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Chris Keall has the Vodafone overseas roaming story at the New Zealand Herald: Vodafone NZ increases global roaming cost from $5 to $7 a day. (The story is behind the pay wall).

A $2 price rise for overseas roaming doesn’t seem much until you realise it’s a 40 percent price increase at a time when inflation is close to zero. Few other service providers could get away with a 40 percent price hike.

That said, no-one can argue that New Zealand mobile phone margins are excessive.

Less than a beer

Nor could you argue that $7 a day for overseas roaming is not reasonable. If you can afford to travel overseas and you want to stay in touch, it costs less than a glass of beer. For many readers, it remains the best option and is far better than the bad old days of bill shock.

Vodafone’s first line of justification for the price rise borders on the ridiculous. Keall writes:

The spokeswoman said, “Vodafone launched Daily Roaming over five years ago and since then have made numerous improvements to the service, including expanding it from 23 destinations to now over 100. Included in the latest round of new destinations are Vietnam and Cambodia, which are hugely popular with Kiwis.

Chris Keall, NZ Herald, June 4, 2019

Vodafone benefits

The fact that there are more destinations may benefit customers. It benefits Vodafone more.

By giving the company a lot more opportunities to bill that $7 a day charge, it means much more revenue. It also improves internal costs by spreading the costs of administering overseas roaming charges across many more sales.

Let’s put it another way: imagine if New World said it was charging more for milk because it was stocking it in more supermarkets.

Vodafone has a much better argument when it says mobile data use is now running at three times the rate when the roaming service was first introduced. However, the cost of delivering a gigabyte of mobile data has fallen over time.

There’s a bit of snark about Vodafone’s customers not having to buy bundles… that’s how roaming works with Spark. And talk about one fixed price across markets where the costs are different. Well yes, but again, keeping the price structure simple is also of benefit to Vodafone.

Overseas roaming is revenue

Whatever the public justification, the increase is also about increasing revenue at a time when there’s little obvious growth. It’s also about improving margins. Both of these are fair enough, Vodafone is not a charity, yet for some reason, the company doesn’t feel able to say so.

The bigger concern for Vodafone customers could be that this is not the only price increase. Six months ago Vodafone jacked up broadband prices. There could be more in the pipeline.

Vodafone can’t go too far. As the Commerce Commission points out, New Zealand’s telecommunications market is competitive. If you don’t like Vodafone’s roaming price increases you can go elsewhere. The international equivalent of buying a prepaid Sim card in the first dairy as you leave the airport is also still an option.

Huawei P30 Pro screen

The US government has blacklisted Huawei. As a result Google has stopped providing and supporting the Android software used on Huawei phones. American chip makers can no long supply technology to Huawei. The Huawei blacklist is part of a wider trade dispute between the US and China. 

Does the Huawei blacklist mean I have to stop using my phone?

No. If you already have a Huawei it will carry on working as normal for now.

Could China be spying on me through my Huawei phone?

Don’t be silly. If you’re like the average Android phone user you already let Facebook, Google and others spy on you. They make money that way.

If China wanted to casually spy on you it could buy data from one of those companies. If you’re a serious intelligence target for Chinese agents they’re probably able to spy on you regardless of your phone’s brand.

Is my Huawei phone a security risk?

No more than any other Android phone. Android is more prone to malware and nasty stuff than other phones, but this changes nothing in that department.

Huawei has not always been the best at providing necessary software updates and security patches in the past. The company says it will go on supporting existing customers.

I was thinking of buying a Huawei phone…

That’s probably not a great idea although if sales slump you may be able to pick up a bargain.

If you buy a Huawei phone today you’ll get updates for the current version of Android. It’s most likely you’ll get upgrades for the next version. After that things start to get tricky.

At the moment we’re on Android Pie. The next version, Android Q is due in a few months. Huawei has had all the code for both of these.

The next version, R, should turn up in about 14 months. The way things stand today Huawei won’t get that code.

Without official support, you could be cut adrift from the Android mothership in as little as 14 months. Huawei says it will continue with security upgrades, but you may struggle to run some apps once R is mainstream.

What about other Chinese Android phone brands?

How much of a gambler are you? The recent Huawei blacklist is specific to one company, but it’s part of an escalating trade war between the US and China. If you count yourself as cautious, then wait to see how the dust settles before buying an alternative Chinese brand.

Isn’t Android supposed to be open source?

Only up to a point.

Android has a number of layers. At the top there’s Huawei’s own software overlay, that’s EMUI on the premium phones. There’s a service layer which connects to things like the Google Play store, Maps and Gmail.

There’s a low level layer that connects the operating system to the hardware. The underlying Android operating system, AOSP is open source. Huawei will still be able to use that. It will be updated as normal.

However, Google usually shares this code with favoured phone makers months before the code is made public. Phone makers pay vast sums for this.

The blockade means Huawei will now get the code on release day, so users may wait months for upgrades.

This is how AOSP works for many smaller Chinese phone makers. If you’ve tried one of those phones you’ll know the customer experience often leaves much to be desired.

Yet it’s also how Huawei’s Chinese phone business works, so the company already knows how to deal with the restrictions.

The real problem is with those services or those of us living in western countries. If Google makes changes there could be problems for existing phone users.

Will I be cut off from Google services?

No. At least not for the foreseeable future. You might not get any new services introduced from next year on.

Is any of this covered by the Commerce Act?

That’s a good question. The simple answer is you probably won’t be able to use the Commerce Act as a way of getting your money back if the phone goes on working as normal. Although there’s an interesting precedent that suggests otherwise.

In the longer term you may have a case if a lack of software updates means the phone is, in effect, rendered useless before a reasonable period of time. 

If this happens, it won’t matter if Huawei is no longer active in New Zealand (see below). The phone retailer is liable, not the manufacturer.

What does this mean for Huawei’s phone business in New Zealand?

It’s possible the spat between the US and China blows over in a few weeks and things will return to normal. If not, it will soon be hard for Huawei to sell phones here. Anecdotal evidence says customers are already avoiding the brand.

That’s a shame because Huawei makes some of the best Android phones. It is the number three phone brand here. While it may not always look like it, Huawei acts to keep Samsung and Apple competitive.

Phones account for about half of Huawei’s revenue worldwide. Half of its sales are in China where losing Google isn’t a problem. So a quarter of the company’s revenue is at risk.

On the other hand, no-one knows if Huawei make much, if any, profit from phone sales. The Huawei blacklist could lead to the company exiting the phone market outside of China. If that’s the case, it could be doing Huawei a favour.

Research company IDC reports that year-on-year phone sales dropped 6.6 percent in the first quarter of 2019. It’s the sixth quarter in a row to see a drop and the rate of fall is picking up. This time last year sales were down 4.1 percent over the same time in 2017.

Samsung remains the leading phone brand albeit with a falling market share. It has been the top-selling brand for each of the last four quarters. During that period Apple jockeyed for second place with Huawei. The Chinese phone maker is now back in second place.

It’s been tough for everyone. Only two of the top five brands sold more phones in the last 12 months than in the earlier twelve months. Huawei and Vivo, which is not visible in New Zealand, both saw sales increase.

Samsung in the driving seat

Samsung accounts for about one phone in five sold. It’s share nudged down a tick as it sold 6.3 million fewer phones than in the previous year. While the company’s premium phone models, notably the Galaxy S10 and S10+, remain popular, Samsung is losing ground lower down the market.

Huawei is the big winner. The company continued its surge that has propelled it past Apple in terms of unit sales. Year on year sales are up 50 percent. In the twelve months to March 2019 Huawei moved to 19 percent market share. That is closing on Samsung’s 23 percent and comfortably in front of Apple’s 12 percent.

This strong growth took place before sales of the recently announced P30 and P30 Pro models could influence numbers. Based on a comparison of the P30 Pro and the Samsung S10 , Huawei may get nearer to Samsung’s share in the coming months.

Worldwide phone shipments

Company1Q19 vol1Q19 share1Q18 vol1Q18 sharechange
1. Samsung71.923.1%78.223.5%-8.1%
2. Huawei59.119.0%39.311.8%50.3%
3. Apple36.411.7%52.215.7%-30.2%
4. Xiaomi25.08.0%27.88.4%-10.2%
5. Oppo23.17.4%24.67.4%-6.0%
5. Vivo23.27.5%18.75.6%24.0%
Others72.123.2%91.927.6%-21.5%
Total310.8100.0%332.7100.0%-6.6%
Figures from IDC, numbers in millions

Apple phone sales fall

Apple’s four percent fall in market share represents something of a sea-change, but is not as dramatic as it is viewed in some quarters. The company’s share price actually rose after it announced its annual results overnight. Apparently iPhone sales were not as dire as expected. The company aims to make up some of the lost revenue from selling services.

We don’t see much of the fourth and fifth brands in New Zealand. Samsung and Apple dominate the New Zealand market with Huawei challenging for a place at the top table. After that, it’s all rats and mice.

For the record Xiaomi’s market share dropped almost half a percent to eight percent. Vivo added two percent of market share taking it to 7.5 percent. Oppo, which is active in New Zealand, was flat and is now in sixth place with a 7.4 percent market share.

Most of the analysts commenting on the results focused on the way consumers are no longer as quick to upgrade phones to the latest models. This makes a lot of sense. A phone should last from three to four years and, advances in photography aside, today’s phones are often not much better than three-year old models.

When new people enter the phone market, they are no longer coming in at the top, but are buying lower priced models from Chinese brands.

Spark esim Samsung Galaxy Watch 4

Spark is the first New Zealand carrier to support embedded Sim or eSim cards. It’s a version of the Sim card that, instead of slotting in, is hard-wired into some of the latest phones and smart watches.

If you bought a 2018 iPhone, you have an eSim. Likewise it is there in the recent iPad Pro and Apple Watches. There’s also an eSim in the Samsung Galaxy Watch 4.

The list of eSim-equipped devices is growing fast, but for now Spark only supports a handful of devices: Samsung Galaxy Watch 4 and iPhone XR, XS and XS Max. Owners of other suitably equipped devices will need to wait.

eSim in Galaxy Watch 4

Spark timed today’s launch to coincide with the launch of the Galaxy Watch 4. Spark offers what it calls the Unlimited Wearable Plan to customers buying the watch but they must also have a Spark phone plan.

The Unlimited Wearable Plan gives customers data, calls and texts for $15 per month. Spark says unlimited data, calls and texts which means after you’ve downloaded 22GB  Spark will drop the data speed to a lower rate.

If you manage to get through more than 22GB of data on a watch you deserve a medal, especially as you must already have a phone to get the Spark plan.

New iPhone owners can activate their eSim with Spark using a QR code. If you already have a suitable iPhone, you’ll need to visit a Spark store to have your current mobile number and plan switched to the eSim. This leaves the card slot free to take another number or plan. It doesn’t have to be with Spark.

This is a beach head for the eSim in the New Zealand market. Spark’s move will spur its rivals to get a move on with their plans. Vodafone has already hinted it has something on the way.

Lots of reasons to like eSims

One advantage is that there’s no need to stuff around removing and installing fiddly little cards. This is handy for phone owners, but essential in tiny devices like smart watches. It’s also important for industrial users and others wanting to use cellular connections in their Internet-of-Things devices.

Another feature of the eSim is that it allows a phone owner to add a second account, possibly from another carrier. This would be useful if you often travel overseas or if you need to work in a part of New Zealand only serviced by one carrier that’s not your first choice. Some people use this to keep separate work and private connections on a single device.

Spark’s eSim press release.

Samsung Galaxy Fold

Samsung has postponed high-profile Galaxy Fold launches in Hong Kong and Shanghai. That’s after review phones sent to journalists had screen failures.

Samsung can ill-afford a second major phone launch disaster. In 2016 the company’s Galaxy Note 7 had battery problems that caused the phone to explode. There were two product recalls. Samsung had to withdraw the phone.

The most humiliating aspect of this came every time an airplane took off. Cabin crew would remind passengers of the explosion danger.

Lasting brand damage

If the Galaxy Fold fails on the same scale, and it looks as if it could, there could be long-term damage to Samsung’s brand.

This is a pity. Folding phones were the star attraction at this year’s Mobile World Congress. If they work as promised, they will give the business the biggest shake up since Apple’s first iPhone.

When folded, folding phones look much like today’s premium phones. The difference is they can fold open to give you a much bigger, tablet-like screen. This makes reading and working on a phone far easier.

Galaxy Fold expensive

Foldability comes at a high price. When, or if, they hit the market the early models will cost the thick end of NZ$4000.

Samsung and Huawei both had models on show at MWC. Some other brands demonstrated folding phones that are still in the pipeline.

Huawei gave New Zealand journalists a brief Mate X demonstration. It was long enough to get a feel for how the phones look. The display is impressive, but you do have to live with a slight crease or line down the centre of the larger screen. The hands on session wasn’t long enough to test the phones in any meaningful way.

Across the aisle, Samsung displayed its Galaxy Fold phone in a glass cabinet. There was no opportunity for the adoring crowds to get closer.

Samsung Galaxy Fold, part folded

Folding phones are impressive

At first sight both phones looked impressive. When folded they are at the large end of the phone spectrum. You could fit one in a jacket pocket. They weigh a few grams more than premium other phones. Opened, they are about the size of an iPad mini.

Most modern phone have toughened glass screens. Samsung covered the Galaxy Fold screen with a protective, flexible layer of plastic. The idea is that this stops the screen from getting scratched. If necessary, Samsung can replace this without the need to replace the rest of the screen.

In some cases review devices failed because journalists pulled off this protective layer. This left the screens vulnerable and easy to break.

Battle of the Galaxy Fold bulge

Yet that only accounted for some of the review screen failures. Journalists reported other screen problems. Some has models where half the unfolded display stopped working. At the Verge, Dieter Bohn’s review phone developed a bulge. This broke the screen.

Samsung cranked its communications machine into damage control mode. It issued a statement saying it durability tested phones to withstand 200,000 folds. It also said the problems were with a limited number of early samples.

If that’s true, the company still has a sizeable public relations disaster on its hands. Sending out half-finished breakable products is, at best, irresponsible. Remember, this is the company that once risked airplanes with exploding phones. Samsung should have learned to take extra care with launches.

Huawei Mate X

Meanwhile Huawei is prepping its Mate X for sale. If the company is prudent it will give the first batch extra testing before sending phones out. After all, Huawei has its own publicity problem caused by incompetence to deal with.

It’s starting to look as if Samsung could have a serious cultural problem. It’s not clear if the problem is engineering, marketing or management. One criticism is that management is rigid and unwilling to listen to warnings when things aren’t going well. Staff fear being punished for “disloyalty” and say nothing.

The company is capable of delivering stunning products. Every so often it can claim to have the world’s best phone. Yet, the Galaxy Fold and the Galaxy Note 7 have not been the only missteps. They happen to be bigger and more noticeable.

Otherwise impressive

The incident is disappointing on another level. Folding phones are amazing technology. They are a sight to behold.

I’m a hardened old campaigner when it comes to new products. Often at product launches I’m the grouchy one who isn’t impressed by demonstrations of slight improvements. Nothing makes me more uncomfortable than an enthusiastic employee inviting me to praise a product when I’m working hard to stifle a yawn.

Folding phones weren’t like that. They charmed and impressed me. Sooner or later I’m going to want to own a folding phone.

It’s a cliché in the tech business to say that Apple is often late with the newest ideas, but that when it moves it gets things right. Yet, if Huawei’s Mate X fails to take off, we may have to wait for the iPhone Fold before folding screen technology is ready for prime time.