Shenzhen 280 wikiopediaMarket for mobile chips disappearing. When Henry Samueli shut down Broadcom's cellular baseband business, I happened to be visiting one of the founders. Many of the 3,000 engineers affected were his friends and the pain was apparent. However, I could see why the decision was necessary. Apple and Samsung dominate the mobile phone business and each made their own chips. Those two companies had growing market share and there just wasn't enough merchant business to sustain the chip vendors. Qualcomm's scale gives them a major advantage and the very efficient Mediatek has also grown.

Huawei, #3 or #4 in cell phone sales, is taking a similar path. Top analyst Linley Gwennap (quote in the headline) is enthusiastic about the new Huawei chip. He believes, "The new chip will outperform both the Snapdragon 810 and the Exynos 7420 on most mobile benchmarks, setting a new bar for smartphone performance."

Huawei HiSilicon is the first to market with the new Cortex-A72, The Snapdragon 810 and the Exynos 7420 "rely on the older Cortex-A57. The Kirin 950 is in production and will first appear in Huawei's Mate 8 smartphone, due to ship in December." The 950 is a 16nm FinFET produced by TSMC.

 Two decades of mergers leave very few survivors across the telecom space. The resulting market power is devastating to suppliers. The decline of AFC, Nortel, Tellabs and many others was accelerated because the three surviving Bells were virtually the entire market. Lucent had the same issue. Cable suppliers tell a similar story and are much fewer than before. Startups find it almost impossible to raise funds because VC's know the problem. Europe is only slightly different. 

Silicon Valley died over the last decade and nobody noticed. Dozens of telecom startups each year have declined to a handful. (Try naming some.) The larger companies are also fewer. Software firms - Google, Facebook, Apple - have seen enormous growth, providing enough jobs that the economy is strong around San Jose. Linley emails, "Some people think we should change the name to Innovation Valley."  "Silicon" no longer belongs in the description.

Mike Moritz writes (FT) "Several of today’s most valuable technology companies did not even exist in 2000. ... Beyond some of the customised systems they operate in their own datacentres, and in Google’s case, some sideline activities such as its Nexus phones and Chrome notebooks, none of these companies sully their hands with anything as taxing as hardware. They have thrived from the artful deployment of software, in particular the “cloud based” variant, and — for Facebook, LinkedIn, Twitter (and Google’s YouTube service) — organising and collating the contributions of their users." 

The Chinese government has allocated $47B to building the domestic chip industry.

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Linley's Processor Watch newsletter is a must read and it's free.

By coincidence, I have just filled out a questionnaire for Huawei. I thought to include my answers here so I can conveniently point other pr people to my preferences. I'm sure Huawei will be happy about my comment, "among the top 3 companies worldwide advancing wireless technology," but less so about my request for more substantive information.

Q1. Besides financial performance and business strategy, what other topics would you be interested in learning about? (Please note all that apply).

 

F. Research and development

 Q2. Which of the following Huawei services are you interested in learning more about? (Please note all that apply).

B. Carrier

 D. Consumer tech products

 Q3. Would you be willing to travel to China to learn more about Huawei?

 yesIf yes, how much notice would you require for such a trip?

enough time to get a visa

Would it be helpful for Huawei to organize meetings for you with other Chinese companies during your time abroad?

 sure.

 Q4. Do you have any impressions of Huawei executives?

Hardworking, competent, trained not to talk much
 

Q5. In your opinion, which companies in the technology sector (specifically the ICT space) provide the best media relations?

Cisco, Texas Instruments

Can you list several qualities of superior media relations?

 Accurate and well-informed

Q6. Do you think Huawei generates too much or too little information to media?

Far too little information of substance.

Q7. Would you be interested in content different formats other than press releases? (For instance, infographics, photography, social releases, video, factsheets, etc.)

Like most working on the web, I try to have a good picture for every article. Unfortunately, too many corporate pictures are stiff executives or head and shoulders. Factsheets are also welcome. 

Q8. What is your general impression of Huawei?

 

I recently said that it was among the top 3 companies worldwide advancing wireless technology.
They generally don't share enough information.
 

dave askOn Oct 1, Verizon turned on the first $20B 5G mmWave network. It will soon offer a gigabit or close to 30M homes. Thousands of sites are live in Korea; AT&T is going live with mobile, even lacking phones. The hype is unreal. Time for reporting closer to the truth.

The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while reducing capex. Deutsche Telekom and Orange/France Telecom also confirm they won't raise capex.

Massive MIMO in either 4G or "5G" can increase capacity 4X to 7X, including putting 2.3 GHz to 4.2 GHz to use. Carrier Aggregation, 256 QAM, and other tools double and triple that. Verizon sees cost/bit dropping 40% per year.

Cisco & others see traffic growth slowing to 30%/year or less.  I infer overcapacity almost everywhere.  

Believe it or not, 80% of 5G (mid-band) for several years will be slower than good 4G, which is more developed.

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5G Why Verizon thinks differently and what to do about it is a new report I wrote for STL Partners and their clients.

STL Partners, a British consulting outfit I respect, commissioned me to ask why. That report is now out. If you're a client, download it here. If not, and corporate priced research is interesting to you, ask me to introduce you to one of the principals.

It was fascinating work because the answers aren't obvious. Lowell McAdam's company is spending $20B to cover 30M+ homes in the first stage. The progress in low & mid-band, both "4G" and "5G," has been remarkable. In most territories, millimeter wave will not be necessary to meet expected demand.

McAdam sees a little further. mmWave has 3-4X the capacity of low and mid-band. He sees an enormous marketing advantage: unlimited services, even less congestion, reputation as the best network. Verizon testing found mmWave rate/reach was twice what had been estimated. All prior cost estimates need revision.

My take: even if mmWave doesn't fit in your current budget, telcos should expand trials and training to be ready as things change. The new cost estimates may be low enough to change your mind.