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What I've been reading this week

I think that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye.

This week: outsource consolidation leads to stifled yawns, China quashes salt rumours, fibre gets faster and why the iPhone won’t get any bigger.

New business models

Another hacking story, this time aimed at the BBC’s ability to feed satellite news into Iran. Although somewhat effective, the attack has been foiled, but given the Iranian regime’s weak electronic warfare capabilities versus the rest of the world, you can but imagine how effective an analogous Chinese or Russian effort would have been.
http://uk.reuters.com/article/2012/03/14/us-iran-bbc-idUKBRE82D00820120314

Perhaps this was therefore a good market in which to sell an encryption company – News Corp just offloaded NDS for $5Bn – I expect that money will find its way into another large content acquisition. For Cisco, this gives them yet another hardware capability to throw into their network switching gear and differentiate themselves from lower cost players.
http://www.digitalspy.co.uk/tech/news/a371628/news-corp-set-for-windfall-as-cisco-buys-nds-for-usd5bn.html

At some point, NTT Data is going to do a grand reveal and launch a frontal assault on the IT services industry. In Dimension Data (acquired a couple of years back) and Keane, which it sneakily bought at the end of 2010 (and no one noticed until now) it’s got a credible degree of global scale and more importantly a strong foothold in emerging markets. Alternatively, they’ll just hold them like a PE and never integrate. Who can tell?
http://www.keane.com/keane-insights/press-releases-03-jan-2011.aspx

Perhaps they’ll be competing against some consolidated Indian mega-outsourcers not that Tech Mahindra and Satyam have “merged”. I foresee difficult times ahead for Indian outsourcers as the value of labour arbitrage declines with a strengthening Rupee and the Indian talent war continues to effect delivery quality.
http://www.moneycontrol.com/news/market-outlook/how-do-analysts-view-tech-mahindra-satyam-merger_683897.html

Here we go again. Cheap ($35) tablet launches! Every gets really excited about the iPad killer... for the wrong reasons. The iPad sells to people who have money and want luxury. There is no kudos at $40, no aspiration. Remember that tablets are useful consumption devices, but from a utility standpoint lag behind portable PCs and smartphones. Amazing that the tech can get this cheap, but that’s all.
http://liliputing.com/2012/03/next-gen-aakash-tablet-to-hit-india-in-april-for-40.html

A fascinating piece on how differences in the way that mobile money works effects the pricing of water in a number of African countries. Interesting that once again Kenya lags the rest of the region in creating a viable digital economy. Silicon Savannah is drying up, in my view, thanks to stifling regulation and legislation.
http://mmublog.org/blog/mobile-water-payments-what%e2%80%99s-in-it-for-mobile-network-operators/

Selling direct to consumers at a reasonable price is a very smart way for the BBC to achieve catalogue digitisation, which is an expensive undertaking in a spend-conscious environment.
http://www.guardian.co.uk/media/2012/mar/14/bbc-boss-confirms-download-pay-service

Emerging technology

SpaceX are an immensely exciting company that I expect to revolutionise human access to space. The flight of Falcon 9 to the International Space Station will be a landmark for them and the commercialisation of space travel. With Virgin Galactic also taking tentative steps into the stratosphere, this could be the most groundbreaking year for space travel since Apollo.
http://www.msnbc.msn.com/id/46826631/ns/technology_and_science-space/

Europe is also rushing ahead in space. This article is about their new “space truck” that ferries supplies to the International Space Station, then dispose of the waste.
http://www.telegraph.co.uk/science/space/9162313/Europe-launches-heaviest-ever-craft-into-space.html

The iPad is the first tablet to support Bluetooth low energy, a standard that I expect to dominate personal area networking for the next few years.
http://www.businesswire.com/news/home/20120307006589/en/iPad-Bluetooth-Smart-Ready-Tablet

Fibre technology just keeps getting smarter. This Ciena product uses signal processing to reduce the number of amplifiers in a cable by reducing noise, boosting speeds and reducing the cost of cable installations.
http://www.theregister.co.uk/2012/03/15/submarine_cables_faster_simpler_no_signal_regeneration/

And in the domestic world, here’s an EU-funded project that’s demonstrating how to create ultra-fast but dense fibre-to-the-home networks. Their trial gave 4,000 users a 300MBit/s connection. Now we just need to figure out what to do with it!
http://www.theregister.co.uk/2012/03/13/sardana_fibre_demonstration/

An amusing, but spot on look at why the new iPhone won’t follow the screen enlargement trend and will stay around 3.5”.
http://gizmodo.com/5895583/five-reasons-why-the-stupid-46+inch-iphone-rumor-wont-happen

3-D printing is going on leaps and bounds. Here an Austrian University demonstrates a technology to rapidly print nanoscale devices.
http://www.tuwien.ac.at/en/news/news_detail/article/7444/

Emerging markets

Two Chinese censorship stories now, both about propaganda and censorship of social channels. I think the capitalist world is beginning to understand that it’s really not dealing with a regime that will ever “civilise” and become capitalists too. This is a brutal dictatorship. Not a Business School.
http://www.cmu.edu/news/stories/archives/2012/march/march7_censorshipinchina.html
http://www.theregister.co.uk/2012/03/23/china_coup_censor_weibo/

Digital media

I never like to use my own behaviour as a benchmark for the mass-market, however this mirrors social/ TV interaction in my household. Twitter is a great medium for quips about what’s on the box and that’s why 85% of US social traffic around TV is on it. Neither is it any surprise that major events drive most of the traffic – Twitter and TV are joined at the hip as one is a conversation medium, the other a conversation starter.
http://www.scribd.com/doc/84722043/Trendrr-TV-February-White-Paper

The speed at which digital markets mature and consolidate is quite incredible. Here Zynga (age 4 and a half years) is buying Omgpop (age 5 years) for $180Mn. Quick bucks!
http://www.adweek.com/news/technology/zynga-nabs-omgpop-139117

Sadly, the speed at which traditional media businesses mature is not so fast. Ultraviolet – the service that allows consumers to store their content in a “digital locker” in the cloud so they can legitimately use it on any device – will cost at least $2 per DVD. As the blogger points out, you’d have to watch every DVD about 50 times before the studio lost money on this transaction. Considering that the people who would want this are enthusiasts with dozens or hundreds of movies, I don’t see many people stumping up for this. Imagine there’ll be a spun up press release on how many do soon enough.
http://blog.streamingmedia.com/the_business_of_online_vi/2012/03/report-walmart-to-charge-2-4-per-dvd-to-convert-movies-to-ultraviolet-cloud.html

I’m bullish about streamed music and impressed by the success of the Beats headphone range. Their acquisition of Spotify-wannabe MOG might be interesting for the market. It’ll only take a small proportion of people shelling out $300 for headphones to pay $5 a month for music to start taking some share.
http://gigaom.com/2012/03/23/say-what-how-much-did-mog-sell-for-what-is-spotify-valued-at-now/

Just for fun

A flying Delorean? Brilliant. And controlled by a Wii Remote, therefore making it a valid tech story.
http://www.slashgear.com/roads-the-back-to-the-future-drone-doesnt-need-roads-12217923/

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