This week at the Mobile World Congress, Nokia announced plans to release a new smartphone running Android, rather than Windows Phone. The news comes after Microsoft’s announcement last year that it is taking over the devices and services arm of Nokia.
As Tom Warren from The Verge points out, the news certainly has raised more than a few eyebrows in the tech industry:
Relations between Microsoft and Google are as icy as Nokia’s hometown of Espoo, Finland, which made it a bit of a shocker when Nokia — by far Microsoft’s largest mobile partner — dropped an Android-shaped bomb on Windows Phone this week with the introduction of its X handsets. Just weeks away from being swallowed by Microsoft, Nokia is releasing three cheap, Android-powered devices that are designed to appeal to the mass market. All three are low-end models that won’t compete with an iPhone 5S or Samsung’s Galaxy S5. Instead, they’re positioned as smartphones targeted at the millions of people globally who are currently switching away from feature phones. Windows Phone has seen a bit of success in this end of the market — and Nokia dominates sales of handsets running it — so why the switch to Android? And why now?
While there are a few benefits to Microsoft in having its future smartphone arm produce an Android smartphone, there are just as many risks:
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For what it’s worth, this wasn’t a win for Google: every time Nokia mentioned Android on stage at its event this week, it was quickly followed by a mention of Microsoft’s services for its X handsets. It almost felt like an apology and a recognition that the two companies will soon be one. For Microsoft, the Nokia X has some benefits because it pushes the company’s services and apps, but it’s also a huge risk: while Windows Phone integrates Microsoft’s services seamlessly, on Nokia X they’re simply separate experiences and apps.
According to Warren, a more likely possibility was that the decision by Microsoft to buy Nokia was done to prevent the Finnish mobile phone maker defecting from Windows Phone to Android:
Regardless of whether Microsoft will quickly abandon X to a footnote in Nokia’s history, the research and development that went into it appears to be one of the key reasons the acquisition is even happening. With devices that come dangerously close to overlapping Windows Phone in the low end, Microsoft couldn’t afford to let its primary Windows Phone partner — a company that ships over 90 percent of all Windows Phone devices — move to Android without exercising some control. A hasty acquisition allows Microsoft to shape the strategy for Nokia X and ensure it doesn’t eat into Lumia’s market share.
Whatever the truth may be, it’s certainly a curious situation.
How the BBC Micro conquered the smartphone market
If you used a computer in the 1980s, you might remember the BBC Micro B. It was a computer system manufactured by a British company named Acorn. What you might not be aware of is your smartphone, and its processor, is a descendant of the venerable BBC Micro.
The unlikely tale of how this came to be is told by Ashlee Vance in BusinessWeek:
The young and/or non-British may not remember Acorn. The important thing is that it made computers when PCs were just starting to appear. In those days, a company with an idea for a computer couldn’t just order up a batch from Foxconn. No, it had to have real engineers to design the parts. Acorn had those: It had a team of young, clever electrical engineers plucked from the local schools and electronics companies. As Acorn endured financial ups and downs over the years, it came to the conclusion that its chip team was a luxury it could no longer afford. The company’s management twice tried sell its chip design department only to have the deals fall through. “We felt quite unloved, really,” says John Biggs, one of Acorn’s chip engineers.
Then, in 1990, a new and determined customer arrived: Apple. The Mac maker had developed plans for a handheld computer and wanted a breakthrough microprocessor for the device. Apple, Acorn, and VLSI Technology, a chip design tools maker, formed a joint venture to build the silicon. Twelve Acorn engineers were picked to staff the company, which they named ARM. It’s an acronym within an acronym: Advanced RISC Machines—RISC stands for “reduced instruction set computing.”
As Vance explains, while Apple’s product was a flop, it led to Acorn’s chip being picked up by another company, called Nokia:
Apple named the handheld Newton, and it flopped. But ARM’s chip caught the attention of companies looking to make small and sophisticated devices. In 1993, Nokia hatched plans for a groundbreaking mobile phone. Unlike the rudimentary brick phones of the time, Nokia’s would have an actual menu with icons and basic games and would be aimed at businesspeople. Nokia picked ARM for this device, which would emerge a couple of years later as the Nokia 6110, one of the first blockbuster handsets.
These days, the chips ARM designs power an industry:
ARM is basically a company of chip engineers. The business model it invented is simple: Tech companies shouldn’t have to reinvent the wheel every time they need a new chip for a product. Instead, they can look over ARM’s roster of chip parts, buy some basic things, and then do a bit of extra custom design work of their own to make their product unique… About half of ARM’s revenue comes from mobile products, while the rest comes from chips that go into TVs, media players, sensors, cars, printers, and other gear.
The full tale of how this came about is a fascinating look at one of the tech industry’s most important, yet least well-known, businesses.
The big privacy problems with WhatsApp
Over at PandoDaily, Yasha Levine has noticed the pro-consumer, pro-privacy rhetoric has been coming thick and fast since Facebook announced its takeover of WhatsApp:
Ever since news of the WhatsApp/Facebook deal broke, members of the tech press have been heaping crazy amounts of praise on founder Jan Koum for his anti-commercialism and his intense dedication to safeguarding user privacy — which they attribute to his experience growing up under constant Big Brother surveillance in Soviet Ukraine.
Koum’s spiel about his childhood experience inspiring him to create WhatsApp certainly makes for good PR. The story imbues his insanely overpriced mobile texting app with a moral force and historical significance — especially with images of Kiev burning and news of Ukraine on the brink of civil war.
But there’s a slight problem with Koum’s dramatic narrative: It’s just not true.
According to Levine, WhatsApp’s track record leaves much to be desired:
In fact, since Koum launched WhatsApp in the summer of 2009, the company’s privacy track record has been horrible: It’s been aggressively incompetent and careless with user data. It has also repeatedly failed to provide users with even the most rudimentary security measures. As a result, WhatsApp left its messaging data wide open for potential surveillance and interception by intel agencies, scammers and Internet lurkers with basic hacker skills.
Far from being secure, Levine alleges WhatsApp messages were originally sent unencrypted over the internet:
It wasn’t till three years after the company’s launch — the end of 2012 — that Koum even bothered securing WhatsApp messages with the most basic encryption. From WhatsApp’s launch in 2009 to the end of 2012, the app transmitted messages and sensitive data over the Internet in simple text, allowing anyone with a basic sniffing tool to intercept and read everything its users were sending.
One well-known hack, called WhatsAppSniffer, revealed the full extent of some of the security issues:
WhatsAppSniffer was more of a prank than anything else, but it demonstrated that WhatsApp’s shoddy security standards could be abused in all sorts of creepy and damaging ways: a lurker could spy on underage kids flirting and sending pictures through a Wi-Fi network in a cafe, an employer could monitor workers texting over a corporate network, scammers could siphon off personal information from someone texting personal financial information while connected to a public network… and of course, intelligence agencies could just vacuum up text, image and location data as it bounced around the Internet unencrypted.
Compared to some of the alternatives, such as BlackBerry Messenger, WhatsApp certainly leaves a lot to be desired when it comes to online security..
How much per user?
Finally, Brightstar has put together this chart comparing some major tech deals on a cost-per-user basis.
The $US35.56 per user Facebook paid for WhatsApp might seem exorbitant, but it’s nothing compared to $US830.26 per user Yahoo! paid for online hosting company Geocities at the height of the ‘90s tech boom.