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Mobile World Congress: 5G, IoT, Virtual Reality Grab Spotlight

Next-generation 5G wireless technologies, the Internet of Things (IoT) and virtual reality are dominant topics at this year’s Mobile World Congress in Barcelona, one of the biggest wireless industry trade shows. The 5G wireless networks are expected to be 50 to 100 times faster than the 4G LTE networks now utilized. IoT refers to wireless technology that connects industrial, medical, automotive and consumer devices to the Web. VR refers to computer-generated artificial environments. Among developments at the Mobile World Congress: — Sweden’s Ericsson ( ERIC ), Cisco Systems ( CSCO ) and Intel ( INTC ) said they would cooperate to develop a 5G network router for business and residential services. The three companies belong to Verizon Communications ’ ( VZ ) 5G technology forum . — Ericsson also said it’s collaborating with AT&T ( T ) to bring its “Digital Life” home security and automation platform to more service providers outside the U.S. AT&T recently licensed Digital Life to British wireless firm O2, owned by Spain’s  Telefonica ( TEF ). — China Mobile ( CHL ) and Nokia Networks demonstrated some industrial automation and robotics applications for 5G technologies. — Nokia ( NOK ) also demonstrated virtual reality applications for 5G technology. — Facebook ( FB ) CEO Mark Zuckerberg, appearing during Samsung’s keynote address at MWC, called VR the next big social network platform. “Zuckerberg thinks that VR can be a social platform, starting with 360 videos and pushing forward to more immersive content,” said Brian Pitz, a Jefferies analyst, in a research report about the Mobile World Congress.  “Zuckerberg discussed the partnership between Samsung and Facebook (through the Oculus platform) to bring the VR experience at a reasonable price point to consumers.”

Verizon Talks Up 5G Wireless, AT&T Less Vocal

Marketing for 5G is revving up fast — well ahead of applicable wireless technology, which is moving from lab demos to field trials, with wide-scale commercialization years off. And 5G marketing is moving a lot faster at Verizon Communications ( VZ ) than at AT&T ( T ). Verizon in September declared its intention to be a global leader, and the first in the U.S., in rolling out a 5G wireless network. In September, Verizon said that its 5G wireless technology would be 50 times faster than its current 4G network, which is engineered to provide average data speeds in a range of 8 to 12 megabits per second (Mbps) during peak usage in urban markets. In January, Verizon CEO Lowell McAdam raised the bar. He touted 5G networks’ one-gigabit-per-second speed. That’s roughly 100 times faster than Verizon’s average 4G speed of 10 Mbps. It’s not clear, analysts say, whether McAdam was referring to peak or average 5G speeds. On Verizon’s Q4 earnings call, CFO Fran Shammo brought up its commitment to 5G numerous times. But on AT&T’s 4Q earnings call Jan. 26, not a word about 5G was heard. Said Shammo: “We are currently at the forefront globally talking about standards. We will be the first company to roll 5G out in the U.S., and we are currently preparing for (2016) field trials.” AT&T management’s latest public comment on 5G came at a Citigroup conference in early January. John Donovan, AT&T’s senior executive vice president of technology and operations, said that 4G networks still seem fast enough for most customers. “Speed has not been a big, successful marketing program recently,” he said, perhaps alluding to a wireless industry price war spurred by T-Mobile US ( TMUS ) and Sprint ( S ). AT&T has filed with regulators to test 5G services in Austin, Texas. Donovan indicated that AT&T may prefer waiting until the cost of 5G network equipment goes down as global manufacturing ramps up. First, standards need to be set, perhaps around 2018-19, analysts say. “We haven’t been overly public because what we want to do is — we want to keep the optionality of being early, mid- or on the back end (of deployment), depending on whether we’re going to optimize to (network) speed, capacity or cost,” Donovan said. While speed matters, analysts say that 5G will also be defined by new capabilities, such as streaming data to and from self-driving cars or to high-flying civilian drones. Verizon has touted plans to roll out 5G commercially in 2017, though its reach could be very limited. By being an early player in 5G, Verizon aims to influence industry standards. Many wireless firms — network gear makers such as Nokia ( NOK ) and Ericsson ( ERIC ), and chipmakers like Qualcomm ( QCOM ), Intel ( INTC ) and Samsung — have the same goal. Europe, South Korea, Japan and China all have 5G initiatives under way. S. Korea plans large-scale 5G testing around the 2018 Winter Olympics. In Japan, NTT DoCoMo ( DCM ) is gearing up for 2020. 5G will be a hot topic at the Mobile World Congress in Barcelona on Feb. 22 to 25. The arrival of 5G networks is important to gear makers because global capital spending on wireless networks is expected to be flat or down until deployment picks up. “Small-cell” radio antennas, which increase network capacity in urban areas, and software-defined network (SDN) technology are expected to be at the core of 5G deployments. Verizon has been pushing the Federal Communications Commission to allocate airwaves in very high radio frequency bands, above 24 GHz and around 37 GHz, to help jump-start 5G deployment. The U.S. regulatory process to dole out 5G spectrum could take a few years. The next World Radiocommunication Conference, where 5G spectrum allocation is expected to be discussed, isn’t until 2019. While many countries are looking at high frequencies, one view is that 5G services could surface earlier in bands below 6GHz. In that case, networks could continue using interfaces designed for LTE gear. The industry in late 2015 approved an interim “4.5” standard that carries the marketing term “LTE-Advanced Pro.” 5G deployment could take two tracks, says Tristan Gerra, an analyst at R.W. Baird, in a report. He says that a version of LTE could be marked as 5G early on, until higher-bandwidth “real” 5G is ready commercially. What’s clear is that  4G networks aren’t going away anytime soon. Research firm Ovum forecasts that by 2020, 3.62 million people will subscribe to services delivered via 4G LTE networks, up from 1.05 billion in 2015.  Ericsson predicts 150 million 5G subscriptions worldwide by 2021. Verizon says that it does not expect 5G networks to replace the existing 4G ones. Consumers will still be viewing Netflix ( NFLX ) on Apple ( AAPL ) iPhones and other devices for a long time. Verizon plans to overlay 5G capabilities in markets, most likely urban areas, to provide ubiquitous street coverage for self-driving cars and other emerging uses. Verizon’s partners include Alcatel-Lucent ( ALU ), Ericsson, Cisco Systems ( CSCO ), Nokia, Qualcomm and Samsung. Verizon has been working with carriers in Japan and South Korea as well. “(Verizon believes that) one of the primary reasons why Japanese carriers are at the forefront of 5G is because cities like Tokyo and Seoul benefit from high levels of densification,” said Amir Rozwadowski, a Barclays analyst in a report. While speed matters, wireless firms are also providing service for applications that require always-on, low-data-rate connections. The apps involve data-gathering industrial sensors, home appliances and other devices oft referred to as parts of the Internet of Things. Image provided by Shutterstock .

Cloud business optimism fails to lift Microsoft stock

Microsoft (MSFT) played up its cloud computing transition, but its June-quarter earnings report went over like a lead balloon with investors on Wednesday. Microsoft shares fell 3.7% to 45.51 on Wednesday after the company late Tuesday posted its fiscal fourth-quarter results. Microsoft’s sales fell 5% year over year to $22.2 billion in its fiscal Q4 ended June 30. Excluding the impact of foreign currency exchange rates, Microsoft’s revenue would have fallen 2%. It was just the second quarter in at least the last four years that Microsoft’s sales have declined on a year-over-year basis. Microsoft earned 62 cents a share excluding items, up 11% from a year earlier. But factoring in its massive impairment charge and restructuring expenses related to its Nokia (NOK) phone unit acquisition, Microsoft lost $3.2 billion, or 40 cents a share. Microsoft’s commercial cloud business is now on an annualized revenue run rate of over…