Thursday, February 8, 2018

Qualcomm builds up 5G momentum with design wins, trials

The major pieces are falling into place for the wide-scale rollout of 5G networks beginning in 2019. according to Qualcomm executives at a media event in San Diego ahead of the upcoming Mobile World Congress.

For the 5G launch to be successful, all of the following would have to be commercially ready: we standards, silicon, network infrastructure deployment, available spectrum, a choice of consumer devices, and viable use cases sustained by business models.

Qualcomm said the industry has made progress in each of these areas, setting the stage for what should be a strong rollout of 5G by a number of mobile operators. This week Qualcomm is announcing:

5G design wins with device manufacturers -- there is a growing list of leading global OEMs choosing the Qualcomm Snapdragon X50 5G NR modem family for standard-compliant 5G NR mobile device product launches starting in 2019. These 5G mobile devices will be for the sub-6 GHz and millimeter wave (mmWave) spectrum bands. Brands committing to the Snapdragon X50 5G NR modem include: Asus, Fujitsu Limited, Fujitsu Connected Technologies Limited, HMD Global – the home of Nokia phones, HTC, Inseego/Novatel Wireless, LG, NetComm Wireless, NETGEAR, OPPO, Sharp, Sierra Wireless, Sony Mobile, Telit, vivo, Wingtech, WNC, Xiaomi and ZTE.

5G NR Trials with mobile operators --  Qualcomm® Snapdragon™ X50 5G modem has been selected for use in live, over-the-air mobile 5G NR trials with multiple global wireless network operators in both the sub-6 GHz and millimeter wave (mmWave) spectrum bands. AT&T, British Telecom, China Telecom, China Mobile, China Unicom, Deutsche Telekom, KDDI, KT Corporation, LG Uplus, NTT DOCOMO, Orange, Singtel, SK Telecom, Sprint, Telstra, TIM, Verizon and Vodafone Group will conduct the trials, which will be based on the 3GPP Release 15 5G NR standard.

Use cases -- 5G use cases include enhanced mobile broadband to smartphones; Always Connected PCs; head-mounted displays (HMD) for virtual reality (VR), augmented reality (AR) and extended reality (XR); and Mobile Broadband, all of which require constant and consistent cloud connectivity.

"2018 will be a big year for Qualcomm Technologies and the mobile industry overall as we work to execute on the agreed upon 5G NR specification,” said Cristiano Amon, president, Qualcomm Incorporated.

Qualcomm rejects Broadcom's latest offer

The Board of Directors of Qualcomm unanimously rejected the latest bid from Broadcom posted -5-February-2018, saying the offer of $82.00 per share ($60.00 in cash and $22.00 in Broadcom stock) significantly undervalues the company and poses regulatory risks.

In an open letter to Mr. Hock Tan, Broadcom's CEO, the directors of Qualcomm point out that the offer "ascribes no value to our accretive NXP acquisition, no value for the expected resolution of our current licensing disputes and no value for the significant opportunity in 5G."

AT&T commits to 520 MW of wind power

AT&T announced one of the largest corporate purchases of renewal energy in the U.S. to date.  The carrier agreed to purchase 520 megawatts (MW) of wind power through 2 agreements with subsidiaries of NextEra Energy Resources:

  • 220 MW of power will come from the Minco V Wind Farm located in Caddo County, Oklahoma. 
  • 300 MW will come from a wind farm in Webb and Duval Counties in Texas. 

AT&T also announced its commitment to the Corporate Renewable Energy Buyers’ Principles. The group is led by the World Wildlife Fund (WWF) and is made up of large energy buyers working to spur progress on renewable energy and fulfill their increased demand for it. AT&T is also a member of the Business Renewables Center, an initiative that, along with the Buyers’ Principles, forms part of the Renewable Energy Buyers Alliance.

“As one of the world’s largest companies, we know how we source our energy is important,” said Scott Mair, President, AT&T Operations. “Many companies are focused on their own carbon footprint but we believe our industry can do more. We’ve been working for a long time to ensure our wind projects deliver for both our business and the environment. We will continue to explore renewable energy solutions to help create a better, more sustainable world.”

T-Mobile U.S. revenues up 8.3% to $30.2 billion in 2017

T-Mobile U.S. revenues in Q4 2017 rose 5.1% to $10.8 billion. For full year 2017, revenues were up 8.3% to $40.6 billion. Net income was $2.7 billion and $4.5 billion in Q4 2017 and 2017, respectively
Diluted earnings per share ("EPS") of $3.11 and $5.20 in Q4 2017 and 2017, respectively.

Some key metrics:

  • 1.9 million total net additions in Q4 2017 - 5.7 million in 2017
  • 1.1 million total branded postpaid net additions in Q4 2017 - 3.6 million in 2017
  • 891,000 branded postpaid phone net additions in Q4 2017 - 2.8 million in 2017
  • 149,000 branded prepaid net additions in Q4 2017 - 855,000 in 2017
  • 1.18% postpaid phone churn in Q4 2017, down 10 bps year-over-year - 1.18% in 2017, down 12 bps from 2016
  • T-Mobile covered 322 million people with 4G LTE at the end of 2017 - targeting 325 million people across 2.5 million square miles by the end of 2018
  • first U.S. carrier to exceed 30 Mbps average download speed
  • Aggressive deployment activity of 600 MHz in 2017, accelerated pace anticipated for 2018
  • 2,800 new stores opened in 2017, including nearly 1,500 new T-Mobile and over 1,300 net new MetroPCS

"Wow - what a way to cap off 2017! Record financial results across the board and over 5 million customers added for the fourth year in a row," said John Legere, President and CEO of T-Mobile. "We made incredible progress in 2017 building out our network and retail footprint to set ourselves up for future growth. Our business is clearly firing on all cylinders and our strong guidance for 2018 shows that we have no plans of letting up!"

CoreSite's data center business continues to grow, up 14% in Q4

CoreSite Realty reported Q4 2017 revenue of $125.9 million, representing a 14.0% increase year over year. Reported fourth-quarter net income per diluted share of $0.44, consistent with the prior-year level.

During Q4, CoreSite executed 128 new and expansion data center leases comprising 41,521 net rentable square feet (NRSF), representing $7.2 million of annualized GAAP rent at an average rate of $174 per square foot. The company also commenced 52,221 NRSF of new and expansion leases representing $8.2 million of annualized GAAP rent at an average rate of $157 per square foot.

“We finished out the year with solid results, highlighted by fourth-quarter revenue, adjusted EBITDA and FFO growth, before the one-time Preferred Stock redemption charge, of 14%, 13%, and 11%, year over year, respectively,” said Paul Szurek, CoreSite’s Chief Executive Officer. “Organic growth was driven primarily by the continued expansion of existing customers across the portfolio and also by new logo growth as we continue to attract valuable deployments to our facilities, driving interactions and interconnections among our customers. When looking at 2017 in its entirety, we executed well on our strategic priorities and took important steps to grow our differentiated scalable and flexible campus strategy in key markets, including Santa Clara, Northern Virginia, Los Angeles, and most recently, Chicago.”

Interoute delivers SD-WAN for Thule

Thule Group, a leading sports and outdoor goods company, has selected Interoute to deliver an SD-WAN connecting 30 of its sites in 14 countries.  Thule is implementing an Enterprise Digital Platform to support its growth and digital evolution.

By prioritising and optimising essential data traffic at the edge of the network and actively directing it along the most efficient lowest latency routes, Interoute Edge SD-WAN will optimise data flows to and from applications hosted in the cloud, improving performance for users.

“As we’ve moved to use more cloud and SaaS based applications, we’ve seen increased bandwidth demand and heavy over-utilisation of our network. We needed an underlying network that would allow us to achieve greater flexibility, scalability and control over our IT estate,” said Anders Olsson, Director of IT at Thule Group. “Interoute owns an advanced world-class network that offers us a platform unlike any other. With Interoute, we now have a software defined network foundation that offers us the flexibility we need to expand our business, enabling us to grow and evolve without technology limitations.”

Former Time Warner Cable exec to head Google Fiber

Dinesh (Dinni) Jain has been appointed CEO of Access, the new name for the Google Fiber and Webpass business.

Jain most recently served as Chief Operating Officer of Time Warner Cable.

Sierra Wireless posts Q4 revenue of $183.5 million up 13%

Sierra Wireless reported Q4 2017 revenue of $183.5 million, an increase of 12.6% compared to $163.0 million in the fourth quarter of 2016.

Revenue from OEM Solutions was $139.8 million in the fourth quarter of 2017, up 3.4% compared to $135.2 million in the fourth quarter of 2016. Revenue from Enterprise Solutions was $31.8 million in the fourth quarter of 2017, up 52.0% compared to $21.0 million in the fourth quarter of 2016. Revenue from IoT Services was $11.9 million in the fourth quarter of 2017, up 73.5% compared to $6.8 million in the fourth quarter of 2016.

GAAP net loss for the quarter was $3.5 million, or $0.11 per diluted share. Non-GAAP net earnings were $9.2 million, or $0.28 per diluted share, in the fourth quarter of 2017, compared to net earnings of $8.8 million, or $0.27 per diluted share, in the fourth quarter of 2016.

“In the fourth quarter of 2017, we delivered year-over-year revenue increases in each of our three segments, with particularly strong growth in our high margin Enterprise and IoT Services lines of business,” said Jason Cohenour, President and CEO. “We also significantly strengthened our IoT Services business with the addition of Numerex, and are now better positioned than ever before to expand our IoT services and scale our subscription-based recurring revenue.”

New market highs for semiconductor sales

The first financial reports of 2018 from semiconductor conductor companies have started to arrive. Intel reported very strong results for the fourth quarter of 2017, as did Microsemi (see below). The figures are encouraging for the networking and telecommunications businesses as well given that nearly every system-on-chip solution ends up in a device that is network connected. The more end-user devices, the more nodes on the network, and the data tsunami continues to grow.

Last week, Gartner updated its forecast of worldwide semiconductor revenue, predicting a total $451 billion in 2018, an increase of 7.5 percent from $419 billion in 2017, The new figure is nearly double the 4 percent growth rate that the firm had predicted earlier. The reason for the increased optimism are “more favourable market conditions”, especially for DRAM and NAND memory. Gartner sees the possibility of price increases for some semiconductor categories during 2018, which in turn would put pressure on margins for system vendors and smartphone manufacturers.

Gartner is predicting other categories will grow at a 4.6% clip in 2018, including field-programmable gate array (FPGA), optoelectronics, application-specific integrated circuits (ASICs), nonoptical sensors and application-specific standard products (ASSPs). This analysis comes from Gartner’s newly published  "Forecast Analysis: Electronics and Semiconductors, Worldwide, 4Q17 Update.

"Favorable market conditions for memory sectors that gained momentum in the second half of 2016 prevailed through 2017 and look set to continue in 2018, providing a significant boost to semiconductor revenue," said Ben Lee, principal research analyst at Gartner. "Gartner has increased the outlook for 2018 by $23.6 billion compared with the previous forecast, of which the memory market accounts for $19.5 billion. Price increases for both DRAM and NAND flash memory are raising the outlook for the overall semiconductor market."

This momentum has also been reported by The Semiconductor Industry Association (SIA) which found that worldwide sales of semiconductors reached $37.1 billion for the month of October 2017, an increase of 21.9 percent from the October 2016 total of $30.4 billion and 3.2 percent more than September’s total of $36.0 billion.  Simply put, October was global semiconductor industry’s largest-ever monthly sales total.
“The global semiconductor market continued to grow impressively in October, with sales surpassing the industry’s highest-ever monthly total and moving closer to topping $400 billion for 2017,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Market growth continues to be driven in part by high demand for memory products, but combined sales of all other semiconductor products were up substantially as well, showing the breadth of the market’s strength this year.”

Intel builds on its data centre strength

Despite the PC market continuing its long-term decline due to consumers not replacing traditional home PCs, Intel is telling the financial community that 2018 will be another record year. Its earnings report highlights its Data Center Group as the leading growth driver for Q4 2017.
DCG's revenue was up 20%. This breaks down as follows: cloud segment was up 35%, communications service provider revenues were up 16%, enterprise was up 11%, and adjacency revenue was up 35%. Overall unit volume was up 10%. The new Xeon Scalable server processors, which were launched in July,  are ramping well.

With all of the new data centre construction underway pretty much in every major metro, it is easy to see how Intel’s cloud sales were up so strongly. Many are wondering if the recently disclosed security vulnerabilities in Intel CPUs will hurt its business.  With the (buggy) firmware patches seen as only a temporary fix, there is a distinct possibility that the operators of cloud data centres will choose to retire the current crop of processors earlier than expected once redesigned silicon hits the market. In that case, the refresh cycle for CPUs in cloud data centres could be brought forward. Intel will still be the leading supplier, even if customers are annoyed or infuriated by the silicon bug, and this would benefit Intel financially rather than hurt it. It’s too early to say this will play out, and industry forecasts have no data at this point.

Growing prospects for semiconductors in 2018 forward
Data centres
5G infrastructure
Bluetooth and Wi-Fi
Automotive segment
Ethernet ICs
AI, machine learning, and machine vision