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Monday, June 26, 2006

Redefining seamlessness

I've long held the belief that "seamless" is a nonsense term - at best an irrelevance, and at worst a dangerous distraction. I remember Motorola announcing its adoption of the term "seamless mobility" a couple of years ago, at a point when the term was already trite. A pity, because it's generally a quite smart product & technology strategy, masked by stupid marketing guff & a lousy brand.

Up until now, "seamless" has tended to be used mostly by people talking about handing off voice calls from cellular to WiFi networks, using dual-mode phones. It's one of the features of UMA (which was designed around facilitating it) and it is often emulated/hyped/exaggerated about the various SIP and IMS/VCC based alternatives.

The idea is that the end-user should remain blissfully unaware of what the technology is connecting him or her to the network, even if that connection changes "seamlessly" mid-call.

Which is fine for the 1 time in a hundred that someone might start a phone call on WiFi & walk out the house and expect the call to just switch over without dropping. But useless (or possibly worse than useless) for many of the other use cases for dual-mode devices. "Seamless handover" is a nice-to-have - but only if it doesn't introduce problems elsewhere.

This all fits in with one of the biggest fallacies with IMS - that applications or services should be "bearer agnostic" - ie work the same, irrespective of whether they're connected over 2G, 3G, WiFi, WiMAX, ADSL or a piece of wet string. And that they should be able to switch over "in mid-flight".

This ignores the fact that at the "seam" lots of things change. Bandwidth, latency, price, maybe ownership, control, security, context and lots of other things. While the user should (in some cases like an ongoing voice call) have minimal interaction, the device itself and its resident applications need to be fully bearer-aware to enable a good user experience, especially for data applications. Moving from a low-latency to high-latency connection has a huge impact on software that has complex "hand-shaking" procedures, for example. And moving from an unlimited-data environment (eg home or office WiFi) to one that is tariffed per-MB clearly needs intervention. If I have anti-virus software, for example, I don't want it downloading 5MB of stuff unannounced, especially if I'm roaming. And I want the music application on the device to recognise I'm at home on WiFi, and default to getting MP3s from my PC hard drive, rather than defaulting to the operator music portal.

Generally, I deduct 2 "credibility points" per use of the word "seamless" in a vendor's or operators presentation or marketing material. (Almost as bad as single device / bill / number, in fact). "Ubiquitous", "Transparent", "Flexible" are all much better terms.

This isn't just me, by the way. I've heard very large operators agree that they want intelligent "bearer aware" applications on devices, not "bearer agnostic" ones. Moore's Law rules, as usual.

So it was interesting to be at a conference this morning and hear both BT and DT essentially start to redefine the term "seamless". Both speakers said that "seamless handover between bearers" was not essential - but that access to certain functions like address book or voicemail was. I agree with this - and if "seamless" is to be more generally used as a marketing-friendly way of saying "multi-access", I may reconsider my views about the credibility of its proponents.

It's still trite, though.

Friday, June 23, 2006

Another problem for dual-mode and UMA

I've seen a couple of articles commenting that the Italian Telecom regulator has blocked Telecom Italia from launching its upcoming dual-mode WiFi/cellular phone, called Unico. (I'm struggling to find the link now, bar this short comment).

It looks like this move is based on the notion that TI can't offer the product on a wholesale basis, and therefore it's anticompetitive. I'm not sure of the exact details of the regulatory regime around FMC in Italy, and I haven't heard of this sort of thing occurring elsewhere, although various people have discussed issues around FMC single bills being in something of a grey area.

I imagine that if the service offers customers some form of benefit (eg better coverage / lower prices) then there will probably be some sort of agreement made with the regulator eventually. However, the timing of this is a bit unfortunate for the already-beleagured UMA enthusiast fraternity, as it is another indicator of the narrowness of the window of opportunity - especially as I've already heard various TI people sing the praises of the next-generation of dual-mode technology, VCC.

Regular readers will know that I'm not the world's greatest UMA advocate. Despite this, I've actually been asked to speak at the UMA Conference in Barcelona next week. More details of my (rather punchy) presentation to follow shortly..... Let's just say that much of this weekend is going to be spent buying a bulletproof vest & hiring a bodyguard in preparation.

Wednesday, June 21, 2006

Place-shifting to mobile - IP and arbitrage, again

I've been watching with interest the growing momentum behind "placeshifting" - ie having access to your home content & applications when you're "somewhere else", either on an Internet connection in a cafe/laptop etc, or potentially on your mobile phone.

The best-known is SlingBox, which hooks into your TV and beams the content outbound over the Internet, for you to watch somewhere else. Access and Sony have launched a similar-sounding product.

Of course, the interesting thing here is whether the "somewhere else" in on a mobile device, arbitraging the inevitable trend of mobile-data towards flatrate pipes/large MB bundles, vs. the alleged extra amount people will pay an operator for a dedicated mobile TV "service". Obviously, the mobile TV service should be optimised for device size, user interface etc, but whether it'll stack up competitively against the "best efforts" version is yet to be proved.

Of course, this concept isn't new. During the earliest days of standalone home telephone answering machines in the 1980s, it was possible to dial-in & pick up your messages from a remote phone. It arbitraged against the hassle & cost of going home to get your messages in person. It used the phone network as a "pipe" for voice messages, rather than a dedicated operator-provided voicemail service.

Sending an MMS enables a friend to send you a "postcard" of wherever they might be. This arbitrages against the airfare needed to go & see it for yourself. This is an operator service, though. Sending a picture via email is less of a bundled service, more like a pipe-based one again.

Push email is obviously in the same category as well, although this has both operator-controlled (ie BlackBerry) and "pipe"-based user-controlled versions.

In other words, operators are more than happy to do their own "place-shifting" when it suits them. So really, the operators have nothing to complain about TV-placeshifting from a moral point of view. You don't hear about airlines barring carrier execs from flights (or downgrading them from business class to "best efforts" standby), as they contribute to turning them into dumb aluminium pipes & arbitraging them to the wall with MMS, do you?

.... all of which brings me to the most fascinating version of place-shifting: Vodafone Germany's trial . Nice to see big Red leading the charge on arbitrage for a change, rather than complaining about it & trying to block it. It will be very interesting to see if T-Mobile has a go as well, or whether "placeshifted TV" is added to the list of things that will get your 3G account summarily cancelled.....

Monday, June 19, 2006

Siemens and Nokia

Well, well, well.

Three weeks ago I posted that Siemens' carrier business unit didn't quite have its story 100% right. I thought that some of the implicit assumptions around rollout of IMS, FMC, mobile TV and other areas were a little bit unrealistic.

...it looks like I wasn't alone in thinking that it needed a bit more weight. Today's announcement that it's merging its operator-facing group with Nokia Networks to create a €16bn / 60000-employee behemoth is hugely significant. There's a conference call later today, so I should have a few extra details.

But a couple of thoughts upfront:

We've now seen Nokia/Siemens, Ericsson/Marconi, and Alcatel/Lucent mergers. Assuming that this trend of consolidation is going to continue, that leaves Nortel, Cisco, Motorola and the various Asian manufacturers still standing. Difficult to suggest any obvious matchmaking "couples" there to be honest - I wonder if Ericsson's going to scoop up Nortel as well? Conceivably Cisco/Moto as well, although Cisco doesn't usually go in for mega-mergers.

It's worth thinking about the underlying root causes of this process as well. Clearly, a lot of telecom infrastructure sales have been under severe price and margin pressure, because of the presence of companies like Huawei and ZTE. But I reckon part of the problem has also been (again) the creeping effect of IP-isation/IT-isation on the telecom industry. It's becoming increasingly difficult for the major equipment vendors (and their standards-body counterparts) to push "centrally-mandated" solutions such as IMS, and have them adopted rapidly. Such architectures are intended for normal "cookie-cutter" operator business models, in an era when either innovative bundling/marketing structures (think quadplay or MVNOs) or disaggregated connectivity/application (Internet etc) is become de riguer.

As well as the network complexity, they are also having to contend with the device complexity as well, necessary in order to exploit the new network functionality. It's like a group of "mainframe" manufacturers, trying to deal with the fact that the "terminals" (same term, even) are now turning into PCs (or mobile computers, as Nokia would say). The analogy doesn't quite work, as obviously in the IT industry, the newly-emergent server vendors didn't have the equivalent of the telco firms' radio business.
In fact, I'm wondering if consolidation would be better served with more horizontal specialisation. As we move towards more standardised hardware platforms in the telecom industry, is there any obvious justification for keeping both servers/networks and radio systems together in the same group? Maybe Nokia and Siemens should have gone further and created two new independent businesses - a radio/access company and a server/application one.

(Rather lost in the noise today is another announcement from Nokia, that it is launching a WCDMA picocell. It's not obvious whether this is entirely own-brand, or whether it is OEM'd in a similar fashion to its 2G picocell from RadioFrame. Perhaps better-known is Siemens' 2G picocell from ip.access . It will be interesting to see how all these products are aligned, not least because I reckon a dual-band 2G/3G picocell is preferable to a 3G-only one. Nokia has also had nothing much to say about femtocells.)

Friday, June 16, 2006

I've said it before, and I'll say it again:

Mobile operators: your strength is connectivity, not content.

And this isn't just a philosophical question, but now proven, quantitative fact. A very clever piece of analysis by mobile testing firm ArgoGroup has demonstrated this in a completely clear & real-world fashion.

Last night, FIFA and Yahoo! managed to beat all the mobile operators in getting SMS alerts out to the end-users who weren't near a TV or radio (ie about 7 people) when Peter Crouch scored against Trinidad & Tobago. FIFA's 2-minute delivery time was half the average speed of the operators. Own goal, or what?

What's the betting that the operators won't have the problem fixed for the England:Sweden march next Tuesday? Or maybe they'll just use their deep-packet inspection boxes to delay all SMSs emanating from Yahoo!'s gateway for 5 minutes, to make their own latency-ridden in-house content teams look good by comparison.

Wednesday, June 14, 2006

OK this goes against the grain.....

.... I mean, I know I enjoy being contrarian, but I have to say that I fully endorse a lot of the views espoused at the new "telecom sceptic central"

It completely fits with my current mantra "Connectivity is King, not Content". Oh, and I might as well add "Context is Prince". Content? Sorry, that's Cinderella's ugly step-sister..... I'd rather invest in pumpkins.

Hmm. Inspiration fails me.... I'm really struggling to stretch out this metaphor for an analogy for IMS.

But suffice to say I'm going to be one of the "analysts in residence" at the Telco 2.0 Brainstorm in October, espousing my views that "IMS handsets" (or rather the lack of them) are another set of nails in the coffin of vertically-integrated telco business models.

(Oh, and speaking about IMS phones, I know I trailed this a few weeks ago, but stand by for a rather louder set of comments about this issue tomorrow.....)

Tuesday, June 13, 2006

Awesome service

OK, this is fantastic idea.

If you use Internet IM a lot, you'll know the benefits of having multiple identities. I also use Yahoo! Mail Plus, which gives me "disposable email addresses" linked to my main account. So I can use the addresses (or in this case phone number) for people I don't really know, or that I think might send me loads of spam. If any of them get over-spammed, I can simply bin that address, safe in the knowledge that my friend can still reach me on my "proper" email address.

That said, this "Tossable Digits" thing looks a bit pricey - $5 for a month, and you get some clunky fixed-line + 5 digit extension number. And it won't cope with SMS by the look of things. By comparison, Yahoo! charges something like $20 a year for their whole "Plus" service, including a whole bunch of features.

This should be offered as an operator service here. I'd gladly pay, say, $2-3 per month for a spare, bin-able mobile number - which should get a huge gross margin as it really only needs a number-translation server somewhere. At the moment, I am very wary of putting my mobile number down on any untrusted mailing list for fear of spam & unwanted calls, but if I had the confidence that I could consign the number to the great spam repository in the sky, I'd use that rather than my fixed-line.

One last point - it's another one in the eye for those Luddites who insist we'll only have one device / number / bill / identity. Not only are you wrong, you're getting more wrong by the day.

Thursday, June 08, 2006

From Dynamic UI, to on-device portal, to....?

Met with SurfKitchen yesterday for an update on their progress. For those of you that are not familiar with the company, it is one of a cluster of firms that have software to enable improved user-interfaces on mobile phones. The general idea is to work around the limitations of mobile browsers, and the inconsistency between the way data applications are implemented on different phones. Operators (and maybe others) will implement these extra software layers on devices in order to make it easier for users to access (and spend money on) new services like music downloads, as well as offering "themes" for the overall handset look-and-feel.

This isn't entirely new - SurfKitchen has been around for a few years. It has a number of important peers - such as Action Engine, Qualcomm's UIone division (formerly Trigenix), Adobe/Macromedia and OpenWave's MIDAS product, all aimed at roughly the same space, albeit each with unique spins. I met with Action Engine last week at another event, so I've been pondering what's realistic about the sector, and what's just marketing bluster.

What has changed has been the practicality and reasonableness of vision. About 2.5 years ago, I was at a mobile handset software conference at which at least 15 separate companies all declared that their product would own the "top layer" of the phone. "The whole phone will be inside the browser / dynamic UI / Java / application suite etc". Frankly, it was unrealistic - not least because none of these products worked across a decent array of devices.

Now, the focus is on "On-Device Portals", where the software solves one or two specific problems: how to make downloads easier, or driving the "music" section of the phone. Less ambitious, but much more realistic than an unproven all-or-nothing approach.

I also see this functionality being driven further "down" - and being used almost as a browser plug-in, to improve the "real Internet" experience, when appropriate. Now, I had a bit of an unfinished argument on this with the highly-knowledgeable SurfKitchen boss Michel Quazza, but I am still a big believer in the web browser being the optimal user interface, with other tools masking its limitations where required.

I also asked a question that seemed to resonate with both Michel & a representative from Orange - using this type of software to improve operators' revenues in...... voice. This strikes me as completely obvious - why just try & improve the user experience (& revenue) from what is a tiny % of data applications.... when you could also try & improve usage of mainstream apps like voice & SMS.

Bottom line - now that this type of product has gotten over some of its more gradiose, unrealistic visions, it now seems to be gaining traction on making specific aspects of the handset work better. I'm waiting for a version to help make phones better at doing FMC - or, more importantly, switching between "public service-oriented" and "consumer device" modes.

Wednesday, June 07, 2006

Nonsense Surveys

I've worked as an technology analyst & consultant for a long time. One of the things I've learnt is that large-scale surveys are exceedingly difficult to do well, and generally produce either self-evident truths, self-serving sponsored propaganda or just utter nonsense. The general rule-of-thumb is that:

"95% of respondents didn't know what they were talking about. And the other 5% lied."

Surveys of consumers (especially the "would you use this function/service? and how much would you pay for it?" type) are invariably suspect. They're often poorly-worded, with a poor selection mechanism for people, and poorly-interpreted. They tend to be over-represented by people who enjoy doing surveys (ie too much time, probably a bit geeky, and liking the self-validation from someone actually caring about their preferences).

Surveys of businesses have to contend with the fact that the people who actually know stuff or buy stuff (CIOs, architects, IT managers etc) are bombarded by survey requests - in some cases more than 50 per week. They might do 1 or 2 at most, if they have a good reason (something decent in return, or more likely being part of panels where they get to network with peers). Survey companies therefore have to make up numbers by speaking to people who aren't saturated with interview requests. I'll let you guess how much those people know, and whether their supposed job titles are actually real.

And then lastly, quite often nobody ever bothers to sanity-check the results. "Hmm, now why is it that 78% of people have claimed they're happy to sell their grandmother to pay for a bundle of 200 MMS?"..... "well, that's the survey result, so I guess that's true then. I'm sure the question was well-worded & asked to the right people. And we spent lots of money on the survey. Let's put it in a press release." And you can absolutely bet that the PR will never mention any findings that are "inconvenient" and that don't support the sponsor's view of the world.

With all that in mind, the survey-of-the week award goes to Nokia , with a survey sponsored by its high-end N-series division called "Multifunctional Mobiles Make the World Go Round"

Some claimed highlights:
- 68% of Indians use their mobile phones as their "primary camera".
- over two thirds predict a music-enabled mobile will replace their MP3 player
- over a third (36%) of respondents are browsing on their mobile devices at least once a month
- more than one in two (58%) of those questioned would like to be able to control all their household appliances via their mobile device. This is especially true in India (85%)

Actually, some of the stuff in the press release was actually genuinely interesting, and I was sufficiently intrigued to contact the PR company for the more detailed findings. I haven't had a chance to go through everything, but some alarm bells started ringing with about 20 seconds.

One chart caught my eye in particular. "% who regularly use MP3 function on their mobile phone". It lists two options "Yes" and "Function not available".... presumably the rest being "No" or "Don't know". For India, Yes = 88% and Not Available = 4%.

Yes, that's right - 96% of all mobile phones in India have MP3 players built in. And 88% use the capability on a regular basis. Allegedly.

So I skipped to the end, to the important bit:

"ICM Research interviewed 5,500 respondents aged 18 – 35 years old across eleven countries between 27 February and 18 March 2006. There were 500 interviews conducted in each of the following countries: Brazil, China, France, Germany, India, Italy, Japan, Spain, Saudi Arabia, UK and USA. All interviews were conducted online with the exception of Saudi Arabia where interviews were conducted via telephone."

So they've selected an audience that has a PC and Internet access. And that is solely focused on the more "sophisticated" age group. In this article, it suggests that India, a country with a population about a billion, has fewer than 5m PC households. (It also has the fascinating line "Cyber café’s are the primary mode of access. 60-70% of internet users access the net at cyber cafés"... but do you seriously expect people who pay-per-hour for online time to spend it filling in surveys?).

And how about this line "Almost half (44%) of respondents are already using their mobile phone as their primary camera." What exactly does "primary" mean? The one they take most photos on? The one they take their most important photos on? The one they carry the most? The one they'd pick out of their pocket if they were carrying both a phone & camera at the same time? The one they show other people pictures on most?

It may well be that there's some good, accurate, meaningful stuff in the survey. But unfortunately, by including what appear to be spurious or ambiguous results, it throws the credibility of the whole thing into question.

Bottom line - if you're a vendor thinking about using a survey... make sure you have someone appropriately cynical check the questions, survey methodology, and results, before putting them out into the public domain - or, worse still, use them as the basis for business plans & investments.

Friday, June 02, 2006

Finally, consolidation in handset software.....

Yesterday Motorola acquired handset software & silicon IP vendor TTPCom for £103m, through a specifically set-up subsidiary. TTPCom is a company I know very well, having first met them shortly after their IPO, more than 5 years ago (I was previously an equity analyst for an investment bank, covering small technology firms). The announcement came on the same day that TTPCom announced its results for its 05/06 financial year, which had been pretty poor, despite the growth in volume of the handset industry.

This is quite telling. There are dozens of specialist software companies (as well as semiconductor & silicon IPR firms) servicing the mobile phone industry. The fact that one of the largest independent suppliers to the sector has suffered from such problems, in a banner year for the industry, is a bit of a sobering thought for the hordes (shoals?) of minnows that still flock to it. I've long thought that the market for handset software - especially application "suites" - has been overcrowded, especially given in-house development by a handful of leading handset manufacturers. But it seemed as though every time one disappeared (eg IXI Mobile) another two would pop up in its place.

Generally, handset software firms fall into two categories - those with "point products" like video players, predictive text functions or individual "clients" like push-to-talk - or those with platforms or "integrated suites". Clearly, there's a huge attraction in becoming a "platform player", but the problem has always been that the larger vendors like Nokia are quite happy with their in-house software, so outsiders have always been chasing the Tier 2's and 3's. And there's not a huge amount of kudos (or value) in being "leading software platform supplier to all the vendors who don't have enough scale to do their own". Not only that, but end customers don't really value software that much (they prefer pinkness & thin-ness), and very few other people in the industry seem to recognise just how tricky it is to get right. (Hence my prediction that "IMS phones" will be incredibly late-to-market, as everyone has understimated the complexity involved. See the new Disruptive Analysis SIP and IMS Phones Report for more details)

Motorola, however, appears to "get it". Long castigated for its phones' user interface limitations, and slow in rolling out its various Linux and Windows Mobile products, I think it's fair to say that handset software has never been Moto's core strength. Lower down the stack, it has also been fairly closely tied to its spun-off Freescale chips. TTPCom fills in a few separate pieces of the puzzle - firstly, its protocol stacks work across multiple vendors' chips, and secondly its Ajar platform can potentially fit nicely "below" the higher-end Java-Linux inhouse platform (or, possibly, be integrated with it). The TTPCom solution should also mean it's easier for Moto to manage its various outsourcing/ODM partners, by providing them with a more standardised software platform.

The acquisition premium was pretty staggering, at 246% of the previous closing price, indicating how vicious and short-term sentiment had been around the company's share price - and how difficult it is for outsiders to get their heads around the mobile phone software business. That said, $200m for 600 high-end mobile engineers is not unreasonable at all.

The other interesting side to this acquisition is TTPCom's stake in ip.access , probably the best-established player in the suddenly smoking-hot cellular picocell infrastructure business. TTPCom recently got a round of external funding for this arm of the company, but retains a large stake. Interestingly, there's a very good fit indeed here - ip.access has been relatively slow with creating 3G "home cellular access point" versions of its products (also called femtocells). Meanwhile, Motorola's AXPT rival lacks 2G capabilities - fine for providing indoor high-speed data connection, but missing out on the more basic need for low-cost homezone voice options.

Potentially, this acquisition throws a few spanners into the works for various of TTPCom's other customers. TTPCom has a broad range of other handset clients (although it has probably focused more on semiconductor firms as routes-to-market of late), while ip.access has an OEM deal with Siemens for picocells. Whether Moto can assuage these companies' fears by setting up a separate subsidiary remains to be seen.

This is also not the only transaction involving handset software recently. Swedish rival Teleca (which owns the Obigo software division, a rival to Ajar) has bought a Russian consulting firm, Telma, which also had Motorola as a client. It will be interesting to see if some of the other big players in the space (eg OpenWave's mobile software unit) also have a role to play in consolidation.