News You Might Have Missed: Week of August 24, 2018

Apple removes Facebook’s VPN app Onavo

Apple officials told Facebook last week that Onavo violated the company’s rules on data collection by developers, and suggested last Thursday that Facebook voluntarily remove the app. Facebook said in a statement that it’s transparent with Onavo users: “We’ve always been clear when people download Onavo about the information that is collected and how it is used,” the company said. “As a developer on Apple’s platform, we follow the rules they’ve put in place.”

Via CNBC

• Onavo is a free VPN app. So I am sure most users never went ahead to read the fine print around Onavo sharing information with Facebook on how the users use their phones beyond the Facebook app. they actually thought they were using an app to protect themselves to expose themselves!
• Onavo has been in the app store for a long time and some have criticized how long it took Apple to take the app down. What is different, however, is the change Apple made to app data collection in June when developers were asked to add the ability for users to grant or deny permission to such data harvesting
• Clearly this is another blow for Facebook at two different levels:
  • The lack of transparency about data collection
  • The fact that they were gathering data on how users used apps and websites to gain a competitive advantage
• Similar to the Cambridge Analytica case, users are frustrated with Facebook bending and breaking rules for a business gain. Had the app was gathering information to improve the experience or the service, sentiment would have been different. While of course, it would still infringe on Apple’s new code of conduct and would have still ended up out of the store users would not have had as much reason to be upset with Facebook.
• In very different ways both Facebook and Twitter are letting users down because of what seems a weak set of corporate values. A set of values that have been chosen to further the business at the expense of its customers and one that more and more users are finding questionable.
• Some of the problems Facebook is facing, like hacks and fake news are to some extent out of their control. What is up to them is, of course, finding a way to improve things. But in cases like Cambridge Analytica and Onavo someone somewhere made the business decision that it was OK to use users data.
• Let me be clear, you might find it to be a subtle difference but I think there is actually a big difference between using my data to better target ads than to use my data to stay ahead of the competition by coming up with a new product or feature based on spying on what I do with my phone.
• Technology, AI, more dedicated staff, they all can solve fake news and harassment, eventually, but only stronger ethics will avoid another Onavo and Cambridge Analytica.

5G Licensing Prices

This week, Nokia set its 5G licensing rate at €3 flat rate. This contrasts with Ericsson, which has a sliding scale of $2.50 to $5 per 5G device, depending on the handset’s price. And it’s considerably lower than Qualcomm, which plans to license its 5G patents at 2.275 percent of a single-mode 5G handset’s wholesale price, or 3.25 percent of a multi-mode 5G handset’s price, capped at $400. That would be $13 in 5G licensing fees for Qualcomm alone, bringing the total royalty fees for just these three companies to over $21 per device — that’s before paying royalties to other essential 5G patent holders such as Samsung and Huawei. By publicly disclosing its 5G patent fees — and keeping them low — Nokia is dramatically reducing the chances of future licensing turbulence. Huawei remains the only big player yet to set a price.

Via Venturebeat 

• Nokia said the $3 is limited to phones and they retain the right to charge differently for other categories of devices. Clearly with the big talk of IoT and 5G there is a much bigger opportunity outside of phones. From smart cities to cars, everything could have a 5G modem, but the cost of the devices using such modem will vary greatly which is why Nokia is not using a totally blanket approach.
• I would think, Huawei might want to keep its licensing competitive to possibly open up some opportunity. This might be particularly helpful in the US market.
• Linked to these prices, there were a few speculations that cost was the main reason why Apple would not have 5G in the upcoming set of devices. And of course, the current Qualcomm litigation would have played a role in the decision.
• However, rather than the cost itself it would be appropriate to look at the return Apple would get from integrating 5G technology so early in the day.
• Often Apple is criticized for not adopting technology early in its life cycle, but this is not quite correct. If you look at decisions such as the removal of the audio jack, the adoption of USB-C and FaceID they are all examples of Apple making an early move.
• What Apple does not do is to deploy a technology or a feature that is either not stable enough and it will likely impact usability or consumers will have minimal return from it.
• 5G falls squarely in these two categories, By 2019, 5G networks availability will be very limited and consumers are yet to understand what the value of 5G will actually be. Hence, adding $20 on the Bill of Materials is unjustified.
• Of course, if you are in the network business as well as in the smartphone business having early 5G devices help your case for network deployments which is why we will see Huawei and Samsung move early.
• Also, brands who are still heavily dependent on carriers for their distribution and marketing budget might launch early 5G devices in collaboration with the carriers to support them more than boost sales. The recent Motorola 5G Mod with Verizon is a good example of that.
• If the 3G rollout has anything to teach us, Apple is unlikely to suffer from this move. You might remember that when the first iPhone launched on EDGE, market leader at the time, Nokia already had WCDMA phones in the market.