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Thursday, October 30, 2008
I'd say things are playing out pretty much as I expected.
Keith McMahon - who is much more bullish on this trend than me - pointed out a report that Toshiba is expecting to embed 3G across its range of business notebooks, in Europe at least. I suspect that not all such devices will actually ship with 3G modules - otherwise various corporate IT departments not wishing to enable HSPA access for all employees will be busy with their screwdrivers, and there will be lots of unused modules appearing on eBay.
Conversely, Apple's recent MacBook launches were conspicuous in their lack of any mention of mobile broadband at all. Many Mac fans are not entirely gruntled by this. However, the ever-present Apple rumour-mill has been whispering about WiMAX coming soon, though.
HP is sitting firmly on the fence, announcing that its new netbooks will come with "optional" WWAN modules - which tallies with my view that embeddable rather than actually embedded by default is the way the market will go in 2009.
AT&T is reported to be subsidising built-in 3G in Lenovo notebooks to the tune of $150. Given the recent hit that AT&T has taken on acquiring (and subsidising) iPhones, I wonder if they'll be giving module-supplier Ericsson (among the keenest of proponents of the concept) a nudge to underwrite some of the costs.
And just by way of a "mystery shopper" test, I asked the manager of my local (large) branch of Carphone Warehouse about 3G notebooks. CPW, for those readers outside the UK, is aggressively targetting the notebook market, with large in-store displays of "free" laptops and netbooks tied to either fixed-DSL or 3G contracts, on a variety of mobile operators and its own home broadband. He said he'd heard about this approach (as he should, as a Vodafone shop selling Dell Mini 9's is only about 50 metres away), but seemed pretty vague and unexcited by the prospect of it appearing in his store any time soon.
And lastly, a tidbit for anyone who's bothered to read this far. For 2009, I'm forecasting 10.9 million shipments of WWAN-embedded PCs.
If you want to see similar forecasts out to 2014, as well as predictions for MIDs, and also installed-base and actual subscriber figures, you'll be wanting to purchase a copy of the new Mobile Broadband Computing research report. Register your interest with me at information AT disruptive-analysis.com , and I'll send you a free summary as soon as it's published.
I was pretty negative at the time, based largely on the limitations of broadband back then, plus the difficulty for businesses to integrate hosted applications with their existing legacy infrastructure.
And indeed, these did turn out to be problems. But not as much a problem as economic downturn. The service limitations meant that real-world uptake was slower than anticipated. Under normal circumstances, this would be painful. But in conditions of poor availability of capital, for many it turned out to be fatal.
Now, we are just at the start of a new wave of SaaS (software as a service) or CaaS (communications...), HaaS (hardware....) rollout. And indeed, things have changed - broadband is ubiquitous and cheap, integration is simplified through web services interfaces.
But something else has changed - caution and fear. Aided and abetted by a new focus on compliance and corporate responsibility, SarbOx rules, and similar concerns, enterprise customers are going to be closely scrutinising SaaS providers' prospects for surviving the downturn.
The last thing you want is to outsource your telephony, or your email, or your sales database to an SaaS provider - and then find that the lights go out when they run out of cash and can't raise any more.
I've spoken today to two players in the hosted mobile PBX/Unified Comms space - Telepo and GoHello. Both seemed very confident that they were financially secure - but my feeling is that many others may not be so fortunate. Ribbit's sell-out to BT earlier this year is looking pretty smart against this backdrop.
I suspect we're going to see a bit of a bonfire of 2nd-generation hosted application companies over the next 18 months. And I'd certainly counsel very close scrutiny of supplier financials by any prospective users of innovative hosted mobile services.
Tuesday, October 28, 2008
Yesterday I spotted VoIPo3G being used on a notebook "in the wild" by an ordinary consumer.
And next up is the iPhone.
Tip of the hat to Alex Kerr over at Forum Oxford (and www.phonething.com ) for pointing me towards the first (?) implementation of VoIPo3G on the Apple device, albeit only with a jailbroken one.
I remember writing about WiFi devices from RIM about a year or so ago, and commenting that the company needed to ensure an "open" option for WiFi as well as one tied to an operator's service.
It's good to see that "vanilla" BlackBerries are now being exploited, as well as the locked-down variants. This is quite an important move for Truphone in my view, especially as it now has support for iPhone as well, meaning that its reach goes far beyond the Nokia E- and N-series that have been the staple platform for most wVoIP services to date.
The growing adoption of BlackBerries among consumers in the US, and to a lesser degree Europe, indicate that the platform is moving outside the corporate email-warrior space to the wider smartphone enthusiast masses. Support from consumer-friendly apps like Truphone should further its reach.
Separately, I'm hoping to catch up with the new Truphone CEO soon - her background at Vodafone and Yahoo sounds like a good combination to me. It will be interesting to see if the company's historically combative stance vs. incumbent mobile operators is softened at all - it's always been striking to see the contrast between Truphone and (say) Fring, which has tried to position itself more as a partner than substitute to the MNOs. I mean, even Skype has played nicely with some of the operators....
Monday, October 27, 2008
I'm sitting in my normal branch of Starbucks in London. There's a young girl a few tables away, with a basic notebook, and dongle from 3 UK. Not an obvious member of the mobile industry / enthusiast fraternity - she looks like a typical foreign student in London.
She's on Skype, with a headset, doing a video call, with, I'd guess from her body language, a family member somewhere in Asia.
It was a year ago that I started saying that VoIPo3G was going to be more important than VoWLAN in the medium term. Coupled with last week's fring/Mobilkom announcement, I'd say we're pretty much on track, despite the slow rollout of HSUPA.
I've had a couple of people ask me about updates of my VoIPo3G Business Models report, and it's something I'll probably do in H1 2009. But if anyone's interested in the current edition, I reckon that it's still pretty much valid - get in touch with me at information AT disruptive-analysis.com for details, or to inquire about a VoIPo3G workshop.
Thursday, October 23, 2008
Wednesday, October 22, 2008
For those that are unaware, Austria is one of the most searing-hot advanced markets for 3G services, both to phones and PCs. Penetration and traffic levels are probably the highest in Europe, with some of the fiercest competition in terms of pricing and service provision.
3 Austria already partners with Skype, but uses the iSkoot "call-through" approach (ie a circuit call into a VoIP gateway), while the fring/Mobilkom arrangement is for "proper" wireless VoIP over 3G.
To my knowledge, this is one of the first VoIPo3G partnerships in Europe - and an important signal for the future. One of my conclusions in my report on VoIPo3G was that mobile operators should look to partner with 3rd-party VoIP specialists, in order to gain early experience (and leverage their software experience) in delivering packet voice on cellular networks.
I expect to see more deals of this type over the next 12 months, as MNOs start to switch from being VoIP-hostile, through VoIP-neutral, to being VoIP advocates, as they realise that the supposed threat of cannibalisation is actually illusory.
The good news - the show seemed quite busy, and I was impressed that Samsung seems to have a much more solid committment to the platform, with a portfolio of 6 phones on display. Also, it's looking like WiFi is becoming a default for inclusion in the majority of non-Japanese Symbian devices going forward. And the early versions of the touchscreen Nokia "Tube" seemed pretty good.
Also, some demos and discussions I had around the new FreeWay IP and connection-manager layer in the OS's future 9.5 version put the platform in a strong position for the future multi-bearer environment. It should be possible to implement per-application priorities and policies, for example on using WiFi vs. 3G.
The less good news - still no news on any HSUPA-capable Symbian devices for now (although it's also in v9.5). And enterprise applications and capabilities seemed to have been downplayed compared with previous years. And I was very aware that Nokia seems to have a multiplicity of developer platforms and sub-platforms - S60, Java, Flash, Silverlight, the ex-Trolltech Qt, Widgets and so forth. (I didn't see that much evidence of Silverlight at the show, so that might be the weakest link).
The unknown - the change of ownership, and the move to the open-source Symbian Foundation is still a bit confusing. The timeframe for the code to be made available to Foundation members is early next year. One developer said to me "We think it will be really good, but we're not sure exactly how it will work".
A couple of possible upsides cropped up:
- Having things like the connection manager in open source should mean that enterprising 3rd-parties might be able to create things like DLNA-over-3G, or smarter custom connection clients that could be made femtocell-aware.
- In theory, someone (Samsung?) might persuade Qualcomm to develop a platform to support Symbian OS devices, without needing to involve Nokia, or having more legions of lawyers trooping between San Diego and Helsinki.
- Hopefully we'll see someone develop a "lite" version of the OS, without all the zillions of under-used applications cluttering up the menus. (I mean really, who uses video editing on a phone?)
Overall - there wasn't as much iPhone/Android -induced despair as I'd imagined, although plenty of people were telling me that's where a lot of developers expect to make money in the short term. I'd say that Symbian shipments will likely see a shaky 6-9 months, probably with a bit of over-done pessimism, but should hopefully pick up again later in 2009.
My view is that this model may indeed be quite popular among certain segments of the urban India population - especially some in the new "middle class" of professionals. BUT it's important to avoid being seduced by numbers like India's overall billion-strong population, or 287 million overall mobile subscribers. But these are not representative of the realistic addressable market for this type of service.
Let's have a closer look at the figures. $30 is approximately 1500 rupees
Reliance has got 51m customers, which is indeed a big number. But 91% of these are on prepaid subscriptions. And 99% of its last quarter's net adds were prepaid, so the balance is shifting to the worse. Its blended ARPU is 282 rupees, although obviously that's skewed by the volume of low-end prepay accounts. However, this very good post cites India's overall (all operators) postpaid ARPU at 600 rupees on GSM and 636 Rs on CDMA [on which the Reliance netbook has been launched]
So despite big headline numbers for India, there are only around 25m current postpaid monthly mobile subscriptions.
In April, Reliance was reported to be selling around 12-14,000 dongle accounts per month, so I'd guess it probably has around 250-300k total data card users, with maybe 500k across India as a whole as Reliance itself estimates it has a c60% share.
And this $30 a month netbook is about 2.5 times the average voice ARPU level. And it's on a 2.5G network (CDMA 1x-RTT), not 3G.
By comparison, Vodafone UK's £25 a month Dell netbook offer compares with a £41 postpaid ARPU, with a 7.2Mbit/s HSPA connection.
As another benchmark, Reliance's landline broadband business has 1.1m subscribers at an average 1715 rupees per month. Overall, there are only around 4.4m broadband lines in the whole country - including business users and shared locations like Internet cafes. So against this, the Reliance mobile proposition sounds an OK deal for young professionals living on their own - but less suitable for instances where a whole family shares a PC.
Bottom line - Reliance's 2G-bundled "free" netbook is an interesting proposition for a small slice of the Indian population. But in my view it's still far too expensive to underlie a major shift in PC adoption in countries like India.
On a side note - that blog post has some interesting commentary on wireless Internet users in India, suggesting that some of the official statistics have questionable definitions. Against a "headline" figure of 75m Internet-enabled subscribers, it cites local experts as estinating the real number of actual active users (mostly using WAP rather than full mobile Web) at 10-15m.
Monday, October 20, 2008
Although definitions vary, I see the MID category as consisting of handheld consumer-centric devices with a 4+ inch screen, optimised for Internet access and services. In other words, a bit larger than the iPod Touch, but more equivalent in size to a Nokia N810.
At the moment, most of the products in this category are WiFi-only (the Nokia being a prime example, along with various early devices based on the Intel Atom processor and MID reference design like the Aigo). Some "bag-sized" mobile devices like the HTC Athena have been 3G-based in the past, but have not been wildly successful.
Looking to the future, I'm expecting this grade of products to adopt built-in WWAN much faster (in proportionate terms) than notebooks or netbooks. Intel's next Atom-based platform called Moorestown should help this trend along.
Initially, I'm expecting a bias towards WiMAX-based MIDs, rather than 3G. There are various reasons for this - not least that the main countries I see adopting MIDs earliest (US, Taiwan, Korea, Japan) are also those that are pretty advanced on the WiMAX track. Moreover, I think that WiMAX makes it easier to have appropriate business models for such products - multiple devices linked to the same data subscription, ad-hoc access and so forth, without the need for a SIM. The WiMAX operators are likely to be more open-minded about the Internet too. The pendulum will likely swing back towards HSPA (and ultimately LTE) over time - which is why the announcement this morning is important.
(There are also other players in the MID silicon space of course - notably Qualcomm with its Snapdragon platform, and Texas Instruments with later versions of its OMAP processors)
However, while I see this segment as important, I'm certainly not as bullish on overall MID volumes as some of my analyst peers. I'm expecting fewer than 100m total shipments of MIDs and netbooks and UMPCs by 2013. I just can't see the MID market reaching the scale that smartphones are at today - I think it will be more along the lines of the scale of handheld gaming consoles or navigation devices. They're certainly nice-to-have gadgets, but I don't see them as ever being a primary device for people to get online, any more than smartphones will be. And I think that consumers will be thinking twice about secondary gadgets during the recession, anyway.
Detailed forecasts and market analysis will be in the upcoming Disruptive Analysis report on Mobile Broadband Computing - please email information AT disruptive-analysis.com for more details and a free summary when the report is published.
Sunday, October 19, 2008
I'm fairly sure that we will see a huge backlash from the UK civil liberties lobby. Some readers outside the UK may be unaware that Britain has a rather contradictory set of views on privacy and anonymity. We don't have to carry driving licences when we're behind the wheel (they didn't even have photos until a few years ago). In fact, we don't have to carry any form of ID - and even if the Government manages to avoid its usual incompetence in large IT projects and finally forces its evil and hideously expensive ID scheme on us, we still won't need to actually carry the things around.
But on the other hand, we have an huge bureaucracy of megalomaniacs and paranoiacs, and so we have the highest penetration of CCTV cameras on the planet. We have roads festooned with speed cameras and automated number-plate readers. We have refuse bins equipped with chips to ensure they're not overfilled. And traffic wardens can issue tickets remotely, zooming in on offenders from overhead cameras.
We regard anonymity as a right - those vocal few who claim that "only those with something to hide" will be worried, are those suburban curtain-twitchers without lives interesting enough to have any secrets.
(Of course, UK anti-terrorism laws are never used for purposes beyond their original intentions. And all data held by the UK government is, naturally, 100% secure)
But maybe a SIM database isn't a bad idea? Plenty of other countries already demand that mobile users are registered - among them Australia, Germany, Indonesia, Japan, Malaysia, Norway, Singapore, South Africa, Switzerland, and Thailand (and I think Italy and Spain as well).
I'm in two minds about this. Like most people in the UK, I like the idea of anonymity, but don't always practice what I preach. I use a credit card to top up my Oyster travelcard, rather than cash. I've registered my prepay data SIM so I can use data and outbound email. I've got a new biometric passport.
In general, I'm supportive of law enforcement where it's needed. I live in central London and I'm as aware of the threats of terrorism as anyone. But I don't want to make it too easy for the authorities to get "casual" access to my data, because government tends to have a lot of "feature creep". I don't want my phone(s)' records linked to my car registration, giving our tax-hungry leaders a way of doing vehicle-tracking and road-pricing by the back door, for example. And I'm a bit wary of what happens when the database shows that I have 4 SIM cards, given that I've seen police-issued posters on the Tube suggesting that citizens should be "suspicious" of anyone with three or more phones. "Excuse me Sir, are these all your phones and modems? Would you please step this way?" is not something I want to be confronted with every time I'm at the airport.
And in any case, I'm really not certain this approach would work. There are so many loopholes it's clear to me that anyone up to serious misbehaviour would have no problem circumventing the system - using an anonymous foreign SIM, most obviously. I can think of various others but I'm not going to write them down here for obvious reasons. I've written before about the likely future break between SIM and individual identity.
Obviously there's quite a long way between a leaked idea in a newspaper, and actual implementation, not least a possible general election. But, pessimistically, I have a suspicion that this is likely to be implemented in law anyway, in which case it's absolutely critical that it's handled in such a way as to avoid the downsides I describe above.
Mind you, I'm just looking forward to seeing the registration process and database entry for this.
Friday, October 17, 2008
Thursday, October 16, 2008
Certainly, there have been some fairly encouraging signs recently for the Mobile WiMAX camp - the Baltimore launch of Sprint's Xohm seems to be being viewed fairly positively. There's a decent stream of devices - dongles, PCs, even a rumoured HTC smartphone. And although the focus is on the US, other markets like Russia, Taiwan, India and obviously Korea also seem to be pretty WiMAX-friendly at the moment.
And despite some rhetoric about "LTE in 2009", all the signs I'm seeing suggest that most operators other than DoCoMo and Verizon are pushing it out to the right. In much of Europe, some of the most likely chunks of spectrum for LTE are mired in legal disputes or at least delayed until 2009 /2010. Not many people expected to see much commercially-used LTE in Europe before 2012 - even before the current economic fears.
Yes, there's a mad scramble by some of the network vendors to get test and early commercial gear out. But there seems to be some skepticism about whether LTE will actually improve capacity that much over HSPA. Yes, theoretical peak speeds will rise, but unless it's deployed in 10MHz or 20MHz chunks, it's not clear that total aggregate throughput will rise much.
So does WiMAX have the race sewn up then?
Actually in my view, it's still far from clear.
Firstly, the elephant in the room is HSPA - it works, its deployed, it's useable, there's lots of devices, we're a long way down the pricing curve. Yes, there's a risk it'll get congested in some locations if operators' capex doesn't extend to improved backhaul, but for now, it sets the bar. Sure, in some circumstances (eg Baltimore) WiMAX alternatives might be a little faster / cheaper right now.... but given the current pricing trends for HSPA data I don't think there's any significant gap in properly-competitive markets.
But the real issue to me is the economy, and its effect on companies - both on the infrastructure and operator sides. I haven't got a Bloomberg terminal to pull hard data from, but some of the key WiMAX advocates - Sprint, Motorola and co - must be viewed as financially weaker than LTE peers like Verizon Wireless or Ericsson. As I'm writing this, I'm hearing reports that today's stockmarket horror story concerns Korean banks - which have complex cross-holdings throughout its industrial & telecom sector. I don't know how the recession might hit the Russian, Indian or Taiwanese economies, but those will clearly be critical factors too. And as for the idea of new entrants borrowing large sums of money (or raising equity) to fund spectrum purchase and build out competing networks......
WiMAX is also still generally consigned to high frequency bands - 2.3GHz, 2.5GHz, 3.5GHz - which, even where they are available, require dense and expensive networks, consume lots of power on both network and device sides, and which have poor indoor penetration.
Bottom line? My take at the moment is:
- LTE gets delayed by recession. Come back in 2013 for massmarket volumes.
- WiMAX is up and running, but remains too patchy to get true scale globally.
- HSPA keeps growing but also faces slow-downs in terms of upgrades.
And all of this is overlaid on a set of macroeconomic and geopolitical unknowns - how will the cards fall when everything settles down? Maybe we'll be looking at Dubai and Qatar as guidelines which future technlogy will win. Maybe all the weaker telcos will be owned by Chinese sovereign wealth funds & we'll be rolling out TD-SCDMA.....
Maybe I'm just getting caught up in the frenzied speculation about the downturn. But I have to say, I'm not expecting to have any sort of 4G phone any time soon.
Wednesday, October 15, 2008
Looking foward a few years, there will be lots of 3G connections, of varying speeds, prices and coverage. Connections and QoS will likely be patchy, especially indoors. But it will also be increasingly easy to share these connections, whether they're hooked up via tethered phones, 3G modems or other devices. Sharing could be via WiFi, Bluetooth, USB, or even "local 3G" via femtos.
I wonder whether we'll start to see devices being smart enough to load-balance between multiple connections, looking for the best speed / price / latency or whatever. We could even see "managed" load-balancing - for example a phone that uses simultaneous routing diversity through its own 3G, and via WiFi, someone else's in the same room. Good for resilience, and could also probably increase the aggregate throughput through the wireless spectrum as a whole. (Are you paying attention, regulators?)
This also hooks into the type of concept that Google hinted at a few weeks ago with its connection-auctioning patent.
This also fits with my general theme that handset & PC connection managers will get much, much smarter - and might even become the source of control, value and identity for the end user.
Apart from anything else, the idea of 3G connection-sharing, meshing or load-balancing (especially across multiple operators) would finally kill the notion that 1 SIM = 1 Access = Person = 1 identity. And it would render all these charts of "subscriptions" for mobile broadband even more vague than the current situation with GSM users with multiple SIMs.
It would also of course mean that whichever service provider had the best network at any given location would also have to contend with all the other operators' users acting as (effectively) parasites on the connection. Sounds like some sort of dynamic-MVNO billing and pricing model is needed - a sort of new 2-sided business model perhaps.....
[Edit - essentially I guess this is a user-driven model for software defined radio (SDR). The traditional view of SDR has a software-reconfigurable radio chip which can morph between different profiles and radio technologies. But if silicon's cheap enough and small enough, why not just have multiple radios and the device software deciding which to switch on/off on a case-by-case basis? A bit like the dual-WWAN notebooks I mentioned yesterday. Clearly there's a lot of constraints here - device size, cost, limited # of radios that could be supported. But using WiFi as licence-exempt "radio middleware" linking to other devices could partly solve that.]
But more recently, this philosophy has expanded to sharing USB dongle-based HSDPA connections via WiFi. I've had discussions about this with a number of WiFi equipment vendors for some time, but it's notable that some of the mobile operators are now pushing it as a solution themselves. I'm pretty sure that the standard T's and C's for most mobile broadband services forbid you from sharing connections, but obviously if the router is the operator's own, they can try and use it to enhance "stickiness" - or simply make a margin on the box.
T-Mobile announced its rather space-age-looking product called a "share dock" a couple of weeks back. Its dongle-dock (have I just invented a new term for these?) is only available to its own customers, and is tied in with service plans. Pricing hadn't been finalised when I spoke to them, but the impression was that it would either be given away to encourage customer retention, or bundled (at a cost) with some of its higher-end monthly service plans.
Today, 3 have announced a similar product called the D100 (from Huawei), at £70 with a mobile broadband plan.
I'm assuming that neither of these are intended to work with prepay dongles (it looks like the 3 one is only available with contract plans), but I'm waiting for confirmation.
Given that these boxes are just basic WiFi routers with a USB port and some software, I can't imagine it'll be long before they're given away for pennies.
One absolutely killer application of these things will be for conference and event organisers who are hobbled by stupid group WiFi prices at places like hotels. A couple of years back I actually demo'd this approach myself with the aforementioned Vodafone/Linksys box....
Now, clearly this type of thing will only go further towards making the 3G networks congested. Add to this the ability to run PCs and 3G handsets as WiFi access points in software (eg with Windows Internet Connection Sharing, or JoikuSpot or WalkingHotspot on Symbian), and it's clear that there will soon be many ways to hook multiple users to a single 3G pipe (or WiMAX for that matter). Maybe we'll also get plug-in 3G docks (or USB connectors) for some phones that do the same thing.
And given that there's also an ethernet port on the back of most of these dongle-docks.... if you really wanted to, I guess you could plug a femtocell into one as well. I'm looking forward to the net-neutrality debates we'll have when someone hooks a Vodafone femto up, via a T-Mobile HSPA connection. And if you're Sprint in the US, you could even do "CDMA over HSPA" via AT&T's macro network hooked up to an Airave....
Tuesday, October 14, 2008
There seem to be two clear trends:
- An increasing % of PCs will have 3G radios, either with internal modules or external dongles
- A small number of PCs now have integral WiMAX and there are also dongles emerging. This will also increase, although it's certainly a lagging trend at present.
We know that vendors like Ericsson, Qualcomm, Huawei and peers are continuing to be aggressive on both 3G module and dongle pricing, as are mobile operators.
And based on past history, we can be fairly confident that Intel is going to price its combined WiFi/WiMAX modules at a level to encourage uptake versus plain WiFi, especially when bundled with its processors. When Intel first launched Centrino in 2003, the extra cost of WiFi was $20 above the standalone processor price. Its initial WiMAX+WiFi modules are $24 more than standalone (802.11n) WiFi. WiMAX dongles will probably fall rapidly in cost too.
In other words, it's seems quite possible that we'll see PCs with WiFi, WiMAX, HSPA and (with Qualcomm Gobi) possibly EVDO as well.
At present, 3G and WiMAX operate in different bands - WiMAX at 2.5GHz (or occasionally 2.3GHz or 3.5GHz), with 3G at 850/900/1900/2100MHz.
At some point, we'll also see 2.5GHz bands for LTE and HSPA, and possibly also other mixed "technology neutral" bands thanks to various ongoing regulatory efforts by the likes of Ofcom and CEPT. But for now, I think we can be safe that we won't get dual radios in the same band.
What's really opaque to me are a few issues:
- Will 2.5GHz TDD WiMAX and 2.1GHz FDD 3G interfere significantly if both radios are on simultaneously? (Possible with 2.4GHz WiFi and Bluetooth too).
- Are there any connection managers that can handle all of these, or will such "dual WWAN" PCs end up with multiple bits of software? Early reports suggest the current software experience on Xohm is a bit clunky.
- Are there any technical or commercial reasons (apart from outright cost) to stop OEMs putting both WiFi/WiMAX and 3G modules in the same notebook? Does it need more complex antennas?
- What happens if you have an embedded-3G notebook with a WiMAX dongle, or vice versa?
- Is it possible to create a combined HSPA/WiFi module which *doesn't* need a SIM card inserted for authenticating the WiFi?
If people are prepared to pay the extra $50-100 for a 3G module today... and if it's going to fall to $30 or more in a couple of years' time.... then presumably a fair proportion will then be willing to pay an extra $15 (say) to have WiMAX too, especially if they expect to travel to places where there are competing networks.
Monday, October 13, 2008
I'm currently up to my ears in a model for mobile broadband computing adoption and shipments - netbooks, MIDs, 3G-embedded laptops and the services that go with them.
The number of input factors was already astonishingly high - device purchase preferences, operator business models, realistic activation rates, fit with the existing 3G dongle market, national/regional variations and so forth.
But added to this, I now need to superimpose the threat of economic recession on end users - and also try to have a view on the issues around the reaction of mobile operators & vendors to financial imperatives like unavailability of credit, and plummetting stock values. Then there's things like currency movements, the need for adequate compliance and corporate governance, managing short-term cashflows......
It's tempting to say "all market forecasts are useless, you might as well rip up the spreadsheet and plan based on gut feel & positive thinking". And for some technology companies, that may be exactly the approach taken. But for others, they will still want external views on both timing and growth of market segments - especially if it has to fit in with other activities like buying spectrum, upgrading network capacity and so forth.
I'm not an economist, but I did spend a couple of years as an equity analyst covering telecoms & technology at an investment bank around the time of the last crash in 2000-2001. I also know various people in the financial sector like James Enck, and another friend who was former head of investment strategy for a European bank. I don't want to have to put a 10-page chapter on economic assumptions and predictions in my reports, but I do at least need to have a baseline view on what the most probable scenarios are.
(There's no point having an "Armageddon" scenario though - if everything really does fall off a cliff, we'll all have better things to worry about then how many netbooks will ship in 2013).
My general feeling is that a lot of the market forecasts that have been issued in the last 18 months need serious revision - especially those for completely new segments which may end up being pushed back years, or even miss their market opportunity entirely. I'm not going to give everything away, but some of the factors to bear in mind are:
- What consumer electronics purchases will survive as confidence falls, and discretionary spending is watched more carefully?
- What are the substitutive effects of people looking for the cheaper options?
- Will mobile operators delay upgrades to network capacity, either in terms of radio or backhaul networks?
- Will enterprises lengthen replacement cycles for existing hardware?
- What happens to spectrum auctions during a recession? Who will still be a bidder?
- Will any service providers go bust? And what new business models might emerge if others acquire their assets or networks cheaply afterwards?
- If device subsidy is tantamount to consumer credit... what's the effective interest rate? And who is doing the risk management?
- Will we see a further move to prepaid mobile services and away from monthly contracts?
- Is mobile broadband and mobile Internet access a "nice-to-have"? Especially if networks get congested, and user experience suffers, as capacity upgrades are deferred?
- Will we see telecom operators moving in new directions that redefine the value chain and business models? If you're brave, is it now cheaper to buy a bank than an LTE network?
- Even if you think demand will remain robust, will CFOs look to delay spending on capex, to conserve cash and impress investors?
- Could we see government intervention (or even renationalisation) of publicly-held telecom companies if failure looks possible?
- Will deployment scenarios be refocused more on cost-savings, rather than new opportunities for revenue-generation and "cool new stuff"?
Obviously, I don't have the answer to all of these - they're unknowable and ultimately based on factors like whether confidence is restored by the actions of Messrs. Paulson, Sarkozy, Brown & co. But any business planning dependent on market forecasts needs to think about these and similar factors, and at least have an idea of the senstitivities possible outcomes.
Friday, October 10, 2008
It's the lastest Telco 2.0 Brainstorm, which is looking at what the guys at STL Partners (a company I work with on various projects) call "Two-Sided Business Models", reinventing the incumbent operators' propositions to exploit open APIs to their networks and devices, and add value by becoming "smart pipes", or using other capabilities to help "upstream" industries reduce friction in their business models.
Areas that will be discussed will include billing & payment systems, advertising & business intelligence, content delivery networks & assorted other "wholesaleable" assets of telcos.
Some familiar names will be there, including James Enck (of EuroTelcoBlog) and Martin Geddes (Telepocalypse). There are CEOs, CTOs & similar level people from TeliaSonera, 3, HP, Carphone Warehouse, Phorm, BT, Microsoft, Habbo Hotel, GSMA, Amazon, T-Mobile etc.
I've been to several of these in the past, and they're always fascinating, and use this cool interactive WiFi laptop things to get instant feedback & comments from delegates.
Edit - I forgot to mention that there's a 10% discount for readers of this blog. Quote Disruptive Wireless & email: contact AT telco2.net for details
Wednesday, October 08, 2008
Interestingly, it looks like it's not just the silicon that's needed to start the ball rolling. I was having a look through the specs for Nokia's new 5th Edition of its Symbian Series 60 UI. It mentions HSDPA (on Page 16), but not HSUPA. It runs on Symbian OS v9.4, which also lacks uplink support according to this spec sheet.
(And, perhaps unsurprisingly, no mention of the connection manager being able to distinguish between femto and macrocells - although that's probably down to the Symbian team rather than S60 guys)
It looks like HSUPA appears in Symbian v9.5 - but given that the shiny new 5800 musicphone announced last week is the first with v9.4, that mean we have to wait another year for v9.5, S60 6th edition and HSUPA-capable Nokia phones?
If so, this is pretty bad news for those hoping for full, high-quality VoIPo3G from handsets - although VoIP works OK with just HSDPA in good conditions, it really needs the extra uplink capacity if it's going to be used seriously, especially by a reasonable number of people in the same cell.
Interestingly, although Windows Mobile has come in for some criticism recently, this is one area where it's solidly ahead of the pack. Apart from some Japan- and Korea-only models from Samsung, Toshiba and others, the only internationally-available HSUPA phones at the moment are WinMob devices such as those from HTC, Toshiba, SonyEricsson and i-Mate.
And just this morning Vodafone has announced its exclusive Blackberry Storm, which will also support HSUPA when it ships and it looks to me as if it's got EVDO Rev A as well ie with Qualcomm's Gobi multi-standard chipset, for roaming between Vodafone and Verizon at full speed. (EDIT - looks like the 9530 version sold by Verizon has HSPA for international roaming, but the 9500 from Vodafone doesn't support EVDO for travel in the US).
EDIT 2 - Looks like the HTC T-Mobile Android G1 has HSUPA in it as well.
In fact, it looks to me as if Nokia might be being caught between the two leaders in HSPA chipsets - Qualcomm and Ericsson Mobile Platforms. It appears that its current silicon providers - TI and ST Micro, are some way behind in the 3.75G game. Of course, there's the messy 3-way merger between EMP, STM and NXP ongoing, but I'd imagine that's not going to solve the problem for Nokia quickly.
This post highlights the "Technology Positioning and Market Due Diligence" advisory service from Disruptive Analysis.
Regular readers will know that I can be ruthless in over-turning hype and assessing the real factors behind new technology and product introductions, and estimating future market growth.
While there are certain technologies which I think are underestimated in importance, there are many more that get exaggerated. Forecasts are wildly optimistic, practical bottlenecks are ignored or overlooked. Real "addressable" market sizes are exaggerated on the basis of attractive but irrelevant large macro-scale numbers.
A significant amount of my work already involves giving "reality checks" to operators, vendors and investors. Looking at business plans, or listening to new product propositions and go-to-market strategies. Analysing them for weak points, flawed assumptions, and unidentified dependencies on other areas.
- Will growth scale smoothly? Are other analysts' forecasts realistic?
- Are your timelines realistic? What about testing? What about legacy integration?
- What are your implicit assumptions about mobile devices and user behaviour?
- Will your service really work on a 3G network? And indoors?
- Are there issues around regulation, number and interconnect fees?
- Are there fundamental market differences between US, Europe and Asia?
- How does your plan fit with strategies from Nokia, Apple, Google, Ericsson, Qualcomm. Microsoft or the largest mobile operators?
Disruptive Analysis has a strong history of being ahead of the game:
September 2003 - New "multimode" wireless devices & services will cause disruption
June 2005 - UMA to play only a minor role in FMC
November 2005 - First analyst mention of the word "femtocell"
November 2005 - Mobile TV skepticism
April 2006 - Embedded-3G laptops are over-hyped
June 2006 - Mobile industry has forgotten about IMS-capable handsets
November 2007 - Mobile broadband is driving carrier data revenues, not content
June 2008 - Optimising handsets for femtocells
I'm not suggesting that I get everything right, because I've made some less-than-perfect calls as well. But I reckon my record on puncturing hype and predicting delays in new technology rollout hits well above average.
So if you want to have your business plan, or investment thesis, reviewed and dissected (under NDA), or if want a "sanity check" or someone else's market forecasts, or if you want to organise an internal workshop to test your assumptions about the wider market.... let me know.
Email: consultancy AT disruptive-analysis DOT com
Tuesday, October 07, 2008
First up is the Open Mobile Summit on Nov 19-20 in San Francisco. I'm moderating a stream & panel session on the first day looking at the impact of "openness" on incumbent mobile operators, with presenters including AT&T and TeliaSonera, plus panellists from BT, Orange, O2 and NextWave.
There's an "early bird" discount until this Friday, so get your delegate tickets ASAP.
Note: I'm in the Bay Area on the 17-18th Nov prior to Open Mobile, so please let me know (via consultancy AT disruptive-analysis DOT com) if you're interested in private onsite briefings or workshops on topics like Femtocells, FMC, Mobile Broadband, European Mobile Trends or related themes.
Next up is the launch of the website & call for speakers for the 2009 eComm event, also in SF, on 3-5 March next year. It was one of the most fascinating events I've attended this year (see blog posts here and here ) and I'd expect next year's to follow on in style. I love the tagline "Defining the Post-Telecom Era"....
And lastly for this list, if you're a VoIP or related company, I'm involved in the UK IP Telephony Service Provider Association (ITSPA) awards this year. Any nominations - let me or the ITSPA folk know ASAP. The event itself is going to be held on December 11th in the centre of the known universe, otherwise called the UK Houses of Parliament, in Westminster in London.
There's a wide variety of non-femto/pico ways of improving coverage in buildings such as distributed antennas and assorted active/passive systems. They're commonly used in office buildings, hotels and the like, as well as in tricky places like railway tunnels or other coverage blackspots.
There are two main sorts:
- carefully located ones installed by the network operators, taking into account positioning, impact on noise and interference etc. These can improve the situation significantly, but need expensive work with RF measurements and location to get right.
- self-installed ones (especially illegal ones in peoples homes & offices) which can do horrible things to a carefully planned network, raising the noise floor and generally causing difficult-to-cure havoc. Historically, most radio folk at operators have hated these with a vengeance.
But given the push to femtos, the need for 3G indoor coverage, and the demands of dongles & iPhones, some radio network departments are having to hold their noses, and re-evaluate whether there's a role for small repeaters after all, especially as it looks as though some may now be "smart" enough to minimise disruption to the macro network.
The femtocell-advocate response is that repeaters don't add capacity to the macro network, which is true. However, they help the network get much closer to its theoretical rated capacity by avoiding the need to waste lots of power blasting at indoor users, so they can improve effective capacity. They also lose out on all the nice integrated triple/quadplay propositions, femtozone services and the like.
But on the other hand, femtos aren't much use where the customer doesn't have broadband at all, or it's poor quality, or its from an "unfriendly" operator that won't prioritise femto-gateway destined traffic. And although some of the models I've heard were suggesting subsidised repeaters, it's at least technically feasible for them to boost multiple operators' signals rather than just one.
Like most things in technology, there won't be a "one size fits all" answer. But based on these discussions, I think it's going to be important to keep an eye on the femto/repeater balance over the next year or two.
Monday, October 06, 2008
I've had a look at the UK prices of Dell's new Inspiron Mini-9 netbook, together with mobile broadband. It's available through two different routes at the moment:
- PC bought from Dell.com, used with an added 3G dongle and standalone mobile broadband subscription. Dell also offers a consumer finance package of its own, with 3 or 4 year terms.
- PC and embedded module from Vodafone UK, available "free" but with a two-year contract.
PC purchased from Dell.com £299, or via a loan from Dell Finance @ £9.59 x 36 months
Standalone Vodafone "Modem Stick Pro" with 7.2Mbit/s HSDPA & 2Mbit/s HSUPA = "Free2 dongle + 24 months x £15 for 3GB / month. (H3G offers 5GB for £15 a month, but only with 2.8M HSDPA)
Vodafone-spec Mini 9 = "free" + £30 / month for 24 months with 3GB / month.
Over a two-year cycle, the options are fairly closely matched, if you consider the implicit charge for finance:
- PC from Dell, plus Vodafone dongle = £299 + £15 x 24 = total of £659
- PC from Vodafone with embedded module = £30 x 24 = total of £720
But taken over a typical laptop's 3 year life, assuming contracts are continued after 24 months at their current prices, the options are:- PC from Dell, plus Vodafone dongle = £299 + £15 x 36 = total of £839
- PC from Dell on finance, plus Vodafone dongle = £915
- PC from Vodafone with embedded module = £1080
The other option that may appear in future is the ability to spec the Dell.com PC with a "vanilla" 3G module, then insert the SIM card of your choice. At present, that's not possible however.
Put simply, it looks like Vodafone's profit margin will be hugely boosted if customers keep paying full price for the PC and broadband after the two year period is up. I wonder if Dell (or some brave banks or retailers) will start to focus on offering 2-year standalone finance deals on PCs.
Now this is a very UK-specific offer, and I know that the "free laptop" hysteria hasn't spread that far yet. But one thing seems clear at the moment - from a consumer point of view, it doesn't look like a particular bargain. But then, that's never seemed to matter in the "free" mobile phone market....
Ajit mentions something called Vicinity:
"Vicinity (£1.79): Takes advantage of the iPhone 3G's GPS to provide one-tap access to information about local services and amenities. It will even pull in relevant Wikipedia entries and Flickr photos."
And he comments that this is essentially a one-off payment for what many might have hoped might be a subscription or per-use "Location Service". Something like "where is my nearest XXX", or "what's interesting nearby?"
This fits with my general belief that far too many communications companies think that they can somehow turn an application (or even just a feature or a function) into an ongoing, billable service. So thinking about the IMS world for a minute, I've heard various people describe "Presence" as a service. It isn't. It's a function, a basic building block of a communications platform.
Service = something delivered as an intangible capability by a service provider, either through subscription, one-off payments, prepaid credit, or perhaps some sort of new two-sided business model. Examples include voice calls (generally), SMS, or for that matter a flight by an airline, or an audit by an accountant.
Application = a standalone piece of software, installed either on your device or used remotely on a server / the web. Usually a one-off licence payment, perhaps together with some sort of maintenance fee. May be free.
Feature = a value-added component of a technology platform. Generally not paid for separately, unless it's something that can be "unlocked" after the initial purchase. However, its presence can help the platform command a premium price.
Function = a core element of the technology platform. Included in the base purchase cost, however that is defined.
Yes, there's lots of grey areas here, especially on the web. And there's the whole move to SaaS (Software as a service) or even Hardware as a service - basically hosted applications, often paid for with a subscription fee. Salesforce.com is the obvious example, as are various managed-email offerings.
But coming back to the original LBS example, and also perhaps things like Skype, there's a counter-trend coming the other way: *Service as software* (and also, Service as Hardware).
Why pay a service provider to provide "Where is my nearest" capabilities, when you can do it yourself with a one-off payment for a capable piece of sofware? Why pay a service provider for voice connectivity when a (free) piece of software can do it for you? Why repeatedly pay a service provider to tell you where you are, when a cheap GPS chip can do it for you over and over again for a fixed price?
Clearly, there are instances in which both SaaS and "Anti-SaaS" make sense (Grammatical sidenote: palindromic acronyms are so inconvenient....). Or HaaS / SaaH.
But, thinking about it, I reckon that when it comes to services, customers tend to have an innate feeling for which things have a high fixed cost component, and which are more variable-cost based.
It feels inherently OK to pay for services with a high variable cost - flights (fuel), TV (content acquisition), 1920's telephony (manual switchboard operators) or those in which you perceive that there's a lot of hard work being done centralised components, even if they are "fixed" cost items (eg Internet access piping lots of data around from different places, or electricity from wind or nuclear facilities).
But I reckon that consumers can sense those "services" which essentially involve the provider "turning the handle" on a fixed-cost system, which has probably paid for itself already. People innately *know* when their extra service cost "goes straight to the bottom line", and feel ripped off. They'll jump at the chance of replacing that service with hardware or software.
This is a problem for many LBS offerings - they're "turn the handle" propositions: "We've got a big map & we'll charge you each time you want to look at it", or "We've got a big map and a directory, and we'll charge you each time you want to find your nearest XXX", or "We've got a big map and a set of tourist guides...." .
You get the picture.
Quite a lot of IMS "services" risk falling into the same trap - like interconnection with Internet IM systems from mobile phones, for example. Hello? This isn't a service - it's a simple feature or application. It works beautifully on PCs with very simple bits of software. Hosted IP-centrex? The same - it's attempting to replace a working product (or application like Asterisk) with a billed service.
Yes, in both those cases there are certain instances where the SaaS approach makes sense - if there's lots of maintenance involved in doing it yourself, lots of complexity involved in configuring & setting up software and so on.... then yes, it makes perfect sense to pay a service provider to deal with it for you. But replacing something easy or "plug and play" with a billed ongoing service is (often) a waste of money.
One delegate at the IMS conference also raised this, asking me a question of what phone manufacturers will put next into handsets, that would cannibalise possible service revenue streams, and what could be done about it. Nokia's put GPS and maps into phones, he complained, which had just trashed their LBS business models. I added that they also just acquired OZ Communications (it does email and IM) and launched "Comes with Music". Yet more examples of Anti-SaaS, or SaaH.
The bottom line here is that many telecom services (legacy, IMS, SDP or whatever) involve buying a standard application server from a vendor like Ericsson or BroadSoft, hooking it up, and then turning the handle. The operator is essentially taking someone else's generic application, and trying to make it look like a service. Spot the problem?
Trying to sustain long-term service revenues by reselling someone else's white-label application will always be a loser - over time, that application will become replicable on the end user's own device.
The solution lies in customising those applications, packaging them in innovative ways, blending them, managing them and so forth. Or, better still, integrating them with something you have that's unique - intelligence from your customer database, capabilities from your network (not just location, either), ability to see and manage devices and so forth.
Thursday, October 02, 2008
I'm going to be collaborating on a greater range of activities in future with Martin, Simon & co, including being at the next Telco 2.0 Brainstorm in November. In particularly, I'm going to be doing a lot of thinking about how the concept of two-sided business models fits with trends I'm seeing in technology areas like mobile broadband, femtocells and IMS.
And as the post mentions, Disruptive Analysis is currently working on a new report, due for publication soon, on Mobile Broadband Computing, which examines the various options for connecting PCs and new “MIDs” (Mobile Internet Devices). It will forecast various important parameters such as 3G and WiMAX attachment rates, as well as examining usage cases and the implications of mobile broadband computing on radio and core networks. If you want to get more details when it's published, please email information AT disruptive-analysis.com