Unpacking the Week’s News: Friday, February 24, 2017

Skype Lite is Reminiscent of Nokia’s Creativity in Emerging Markets – by Carolina Milanesi

During the Future Decoded event held in Mumbai, Microsoft CEO Satya Nadella announced Skype Lite. This is a lighter, more data friendly version of the video calling app only available in India. Designed to work well on 2G networks, Skype Lite will support Aadhaar integration in the summer. If you are not familiar with Asdhaar, it is a 12 digit unique-identity number issued to an Indian resident based on their biometric and demographic data. The data is collected by “Unique Identification Authority of India (UIDAI)”, a central government agency and stored in a central database. The integration with Skype Lite will allow users to identify unknown callers.

Skype Lite is just 13MB in size but it is in no way a dumbed down version of the original app. Microsoft actually customized it so it still offers all the functions of the main app and supports seven Indian languages — Gujarati, Bengali, Hindi, Marathi, Tamil, Telugu, and Urdu. Interestingly, it will also let users integrate their regular mobile calling and SMS’ into the Skype Lite inbox. This will make it easier for users to manage their exchanges with callers as they have them all in one place. The Skype Lite inbox also moves promotional messages into a separate tab which helps with keeping only what matters, especially as promotional messages seem to be a serious problem in India. Skype Lite also supports businesses that can use it to communicate with customers.

Why did Microsoft bother with all of this? Consumers in India spend, on average, about three hours of every day on their mobile phone. Their phone is also their preferred device to connect to the internet. 84% of Indian consumers use their phone to go online. When it comes to social media, Indian consumers are avid users. On average, 72% use Facebook Messenger in a month, 84% use WhatsApp, 63% use Twitter and 66% use LinkedIn. When looking at apps used on mobile phones over a month average, WhatsApp leads with 84% followed by Facebook at 81%, YouTube at 78% and Facebook Messenger at 67%. Skype ranks 8th at 38% surprisingly coming before WeChat and Snapchat at 36% and 35% respectively.

Allowing for Skype to run on more affordable devices will help widen the opportunity pool and improve the user experience. Microsoft’s brand and its franchises like Office, Skype, Windows, and even Windows Mobile have high loyalty and strong brand awareness in India. With the Nokia brand re-entering the market through HMD phones running Android, I would not be surprised to see Microsoft pre-loading Skype Lite on those devices. India is not currently a priority for HMD as China is the first market they are moving into. The Nokia brand in India is still very much loved and as is Android which has the highest penetration. I very much doubt HMD will pass on trying to penetrate that market. Considering the current relationship between HMD and Microsoft, a pre-load deal does not seem too far-fetched.

Qualcomm and Intel Unveil Gigabit Cellular Modems – by Jan Dawson

Qualcomm and Intel this week both unveiled new cellular modems theoretically capable of delivering gigabit speeds to smartphones. Intel announced its 7560 modem, which not only adds LTE Category 16/13 capability for faster speeds but also supports both GSM and CDMA technologies, unlike the modem it provided for last year’s iPhones. Qualcomm, meanwhile, already had a LTE Category 16/13 modem in the market in the form of its X16 modem which is part of its Snapdragon 835 chipset. Also this week, they announced the X20 modem, which supports Category 18 and even higher speeds.

There have been lots of headlines about these gigabit modems and it’s worth unpacking those a little. On the one hand, the focus has been on gigabit speeds, as if we’re likely to see these show up on our phones any day now. But, of course, the reality is these are theoretical peak throughputs and not the actual speeds users are ever likely to see in everyday usage. Just look at today’s real-world LTE speeds in the US and many other markets, which tend to top out at around 10-15Mbit/s most of the time even though the underlying technology is supposed to deliver 100Mbit/s plus. In the early days of Verizon’s LTE network, you did indeed see speeds approaching 100Mbit/s but that was because no one was using those networks, apart from a handful of early adopters. As networks have filled up, average speeds have come down, so real-world speeds are a fraction of the advertised ones.

In other words, we shouldn’t get too excited about gigabit speeds just yet. Obviously, these modems have to make their way into phones but wireless carriers also need to enable the equivalent technology in their base stations and, even then, real-world speeds will again be a fraction of the advertised ones. Yes, speeds will get faster, but not by nearly as much as the breathless headlines would indicate.

The other idea I’ve seen floating around is that, with Intel now supporting CDMA in addition to GSM, its modems could now be used in all of this year’s iPhones, rather than just a subset as was the case this past year. It assumes Apple wants to shift its entire modem supply to a single vendor. Given the contentious nature of Apple’s current relationship with Qualcomm, there is some logic to diversifying but that relationship also highlights the dangers of single sourcing from a powerful company. I would guess Apple would be reluctant to jump straight from one single-sourcing relationship into another. It was also clear from testing of the iPhone 7 models that Intel’s modems were actually somewhat inferior to Qualcomm’s. If the purpose of dual-sourcing was to provide a hedge and exert some pressure on Qualcomm, it was a price worth paying but performance suffered a little. It would be quite the risk (and potential downside in performance) for Apple to go all-in on Intel modems, even if Intel was capable of ramping performance that quickly.

To be sure, Intel’s advances in modems do give Apple and other vendors more options and we could well see some market share gains at Qualcomm’s expense over the next couple of years. But no one should be under any illusions we’re all going to be seeing gigabit connections on our smartphones anytime soon or that very many of those smartphones will be running Intel chips. This is still Qualcomm’s market to lose and it’s not going to give it up without a fight.

Google may be Creating a Custom Chipset Spec for ChromeOS – Ben Bajarin

This report from the Verge struck me as quite interesting. It outlines Google’s work with Chinese chipset maker Rockchip and suggests some elements of custom tuning of the chipset specific to parts of ChromeOS. While the move to work with Rockchip is a little suspect considering the options out there to customize a SoC around ChromeOS, it is an interesting first move. My read on this is in line with something I have been hearing for a while — Google wants to get more hands-on with the chipset design process for things that give them specific advantages. TensorFlow’s custom ASIC is a good example but I can see Google working with a chipset provider like Rockchip to begin the process of eventually designing their own chip for Android and ChromeOS and make, or strongly recommend, their partners use these custom designs in order to yield the best performance and experience around their software and services.

AMD Launches Ryzen CPU – by By Bob O’Donnell

Semiconductor stalwart AMD took the wraps off their hotly anticipated new desktop CPU chips, the Ryzen 7 at an event in San Francisco this week. After having unveiled the completely redesigned Zen core architecture at the heart of Ryzen back in 2015 and the new Ryzen branding of the finished chips in December of 2016, there’s been a huge degree of build-up and curiosity among tech enthusiasts and PC OEMs about the new parts. Though a complete range of benchmark tests won’t be available until the chip line’s official on sale date of March 2, early indications are that the anticipation was well-warranted. To put it succinctly, after about a decade of completely ceding CPU performance to rival Intel, AMD is back in the game.

AMD’s new design goal for the Zen core was to deliver a 40% improvement in instructions per clock—a key indicator of CPU performance—versus the company’s previous design. In fact, they exceeded that goal and claimed 52% improvements. More importantly, in a few competitive benchmarks against roughly comparable, but more expensive, alternatives from Intel, AMD claimed to beat the long-time CPU leader—something they haven’t been able to do in a very long time. Admittedly, the choice of benchmarks can be controversial and no doubt there will be some who question the results. Regardless of what the final specific numbers turn out to be, however, what these early results clearly suggest is the performance battle is back on.

For the PC industry, overall, this revived competition can be nothing but good. Intel will undoubtedly react in some way to these announcements, either with price cuts or other new parts of their own. As a result, PC vendors will be able to offer a wider range of systems, with better price/performance ratios than we’ve seen in a while. That, in turn, should inspire some respectable consumer PC sales.

Of course, this first release of Ryzen is only for desktop PCs (mobile parts for notebooks and server-focused parts are expected later this year) and consumer desktops have suffered fairly steep declines over the past few years. But within the struggling desktop PC market, there are some rays of hope: PC gaming is enjoying renewed growth, driven in part by the enormous interest in eSports, and VR-capable PCs are essential for the growing market in virtual reality headsets. In addition, for the small but very influential group of hardcore PC performance enthusiasts, a renewed battle between AMD and Intel will likely drive a robust refresh cycle.

The launch of a single line of CPUs can’t reverse the PC industry’s fortunes on its own but the renewed vigor and excitement the Ryzen launch brings with it should help all its varied participants.