Delimiter » apple

New BlackBerry OS 7.1 hits Australia

Renai LeMay — Thu, 17 May 2012 04:39:06 +0000

news Troubled Canadian device manufacturer Research in Motion has made the new version of its operating system available to Australian customers, with the new platform being approved already for Government use and telcos Optus and Vodafone making it available to customers.

BlackkBerry OS 7.1 adds a number of new features to BlackBerry handsets such as the Bold 9900, the Torch 9860 and 9810 and the Curve 9360, such as BlackBerry Tag, which lets BlackBerry users with Near-Field Communications chips embedded in their smartphones tap their handsets against each other to share information, or pair their device with a Bluetooth device enabled for NFC. NFC is gradually being used across Australia to make small transactions with smartphones and other enabled devices.

The update will also let Australian customers turn their BlackBerry into a mobile hotspot that can be shared by up to five Wi-Fi-enabled devices, including, for example, laptops and tablets. This feature has been available to smartphone users with Google’s Android or Apple’s iOS platform for some time. It is commonly used to share a smartphone’s Internet connection to a laptop or tablet, meaning users don’t need to pay for an extra 3G mobile broadband connection for those devices.

Other new features include additions to the Universal Search capability found on BlackBerrys, as well as the ability to use the Curve 9360’s built-in FM radio. “The FM radio circuitry is already built in to the Curve 9360 model and BlackBerry 7.1 provides users with a new app that allows them to tune in and enjoy local FM radio stations,” said a statement from Research in Motion this morning. “Listening to the FM radio does not require a data plan or count as data usage.”

Customers who want to upgrade their handsets to OS 7.1 are able to do so by connecting their smartphone to their PC through a USB connection and updating the software manually. “BlackBerry 7.1 is now available from Vodafone and Optus,” RIM said this morning. “Devices powered by BlackBerry 7 OS – the BlackBerry Bold™ 9900, Torch 9860 & 9810 and Curve 9360 – are compatible for the upgrade.” Telstra has not clarified whether it will allow the update.

RIM also announced this morning that the Defence Signals Directorate, which certifies technology for government use, had already certified OS 7.1 for use by Australian Government agencies. “The certification from the DSD affirms that the BlackBerry 7 Operating System meets the Australian and New Zealand Government’s strict security standards for a wide range of the Governments’ information classifications, representing the majority of day-to-day operational communications,” said RIM.

“BlackBerry 7.0 and 7.1 Operating Systems, when used in accordance with Government guidance, can be used to secure information with a classification of up to and including PROTECTED for the Australian Government and up to and including RESTRICTED for the New Zealand Government.”

DSD also recently approved devices running version 5 of Apple’s iOS platform (including iPads and iPhones) for classified government communications, after a lengthy evaluation period and the production of a detailed security ‘hardening’ guide for the popular mobile products.

However, despite the fact that Google’s Android platform is rapidly outstripping RIM’s BlackBerry OS as the second major mobile platform of choice (along with Apple’s iOS) in Australia, last year DSD clarified it hadn’t yet started evaluating Android for use within the public sector just yet — seeing no immediate need.

The news also comes as RIM has recently been showcasing version 10 of its BlackBerry OS platform, which is expected to feature a radically overhauled user interface compared to previous versions.

opinion/analysis
It’s fascinating to see how streamlined the process of updating RIM’s BlackBerry software is in Australia, compared with Google’s Android. The company just issues one media release, on one day, with most of the major mobile carriers and the Government’s peak IT security agency already on board. Bingo! You get a new BlackBerry operating system.

In comparison, the situation with Android is so ridiculously convoluted that Vodafone has actually set up a whole page so that users can see what version of Android they can get on what device. And rumours persist of carriers such as Telstra being so frustrated with the Android updating process for their customers that they are considering dumping the platform altogether (although I don’t really believe this would actually happen).

Apple’s iOS platform, of course, is a dream to update. I updated my iPhone 4 to a new point release last night – all it took was hitting ‘yes’ on a prompt or two on the device itself, and Bob’s your uncle.

This release also makes me consider what the future of Australian enterprise mobile communications would look like, particularly in the public sector, if RIM’s financial and market share problems finally hit home and the company was sold or broken up somehow. The amount of BlackBerrys in use in Australia’s public sector, in particular, must be huge by now; at least in the hundreds of thousands.

It would be fascinating to see how departments and agencies around the nation would deal with a dying RIM; would DSD face increasing pressure to certify Android? Would Microsoft’s Windows Phone 7 platform get a strong boost from public sector use? Or would Apple’s iPhone (already certified, after all), simply be moved in en-masse to replace the BlackBerry? It would be fascinating to find out, although I’m sure it’s a fate RIM would much rather avoid ;)

Image credit: Research in Motion

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ASUS Transformer Pad tablet hits Australia

Renai LeMay — Wed, 16 May 2012 02:33:59 +0000

news Taiwanese consumer electronics giant ASUS has started selling its Transformer Pad TF300T Android tablet in Australia, with the device to hit retailers this week starting at $499 for the basic model, and $599 with a docking station attached.

The Transformer Pad is the latest in a line of ASUS Android tablets which feature the ability to be connected to a keyboard docking station, as pictured above. The docking station also dramatically extends the device’s battery life.

The Transformer Pad is one of the first of an expected second-generation of Android tablets which are slowly arriving on Australian shores. The device features an NVIDIA quad-core Tegra 3 CPU running at 1.2GHz, a 12-core NVIDIA GeForce graphics processing unit, 1GB of memory and 12GB or 32GB of storage space, a 10.1″ WXGA touchscreen running at 1280×800 pixels, an eight megapixel rear camera and a 1.2 megapixel front camera, an SD card slot and other advanced tablet features. It runs version 4.0 (Ice Cream Sandwich) of Google’s Android platform, and has a battery life of an estimated 10 hours, extendable up to 15 hours with its optional keyboard dock. THe device weighs some 635 grams, measures 263 by 180.8 by 9.9 mm, and comes in “”Royal Blue, Iceberg White and Torch Red” colours.

Delimiter’s review of the previous device in ASUS’s tablet line-up, the Eee Pad Transformer Prime, found that the device had great hardware, but was let down by its software. Reviewer Jenneth Orantia wrote:

“Based on the lag and stability issues that plague the Transformer Prime, we get the feeling that ASUS rushed the Ice Cream Sandwich update out just for the privilege of being first to market. What we’ve ended up with, then, is a beautifully-designed, extremely powerful tablet that fundamentally fails to deliver the performance improvements we were expecting. Yes, gaming and video playback is better, but performance for everyday usage actually seems to have gotten worse in some areas, and we can see a lot of unhappy customers kicking themselves over not having gone the more sensible route of buying an iPad 2 or waiting for the iPad 3.”

Engadget has published a broadly positive review of the Transformer Pad, writing: “Even as more mid-range, 10-inch Android tablets start hitting the market, the second-gen Transformer still feels like the best deal, with smooth, Tegra 3-powered gaming, good endurance and an understated design that calls to mind ASUS’ other Transformer, the $500 Prime … the tablet is eminently usable, and ultimately a pleasure to live with.”

opinion/analysis
I don’t expect the Transformer Pad to set Australia on fire, but right now if you’re considering an Android tablet, this is one of the better options available in Australia. Of course, you’ll need to decide not to buy an iPad first. This isn’t an unreasonable choice. While Apple’s still out in front, many people won’t buy anything which was designed by Cupertino, and the quality of Android tablets is gradually increasing.

Image credit: ASUS

HTC One XL on sale: Compatible with Telstra 4G

Renai LeMay — Tue, 15 May 2012 01:31:03 +0000

news Independent mobile retailer Mobicity has started selling a version of HTC’s flagship HTC One XL smartphone which will fully function on Telstra’s 4G mobile network, ahead of an expected launch by the telco of the device in the next month or so.

In early March Telstra confirmed it would shortly be launching two handsets in HTC’s new flagship One line-up in Australia, firming suspicions that HTC’s new top-end LTE model, the One XL, could be headed to the big T’s flagship Next G 4G mobile network. All of the HTC One handsets run the new Ice Cream Sandwich (version 4.0) edition of Google’s Android operating system, and offer advanced features over the company’s line of HTC Sensation and Desire handsets previously launched in Australia.

However, the telco has not yet launched any HTC One handsets locally and is still believed to be testing the handsets with its Next G network. Unlike Optus and Vodafone, which have already launched 3G versions of the One X, Telstra also offers an extensive national 4G network with dramatically enhanced speeds over its rivals. Consequently, it is likely the telco is testing at least one of the HTC One series phones against this network.

The likely delay of the One XL handset launch in Australia has left the nation without a really high-end handset supporting Telstra’s new 4G network for some time. The current 4G handsets available through Telstra — notably the HTC Velocity 4G and the Samsung Galaxy S II 4G — are largely seen as re-workings of existing handset offerings in Australia rather than examples of the next-generation of handsets available internationally.

However, as of yesterday, independent retailer Mobicity is offering Australian customers a way out of the delay. The company has started selling a version of the HTC One XL which it guarantees works on Telstra’s 4G network. This news was first reported by Ausdroid.

“The HTC One XL X325s has been exclusively tested by MobiCity on Telstra’s new high speed, Long Term Evolution (LTE) 4G network and has hit astonishing speeds of over 54mbps download and 35mbps upload,” the company’s website states. “It’s also Telstra Next G compatible, meaning you can take advantage of Telstra’s extensive network coverage and high data speeds in more places.”

The screen of the One XL handset being sold by Mobicity is a 4.7″ touchscreen running at a high definition resolution of 720p (1280×720) and using Corning’s Gorilla Glass material. As previously reported, it runs a dual-core Qualcomm Snapdragon CPU running at 1.5GHz, instead of the NVIDIA Tegra 3 chipset used by the non-4G versions of the HTC One X.

Mobicity’s version comes with an eight megapixel camera, it weighs 129g and is 8.9mm thick. It is unlocked, and can also work on the networks of Optus and Vodafone. It comes with an 1800 mAh battery. Delimiter’s review of the similar HTC One X states:

“HTC’s One X sports a very generous 4.7-inch display, yet manages to retain an elegant look and feel. It’s only 8.9mm thick and weighs in at an impressive 130gm thanks to the polycarbonate unibody design with the slightest of curves which should still fit most pockets.

… It’s still early days for Ice Cream Sandwich and quad-core processors and we can expect more great handsets this year, but for now we’d say HTC’s One X is the new gold standard in Android superphones.”

opinion/analysis
In my opinion, this HTC One XL handset is likely to be one of the handsets of the year in Australia, if not the handset of the year. The only handsets which I would expect to beat it would be the next version of the iPhone, if it launches with 4G support in Australia (and bear in mind we know next to nothing about Apple’s next iPhone plans), or a 4G version of the Samsung Galaxy S III, which is not even on the horizon at this point. If you have the cash up-front and you are in the market for a new phone, this HTC One XL is looking like a very safe option on Telstra’s network. It should be future-proof for at least 18 months or so.

Image credit: HTC

Geo-block busting ISP not realistic, says Hackett

Renai LeMay — Fri, 11 May 2012 05:14:46 +0000

news Internode managing director Simon Hackett has downplayed the potential for Internode or other Australian ISPs to follow a New Zealand ISP and offer a “Global Mode” that offers greater access to the internet by circumventing geographical restrictions placed on the certain internet services such as Hulu and Netflix.

A long-time issue for Australian Internet users has been that a number of major Internet content companies — such as Amazon, Apple, Hulu, Netflix and others — will only stream content online to customers located in certain jurisdictions, usually the United States. Visitors with an Australian IP address are told they are not able to access the content in their jurisdiction. However, this week an ISP-based solution to the issue surfaced in New Zealand. The country’s National Business Review newspaper has an extensive article on the subject, stating:

“FYX (“Fix”), launched on May 4 as a sub-brand of established ISP Maxnet, holds the tantalising promise that its users will be able to directly access US based-commercial download services such as Hulu and Netflix, and the likes of the BBC’s iPlayer – all of which offer a motherlode of street-legal movies and TV shows for download, but are “geo-blocked” to stop people outside their parent countries accessing them.”

Could such a service be provided by an innovative Australian ISP? That’s the exact question which a Whirlpool user asked iiNet subsidiary Internode this week. The company’s response came quickly from the group’s outspoken managing director Simon Hackett.

“Frankly it’s something I’ve often pondered doing,” Hackett wrote. “To the extent that from time to time we’ve done some internal design exercises to work out what it might look like … we have routers, servers, and rack space in other countries already, so operating one of several possible forms of VPN server and/or NAT based session rewrite and/or application level gateway service (e.g. a Socks proxy etc) in the USA and/or Europe… it all works in theory.”

However, Hackett added, there turned out to be technical barriers to an ISP like Internode offering such a service in practice.

“… it winds up being quite easy for a Netflix or Hulu to identify such proxied sources and block them, based on technical tests as simple as end to end latency (e.g. > 150 milliseconds round trip time for a connection generally implies ‘out of this country’),” the Internode MD wrote. “It can also be done based on administrative tests (“who is the owner of the IP range concerned, and is that a non-USA ISP?”).”

Consequently, he said, customers who had signed up for such a service from Internode might end up being disappointed. “So, now let’s imagine that Internode fielded such a service, and 6 months later, having got a great name for it, and having had people sign up because of it, the service then suddenly stopped working for major content services like Netflix, as they caught up with us doing this … and they would catch up with us precisely because it got popular and hence because it got us noticed.”

“Then, we’d wind up being crucified by, well, by you guys, as examples of customers who have signed up ‘just because of this’. Customers who would then say that we touted ourselves as being the ISP of choice because of this. Those customers would then start demanding exit from their contracts with no penalty because it no longer did what they expected (not withstanding that the underlying service itself would continue to work just fine – it’d just be Netflix etc who had blocked us) and would spend the next two years telling everyone who posts in “Choosing an ISP” not to trust Internode because they did this ‘bait and switch’ thing.”

“Not a place we’d want to knowingly put ourselves (or our customers), really, is it?”

“I don’t know how the NZ ISP concerned is doing it, and whether they’ve found some magic pudding we haven’t thought of,” Hackett added. “But if, in six months, you see them unexpectedly withdrawing the service in the face of customer complaints that Netflix suddenly blocked them… well, put it this way – I wouldn’t personally be all that surprised.” The more realistic way to approach the problem, Hackett said, could be for Australian customers to sign up themselves for commercial VPN services from the US.

opinion/analysis
I highly encourage readers to check out Simon Hackett’s excellent post in this area. It goes through the technical and commercial arguments for this kind of ISP service in Australia at length, and provides a solid grounding for further discussion. As always, we are grateful to Hackett for this kind of transparency and insight into the situation; it’s a level of transparency we don’t see from any other ISP in Australia.

My own point of view on this is that Hackett is likely right. It would be unseemly and pointless for Internode or any other Australian ISP to get into this kind of ‘arms race’ with commercial content providers in the US. Much better to solve the problem permanently (and on a more legitimate basis) through a traditional avenue: Customer demand. If a company like Netflix receives hundreds of letters demanding they launch in Australia, I’m sure that would change the conversation they have internally around such matters.

Image credit: Netflix

Has Telstra delayed HTC One XL launch?

Renai LeMay — Fri, 11 May 2012 02:57:19 +0000

news Australian specialist Android media outlet Ausdroid has reported that Telstra may have delayed its rumoured launch of a 4G version of HTC’s new One smartphone series, further pushing back the date when Australian mobile phone enthusiasts will have access to a top-level smartphone supporting the telco’s new 4G network.

In early March Telstra confirmed it will shortly be launching two handsets in HTC’s new flagship One line-up in Australia, firming suspicions that HTC’s new top-end LTE model could be headed to the big T’s flagship Next G 4G mobile network. All of the HTC One handsets run the new Ice Cream Sandwich (version 4.0) edition of Google’s Android operating system, and offer advanced features over the company’s line of HTC Sensation and Desire handsets previously launched in Australia.

The top-end model of the One range is the HTC One X. The phone features a polycarbonate unibody design and is powered by NVIDIA’s Tegra 3 CPU, with a quad-core processor running at 1.5GHz (plus an additional core which HTC says is aimed at saving battery life). To keep the phone’s graphics up to speed, it runs a 12-core NVIDIA graphics processing unit.

The screen of the One X is a 4.7″ touchscreen running at a high definition resolution of 720p and using Corning’s Gorilla Glass material. In countries with 4G (using the Long-Term Evolution standard or LTE), it will also launch in a model supporting LTE and with a dual-core Qualcomm Snapdragon CPU at 1.5GHz, to be known as the One XL. It is this HTC One XL handset which some in the industry suspect Telstra will launch over its 4G network. Telstra is currently the only Australian mobile carrier to have launched 4G services in Australia.

It is possible that Telstra will launch the HTC One XL and also the HTC One S, which features lower specifications than the One X and XL, but is still high-end by smartphone standards. HTC is billing the phone as its slimmest phone yet, at just 7.99mm thick. Telstra previously launched the S version of HTC’s Desire smartphone in mid-2011.

Both Optus and Vodafone have already launched the HTC One X in Australia, but according to a report by Ausdroid this morning, Telstra’s own launch may be further delayed. The publication reported this morning: “Take this with a huge grain of salt, but we’ve been hearing from a few people — and it’s been posted on Telstra’s own community forums — that the HTC One XL for Telstra may have been delayed until the middle of June (next month).”

One poster on Telstra’s CrowdSupport web forum this week stated that “A birdie tells me to expect the One XL on May 28th”, however another poster noted that they had been told by Telstra retail staff that the launch date for the One XL was the end of June, and another wrote that it was virtually confirmed that the launch date would be mid-June. Telstra is advertising the HTC One line through Google Adwords, with interestd customers directed through to the company’s general early registration page.

If the HTC One XL is delayed significantly in Australia, it will leave the nation without a really high-end handset supporting Telstra’s new 4G network for some time. The current 4G handsets available through Telstra — notably the HTC Velocity 4G and the Samsung Galaxy S II 4G — are largely seen as re-workings of existing handset offerings in Australia rather than examples of the next-generation of handsets available internationally.

opinion/analysis
It’s a bad time to be in the market for a high-end smartphone in Australia. I strongly recommend, if you’re looking for a new top-end model, that you wait at least 2-3 months to see what 4G launches HTC, Samsung and perhaps even Apple and Nokia have planned for Australia on Telstra’s 4G network. If you buy too soon, you’ll be kicking yourself in a year when most of your friends have a top-end 4G model ;) It makes absolutely no sense to buy a 3G smartphone in Australia just now, when great 4G offerings are so close.

Image credit: HTC

Reality check: ISPs do not understand content

Renai LeMay — Wed, 09 May 2012 02:29:45 +0000

opinion Australian ISPs, regulators and the Government need to take a step back and stop fooling themselves that future telecommunications competition will rest on ISPs’ ability to provide bundled video content services to users. The reality is that ISPs aren’t good at this task and customers don’t want them to do it.

Over the past few weeks, an old dream has begun to resurface strongly in the ongoing conversation around the future of Australia’s telecommunications industry. In this dream, ISPs and telcos are able to diversity beyond their roots providing telecommunications services such as broadband and telephony to customers. Under this so-called ‘triple-play’ vision, ISPs would add services further up the networking stack, providing video services such as films and television episodes on top of their network infrastructure.

The desire to realise this dream has become very evident in a number of comments made by industry figures over the past year or so.

In a briefing in Sydney yesterday, ACCC telecommunications commissioner Ed Willett said the nature of telecommunications competition could change as the powerful National Broadband Network rolled out, with ISPs competing with content providers for access to video streaming rights. This new world could see ISPs forced to compete with an emerging class of rivals such as Apple and Google for “the primary customer relationship”, Willett said, according to this article published by iTNews. The Australian also has more on this. One can’t help but feel the regulator already has its eye strongly on this new market opportunity, given the provisions it forced on Foxtel in its $1.9 billion buyout of Austar, which ensured some of the pair’s key content holdings would be unlocked for competitive use by ISPs.

Across town, the nation’s biggest telco Telstra was reportedly discussing its “media strategy” with the aid of ex-Television NZ chief Rick Ellis, with the idea raised that the company could make a bid to buy pay TV ConsMedia, which, along with Telstra, part-owns Foxtel and also has interests in Fox Sports Australia.

Meanwhile, at an investment conference held by Macquarie Bank, top-tier ISP iiNet was spruiking its growth strategy. In a broadband market which is experiencing negligible amounts of growth, a core plank of iiNet’s strategy — as with every other ISP — is getting its customers to buy more from it. This means, according to the company’s presentation, getting more people to sign up for its “TV Bundle” — the FetchTV set-top box through which iiNet can get its customers to pay for TV and movies delivered over their broadband connection.

And the nation’s number two telco Optus is also certainly taking the content opportunity seriously.

Like iiNet, the company is pitching the FetchTV offering to its customer. Its chief executive has publicly called for the Australian Competition and Consumer Commission to regulate content as it does telecommunications access, citing this area as the next major regulatory battleground. And of course the telco has over the past year taken the fight directly to the TV networks with its TV Now cloud-based personal video recorder, which the Federal Court unfortunately shut down last month.

Yes, yes, for Australian telcos at the moment, you can’t escape the feeling that the future is very much about content. Lovely, juicy, value-adding content, streamed on their networks, delivering extra profit margins and locking customers into triple-play or even quad-play (with mobile) bundles. It sure sounds like a lovely vision. But there’s just one problem: If you dig a bit beneath the surface a bit, it’s hard not to escape the conclusion that it’s a false hope.

For starters, it’s important to realise that the ISPs’ forays into content provision over their networks over the past decade have broadly failed.

In total, iiNet has approximately 860,000 broadband customers. But in the almost two years since it launched FetchTV, it has succeeded in converting only 20,000 (two percent) of those customers into FetchTV customers as well. With that abysmal run rate, it’s hard not to make a case right now that iiNet should simply abandon its FetchTV efforts altogether. The project certainly isn’t making iiNet any money. Optus, which launched its own FetchTV offering in Octover 2011, is no doubt doing no better than iiNet on that front right now.

Telstra, which has many millions more broadband customers than iiNet, has fared a little better; in late March this year, the company revealed that it had sold more than 300,000 units of its T-Box Internet video set-top box. Given that the company has some 2.5 million broadband connections using its network, that’s a much better sign-up rate than iiNet’s FetchTV service enjoys — about 12 percent. But it’s not enough to call the platform a success just yet.

But wait, there’s more.

The recent wave of Internet video services launched by the telcos are only their most recent foray into the area of content provided over their telecommunications networks. Before there was content on fixed broadband, there was content on mobile.

A July 2007 article published by the ABC chronicles how Telstra had then launched a service which would allow customers to watch television programs on their mobile phones — for a charge. At the time, then-Telstra executive Justin Milne, who was then in charge of Telstra’s BigPond ISP unit, hyped the device up as a revolution.

“We are inventing a new medium here and what I earnestly hope is that by giving them some slots and making them available to Australian producers to help us invent this whole short form of TV, that the folks will vote with their feet and they’ll buy those shows, and those will become the most popular shows and so we’ll produce more of them,” he reportedly said.

At the time, mobile television was all the rage. Telstra was doing it, Optus was doing it, Vodafone was doing it, and the then-separate Hutchison Telecommunications, developer of the ’3′ network in Australia, was doing it. You could buy individual ‘packs’ through the various companies which would give you access to various slices of content. The only problem was, these types of services never took off. For a time, Australians were interested, but after a while the interest dropped off and the various telco’s efforts to pump content through their mobile networks slowly failed and were largely abandoned.

It wasn’t the first time that this had been tried in Australia, either.

Those of you with slightly longer memories might recall that in late 204, Telstra launched what was then described as an ‘i-mode’ service (imported from Japan, where it was quite popular) through its mobile devices. At the time, the idea was that content providers like eBay, Citibank, CNN, Fox Sports, Whereis, Flight Centre and The Weather Channel would provide portals through Telstra’s mobile devices that would allow customers to buy content directly on their mobile.

But, just like the mobile content wave which would follow it a few years, later, i-mode bombed in Australia and is now remembered as one of Telstra’s greatest mobile-related failures locally.
Now, I don’t want to imply that every attempt by an Australian telco to diversify into content services has failed.

Probably the most high-profile success in Australia in this area — and, by now, you’re wondering why I haven’t noted this elephant in the room — is Telstra’s 50 percent investment in pay TV company Foxtel, and the provision of extremely profitable Foxtel services over Telstra’s HFC cable network. Formed in 1995 through a joint venture between Telstra and News Corporation, Foxtel has historically made a stack of money for both, and you can only get access to it if you have Telstra’s HFC cable running to your door.

Now, it’s true that Foxtel has been a success. But what’s important to realise is that Telstra has had very little to do with that.

Telstra’s role in Foxtel is essentially limited to two areas. Firstly, Telstra is a 50 percent investor in Foxtel, so it has put in a stack of money into the company. And secondly, Telstra maintains the HFC cable network over which the Foxtel services are provided. This is simplifying things a bit, given the complex relationship between Foxtel and Telstra, but when you break it down, you quickly realise that all of the content-related work that goes into Foxtel is done in a separate company to Telstra — one focused on content. The success of Foxtel is based on the fact that Telstra kept its nose out of the content and focused on what it does best — providing telecommunications carriage services to get that content to users.

And every other area where Telstra has attempted to leverage the Foxtel relationship itself, it appears to have broadly failed in.

Telstra’s attempts to provide access to Foxtel content through its mobile phones; Telstra’s attempts to provide access to Foxtel content through its T-Box platform — in short, Telstra’s attempts to leverage its Foxtel relationship through any other avenue than simply providing the telecommunications network for Foxtel to sell pay TV — have broadly failed. In fact, Foxtel is probably experiencing more success offering its services through Microsoft’s stand-alone XBOX 360 platform right now than it is through Telstra’s competing platforms.

Now that we’ve established that ISPs don’t do content very well, the key question which needs to be asked is why. On this front, I think it’s appropriate to go to a quote from Walter Isaacson’s Steve Jobs biography. This is vintage Jobs, speaking about the recording industry and why it couldn’t get its own online music store off the ground:

“When I went to Pixar, I became aware of a great divide. Tech companies don’t understand creativity. They don’t appreciate intuitive thinking, like the ability for an A&R guy at a music label to listen to a hundred artists and have a feeling for which five might be successful. They think that creative people just sit around on couches all day and are undisciplined, because they’ve not seen how driven and disciplined the creative folks at places like Pixar are.

On the other hand, music companies are completely clueless about technology. They think they can just go out and hire a few tech folks, but that would be like Apple trying to hire people to produce music. We’d get second-rate A&R people, just like the music companies ended up with second-rate tech people. I’m one of the few people who understands how producing technology requires initiation and creativity, and how producing something artistic takes real discipline.”

What’s happening right now in Australia’s telecommunications sector is that the ISPs and telcos are, as Jobs said about the record-labels, hiring second-rate people to enter industries which they don’t understand. The fundamental business of telcos is to provide telecommunications carriage services; not to provide content services. And consequently, telco people just don’t understand the content industry. Telco people think of everything through the lens of their network infrastructure; cables, routers, datacentres. But they don’t think about the content itself — the content, for a telco person, is just something carried on their network.

But providing content isn’t about getting a network right and bundling content onto it. It’s about making that content available wherever a customer wants it, in whatever format they want it; no matter what underlying network may deliver that content. The birth of the Internet has ensured that content has become disaggregated from the network layer that delivers it; and very few customers want to go back to the bad old days where the two are tied irrevocably together, as they are with Foxtel.

Now, I don’t want to argue that the content industry is getting this right either. It has been exhaustively documented right now that Australians are getting a rough deal when it comes to obtaining TV and film content on-line, on-demand and in a timely and affordable manner. But the answer to that problem is not going to come from Australia’s ISP industry.

As the US and UK have also exhaustively demonstrated with companies like Netflix, Apple and Amazon, the solution to that problem will come from a new category of companies which sit in the middle between content owners and consumers, with their service to be provided on top of telecommunications networks, but with no need for an explicit relationship with the providers of those networks. Quickflix founder Stephen Langsford, whose company sits squarely in the middle of this new industry category, nailed this concept in a speech last week; he’s perhaps one of the first executives in Australia to do so publicly.

The Quickflix executive said the best option for Australian consumers was a streaming platform which would offer an unlimited “all you can view” movie and TV streaming service for a single monthly price across any device or platform. This, he said, was an important point because currently in Australia, most companies locked customers in to a particular device, which he said limited the number of consumers who would take up such services. This is the model which has driven Netflix to a level in the US where it accounts for 20-30 percent of all Internet traffic in the country. And it is the model which will see paid Internet video succeed in Australia.

Ironically, Langsford’s speech was given at the same conference where iiNet and Telstra were hyping up their own Internet video options. I wonder if many in the audience appreciated the subtle difference — which will mean the difference between success and failure — between the different philosophies presented.

I suspect not.

Update: This article has been updated with correct T-Box figures. We had estimated about 100,000 sales over the past several years; the correct figure is 300,000.

An Aussie IPTV revolution we can believe in

Renai LeMay — Tue, 08 May 2012 06:37:08 +0000

news The founder of DVD and streaming online video service Quickflix has made a stirring speech to a local investment conference, arguing that Australia is at the beginning of “an IPTV revolution” that will see the nation’s entertainment choices reach equal par with those available in the US through popular platforms such as Netflix.

In the US, multiple options for streaming and downloading online movies and TV shows are available, ranging from Netflix to Hulu, Amazon Prime and Apple iTunes. In addition, it is common for new television shows and movies to make their way onto such platforms shortly after release. However, in Australia, content is often delayed before it is released online, and platforms such as iTunes do not contain the full range of content.

Netflix does not operate in Australia and has no immediate plans to do so, with Quickflix, which has its roots in DVD rental via physical mailouts but has also recently branched out to online streaming, FetchTV and Telstra’s T-Box platform being the main options for online video.

However, Quickflix founder and executive chairman Stephen Langsford told a conference held by Macquarie Bank last week, Australia was currently “at the beginning of an IPTV revolution, which will fundamentally alter the way we enjoy movie and TV content”. “The battle for the lounge room in Australia is only starting,” he said.

According to Langsford, at the heart of this revolution was several factors. Firstly, he said, all major TV manufacturers were now selling Internet-connected TVs with native interfaces to content services such as the one which Quickflix provided. “Penetration of these new TVs is still relatively small at less than 8 per cent of households but is set to grow dramatically as Australians upgrade their TVs,” he said.

This, combined with the fact that game consoles such as Sony’s PlayStation 3 and Microsoft’s Xbox 360 and tablets and mobile phones were becoming platforms to stream content, meant content was being liberated through the Internet and giving consumers ” unprecedented choice and access”.

Langsford pointed out that in the US, Netflix streams accounted for 20-30 percent of all Internet traffic in the country. Quickflix wanted to replicate this success in Australia, he said. “Our mission is to become a major entertainment brand with over one million subscribers by 2016.”

The Quickflix executive pushed the view that the best option for Australian consumers was a streaming platform which would offer an unlimited “all you can view” movie and TV streaming service for a single monthly price across any device or platform. This, he said, was an important point because currently in Australia, most companies — notably, FetchTV, T-Box and iTunes — locked customers in to a particular device, which he said limited the number of consumers who would take up such services.

Langsford said much of the growth in the sector would come through the cannibalisation of existing sectors of the entertainment market.

“In the 1990’s there were over 3,500 video stores in Australia — that number is now around 1000,” he told the audience. “PayTV in Australia has flat-lined at just over 30 per cent household penetration. In the US where cable has achieved 90 per cent household penetration there is increasing evidence of cord-cutting—consumers turning off their TV opting for over-the-top internet services such as Netflix.”

In addition, DVDs in general were going to go the way of the dodo.

“Even with the rise and rise of streaming, DVD still accounts for 80 per cent of Hollywood’s revenues,” Langsford said. “The inevitable overtaking of DVD by streaming and digital download as the primary way in which households enjoy movies and TV will play out over the next decade as more and more consumers IP-enable their lounge rooms and as Hollywood makes more content available digitally, removing the earlier release window advantages that DVD still enjoys today.”

“Video stores are receding from our suburbs, facing the same issues as other retailers. Not only are they confronting high cost of rent and labour but they face competition online from services like Quickflix which offer better choice and convenience. Quickflix 50,000 titles compares to around 2,000 titles in the average video store. Each day as Quickflix range expands and our service improves , our proposition to consumers becomes more enticing —we’re in a virtuous cycle of growth, while video stores are in a state of terminal decline.”

In addition, Langsford said even those currently downloading pirated content online through platforms such as BitTorrent were a potential target market for IPTV services like Quickflic.
“We’re targeting the $1.5 billion DVD market as well as a segment of the piracy market who we believe we can revert to legal usage by quality streaming content experience; ease of access and attractive price point,” he said. “Today more movies are streamed legally through Netflix than are illegally downloaded through Bit Torrent.”

opinion/analysis
From what I’ve seen so far, Quickflix’s IPTV streaming video platform isn’t all that crash hot; in terms of codec quality and range the service still leaves a lot to be desired. But we already knew that.

What I think it’s important to take away from what I believe is a landmark speech by Stephen Langsford is that finally, FINALLY, someone in Australia’s entertainment market has recognised precisely what consumers want when it comes to online video content and is preparing to give it to them. One monthly subscription cost for all you can download, with content that you can view on any device and that isn’t tied to your broadband connection. Bingo. This is what everyone wants, and I applaud Langsford for finally saying what very few executives in Australia’s entertainment sector have had the courage to say.

DVD is dying, and our TV networks are not giving us what we want. It’s time for a new model; a model which has already been proven in the US through Netflix and similar platforms. All that remains for Quickflix now is to execute on that vision. And if a home grown Australian company can do that before the big multinationals come along and try to steal the pie for themselves, even better. As Bender Bending Rodriguez would say, “Netflix? We’re going to build out our own Netflix. With blackjack, and hookers!”

Image credit: William Murphy, Creative Commons

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Vendors unimpressed by IT price hike inquiry

Renai LeMay — Tue, 08 May 2012 05:30:36 +0000

news A number of global technology vendors likely to be hauled before Australia’s Parliament to justify their local price markups have grudgingly and briefly signalled their acceptance of the proceedings and willingness to participate, although some have completely refused to comment on the issue.

In late April, Communications Minister Stephen Conroy confirmed the Government would hold an official parliamentary inquiry into the issue of technology companies marking up goods and services for Australia, following a long-running campaign by Federal Labor MP Ed Husic.

Husic (pictured right) has been raising the issue in Parliament and publicly since the beginning of 2011 (he was elected in the 2010 Federal Election), in an attempt to get answers from technology giants such as Adobe, Microsoft, Apple and others as to why they felt it was appropriate to price products significantly higher in Australia (even after taking into consideration factors such as exchange rates and shipping) than the United States.

Just last week, for example, global software giant Adobe continued a long-running tradition of extensively marking up its prices for the Australian market, revealing that locals would pay up to $1,400 more for the exact same software when they buy the new version 6 of its Creative Suite platform compared to residents of the United States.

After the inquiry was announced, Delimiter invited global vendors Adobe, Microsoft, Apple, Lenovo and Amazon, which are some of the most visible companies selling high-profile technology goods and services to Australians, whether they would commit to attending the parliamentary inquiry if invited, and whether they had any other statement to make on the matter.
The results were brief.

“Adobe Systems will co-operate with any parliamentary inquiry as required,” said an Adobe spokesperson. “We are not making any further statement at this time.”

Microsoft is charging Australian software developers about 83 percent more than their US counterparts to access subscription services associated with its Microsoft Developer Network (MSDN) platform, and also charges higher prices for software products and cloud computing offerings.

A spokesperson for the Redmond, US-based company said: “Microsoft will review the Parliamentary Committee’s terms of reference when available and will respond to the Inquiry.”

Lenovo and Amazon are both represented in Australia by the public relations agency Text100. The company acknowledged the receipt of queries on the matter of the price inquiry, but did not respond with comments on the matter. Spokespeople for Apple did not acknowledge the receipt of Delimiter’s queries and did not issue a comment on the matter.

PC manufacturer Lenovo has in the past attempted to defend of its Australian pricing, despite in 2011 launching its flagship new ThinkPad X1 laptop in Sydney for$560 more than the same hardware will cost in the United States. Apple also commonly charges more for its products in Australia, although the company has made some moves towards international price harmonisation over the past year. Amazon’s prices are the subject of less complaints by Australians than the other vendors mentioned in this article, but price differences on the company’s extremely popular eBooks offerings do exist, despite the content being the same between jurisdictions.

The Australian Competition and Consumer Commission (ACCC), which has indicated that it is following the issues the IT price hike inquiry is raising, is also interested in the eBook issue. In mid-April, the regulator noted it was considering its options on the issue of eBook pricing, following a lawsuit filed by the US Justice Department against Apple and five global book publishers on the issue of price fixing.

opinion/analysis
I am disappointed in the muted reaction which we’ve seen from these massive technology vendors on the issue of IT price hikes in Australia so far. This is an issue for the entire technology sector to ponder, and we really need these companies to be open and honest about how they set pricing so the debate on the issue can be on an honest grounding.

It is possible that the parliamentary inquiry approved by Conroy will broadly find that vendors such as Adobe and Microsoft have been doing nothing wrong when it comes to their Australian pricing, and that their honest testimony will vindicate their actions. We need to keep an open mind with respect to this possibility. But the unwillingness of the vendors to comment on the issue will only lead to an impression that they have something to hide.

Image credit: Still from Gladiator

Google Australia: ~$1bn in revenue, $74k in tax

Renai LeMay — Thu, 03 May 2012 06:59:51 +0000

news Search giant Google has revealed it expects to pay just $74,000 in corporate income tax for the 2011 calendar year in Australia, off claimed local revenues of $201 million, despite the fact that industry estimates have continually pegged the search giant’s Australian income at closer to $1 billion.

In its latest set of financial accounts filed this week with the Australian Securities and Investments Commission, Google stated that it received some $201.1 million in revenue in the 2011 calender year in Australia. Expenses largely associated with its significant Australian headcount of 568 staff ($143.5 million) and advertising costs ($18.9 million) meant the company made a loss on paper of $3.9 million in that period. Both Google’s revenues and losses were up over calendar year 2010.

In the statements, Google accounted for just $74,176 in taxation for that year, compared with $1.1 million for the year previously. It had $46 million in cash and cash equivalents on hand as at the end of December last year.

In its financial statements, Google Australia did not list its activities as being the provision of advertising and software services, both of which it charges Australian customers for. Instead, it noted that it has agreements with its US parent, Google Inc, and a company called Walkway Technologies for the provision of research and development services, and with Google Ireland and Google Asia-Pacific for the provision of sales and marketing services. Consequently, almost all of Google Australia’s revenues were listed as being for services thus rendered to those companies.

“The company’s service revenues are generated under service agreements with Google Inc, a company incorporated in the United States of America, Google Ireland Ltd and Google Asia-Pacific Pte. Ltd, all of which have Google Inc as their ultimate parent company,” Google wrote in its ASIC filing. “As a consequence, the company is dependent on the operational support of Google Inc, for future revenues and profit under the agreement.”

Google Australia’s financial statements were audited by accounting firm Ernst & Young, with partner Meredith Scott certifying in the documents that the financial report of Google Australia “gave a true and fair view of the company’s financial position as at 31 December 2011″, and that it complies with applicable laws.

Since Google Australia’s financial statements were published, the company has come under significant criticism from various media outlets for the amount of revenue it declared, and the amount of tax it claimed it should pay.

The Australian newspaper reported that local analyst house Frost & Sullivan had estimated Google Australia’s revenue from the local ad search sector at closer to $940 million a year. The Financial Review listed similar estimates, but Google spokesperson Johnny Luu told the newspaper Google’s actual annual tax expense for the 2011 calendar year was $781,461, and that it complied with all relevant tax rules.

If it is true that its Australian revenues are close to $1 billion, the way that Google Australia accounts for its revenue does not appear to be consistent with the way other major technology companies account for their revenue in Australia.

In January, Apple, a major rival of Google, published its own financial statements for its 2011 financial year, noting that it made $4.88 billion from its Australian division in the year to 24 September 2011. The company made $190 million in local profits, and paid $94 million in tax in Australia. IBM Australia also filed its financial results over the past several weeks. The company made local revenues of $4.5 billion, with Australian profits being $428 million, and taxation taking a $119 million chunk out of IBM’s pocket.

In January this year, Mashable reported that Apple maintained much of its profits in so-called “offshore tax havens” which allowed it to stop the US Government from taxing it to the full extent possible in its home country.

In 2010, The Huffington Post wrote about IBM’s taxation purposes: “In December 2008, the Government Accounting Office reported that 83 of the 100 largest publicly-traded companies in the country — including AT&T, Chevron, IBM, American Express, GE, Boeing, Dow, and AIG — had subsidiaries in tax havens — or, as the corporate class comically calls them, “financial privacy jurisdictions.’”

However, in Australia, neither Apple nor IBM appear to use the same technique as Google with respect to tax accounting. The pair’s financial statements do not contain references to similar international subsidiaries in locations such as Ireland that Google Australia’s do, and both pay significantly more corporate income tax in Australia.

It’s not the first time Google Australia has been in a similar situation with respect to its taxable income in Australia. In May 2011, the company reported similar finances. In a statement at the time, a Google Australia spokesperson said: “Google complies fully with all relevant tax legislation in all the countries in which it operates, including in Australia. That means that we contribute to all relevant local and national taxation schemes – as well as providing employment for over 400 employees in Australia.”

opinion/analysis
In this article we have compared Google’s revenue disclosure and taxation approach to that of several other major technology companies operating in Australia; direct competitors of Google’s in several areas that also make significant amounts of money locally and are known internationally for their success in areas such as taxation minimisation.

However, neither company appears to take the same approach that Google does in Australia when it comes to disclosing how much money it is making locally and how much tax it is paying on those revenues. It appears that Google is going far beyond what large corporations such as IBM and Apple are doing in terms of taxation minimisation in Australia.

Of course, Google Australia does pay more tax than its ASIC statement would indicate — at the very least it would be paying many millions in income tax for the 500-odd staff it employs locally. And I’m sure that its spokesperson’s claims this week that its real tax figure in Australia is closer to $800,000 is correct.

However, that doesn’t change the fact that it appears as if fellow technology companies IBM and Apple are paying at least a hundred times more in real dollars in tax in Australia than Google is.
I don’t know enough about Australian taxation law to say whether Google is breaking Australian law with respect to its taxation practices. But what I do know is that if you asked anyone on the street locally whether a company which makes an estimated $1 billion in Australian revenues should be paying less than $1 million in tax, the answer would definitely be “no”.

When Google was founded in 1998, its infamous unofficial slogan was “don’t be evil”. Its current approach to paying tax in Australia does not appear to fit well with that slogan. Right now, Google is making hay while the sun shines off Australian businesses and consumers. And it is not contributing its fair weight back to the nation in return. I would encourage the Australian Government to change taxation law, if necessary, to make Google’s practices illegal; and I would encourage the Australian Taxation Office to conduct an investigation into Google Australia in the meantime.

Image credit: Posted by Mark Anderson under Creative Commons (original from Walt Disney)

IT’S ON: Govt sets up IT price hike inquiry

Renai LeMay — Sun, 29 Apr 2012 01:21:34 +0000

news Price-hiking technology vendors are set to be hauled before Australia’s Parliament to justify their local markups, with Communications Minister Stephen Conroy confirming the Government will hold an official parliamentary inquiry into the issue, following a long-running campaign by Federal Labor MP Ed Husic.

In late March, after achieving some initial success in raising the issue with David Bradbury, Parliamentary Secretary to the Treasurer, and the Treasurer himself, Wayne Swan, Husic revealed he would write to Communications Minister Stephen Conroy (who is generally seen as having responsibility for the technology portfolio in Australia), asking for a parliamentary inquiry into the matter. In a letter to Husic on 10 April seen by Delimiter, Conroy responded.

“I agree that Australian businesses and households should have access to IT software and hardware that is priced fairly relative to other jurisdictions,” he wrote. “I also agree there is evidence to suggest that the innovative use of technology is not always matched with innovative new business models, in the case of products and services distributed online. The global digital economy is likely to make it increasingly difficult to sustain business models that are based on a geographic carve-up of markets.

“In light of your letter, I will consider possible terms of reference for the House of Representatives Standing Committee on Infrastructure and Communications to inquire into the pricing of software and other relevant IT-related material.”

Top-ranking executives from major companies are often invited to appear before such parliamentary inquiries into their sectors. In this case, it is likely that high-profile companies such as Adobe, Microsoft, Apple, Lenovo and so on, would be invited to attend, due to their existing position in the line of fire, as well as companies retailing video games for the local market, which has also been an area of focus for the criticism, and other companies ranging from top-end camera manufacturers to business software vendors.

In his earlier communications with Conroy, Husic had written that such an inquiry held by the parliamentary committee mentioned by Conroy could:

Determine whether a difference in pricing existed, as well as determining the extent of the difference
Examine why households and small businesses have to suffer the increased prices
Set out the impact of the price hikes on Australian businesses, households and even Government (“bearing in mind that $2 billion is spent on IT procurement by Government”)
Examine what might be done within the law to deal with this issue, which Husic said IT companies had failed to respond to.

The parliamentary inquiry may also be given a little more bite through the interest which the competition regulator, the Australian Competition and Consumer Commission (ACCC) has in the outcomes. In parliament last week fronting a committee on the NBN, ACCC commissioner Ed Willett was asked by Husic whether the regulator would consider pursuing the matter, “given that consumers rightly feel that they have been unfairly slugged for the prices that they are paying, particularly, as I mentioned before, on software”.

“Over time, information technology will mean it will be harder and harder for particular service providers to maintain higher prices for products in Australia compared to overseas,” Willett responded. “I think that model that we have seen in the past in a number of services has been exacerbated by the value of the dollar, and that has made those comparisons even more stark. I think those sort of practices will be harder and harder to sustain.”

“But certainly the Commission will be pretty keen to ensure that those sort of differences are not supported by contraventions of the Act.”

Technology vendors such as Adobe and Microsoft have in the past offered a number of reasons for why prices were set differently in Australia compared with their home country of the US. In August last year, Microsoft responded to Husic’s comments about Australian markups on its products by stating that it doesn’t set final prices to local customers — and stating that it was difficult to make direct pricing comparisons between countries, given differing local conditions in each jurisdiction.

Adobe stated the issue wasn’t one for the technology industry alone — claiming it was a wider problem affecting other areas such as the automotive sector as well. At the time, the company said the majority of Adobe’s software in Australia was sold through channel partners — and so the prices listed on its online store may not reflect competitive pricing in the market. In fact, the price through its own online store would reflect a price towards the upper end of the range which its channel partners were charging. The company didn’t want to undercut its channel partners in Australia.

PC manufacturer Lenovo has also attempted to defend of its Australian pricing, despite in 2011 launching its flagship new ThinkPad X1 laptop in Sydney for $560 more than the same hardware will cost in the United States. Apple also commonly charges more for its products in Australia, although the company has made some moves towards international price harmonisation over the past year.

The issue has also come to the attention of the NSW Government, with NSW Fair Trading Minister and Liberal MP Anthony Roberts adding his voice to the debate about price markups on technology goods sold in Australia in October 2011, claiming iconic technology giant Apple was “price gouging” the Australian public when it comes to digital goods such as films, music and software.

opinion/analysis
In 2012, it’s common to be extremely cynical about politicians, but I think we have to re-think this approach when it comes to Labor MP Ed Husic.

Despite being a backbencher who only entered parliament in the 2010 Federal Election, Husic has proven extremely successful already at representing the views of his electorate (I note his efforts regarding the National Broadband Network) as well as the wider community. In his ongoing campaign to highlight technology product price hikes in Australia, Husic has tapped into an undercurrent of dissatisfaction on the issue on the part of the Australian community. And now his tireless efforts have paid off, with the creation of a dedicated parliamentary inquiry to look into the matter.

In some ways, Husic reminds me of that other relatively new parliamentarian interested in the technology sector — Greens Senator Scott Ludlam. Their personal styles and political affiliations are obviously markedly different, but like Ludlam, Husic has been successful at using the structures and relationships set up in Australia’s Parliament to his advantage. The Committee system, the openness of ministers to discussing issues within the Government, the Government’s relationship with regulators, the importance of comment on the Parliamentary floor (even late at night) in getting issues on the record; Husic has worked all of these tools to his advantage to a remarkable outcome.

I don’t know, at this stage, whether the inquiry will have any impact on actual prices of technology prices in Australia. However, what I do know is that it will certainly do much to highlight the issue to the broader community, and make powerful corporations accountable to their customers. And that can only be a great thing. You can bet that there will be a bevy of journalists listening in as Husic and others question the likes of Microsoft, Apple, and Adobe on Australian IT price hikes.

So for now, let’s recognise that Australia’s political process, even for the often-low profile technology sector, sometimes isn’t broken. Sometimes, when individuals such as Husic show determination and passion, it can work and achieve real outcomes. In all processes, there is a time for cynicism. But for now, with relation to the issue of IT price hikes in Australia, there is an appetite and determination for positive change. It will be fascinating to see where it takes us.