We hope everyone had a wonderful week!
This week, I am attending Samsung Unpacked and am attending an analyst council meeting in the Seattle area.
Last week, our MI&S team published 26 deliverables:
The press quoted us with 10 citations. Journalists wanted to hear about Apple, Ericsson, Google, Intel, and Telecom.
MIS Quick Insights:
A.I./Machine Learning (Paul Smith-Goodson)
- Buzzfeed announced its plans to integrate AI technology into its content creation process to enhance the creativity of its writers. With the advancements in AI, such as large language models like ChatGPT, the creative process is becoming increasingly technology-enabled. In the next 15 years, Buzzfeed expects AI to play a significant role in creating, personalizing, and animating content. The industry is expected to move beyond AI-powered curation and toward AI-powered creation. At Buzzfeed, AI-inspired content is transitioning from a research and development stage to becoming a core aspect of its business.
- Buzzfeed might consider taking advice from CNET, which published 77 stories written by AI. Problems ranged from minor mistakes to plagiarism. Still, the advantages of AI-driven content are too significant to ignore entirely. CNET plans on continuing to explore the use of AI-generated content.
AR/VR (Anshel Sag)
- Microsoft has effectively exited the XR business. Microsoft's entire hardware and platform strategy for the Metaverse appears to have met the chopping block. There is an IVAS contract for a military version of the Hololens that is on life support as that is part of a $22 billion contract that may still move forward. Still, I am not entirely sure how that can succeed while the rest of the business is effectively shut down and a commercial failure. Microsoft will likely still build apps for the Metaverse using things like Microsoft Mesh, but ultimately the company has bowed out of the hardware and platform business for spatial computing.
- MojoVision, the company working to bring augmented reality contact lenses, appears to have failed to raise additional funds. It has laid off 75% of its workforce and pivoted towards building AR displays. This is an unfortunate development, but I also believe it is a consequence of pursuing a market application that is heavily regulated and may take years more to crack
Carrier/Wireless (Will Townsend)
- Two industry stalwarts, AT&T and Nokia, recently reported earnings. AT&T continues to drive impressive fiber subscriber growth that supports critical 5G backhaul. The operator is also executing against its mid-band spectrum deployment, declaring that it exceeded its 2022 goal by a factor of 2X. Both lay the foundation for success this year as the company expands its FWA and mobile services. Nokia is turning the corner, given its positive financial performance across all its major business units. Bright spots include private cellular networking and optical, and a healthier Nokia is good for the cellular infrastructure industry to support innovation and supplier diversity.
Networking- (Will Townsend)
- Many often overlook Extreme Networks, given the dominant market presence of enterprise networking players Cisco, HPE Aruba, and Juniper. Extreme continues to deliver positive financial results, as evidenced by its recent earnings. For its fiscal second quarter, revenue is up 13% YoY, and ARA is at a whopping 29%. I credit the success to the company's focus on employee retention in light of recent tech layoffs (the company is named a 2023 Best Places to Work in IT by Computerworld) and partnerships with the NFL that provide repeatable and profitable deployment opportunities.
Server- (Matt Kimball)
- Since Intel's launch of Sapphire Rapids, each of the major server vendors announced portfolio refreshes, with some adding new platforms to target specific needs. Each server company took the opportunity to deliver additional value around its overall platform (e.g., Lenovo introduced enhanced security and management capabilities) in addition to these refreshes and some new platforms. I found Dell to have a couple of interesting plays with Sapphire Rapids. First was the introduction of the HS server family, with HS standing for hyperscaler. These are servers based on open standards and mechanically designed for a hyperscale datacenter. And at the high end, the company refreshed its four-socket portfolio after choosing not to refresh its 15G lineup. This is important as it shows that Dell finds real value in Sapphire Rapids for the performance-hungry business-critical workload category.
- At the tail end of Microsoft's earnings calls, the executive team forecasted a 4-5% slowdown in its Azure business. This caused the stock to drop by a few percentage points and for pundits to decry the cloud business was starting to fall to earth. To be clear, the company is saying that the 25% CAGR it has seen over the last few years will slow to a 20% CAGR. If this spells doom for the cloud business, I'm a fan of doom.
- There is normalization of cloud growth that was long overdue. The big "lift and shift" movement was replaced by pandemic spending. And now we are seeing organizations hit a saturation point with the cloud. Further, I expect to see more organizations rationalize (i.e., balance) cloud usage as we progress into 2023 when budgets tighten, and ballooning cloud costs are further scrutinized.
- Finally, I expect cloud players like Oracle to see further growth. This is a cloud provider that has a unique offering – not bespoke, but certainly attractive to every enterprise with data management needs. So, I guess we could say every enterprise.
- I'm a fan of Dell's acquisition of Cloudify to enhance its portfolio around DevOps and development for multi-cloud (and edge) environments. The amount of time wasted on optimizing applications to run on specific clouds is significant – and takes away from the very real and productive work developers, architects, data scientists, etc., can be focused on. And Cloudify addresses this pain point with a solid offering. Dell adding this to its portfolio is smart and enables the company to address a real problem for IT organizations.
FinTech (Melody Brue)
- LEX has shut down its real estate investment platform. The company raised $15M in June 2022 to "take buildings public," - although it seems the platform was much more about skirting taxes. The CEO explained the structure of the recap equity option was to…: "You know how Donald Trump only paid $750 in federal taxes? That's now available to everyone," Drew Sterrett said. Luckily, it seems the company has enough liquidity, or at least a transfer agent, to make its investors whole, but count this amongst the tragedies in fintech lately. At least the team was small, and the fallout was minor. I worry it signals a bigger problem in real estate.
- CB Insights says challenger banks are back. That was a little bit of a surprise, but after speaking to Neo Financial CEO Andrew Chau, I see the light at the end of the tunnel. Challenger, or neo banks, have suffered this year due to their aggressive product and hiring advancements. There was no way that the market that evolved so rapidly during the pandemic could keep up with consumer demand, especially as brick-and-mortar bank branches shuttered and they needed to answer to more customers than anticipated. However, some have weathered the storm with variable-rate lending products or higher deposit float revenues. The ones who have survived will be able to expand their roadmap horizontally in the next few months while expanding on the growth they've experienced to create better value in the long run.
IioT and IoT (Bill Curtis)
- PX5 RTOS launched this week. It's a very intriguing real-time OS for microcontroller (MPU) systems, essentially a native implementation of the widely deployed POSIX PX5 API, which is already part of every embedded Linux distribution. It's the brainchild of Bill Lamie, well-known for his work with Nucleus and ThreadX RTOSes. Over the past few years, as MPU OSes converged around embedded Linux, MCU OSes remained fragmented, with dozens of OS options. PX5 RTOS might be more than "just another OS option" because it is compact, efficient, and uses familiar APIs. We'll soon find out if the company provides a complete platform with connectivity, security, debugging, monitoring, system management, and support. I'll be watching this one closely.
- After all the excitement about Matter at CES, I'm disappointed (but not surprised) to hear about consumer confusion regarding Matter support. Specifically, which Matter-enabled devices use Thread? And which ones have Thread border router capabilities? For example, Google and Apple have broad support for Matter and Thread in newer products but not many older ones. Many Amazon devices support Matter over Wi-Fi, but Thread support is a few months away. And products from many vendors aren't specific about whether or not Thread support includes a border router. The situation is needlessly murky because the concepts are simple. Matter works over Ethernet, Wi-Fi, and Thread, and Thread requires at least one border router somewhere in the home to connect with Wi-Fi or Ethernet. Consumers need a simple product checklist indicating which networks are supported and whether or not there's a Thread border router. Product selection is too mysterious, and I'm encouraging Matter members to clean it up ASAP.
Personal Computing/ Collaboration (Anshel Sag)
- Verizon reported that its growth was half of what was expected in 2022 and has revised its 2023 numbers downward as well, as it does not expect growth to rebound until Q4 of this year. This indicates that Verizon's strategy around 5G was a failure, and trying to convince its customers that it had superior 5G was a mistake. Verizon may have been the first to launch a 5G network, but it was a non-standard mmWave solution that, I believe, set the company up for failure.
- AT&T reported improved growth and profitability with a renewed focus on its connectivity businesses, which have seen quite a bit of growth between fiber and wireless. I believe AT&T's 5G strategy was much better than Verizon's, and its strategy to deploy new spectrum will also pay dividends. That said, AT&T is also somewhat responsible for its issues with its pursuit of media and entertainment businesses which it eventually merged with Discovery.
- Razer finally launched the Razer Edge 5G after officially announcing it at CES 2023. It is the first 5G gaming handheld on the market and the first product with Qualcomm's G3x gaming chip, specifically designed for 5G mobile gaming. That said, launching with Verizon has set it up for a less than advantageous experience since Verizon's network is not yet fully mature, and the pricing for the plan is $30 a month, which I believe will limit its uptake with consumers. That said, Verizon is offering 90 days free as a promotion for connectivity.
- The ESA is expanding its 5G/6G hub in the UK, which I think is a clear demonstration that the Space industry is getting serious about 5G and 6G and improving connectivity between satellites and future cellular standards, especially in Europe.
- Samsung is finalized testing its new 5G modem for Gogo, which it will use to power in-flight Wi-Fi to the tune of up to 80 Mbps averaging around 25 mbps, which is great compared to current solutions. The new 5G network is already in place, and service is expected to be operational by the end of the year.
- Intel and Microsoft's earnings have shown that the PC segment struggled in Q4 of last year and will likely continue to struggle into this year. This is not only a correction from the pandemic, where supply shortages drove up prices but also a macroeconomic adjustment where companies are holding off on spending with the expectation of an impending recession.
Quantum Computing (Paul Smith-Goodson)
- PASQAL, a quantum computing startup, has raised €100 million in a Series B funding round led by Temasek, a Singapore-based investment firm. The funds will accelerate the company's R&D efforts to build a 1,000-qubit quantum computer in the near future and develop fault-tolerant architectures in the long term. Additionally, PASQAL plans to increase the production of its quantum systems for on-premise installations and develop proprietary algorithms for customers across various industries, including energy, chemistry, automotive, healthcare, and finance. The company's CEO, Georges-Olivier Reymond, told Moor Insights & Strategy that PASQAL's analog quantum computer architecture had performed so well that he is not sure when the company will develop a gate-based quantum machine.
- The automotive industry is exploring the potential of quantum technology to address various challenges related to material design and battery technology simulation. Ford and BMW are utilizing the Quantinuum InQuanto computational chemistry software platform for this research. Ford's quantum research team recently conducted a study using Quantinuum quantum computers and InQuanto software to model EV battery materials, demonstrating the ability to perform valuable chemical simulations on more powerful quantum systems. This research aims to improve the performance, safety, and sustainability of lithium-ion batteries through quantum computational chemistry.
Retail Tech (Melody Brue)
- The layoff waves of Big Tech have struck retail. A darker cloud looms over these layoffs in an industry plagued with the highest attrition rate of any category. This industry struggles with retention and needs to retain valuable frontline workers. Yet I feel that the "me too" contagion is spreading. There's a backlash, which could be a healthy one happening simultaneously. Walmart announced an increase in its minimum wage. This may create some equalization of workers and corporations. Each one needs the other, so let's work it out.
Security (Will Townsend)
- ChatGPT is in the limelight, and many believe it could pose a cybersecurity threat. Generative AI responding to a command cannot analyze the underlying data to provide understanding. Thus, bad actors can use it to create large volumes of phishing emails. Given ChatGPT's current novelty, it could also be exploited as a malware development and delivery mechanism. Consequently, CISCOs should put plans in place to safeguard the use of such tools within the bounds of networked infrastructure.
Space (Paul Smith-Goodson)
- Zoho – Running A Software Enterprise From A Village, by Patrick Moorhead
- Kyndryl – Spinoff From IBM Making The Right Moves, by Patrick Moorhead
- Are The EU Concerns With BroaBroadcoBroadcom'sl Justified? By Patrick Moorhead
- A First Chat With New Infoblox President And CEO Scott Harrell, by Patrick Moorhead
- CES 2023: Matter — Unlocking The Smart Home, by Bill Curtis
- Fintech: 10 Expert Predictions For 2023, by Melody Brue
- How Are Server Vendors Embracing InteIntel'sIntel'sreids? By Matt Kimball
- Seamless Checkout, AI, Robotics News From Microsoft, Google, Brain Corp, And More At NRF 2023, by Melody Brue
Blogs Published (MI&S)
- NVIDIA Continues Its Forward Momentum With New Robotics, Gaming And Creator Announcements At CES 2023, by Patrick Moorhead
- The Samsung Galaxy Xcover6 Pro Is SamsSamsungSamsung'surable Capable Phone Yet, by Patrick Moorhead
- Cloudera – As The World Goes Hybrid, So Must Data Management, by Patrick Moorhead
- A Worrisome Revelation For Apple: The HP Dragonfly Pro Laptop Rocks Unique AMD Internals And Optimizations, by Patrick Moorhead
- Lenovo Shows Off New And Innovative PC And Phone Designs At CES 2023, by Patrick Moorhead
- Intel Announces New 13th Gen Mobile Processors At CES To Kick Off 2023, by Patrick Moorhead
- Low-Code, No-Code Aligns Business Needs With IT Strategy For Greater Workforce Productivity, by Melody Brue
- Three Sport And Entertainment Venues That Understand The Value Of Connectivity, by Will Townsend
- Zapata CompComputiComputing'sual Global Survey Shows Strong Progress For Quantum Computing In The Enterprise Market, by Paul Smith-Goodson
- Snapdragon Satellite And The State Of Satellite Mobile Communications, by Anshel Sag
- DigiLens Makes Waves In The AR Market With Its ARGO Headset, by Anshel Sag
- Sapphire Rapids Signals Intel Has Found Its Bearings, by Matt Kimball
- AWS'AWS'WRoAWS'n Metaverse And Spatial Computing Is Constantly Evolving, by Anshel Sag
- IonQ Acquires Entangled Networks And Locks In Quantum Networking Technology Critical To Its Future Success, by Paul Smith-Goodson
The G2 on 5G by Moor Insights & Strategy, with Anshel Sag and Will Townsend
The Six-Five Podcast by Moor Insights & Strategy and Futurum Research, with Patrick Moorhead and Daniel Newman
Moor Insights & Strategy Podcast
- Apple / Yahoo Finance https://ca.finance.yahoo.com/news/apple-ceo-tim-cooks-slow-223431228.html
- Apple / Nationworldnews https://nationworldnews.com/apple-ceo-tim-cooks-slow-and-steady-leadership-style-may-be-the-needed-antidote-to-massive-tech-layoffs/
- Apple / Businessinsider https://www.businessinsider.nl/apple-ceo-tim-cooks-slow-steady-leadership-style-may-turn-out-to-be-the-exact-antidote-to-the-carnage-sweeping-the-tech-sector/
- Apple / CNET https://www.cnet.com/tech/mobile/the-iphone-14-set-up-2023s-biggest-phone-trend/ (Anshel Sag)
- Apple/ Canada today https://canadatoday.news/ca/apple-ceo-tim-cooks-slow-steady-leadership-style-could-prove-to-be-the-exact-antidote-to-the-carnage-sweeping-the-tech-sector-236268/
- Ericsson / TMCNet https://www.tmcnet.com/voip/news/articles/454725-ericsson-strengthens-private-network-portfolio.htm (Will Townsend)
- Ericsson / NigerianTribune. https://tribuneonlineng.com/ericsson-private-network-portfolio-leads-market-in-solution-choice-2/ (Will Townsend)
- Google / Sfexaminer https://www.sfexaminer.com/news/google-is-laying-off-12000-as-tech-downturn-deepens/article_6cbba7cc-98e0-11ed-a77f-d7b053107a7b.html (Melody Brue)
- Intel / Siliconangle https://siliconangle.com/2023/01/26/intels-stock-falls-double-whammy-earnings-miss-dismal-guidance/
- Telecom / Telecomreseller https://telecomreseller.com/2023/01/26/total-telecom-takes-highly-successful-connected-event-series-to-the-u-s/ (Will Townsend)
New Gear or Software We are Using and Testing that is Public Knowledge
- Inseego MiFi X Pro 5G hotspot
- OnePlus 11 5G
- OnePlus Buds 2 Pro
- Solis Lite Global Mobile Wi-Fi hotspot
Events MI&S Plans on Attending In-Person or Virtually (New)
- Samsung Unpacked, San Francisco, January 31- February 1 (Patrick Moorhead)
- SMB Finance Leadership Forum, February 2, (virtual) (Melody Brue)
- Seattle area advisory, February 2-3 (Patrick Moorhead)
- Cisco Live EMEA – Amsterdam, February 6-8 (Will Townsend)
- Net Events Debate Moderator – Digital Transformation and the challenges of CIOs and CISOs, San Jose, Feb 15-16 (Matt Kimball)
- Mobile World Congress – Barcelona, February 27 – March 2 (Anshel Sag, Will Townsend)
- Mobile World Congress, March 1 (Patrick Moorhead)
- APS Quantum, Las Vegas, March 5-10 (Paul Smith-Goodson)
- LoRa Alliance Event - Orlando, March 14-16 (Will Townsend)
- Connected America – Dallas, March 28-29 (Will Townsend)
- Fortinet Accelerate – Orlando, April 3-6 (in person) (Will Townsend)
- RSA Conference – San Francisco, April 24-27 (virtual) (Will Townsend)
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Analysts, Analysts In-Residence, Contributors
- Patrick Moorhead, Founder, CEO, Chief Analyst; Broad technology coverage plus deep insights into Cloud & SaaS, Personal Computing, Semiconductors, & Automotive
- Bill Curtis, Analyst In-Residence, IIoT, and Deep IoT Technology
- Matt Kimball, Principal Analyst, Datacenter Servers, CI, and HCI
- Melody Brue, Principal Analyst, Financial Tech
- Anshel Sag, Principal Analyst; VR, PC Gaming, Mobile Platforms
- Paul Smith-Goodson, Principal Analyst; Machine Learning, A.I. and Quantum Computing
- Will Townsend, Principal Analyst; Security, Carrier Services, Networking
- Chris Wilder, Contributor, Security
- Jacob Freyman, Junior Analyst
- Dan Pickens, Business Director
- Paula Moorhead, Marketing Director, Website and Social Media