that we think of mobile as being kind of like this wireless, broadband that goes into phones that we carry into our pockets is kind of atavistic now. The ecosystem that we’re talking about, we talk about mobility, is so much richer and has so many more layers that the term mobility and the term wireless are becoming kind of too limited to describe what we’re actually talking about.
Fred McClimans: So Dan, you have a thought on that.
Daniel Newman: No, you’re basically right. I think four years ago I wrote a piece saying that it’s not mobile anymore. It’s just mobility. Whether connectivity becomes the new terminology or vernacular, who knows. The conversation could be GSM, it was specific to GSMA in certain connectivity types. So I can certainly see there being some vernacular change, but I also think Mobile World is still very fitting. I really describe it as the world’s largest enterprise show. So whatever you want to call it, but there are certainly consumer applications too with car companies and drones and things flying around that can be used in consumer applications.
That of course leads me to one final thought about that, is there really an enterprising consumer anymore? While there are from a standpoint of delineation of how devices and technologies work, most of these technologies are fully transferable. And any sort of demark into one enterprise versus two consumer has more to do with the application and the company specific choice of how they use and design it versus it design itself.
Fred McClimans: Yeah. I would also add to that sort of a differentiator between the two, being the channels that they’re sold through and the type of support and ecosystem that’s built around those. But with that gentlemen, let’s kind of walk through your winners and honorable mentions from the event. Let’s start here with connectivity. Dan, what’s your pick for the connectivity winner of the show?
Daniel Newman: I said this very simply. In first place was Qualcomm and in second place was nobody. Their press junket was like a-
Olivier Blanchard: A sledgehammer.
Daniel Newman: It was like an orgy for my brain. It was like the nerd’s brain. There was just an answer for everything when it came to connectivity. You’re talking about this current chip in the model. They’re already talking about what the next chip and model is going to be able to do. They have design wins like crazy. It’s going into all the major players and devices and basically as of right now, if you’re going to build a 5G phone and you’re going to put it in the market this year and you plan to use the blistering pace of millimeter wave technology, there is no one else. It’s Qualcomm, they’re completely on their own. I put them on an island. I mean, HUAWEI with their sub-6 announcement could be considered a runner up. But like I said, it would basically be like a Boston marathon winner against your local couch to 5K competitor.
So until they really get it right, not to mention all their other issues which will be a theme throughout this show, Qualcomm’s running away with this particular category. Yeah.
Fred McClimans: Olivier?
Olivier Blanchard: Oh yeah. Going to their press conference was basically like just somebody dropping a giant sledgehammer into a pool of chocolate pudding over and over and over again. They completely dominated the technology and the innovation part of the show. Their 5G modems, millimeter wave, Wi-fi 6, mixed reality.
Everything was an, oh by the way, and then they would show you all of the other winning technology examples that were on display at Mobile World were powered by Qualcomm in some way. Even Microsoft’s HoloLens 2, which was a huge hit at the show, was powered by Qualcomm. And just as a point of note, this is something that was kind of in the periphery of my understanding of this whole space.
5G right now is android. IOS is not in this. Apple is not in this. This is purely an android movement and Qualcomm freaking owns it and drives it. I think that’s the reason why I laughed earlier and I completely agree with Dan that currently Qualcomm is in first place when it comes to connectivity and there is no one in second place. Even HUAWEI doesn’t come close at this point.
Fred McClimans: Moving along, automation and orchestration. One of those technology sets that is paramount for any organization, a provider or an enterprise starting to build out their infrastructure and manage it efficiently. Dan, automation and orchestration, who’s your winner in that category?
Daniel Newman: Yeah. So I have Cisco down. I came in kind of bullish on a few different players. I was looking at what Ericsson was doing. I was looking at, DALI MC has a really big play in this space. But in the end, it’s funny I actually ran into my analyst relations contact, Ben Coll siting on the said of the Cisco booth as I walked by and I said, “Hey Ben, how come I don’t have a meeting with you?” And he’s like, “What are you doing right now?” It was like no joke, I had one free hour on a day that I was on the floor and I’m like, “Nothing. Show me what you got.”
So I’d just been at the Qualcomm junket and they talked about this Rakuten, small cell 5G deployment, nine millimeter wave that’s going on in Japan. So I see Rakuten all over the Cisco booth and I’m like, what are you guys doing for these? Well if you know about what’s going on with 5G, the physical infrastructure at the end, the antennae end of this is completely different. These small cells, these Edge deployments are going to completely reimagine the way 5G’s deployed. So you’re going to have these big tier one data centers and then these number of small regional data centers. But then what we’re going to have are these Edge data centers and there’s going to be hundreds or thousands of them that are going to be required to be deployed in order for 5G to work the way it’s supposed to knowing it has to be much more targeted. There’s much more directional impacts and what not.
So they showed me their orchestration tool. What they can basically do is design once, deploy 3,000 times. That’s what they’re doing with Rakuten. They basically are designing the infrastructure for this small cell deployment of 5G and they’re going to be able to orchestrate it and deploy it to all these Edge’s from a single configuration with a single push. They basically showed me how it works. It’s a single press of a button. There’s a setup and a push and it pushes the entire config to each of those Edge data centers. Then I went and I had meetings with others. I talked with Ericsson, I talked with Dell. I said, can you guys do this?
My only caveat is I have not actually witnessed the physical activity take place but if Cisco’s doing what they’re saying they can do in terms of orchestration; they are right now the only ones that can automate it in such a complete fashion.
Fred McClimans: Olivier?
Olivier Blanchard: Yeah. I agree with everything Dan says. Yeah, no. Full disclosure, Cisco is on the very edge of my wheelhouse and we kind of divvied up the booth tours. I completely let Dan take over at that side of the show. So I’m mildly aware of Cisco but I cannot speak with as much eloquence and is as much detail about what I saw at the show as Dan. So, I defer to him on that.
Daniel Newman: I’m going to take that IP orchestration, I’m going to make it sexy.
Fred McClimans: Yes. Well hey, there’s something underneath the covers there and Dan, if you want at it, it’s all yours. So moving along here. We talk a lot here at Futurum about the arrival of Edge computing. One of the categories here that we’re looking at is Edge to Core or Edge to Cloud. Dan, who do you pick as sort of the go-to guy or gal, or the go-to organization in Edge to Core space right now?
Daniel Newman: There are quite a few. I think HPE has done a really nice job with their Edge line products, especially for the industrial IOT space. But I think the overall winner because of what I was focused on was 5G as well as just Edge to Core is Intel. Basically, while Intel has had their challenges in terms of getting their modems built and getting the on device technology for mobile connectivity, when it comes to the fixed deployments of 5G, their design wins and actual implementations have been very successful. From their processing, the Xeon Scalable that sits in the data center, we basically don’t have a fixed 5G deployment right now that will not run with Intel at the core. Intel is going to be at the core of just about every one of these deployments.
Companies like Arm and AMD are going to push them but they just don’t have the track record. So, right now I’m just looking at where they’re at. I’m looking at who’s got deployments out there. Who’s being summoned and asked to participate in complex, fixed 5G deployments for stadiums, for large malls, for airports and Intel is really deeply involved with all of it. And this year they continue to make those announcements and share that. To me, that was very compelling. Like I said, certain hardware providers like HPE, like Dell, like Cisco, they’ll all be part of that because HPE’s building the chips and the underlying but Intel is really the driving force in that space right now.
Fred McClimans: Yeah. So Olivier, when we talk about Intel, that’s a company that we’ve talked about in a number of different categories. Everything from processing capabilities to their involvement in litigation at various times over modem, technology in Qualcomm. How do you see Intel right now? Does this Edge to Core advantage here really define a new market potential for them?
Olivier Blanchard: Yeah, no it does. The 5G ecosystem is honestly very large. One thing that you notice, and especially how interwoven how all these companies are. For instance, Intel had an installation which interestingly enough was about just playing a VR Spiderman game. So it’s kind of fun. It’s not necessarily the sort of thing that you would find in factory setting. But Intel was partnering with Nokia on that one, just kind of merging the fixed and the Edge 5G and then the end to end solutions that Nokia was putting out.
So you had one player playing this VR game all the way at the other end of the building in the Nokia booth and then one player playing against them in the Intel booth and they were using a 5G network to showcase that. I tend to be a little critical of Intel when it comes to phone modems. They’re a little bit behind. They’re selling their modems to Apple and they’re still not very good and they haven’t really, I don’t think, released a 5G modem that’s workable yet. But in everything else they’re really strong. They’re a really good company. They’re a national treasure and I think that they have a huge opportunity with 5G. They realize that and I think they’re in the right place for it. I think they found a good niche.
Fred McClimans: So keeping with the 5G theme, let’s shift a little bit to 5G in the end to end infrastructure play. Dan, who’s your leader there right now out of the show?
Daniel Newman: I had a great opportunity to spend some time with Nokia and they really do have everything and it’s been through a series of acquisitions, Alcatel-Lucent was one of their big ones. Everything from core to the radio and antennae to all the connectivity in between to, as Olivier mentioned to and alluded to earlier, the last mile. Them and HUAWEI are really the only two. And admittedly, if you ask the other companies, if you ask Intel, if you ask Qualcomm, if you ask Cisco, any of these companies that we’ve mentioned before, even Ericsson admits to an extent that really it is Nokia and HUAWEI are the ones that can say we can really do the whole thing, from the core of the network to the last mile. We have all the pieces that are required.
And they actually manage these projects and see them all the way to completion. So they’re really the player to watch right now. I was really impressed listening at the Nokia press junket, listening to their CEO, listening to them tell their story, listening to them sort of share their vision for what 5G is. I have to say, Nokia has been a little bit under the radar at times, or even off the radar. They’ve got some new life in their blood through their HMD partnership for devices. They’ve actually had some significant success and growth, although the thing is that’s a pure licensing agreement. So they’re just putting their name on phones.
But when it comes to the infrastructure and services and even the enterprise plays, actually having a really dedicated team to support enterprise, healthcare in the different verticals, they really are seemingly the most prepared to handle the whole equation of deployment. That’s going to be a big deal. One of the things that I really thought was interesting too was their private LTE offering, which will become a private 5G offering, which is something that’s going to be super important in these highly challenging Wi-fi environments. When you’re running connectivity and it needs to be in the bottom of the mine on an oil rig, things like that, they also have the capabilities to truly offer a high speed five/nine level connectivity that you just can’t get in any other way.
So, Nokia impressed me that’s why they’re getting this extra blurb from me right now.
Olivier Blanchard: Were you just talking about their fast mile, like 5G fixed solution? It looks like a tube. It looks like a little smart speaker bu it’s actually a private 5G network?
Daniel Newman: No, that’s the in home box, Olivier.
Olivier Blanchard: Right.
Daniel Newman: What I’m actually talking about is they have a full infrastructure based by LTE private deployment that they can put into a mine and make sure that if someone’s at the bottom of that mine, they’re going to have the connectivity they need and be able to get emergency support to be able to manage the temperatures. There’s a lot of wearable type devices now that are designed for safety. It’s measuring people’s temperatures and making sure that their health is okay, that they can get to them before something goes wrong. You don’t want to be running that on Wi-fi, even Wi-fi 6. That’s not dependable enough when you’re talking about first responders.
Fred McClimans: Yeah. I think that indicates the potential for 5G in the home, in specialized applications where Wi-fi has some significant competition moving forward there. So, let’s move on here to 5G devices. I know that the Samsung Galaxy S10 was a big hit at the show. Olivier, give me your thoughts on the S10 and sort of the positioning that they take in 5G.
Olivier Blanchard: The S10 is a beautiful device. Everything that Samsung puts out is really good. I haven’t tested it out in the real world. So I got my hands on it, I played with it. It’s very thin. It’s very pretty. Everything works super-fast. It’s 5G. There’s no complaints. I’m starting to read though reviews from people who’ve played with the S10 a little bit in the last few days and who have some issues with some of the design itself. For example, the no notch camera is maybe not as good as others. The fingerprint sensor isn’t as solid or as smooth as it was set out to be. So time will tell. I don’t know if the S10’s going to be as much of a success as we hoped or if it’s going to turn out to be a lemon. They might’ve maybe rushed production a little bit. I have no idea.
Daniel Newman: I got to touch and play with a live one. I had dinner with Pat Morehead and Angela, our friends at More Insights, and I’ll tell you this much though, Olivier. Thumbprint works pretty well, the reader. It is a new type embedded in the glass. It is new technology. It’s actually Qualcomm technology. I do believe it’s something that if there are some issues, it’ll likely be able to be corrected with a firm wear. I’ll also say that the power charging, and I forget the term I’m looking for, but it’s where you can basically share power from the device. My phone was dying, my Apple iPhone X surprisingly trying to stay … I say X, I joke. Somebody called it the X the other day instead of the 10. But they turn the Samsung on. So Pat turns this little feature on and I just drop my phone on top of it and it’s able to give charge to my phone.
I’m just like, some of the innovation on these devices is just super smooth. They’re so far. They’re light years ahead of where Apple’s at in terms of maximizing new technologies in the devices. So I’ll give them a few breaths of space to get some things right with their iterations one and two. But that is still a beautiful device. But I’m sure you also want to talk a little bit about foldables?
Fred McClimans: Yeah. So Olivier, in the foldable space, we’d been talking earlier about Huawei’s foldable device as an honorable mention in the 5G space. What are your thoughts on that? We’ll come back to the foldable market a bit here in our crystal ball but quickly honorable mentions for devices.
Olivier Blanchard: I’m almost done writing an apology blog post for an Insights blog in which I admit that I was wrong. I was wrong about folding phones. The first few days I confess still was, I thought they were overpriced and stupid and just had no purpose and just this weird fad. I’m a believer now. First of all, they’re very well designed. They’re pretty slick and they’re going to get better. Some people complain they’re too thick when they’re folded but that’s going to go away. It’s going to be fine. I do think that they serve a purpose. Our friend, Chris Penn, coined this kind of just logic of the calculus right now of these folding phones. It’s two devices in one for the price of three, which I think is just freaking brilliant.
But what it will become is just simply two devices in one. I think that in a year or two potentially, folding phones will become tablet killers. That’s going to force Apple to either get in this game or come up with a solution that makes people actually want to carry a phone and an iPad in their bag when they travel when everybody else in the android space is just carrying one device instead of two.
Fred McClimans: Right. On that, we’ve already seen Apple shift their focus on the tablets. Larger tablets, more focused on the creative space and less sort of that I carry a tablet and a phone along with my laptop kind of device there. So I see what you’re saying there and I tend to agree. So let’s move along to IOT, 5G IOT. Dan, who’s your pick there from the show?
Daniel Newman: Yeah, there was a few of them. I thought Ericsson had a really interesting demonstration. They seemed to be really focused on it and I gave Ericsson some grief for kind of being quiet at the event. I felt for being one of those core 5G, 3G PP contributors over the years, big contributor to standards, they really had nothing that splashed. Nothing in the modem space, nothing really in the infrastructure space. But I really like their IOT story. So it wasn’t so much like a, here’s one specific gadget or release. It was just their overall investment and commitment to the IOT space. I think Qualcomm’s another company that’s done a really good job in that space. I think on the industrial side I’m still … You and I Fred have worked deeply with HPE and we’ve seen what they’re doing on the IOT space.
But again, with it being focused on 5G, Ericsson being an infrastructure provider for connectivity, they’ve had a little bit of that advantage. Now you are starting to see like to Edge line 3,000 from HPE building 5G connectivity right into the box. So we will see that more. But like I said, I was looking at the completeness and I thought Ericsson’s story was solid. In the case of IOT, it’s not so much a gadget or a sensor or a particular piece of equipment. It really more is, how are they thinking about an ecosystem, and I thought Ericsson did it.
Fred McClimans: Right. One of the technologies that we’ve started to link to IOT is in the area of mixed reality or AR or VR devices. I’ve seen some really slick applications there in the industrial space but Olivier, take us home on our coverage here of the event with your thoughts on who are the top players coming out of MWC ’19 in the XR space.
Olivier Blanchard: Well actually, I’m going to go back and include that in the IOT. So the way I want to kind of look at it is the categories of IOT that really impressed me were XR or basically the entire universe of virtual reality, mixed reality, augmented reality. So there’s that. Then that particular game, it was Qualcomm. I hate to keep bringing them up but they really do help power this stuff, and especially as XR becomes wireless now. The initial releases were more plugged in, even some of the “AR glasses” that are trying to push through are still connected to boxes or have weird wires.
But what I noticed is that Microsoft’s HoloLens 2, in terms of creating the device, I think Microsoft was the big winner at the show. Microsoft’s HoloLens 2 is partly powered by Qualcomm, so there’s that. On the automotive side, I actually wanted to mention Arm. We don’t talk about Arm enough and they had a pretty cool installation. I have to admit I’m a little bit skewed because they have this incredible looking Audi sports car on display that caught my eye. But Arm is definitely I think a player to look at in the IOT period, especially when it comes to automotive.
I think that automotive is definitely one of the big sub-threads of Mobile World Congress. I saw BMW there, I saw Audi there, I saw Mercedes had a huge installation there. The connected cars and the autonomous vehicles, which are kind of two subsets of how automotive plug in to mobile world are going to be I think the big, big new movers and shakers in the mobile world next couple years. And then the last thing is just robotics and the industrial IOT. I wanted to give props to Nokia and Bosch for that kind of work, and Qualcomm as well. They’re involved with the Bosch play. Those are the types of partnerships that I think are going to kind of revolutionize the robotics and robotic process automation in industrial environments. And the IOT was a huge topic and a huge opportunity for 5G deployments at MWC.
So those are the three things I wanted to kind of sneak in there at the end because I think they really matter. More so than the folding phones.
Fred McClimans: All right. So with that, let’s kind of wrap up our main dive here into MWC ’19 and shift gears into a nice, quick, tight, fast five. Five things that caught our attention over the past week that made us go, hm. Dan, let’s kick it off with you and 5G.
Daniel Newman: Yeah. I’m actually just going to do a little bit of a self-pitch, but we just don’t do this enough and I’m not going to say it’s great or bad but I’m just going to say in our show notes check out, we just released a 5G readiness research study that we did in partnership with Intel. We went out and worked with over 500 Telco executives across western Europe and the United States and North America to basically find out where are they at with their 5G deployments, what are their biggest challenges, what are the core applications. This great little study full of some really nice little graphics is a quick read, quick consumption. But if you’re interested in where 5G’s at, where it’s going, what’s going to happen over the next 12 to 24 months, check out this study. Go to the link, download it. It’s free. Appreciate you checking it out.
Fred McClimans: Yeah, that’s on our site at futurumresearch.com and link in the show notes. Olivier, I’m a big Excel user, as are you. What’s new here? This kind of really caught my attention as well.
Olivier Blanchard: Yeah. Something else that android is doing well now. So it pays to be an android user. I picked the right year to switch my LS to android. I am psyched. So Microsoft now let’s Microsoft 365 users on android take a picture of a printed data table and an AI essentially will automatically convert it into a fully editable Excel spreadsheet. So you can take a picture of a printed database table and your phone with Microsoft 365 will turn it into an Excel spreadsheet that you can edit. It’s genius. I love it. It’s just a simple thing that somebody must’ve worked just millions of hours on slaving away in a basement just to be able to do this. This is a project that has love and passion all over it and I freaking love it because it’s actually useful. Even if I only use it once in my life, it’s going to be brilliant when I do.
Fred McClimans: It reminds me a bit of some of the apps that have made their way to the educational system. Kids taking a screenshot or positioning their mobile’s camera over a math problem and the solution pops up here. So a very interesting way that AI is kind of making its way into our technology and our lives here. So I’m going to shift a bit here into Amazon, one of our frequent topics of conversation. It’s come out this week, in fact there was a story in Gadget suggesting that Amazon is planning to open sort of a low-cost grocery chain, dozens of different locations across the US that would be under a different branding. Not branded as Whole Foods which they acquired last year, and really targeted at kind of that lower end grocery play where people are looking to get in, get out, get their brands.
And from my perspective, one of the things that Amazon does really well is the logistics of shipping and delivery.
This kind of a store environment requires a lot of that. So I would expect to see some Amazon Go technology baked into this and think it’s a very interesting play. Alongside their move this week to say, hey all you people who are getting Amazon prime packages, of you like, rather than us ship you a package this day, the next day, et cetera, pick one day a week. Order all you like and we’ll deliver everything in one package to your home on that day when you will actually be there. This is interesting and something definitely that we’re going to keep watching as we move forward.
Dan, let’s flip back to you for our fourth fast five here. China, Samsung, folding phones and intellectual property.
What can go wrong?
Daniel Newman: What could go wrong when the Korean giant Samsung alleges that their technology for foldable devices, flexible LED, was stolen and sold to China? You catch that pause there, that was on purpose. As you know-
Olivier Blanchard: Allegedly.
Daniel Newman: … the actual success and probably the show stealer for foldable devices was actually the HUAWEI device. Samsung kind of was rated and kind of looked at as the second nicest of the devices. Again, they’re not saying HUAWEI did it but they’re saying that one of the companies that they partner with in the technology took the data and sold it to China, which allowed companies to more quickly get their products to market. Now with HUAWEI being the only other company to put a device in market, it sure is suspicious. But I will say there’s no proof. They’re not suggesting any proof.
The only thing that stands right now is that their prosecutors allege that Samsung supplying blueprints of Samsung’s flexible LED Edge panel 3D lamination to accompany that it had set up, the company then sold the tech secrets to Chinese firms for nearly $14 million. So this is really, really big and if this turns out to be true, you just have to wonder who in China actually got this tech and who is using in, and what cost of that is to Korea. And if there’s any repercussion at all, even if it turns out to in fact be true.
Fred McClimans: We talk about this a lot, sort of the underside of technology. It’s such a competitive market and the global economy is moving so fast that in many cases, we see the fastest way to product to value is through acquisition by any means. This is an unfortunate one that we will keep watching it. I’m pretty certain that at some point this will be one that comes up in some way in the ongoing trade talks between the US and China.
But now, Olivier, take us home in our fast five. Amazon dash, that little button that I rarely use. What’s going on there?
Olivier Blanchard: I know. It’s the end of an era that never was. So in case you don’t know, the dash buttons, the Amazon dash were these physical little clicker devices that you would put in your, I don’t know, I guess your broom closet, your cupboard in your kitchen. It would have a little brand logo on each one. So whatever, Gillette for razor blades or Tide for your laundry detergent or Glad for your Ziplock bags. When you ran out, there was the sticker, the little gizmo that the dash was supposed to be right where you keep your stuff and you would just push it and it would automatically order a new box or a new bottle from Amazon that would be delivered to your door.
It seemed like a good idea at the time. It’s not necessarily the kind of thing that you would use for your chicken breasts but I could see it definitely being used for certain products in the home. But it just never took off. People didn’t buy them. People who did buy them didn’t use them. So Amazon has decided to stop selling dash buttons, which is sad. It’s kind of like the end of an era of kind of the first clumsy kind of ideas of Amazon trying to get into the smart home business and trying to figure out how to make these little interfaces work. It was a cool experiment. It was a fun experiment. But just commercially it wasn’t really fun, never took off.
Fred McClimans: It’s interesting to me the idea of a digital eCommerce company creating physical buttons to sell eCommerce products that it then obsoleted by improvements in eCommerce. It’s kind of interesting. I will say, and just to close that out on the Amazon dash, there were recently some concerns that came up from a consumer awareness perspective. When you push that dash button, it doesn’t actually tell you, well here’s the price you’re going to pay. Would you like to buy it here at a lower price? So I know there were some concerns there.
But speaking of concerns, let’s take a quick bite into our tech bites of the week. As we all recall, last year AT&T gobbled up Time Warner. Or at least they tried to. The deal was approved and subsequently challenged by the US justice department under their antitrust guidelines, who said that this $80 billion deal was anti-competitive. That it would result in monopoly. Well that ruling, or that challenge, was just tossed out by the US appeals court that said essentially, “Look your argument is unpersuasive. These two companies are not competitive right now. They’re not in the same industry vertical, which is usually what we look for in terms of signs of a monopoly. In this case, two companies in different marketplaces, different verticals that were coming together.”
I have got to say, I’m on the side of thinking that this government challenge had more to do with politics than actual business economics. But with this, AT&T is not free to actually start integrating Time Warner, which had been on hold pretty much since the ruling here. So Olivier, I’d love to get your 30 second thought on this. I put it in tech bites because I think this is a case of the US justice department kind of going down the wrong political path.
Olivier Blanchard: Yeah. Honestly, I don’t care. It’s one of those things I really could care less if AT&T and Time Warner merge. I’m concerned by the consolidation of mega companies, especially when it comes to media. I am concerned that corporate interests are taking over kind of majority power positions over news organizations that should remain independent and that should feel that they can remain independent so that they can be a check on power, whether it’s corporate power, political power, whatever. And I’m always concerned when I see the neutrality and the independence of news bureaus being threatened by this sort of for profit takeover.
I’d like to see some kind of legislative solution to that, that allows news organizations to remain neutral. Having said that, this is kind of par for the course and it was kind of expected and I’m not really surprised.
Fred McClimans: Yeah. Dan, your thoughts on this?
Daniel Newman: I share part of the sentiment with Olivier. If it went through or didn’t go through, I don’t know how much it would change my life. I think the media industry’s a very, very challenging industry right now. I think Time Warner has some interesting and valuable media brands and obviously their cable business. And that’s the big part of it, right? Their concern is the monopolizing. But there are legitimate sizable competitors. There’s Charter, there’s Comcast. They aren’t alone.
And second of all, there’s other options now and with cord cutting even more so, these people have a lot of different ways they can get the content. They don’t have to subscribe to these companies. They’re not stuck using them for their Telco. I think we’re in an age where no matter how big they are, people have too many choices to call any of these media or cable companies truly monopolies. I wish the government in some cases would kind of butt out. This goes back to, we’ve talked a lot about these FDC litigation with Intel and Qualcomm and Apple.
Look, there’s certain things where government needs to take part and get involved and there’s certain places where they probably don’t. The influence and the reason that this probably even happened was probably some relationship in some back room that pushed probe that would slow down this merger. There’s just so much political noise and nonsense in these transactions that just stop businesses from being productive and just wastes tons of taxpayer dollars. It just makes the entire business process filthy and it exhausts me. Let companies compete. When the service stinks and the available options are zero, then I want the government to step in and help me.
Fred McClimans: Yeah, Dan I’m with you on that one. I look at this here from a content access or consumption perspective, it’s pretty hard to say that this merger would create a monopoly in that space. Certainly, it brings sort of the best of AT&T and Time Warner from infrastructure and content together here. And AT&T already deep into DirecTV and other streaming aspects. But when you look at the big picture, you want TV, I’m right now looking at YouTube TV that costs a fraction of what I pay from Verizon. You’ve got Netflix streaming services, you’ve got Disney pumping out content every day. You’ve got Apple moving into that space.
I don’t see any huge threat here other than these companies; they are consolidating and as they do I think we can expect that certain things that we were able to get before might cost a little bit more in some areas and others. But that’s not AT&T and Time Warner. That’s just the industry. That’s the direction we’re going.
Olivier Blanchard: Yeah. I would be more concerned with how this plays with net neutrality. So we need to get net neutrality right before we start focusing on this. And then with regard to this, should whatever this merger produced, should any one of these companies behave in a way that’s anti-competitor? That there are still remedies to go after them for antitrust behaviors.
Fred McClimans: Right.
Olivier Blanchard: The merger in and of itself should not be the basis for government scrutiny. Behavior should be. So I understand the caution of say, let’s look at this before we approve this because it’s such a huge deal. But at the same time, I think you guys are right. This felt more like it was a political power play than it was a legitimate investigation. Let it happen, keep an eye on things and make sure that the resulting major, massive group doesn’t use its market position to behave in anti-competitive ways.
Fred McClimans: Right. I think at the end of the day, I’ve got to say that I think Time Warner’s ownership of CNN played as much a role as anything in the justice department’s decision here. So I’m kind of glad to see it be rejected because I thought the suit itself was kind of groundless there. So with that, let’s move into our crystal ball. And gentlemen, our crystal ball intent is to get to the essence, your thought, on something that we think may or may not happen. Our perspective, our vision, whatever you want to call it. I won’t say prediction here.
However, in one word, here’s the question. You give me the answer. Dan, Apple. Are they too late to the game with 5G and flexible devices or do they still have a chance to get into the game?
Daniel Newman: Yes. They still have a chance. As an Apple scrutinist and a constant Apple banger, they do have their audience. They will have their market. I think being a year late minimum 5G and being late on these devices, but some clever marketing can cover a lot of ground. Why can’t the next iPad Pro, iPad X, iPad foldable, right? It’s your phone and your iPad all in one and it’s $17,000 and there’s still people who are going to buy it. So again, sometimes companies like Ferrari and Lamborghini made a lot of money for a long time without selling a lot of automobiles.
So Apple may not be able to ever gain the main market again and yes, that was way more than one word but I don’t even know if I could’ve answered that in one word.
Fred McClimans: Well actually, I asked two questions in there so you could’ve used two. And yes and yes perhaps or no and yes.
Daniel Newman: Yeah. They’re going to be okay but I think this is going to hurt. It’s just how bad is really the question.
Fred McClimans: Yep. Olivier?
Olivier Blanchard: Yeah. Apple pioneered folding devices years ago. It’s just that there’s only a fold once.
Daniel Newman: I had one of those. My iPhone 6.
Fred McClimans: I copywrited that tweet.
Olivier Blanchard: So, yeah no. It’s funny. They’re always behind with everything now, which is kind of sad because I used to look at Apple to be the first at everything. Even if they didn’t come up with the technology, they came up with the cool way to use it. So when they introduced iPhone in, was it 2007, it was revolutionary. Even though most of the features on the iPhone weren’t new. It’s just they created a new product that’s cool with it.
Fred McClimans: In particular, it was 2008 when the app store came out. It was how you used that device that was truly…
Olivier Blanchard: Right. Right. Because the app store was actually embedded much, much earlier and not by Apple. But in this particular case, yeah it’s sad. Apple missed the boat on 5G, which isn’t because Apple isn’t capable of producing a 5G phone. It’s just they made some supply chain decisions that kind of pulled them back a little bit. It’s as much their fault as it is their suppliers’, plural, fault. But yeah. The fact that Apple was not at Mobile World Congress, and I understand they were never there just like they were never at CS but it’s kind of silly.
That works maybe if you really, truly are the coolest kid in the room and you just kind of, you’re too good to go. But when the entire world comes together to this congress to talk about connectivity and the future of wireless and Apple isn’t there, Apple is nowhere near 5G, Apple is nowhere near flexible devices, it starts to feel a little weird. Like are you even in this space anymore or are you just in your Apple bubble somewhere kind of in this time war, constantly improving on 2012 designs over and over and over again? That’s kind of what it feels like to me. So it’s not too late. It’s just I don’t think Apple is playing the same game as everybody else. I think Apple is just designing for itself at this point and just kind of, I don’t know, drifting off into this pond of obsolescence. I really want Apple to get back on track because it’s starting to worry me honestly.
Fred McClimans: Yeah. Well the size of the Apple has grown considerably over the years. Just looking at the number of markets that they do play in, there are many people who think of Apple, oh the iPhone company. Others, oh it’s the Mac company. With a billion dollar investment in streaming content, they may very well become known as the media company.
Daniel Newman: And the healthcare company, Fred.
Fred McClimans: And healthcare as well. Healthcare with the-
Daniel Newman: That’s what he said.
Fred McClimans: … iWatch.
Olivier Blanchard: And payment, right? Payment.
Fred McClimans: And payments.
Olivier Blanchard: Apple’s going to be a bank.
Fred McClimans: And the latest I saw was that Apple’s project Titan is leaning more into mass transit rather than individual cars. So we still have to see what Apple morphs into, how many fruits they can pull around themselves. But I don’t think it’s too late to get into the 5G game or the flexible device game.
Daniel Newman: No. They’ll be in 5G in a year or two.
Fred McClimans: Yeah. What I do question is how effective they’ll be and if they kind of lose a little bit of their luster. They’ve already lost a lot and it’ll be interesting to see moving forward. But AT&T definitely not out of those plays. So gentlemen, with that let us call a wrap to this edition of the Futurum Tech Podcast. I’d like to thank you both for sharing your insights on Mobile World Congress and the event. I would like to thank our listeners for their continued patronage of our podcast and remind people go ahead, like the podcast, subscribe. We’re on SoundCloud, we’re on iTunes, we’re on Spotify.
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Disclaimer: The Futurum Tech Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Fred is an experienced analyst and advisor, with over 30 years of experience in the digital and technology markets. Fred launched the equity research team at Samadhi Partners and provides marketing strategy through the Wasabi Rabbit digital agency. He previously served as an EVP and Research Vice President at HfS Research, launching its Digital Trust practice and coverage of emerging “trust-enabling” technologies. Read Full Bio.