The rollercoaster world of communications and technology is never boring. The latest big deal, in which Google has made an offer to buy Motorola Mobility for the huge sum of US$12.5 billion in cash, underlines this. Eric Schmidt, the previous CEO and now executive chairman of Google, clearly indicated in his Barcelona World Mobile Congress keynote address in 2010 that mobile is where Google sees the future. He assured the industry that Google would put increasing resources into the Android ecosystem, and continue with the optimising of Google for mobility. Coincidentally, at the same event there was much talk of the decline of Motorola as a mobile phone manufacturer. Who would have thought that just over 18 months later Google would make the bold move of actually buying a hardware manufacturer, and that that manufacturer would be Motorola. Motorola has been a pioneer in the mobile space for more than 80 years. Motorola created the world’s first portable cellular phone, amongst other groundbreaking technology based inventions. Motorola’s mobile dominance came to an abrupt end after its best-selling RAZR phone lacked a successor: this was partially due its lack of foresight, and upheavals in the smartphone industry which Nokia had dominated with Symbian, and by Apple’s introduction of the iPhone in 2007. By 2011 Motorola mobility was spun off and reorganised into a separate division, with all mobile products as well as, crucially, all the home IP based video products – two way radio products included. Motorola had already put all its eggs into the Android basket in 2010; this was seen as a major turnaround strategy. Motorola managed, through its production prowess and deep understanding of the mobile market, to launch 23 Android based smartphones globally. As a result, Motorola based Android phones succeeded in taking a huge chunk of new smartphone sales in the USA. The turnaround seems to be working. Ironically, it was probably the above success that motivated Google to approach Motorola with a view to buying the Mobility division. The implications and effects of this acquisition will be long felt in the mobile world. Android has become the fastest growing and in fact the dominant smartphone platform globally. A large number of manufactures, developers, and operators have thrown their weight behind a platform. Android has proven to be innovative and cost effective, as well as an effective competitor to BlackBerry and the iPhone. It may seem that the purchase of Motorola by Google came out of the blue, but there were plenty of warning signs. The first and biggest of these was the increasingly acrimonious patent wars that recently erupted between Apple and Google – not to mention Microsoft and Nokia. At present it is difficult to figure out who is suing who in this industry. As the smartphone market developed and evolved, the big ecosystems from Google, Microsoft, BlackBerry, and Apple were going to war, on all levels. The patent issues were playing out in a big way – and will continue to do so – and the nominally free platform, Android, was the most vulnerable. Google in purchasing Motorola has in one fell swoop rectified a major vulnerability in its armour, which was the patent arena. This was a critical reason – but by no means the only one – for Google to acquire Motorola. The patents that Google will acquire from Motorola cover everything to do with mobile communications, including a patent on the actual mobile phone. In one acquisition, Google will increase its war chest of patents from around 3,000 to over 20,000, putting Google on the same footing in this respect as the other mobile heavyweights such as Nokia. Motorola also has substantial blocking patents around the actual GSM system, which are vital in any mobile ecosystem. These patent assets will prove vital in the defence not only of partners such as HTC, who are being sued currently by Apple, but also for Google and Android itself. Android had been built in part by borrowing heavily from Java, and incorporating lots of nominally free open source GPL licensed code – some of which Microsoft has long contented breached their deep patent portfolio. As an open source platform, Android was particularly vulnerable. It is clear than a real motivation for the purchase was to rectify a shaky and deficient IP strategy on Google’s part which was threatening to undermine five successful years of hard work on Android. Apart from simply buying some insurance in terms of patent rights, Google will also acquire the huge resource of Motorola skills and expertise, thus bringing enormous maturity and depth to the Android team. This will benefit the entire Android ecosystem, and enhance the Android product for all its partners going forward. Of great importance is that the recent Microsoft and Nokia tie-up over Windows Phone 7 had very similar goals. The strength that Google now has in patents also has one final but fundamental implication. Android as a platform is offered free of charge by Google and under an open source licence. Google has realised that fragmentation and lack of standards will ultimately fundamentally threaten the Android business case. Fragmentation and lack of consistency is something that Microsoft learned to its detriment a long time ago, and is also something that Apple deeply understands. The new arrangement will allow Google to extend a type of insurance policy over its product, but will in all probability only offer this to standards and software compliant partners. This level of insurance and security from patent wars will make it untenable for these manufactures to bypass Google certification of their offerings. Certification and standards compliance will immeasurably benefit users of the platform by guaranteeing consistency and software and hardware functionality. Another motivation for the purchase of Motorola by Google is that despite the huge growth of Android globally and in fact the dominance of Android in the smartphone market, Apple remains number one with essentially only one device. Apple has complete control of the ecosystem from hardware to services down to the actual device. The benefit of Apple’s tight integration on the iPhone, iPad, and iTunes is unrivalled user experience and a very clearly defined approach to the market. Google on the other hand is still trying to get OEMs such as HTC to update their early and even some current devices from older and essentially obsolete versions of Android. The effect of this operating system fragmentation is poor support of applications in the market and a very poorly defined user experience. Application developers also lament the complexity of developing for Android due to these factors. Essentially Google has to change its business model substantially, in order to become what has been called an “Experience Licensing” business with the Android platform, as opposed to simply a software vendor. The Motorola acquisition will help them do this. The current rampant growth of Android has been largely as a result of low price commodity devices being sold in huge quantities around the globe. The Motorola experience in North America with the operator based flagship Droid devices has indicated another option. Google needs to offer a top level or Premier style device to the market – partly to counter fragmentation and partly to fight off the Apple and Nokia threats at the high end of the market. Motorola already operates at this end of the market and its experience and operator relationships will help Android and by extension Google immeasurably in this regard. There will be two immediate benefits for Google. The first will be that these Premier devices will allow Google to compete with Apple and Nokia when dealing with the various operators around the globe. These devices will offer cutting edge features not available on other lower end devices and will also be offered exclusively to operators. Apple, Nokia, and other manufacturers such as Samsung, have built very good relationships directly with operators where Google had none. Google’s various licensees, such as HTC and Samsung, owned that particular relationship. Motorola historically has exceptional operator insight and relationships, which it will bring to the party. One other factor that sweetened the deal for Google in the purchase of Motorola was the home video Internet based product. This aspect of Motorola’s business is little known outside of North America but is in fact a significant player in the Video over IP market. Motorola manufactures set top boxes and devices for multiple vendors in the United States. Google on the other hand, through the Google TV initiative, has been trying to popularise its internet TV software platform. Google has not had much traction from hardware vendors so far in this competitive and challenging market. One aspect for this lacklustre performance was the shortage of blockbuster content as well as poorly defined inked DRM and content security. Apple TV, via iTunes and even Amazon, has been playing here with some success. Motorola’s experience and technology will give Google a huge boost in this emerging but significant market. The indications are that the Android platform and the Google TV platform will become one and the same, and this acquisition will have the effect of boosting both businesses. Google now has the ability to control both the hardware and software aspects of the offering and judging by Apple’s success in this regard, that will be no bad thing. The combination of Google and Motorola will fundamentally shift the technology landscape. The most immediate effect will be on the mobile device ecosystem, with cutting edge Motorola based devices coming thick and fast, along with similar products based on Android from other manufacturers. All this at the same time that Microsoft launches with Windows Phone 7 Mango, and Apple, with the iPhone and iOS 5, is charging into the market. Whatever the reasons, the acquisition of Motorola by Google may prove to be a step shift in the technology industry, solidifying the Android ecosystem and making Google a significant and perhaps dominant force in the high tech world we live in. AT The second key benefit to Android will be that Google will be able to lead and essentially dominate the relationship with its licensees and OEM manufacturers, without giving any special privileges or knowledge to any one of them. The Premier high end products will be priced and positioned to allow brief dominance, before the new technology and features trickle down to other companies. One other factor that sweetened the deal for Google in the purchase of Motorola was the home video Internet based product. This aspect of Motorola’s business is little known outside of North America but is in fact a significant player in the Video over IP market. Motorola manufactures set top boxes and devices for multiple vendors in the United States. Google on the other hand, through the Google TV initiative, has been trying to popularise its internet TV software platform. Google has not had much traction from hardware vendors so far in this competitive and challenging market. One aspect for this lacklustre performance was the shortage of blockbuster content as well as poorly defined inked DRM and content security. Apple TV, via iTunes and even Amazon, has been playing here with some success. Motorola’s experience and technology will give Google a huge boost in this emerging but significant market. The indications are that the Android platform and the Google TV platform will become one and the same, and this acquisition will have the effect of boosting both businesses. Google now has the ability to control both the hardware and software aspects of the offering and judging by Apple’s success in this regard, that will be no bad thing. The combination of Google and Motorola will fundamentally shift the technology landscape. The most immediate effect will be on the mobile device ecosystem, with cutting edge Motorola based devices coming thick and fast, along with similar products based on Android from other manufacturers. All this at the same time that Microsoft launches with Windows Phone 7 Mango, and Apple, with the iPhone and iOS 5, is charging into the market. Whatever the reasons, the acquisition of Motorola by Google may prove to be a step shift in the technology industry, solidifying the Android ecosystem and making Google a significant and perhaps dominant force in the high tech world we live in.

A brand new offering by Google shrinks the global village and redefines networking.

After reading the considerable hype online about the much touted Google Wave, Africa Telecoms took the time to watch the ‘Loooong Video’ (and yes it is long 1hr20min to be exact), presented by Google to highlight its groundbreaking Google Wave. To our considerable surprise, our reaction was one of huge excitement and awe at what Google was proposing. However with Google Wave not being in operation in Africa the only experience has been in watching the video posted on You Tube. This video was presented by Lars Rasmussen who, with his brother Jens Rasmussen, founded a ‘small’ startup Where 2 Technologies, which was acquired by Google in 2004, now known as Google Maps. Lars explains the many uses of Google Wave, from conventional e-mail type messaging to IM (in the same wave dependant on whether the recipient is online or not), to blogging, to video sharing, to collaborative document editing. And all this takes place on the same Wave. To find a definition of a Wave is fairly difficult as the technology is still in development and state of the art. In fact, we have never seen anything like it before. However, Lars Rasmussen sums it up best at the beginning of his video presentation asking ‘If one was to design E-mail today how would it function and what would it look like’ and this has been done to include some of our favourite social networking and informational tools. It is truly an amazing technology with apps fondly named Mappy (Google Maps for Waves), Bloggy (A Blogging App – that updates your blogs in real time character by character as you type), Tweety (Clearly a collaboration with Twitter to include your Tweets to your Wave) and our favourite Rosy. Rosy is an amazing IM and e-mail tool whereby as you type in your messages or e-mails, they are immediately translated into any one of 40 languages. And this can be done in real time while having an IM chat with someone from another country speaking a foreign language. With these kinds of apps and collaborative tools, the Global Village is truly shrinking. The possibility of allowing collaborations across geographical and linguistic boundaries is mind-boggling. For instance, individuals in Cairo, New York, Cape Town and Shanghai, can all work and share a single document in real time in their own home language, with all Wave participants being able to understand one another with the aid of Rosy. With this the final word from the Africa Telecoms team for 2009, and moving into the next decade of the 21st century, we find it difficult to put this topic to bed, but as the last word for this decade, we as a team are excited about the future of Telecoms in Africa. And we do look forward to Waving at colleagues, collaborators and friends across Africa with Google.

In the Hitchhikers Guide to the Galaxy, the Sirius Cybernetics Corporation Complaints Department had as its slogan “SHARE AND ENJOY.” Now this would be a great slogan for a company that made products that could in fact be shared and enjoyed, but in the case of Sirius Cybernetics Corporation (SCC), this was patently not the case. All their products were inherently flawed. Ironically, this is the future for mobile communications with the development of 4G networks. No true 4G network has yet been implemented anywhere. Yet, this does not stop us from wondering what to expect from the next evolution of mobile and fixed technologies. The main aspect of 4G that will be important to bear in mind is that it will allow anywhere, anytime connectivity that genuinely allows us to share and enjoy. The implications of this are both fascinating and frightening. The era of Peer-to-Peer connectivity will finally be fully realized and it will herald the era of Machine-to-Machine communication and connectivity. It will be the age of connected things. For the first time, the general consumer will begin to notice every day machines and appliances coming to life and becoming extensions of us as individuals and communities. 4G devices will be embedded into everything from the cars we drive to the fridges in our homes, and surely everything in between. With Google’s recent announcement of its automated car, the company stated that “Our goal is to help prevent traffic accidents, free up people's time and reduce carbon emissions by fundamentally changing car use." The landscape of the science fiction novel is becoming ever more real. It might not be quite a dystopian reality where machines govern our existence, but a future where our washing machines, fridges and microwaves can talk to us, keep us company and give us advice is not far off. A typical morning could go as follows: House (with a posh English accent): “Good Morning Sir/ Madam, and what are we in the mood for this morning? Tea, Coffee, or a spot of orange juice? Surely not that nasty shake again?” House: “Shall I instruct the shower to start running?” Computer/TV (with a US accent): “Mornin’. Would you care to hear today's headlines?” Kitchen (with a French accent): “Your Alfalfa Goji berry soya high proteen meelk smoozie is ready” Phone (SMS) reminder: “Out of soya high protein milk” Phone (SMS) reminder: “Special Bogof (1.99) on high protein soy milk at your local Supersavers. Offer valid until 30/09/2020. Kitchen: “ Les croissants. Zay are magnifique.” House: ““Traffic reports suggest that an accident is causing severe delays, it will be advisable to consider an alternate route to work this morning” House: “Your vehicle has undertaken its daily checks and all systems are in order. Camera number 2 will need a service soon.” Cupboard (with an Italian accent): “Bon Journo, the weather eez not so bootifool today. Your mama, she say you must a dress warm today.” And so it goes on. But there is little doubt that we are on the cusp of the next evolution of the telecoms revolution. Don't Panic.

SHARE AND ENJOY

AUGMENTING OUR WORLD

One gadget I really would love is a pair of specs that cunningly displays information about the person I’m looking at. So I can shake hands with enthusiasm while I’m reading a little note in the corner of my eye that says ‘Robert Ndlovu, works at IBM. Last met at a conference in Cape Town.’ “Robert,” I’d cry, “It’s been ages - how’s IBM treating you?” Which is a vast improvement on my usual blank look that means someone I’ve met a dozen times still has to remind me of their name. Actually I hate wearing specs, so if that name and face recognition technology could project the information onto my contact lens, that would be ideal. It should happen – eventually - but probably not until I’m retired and can blame my bad memory on age, not carelessness. Incalculable amounts of money and brainpower are being poured into devising such ways to marry the real world with computer-generated information. To supplement the things we see with Augmented Reality (AR) to tell us things we might like to know about them. Several AR applications have already been devised for cellphones, so you can hold the phone’s camera up to a building, for example, and read about its history. It won’t be long before you can do the same with a person, and see their name and salient details hovering over their head when you view them through your cellphone’s camera. But that’s so unsubtle that I’d rather just admit to a memory lapse than pull out my phone and pretend I want to take their photo. 

DEFINING AUGMENTING REALITY

AR is one of those fascinating technologies that has been bubbling around for years, and will probably remain bubbling for several years to come. So far there are no compelling applications, the equipment is still clunky, and it’s far too early to estimate whether consumers will actually be interested in the results. In other words, it could become a technology for technology’s sake. Just like the much-hyped ability to watch movies on your cellphone, which occasionally happens, but only in relatively isolated islands of geekiness. The strength of AR is its ability to bring masses of stored data to your instant attention, by superimposing relevant text, graphics, sounds and even smells on top of your view of the real world. Not surprisingly, the military were among its pioneers, to give soldiers crucial information about their surroundings and enemy movements in the area. One commercial niche where it could certainly have a place is in tourism, since you often walk around wearing a headset in museums, art galleries or city centres listening to a commentary about what you’re seeing. If the headset was adapted to feature a display screen that shows text too, or perhaps overlays the ruins in front of you with a splendid scene of how they used to look, then AR could fly.

LOCATION BASED TECHNOLOGIES

Cellphone users can already use location-based technologies to indicate where they are, and that information is shared with others via the internet so friends can locate them, or marketers can send locationspecific offers. As this merges with AR, subscribers could access increasing amounts of data to tell them about their surroundings. Perhaps text from Wikipedia could be displayed on top of the real images you admire through your camera phone on a walking tour, telling you about the area you’re exploring. Images of how the area looked decades ago could be overlaid, or by clicking an icon you could hear some relevant audio. If advertisers got in on the act, a nearby restaurant could pop up with an icon offering you discount.

SOME REAL-WORLD APPLICATIONS

So far the cash-flush gaming world is leading AR developments, but its uses could extend to interactive marketing, education, and “how-to” applications. Probably the best-known examples so far are in sport, with yellow ‘first down’ lines drawn virtually across the pitch in TV broadcasts of American Football. Or the advertisements that appear to be painted onto rugby and cricket pitches by their sponsors when you watch a match on TV. Technology company Qualcomm’s global research and development teams are beavering away with complex computer vision algorithms, computer graphics, tracking and image detection at a new research centre in Austria devoted to the development of AR. The research will build on intellectual property acquired from Imagination Computer Services, a developer of computer vision and AR technology for mobile devices. “As part of our efforts to bring augmented reality to market, Qualcomm has been continually enhancing the capabilities of mobile devices with highspeed connectivity, powerful applications and graphics processors, GPS, cameras and other sensors,” said CEO Paul Jacobs. The acquisition of Imagination’s technology and the new research centre would accelerate this vision to make mobile devices “the remote control for your life,” both in the physical and digital worlds, he said. In June Qualcomm also joined forces with the Georgia Institute of Technology to establish an Augmented Reality Game Studio to pioneer advancements in mobile gaming and interactive media. The university’s Augmented Environments Lab has been researching ways to enhance a user’s senses by creating interactive computing environments for more than 12 years. “Powerful processors and sophisticated graphics engines in today’s mobile devices have only recently reached the point where they can meet the computing requirements for augmented reality,” said Lab Director Blair MacIntyre. “By collaborating with Qualcomm, we’ll have access to both the high-end hardware and core augmented reality technology that will enable us to push the envelope in game development.” AR technology in gaming and military applications on computers has been around for years, but has only recently begun moving onto handheld devices thanks to their increasing sophistication, faster wireless broadband networks, and new and cheaper chip developments. Yet much more experimentation and innovation is needed before any large-scale consumer services actually hit the market. Once they do, said Mark Donovan, a senior analyst at ComScore, we will go from telling applications where we are to applications that tell us about the world around us. We are getting there, slowly. A company called PresseLite has developed a Paris Subway application that uses AR to display information about local businesses when you look at the city through an iPhone camera. Acrossair has developed a similar application for New York’s subway system. If you hold up your phone and look through the camera, the screen will show where the closest subway is, and point toward nearby tourist attractions too. Even so, AR is still little more than a novelty. But as handheld devices and software get cheaper, more sophisticated and more powerful, the level of information they can access and display will increase. It’s just that the way they do it isn’t too convincing yet.

MACHINE-LED FUTURE

In an interview for The Naked Scientist, Tom Drummond, a senior lecturer at the Machine Intelligence Laboratory at Cambridge University, said AR was about taking computer graphics off the computer screen and making them available over the real world. Since the real world doesn’t have a computer display capability, you need to display those graphics by some other means. Some applications use a clunky headset, which is ok for pilots needing to see vital data about the landscape they’re viewing, but a bit daft if you’re walking down the street merely admiring the architecture. The advantage of Head Mounted Displays, the developers say, is the immersive experience for the user. “When you're looking at the world, the computer graphics are right there in front of your eye,” Drummond said. “So there’s a very strong connection between the virtual elements and the real elements. But there are some negative consequences as well. It’s very difficult to build these systems without latency in them. So when you move your head, the computer graphics might follow a tenth of a second later. Unfortunately, one of the consequences is that it can make people feel motion sickness and it can be very unpleasant to use.” Headsets are also very expensive and cumbersome and get between you and the real world they are trying to enhance. Far more likely to succeed are small, handheld computing devices with a display that uses see-through video techniques to overlay graphical information onto the real-world image. AR on a smart phone is like holding up a magic spy glass to learn something new about what you're looking at, Drummond said. “If there’s some latency and the picture takes a tenth of a second to catch up as you move it, nobody really minds because it’s not directly affecting what you're seeing and conflicting with what your inner ear is telling you.” Applications are already available for iPhones and Google Android phones that use GPS to pinpoint your location and an internal compass to work out which direction the device is pointing in. Then it displays computer graphics like “this is Table Mountain” over the image in the viewfinder. These applications will become very popular, Drummond believes, justifying the huge effort going into shrinking the algorithms down to run in the computer capacity of a cellphone. A third technique being developed is Spatial Augmented Reality (SAR), using digital projectors to display graphical information on physical objects. SAR is a system that can be used for mass audiences, since the displays are not related to devices for individual users. The results can also be larger and more impressive, since an SAR system can display information on several surfaces at once, instead of requiring users to squint at a tiny screen.

MARKETING THE FUTURE

Marketers have already started to use AR to promote their products. At the LA Auto Show in 2008, Nissan unveiled its concept vehicle Cube and gave visitors a brochure. When they held it against a webcam the page showed several versions of the vehicle. But who wants to hold a magazine up to a webcam just for the novelty of reading information they can live without? A more practical use is the possibility of giving people additional information to help them with a complex task such as assembling or maintaining components, or even performing surgery. Details about different engine parts could be displayed for a mechanic – or even a layman – holding their cellphone over the steaming, wheezing engine in his car. In medicine, a doctor performing keyhole surgery could wear a head visor to see images from probes or ultrasounds happening in real-time on the patient. One crucial component of an AR system is a tracking system to pinpoint the user’s location and track their hand or eye movements. The complexities of confirming their overall location and their movements so the graphics display correctly are a major hurdle in developing successful systems. To be effective, AR has to be almost instantaneous. Any time lag or mismatch between the graphics and the actual scene is disorientating. The data needs to be refreshed quickly too as you shift the device to focus on a different view. One day AR displays could look like ordinary glasses, with graphics appearing in your field of vision and audio playing in your ear. Which still sounds awfully disorientating. Imagine walking into a lamppost because you’re concentrating on the text telling you the history of the street you’re in. The technology may eventually become foolproof, but we foolish mortals may need educating in how to use it.

CUTTING THE EDGE

It’s still very much theoretical rather than practical at the moment, however, but it’s edging closer. Developers from MIT’s Media Lab first demonstrated their AR system called SixthSense in 2009. It combines a camera, mirror, small projector and a smartphone in a device that the user hangs around his neck. He uses the camera and mirror to view the surrounding world and that image is fed to the phone, which processes the image, gathers GPS coordinates and pulls data from the internet. The projector then displays the resulting data onto any surface in front of the user, whether it’s their wrist or a wall. Because the camera is on his chest, SixthSense will augment whatever he is looking at. So if he looks at a car, it could call up its specs, pricing and motoring reviews. He can interact with the projected information too, with the camera and phone picking up and processing those actions. With the car, for example, he can use his fingers to tap on projected links to receive more details. Equally exciting is a prototype application unveiled at the Mobile World Congress in Barcelona which is focusing on the personal touch. Its Swedish developers at The Astonishing Tribe call it Augmented ID, and it works by calling up personal details about somebody when you point a cellphone camera at them. The software trawls the internet for details including their Facebook page and Twitter name and display them around their head. The application was voted one of the most innovative and promising worldwide initiatives of 2009 by the Netexplorateur jury. And it’s basically the first step towards those specs – or contact lens – with the built-in face and name recognition software that I so desperately need.

USING AR FOR EDUCATION

Educause, a non-profit association that advances higher education through the intelligent use of IT, believes AR is promising because it can add contextual data to deepen a student’s understanding of the world and its contents. Its website at www.educause.edu/eli suggests that in a technical course on PC maintenance, AR could overlay a schematic diagram onto the inside of a computer to identify the various components and access technical specifications about them. Augmented reality blurs the line between the reality the user is experiencing and the appropriate and timely content provided by technology, Educause says. Since every object or place has a history and a context, making that content available to individuals interacting with it will provide a richer experience. By exposing students to an experiential and explorative way of learning, AR has the potential to change education so students are not simply receiving content but take an active role in gathering and processing information.

Building the Third Ecosystem

Stephen Elop, the new CEO of Nokia, has his work cut out for him. Reinventing Nokia as a smartphone manufacturer is only part of the challenge – a broader objective is in stopping Google from dominating the market.

On 21 April 2011 Nokia and Microsoft ratified the partnership that they announced in February. The Finnish cellular giant has hit an all-time low in terms of its smartphone market share with its Symbian operating system being displaced by Google’s Android that is now the leader with an estimated 33% global market share. With Microsoft in tow, it’s all eyes on Nokia’s new CEO Stephen Elop and the company’s next move that will be a Windows Phone-based device promised by the end of the year. I met with Elop in Dubai in March to discuss his strategy for re-establishing Nokia in the smartphone market and perhaps diversifying its product range. Emerging markets and new revenue streams were also put on the table – but Elop pointed to a more serious war underway in terms of mobile ecosystem providers. The agreement Elop has struck with Microsoft goes beyond Windows Phone. The two companies will also work on a new advertising platform that will make its way into Xbox LIVE, Windows Live, Bing and other Microsoft product sets. This platform will provide Nokia with a fresh revenue stream and should be music to Nokia shareholders’ ears. Nokia as a smartphone manufacturer is only part of the challenge – a broader objective is in stopping Google from dominating the market.

In with the old

The focus, however, remains on Nokia’s core business as a device manufacturer. Success in this space will depend on the company attracting developers to its platforms, and this includes existing systems. Developers I have spoken to are not convinced. They see Symbian as a dead-end street. If anything, they are looking to Windows Phone as a potential platform – but many will switch to developing for Android or iOS instead. Winning them over – or back – has to be a preoccupation for Nokia and is something Elop is fully aware of. “I think the best message for a developer to embrace, if you like, is to look closely at the strength that Nokia has, and what we bring to the market as it relates to Symbian today, and in the months and years ahead – because Symbian still has a large role to play even as we transition and focus on other things in the future,” he says. “For example, in my recent travels, which have included the Middle East and Africa, where we are today, last week in Russia and so forth, there is a wide range of markets where Nokia the brand and Symbian the platform are remarkably strong,” continues Elop. “And as we’ve described, we expect tens of millions of devices still to ship in the months and years ahead. There’s a tremendous opportunity there for developers, because when you look at the absolute scale of the operation, you say ‘wow, there’s something really there’, and so we’re definitely encouraging developers to continue with that, while also recognising that we hope to create a new opportunity around Windows Phone in the future,” he adds. Another challenge facing Nokia is how it will differentiate itself from other Windows Phone manufacturers. Services would be an obvious way to achieve this and Nokia has a powerful set of services grouped under its Ovi brand. However, the Microsoft agreement will see Nokia handing its services over for integration into Windows Phone and to the benefit of all manufacturers shipping the operating system. It seems a curious move at first, until Elop outlines his objectives. “First of all, the highest order point of differentiation that we need to focus on is Windows Phone versus Android versus Apple,” he explains. “Our number one competitor isn’t a Samsung or an HTC or whatever – it is Android. And so as we proceed in the months ahead, our expectation is that we have to take steps to ensure that the Windows Phone ecosystem is very strong and very powerful. Whether it’s us or even our competitors within Windows Phone who have access to some of the best technologies, we want to make sure that the platform holistically is very strong,” says Elop. “Now that being said, we have a number of different areas, be it in services, in hardware or in software, that can and will contribute to our efforts to ensure that we can differentiate,” he continues. “While mapping and navigation and location-based services are something that are crucial in the ecosystem, we will also make sure that we do unique and differentiated things on our devices, within that ecosystem, so that we work to stand apart from everybody else. But again, I emphasise, our principle competition is Android.”

Turning it around

Windows Phone had a less than ideal launch phase and uptake has been slow, to say the least. Last year Microsoft’s global market share in terms of smartphones was estimated at 5%. This year it has actually lost ground and dropped to 3%, according to Canalys. Elop and his colleagues at Nokia obviously think that this can be turned around. “I think there’s an opportunity to first of all differentiate on the range and quality of services that are provided within that ecosystem. For example, Microsoft brings certain properties – take the Xbox gaming environment, which in certain environments is a very powerful capability,” he says. “I think that we also bring a quality of mapping and location-based services that is better than and is differentiated from everything else, so there are elements of that. But when you look at it from a developer perspective, there’s actually a range of things you consider: does it have breadth, are there lots of people using Windows Phone devices? Well, not today – but clearly with the relationship between Nokia and Microsoft, we believe that there will quickly be tens of millions of people who are using these devices,” states Elop. “There needs to be great monetisation for the developers,” he adds. “Nokia brings operator billing with more operators in more countries and regions around the world than anyone else by far, and that we will bring to the ecosystem for general use,” he promises. “Developers need great tools; they need a solid development platform. Clearly that’s part of it already in terms of what Microsoft brings to the table. And then of course developers need the support from the vendors, such as Nokia. For example, here in Dubai today we’re asking what we can do with developers to help them build local applications and local capability,” he says. “At Ramadan, for example, there were applications supported and encouraged by Nokia, delivered by our development community, that were unique for this region at that time of the calendar. And it’s those types of things that we will do to ensure that this is a great platform for developers to target as they go forward.”

Building out

There has also been speculation that Nokia is working on a tablet device. In the past we have seen diversified products from the company, such as its Booklet 3G laptop computer. Elop sees potential for other devices in the future, but isn’t sold on tablets unless Nokia can do something wholly different with the form-factor. “We are building and contributing to this ecosystem with the belief that the opportunity is much larger than mobile phones, smartphones – however you would characterise them,” he explains. “The challenge I have for our team is to make sure that as we enter adjacent markets, that we have a unique and differentiated position. Today you can go and buy one of 150 or 180 – I’ve lost count – different tablets out there that frankly you can’t tell apart, and most of them aren’t particularly useful for much,” says Elop. “There are a couple that are very successful and we know who some of those are, at least one of them, and that’s fine. But Nokia has to look at itself – its market opportunity, the strength of its ecosystem, the geographies where it has strength – and consider what we can do that sets us apart and goes after a unique opportunity.” He continues: “We have some specific ideas, but are not announcing things there today. It’s not just about tablets – there are other devices, platforms, things that can be done, that take advantage of the ecosystem, and contribute to the ecosystem, and these are places where you may see us play in the future.” Nokia is also looking to emerging markets as a key strategy for the future. In these markets it has tried to play a more meaningful role than some of its competitors who are very good at talking the talk instead of delivering real value. I ask Elop whether Nokia has placed an emphasis on hyper-localised content that is not only designed for particular regions, but is actually developed by local developers. “You’ve just described a key element of our strategy, and that is the local aspect,” agrees Elop. “Local content, local applications and local services are hugely important to our efforts to differentiate. And indeed the strength of the Nokia brand in emerging markets and Africa and other places is largely because we have delivered more than anyone else on the promise of a great experience that makes sense within your local environment,” he adds.  “While other ecosystems and players churn out devices at a furious rate, we’re far more focused on making sure that you have a great experience that connects you. You know our overall statement about the company – ‘connecting people’ – well, that’s about connecting people with their community, with the environment in which they operate, with opportunity. That’s what Nokia is focused on. “And so, when you think about it, yes we’ll have great devices, we’ll have wonderful software and services that go with that, but to the extent that we deliver an experience that is unique and differentiated in the environment in which people are working … you’ve seen it already,” he says. “And we can go so much further with that. That’s part of the excitement that travelling around to these different regions is: you feel that, you meet people whose lives have been changed by the experience. And that’s not just about placing a phone call, or doing an SMS, it’s the whole experience.”

The next billion

Nevertheless, manufacturers still have a long way to go in terms of scaling prices for the broader market in developing economies. Nokia has managed to get its non-feature phones down to ridiculously low prices, but smartphones are still just out of reach of the average emerging market user. This is changing rapidly, however. Elop believes that affordable devices in terms of these markets is around the corner. “I think it’s much sooner than people realise. The rate at which price points can be addressed, starting at the high end and moving well down, with smartphone experiences or ‘smartphone like’ experiences even plunging below the prices [$100 mentioned in discussion], I think there’s a lot of opportunity there,” he says. “There’s work that we’ve already done to bring some elements of a ‘smartphone like’ experience to very inexpensive handsets. The thing that I keep in mind, and this is particularly true in a region like Africa, is that today 80% of the world’s population is within cell phone signal range,” continues Elop. “They’re close enough to a tower, and yet only 20% of them have had an Internet experience. And that’s why we’ve called this strategy ‘the next billion’. How do we bring the next billion to their first Internet experience, to give them their first banking experience, using their device? Some of that is smartphone capability, some of it is lower in the price point than that, but I think you’re going to see things come down much faster than anyone would have previously predicted,” he says. “And in our relationship with Microsoft that was a key part of the conversation with them: to make sure we jointly agreed to that, understood how it would be done, and could begin the engineering work to make it happen.” Elop reinforced his previous statements that the first Windows Phone-based Nokia product will be on sale before the end of 2011. One can only imagine the kind of frenetic work underway behind the scenes at Nokia to pull that one off. The smartphone market is inherently frenetic. Apple set the pace when it committed to annual iPhone updates. The market scrambles to keep up and revisions come hard and fast. Android seems an unstoppable force at the moment, but Elop apparently sees it as inevitable that Google is kept away from a dominant market share. Microsoft and Nokia need each other and may just be the perfect combination to bring the fight to Apple and Google. By this time next year we should know for sure.

As global economies continue to recover from the worldwide recession of 2008 and 2009, with a number of developed economies still struggling, the emerging economies of the world have shown the strongest growth, especially in Africa. One area where this is most evident is the information and communication technologies (ICT) sector. This sector is a key socio-economic driver, as it has a huge beneficial impact on social and economic development and contributes significantly to GDP growth. The vast investment going into fixed-line and wireless communication technologies in Africa, South America and parts of Asia is helping to open up these economies and accelerate growth and development more rapidly than in developed nations. These trends are clearly illustrated in the annual Connectivity Scorecard study commissioned by Nokia Siemens Networks and conducted by Professor Leonard Waverman, Dean of the Haskayne School of Business, University of Calgary in Canada, in conjunction with the economic consulting group LECG. The Connectivity Scorecard is the first study to rank 50 countries around the world in terms of useful connectivity: that is, the extent to which governments, businesses and consumers make use of ICT to enhance a country's social and economic prosperity. The study groups economies into two separate indexes, to account for differences in the level of their development. The indexes rank economies according to the World Economic Forum's definition of innovation, resource and efficiencydriven economies. Developed economies, which are driven largely by the intersection of technological innovation, globalisation and deregulation, fall into the innovation-driven economy index; developing and emerging economies are classified as resource and efficiencydriven economies, and are grouped together for the purpose of the study. The scores are determined by the measurement of a series of indicators for each country in two areas –infrastructure and usage, plus skills – in the categories of business, government and consumer markets. Individual weightings are allocated to each sub-category of the country, with a larger weighting applied to business, since it is a key contributor to productivity growth. The Connectivity Scorecard therefore measures countries on a relative basis rather than on an absolute basis, with low scores reflecting gaps in a country's infrastructure and/or usage. Historically, African countries have done well in the study, with South Africa leading the pack in 2009 and 2010. Other key African nations that feature prominently in the study include Nigeria, Egypt, Tunisia, Kenya and Botswana. This is mainly due to the large scale investment going into fixed-line and wireless connectivity infrastructure, as service providers look to expand reach and market share in these burgeoning markets. South Africa has done particularly well in the study, placing fourth in 2009 and second in 2010, due largely to the robust spending and investments being made into ICT by the business and public sector, as well as the high level of business usage and ICT skills in the market. This reflects the fact that the larger South African corporations are sophisticated IT users, especially compared with other resource and efficiency-driven economies. However, there is room for improvement in the consumer segment, as the country displays low Internet subscription levels, as well as usage. The case is different in the mobile sector as South Africa's mobile telephony penetration and coverage range from good to very good, with high level SMS usage; but it is lacking voice minute usage when compared with other resource and efficiency-driven economies. This robust investment is being driven mainly by large-scale fibre infrastructure projects aimed at harnessing the massive amounts of international bandwidth available from a number of undersea fibre optic cable systems that have come online in recent years. The SEACOM and Eastern Africa Submarine Cable System (EASSy) along the East coast of Africa, along with the West African Cable System (WACS) and the incumbent SAT-3 cable system along the West coast, has increased international broadband capacity exponentially, to the point where it is now cheaper than local bandwidth capacity. The major hurdle in the advancement of the local connectivity market has been the widespread inability of service providers to access the incumbent operator's local loop, as well as a lack of suitable infrastructure to deliver all this capacity to the door of businesses and consumers. This has resulted in some level of fixed-mobile substitution, where home users adopt mobile data as their primary source of connectivity. However, Nokia Siemens Networks (NSN) has experienced a great deal of demand for our 40G technology on fibre, and there are a number of new fibre infrastructure projects rolling out in South Africa, driven either by government or consortiums of service providers and network operators. Due to the restraints of the local loop in the country, NSN also expects that the broadband access market for home use will be dominated by wireless and DSL services for some time to come. From a satellite perspective, large bluechip corporates – for whom connectivity is mission critical – still rely on satellite services to provide an essential level of redundancy. A number of projects aimed at providing connectivity services to rural and remote areas are also using a combination of satellite services and next generation wireless networks to reach these untapped markets. Satellite projects such as the Google-backed O3b and Intelsat SA's New Dawn satellite will benefit both South Africa and Africa, as more high capacity broadband services will be provisioned to the African continent in the near future. Despite these factors, South Africa dropped down the Connectivity Scorecard rankings in 2011, but this was mainly due to the more robust data and methodology used – specifically, a re-weighting that affected the business components of the scorecard; and also the use of new data and indicators, such as usage, that adversely affected South Africa. In 2011 South Africa fell seven places to rank ninth among the resource and efficiency-driven economies. However, when these fibre and satellite services come online we can expect a marked increase in the connectivity capabilities of a number of African countries, including South Africa, as they will bypass the barriers currently in place around the provisioning of ICT services, specifically high speed connectivity. This will make the Internet a part of everyone's life and will increase capacity from Kbits per second to Mbits per seconds. The key element, relating to the Connectivity Scorecard, is a country's ability to utilise these services to improve its level of socio-economic growth. Taking a closer look at the scorecard, a similar pattern can be seen in the performance of all the other African nations discussed, with the exception of South Africa. They display a satisfactory performance in the consumer segment, driven by adequate mobile network penetration. However, focused development in areas such as human capital and regulatory frameworks needs the most work, as these areas will enable the countries to look beyond the mobile sector for growth. The challenges and potential are evenly matched, thereby calling for sustained efforts across all segments to harness existing potential, with fixed-line fibre infrastructure playing the primary role in provisioning affordable high speed connectivity services. More specifically, Botswana has moderate consumer and weak business infrastructure, yet it has strong business usage of ICT. The country needs to further develop ICT infrastructure, especially fibre infrastructure, to improve measures like broadband penetration and Internet connectivity. Despite its high mobile penetration, Kenya's low ICT investments by businesses and the government affect its overall ICT development. However, the telecommunications sector is progressive and increased investment into fibre and satellite capacity can greatly enhance its capabilities. Tunisia has a strong consumer segment as a result of heavy investments in the telecom sector since the mid-1990s, which has created one of the most developed telecommunications infrastructures in Northern Africa. A high penetration rate driven by nearly 100% mobile network coverage is the country's biggest advantage. However, the country is held back by mediocre to low performances across the business and government segments and will do well to focus on a supportive regulatory framework, while developing basic human capital to boost overall ICT development. Supported by a strong showing in mobile telephony, Nigeria's relative strengths lie in the consumer segment. Poor performance across business and government is holding back its overall ICT development. Lastly, Egypt remains at the lower end of Africa's resource and efficiency-driven economies due to its weak business and consumer categories. Its relative strength lies in the government segment, but it needs sustained growth across all sectors to see real advancement. It is clear that significant investment into the provisioning of fibre infrastructure will greatly assist the majority of Africa's strongest resource and efficiency-driven economies in the Connectivity Scorecard study. This should see them improve their rankings in years to come, especially as it will allow them to tap into the wealth of international bandwidth capacity running up and down the African coastline. For land-locked nations, satellite services will greatly boost ICT capabilities in the short term; as they build out more sustainable, lower cost connectivity capabilities, such as fibre and next generation wireless networks.

The markets were abuzz with rumour and speculation. Skype had been on the market for a bit and many were rumoured as suitors. Google was mentioned, as well as Facebook; both were well credentialed as purchasers of smart companies in the past. It was however another large tech company that did the deed in the end – one many considered the most unlikely. Microsoft finally bought Skype for a whopping US$8.5 billion and put paid to all the rumourmongering. Skype had revenue of $860 million and operating profits of only $264 million, which after expenses resulted in a small loss of US$7 million for the year 2010. What was of more concern to many was its long-term debt of US$686 million. The question that had to be asked was why Microsoft would buy a loss-making company with huge debt. And of even more importance was why Microsoft would pay an amount that made Skype its largest single acquisition ever. Skype has an interesting and, for some, rather chequered history. The creators of the Skype software were the founders of Kazaa, which was a peer-to-peer file-sharing application that was used to share MP3 music files, much to the horror of music companies worldwide. The founders of Skype, Niklas Zennström from Sweden and Janus Friis from Denmark, sold the company to eBay for around US$3 billion and shortly thereafter Skype reached 100 million users in early 2006. Skype became the technology of choice for anyone with loved ones overseas or who welcomed a simple and inexpensive way to communicate with anyone else who had a computer and a reasonable internet connection. The cracks began to show in 2008 with the Skype founders and eBay not seeing eye to eye on many issues, not least that the number of subscribers had plateaued, and financial metrics had not been met. In late 2007 eBay had taken a so-called "impairment", essentially a write-off, of its investment in Skype of US$1.4 billion. The marketing and the Skype product were revamped with greater focus on premium services aimed at business and consumers. These efforts resulted in solid growth throughout 2009. At this point eBay announced it would spin off Skype through an initial public offering or IPO. To cut a long story short, much legal wrangling ensued and the IPO looked somewhat uncertain. The key issue at that point was that Skype was valued at around US$2.4 billion and then they hit the big time. Microsoft bought Skype for three times its value 18 months ago. Microsoft has been in the news a lot lately and it is perhaps in this context that the purchase of Skype may make some sense. In my opinion it was an extremely strategic and well thought-out purchase. Microsoft is on a bit of a roll and has not been seen to put a foot wrong since its launch of Windows 7. After the huge failure of Windows Vista and the publicity nightmare that caused for Microsoft, the Windows 7 series – both the desktop and the new Mobile OS – have been a breath of fresh air. More fundamentally, along with the new software came a new outlook from Microsoft. Gone were the days of closed techie-based software, and in came an era of openness and apparent concern for what customers wanted from Microsoft, and what they wanted from its software. It is also clear that Microsoft realised that the future of communication was increasingly mobile and would become more and more integrated and converged. Microsoft already had a huge Skype-type service called Windows Live messenger, which offers free voice and video chat services to around 330 million active users on a monthly basis. Skype actually has around 120 million active users at any point in time, with a lower number of concurrent users than Windows Live messenger. The key differentiation here is that Skype has around 8.5 million paying users of the service whilst Windows has none. Skype also has outbound and inbound points of presence globally, allowing users to break out into traditional telecommunication networks on a global basis. In fact Skype currently is a major player in international call minutes across all networks, both mobile and fixed. These attributes alone would make Skype an attractive addition to the services that Microsoft currently offers, such as Lync, Live Messenger and various Exchange services. The other key issue is that the Skype service was predominantly a video service and with 180 million people actively using Skype to make video calls from all manner of computers and devices it was a compelling and attractive proposition, especially as more and more users are migrating to faster flexed landline and mobile platforms such as fibre to the home, and 4G LTE for mobile. Internet-based video calling is becoming one of the fastest growing sectors in communication. Microsoft is currently a bit of a slumbering giant: the bottom line is if Microsoft switched off all its current licences for all the servers and desktops out there worldwide, the world as we know it would stop. The same can't be said for Google or Apple. Microsoft has a huge portfolio of products and patents that run the entire gamut of technology, and almost all companies involved in tech today owe it some of their success – and may in fact be paying Microsoft for some technology in use in their offerings. What Microsoft currently lacks is a coherent – and may I say 'cool' – consumer strategy. The elements are there: Windows 7 on the desktop, Xbox in the lounge, Windows phone 7 emerging from your pockets, Bing pretty much everywhere, and much of the behind the scenes server technology that runs all the above. Skype represents another building block in Microsoft's determination to become globally cool and dominant once again. Mobility and converged communication is a given going forward, and despite the price Microsoft paid for Skype, and taking into account that much of Skype's technology is already owned by or could easily be replicated by Microsoft, the purchase of Skype was a canny one for Microsoft. Skype is a well-known and respected service. In the words of a noted magazine publisher: "It is personally, I think, the single most useful work tool I use in my daily life ... (It) just makes comms so easy." In a nutshell, that is why Microsoft paid what it did. Once we see Skype on our Xbox, TV, mobile phone, office phone, public phone, in fact everywhere, we will finally understand why Microsoft needed to buy Skype.

Getting Africa up to speed with the developed world when it comes to connectivity and Internet penetration is about more than laying cables. Brett Haggard takes a look at how Google’s emerging markets division is driving access, relevance and sustainability into the formerly dark continent.