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Apple Newton MessagePad 130It raised smiles 14 years ago when I carried a 1996 Apple Newton MessagePad 130 into the IDC Auckland office.

IDC is the publisher of titles like Reseller News, ComputerWorld and PC World. It was one of the few workplaces where the Newton was instantly recognisable.

The Newton looked odd among the 2006 Motorola flip phones, Blackberrys and Palm Pilots1.

Old dogs, old tricks

Odd, but not too ancient to use. My Newton still worked fine. I could still scrawl notes on the screen with a stylus2. It could still track my diary dates and manage my contacts.

Of course, the Newton couldn’t hook up to much else. The Newton MessagePad predated Wi-fi and Bluetooth. However there was a proprietary cable that would send a trickle of data to and from a PC or Mac.

The Newton needed AA batteries. I had a rechargeable pack that was an afterthought, but my MessagePad didn’t have internal rechargeable power like many modern devices in the 2005.

My motivation for digging the Newton out from the back of the cupboard and giving it another go was twofold.

First, I wanted to see if the technology was as far ahead of its time as it seemed in 1993 when I had my first Newton. In some ways it was.

The second reason was because, at the time, there were rumours Apple was working on something that would replace the Newton. According to the reports that something was also a phone.

The rest is history.

Hardware that goes on and on

Perhaps the most remarkable thing about the Newton MessagePad 130 was that it was still working after a decade. When the Newton line was first launched there was talk of the devices being short-lived. A year later I sold my working Newton on TradeMe.

So long as it isn’t dropped or hammered by hard use, a digital device can live a long time. It will always be able to do whatever it was purchased for in the first place3.

But keeping devices for years is not fashionable. In some circles it is almost viewed as subversive.

Technology companies carpet bomb journalists like me who covering the sector with new products. There is a constant stream of product launches. New this, improved that, enhanced4 something else and so on.

It can get tiring.

New, improved a bit

Often the new thing is better than the old thing. It is rare that it is so much better that we should bin the old stuff and buy the new. And yet that is what people do. Often far too soon.

The hardware you buy can, and should, last for years. There is more to not jumping to the latest model than being frugal. Electronic hardware is hard on the planet, an ecological time bomb. In the case of some materials it can also be the cause of much misery.

Upgrading less often makes the world a better place.

Wise technology buyers choose hardware with a long life. Even if you don’t intend to hang on to something for ages, you’ll get a better price if you sell your device on when you upgrade.

Hardware that lasts

There are two parts to finding products that last a long time. Some hardware brands take a pride in making things that last. Others design their gear so that it can be upgraded.

According to Asymco, the average life of an Apple device in 2018 was four years and three months. That number has increased since then. I’ve seen estimates that iPhones now last almost five years.

Statista estimates the life of an average phone, iPhone and Android, in the US is around 2.88 years.

The sources and methodologies for the two sets of statistics are different, so we can’t read too much into the numbers. Even so, it appears Android phones are active for much less that iPhones.

Retain value

Supporting evidence for this comes from Trademe. Second hand iPhones retain value far more than second hand Android phones.

Another thing to consider is that Apple has historically provided software updates for longer than Android phone makers.

The point here is not to say one is better than the other. I’ll leave that to you. What’s important is if a phone’s lifespan is important to you, choose an iPhone.

You can do similar research with tablets and various types of computers. Apple hardware tends towards lasting longer than average.

Meanwhile some brands are easier to upgrade. You can’t do much to keep a MacBook Air up to date. It’s a piece of cake to put more memory, more storage or a faster drive in a Windows desktop computer.

Popular helps

There is something else to consider about device long life. If you choose a popular brand, that would be Apple or Samsung for phones, Apple, HP and Dell for laptops and so on, there’s a bigger community of people to support that product over the long haul.

You won’t have trouble finding someone to fix a broken Apple or Samsung phone, you might struggle if you pick a less popular brand like, say, Oppo.

Likewise there is a ready market in components like replacement batteries or screens for popular products. Finding parts for obscure hardware is tough.

You may have other tips for getting more out of your spending on hardware. Feel free to share in the comments below. There is a prize for the best tip.


  1. I had one of each of these too ↩︎
  2. Apple had fixed the early teething troubles with handwriting recognition, late model Newtons like the 130 were remarkably good at the job. ↩︎
  3. So long as there are no idiotic software updates that render the thing useless. ↩︎
  4. Was there ever such a weaselly marketing word as enhanced? It implies something is better when often it means is some problems are now fixed. ↩︎

Some telcos are waging a public relations war on Ultrafast Broadband.

Reading between the lines of their public statements, they don’t like the market model.

This was set-up over a decade ago by John Key’s first government. The government restructured telecommunications. It tilted the playing field in favour of customers. New Zealand businesses and consumers got a great deal.

Regulated separation

Regulation separated the market into two parts. Fibre companies would build, own and operate the UFB network. They are regional monopolies. They can only sell wholesale services.

Retail service providers can sell broadband without geographic boundaries. RSPs all buy wholesale services on exactly the same terms.

This model promotes competition. No single player can dominate in the way companies could before the restructure.

Chorus, Northpower, Enable and UFF are the fibre companies. There are 90 or so retail service providers. The biggest and best known are Spark, Vodafone, Vocus, Trustpower and 2degrees.

Consumers are happy with how the market operates. At least those in areas that can get fibre are. The fact that people in areas without fibre are grumpy about it speaks volumes about the model’s success.

World class

Thanks to UFB New Zealand has one of the best and most affordable broadband networks in the world.

It is great for consumers. It is often less wonderful for some of the RSPs. The bigger ones are not happy.

There are two main reasons they don’t like the UFB model.

First, from their point of view, separation does too good a job of promoting competition. RSPs fail to compete on anything other than price. They discount broadband to the point where, as Vodafone CEO Jason Paris says; “They compete away all the margins”.

Thin margins

Retail broadband margins are wafer thin.

A consumer might pay $80 to $100 or so each month for a fibre broadband account. Roughly half of that goes to the wholesale fibre company. RSPs have overheads and costs. The margin is often less than 10 percent of the monthly fee. It can be lower, some only make five percent.

They get that money 12 times a year. Yet UFB is not as lucrative as the old ways of selling telecommunications.

This explains why Spark and Vodafone are so keen on fixed wireless broadband. It’s an inferior product, but they get to keep a larger slice of the cake.

The second reason the bigger telcos don’t like the UFB model is they are not in control of their own destiny. This bothers them. They have few options, little room to manoeuvre.

Equivalence

Another, less obvious grievance is the UFB idea known as equivalence.

A supermarket chain like Countdown usually pays less for products than the wholesale price paid by a corner dairy. They get economies of scale. Countdown buys tins of baked beans from a wholesaler at a lower price than dairies pay.

Equivalence means the largest telco pays the same as the smallest RSP for a customer hook-up.

There are economies of scale when it comes to support, back-end services and marketing. Yet the aristocratic telcos resent paying the same price as the peasant RSPs.

Phoney war

All these aspects of the UFB model come into play as some telcos wage a phoney war. It is a war that is being fought on a few fronts.

Last month there was fuss from big telcos about something known as the wall of bad debt. This sounds like something from the Pilgrim’s Progress.

Spark, Vodafone and 2degrees have been the most vocal. They say a recession is coming and they face large unpaid broadband bills.

They want Chorus, it’s always Chorus 1, to foot some of the bill.

This is an unusual argument on two counts. Wholesalers don’t shoulder the risks of their retailers in other sectors.

What’s more, the debt risk facing the large RSPs is largely of their own making. When lockdown began the telcos said they would not cut off customers for non-payment.

Decent

It was a good and decent thing to do. Or at least it is a good and decent thing to do with your own money.

It’s not such a good and decent thing to be generous, then turn around and ask the fibre companies to pay half. It would be fine if they had gone to the fibre companies first and agreed something along these lines. But they didn’t.

This doesn’t mean their argument is unjustified. They have a case. It is not as clear cut as they argue.

Also, it is not as if fibre companies don’t face their own post-lockdown financial risks.

First they had to keep contractors ticking over when there wasn’t much work. What’s more, they face their own potential wall of bad debt if RSPs go bust in the looming recession. Having an RSP fail to pay would be far more serious than an individual consumer missing a payment.

Moral hazard

There is a moral hazard aspect to the wall of bad debt. If telcos get wholesalers to carry half of the risk, they have an incentive to take more risks.

Companies have a tendency to be reckless when protected from consequences. Among other things, they might not chase bad debts as hard if they know they only face half the loss. They might be less fussy about who they give credit to and so on.

It doesn’t help Chorus’ case that it is now enjoying the financial light at the end of the UFB-build tunnel.

That said, Chorus agreed to pay $2 million towards the bad debts. In round numbers that’s about half the cost if 7000 New Zealanders fail to pay for six months of broadband. Around one million New Zealanders connect to the UFB. So if seven percent default on payment, Chorus pays RSPs half the cost.

Some telcos don’t think that’s enough. Remember here that Chorus has no legal obligation to pay anything.

Minor regulatory risk

There is a small danger here to the idea of separation. If the fortunes of wholesale fibre companies depend on RSP performance, they could play favourites. A bigger danger comes from another battle: fibre unbundling.

To understand how fibre unbundling threatens UFB, let’s go back to the original plan. The government decided fibre companies would sell layer 2 services. It left open an option for layer 1 services at a later date.

In this context layer 1 is an unbundled service.

That later date is now. Or, to be more precise, it was January this year.

Layers

You don’t need to know the technical nuance about layer 1 and layer 2 to understand what is at stake. Here’s the simple version.

In effect layer 2 means fibre companies sell RSPs a complete service from a home or office to a network node. This includes the network connection hardware at each end of the link. Fibre companies wrap all the parts needed to do this into a bundle and sell it as a whole.

If they sold layer one, RSPs would get a fibre connecting the home to the node. They pay for the hardware on the ends of the line. Hence unbundled.

The problem with unbundled fibre is that all the costs in a network are in the civil engineering. Stringing fibre around the country is expensive. The hardware on the ends of the fibre cost peanuts in comparison.

Wholesale UFB prices are regulated. The price depends on the cost of building and supporting the network. The bundled hardware turning layer 1 into layer 2 is only a small percent of the total. So the input cost difference between bundled and unbundled fibre is tiny.

In other words, in the UFB model unbundled fibre doesn’t make economic sense.

Economics

Big telcos know how the cost structure works, but don’t accept the economics. They continue to argue and lobby for lower unbundled prices. If they get their way, fibre companies would sell connections at below cost.

The entire UFB model would collapse. And future governments would struggle to raise private capital for infrastructure projects.

This connects to another way telcos are waging war on UFB. Last week, a Vocus press release said the latest round of Chorus fibre price rises is: “cynical, money grabbing and unwarranted”.

It’s an opinion. UFB regulations say fibre companies can raise prices in line with inflation. That’s not quite the same as “cynical, money grabbing and unwarranted”.

Inflation is tiny, around one percent, so the rise is small. It reflects the increased costs fibre companies pay for things like maintenance. Without it, a fibre company’s margins would ratchet down each year.

Futureproof

Government choose this price rise at part of the UFB model when it feared investors would not want to fund fibre. It needed this clause to attract investors. It still needs this clause to attract private investors for future infrastructure projects.

Vocus, like the other telcos can choose to pass this cost on to customers. As we’ve already seen, competition is tight, if a telco raises prices customers may move elsewhere. But that’s how market economies work.

And that’s the real story here. Price increases, unbundling and, to a lesser degree, the coming wall of debt are all hardwired into the UFB. Government designed market regulations that way for a reason.

Regulated competition

UFB has been a success, in part, because there is a competitive market. Unpick the regulations and the whole UFB fabric unravels.

The real challenge facing telcos is that the market is too competitive. As Paris says, they have competed away their profits. Corporations might pay lip service to free markets, but they don’t like them.

Mobile means Spark, Vodafone and 2degrees have alternative paths to profit. Enterprise services, adding value through content deals or power billing are other paths. Being better at what you do is always an option. Market consolidation might help.

Attempting to repair margins by chipping away at the foundations of UFB is not a wise strategy. There was a time when Telecom thought it could defy government policy and regulation. Look how that ended.

Disclosure: I do some freelance writing and editing for Chorus, but the company doesn’t tell me what to write. 


  1. Telcos have figured out it is easier to bash the biggest fibre company. Criticising Chorus gets more media attention and more sympathy, than disrespecting “fibre companies”. Yet almost every accusation made against Chorus applies to the other fibre companies. If, say, Northpower was the target of anger, that would look like bullying. ↩︎

Tutela’s Consistent Quality percentages

Tutela says Vodafone has New Zealand’s fastest mobile data. It wins with downloads and uploads. The mobile industry research company says 2degrees has the highest consistent quality and the best latency.

When it comes to raw mobile speed Vodafone is well in front of Spark and 2degrees. Its median download speed is 23.9 Mbps. Uploads come in at 9.2 Mbps.

Spark trails with a median download speed of 20 Mbps. That’s not far behind Vodafone, yet it has the slowest upload speed at 7.7 Mbps.

Tutela speed test results June 2020

While 2degrees has the slowest median download speed at 19.5 Mbps, that is only 4.4 Mbps behind the leader. The company is second when it comes to upload speeds with a median of 8.1 Mbps.

Tutela reports on consistent quality

According to Tutela the 2degrees network is good enough for applications like high definition video calls, streaming video and mobile gaming for 85.6 percent of the time.

Tutela calls this measure ‌Excellent Consistent Quality. The mobile carriers are only compared in places where they all have coverage.

Spark follows a fraction behind meeting the standard for 84.9 percent of the time.

Vodafone brings up the rear on that measure, reaching the required level 81.9 percent of the time.

The numbers are so close that it might help to think of the scores as a draw with Vodafone a tick behind.

2degrees wins on latency

2degrees had the best one-way latency result at 24.5 ms. It was followed by Vodafone at 25.9 ms. Spark in third for a median one-way latency of 29.4 ms.

Looking at these numbers it seems there is not much in it. Although Vodafone and 2degrees do better than Spark in almost every measurement, no single carrier is a long way ahead or behind the pack.

The report also shows that if Vodafone’s December 5G launch has made any impact, it is mainly at the margins.

To get these results Tutela took 3.89 billion network quality measurements including 1.36 million speed tests.

Tutela carried out tests for the June 2020 report between March and May of this year. As New Zealand was in lockdown for much of this time the numbers may not reflect everyday mobile performance.

Australian title Business IT covers a report released by Huawei: Australia suffering gigabit gap despite spending A$51B.

The report says it cost A$4,500 for each NBN connection network, a total of A$51 billion, but the network still only reaches 28 percent of premises. In comparison New Zealand’s UFB network now reaches 75 percent of premises. That figure will rise to around 85 percent when the second UFB stage finishes at the end of 2022.

 

 Gigabit capability in selected countries
Gigabit capability in selected countries (percent of premises)

Ten years after starting the NBN project, less than a third of homes can get gigabit fibre. Meanwhile New Zealand fibre companies are starting to offer speeds of up to 10Gbps. Australia has no plan to extend its fibre footprint.

The report also shows Australia has the world’s third most expensive gigabit broadband. The only people who pay more are in Norway and Canada.

OMDIA, formerly known as Ovuum carried out the research for Huawei.