... then you might want to avoid reading this which I've written for the guys over at Telco 2.0.
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
Dean Bubley's Disruptive Wireless: Thought-leading wireless industry analysis
Dean,
ReplyDeletePlease let me start by saying that I have great respect for you as an analyst and that I great enjoy your posts. BUT;
I have read the post at Telco2.net.
As you will see from my review there, I find the article very flawed, simplistic, inaccurate and lacking in context.
For example:
What you do not say is that sales projections for notebooks in 2009 is 139 million laptops!
60% = 83.4 million in 2009
23% = 31.97 million in 2009
You then go on to state:"consumer notebooks sold in developed markets could enjoy WWAN attach rates of 15% in 2009"
Calculate this:
100-23=77% Developed market = 107 million.
107 * 15% = 16 million units in 2009!
According to your own numbers, this is not a small amount. In fact, I'd bet that this will already create more connections the all of Starbucks hotspots combined.
Also;
Operators do not really want to sell notebooks. It is just what they are used to doing (like selling Mobile Phones). They need time (2009) to realize that the best channel is the OEM. Dean, you keep focusing one subsidy. its not a model or strategy. Its MNO's trying stuff to see what works.
You make another a mistake in assuming that corporates do not want to provide embedded modules to people because of cost. The cost of purchase is not the factor in a corporate environment (maybe in SME).
In their case its more about the ROI. The same logic that allows them to give blackberries, allows for providing embedded modules. The (illusion) assumption of increased productivity. The less cost of helping someone setup a Wifi Connection at home, the enhanced security features one can use with embedded modules, like the Gobi built in GPS add-on. Less loss of dongles, etc...
We have certain corporate customers that even buy unlocked dongles just for the switching ability with Sims. So purchase cost is not a big factor, as long as there is tangible ROI.
Frankly, I feel that you are projecting your own opinions on what you think corporates want.
We have many corporate customers who beg us for this stuff.
Lastly, and this bothered me the most, your "plusses" and "minuses", which you often get very very right, were totally wrong this time and showcased your illinformedness about the subject:
Plus you seem to think that the RF will be better. so far, all tests with 3G notebooks have shown poorer coverage, because the antenna is in the screen next to all the other antenna's. This has been widely discussed over the past 18 months and is still an issue. So, no plus there!
Your Minus: difficulty of churning because of (drivers) conflicting issue. This issue has been worked on for the last 2 years by all involved. First, Gobi addresses this issues as the firmware is flasheable per operator (so does Ericsson), the Gobi SDK is independent and the most important; The OEM's are launching with Operator independent connection managers of themselves. So this statement is completely incorrect! All the user needs to do is switch a SIM. (so 2 points incorrect)
In fact you omitted a big plus; and that is the ability via firmware to switch between EV-DO and GSM (error 3).
And many of your listed cons, (long contract) also apply to dongles and datacards.
Extra costs may result in other missing features. How do you come to this conclusion. Do you get less when you choose the optional extra harddisk or RAM when picking your notebook??? the embedded module is an option. You're grasping...
I hope your report of October will be better then this.
Regards,
Edsard
Edsard
ReplyDeleteAs frequent comments have indicated, you have a different opinion on this issue to me.
You also have a specific vested interest in promoting the concept, as I suspect it benefits your company's connection manager products.
You have misrepresented several of my comments. Most importantly, your 107x15% calculation ignores my reference that the possible 15% attach-rate specifically relates to CONSUMER notebooks. ie Not business.
[FYI the term “attach rate” has different meanings to different people. In the mobile device industry, it is used to refer to the installation of a given feature, not usage – for example the “attach rate” of GPS or Bluetooth in phones refers to hardware in the device. Intel has frequently referred to “attach rate” for the inclusion of WiFi in notebooks. Some service providers use it to refer to activation rate. I'll highlight the ambiguity in the report]
I’ve been consistently skeptical of embedded-3G notebooks since April 2006, and thus far I’ve been proved absolutely right. I recognise that some of the early difficulties have now been fixed, and a variety of new business models and technologies have become available. However, I still don’t believe that this is a megatrend, but a continued slow evolution that is in no way comparable to the adoption of WiFi in notebooks.
http://disruptivewireless.blogspot.com/2006/04/3g-embedded-laptops-im-not-convinced.html
(Sidenote: This is Year 3 after introduction of the first embedded-3G laptop. The attach rate is much lower than Year 3 after intro of WiFi notebooks - and that was in the depths of the 2002 bust)
There is already data showing that 3G access to the Internet while “on the go” is catching or passing paid WiFi hotspots. This is no surprise, whether it is dongles or embedded 3G. I have often written that hotspot providers have squandered a 4 year lead in the market through ridiculous pricing strategies. But although hotspot use tends to get all the press focus, it is one of the least important use cases of WiFi. Use for shared Internet access at home, or ability to move about workplaces are far more important.
You mistakenly suggest that I focus solely on subsidy. That is false – read the piece again. I am quite aware that a variety of pay-as-you-go and other tariff plans are likely, as well as (possibly) Telco 2.0-style ones sponsored by third-parties like VoIP providers or advertisers.
On enterprise, I am referring to TCO, total cost of ownership. I am not alone in expecting enterprises to remain highly selective in which employees they give mobile broadband to – Gartner has said much the same recently, and I have heard the same from multiple other sources. As you say, the same logic as BlackBerries – which are typically only given to a small fraction of staff in typical organisations, and not even all mobile users. When it is proven that TCO is lower with embedded vs. dongles I’d expect purchasers to start switching, but that will take time. And as the costs come down, companies will also look to extend the reach of employees entitled to mobile broadband – just the same as with push email / BlackBerry.
The RF point is interesting – the companies I’ve spoken to have made a strong argument that the embedded antenna is one of the major advantages. If it isn’t (and I don’t have a personal testing lab) then that removes one of the major perceived benefits. I hadn't detected the mismatch of expectation vs reality - although I have queried vendors about multi-band support (eg HSPA at 900MHz, 2.6GHz etc)
Gobi's ability to blend HSPA+EVDO is worthwhile for some frequent intercontinental travellers. It is less relevant to most consumers. And I also expect to see dual-standard dongles. I refer to it in the report.
I also know that the driver & CM issues have been worked on, but I expect there to remain a significant number of exceptions - for example if a user plugs a dongle into a 3G-embedded PC for some reason, rather than just the SIM. (eg an LTE or WiMAX dongle when the module is HSPA). There will be other scenarios too potentially.
The extra cost issue is a real one, where the embedded module is not an option (eg bought instore rather than online). As I suggested in a previous post, I expect "embeddable" PCs with a slot to become very common.
http://disruptivewireless.blogspot.com/2008/09/3g-embedded-vs-3g-embeddable-notebooks.html
Dean
And in terms of software conflicts - I certainly hope the new connection managers and drivers fix the problem.
ReplyDeleteI've had personal experience of conflicts (as did several other analysts & journalists), when, ironically, the GSMA itself gave me a temporary dongle during 3GSM in Barcelona this year. Which had a serious fight with the settings for my existing modem, needing the attentions of a software wizard from Huawei to resolve.
I'm expecting the practice of giving out free/temporary dongles to increase at events (you can already rent them at some airports I believe), so the dongle / embedded CM issue likely to be a real one. Maybe you can take the SIM out of the dongle & out it in the PC, but presumably that's dependent on the MNO permitting that use.
Dean,
ReplyDeleteThanks for the response.
As odd as this sounds, I think we are not that different of opinion (in a lot of cases).
I agree (and have never disagreed) that embedded notebooks will not have the same curve as WiFi enabled notebooks. Anyone who thought 3G embedded was going to be mainstream from the beginning, starting in 2006 was drinking some spiced cool-aid. :-)
But I believe that sometimes need to be put into the right context and meaning.
Suggesting I have something to gain with my comments is a shame.
It demeans the time I take to give my expert opinion about a field I know something about. We may disagree, fine. No problem. But please don't think I have a hidden agenda. I write as Edsard, the person. Not the COO of Diginext.
Go back to all my posts and see if I plugged our company or services anywhere.
In fact, this process of embedded 3G, will in the end, not be good for Connection Manager companies at all!
One of the datapoints that helped WiFi adoption grow was also the embedded WiFi software in the XP OS. And frankly, I know that "Mobile Broadband" will also be embedded in the OS. Regardless of Diginext, this will be good for the market. That process is also ongoing for the last 18 months.
Advantages of being in the OS:
1. All datadevices will need to conform to one common API (Not happening in Dongles).
2. No need for separate Connection Managers from anyone, whether it be OEM or MNO. Thus less conflicts.
3. This will also solve the embedded vs. dongle conflict scenario you mentioned
4. Increased stability and less interoperability issues.
Already today many MNO's take the standard CM from the device vendor. So embedding the CM in the Notebook just means less customers for CM companies.
All I was trying to say is that in the case of embedded 3G it's not a question of "if" but "when". And I had the feeling that you are/were at the point of "if" it happens.
That's all.
- Edsard