Wireless

• 25Aug

  One iPhone per Child Might Not Be The Answer

  Emerging Markets No Comments

  Stay in any business long enough, particularly a growing one, and it’s easy to start thinking that your product or service is the key to human happiness. Automobiles in the early days were going to bring about freedom and the perfection of democracy. Pesticides would eradicate global hunger. Electricity from nuclear power was going to be too cheap to meter.

  And let’s face it, we in mobile communications are the same way. Just put enough phones in enough hands and markets will become efficient, families will stay connected, dictatorships will topple, and the Age of Aquarius will finally dawn.

  Looking at the developing world it is particularly easy to fall into this mindset: having a mobile phone really can make a tremendous difference in quality of life.

  But hold on a minute, says ”Mobile Phones and Economic Development in Africa,” a forthcoming study by economists Jenny Aker of Tufts and Isaac Mbiti of Southern Methodist University. Before we assume that m-development, m-health, m-whatever is the only sensible thing to promote, let’s take a cold-eyed look at the evidence.

  • Studies that have produced much cited relationships between mobile penetration and GDP growth – e.g. a 10% increase in mobile penetration is associated with a 0.6% increase in growth rate – do not credibly establish that mobile penetration causes GDP growth, only that the two are associated. They may both be results of some other cause, or the relationship could be reversed: make a country richer and more people are likely to have mobile phones.
  • The use of mobile phones by NGOs to distribute cash is appealing and reduces the NGO’s overhead, but may transfer risk and cost to the beneficiary by forcing them to travel to a retail agent to get their cash.
  •  According to a 2009 FinAcess study they cite, M-Pesa does not primarily serve the unbanked, as 72% of users have a bank account.

  Aker and Mbiti are certainly not arguing against encouraging mobile phone use in Africa, only against the idea that it is “the ‘silver bullet’ for development in sub-Saharan Africa.” It doesn’t benefit a millet farmer much to know the price of grain in a market to which there is no decent road.

  Posted by Tom Elliott @ 9:11 pm

• 24Aug

  Facebook Places: A slowly emerging giant

  Wireless Media No Comments

  Dennis Crowley – Founder of Foursquare - may be right. Facebook Places is indeed boring. However, anyone – Crowley included -that thinks Facebook Places in its current iteration is the final step for Facebook into the location based social networking space is kidding themselves. Facebook Places will have long term ramifications on the location based social networking space in due time but for now there are more questions than answers:

  · Will users be able to check in their friends on third party sites even if they are not members of that service?

  · Fragmentation of various services still exist making checking in to Brightkite, Foursquare, Gowalla, and others time consuming. FB may allow for dual service check-in (ie. Foursquare and FB or Gowalla and FB but not all three).

  · Will FB users find enough usefulness in third party networks to utilize them or will their growth be stunted?

  The question about competition comes down to Facebook’s ambitions which is a desire to drive revenue through the creation of a comprehensive ad network. Places will allow FB to acquire more information on users, increase the frequency of user interaction with Facebook, and better understand the nature of relationships between individual users. This type of data is important and integral to advertising not only via mobile but also on the web. If Facebook knows who a user spends time with it creates compelling new advertising opportunities. Let alone knowing where people go. How frequently they are there. The intelligence and effectiveness of Facebook’s advertising platform could come to rival and quickly exceed that of Google.

  Partnering with others gives FB a way to appease the market in the short term by not appearing anti-competitive but Places will thwart competitor’s long term growth. Even if it helps them in the short term by bringing awareness to the services. But think about this – if just 1% of Facebook users regularly uses Places – Facebook will have more than 5M users – double that of Foursquare. And 1% of users would be a failure by Facebook’s standards.

  For now, competition can continue to abound as competitors will have the opportunity to differentiate. Foursquare can continue to offer mayorships and enticements. Gowalla can offer trips, pins, and other prizes. But in the long term - competitive services - will have to move well beyond the check-in in order to grow beyond their current user base. Booyah’s MyTown is an excellent example of how to accomplish this – by turning location – into a game.

  The immediate effect will be on weaker competitors who don’t have the resources or the buzz to convince new users to sign up. Some of these services will likely wither away before the end of 2010 as others see growth stunted and plan exit strategies for 2011. A select few may continue to press on, but Facebook will be the biggest game in town by then. And with scale comes sponsors, advertisers, new business models, etc.

  Competitors aren’t the only long term losers either as carriers – hoping smaller third party services – would emerge as a viable new revenue stream from local advertising may miss the boat as subscribers instead opt for Facebook’s service which is unlikely to share revenue with carrier partners.

  Posted by jmartin @ 3:42 pm

• 11Aug

  Verizon and Google’s Net Neutrality ‘Policy Framework for Lawmakers’ creates Furor on both sides of the Atlantic

  Uncategorized, Wireless Media, Wireless Networks, Mobile Broadband No Comments

  August 11^th 2010

  Doing the FCC’s job? On Monday August 9^th. Verizon and Google issued a joint ‘suggested policy framework for lawmakers’ which reads as if it had come from the FCC, leading to an appropriate response from FCC commissioner Michael J. Copps that it is “time to reassert (FCC’s) authority”.

  The framework endorses all the good ‘motherhood’ concepts - openness for legal content, nondiscrimination that does not block or degrade the Internet, and transparency for both wireline and wireless. And it addresses some of the traffic and network management concerns raised in my blog of May 27^th . But the sting is in the tail. The fifth and sixth points posted in the expository blog carve out two major markets.

  The ‘Carve Out’.Two key markets are carved out for minimal FCC oversight and therefore would not be subject to many ‘net neutrality’ and access requirements.

  First area is ‘differentiated online services’ that integrate application services with bandwidth – “healthcare monitoring, the smart grid’ etc. i.e. vertical markets where performance and security must be guaranteed. The proposed Verizon and Google approach allows each application to be ‘nailed-up’ to a specific network - rather than the Virtual Private Networks VPNs) with Service Level Agreements(SLAs) that operate today. This could lead to significant innovation – if only it were not based on exclusive bi-lateral transport and applications vendor deals. Haven’t we been here before? Didn’t this lead to the original Enhanced vs. Basic Services split of Computer Enquiry II.  And it recreates the comparatively unsuccessful ‘Walled Garden’ approach to applications.

  Second ‘carve out’ is wireless broadband which is claimed to have “unique technical and operational characteristics” and to be “more competitive and changing rapidly”, so “in recognition of the still-nascent nature of the wireless broadband marketplace” Verizon and Google recommend against applying any of the “wireline principles” except transparency.

  Broadband is Broadband is Broadband….Although wireless has historically had special treatment, mobile broadband is rapidly reaching parity with wireline speeds and quality. Over the next two years applications will operate seamlessly across wireless and wireline networks and many users may not even be aware which network they are on.

  To users Broadband is Broadband. All applications require an appropriate class of service at a competitive price. Special value added networks and mobile broadband cannot and should not be carved out from the general area of FCC broadband service oversight.

  Reactions and Furor on both sides of the ‘pond’

  In the US, Wall Street Journal welcomes this ‘Traffic Plan’ and TIA notes that the “Verizon and Google…rightly addressed important issues such as the need for network management welcoming it as a “step in the right direction … and a possible solution to the uncertainty created by the Comcast decision.”

  But bloggers and the New York Times Opinion page started discussing carrier/search engine business alliances and making jokes about ‘VerGoogle’ that have now prompted a strong tweet denial from Google “We’ve not had any convos with VZN about paying for carriage of our traffic. We remain committed to an open internet.”

  Wired magazine however, describes the ‘differentiated online services network’ as a “left-field proposal to anticipate an entirely new information highway for ‘fast lanes’” and believes that “Google and Verizon have proposed creating a second, paid-access-only internet” “over an unspecified global network”. Could that be Verizon’s new Packet Optical Transport Platform (P-OTP) network?

  Across the pond reactions are still evolving. Financial Times subtly points out that “industry insiders on Capitol Hill and at the FCC are questioning Google’s motives for an apparent about-face on its position as one of the most powerful advocates of net neutrality.”

  Others reflect the stronger view that the EU is taking on Net neutrality.with one blogger warning that “An obvious outcome … is that when Google is dragged backwards through an antitrust investigation by the EC or DoJ, it will find no favours from civil society after this betrayal…..Good luck, Google - you thought China was sticky in terms of political support, you’ll find that was a storm in a delicate teacup.”

  Posted by srudd @ 4:59 pm

• 11Aug

  AT&T Ramps Up Android Portfolio

  Wireless Devices, Smartphone Strategies No Comments

  It may be the exclusive iPhone carrier in the US, but AT&T is also becoming an attractive option for consumers looking to buy an Android handset. Though things weren’t always as they are today.

  If T-Mobile was the clear early leader in Android adoption among tier-one US carriers, then AT&T was the clear laggard. Let us quickly recap highlights from the US Android timeline:

  • T-Mobile launched the first Android phone in the world in late 2008.
  • It took approximately one year for Verizon Wireless and Sprint to bring to market their own models, in time for the 2009 holiday season.
  • AT&T began selling its first Android handset quite recently: in March 2010.

  Less than six months later, AT&T will have as many as five Android phones in its portfolio. This won’t be quite as many as Verizon Wireless and T-Mobile, but it will put AT&T roughly on par with Sprint. AT&T will also be a leader from a variety standpoint, offering smartphones from vendors Motorola, HTC, Samsung, Sony Ericsson, and Dell.

  

  So, what are the key drivers for the ramp-up?

  • Catering to consumer tastes. Despite what Apple might tell you, not everyone wants an iPhone. Consumers looking for alternative features, such as a bigger screen, memory expansion, a more customizable UI, HDMI, etc., can find them among Android handsets.
  • Lower subsidy levels. Now that AT&T has lowered its monthly data plan rates, there is less revenue to offset the subsidy burden. Paying $200-$300 subsidy for an Android handset seems more attractive than Apple’s $400+ subsidy.
  • End of iPhone exclusivity? The Internet is always abuzz with rumors, and AT&T shifting its focus to other platforms is yet another sign that a Verizon Wireless iPhone is potentially in the works. The carrier may be strengthening its portfolio to offset potential losses once the exclusivity ends.

  Regardless of AT&T’s underlying reasons, broadening the options available to consumers is a good thing for many of the involved parties. For example, shoppers get a wider selection of handsets and emerging vendors like Dell get exposure to a growing market. However, AT&T will need to be careful in managing the persistent issue of fragmentation. While developers and content providers will be happy to have a larger Android installed base for which to create applications and services, they will also be faced with the cost of addressing multiple models/processors/resolutions/etc.

  -Alex Spektor

  Posted by Alex Spektor @ 2:14 pm

• 05Aug

  More BlackBerry Bashing…but what’s the real story?

  Enterprise No Comments

  I’ve been watching RIM’s BlackBerry revolution unfold over more than a decade, to the point where telecom regulators or governments airing their latest complaints in the public domain has become predictable and commonplace. Following the protracted complaints by a minister in the Indian government in 2008, RIM has most recently been in the firing line from the UAE’s Telecommunications Regulatory Authority, which claimed that:

  “As a result of how BlackBerry data is managed and stored, in their current form, certain Blackberry applications allow people to misuse the service, causing serious social, judicial and national security repercussions…”

  

  Saudi Arabia may also suspend BlackBerry mobile email and instant messaging services because they are considering the services to operate “outside local laws” and raise “national security” concerns.

  The services are apparently under scrutiny because they are operated through secure network operations centres around the world, meaning that most governments can’t access the data easily on their own, a requirement of local legal interception legislation.

  This is nothing new for RIM. In my opinion, it is difficult to take these objections at face value. Comments that UAE and Saudi are small markets and do not matter to RIM are also wide of the mark (they still represent around 1.2 million subscribers).

  • • There is a broad difference between accessing information on reasonable grounds and unreasonable monitoring of users. Legal intercept is fundamentally complex concept, for which there must be reasonable grounds for investigation, but is not the same as spying on users without reason.
    • A negotiating tactic to drive greater investment in these local country markets, through location of data centres or NOCs in these regions.
    • Business customers, who make up the majority of RIM customers, especially in developing markets, are higher ARPU customers. For a telecom regulator to shut off a high ARPU service for mobile carriers is hardly beneficial to a developing country’s economy.
    • The governments and regulators  that publically object to RIM’s level of content encryption are the same who benefit from RIM’s content encryption.
    • RIM is only subject to this scrutiny, because it is the only company that can meet the rigorous security standards set by national governments.  It is also the only incumbent that has a presence in vertical markets that require tight GRC (Governance, Regulation and Compliance).

  Ultimately, RIM will have to allow its carrier partners access to tools that allow them to comply with lawful intercept legislation. However, RIM holds the keys and will likely only offer the tools to carriers that allow access to information that is legally required on a case by case basis. This will allow for reasonable compliance with requests from regulators and governments, whilst avoiding the less than savoury possibility of broad population monitoring, that in itself have broad moral repercussions. What is clear is that the company will not decouple the solution that would create a fragemented entity and damage the company’s USP.

  What is clear, is that RIM is in a bizarre predicament whereby it’s tight security and GRC adherence, driven by its architecture, which has given it an apparently insurmountable installed base in government, is having a seemingly negative impact on its business.

  Nevertheless, I believe RIM can and will meet reasonable demands by providing tools to carriers, whilst avoiding the unsavoury business of wholesale privacy violation. The stark reality remains, that RIM is only open to this scrutiny is because it is the only company that can provide this level of security to users, companies and even government agencies!

  Posted by Andrew Brown @ 10:34 am

• 04Aug

  IS THE BLACKBERRY TORCH AN ANDROID KILLER?

  Blogroll, Wireless Devices, Smartphone Strategies No Comments

  Blackberry has finally introduced its much-awaited OS 6 upgrade with the launch of the Torch 3G smartphone. It will initially be sold exclusively at AT&T in the USA in August 2010, giving the operator an alternative to the iPhone. OS 6 employs a Webkit engine, HTML5 support and universal search. The Torch is a QWERTY slider with a 3-inch HVGA+ touchscreen optimized for messaging and media prosumers. Can the Torch outshine Apple? Is it an Android killer?

  

  Well, the external design is a little unexciting. It looks not dissimilar to the Palm Pre. The hardware-list ticks the right boxes for a premium handset — with 802.11n, 5MP camera, and so on — but the 624MHz Marvell processor might be perceived as sluggish compared with the emerging tide of 1GHz superphones. The software-list looks good, with Flash, HTML5 support and Webkit for developers. The Webkit-rendered browser will compress data traffic, benefitting AT&T’s stressed network. RIM has opened up the platform a little for a better developer environment. Data services are prosumer-friendly and consumer-friendly and primed for email, Internet-browsing, social networking, instant messaging, maps, WiFi geolocation, universal search, RSS feeds, media playback, Blackberry World and PC tethering. No head-to-head videophony, though.

  Navigation of the UI is delivered through 3 main interfaces; touchscreen, trackpad and hard-QWERTY keyboard. Our brief trial of the handset in New York recently found the user-experience to be generally satisfying with a responsive touchscreen and good discoverability for apps and services. Retail pricing will be set initially at US$199 postpaid with a two-year contract. This is just in the sweetspot zone for high-end users, and it indicates AT&T will be subsidizing the Torch to the tune of roughly US$200 per unit.

  So… are OS 6, Blackberry World and the Torch an Android killer? No. The overall package of hardware, software and services lacks a true wow factor. The Torch helps RIM to close the gap on Android models and iPhone, but it does not overtake them. Is the Torch a Blackberry savior? Maybe. Torch 1 is a solid step in the right direction to stemming churn by upgrading its touchphone portfolio. Torch 2 and Torch 3 will need to be even better, though, with improvements like a 2GHz processor, because the consumer-enterprise handset market in the US has become hyper-competitive and the Torch will not be a leading light for long.

  Posted by Neil Mawston @ 11:52 pm

• 28Jul

  Selling More Stuff to Fewer People Who Already Have a Lot of It

  Emerging Markets No Comments

  For some time now, a dominant cultural meme – a word I use experimentally and won’t repeat, since it evoked a fierce gag reflex as I typed it – holds that there will be more of everything in the future, especially people, and that stuff will cost more, unless it’s digital hardware in which case it will cost less and there will be way more of it.

  Real estate crashes and the more serious specter of deflation suggest that in fact stuff may not always cost more. And according to UN demographers, while global population will continue to rise for some time, there are places where population is shrinking.

  This sounds like good news, considering global warming etc., but it may not be, if your business depends on selling more stuff next year than you did this year. Fewer customers just makes your job harder. And if that shrinking customer base already has a lot of your stuff, it’s harder still.

  Consider the situation in the developing world, as shown in the chart below, which plots mobile subscription penetration against projected population growth for 135 countries. (I ran out of label space in the middle; email me if you’re curious and I’ll send you the whole list.)

  

  Rapidly growing population and low mobile penetration (lower right of the chart) does not necessarily mean a country is a terrific opportunity. Afghanistan, for example, has some issues as a business environment. But the scenario of high mobile penetration and shrinking population (upper left) raises a unique set of challenges to growth.

  Clearly, penetration on a user basis in these countries is lower than 100%; subscription penetration is particularly high in Russia and elsewhere because of multiple SIM and multiple device ownership. So it is not the case that everybody who wants a mobile phone already has one. But an awful lot of them do. And a shrinking population means fewer first time buyers are entering the market.

  Clearly, the focus for an operator in a developing country with high penetration and low or negative population growth needs to be different than in the more usual case of emerging markets with rapid population growth and low penetration. Loyalty and churn reduction become critical, as does revenue enhancement through incremental service offerings, and in particular, cold-eyed and ruthless cost justification of network expansion. If you build it, they won’t come if they’re just not there.

  Posted by Tom Elliott @ 2:19 am

• 26Jul

  Amazon results points to mobile commerce growth

  Wireless Media No Comments

  Amazon has announced that over the past 12 months purchases made from mobile devices generated US$1 billion in sales, representing almost 3.5% of its total net sales during that period. $1 billion is clearly a large amount of money and 3.5% not an insignificant share.

  Furthermore, Jeff Bezos indicated that smartphones have had a strong role in driving mobile commerce to date, which is not surprising given the larger screen size and better resolution provides an improved product browsing experience over standard phones:-

  “The leading mobile commerce device today is the smartphone, but we’re excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business.”

  Unfortunately, there was little further information relating to the type of products being purchased via mobile, e.g. whether or not it includes the sale of ebooks, or the % mix between digital content (e.g. MP3) versus physical goods?

  However, this announcement, combined with the increasing volume of web traffic generated by mobile phones, and the fact that that the global smartphone installed base is set to expand from 458 million in 2010 to 1.1 billion by 2015, has a clear implication for web retailers that are seeing increasing mobile traffic to their sites: Integrate mobile to your digital sales process, because a growing share of consumers are using their phones to buy stuff!
  
  Perhaps not surprisingly, Amazon has been ahead of the curve with respect to mobile commerce for sometime. It currently offers dedicated smartphone applications for the major smartphone platforms (Android, Blackberry, iPhone, and iPod Touch) in the US. The absence of support for Symbian is clearly a consequence of Symbian’s low penetration in the US. Amazon has also designed mobile optimised sites for smartphones and in June 2009 Amazon’s subsidiary A9.com acquired Snaptell, a company focused on image recognition and visual search technology which allows users to take photos of products and find pricing information, rather like Google’s Goggles (still Beta) and ScanBuy. Linking the image capture capability on camera phones with off-board product recognition, price comparisons and product reviews can help to convert the handset into a powerful commerce device in my opinion. Perhaps most importantly though, Amazon allows users to register their payment details to their account and to make purchases using a single click, through its 1-Click ordering system, which eliminates the inconvenience of manually entering payment details.

  For many web retailers adapting for mobile is not likely to be a priority yet – few will have forgotten the dotcom bubble bursting. However, I believe this announcement by Amazon provides an indication of the potential size of the missed opportunity if they do fail to address evolving consumer behaviour.

  Nitesh Patel

  Posted by npatel @ 5:57 pm

• 16Jul

  Apple’s Antenna Saga

  Wireless Devices No Comments

  Those following the “Antennagate” saga no doubt tuned in to reports from the press conference held by Apple earlier today.

  As Apple explained during the event, many other phones potentially suffer from a similar issue. Putting on my electrical engineering hat, I have to say I believe it – to an extent. A user’s hand (or ear or cheek) all impact the environment “seen” by the phone. Antenna engineers work carefully to direct signals away from such sources of interference. However, there should be no reason why the left-handed “deathgrip” scenario is unaccounted for.

  The smartphone vendor announced that while its “18 PhDs and scientists” work on studying the problem further, Apple would issue free protective cases (of both the Apple-made “bumper” variety and the third-party kind) to all iPhone 4 buyers.

  So, why all the negative press?

  It appears that consumers and the media alike have a love-hate relationship with successful electronics firms. We love to use their products, but also love to find faults in them. (Google and Microsoft come to mind.) The antenna issue has put the first major dent in Apple’s armor since the original iPhone launched in 2007. To find a fault with a company this successful is a rare occasion, and it often makes for catchy headlines.

  The iPhone still offers best-in-class usability for data services. However, the vendor will now need to fix the growing perception that its voice-call capability is sub-optimal. As Apple loses heartshare, it may not stop the die-hard fans from purchasing a device, but it may impact on-the-fence buyers. Given that Apple relies on essentially a single SKU, consumers holding off on making their buying decision can have a quick impact on volumes (without other SKUs to absorb the impact).

  Unlike previous years, when Apple’s competition was lackluster, this summer brings compelling Android-powered alternatives from vendors like HTC, Samsung, and Motorola.

  So far, we believe that the negative impact on marketshare has been negligible. After all, Apple has already shipped 3 million of the new handset since launch. Furthermore, according to Apple-provided stats, only 0.55% of iPhone 4 users have called to complain about the antenna problem.

  However, while the figure is pretty low in percentage terms, it still comes out to about 17 thousand people. The sooner Apple can bring that number to zero (the vendor hopes that consumers will accept the free bumper solution) the sooner it can curb the loss of heartshare and the potential long-term impact on the iPhone’s otherwise gold-plated brand.

  iPhone 4 Insight

  Smartphone Sales by Country Forecast

  -Alex Spektor

  Posted by Alex Spektor @ 9:38 pm

• 16Jul

  Vodafone charts an open source course for location based services

  Wireless Media No Comments

  Is there any benefit for Vodafone making its LBS software open source? I’m sure developers will love to get their hands on this code and use it to develop appealing location enhanced applications. But other than attracting developers to write compelling location services that can be distributed through Vodafone’s 360 application store, the move surely falls short of Vodafone’s initial intentions after gobbling up Wayfinder in December 2008 for $29 million. Up until this point, Vodafone had been the only carrier to have acquired a location based service application developer in an attempt to move into other parts of the LBS value-chain beyond providing user location and managing subscriber privacy.

  Vodafone decided to close down Wayfinder in March 2010, after Google and then Nokia launched free mobile navigation in December 2009 and February 2010 respectively, eroding Vodafone’s prospects of charging a premium for Vodafone Navigator, its turn-by-turn location application. Prior to this open source announcement, it seems likely that Vodafone would have attempted to sell the unit. However, given the shift to a free business model for navigation, I strongly suspect that interest would have been very low.

  Although maps will continue to work on Vodafone 360 Samsung H1 and M1 devices, its branded search application, Vodafone Locate, will be discontinued. Vodafone Locate is no longer available in the iTunes App Store or the 360 Apps Shop, nor has it been embedded in devices since Vodafone announced the intended closure of Wayfinder. Vodafone Navigation is also being phased out, with a final decision on when and how to be made. Vodafone Navigation is no longer available in the 360 Apps Shop, nor has it been embedded on any devices since Vodafone announced the intended closure of Wayfinder. Vodafone will now offer navigation through a partner, a more profitable approach to running their own navigation service, as highlighted in our report ‘Nokia & Google Shake Up $3.8 B Handset Navigation Market.’

  This withdrawal by Vodaofne underlines the broader challenge that operators face in competing on services with internet giants like Google, whose business model is based on advertising and handset vendors, like Nokia, Apple and RIM that recognise the importance of delivering well integrated services in order to drive further growth in handset market share.

  Nitesh Patel

  Posted by npatel @ 6:18 pm

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