The Week in Review: all eyes on Europe, from 5G Action Plan to IBC
So the iPhone 7 is a sell-out despite the lukewarm reviews. Apple, for the first time, won’t be sharing first-weekend sales figures, but stores in the US are reporting that they are out of stock. Of course, Apple is a master of managing supply to be just behind demand, and the anecdotal reports of iPhone shortages are certainly boosting its share price at a time when rival Samsung’s recovery is severely compromised by the Galaxy Note 7 recall.
‘7’ is a lucky number for one handset giant, but not the other, it seems. The next set of quarterly results will tell us more than the current speculation and spin, and also reveal the extent to which tax issues will affect Apple’s finances going forward – this week, it was reported to be facing an $118m bill for under-reported tax in Japan. A tiny sum for a company like Apple, especially compared to the $14.5bn in Europe, but a worrying indicator for investors, that traditional levels of tax payments may be over for the bit US multinational electronics firms.
In the meantime, more important events were happening this week.
The European Union announced its 5G Action Plan, and president Jean-Claude Junker set out some ambitious connectivity goals in his State of the Union address. These include promises to enable free WiFi in public spaces in every town and village in the EU states, and to achieve “full deployment” of 5G by 2025 (including railways). As an interim goal, it repeated the goal of having commercial 5G in at least one town or city per EU country by 2020.
This will only be possible if other EC plans come to fruition, including planned reforms to spectrum policy and the Electronic Communications Code. Junker said: “The Commission is proposing a reform for our European telecommunications markets. We want to create a new legal framework that attracts and enables investments in connectivity. Businesses should be able to plan their investments in Europe for the next 20 years. Because if we invest in new networks and services, that is at least 1.3m new jobs over the next decade.”
More near term excitement for European users came with the first launch of the Amazon Echo, with its Alexa AI-enabled digital assistant, across the pond. This is potentially more significant than new iPhone or Galaxy models going on sale – Echo has been a surprise success in the US, and more importantly, sees Amazon bouncing back from its smartphone failure to steal a march on Apple and Google in the smart home hub space, which will drive an important new area of digital consumption.
The big event this week was giant broadcasting show IBC, at which virtual reality was an important theme, on mobile devices as well as TVs. The convergence of different screens, as users watch video on many devices, is also creating new opportunities for mobile network vendors.
Nokia had a high profile at IBC, launching an “industry-first” predictive optimization service which simulates network conditions under heavy traffic from video or mobile gaming. The Finnish firm is targeting traditional MNO customers which are expanding into quad play services, and hoping to extend its reach with IPTV and cable providers with a set of IP video packages designed to smooth migration to next generation platforms.
These are the sort of trends which will drive 5G in the first instance, before its true promise in virtualization and the Internet of Things starts to be fulfilled (probably by a new set of providers). The EU, like the MNOs and the wireless establishment, is focusing in the short term on traditional mobile and fixed broadband enhancement, as a driver of social change and economic growth.