Author(s): Ben Wood
Geoff Blaber, Kester Mann, Paolo Pescatore
In our third summary of news from Mobile World Congress, we look at highlights from the realms of semiconductors, handsets, networks, content and connected cars.
CCS Insight will publish several more-comprehensive reports in the days after the show closes.
Regulation, Net Neutrality and 5G Firmly in Focus at Keynote
Regulation and Net neutrality have become thorny and sensitive topics, with the European Union and the US taking different stances. Imminent spectrum auctions to enable launch of 5G networks make the topic particularly relevant.
This explains huge interest in Monday evening's keynote presentation at Mobile World Congress featuring Ajit Pai, chairman of the US Federal Communications Commission. Mr Pai announced plans for an auction of 28 GHz spectrum in November, followed by an auction of 24 GHz spectrum. He warned that if legislation for these auctions is not passed by May, the US runs the risk of seeing 5G delayed.
US carriers have been racing to be the first to launch 5G, with AT&T aiming for a launch in the second half of 2018, starting with a fixed wireless service using 28 GHz spectrum. Should Mr Pai's fears come to fruition, US carriers risk losing a claim to being the world's first 5G network.
However, with mobile use more reliant on sub-6 GHz spectrum for coverage, it could be argued that a small delay in auctions of millimetre-wave spectrum would have a limited effect in the medium term, despite short-term damage to AT&T and to a lesser extent Verizon, which have built 5G launch strategies based on fixed wireless services. A delay would play into the hands of T-Mobile, which is prioritising coverage for mobile use using 600 MHz spectrum.
Qualcomm Showcases Its Automotive Credentials
Much is made of the scope and potential of Qualcomm's position in the automotive sector if it successfully acquires NXP Semiconductors. Although this is undoubtedly true, it overlooks the strength of Qualcomm's position today and specifically in telematics, infotainment and Bluetooth.
Qualcomm claims it is the number-one semiconductor supplier in telematics and Bluetooth in the automotive sector, with 25 infotainment and telematics design wins in its financial year 2017, accounting for about $3 billion in pipeline revenue. Qualcomm now has relationships with all leading vehicle suppliers, and its infotainment products are used by 14 of the top 25 global automotive companies.
Qualcomm estimates that by 2024 three quarters of new vehicles will have embedded cellular connectivity. With Qualcomm's 9150 vehicle connectivity modem available as commercial samples in the second half of 2018, and gathering industry support from the likes of Continental, LG, Audi, Ford, SAIC Motor and Groupe PSA, the chipmaker is in a strong position despite the market being disproportionately focused on self-driving platforms.
MediaTek and China Mobile Collaborate on 5G Devices
MediaTek has been relatively quieter about 5G than other leading silicon suppliers, but it's clear that the company is now accelerating development, collaboration and communication of its efforts. MediaTek is highly unlikely to be at the forefront of 5G development. This echoes its approach to 4G, for which it followed steadily behind Qualcomm.
The collaboration with China Mobile illustrates its commitment to deliver chips for tests in 2018, with 2019 targeted for preliminary roll-out and commercial deployment in 2020. The agreement is particularly significant given the importance of the Chinese market to MediaTek. As China races to commercialize 5G services, MediaTek is being pushed to accelerate its efforts and avoid further loss of market share to Qualcomm. The complexity of 5G technology and MediaTek's relative weakness in 4G mean this could prove a challenging transition for the Taiwanese company.
Xiaomi Bounces Back
After years of events on the sidelines of Mobile World Congress, Chinese consumer electronics maker Xiaomi has made a substantial investment to have its first large stand at the event. In addition to showcasing its Android smartphones, Xiaomi also presented a wide variety of its other products, such as smart lights and headphones.
The company is a growing force to be reckoned with. It has a strong position in its home market and most recently grabbed the top spot in India (see Xiaomi's Phenomenal Rise in India), although significant success in Europe has remained elusive. This was partly because of problems relating to intellectual property rights, but these barriers appear to have been overcome, and Mi-branded phones have gradually been appearing in Europe during the past few years.
Despite some stunning products such as the Mi Mix 2, like so many other Android phone-makers, Xiaomi is finding that standing out in such a crowded market is a huge challenge that needs massive marketing investment. The company's presence at Mobile World Congress is undoubtedly an effort to address this, but it'll be an uphill battle taking on entrenched giants such as Samsung.
Feature Phones Still a Feature
KaiOS is one of the lesser-reported stories at Mobile World Congress. This efficient phone operating system has its roots in Firefox OS, which was launched with a huge fanfare back in 2012. KaiOS is garnering interest as a popular option thanks to the need to offer 4G and associated capabilities on feature phones such as the newly announced Nokia 8110 and Doro 7060, a feature phone for older users.
These two KaiOS-powered phones join India's hugely successful JioPhone, which has already sold millions of units. The feature phone segment should not be ignored. Although it's a market in decline, according to CCS Insight's latest mobile phone forecast it will still account for 380 million unit shipments in 2018.
Qualcomm Unveils Snapdragon 700 Series Chipset
Qualcomm's decision to introduce a new chipset platform between its premium-tier Snapdragon 800 and high-end Snapdragon 600 is indicative of a highly competitive and increasingly segmented smartphone market.
The inclusion of premium features such as Qualcomm's AI Engine, Spectra imaging chip, Hexagon signal processor and Kryo CPU creates a considerable advance in performance compared with the Snapdragon 660. The new design clearly hopes to address Chinese manufacturers' need for premium experiences at a lower cost as they produce higher-priced phones and and seek to expand internationally.
Qualcomm has had considerable success in China by taking premium features into lower priced segments, and this will be of clear concern to MediaTek following the announcement of the latter's Helio P60 chipset (see Mobile World Congress 2018, Monday 26 February). However, the move will exacerbate Qualcomm's challenge of managing a growing portfolio and limiting the risk of cutting into sales of its Snapdragon 800 products.
Wiko Announces Two More Smartphones
The French smartphone maker unveiled two new devices, the Wiko View 2 (€199) and Wiko View 2 Pro (€299). The design bears a remarkable similarity to Andy Rubin's Essential phone and also has echoes of Apple's "notched" display on the iPhone X.
The extra €100 for the Pro variant seems like a hefty premium for a dual camera, more memory and a slightly better processor, but offering two variants is a smart move. Even so, there appears to be a palpable oversupply of mid- and low-tier Android smartphones at Mobile World Congress this year. We repeat our concerns that the future for companies such as Wiko is likely to be extremely challenging in a smartphone market with slowing demand and ever-narrowing margins.
Telefonica Offers TV in VR
Telefonica has announced a project to bring its Movistar+ TV programming to a virtual reality environment. The initiative works with most current virtual reality platforms, including smartphone-powered devices. It places viewers in a virtual room where they can watch a TV screen, interact with other avatars and see related social media content on "floating" screens.
Telefonica has made huge strides with its Movistar TV offering. This bold move certainly seems to offer something novel, but there remain significant costs in content creation, production, editing and distribution in virtual reality formats. There are also the questions of how the media industry can make money from virtual reality and whether viewers will commit to wearing a headset to watch TV.
Nevertheless, we believe that 360-degree content will achieve a breakthrough in 2018 as the likes of BT Sport move to broadcast live sport in the format.
UK Universities Claim World's First 5G End-to-End Network
In a demonstration in Barcelona, the University of Surrey, King's College London and the University of Bristol showed off a 5G-connected robotic football player to demonstrate low-latency communications.
The partnership of the three institutions was facilitated by £16 million funding announced by the UK government in 2017. The UK has ambitions to be among the leaders in 5G, but this year's Mobile World Congress has only served to illustrate how far Europe is behind the front-runners Japan, South Korea and the US. Indeed, Nokia CEO Rajeev Suri said that the region lacks the catalysts for large-scale 5G roll-outs and believes activity in other markets will "far and away" dwarf that in Europe.
Qualcomm Announces X24 Gigabit LTE Modem
In the weeks before Mobile World Congress, Qualcomm unveiled its Snapdragon X24 LTE modem, the company's third generation of gigabit LTE modem following the launch of the X16 in 2016.
The rate of innovation since then has been astonishing, with the X24 doubling speeds to a potential 2 Gbps. The LTE Category 20 modem is the first of its kind to be built on a 7 nm process node. It features up to 7x carrier aggregation with 4x4 MIMO on up to five aggregated carriers.
Given Broadcom's efforts to pursue a hostile takeover of Qualcomm, the rate of progress is a timely reminder of the investments needed to sustain leadership and further innovation. The new chip underlines the continued importance of LTE ahead of and during the transition to 5G. This leadership in 4G and ultimately 5G is exactly why Broadcom is relentlessly pursuing Qualcomm.
Sign up to our free Daily Insight service here.