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5G phones are here but there’s no rush to upgrade

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This year’s Mobile World Congress — the CES for Android device makers — was awash with 5G handsets.

The world’s No.1 smartphone seller by marketshare, Samsung, got out ahead with a standalone launch event in San Francisco, showing off two 5G devices, just before fast-following Android rivals popped out their own 5G phones at launch events across Barcelona this week.

We’ve rounded up all these 5G handset launches here. Prices range from an eye-popping $2,600 for Huawei’s foldable phabet-to-tablet Mate X — and an equally eye-watering $1,980 for Samsung’s Galaxy Fold; another 5G handset that bends — to a rather more reasonable $680 for Xiaomi’s Mi Mix 3 5G, albeit the device is otherwise mid-tier. Other prices for 5G phones announced this week remain tbc.

Android OEMs are clearly hoping the hype around next-gen mobile networks can work a little marketing magic and kick-start stalled smartphone growth. Especially with reports suggesting Apple won’t launch a 5G iPhone until at least next year. So 5G is a space Android OEMs alone get to own for a while.

Chipmaker Qualcomm, which is embroiled in a bitter patent battle with Apple, was also on stage in Barcelona to support Xiaomi’s 5G phone launch — loudly claiming the next-gen tech is coming fast and will enhance “everything”.

“We like to work with companies like Xiaomi to take risks,” lavished Qualcomm’s president Cristiano Amon upon his hosts, using 5G uptake to jibe at Apple by implication. “When we look at the opportunity ahead of us for 5G we see an opportunity to create winners.”

Despite the heavy hype, Xiaomi’s on stage demo — which it claimed was the first live 5G video call outside China — seemed oddly staged and was not exactly lacking in latency.

“Real 5G — not fake 5G!” finished Donovan Sung, the Chinese OEM’s director of product management. As a 5G sales pitch it was all very underwhelming. Much more ‘so what’ than ‘must have’.

Whether 5G marketing hype alone will convince consumers it’s past time to upgrade seems highly unlikely.

Phones sell on features rather than connectivity per se, and — whatever Qualcomm claims — 5G is being soft-launched into the market by cash-constrained carriers whose boom times lie behind them, i.e. before over-the-top players had gobbled their messaging revenues and monopolized consumer eyeballs.

All of which makes 5G an incremental consumer upgrade proposition in the near to medium term.

Use-cases for the next-gen network tech, which is touted as able to support speeds up to 100x faster than LTE and deliver latency of just a few milliseconds (as well as connecting many more devices per cell site), are also still being formulated, let alone apps and services created to leverage 5G.

But selling a network upgrade to consumers by claiming the killer apps are going to be amazing but you just can’t show them any yet is as tough as trying to make theatre out of a marginally less janky video call.

“5G could potentially help [spark smartphone growth] in a couple of years as price points lower, and availability expands, but even that might not see growth rates similar to the transition to 3G and 4G,” suggests Carolina Milanesi, principal analyst at Creative Strategies, writing in a blog post discussing Samsung’s strategy with its latest device launches.

“This is not because 5G is not important, but because it is incremental when it comes to phones and it will be other devices that will deliver on experiences, we did not even think were possible. Consumers might end up, therefore, sharing their budget more than they did during the rise of smartphones.”

The ‘problem’ for 5G — if we can call it that — is that 4G/LTE networks are capably delivering all the stuff consumers love right now: Games, apps and video. Which means that for the vast majority of consumers there’s simply no reason to rush to shell out for a ‘5G-ready’ handset. Not if 5G is all the innovation it’s got going for it.

LG V50 ThinQ 5G with a dual screen accessory for gaming

Use cases such as better AR/VR are also a tough sell given how weak consumer demand has generally been on those fronts (with the odd branded exception).

The barebones reality is that commercial 5G networks are as rare as hen’s teeth right now, outside a few limited geographical locations in the U.S. and Asia. And 5G will remain a very patchy patchwork for the foreseeable future.

Indeed, it may take a very long time indeed to achieve nationwide coverage in many countries, if 5G even ends up stretching right to all those edges. (Alternative technologies do also exist which could help fill in gaps where the ROI just isn’t there for 5G.)

So again consumers buying phones with the puffed up idea of being able to tap into 5G right here, right now (Qualcomm claimed 2019 is going to be “the year of 5G!”) will find themselves limited to just a handful of urban locations around the world.

Analysts are clear that 5G rollouts, while coming, are going to be measured and targeted as carriers approach what’s touted as a multi-industry-transforming wireless technology cautiously, with an eye on their capex and while simultaneously trying to figure out how best to restructure their businesses to engage with all the partners they’ll need to forge business relations with, across industries, in order to successfully sell 5G’s transformative potential to all sorts of enterprises — and lock onto “the sweep spot where 5G makes sense”.

Enterprise rollouts therefore look likely to be prioritized over consumer 5G — as was the case for 5G launches in South Korea at the back end of last year.

“4G was a lot more driven by the consumer side and there was an understanding that you were going for national coverage that was never really a question and you were delivering on the data promise that 3G never really delivered… so there was a gap of technology that needed to be filled. With 5G it’s much less clear,” says Gartner’s Sylvain Fabre, discussing the tech’s hype and the reality with TechCrunch ahead of MWC.

“4G’s very good, you have multiple networks that are Gbps or more and that’s continuing to increase on the downlink with multiple carrier aggregation… and other densification schemes. So 5G doesn’t… have as gap as big to fill. It’s great but again it’s applicability of where it’s uniquely positioned is kind of like a very narrow niche at the moment.”

“It’s such a step change that the real power of 5G is actually in creating new business models using network slicing — allocation of particular aspects of the network to a particular use-case,” Forrester analyst Dan Bieler also tells us. “All of this requires some rethinking of what connectivity means for an enterprise customer or for the consumer.

“And telco sales people, the telco go-to-market approach is not based on selling use-cases, mostly — it’s selling technologies. So this is a significant shift for the average telco distribution channel to go through. And I would believe this will hold back a lot of the 5G ambitions for the medium term.”

To be clear, carriers are now actively kicking the tyres of 5G, after years of lead-in hype, and grappling with technical challenges around how best to upgrade their existing networks to add in and build out 5G.

Many are running pilots and testing what works and what doesn’t, such as where to place antennas to get the most reliable signal and so on. And a few have put a toe in the water with commercial launches (globally there are 23 networks with “some form of live 5G in their commercial networks” at this point, according to Fabre.)

But at the same time 5G network standards are yet to be fully finalized so the core technology is not 100% fully baked. And with it being early days “there’s still a long way to go before we have a real significant impact of 5G type of services”, as Bieler puts it. 

There’s also spectrum availability to factor in and the cost of acquiring the necessary spectrum. As well as the time required to clear and prepare it for commercial use. (On spectrum, government policy is critical to making things happen quickly (or not). So that’s yet another factor moderating how quickly 5G networks can be built out.)

And despite some wishful thinking industry noises at MWC this week — calling for governments to ‘support digitization at scale’ by handing out spectrum for free (uhhhh, yeah right) — that’s really just whistling into the wind.

Rolling out 5G networks is undoubtedly going to be very expensive, at a time when carriers’ businesses are already faced with rising costs (from increasing data consumption) and subdued revenue growth forecasts.

“The world now works on data” and telcos are “at core of this change”, as one carrier CEO — Singtel’s Chua Sock Koong — put it in an MWC keynote in which she delved into the opportunities and challenges for operators “as we go from traditional connectivity to a new age of intelligent connectivity”.

Chua argued it will be difficult for carriers to compete “on the basis of connectivity alone” — suggesting operators will have to pivot their businesses to build out standalone business offerings selling all sorts of b2b services to support the digital transformations of other industries as part of the 5G promise — and that’s clearly going to suck up a lot of their time and mind for the foreseeable future.

In Europe alone estimates for the cost of rolling out 5G range between €300BN and €500BN (~$340BN-$570BN), according to Bieler. Figures that underline why 5G is going to grow slowly, and networks be built out thoughtfully; in the b2b space this means essentially on a case-by-case basis.

Simply put carriers must make the economics stack up. Which means no “huge enormous gambles with 5G”. And omnipresent ROI pressure pushing them to try to eke out a premium.

“A lot of the network equipment vendors have turned down the hype quite a bit,” Bieler continues. “If you compare this to the hype around 3G many years ago or 4G a couple of years ago 5G definitely comes across as a soft launch. Sort of an evolutionary type of technology. I have not come across a network equipment vendors these days who will say there will be a complete change in everything by 2020.”

On the consumer pricing front, carriers have also only just started to grapple with 5G business models. One early example is TC parent Verizon’s 5G home service — which positions the next-gen wireless tech as an alternative to fixed line broadband with discounts if you opt for a wireless smartphone data plan as well as 5G broadband.

From the consumer point of view, the carrier 5G business model conundrum boils down to: What is my carrier going to charge me for 5G? And early adopters of any technology tend to get stung on that front.

Although, in mobile, price premiums rarely stick around for long as carriers inexorably find they must ditch premiums to unlock scale — via consumer-friendly ‘all you can eat’ price plans.

Still, in the short term, carriers look likely to experiment with 5G pricing and bundles — basically seeing what they can make early adopters pay. But it’s still far from clear that people will pay a premium for better connectivity alone. And that again necessitates caution. 

5G bundled with exclusive content might be one way carriers try to extract a premium from consumers. But without huge and/or compelling branded content inventory that risks being a too niche proposition too. And the more carriers split their 5G offers the more consumers might feel they don’t need to bother, and end up sticking with 4G for longer.

It’ll also clearly take time for a 5G ‘killer app’ to emerge in the consumer space. And such an app would likely need to still be able to fallback on 4G, again to ensure scale. So the 5G experience will really need to be compellingly different in order for the tech to sell itself.

On the handset side, 5G chipset hardware is also still in its first wave. At MWC this week Qualcomm announced a next-gen 5G modem, stepping up from last year’s Snapdragon 855 chipset — which it heavily touted as architected for 5G (though it doesn’t natively support 5G).

If you’re intending to buy and hold on to a 5G handset for a few years there’s thus a risk of early adopter burn at the chipset level — i.e. if you end up with a device with a suckier battery life vs later iterations of 5G hardware where more performance kinks have been ironed out.

Intel has warned its 5G modems won’t be in phones until next year — so, again, that suggests no 5G iPhones before 2020. And Apple is of course a great bellwether for mainstream consumer tech; the company only jumps in when it believes a technology is ready for prime time, rarely sooner. And if Cupertino feels 5G can wait, that’s going to be equally true for most consumers.

Zooming out, the specter of network security (and potential regulation) now looms very large indeed where 5G is concerned, thanks to East-West trade tensions injecting a strange new world of geopolitical uncertainty into an industry that’s never really had to grapple with this kind of business risk before.

Chinese kit maker Huawei’s rotating chairman, Guo Ping, used the opportunity of an MWC keynote to defend the company and its 5G solutions against U.S. claims its network tech could be repurposed by the Chinese state as a high tech conduit to spy on the West — literally telling delegates: “We don’t do bad things” and appealing to them to plainly to: “Please choose Huawei!”

Huawei rotating resident, Guo Ping, defends the security of its network kit on stage at MWC 2019

When established technology vendors are having to use a high profile industry conference to plead for trust it’s strange and uncertain times indeed.

In Europe it’s possible carriers’ 5G network kit choices could soon be regulated as a result of security concerns attached to Chinese suppliers. The European Commission suggested as much this week, saying in another MWC keynote that it’s preparing to step in try to prevent security concerns at the EU Member State level from fragmenting 5G rollouts across the bloc.

In an on stage Q&A Orange’s chairman and CEO, Stéphane Richard, couched the risk of destabilization of the 5G global supply chain as a “big concern”, adding: “It’s the first time we have such an important risk in our industry.”

Geopolitical security is thus another issue carriers are having to factor in as they make decisions about how quickly to make the leap to 5G. And holding off on upgrades, while regulators and other standards bodies try to figure out a trusted way forward, might seem the more sensible thing to do — potentially stalling 5G upgrades in the meanwhile.

Given all the uncertainties there’s certainly no reason for consumers to rush in.

Smartphone upgrade cycles have slowed globally for a reason. Mobile hardware is mature because it’s serving consumers very well. Handsets are both powerful and capable enough to last for years.

And while there’s no doubt 5G will change things radically in future, including for consumers — enabling many more devices to be connected and feeding back data, with the potential to deliver on the (much hyped but also still pretty nascent) ‘smart home’ concept — the early 5G sales pitch for consumers essentially boils down to more of the same.

“Over the next ten years 4G will phase out. The question is how fast that happens in the meantime and again I think that will happen slower than in early times because [with 5G] you don’t come into a vacuum, you don’t fill a big gap,” suggests Gartner’s Fabre. “4G’s great, it’s getting better, wi’fi’s getting better… The story of let’s build a big national network to do 5G at scale [for all] that’s just not happening.”

“I think we’ll start very, very simple,” he adds of the 5G consumer proposition. “Things like caching data or simply doing more broadband faster. So more of the same.

“It’ll be great though. But you’ll still be watching Netflix and maybe there’ll be a couple of apps that come up… Maybe some more interactive collaboration or what have you. But we know these things are being used today by enterprises and consumers and they’ll continue to be used.”

So — in sum — the 5G mantra for the sensible consumer is really ‘wait and see’.

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UK worries Starlink and OneWeb may interfere with each other, plans new rules

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Enlarge / Artist’s impression of low-Earth-orbit satellites like those launched by SpaceX and OneWeb.

A UK government agency is worried that OneWeb, SpaceX’s Starlink, and similar low Earth orbit (LEO) satellite-broadband systems could block each others’ signals.

Ofcom, the UK’s communications regulator, proposed new rules today in a report that details its interference concerns. Ofcom also said it intends to amend satellite licenses already issued to SpaceX and OneWeb to require coordination of frequency use. Without new requirements, the risk of interference could prevent competition by shutting new players out of the market, Ofcom said.

Non-geostationary satellite orbit (NGSO) systems are more complex than the traditional geostationary type because they use hundreds or thousands of satellites, Ofcom noted. “Satellite dishes need to track these satellites as they move across the sky, unlike existing satellite networks, where the dishes are fixed pointing at a single satellite which is stationary in the sky,” the Ofcom report said. Because so many low-Earth-orbit satellites are being launched, “there is a risk of satellites from two different operators appearing to be in the same part of the sky,” causing interference known as “in-line events” in which multiple operators’ satellites are lined up in the sky, Ofcom wrote.

This interference can affect uplink and downlink transmissions between satellites and user terminals that serve individual homes, the report said. The interference can also affect links between satellites and the Gateway Earth stations that connect to the Internet backbone.

“Since NGSO satellites are moving relative to each other and relative to the ground, in-line events may individually only be brief, maybe a few seconds,” Ofcom wrote. “However, if an in-line event occurs and causes interference, it may take longer for the terminal to reconnect to the network. The interference could continue to repeat over time, reoccurring in a regular pattern which will depend on the orbits of the respective systems.”

Outages from interference

Users could lose service when there’s interference to either the user terminal or gateway earth stations, but interference to a gateway station would affect many more users. “[T]he impact of interference on gateway links would be much greater than on individual user links as each gateway provides connectivity for many users (perhaps hundreds or thousands of users depending on the design of the system), so a loss of connection due to interference at the gateway will be experienced more widely across the network,” Ofcom wrote.

Gateway Earth stations operated by different companies “are likely to require large minimum separation distances” of tens of kilometers to avoid interference, Ofcom wrote. In contrast, “multiple GSO [geostationary satellite orbit] gateways can be located on a single site” without causing harmful interference to each other.

The Ofcom report listed five NGSO constellations that are planned or already semi-operational. The biggest example is SpaceX, which is offering beta service from 1,500 already-launched satellites and has over 4,400 satellites planned for its initial phase. Amazon’s Kuiper division hasn’t launched a satellite yet, but it has 3,236 satellites planned in its initial phase, the report noted.

OneWeb—which is co-owned by the UK government and Bharti Global—has launched over 200 satellites and has plans for 648 satellites in its initial phase. Telesat and Kepler round out the list, with plans for 298 and 140 satellites, respectively.

Here’s the Ofcom chart listing low-Earth-orbit satellite networks:

Coordination difficult

The US Federal Communications Commission in 2017 adopted rules, including power limits, to minimize the danger of interference in NGSO systems. The FCC adopted different rules for different slices of spectrum. In the 17.8 to 18.3 GHz band, for example, the FCC said, “while terrestrial use of this band is significant, there are areas, particularly rural areas, where terrestrial deployment is less dense and by using mitigating techniques like siting considerations, off-axis rejection, and shielding, we expect FSS [fixed-satellite service] earth stations will be able to operate successfully without receiving harmful interference… If interference does occur, earth stations can switch to other bands not shared with terrestrial users or use alternative mitigation techniques.”

The FCC also imposed specific conditions to prevent interference and space debris on licenses awarded to SpaceX, OneWeb, Amazon, and others.

Ofcom is worried that the global system for coordinating satellites, overseen by the International Telecommunication Union [ITU], isn’t good enough to prevent NGSO problems. “The potential for harmful interference between different satellite systems is usually managed by operators cooperating with each other under the ITU satellite coordination procedures,” Ofcom wrote.

The agency added:

However, coordination between NGSO systems is proving to be more challenging due to the dynamic nature of these systems, combined with operators having differing rates of deployment (some operators holding older filings will not deploy their systems for a few years) and changing their architecture over time. We are therefore concerned that NGSO satellite services could be deployed before an appropriate level of coordination has been possible with other operators.

Ofcom is also worried about the coexistence of user terminals when two or more companies provide LEO satellite service in the same area:

A lack of agreement over how user terminals of different systems can coexist in the same area and band could restrict competition as a result of earlier deployed systems hindering later ones. Once one operator starts deploying user terminals, other operators wishing to launch services using the same band may expect to experience harmful interference from the existing user terminals. In the worst case, this could mean that the quality of their broadband services would not be sufficiently reliable in order to enter the market. Nonetheless, the established player could have an incentive to cooperate given that the interference is likely to be mutual, i.e. their services could be degraded as well.

New rules, license changes

Ofcom said its goal in issuing new rules is to minimize interference while encouraging competition. The agency proposed, among other things, “an additional explicit license condition requiring NGSO licensees to cooperate so they can co-exist and operate within the UK without causing harmful radio interference to each other.” Ofcom said it also intends to “[i]ntroduce checks when we issue new NGSO licenses so that these are only granted if all systems (existing and new) are able to coexist and provide services to end users” and implement new conditions letting Ofcom “take action to resolve degradation to services if this were to occur at a particular location or location(s) in the UK.”

To preserve competition, Ofcom said it will “introduce a competition check” into its licensing process to account for the “technical constraints that the gateway or user terminals could create on future licensees.” Ofcom said:

In particular, in a market that was concentrated, if there was limited prospect of the licensee system and future systems (applicants) being able to technically coexist, then this could form a barrier to future entry to the market. As a result, we are proposing that a key piece of information that applicants should provide when applying for a network license is credible evidence about the technical ability for their system and future systems to coexist. This would include evidence about the flexibility of their system and/or what reasonable steps new licensees could easily undertake to protect them. This information would also be used when assessing whether it is reasonable for new applications and existing services to coexist, to understand the reasonableness of mitigations being undertaken by existing licensees.

Ofcom said it plans to review all NGSO licenses to determine which companies are using the same frequencies. The agency said it will also amend the existing licenses held by SpaceX Starlink, OneWeb, and Kepler. The changes would require “NGSO licensees to cooperate with the other NGSO licensees operating in the same frequencies so they can coexist,” and allow Ofcom “to require operators to take action in cases of interference between NGSO systems which impacts the provision of services to users in particular location(s) in the UK.”

Ofcom said it will take comments on its proposals until September 20, 2021.

We contacted SpaceX about Ofcom’s report and will update this article if the company provides a response.

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Sean Gallagher and an AI expert break down our crazy machine-learning adventure

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We’ve spent the past few weeks burning copious amounts of AWS compute time trying to invent an algorithm to parse Ars’ front-page story headlines to predict which ones will win an A/B test—and we learned a lot. One of the lessons is that we—and by “we,” I mainly mean “me,” since this odyssey was more or less my idea—should probably have picked a less, shall we say, ambitious project for our initial outing into the machine-learning wilderness. Now, a little older and a little wiser, it’s time to reflect on the project and discuss what went right, what went somewhat less than right, and how we’d do this differently next time.

Our readers had tons of incredibly useful comments, too, especially as we got into the meaty part of the project—comments that we’d love to get into as we discuss the way things shook out. The vagaries of the edit cycle meant that the stories were being posted quite a bit after they were written, so we didn’t have a chance to incorporate a lot of reader feedback as we went, but it’s pretty clear that Ars has some top-shelf AI/ML experts reading our stories (and probably groaning out loud every time we went down a bit of a blind alley). This is a great opportunity for you to jump into the conversation and help us understand how we can improve for next time—or, even better, to help us pick smarter projects if we do an experiment like this again!

Our chat kicks off on Wednesday, July 28, at 1:00 pm Eastern Time (that’s 10:00 am Pacific Time and 17:00 UTC). Our three-person panel will consist of Ars Infosec Editor Emeritus Sean Gallagher and me, along with Amazon Senior Principal Technical Evangelist (and AWS expert) Julien Simon. If you’d like to register so that you can ask questions, use this link here; if you just want to watch, the discussion will be streamed on the Ars Twitter account and archived as an embedded video on this story’s page. Register and join in or check back here after the event to watch!

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Kaseya gets master decryptor to help customers still suffering from REvil attack

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Kaseya—the remote management software seller at the center of a ransomware operation that struck as many as 1,500 downstream networks—said it has obtained a decryptor that should successfully restore data encrypted during the Fourth of July weekend attack.

Affiliates of REvil, one of the Internet’s most cutthroat ransomware groups, exploited a critical zero-day vulnerability in Miami, Florida-based Kaseya’s VSA remote management product. The vulnerability—which Kaseya was days away from patching—allowed the ransomware operators to compromise the networks of about 60 customers. From there, the extortionists infected as many as 1,500 networks that relied on the 60 customers for services.

Finally, a universal decryptor

“We obtained the decryptor yesterday from a trusted third party and have been using it successfully on affected customers,” Dana Liedholm, senior VP of corporate marketing, wrote in an email on Thursday morning. “We are providing tech support to use the decryptor. We have a team reaching out to our customers and I don’t have more detail right now.”

In a private message, threat analyst Brett Callow of security firm Emsisoft said: “We are working with Kaseya to support their customer engagement efforts. We have confirmed the key is effective at unlocking victims and will continue to provide support to Kaseya and its customers.”

REvil had demanded as much as $70 million for a universal decryptor that would restore the data of all organizations compromised in the mass attack. Liedholm declined to say if Kaseya paid any sum in exchange for the decryption tool. Kaseya has since patched the zero-day used in the attack.

That means that, for the time being, it’s not publicly known if Kaseya paid the ransom or received it for free from either REvil, a law enforcement agency, or a private security company.

In the days following the attack, REvil’s site on the dark web, along with other infrastructure the group uses to provide technical support and process payments, suddenly went offline. The unexplained exit left victims and researchers worried that the data would remain locked up forever, since the only people with the ability to decrypt it had vanished.

Where did it come from?

REvil is one of several ransomware groups believed to operate out of Russia or another Eastern European country that was formerly part of Soviet Union. The group’s disappearance came a few days after President Joe Biden warned his Russian counterpart Vladimir Putin that, if Russia didn’t rein in those ransomware groups, the US might take unilateral action against them.

Observers have speculated since then that either Putin pressured the group to go quiet or the group, rattled by all the attention it received from the attack, decided to do so on its own.

Some of the companies victimized by the attack include Swedish grocery store chain COOP, Virginia Tech, two Maryland towns, New Zealand schools, and international textile company Miroglio Group.

REvil is also behind a crippling attack on JBS, the world’s biggest producer of meat. The breach caused JBS to temporarily close some plants.

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