It's not great surprise to see a number of MNO announcements about low-cost, small "netbook" PCs with embedded 3G - Vodafone+Dell, and T-Mobile+ Asus/Acer [link in German] in particular. Interestingly, Telecom Italia Mobile has gone the MID route instead.
Regular readers will know that I'm skeptical that what I'm calling "Mobile Broadband Computing" products, sold by carriers with embedded 3G, will amount to much. I think there's a lot of wishful thinking going on, which isn't going to fit with the ways in which customers buy and use computing devices.
One thing I haven't been able to track down yet is whether the mobile broadband contracts for these devices will be have standard flatrate dataplan T's and C's, which prohibit, block (or even charge extra) for applications like VoIP and IM. If they do, the proposition will likely fail even sooner than I anticipated. It would be a very serious mistake indeed.
I can just imagine the marketing pitch - "Get our free laptop with embedded HSPA, and ditch your ADSL service! It's like fixed broadband but better in every way! Only, er, you can't use Skype. Or MSN. Or that IM feature built into FaceBook, although as it's a web service we can't see you using it, anyway".
One thing that MNOs will likely find it tricky to grasp is that in the computing domain, you can always give extra applications to customers - perhaps an SMS client, even IMS RCS - but you can't stop them from using their choice of other software. (Unless you're an enterprise IT administrator... and they are doubly certain in not wanting to have PC applications determined by their carrier).
In any case, I'm just not convinced that end users will want to buy their PCs from a mobile operator - and I suspect that those who are most tempted by "Free Notebook!" offers are probably the most likely to prefer prepaid mobile services rather than another 24-month contract. Or those whose credit cards or banks aren't too keen about providing payment plans for PCs.
I'm definitely of the opinion that some embedded-3G offers are really just about massaging up carriers' apparent data ARPU when in fact all they're doing is simply retail finance masquerading as subsidy. I wonder when we'll see cars with embedded HSPA modules for telematics being sold by MNOs too "Our ARPU is now €450 a month".....
One more passing thought on this - given the numerous horror stories about time/hassle in replacing broken or faulty handsets, do you really fancy leaving your embedded-3G PC, with all your data, at the local phone shop if you have a problem with it 6 months down the road? Or perhaps buying separate PC + dongle is the way to go after all?
Dean Bubley's Disruptive Wireless: Thought-leading wireless industry analysis
8 comments:
I fully agree that these Mobile Broadband with Laptop deals are retail finance arrangements, Surpisingly low interest on the arrangement I tend to find once you calculate it all. But, I am surprised that companies are allowed to promote these as free laptops when you can be paying twice the line rental than if you didn't take the laptop.
Neil.
http://mobiledatauk.blogspot.com/
Dean,
I don't believe the flat-rate data plans (at least the ones in the UK such as 3) prohibit applications such as IM or VoIP. They have a monthly quota limit after which they start implementing Fair Use Policies.
Hi Ram
Yes, I know that H3G has an open policy on apps - but other MNOs still have a variety of silly rules.
T-Mobile is one of the worst offenders for this in Europe - it tries to force VoIP users into buying its "Max" broadband rather than the normal one, at £30 a month rather than £10/15.
http://www.t-mobile.co.uk/shop/mobile-broadband/data-plans/pay-monthly/mobile-broadband-laptop/plans/
T-Mo UK forbids VoIP, P2P and even IM on its capped 1GB Web'n'Walk tariffs.
On its Mobile Broadband PLus plans it forbids VoIP but doesn't mention IM.
Although interestingly, its fair use policy says "Remember that you can't use your plan to make internet phone calls", which suggests to me that *in theory* you should be able to use VoIP for applications other than "phone calls" - eg talking in games, talking within Skype but not SkypeOut/In, conferencing, voice mashups etc.
Dean
Dean,
As I wrote in earlier comments, something "dumb" does not mean it won't be adopted. In fact, please read the following URL:
http://web20.telecomtv.com/pages/?newsid=43915&id=e9381817-0593-417a-8639-c4c53e2a2a10
Amongst the companies that have signed-up to participate in Phase 1 of the GSM plan are the 3 Group, Asus, Dell, ECS, Ericsson, Gemalto, Lenovo, Microsoft, Orange, Qualcomm, Telefónica Europe, Telecom Italia, TeliaSonera, T-Mobile, Toshiba and Vodafone.
Also:
The GSMA's initiative came about as a result of research showing that the total demand for notebook PCs this year will top 79.5 million units, and have a value of $50 billion. The research findings also indicate that 88 per cent of consumers considering the purchase of a notebook PC in the $500 to $1000 price range want a device with inbuilt mobile broadband capability.
And this research was not bogus. I know.
Food for thought:
1. You keep thinking that this will be linked to a 2 year deal. This will not be the only deal
2. You mention having to bring back a notebook if/when the 3G module is broken. So? its the same for a CPU, WiFi Chip, HD, Videocard, Soundcard and everything else in the notebook.
3. And what's wrong with "which prohibit, block (or even charge extra) for applications like VoIP and IM."?
I would rather have the option of choosing a subscription that fits my needs instead of paying more for guys that overuse the network.
In other words; I would accept no VOIP or IM with a cheap 10 Euro a month browsing subscription and expect unlimited ability with 30 euro a month. What is wrong with that? Before answering, do you also require the naughty channel with your basic TV subscription? ;-)
And why do you assume:"ditch your ADSL service!" PCCW in Hong Kong actually gives you a free dongle and HSDPA when you take the unlimited ADSL sub. The same happens here in holland with ISP's like Xs4all. It does not have to be an "or". It can be an "and"
In fact, I believe the fixed line providers will que up to make a deal. They are in trouble too and need other ways to increase their own dwindling revenue. Look at all the MNO's that are basically becoming ISP's. In the UK, look at O2 for example.
Lastly, I think you focus too much on the "free notebook from the MNO" where you should be looking at the ability for the MNO to get a big and important channel via the OEM. What you should realize is that the OEM is the key player here, not the MNO. If all the OEM's are aboard, it will happen, because they can create volume and are masters at getting prices down.
Edsard
Thanks for the comments.
I didn't say it was "dumb", just that it's niche. I'm probably in the niche personally. But most notebook buyers aren't. I'll be writing a full post on this soon, and also publishing a report.
I've seen the GSMA announcement and already commented on it. They've solved some of the problems but not others.
The fundamental one being that most people's (and especially business) expectations of computers is that they are not linked to service offerings, in the way that phones are.
I don't have access to the survey data or methodology, but I'm sure that 88% of people would say they'd want an ice-cream dispenser in their notebook if it was free, and the question was well-phrased. What I'd like to know is which survey responses did they decide *not* to put in the PR?
I don't think the 2yr-contract will be the only option, no - nor that the "free laptop" proposition will be ubiquitous.
The problem isn't if the 3G module breaks, the problem is taking it back to a mobile phone retail outlet rather than a computer store. And dealing with MNO customer service people.
On the VoIP/IM issue - the experience from fixed broadband is that people are generally OK with bandwidth caps, grudging about throttling of individual high-traffic applications(eg P2P) and totally against arbitrary application-level blocking from PCs. VoIP & IM takes a trivial amount of bandwidth (although presence can have nasty effects on radio networks).
If mobile broadband has any chance of competing with fixed broadband, it needs to have parity in terms of application performance.
Not all the OEMs I've spoken to are huge believers in embedded 3G.
Hi Dean,
You seem to have missed the subtext of Edsard's post and the view of many MNO's Marketting department when you say 'If mobile broadband has any chance of competing with fixed broadband, it needs to have parity in terms of application performance.'
Why do you say compete? I'd say it complements.
It has taken nearly 15 years of 'mass-market' mobile phones for there to become meaningful %ges who have 'cut-the-cord'.
Until now (and into the future for most people) Mobile is a supplement to PSTN, not a replacement. Mobility has a discinct and tangible value that people are willing to pay for, and I think that value is what keeps you and I in a fulfilling occupation.
Paul
Some people in the mobile industry seem to believe that HSPA can be used as a direct substitute for ADSL & Cable.
My view is that it can act as a replacement for certain people, in certain contexts - but not in the majority of cases.
So for example, a recent immigrant to a country, with no bank a/c or credit record, can get a prepaid 3G dongle for his PC much more easily than an 18-month ADSL contract.
Also depends on the country - some markets have little copper/cable in the ground, or have astonishingly low prices for HSPA (eg Sweden or Austria). Also, different countries have very different levels of PSTN/mobile substitution.
I agree that mobile broadband (and WiFi) may be best sold as an adjunct to fixed broadband, like the various ADSL routers with detachable 3G dongles. (Huawei is selling a Vodafone-branded one in Italy for example)
Actually, I think that the value of the "mobility premium" is diminishing rapidly. In some cases it is already negative - one of these being the extra cost of HSPA for a user who only wishes to use a PC in locations with WiFi (eg home & office)
Dean
I agree with Dean here in general, although there are some success stories, mostly in emerging markets with government subsidies added in.
Someday the PC (in the form of a notebook) will become a disposable $100 closed device. Most people chuck their phone when it dies and buy a new one. The same will happen to the PC in this $100 future. At that point, bundles in subscription (or prepaid card form in emerging markets) will take off. Until then, this projects will be a matter of "market dabbling."
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