Since when does 4G=ADSL?
By Chris Nicoll
By Chris Nicoll, Distinguished Research Fellow, Yankee Group
If you have been following the blogs lately you would think Verizon’s recent LTE trial demonstration in a Boston coffee house is the second coming of Charles Kao. (Come on, you remember, he won the Nobel prize in Physics for his work in optical transmission. Yeah, THAT Charles Kao!) So many blogs have picked up on the test, which apparently demonstrated download speeds in the 8.5Mb range and uploads in the 2Mb range that this MUST be the advent of “true” 4G networks in the U.S. Right?
So why does the VZW LTE test feel less than significant? At CTIA in March, VZW was talking about rates in the 40-50Mb range with initial averages in the 5-12Mb range as those tests were coming to a close. Too bad that Sweden and Finland are laughing at us as they sit in THEIR coffee houses. Pre-launch test speeds on the TeliaSonera commercial network last December showed rates of 40+Mb in Oslo and 80+Mb in Stockholm. [Countering those rates is Northstream which reported a test it ran only achieved 12Mb speeds but it has not released the documentation of that test. Countering THAT was a test TeliaSonera commissioned with SwissQual showing speeds in the mid-40Mb range in Stockholm.]
So here in the U.S. we are looking forward to 4G speeds and getting ADSL instead and we are happy about it? Sprint today is seeing average user speeds in the 4-6Mb range, bumps to 6-8Mb and peaks to over 10Mb. So 8.5Mb is at the top end of the range, but certainly not blowing anybody’s socks off. Is this perhaps just LTE-exuberance run amok?: Engadget: “4G Shocker! The good people of Boston enjoy Verizon’s trial LTE network”. Or did the good people of Boston just have too many Sam Adams and didn’t notice they were getting LTE-Lite or 4G Decaf?
VZW is preferring to take a very conservative approach to the bandwidth discussion, focusing on the ‘real world’ user experience and not maximums or peaks. If you nearly ALWAYS got 8Mb download service would you be thrilled, esp if your peaks were at 20Mb or more? Probably. And that seems to be the VZW goal, and consistent with their 3G service delivery. Set a strong floor to the service experience and build up from there.
So T-Mobile is looking at HSPA+ speeds in the 14-21Mb range and not to mention the new HTC WiMAX phone from Sprint is bringing voice to 4G networks ahead of Verizon (and integrated Wifi Hotspot, etc). VZW is effectively playing 4G catch-up so perhaps my expectations are too high for this demo? Actually, I’m not measuring VZW’s LTE against Sprint or T-Mobile and WiMAX or HSPA+. What I’m looking at is the other commercial LTE networks in the world and asking why not us? I think VZW would answer back: just wait and see.
Right now 8.5Mb is better than most anything available in the U.S. today. But somebody spent billions on spectrum, network rollout, backhaul, etc. for 8.5Mb? And we are supposed to be at the forefront of LTE networking? I don’t think we are seeing that yet. So I’m just not excited about 8.5Mb. 28.5Mb? 38.5Mb? 48.5Mb? 98.5Mb? Oh yeah, THAT I’ll get excited about. And make sure you throw in that integrated WiFi hotspot with your new devices too. VZW, I’m watching!
Auctions must be decoupled to release brakes on mobile broadband
By Caroline Gabriel
Auctioning licenses in several bands at the same time appears to be a good idea, and one increasingly favored by regulators round the world. Rather than selling each set of frequencies in sequence, and often with no over-arching strategy, governments can offer bidders the flexibility to acquire the right mix of spectrum for their business models.
So India decided to offer 3G and WiMAX spectrum at the same time, allowing operators to create plans that combined 3G for coverage with 4G for data intensive zones and fixed broadband. The authorities argued this would be a better model than one based on a single technology and frequency, both for commercial return and the expansion of services around the country. In the UK, a very different market, the idea was to auction the two bands earmarked for 3G expansion and 4G - 2.6 GHz and digital dividend around 800 MHz - simultaneously. Again, this would allow operators to make a clearsighted judgement on what balance of frequencies they needed to balance wide coverage with urban capacity, and to value the bands accordingly, rather than in isolation.
All this sounds very progressive, compared to a past situation where operators often had to snap up whatever band was available at any one time, even if it was not optimal. But we are talking about government agencies here. Putting two auctions together doubles the complexity, the bureaucracy and the opportunity for delay. So while countries like Sweden, sticking to sequential auctions, already have 2.6 GHz out of the door, and are hurtling towards 800 MHz sales, cellcos in the UK and India are living with protracted delays in being able to acquire any spectrum at all for the next generation of their services.
This is leading to calls for auctions to be decoupled again, especially in the interests of new entrants with new service models. In the UK, existing cellcos can make do with their existing holdings for some years, now that they are almost certain to be able to refarm their GSM bands for 3G (though the possible redistribution of 900 MHz, which only Vodafone and O2 hold, remains a sticking point even for that). But operators hoping to acquire a license to create a new model and introduce added competition and new types of services are increasingly frustrated. The UK was supposed to be the first European country to auction 2.6 GHz licenses, back in 2008, and that would have provided a favourable environment for a new mobile player (or a returning one like British Telecom) to leverage a new technology like WiMAX, to leap ahead of the existing 3G incumbents. The longer the delay, the less attractive that opportunity is, because the new players will be running head-to-head with the incumbents’ LTE plans, as that technology becomes available.
In India, even entrenched mobile operators cannot afford to wait much longer for new spectrum, since exploding demand is overloading their current networks to breaking point. However, there is still a case for separating the two auctions, since the problems that are delaying the 3G sale (mainly disputes over when the Department of Defense will vacate spectrum, and the reserve prices) do not affect the 2.5 GHz band, and at least the WiMAX providers could make a start on addressing the country’s glaring shortage of broadband services.
Yet the two sales remain bound together, and delayed yet again, probably until the new fiscal year starting in April, according to government sources. The auctions have been delayed many times, most recently until January 14 and then February 12. This will be bad news on all fronts. The wireless infrastructure suppliers may not be expecting quite a big a boost as from Chinese 3G, given the price competition in India, but the sheer size of the market is still vital to a still pressurized sector; India is probably the world’s largest potential market for WiMAX; and the Indian cellcos themselves badly need the new spectrum to add desperately needed capacity and launch higher margin services.
All this is creating a groundswell of lobbying for the WiMAX sale to go ahead regardless of the constantly changing rules on the number, price and conditions of the 3G licenses. An internal note authored by two units of the Department of Telecom, and quoted in the Economic Times newspaper, bemoans an “amazing array of inconsistencies in the government’s approach to 3G mobile licenses, which are unlikely to be granted anytime soon”. As the paper points out, further delays could “stymie the progress of the telecoms sector, the vaunted success story of liberalized Indian infrastructure. This hurts the economy, forgoing enormous, life changing growth potential in rural India.”
It voiced the views of many elements of the telecoms industry, saying: “The time has come for the government to delink the auction of licenses for wireless broadband services using WiMAX from auction of 3G licenses. The government should move ahead with WiMAX spectrum auctions, without waiting to complete 3G auctions. This would open up much needed new revenue streams for the industry. The issues that hold up licenses in 3G do not apply to WiMAX. The government should move ahead on this front.”
The most likely opposition to this view would come from LTE suppliers, reluctant to see WiMAX get such a powerful beach head in the world’s second largest market. Such parties would be pleased to see 2.5 GHz allocations delayed, especially as the Indian DoT and regulator TRAI said last week they were considering further auctions “very soon” after the 3G and WiMAX transactions, to support ‘4G’ services. The first would be digital dividend spectrum around 700 MHz, which India has long planned to bring into play ahead of most of the world. As 2.5 GHz will be used almost entirely for WiMAX, because of the immediate availability of the technology, this leaves 700 MHz as the only near term band with international support for LTE suppliers to target, although HSPA and WiMAX may be more likely options. LTE proponents like Ericsson and Qualcomm have already been accused by the WiMAX community of lobbying to delay mobile broadband auctions in countries like Brazil, until their favored technology was ready.
This was also a factor, as we saw above, in a very different mobile economy, the UK, where timely spectrum availability could have given WiMAX a foot in a firmly GSM-focused door. That door may be closing, as the country is now likely to wait until 2011 for its 2.6 GHz sale, leaving carrier plans for LTE or WiMAX on hold. Kip Meek, the government appointed independent spectrum broker, says a 2010 auction is now “a real stretch” and 2011 is the probable date.
The auction was originally delayed by a legal challenge from the UK arms of T-Mobile and O2, which argued that they could not put a realistic valuation on the new bands until regulator Ofcom had clarified its policy on refarming GSM spectrum. That in turn would require a settlement of the long running dispute over whether O2 and Vodafone, the only holders of that lower band GSM spectrum in 900 MHz, should be forced to redistribute their holdings, which are valuable for cost effective rural coverage.
Now, other factors are causing delays - the proposed merger of T-Mobile UK and Orange UK, which could break existing spectrum caps even without new allocations; and the decision to sell the 2.6 GHz licenses in tandem with the digital dividend spectrum around 800 MHz.
Meek’s latest update was reported by online newspaper ZDNet UK (www.zdnet.co.uk), at a Westminster eForum on the spectrum implications of the digital switchover. Meek said the outcome of his proposals for 2.6 GHz allocation was “uncertain” because of operator concern over the TMo-Orange merger, and there is threatened legal action from British Telecom. He told ZDNet: “The government will be considering its response to the consultation paper, [but] that process is taking longer than originally anticipated. They will have to take a view whether, in the dying months of this government, they will want to push through with this particular set of proposals.”
Meek wants Vodafone and O2 to receive 800 MHz allocations only if they surrender an equal amount of 900 MHz spectrum. And TMo and Orange should be able to bid only for limited amounts of 2.6 GHz, unless they give up some holdings at 1.8 GHz or 2.1 GHz. He has also proposed making 2.1 GHz 3G licenses indefinite in length, in return for commitments from cellcos to improve 3G coverage. Currently, they are due to expire in 2020.
This last idea is the one that could incur BT legal challenges. The incumbent has described it as “a gift of several billion pounds from the UK taxpayer to the mobile operators”. BT spun off its own cellular arm, which became O2 and is now owned by Telefonica. BT was widely expected to bid for a 2.6 GHz license and run WiMAX in it, primarily as a wholesale network or to support new business models such as machine-to-machine.
Sprint mandates Wi-Fi but WLANs remain both friend and foe
By Caroline Gabriel
Only a few years ago US carriers were mounting lawsuits against WiFi metrozone operators. Now AT&T and T-Mobile have made such hotspots a key element of their proposition, and last week Sprint Nextel said it would insist on WiFi support in all the smartphones it offers from next year. WiFi, then - provided it is under cellco control - has shifted from being a threat (diverting users away from mobile networks onto unlicensed, often free services), to a friend (allowing the exploding levels of wireless data to be spread over multiple pipes, with WiFi the cheapest to the carrier). But any strategy involving unlicensed networks involves a double-edged sword, and this is especially seen in the rising use of mobile application stores.
The upsides of WiFi for carriers? If they can direct users onto WiFi hotspots and networks they control (and charge for, at least as part of a services bundle), they can mitigate the loss of revenue from 3G to WLANs; do something about the quality of service; increase user loyalty and reduce churn; and offload the kind of low value but data-intensive traffic that can compromise a 3G network. Increasingly, consumers do find themselves on a WiFi network controlled by their operator. T-Mobile USA was a pioneer in using dual-mode devices and UMA to support fixed/mobile convergence and value added services in the home, while offering users bundled deals that included access to its huge hotspot system - reducing their cellular spend while on the road, but keeping them within the T-Mobile world. AT&T has aggressively emulated this strategy on the hotspot and bundling front, especially since acquiring Wayport and poaching the important Starbucks coffee chain deal from its smaller rival - though it does not use UMA for FMC and homezone services, pursuing a femtocell strategy instead.
The downsides? They cannot ensure that users stay on their own WLANs, rather than roaming off to third party services, taking all their wireless data spend with them (and even voice, with the advent of usable mobile VoIP, Skype and Google Voice for Android). They can make their WiFi connections more attractive, but only by providing free access to subscribers and outlaying considerable sums on extending their hotspot network to ensure availability, and on improving quality. And though traffic offloading may be a short term bonus, given the creaking nature of current 3G coverage and capacity, the cellcos live with the dream of moving to 4G networks and supporting true broadband and massive data usage, with the improved ROI of a flat, IP system. But if the users are accustomed, by then, to carrying out most of their heavy duty applications work on WiFi, how easy will it be to get them back onto the cellcos’ network, except by making it just as cheap (which means free or at least aggressively flat rate), and enhancing the user experience (expensive, not the carriers’ forte, and with the significant chance that Google or other over-the-top giants will do a better job)? This will be especially tough when the LTE networks are not universal in coverage, and may well be less widely available than WiFi for some years.
So the bitpipe beckons, strengthened by the carriers’ own willingness to show users that there is a faster, cheaper alternative to 3G for doing YouTube on the phone. Operators’ attitudes to app stores, particularly the Apple blueprint, epitomize the dilemma. AT&T bars the mobile version of the SlingPlayer placeshifting TV app, available from the iPhone store, from its 3G network, forcing its most-loved customers, the Apple users, to run the app on the phone’s WiFi link only. It pleads overburdening of the 3G system, resulting in poor experience for other customers - probably true, but hardly persuading the subscribers that their high value iPhone 3G data plans are worth the money.
Across the world, one of the many sticking points in the negotiations to get the iPhone into China is precisely its WiFi component. The carrier that does take the handset, most likely Unicom, will almost certainly insist that WiFi is disabled. This is largely because of government policies on unfettered internet access, but the restriction is supported by the cellcos, because they are determined to keep iron control of their networks, revenue models, app stores and brands. Hence another sticking point - China Mobile’s refusal to entertain an iPhone store that was not using the operator brand and revenue split (see separate item).
The Chinese carriers have the ‘luxury’ of building out new networks from scratch, using the latest 3G (and soon, 4G) kit and with little chance of their new systems overloading any time soon (3G usage will be a tiny fraction of the total for years). But for their US counterparts, there is the need to cope with an explosion of mobile data, driven by netbooks, dongles and smartphones, on 3G networks that are inadequate to the task, necessitating rapid upgrades and 4G plans. In the meantime, WiFi offload looks almost inevitable, especially for the GSM/UMTS carriers, with their less efficient networks.
Even in CDMA land, Sprint is following the trend, its own hotspot efforts having fallen drastically behind those of the GSM majors. Sprint only announced plans for a widespread hotspot service in 2003, behind its rivals, but its promises of a 2,100-strong network did not materialize and it has often misstepped in the WiFi market - for instance, in 2004, at the height of hotspot fever, it introduced a flat rate WiFi plan priced at $49.95 a month, double the price of competitors. Now it is heavily focused on femtocells for in-home coverage and FMC, and has been a real pioneer there, but it still needs to add WiFi to its mix once its customers are out on the road.
It is, therefore, going to insist that every midrange and high end handset it offers in 2010 will have WiFi support, which may point to stepped-up hotspot activity too - cellcos are not the only operators enhancing their service bundles with hotspot and metrozone access; cablecos are keen on this route too, most dramatically Cablevision, with its WLAN build-out across its New York, New Jersey and Long Island territories.
One of the vendors that will have to adapt to Sprint’s new rules is RIM, which has been remarkably slow in adding WiFi even to some of its highest profile phones such as the Storm and the new Tour. It will reportedly put this right by year end, adding WiFi to ‘Storm 2′, expected at Vodafone and Verizon in time for the holiday season, and to an updated iteration of Tour, which could see the light of day before the end of 2009, or early in 2010.
Sprint did go ahead and launch Tour this month, as did Verizon, despite the lack of WLAN facilities, saying that it did not want to delay its roll-out. But “Sprint is embracing WiFi in all its major devices going forward,” said Jeff Clemow, director of business product marketing. “It is now a requirement for all our PDA equipment suppliers to include WiFi. Several quarters ago we made a conscious decision to require all of our PDA suppliers to support WiFi.” This will be gradually extended to all high end handsets and webphones, said Sprint sources.
Clemow added that Sprint will offer a version of the Tour, from early next year (”after the first of the year”), that will include WiFi - this could, however, slow sales of the current model if users are keen to wait for the new facility. Sprint, of course, also has a WiMAX option to offer its users via its stake in Clearwire and its MVNO deal with the operator. As that network expands, it will give Sprint additional devices and service plans to add to its bundles, and the most powerful mobile broadband connectivity in the US, at least in certain metrozones.
Mobile billing service provider, Bango, says that 20% of users purchasing content on their phones are now connecting via WiFi, and unless this is through an operator portal or controlled environment, this damages the mobile revenue model for cellcos and their content partners. It could also make vendor stores more attractive to consumers than operator branded alternatives - a WiFi iPhone user still pays the App Store developer for the product, but buying from a cellco store will be tied to a specific network.
“The use of WiFi on mobile handsets is becoming pervasive,” commented Frank Dickson, VP of research at In-Stat. “By 2010, In-Stat anticipates that 20% of the total WiFi chipsets will be used in mobile phones as manufacturers, currently led by Nokia, continue to ship an increasing number of WiFi enabled handsets.” The solution, says Bango, is for operators to extend their billing mechanisms beyond their own networks - carrier billing is a significant attraction, often offering well tried, trusted and streamlined processes, and allowing purchases to be put on the mobile bill. “Operator billing delivers the highest payment conversion rates for mobile content,” said Bango CEO Ray Anderson. “These statistics are both a warning and an opportunity for mobile businesses to ensure that their billing solutions can secure the same high conversion rates from the growing number of WiFi connected customers.”
So perhaps, even as the cellcos invest large sums in creating attractive user experiences and strengthening their brands, it may be the more mundane weapon in their armory, billing systems, that give them an edge even in the world of WiFi.
UK 2.6 GHz auction pushed back again, to 2010
By Caroline Gabriel
The UK, once set to be the first European country to auction 2.6 GHz spectrum for ‘4G’ services, is delaying its spectrum sale yet again. In November, regulator Ofcom indicated it hoped to award licenses by mid-2009, and in April it said it promised to hold the auction “as soon as possible”. Now it has “withdrawn” that statement and, in the wake of the new Digital Britain report recommendations, will bundle the 2.6 GHz and digital dividend spectrum sales into one super-auction next year.
The delay is a further blow for operators that had hoped to steal an early march in mobile broadband, especially those aiming to challenge the cellular incumbents, possibly with a WiMAX network. While a few countries, notably Sweden, have sold 2.6 GHz licenses, most auctions will take place in 2010, as operators create strategies that also take account of the sale of analog TV spectrum around 800 MHz; possible broadband stimulus initiatives in some markets; and the ruling, by many regulators, that 3G services can be expanded using current GSM frequencies around 900 MHz.
Existing cellcos argue that they can only reach a meaningful valuation of the 2.6 GHz licenses when the rules on all these other factors are made clear. This was one reason for the initial delays of the UK auction, which was once expected to have taken place over a year ago. It was held up by legal challenges by T-Mobile and O2, which sued Ofcom for trying to sell the licenses before it had completed its rulemaking on refarming 900 MHz GSM spectrum for 3G – something that could reduce 3G carriers’ need for 2.6 GHz licenses, and certainly affect the spectrum’s value.
The Digital Britain report has further complicated the UK auction picture, stating that it intends to implement the proposal of the independent spectrum broker to hold at least part of the 2.6 GHz sale together with the award of the 800 MHz band. ”In light of the Government’s intention to implement the ISB’s proposals, including possibly directing us in this regard, and the further period of time which will elapse before any such direction is made, Ofcom considers that it is no longer appropriate to rely on its decision of 4 April 2008 to hold the award of the 2.6 GHz band as soon as possible,” the regulator said.
The UK auction is potentially the most significant sale of 2.6 GHz licenses in the EU, because it is the most open to a new technology such as WiMAX and is regarded as a bellwether for various reasons. Ofcom has been more aggressive than many fellow regulators about opening up new bands with as few regulations as possible in order to encourage new services and new operators. And, unusually among European states, incumbent telco BT has no wireless networks, but is widely expected to re-enter the wireless market – which it quit when it spun off its mobile arm, now Telefonica-owned O2 – via a 2.6 GHz license. It has shown a strong interest in WiMAX, and so could be the technology’s route to a national network in the heartland of 3G and LTE. Also of interest to the WiMAX community is Ofcom’s stance that it will leave 2.6 GHz winners to decide whether to implement TDD or FDD networks, according to their business models, rather than defining the split between the two profiles, as most regulators are doing. This could make a license more attractive to a data-driven carrier, since TDD spectrum is advantageous for this model.
Sprint Path to 4G: Integrating CDMA/EV-DO and Mobile WiMAX
By Berge Ayvazian
I attended the Sprint Industry Analyst Conference on May 13 and 14, nearly one year to the day after Sprint held the first Analyst conference with Dan Hesse as its new CEO. The 2008 
conference was held less than six months after Hesse took office and during the same month that the merger of Sprint Xohm and Clearwire was announced. It took another six months to complete this transaction, in which Clearwire acquired the Xohm assets from Sprint and the partnership with Google, Intel, Comcast, Time Warner and Brighthouse was finalized in December 2008.
As such it was only fitting that I used this trip to Kansas City to get immersed in the Sprint strategy for integrating its existing 3G network and the 4G Mobile WiMAX network being built by Clearwire to enhance the mobile Internet experience. I also had the opportunity to examine Sprint 4G in the context of the company’s other priorities as it restores financial stability by reducing its cost structure and debt, dramatically improves its customer care and satisfaction, introduces new cutting edge devices, refocuses its wholesale and business markets strategies and launches a new ad campaign showcasing the “Now Network.” Dan Hesse presented an upbeat assessment of the company’s accomplishments over the past year and covered this year’s core principals including Customer Experience, Brand and Financial Condition. He highlighted the key customer care and satisfaction metrics that demonstrate that Sprint is restoring its position in key market segments as AT&T and Verizon Wireless battle for the title as the largest US mobile operator.
This meeting was my first opportunity to meet Bob Brust, who joined Sprint as CFO a year ago after retiring as CFO of Eastman Kodak, two years as Unisys CFO and following a 31-year career with General Electric. Under Brust’s leadership, Sprint has reduced its annual labor cost by $2 billion and continues to reduce its cost structure in order to use the resulting free cash flow to pay back $9 billion of debt due over the next three years, rather than raise new financing in tight capital markets. Brust is working with other Sprint executives to reduce access and roaming costs, close contract call centers, sublet office space and evaluate proposals to outsource some network management and information technology functions. He also described plans to reallocate some 25 percent of these savings to marketing and advertising aimed at stemming further customer losses. Brust also described the positive effect of the Clearwire transaction on Sprint’s cash flow and balance sheet, since Sprint traded its 2.5 GHz, spectrum and other Xohm-related 4G assets for a 51% stake in Clearwire, and the costs for deploying the Sprint 4G network and upgrading its backhaul capacity are now being funded by Clearwire and its investors.
Over the past year Sprint has been reorganized to separate the retail and wholesale businesses, to create separate sales and marketing organizations for consumer and business markets, and to build a prepaid retail business around the Boost brand to offset customer losses in the iDEN network and Nextel business. Hesse highlighted the success of the Boost $50 “Monthly Unlimited” prepaid offer launched on the iDEN network in February, and indicated the company is considering Boost-only stores and other initiatives to build on the popularity of the Boost brand. Sprint will also be placing more emphasis on its wholesale business, in an effort to leverage its channel partnerships with Virgin Mobile USA which recently acquired Helio from SK Telecom and Earthlink and companies like Amazon.com which uses Sprint’s EV-DO network to download books to the popular Kindle e-reader.
The Business Markets team under Paget Alves is now responsible for 19 million business customers in segments ranging from SOHO and SMB to Enterprise and is targeting growth by selling 9 core solutions into six key vertical industries. This organization is also responsible for managing the Sprint 4G products and services that will complement the existing EV-DO and iDEN networks, Nextel DirectConnect and mobile broadband services for business customers.
Dan Hesse also used this occasion to introduce a new member of his executive team, Robert H. (Bob) Johnson, a senior marketing, sales and customer service executive formerly with AT&T Wireless, as president of the company’s CDMA business unit. Sprint’s CDMA business unit encompasses all postpaid consumer marketing and sales, including acquisition, growth and base marketing programs, as well as the more than 11,000 retail sales touchpoints. He will also assume responsibility for the demand generated from the new “Now Network” ad campaign, which has replaced the Dan Hesse retro black and white ads with an edgy and futuristic brand image. We can only hope that this new Bob H. Johnson is as successful in reinstating growth in the core consumer mobile market as Bob L. Johnson who has presided over the dramatic improvements in Sprint customer care during the past year.
After a long drought, Sprint is starting to introduce a number of new cutting edge devices to restore excitement for business and consumer customers. Hesse was particularly enthusiastic about the sleek new Novatel MiFi personal hot spot that links Sprint’s 3G mobile broadband to up to five WiFi-connected devices including notebook computers, cameras, media players and smartphones. Over the past year, Sprint has lost millions of customers to AT&T’s iPhone, T-Mobile’s G1 and Verizon’s extensive portfolio of smartphones. The touch screen Samsung Instinct was launched the flagship of Sprint’s Simply Everything plans and used to defend the high end of Sprint’s customer base. But even as the second generation retooled Samsung Instinct S30 has gone on sale at Sprint stores for $129.99 on-contract price, Sprint is now completely focused on the launch of the Palm Pre, scheduled for June 6. This elegant combination of advanced touch screen and slide out QWERTY keyboard could easily serve more as an offensive weapon than as a retention tool for existing Sprint customers. I am looking forward to personally experiencing the smooth functioning WebOS and the seamless integration of productivity applications, media content and web surfing. At the promotional price of $199.99 (with a two year commitment) the Palm Pre should help Sprint address the next iPhone release also reported to be in June, and it should appeal to both high end consumers and individual business customers.
Sprint has been actively marketing and selling its 4G products and services under the new Sprint 4G brand in Baltimore, leveraging the original XOHM mobile WiMAX network now owned and operated by Clearwire. The Baltimore network coverage is being expanded and additional products and services will be launched under the Sprint 4G brand in 2009 and 2010, and Clearwire, 51% owned by Sprint, will also re-launch services under the Clear brand later in 2009. Sprint has been selling the industry’s first dual-mode 3G EV-DO/WiMAX U300 USB card made by Franklin-Wireless primarily to business customers. Sprint claims that the availability of this 3G/4G card for $79.99 (with a two-year commitment) and the 4G mobile broadband service at $79.99 (a $20/month premium over the standard rate for Mobile Broadband) has resulted in significantly higher sales in Baltimore over other Sprint markets. Although the 3G mobile broadband service carries a cap of 5 gigabits per month, the 4G service is unlimited with peak download speeds experienced in Baltimore today up to 12 Mbps and average download speeds of 2-4 Mbps and upload speeds of .75 to 1.5 Mbps. Sprint has plans to introduce EV-DO plus WiMAX equipped notebooks later this year, and also plans to offer a 4G embedded handset later in 2010. This approach will also allow Sprint to provide an uplink capability of 1Mbps or greater and offer extremely low latency to support real-time video and other social media applications.
Sprint 4G is positioned as complementary to its existing 3G mobile broadband services and to Clearwire services and products sold under the Clear brand. While Clearwire is selling WiMAX-only service currently only in Portland, Sprint is leveraging the coverage and reliability of its extensive nationwide 3G EVDO network along with the 3-5x performance improvement of mobile WiMAX targeting business customers first in Baltimore and wherever it becomes available. Sprint is looking forward to the planned commercial availability of mobile WiMAX in Atlanta and Las Vegas this summer and will launch its dual mode 3G/4G services in Portland soon. Both companies will be distributing their 4G products in third party retail outlets such as Best Buy, with Clear pure-WiMAX products aimed at local consumers and Sprint 4G dual mode products targeting traveling business customers.
Sprint’s strategy is to integrate its existing “most dependable national” 3G mobile broadband network and Clearwire’s 4G network to enhance the performance of both networks and the Mobile internet experience of its customers. In many locations, Clearwire is using Sprint towers for its WiMAX base stations and is upgrading the backhaul infrastructure to support both its 4G network and Sprint’s 3G traffic requirements. Sprint also serves as the channel manager for the 3G/4G services sold by the cable partners and expects Comcast to initiate service in at least one market by yearend 2009. I look forward to an update on Sprint’s 4G business and plans from Sprint strategic planning chief Keith Cowan at 4G World in September.
Vodafone opens APIs in bid to create giant mobile software store
By Caroline Gabriel
The mobile operators have been busily readying their own application stores and underlying processes, seeking to steal the limelight - and pole position in the mobile value chain - back from Apple, Google and Nokia. Some, like Orange and T-Mobile, have been focusing on cross-platform stores to span all their portfolio of devices, plus PCs and even TVs, but Vodafone has made the most aggressive move yet, opening up its billing platform to third party developers.
This will allow any developer to reach Vodafone’s 289m subscribers from a single point of access, and any of those users will be able to purchase the software via their usual Voda bill. It is not too much of a stretch to think that, in future, Vodafone could also extend the system to non-competitive partner operators, to make it even more attractive to developers - Verizon, China Mobile and Softbank, with which it is creating a common widgets platform, being obvious candidates. The UK-based cellco made a point of noting that its latest move was related to its involvement in this initiative, Joint Innovation Lab (JIL). This will also underpin China Mobile’s planned store, due later this year - which is reported to be branded Mobile Market. The Chinese cellco’s determination to control the branding and business model of its software was said to be a key reason for the breakdown of its talks to carry the iPhone, with its integrated App Store.
Vodafone will publish a set of network APIs to enable the programmers to build capabilities such as direct billing and location awareness into their products and will offer access via JIL. Developers creating widgets using the JIL interfaces will be able to deploy them across all four JIL operators’ networks and stores unchanged. This cuts down on the complexity of making apps suitable for a particular cellular network/store, making the apps instantly suitable for Vodafone’s storefronts, and those of Verizon, Softbank and China Mobile as they upgrade these to support JIL.
Vodafone hopes to gain a far wider choice of software for its stores, vying with Apple’s and Nokia’s grand totals, but also says it should benefit from an increase in revenue via the revenue sharing model with developers (though it refused to specify what this share would be). JIL will release its web site and software developers’ kit later in the summer.
Vodafone’s statement said: “Developers will only need to create internet applications once in order to reach millions of Vodafone customers on any device and will be able to charge for it directly through Vodafone’s billing system.” Users gain the benefits of a wider selection of apps, more payment and micropayment options, a simpler web experience, and consistent quality of service across the Vodafone footprint, it added.
This is more sophisticated than most operators’ attempts to take the reins of running app stores - because not only does Vodafone offer developers a direct channel to market and a billing structure, but a rapidly developing software platform that could potentially reach the one billion-plus customers shared between JIL’s four supporters. But Vodafone’s goals are shared by most of its counterparts in developed markets - to make its own brands and user experience dominant; to ensure that customers are attached to its services and see the carrier as their main point of contact in the mobile web; and to put itself in pole position in the mobile software value and revenue chain.
These goals are hard to pursue when cellcos also want to carry the most eye-catching handsets and applications, which forces them to work with big brands from the device and software fields. Vodafone, partly because of its scale, has been reasonably successful in segmenting its customer bases and its marketing, highlighting partner products like Nokia Musicstore and smartphones for certain categories of consumer, and majoring on its own Vodafone Music for others.
Other carriers have been less decisive, and appear to be trying out various approaches to see what works. For instance, Orange was the most hostile of the European majors when Nokia decided to enter the mobile web services market under its own brand, but its UK arm has now signed with the Finnish giant for a relaunch of Comes With Music (CWM). This unlimited download subscription offering has had a rocky start in its first market, the UK, and this has, in turn, probably taught Nokia a few lessons about the pitfalls of going direct-to-consumer, bypassing its major channel, the mobile operator.
While Nokia may dream of a world where it sells its devices and integrated web services directly to the consumer, in reality, especially in its developed markets, it needs the support of the mobile carriers to thrive. So it is a real breakthrough for Nokia to have signed an exclusive contract with Orange UK to offer the 5800 XpressMusic touchscreen musicphone with a two-year subscription to the CWM unlimited download service (the usual CWM deal from Nokia is just one year). Exclusives, as Apple knows well, have the downside of limiting market reach for a while, but they do bring the operator’s marketing reach and budget with them. Given that CWM saw limited uptake and was generally thought to be poorly communicated to the UK public, a relaunch with a strong new handset and Orange’s full blown support should help matters second time around.
CWM initially launched with Carphone Warehouse but no major cellco, and is reported to have attracted only 20,000 UK users, though subsequent launches in other countries like Singapore are looking more successful.
But while cellcos and handset makers definitely need one another, that does not stop them making every effort to be the dominant players in the app store battle. This battle continues to heat up, and some players will have to be more flexible about operator demands than others, notably Microsoft (see separate item). But despite carrier resentments at Apple’s iron control of its App Store and revenue share, that platform continues to shine with users, and will be the key target for Nokia’s Ovi Store when that opens for business soon.
The Finnish vendor is promising that Ovi Store will go live with about 20,000 items, making it the second largest after Apple’s, which has about twice that number. This would certainly enable Ovi to top Android Market’s launch with just 50, and RIM’s with a few hundred. Key differentiators, says Nokia, will be a heavy focus on entertainment and video; the ability for users to personalize the choices with which they are presented; and extensive use of the store to distribute new Nokia software updates as well as apps.
Nokia aims to unite all its web services under the Ovi store, which is leading to some casualties. The latest is Ovi Share, a media sharing site. The Finnish giant only launched it in February, but said it is now stopping further investment in the product as part of its total overhaul of Ovi’s line-up and branding. It will keep the site operational, but will make no further enhancements to it.
Analysts believe Ovi Share saw poor take-up because of strong competition from established names like Picasa, Flickr and Facebook. Nokia is now likely to work with such firms rather than against them, indicating that it needs to drop its ‘not invented here’ approach to mobile web services. It has already taken a major step in this direction by starting to create a network of partnerships under the Ovi umbrella, saying recently that it would rely more heavily on third parties to expand its offering, in order to reduce cost and time to market, and leverage popular apps in the market.
Handset makers bely Google’s Android bullishness
By Caroline Gabriel
Google CEO Eric Schmidt pinned high hopes on Android as the search giant reported slowing revenues and sought to calm investor jitters. “Overall, it looks like Android is going to have a very, very strong year,” he said during the results conference call. However, he failed to offer specific sales figures or targets for Google’s mobile activities, and it remains unclear where exactly all this success is going to come from, with Sony Ericsson and Motorola both cautious on timescales for their Android launches.
As if the market weren’t frustrated enough with the uncertainty about the shipment of another Linux-based smartphone, Palm Pre, Sony Ericsson is now trying to manage expectations about the release of its first Android models, which should be a much needed boost to the venture’s flagging fortunes. CEO Hideki Komiyama told news agency Reuters: “It does require a lot of evaluation, as well as a lot of testing, a lot of acceptance from a consumer viewpoint, and there is still some time to go.”
Komiyama’s comments highlight two important challenges for Android that may slow down initial uptake. One, the sheer difficulty of getting a brand new handset platform market-ready, on multiple devices, to the satisfaction of a huge number of network operators. Google has always had hugely ambitious timelines for this, even though it is competing with systems like Symbian that have been developing for years, and has often been accused of underestimating the complexity of getting each product certified by operators - one issue that was reported to have delayed a launched planned for 2008 at China Mobile.
Two, there is the inevitable downside of open standards, the problems for vendors in creating competitive edge. “Our focus is on how can we differentiate from the competitors using the same operating system,” Komiyama said. His firm will focus on the user experience and interface, and its Xperia X1 Windows phone has already demonstrated what it can do in this respect - but its rivals will be taking a similar approach, and cutting edge will be hard and expensive to achieve.
Nevertheless, HTC’s second Android phone, Magic, is about to ship at Vodafone and T-Mobile USA, and Samsung plans a launch in mid-year. “There are announcements happening between now and the end of the year that are quite significant from operators and new hardware partners in the Android space, which I won’t pre-announce except to say that they really do fulfil much of the vision that we laid out more than a year ago,” Schmidt said. But of course, market leader Nokia will not support Android and LG has put its primary focus on Windows, making launches from the rest of the top five - Samsung, Sony Ericsson and Motorola (also hazy on timescales for its make-or-break Android plan) critical to gaining critical mass in the near future.
The complexity of the handset development process will explain the accelerated efforts to put Android on other types of devices, including set-top boxes and netbooks. In Japan, Motorola is building a set-top box for KDDI, to be launched in October under the carrier’s ‘au’ brand. It will allow users to take their music and video content with them on the go by connecting to a handset or portable player.
And a group of Japanese CE manufacturers, calling themselves the Open Embedded Software Foundation (OESF), are looking to use Android in a range of devices with embedded wireless, such as set-tops, VoIP phones, karaoke machines, security and monitoring systems, and digital photo frames. The founder members are ARM, KDDI, Japan Cable Laboratories, Alpine Electronics and Fujitsu Software, and first products should appear at Japan’s largest electronics show, CEATEC, in the fall. JVC is also said to be developing an Android TV set.
OESF chairman Masataka Miura said the Foundation had been established in February to create a viable Android platform for embedded products and now has 25 members. It will look into applications and services, as well as marketing and awareness programs, not just hardware.
While ARM has stolen a march on Intel in being an original member, Miura told EETimes that many semiconductor companies are also interested in joining, including Intel itself, TI, Marvell, Freescale, Qualcomm and Renesas. The group plans to open offices in Taiwan and South Korea this summer.
Against this backdrop, a response from Nokia is widely expected. Of course, the main one has come from the open sourcing of Symbian and Series 60 to provide a more established and mature open source option for handsets. However, Nokia does use the Maemo Linux platform in a few products too, notably its Internet Tablets, and with its recent heavy hints about a more aggressive cross-platform strategy, is likely to use this system to drive a push into netbooks and other non-handset devices. This could entail the porting of Series 60 to Linux, and will certainly see Nokia pouring R&D resources into beefing up its implementation of Maemo to act as a viable counterweight to Android in the Linux world.
All of which could make Mobile Linux even more fragmented than it already is ….
Google reported first quarter net income of $1.42bn, an 8% year-on-year increase, and beating Wall Street forecasts partly because of a recent cost cutting program. Revenue rose just 6% to $5.51bn, and was also down 3% on the fourth quarter of 2008, Google’s first quarter-on-quarter decline since it went public five years ago. The main culprit was the cut in online advertising spend. “No company is recession-proof,” Schmidt said.
CTIA: Alcatel-Lucent and Motorola Driving 4G Synergy and LTE Leadership From WiMAX Experience
By Berge Ayvazian
As you might expect, a major focus at CTIA 2009 for leading wireless infrastructure suppliers was on their ability to deliver products and network solutions for mobile operator early deployments of LTE. This was especially true for those vendors that received a major boost earlier this year when they were selected by Verizon Wireless for its early LTE deployment planned for 2010.
Verizon chairman and CEO, Ivan Seidenberg, used his CTIA keynote to express confidence that the vendors selected will be able to meet their deadlines for providing equipment in time for the launch of commercial LTE in 30 US markets during 2010. Seidenberg also highlighted Verizon’s open network program as an innovation critical to expanding the market through next-generation wireless networks. Verizon Wireless selected both Ericsson and Alcatel-Lucent for its LTE radio access network (RAN) equipment.
At CTIA 2009, Ericsson kept the spotlight off Verizon and on its HSPA and HSPA+ solutions, with a focus on planned deployments by AT&T and T-Mobile. Ericsson seems to be treating the Verizon project as a “greenfield LTE deployment” and is leveraging its role in finalizing 3GPP specifications to provide the very latest updates for the LTE technology.
Alcatel-Lucent, meanwhile, emphasized its years of experience with CDMA and its ability to help Verizon smooth the evolutionary path to LTE and integrate its new LTE network with its existing infrastructure. My interview with Alcatel-Lucent Vice President for Product Marketing and Strategy, Jean-Pierre Lartigue, reinforced previous reports that Alcatel-Lucent has combined WiMAX and LTE in a common business unit and has significantly increased its R&D investment in LTE driven in part by the effort to meet Verizon’s requirements. Alcatel-Lucent has also expanded its wireless networking portfolio to enable mobile service providers to offer both 3G CDMA and Long Term Evolution (LTE) services using a common network infrastructure. For example, Alcatel-Lucent’s innovative “Converged RAN” offerings support multiple technology standards in a common base station platform and the delivery of a wide variety of new wireless broadband services while simultaneously reducing power consumption and lowering operating costs. This Converged RAN uses software defined radio (SDR) technology to enable CDMA service providers to deploy one technology today and then upgrade smoothly to LTE in the future, or even introduce both technologies in the same existing base station simultaneously.
Alcatel-Lucent believes the requirements of LTE are revolutionary, not evolutionary, and therefore new platforms must be purpose-built, all-IP and optimized for LTE. At CTIA 2009, Alcatel-Lucent positioned its Evolved Packet Core (EPC) as service nodes that tie together existing CDMA and new LTE networks. This is a critical element of the company’s end-to-end LTE solution and as the focus of convergence between next generation wireless and wireline networks. EPC replaces the service gateway architecture in 3G networks with an all-IP platform designed for any operators planning to deploy an LTE network. The EPC solution includes network policy and personal subscriber policy control and it is equally applicable whether an operator is moving from the CDMA and EV-DO world or from HSPA to LTE. In response to Verizon’s open network program, Alcatel-Lucent has established ng Connect, an industry program driving an open LTE ecosystem of devices, content and application partners. With ng Connect, wireless broadband operators benefit from open innovation, reduced time to market with LTE-enabled services, and the ability to drive new and non-traditional business models.
The increased R&D investment in LTE corresponds with Alcatel-Lucent’s decision to stop funding efforts to deliver truly mobile broadband services via mobile WiMAX. Alcatel-Lucent CEO Ben Verwaayen has recently said that WiMAX is not a viable mobile broadband option as compared to LTE technology. Alcatel-Lucent now positions WiMAX 802.16e as a flexible broadband access technology that offers new entrants both an efficient way to deliver high-speed Internet access and VoIP-based telephony services in rural environments where copper DSL is not available, and advanced “on the go” broadband services in urban markets to extend the reach of broadband coverage. Although the company has dramatically reduced its investment in WiMAX for 2009, Alcatel-Lucent has announced several new contracts for fixed/nomadic WiMAX networks in developing markets since the beginning of 2009, but has not been selected by any operators seeking broadband mobility such as Clearwire.
Nortel and Motorola were both strong contenders for Verizon’s LTE network, but neither was among the Verizon LTE vendors selected during this round. Nortel filed for bankruptcy and withdrew from its mobile WiMAX partnership with Alvarion in January 2009, and this major CDMA vendor used its CTIA exhibit to showcase its LTE base stations and advanced femtocell solutions developed with partner LG. The focus for Nortel is now on smaller US-based CDMA operators that have also selected LTE as their path to 4G, such as MetroPCS. Making the path even more challenging for Nortel of course are that executives have now begun to openly acknowledge that it will be difficult to win a multi-year LTE deal until their bankruptcy is cleared up, and resolving the rumours about a Nortel break-up.
I conducted an extensive interview at CTIA 2009 with Fred Wright, Motorola SVP and General Manager of Network and Wireless Broadband Products. Mr. Wright argued that Motorola has maintained its leadership position in mobile WiMAX infrastructure while recognizing that few operators other than Clearwire will engineer their WiMAX networks for full mobility. Motorola is accelerating its LTE investment despite losing the initial Verizon competition, and the company is building its LTE initiatives on its significant deployment and operations experience with WiMAX-based OFDM broadband networks and CPEs.
At CTIA Wireless 2009, Motorola showcased its LTE solutions, including the Wireless Broadband Radio (WBR) 500 series eNodeB, an evolved packet core (EPC), high-speed backhaul, network and device management solutions and a complete portfolio of professional services. The WBR 500r eNodeB is the latest zero footprint advanced LTE RAN solution that addresses the full scope of wireless carriers’ deployment needs while meeting size and deployment cost criteria. Motorola claims that its flexible eNodeB LTE base stations will support both Frequency Division Duplex (FDD) and Time Division Duplex (TDD), and will be available in a range of frequencies from 700MHz to 2.6GHz with bandwidths from 1.4 MHz to 20MHz. The eNodeB features enhanced coverage and capacity for improved performance, superior power efficiency for reduced energy consumption and lower total cost of ownership and advanced self organizing network (SON) implementation that help operators build and operate their LTE networks at a lower cost. Mr. Wright claims that Motorola remains on track for the first commercial release of its LTE solutions for 700Mhz and 2.6GHz – including the WBR 500r – later this year.
Verizon plans to use IP Multimedia Subsystem (IMS) equipment from Alcatel-Lucent and Nokia Siemens Networks, and Evolved Packet Core (EPC) equipment from Alcatel-Lucent, Ericsson, and Starent Networks. Motorola has recently selected Starent Networks to provide multimedia core networking solutions for use in its LTE network offerings. The inclusion of Starent Networks’ solutions into Motorola’s LTE portfolio allows Motorola to offer an end-to-end network solution for its operator customers. The Starent Networks products are designed for a smooth migration to LTE for both CDMA 1X/DO-A and GSM/UMTS operators. Starent Networks solutions will serve as an eHRPD function upgrade and a bridge between the EV-DO and the Evolved Packet Core network fulfilling the functional requirements defined in the SAE standards.
Unlike Motorola, Samsung has yet to make any announcements regarding LTE, and remains committed to delivering full mobility on its WiMAX network solution. Samsung highlights the headstart its customer Clearwire has enjoyed by selecting Mobile WiMAX as its 4G network technology, and its major product announcement at CTIA 2009 was the Mondi, a WiMAX and WiFi enabled Mobile Internet Device (MID) to be offered by Clearwire later in the second quarter.
CTIA: Google wakes up to real world dilemmas of app store game
By Caroline Gabriel
This year’s CTIA Wireless is a very software driven show, and the two themes that are emerging above all are widget-based user interfaces ( see separate item ) and the latest developments in application storefronts. RIM and Microsoft opened their stores, Nokia and Samsung fleshed out details of content for theirs, and Android continued to attract operator support, even as Google found that, in the real world, it has to grapple with many of the same dilemmas for which it has criticized the grandfather of these virtual shops, Apple App Store.
As promised, RIM opened BlackBerry App World, initially offering 1,000 free and paid-for products for download to one of its smartphones. The higher priced structure of this store, compared to those of Google and Apple, suggests it will far best in RIM’s enterprise heartland, though the company says it will also include plenty of consumer items such as games. Features will include keyword searches throughout the store and reviews of apps from other users.
As part of the appeal to consumers, RIM also plans a full episode mobile TV service for the BlackBerry devices, as it looks to put real meat behind its pronouncements about delivering media to the ‘four screens’ (cellphone, PC, TV and landphone), with the BlackBerry at the hub. The company is not commenting on its plans, but NewTeeVee.com’s sources say these consist of a monthly premium subscription plan, with unlimited content included in the fee, and licensed from a range of broadcast and cable networks. Initially, the offering will be for the US only but RIM will seek partnerships in Europe too.
However, the show will be downloaded over Wi-Fi where this is available, to support faster performance and avoid clogging the 3G network - US cellcos like AT&T have suffered much reported glitches in supporting high end smartphones like the BlackBerry Bold on their 3G systems. This would preclude the Verizon Storm from using the TV download service, since it does not include Wi-Fi.
Video is also important to Samsung’s proposition - as we saw last week, the Korean leader is attacking iTunes head-on with a mobile video store boasting full length movies, and it is also announcing a storefront for rich media applications created for its TouchWiz widget interface ( see separate item ). But it seems that the mobile movie store business will remain a head-to-head between Apple and Samsung for some time. Nokia said last week that it would include films in its upcoming Ovi Store, but not a full blown ‘Comes With Video’ offering as was previously rumored. Meanwhile, as Motorola retrenches to its core businesses, it has quietly closed its own movie download platform.
When Nokia introduced its flat rate Comes With Music service last year, it hinted strongly at a movie and video version to follow in 2009, taking on the video side of Apple iTunes. However, it seems less interested in this type of content now, despite Samsung’s launch of an ambitious movie store for Europe, tied to high end handsets like the Tocca Ultra. Although the Finnish giant also has high end phones with OLED screens - though perhaps not quite as video-optimized as Samsung’s flagship - it is currently more interested in stealing Apple users on the basis of games, the most popular section of the iPhone App Store.
Nokia’s head of entertainment business, Tero Ojanpera, said: “Movies will be part of the offering but this kind of a full fledged video store is not in our roadmap.” He was keen to allay confusion over the N-Gage gaming brand, which appears from recent moves to have been sidelined. He said N-Gage will remain a platform for high end games, and its titles will be discoverable in the Ovi Store, but the store will aim to present everything under various personalized channels, but with a single umbrella brand.
Meanwhile, Motorola has closed its movie download service in the UK after just nine months. It was created in conjunction with film studio Paramount and platform provider Saffron Digital and allowed users to download content to a PC for £5.99 to £8.99, and then sideload it to a Motorola phone. However, the offering was hardly marketed and the executives responsible for it both left the firm in January.
Over at Microsoft, the company is determined to make a bigger splash at CTIA than at Mobile World Congress, where it was largely drowned out by the launch of Ovi Store and much Android chatter. It has already talked up its important agreement with LG, which will result in 50 new Windows Mobile products over the next three years, and the Las Vegas event will showcase its mobile web store and applications.
While the Redmond giant cannot launch the delayed Windows Mobile 7 yet, having to rely on the stopgap release 6.5, it can stuff its upcoming Mobile Application Marketplace with eye-catching features, which should include a new Facebook app, and themes created by fashion designer Isaac Mizrahi.
The Facebook app will be an important catch-up on the other smartphone platforms, most of which now boast an optimized client for the popular social networking system. The WinMo implementation will be released in April, and another client for rival MySpace in the summer.
Microsoft has also shipped its Windows Live suite for its mobile OS, consisting of cellphone versions of Hotmail, Messenger, Live Contacts, Spaces and Live Search, for releases 6.0 and higher. Older phones can access Hotmail via the browser, with a new version optimized for the mobile web, said Microsoft.
Other software houses that should be unveiling apps for Microsoft’s store include games makers EA Mobile, Gameloft and Hands-On Mobile, and other recognizable names include AP Mobile, Accuweather and Pandora. However, many reviewers are noting that Windows Mobile Application Marketplace seems to have a less stellar line-up of high profile software than its rivals, such as Ovi Store, are boasting for their imminent opening days.
For Marketplace users, Microsoft will support two methods of purchasing - credit card or via the cellphone bill, and unlike Nokia, there will be no difference in price or developer revenue share terms, with either mechanism. Unlike Apple, RIM and the others, Microsoft will also allow users to return unwanted apps within 24 hours, for a refund.
It has also backed off unpopular plans to charge WinMo developers $99 for submitting even small tweaks to their apps in the store. This was hardly likely to encourage software programmers to focus their efforts on Windows rather than other platforms whose stores provided free entry, or at least free updates. Now all updates, bug fixes or version upgrades for applications that are already in the Marketplace will be accepted free of charge. Developers will still pay $99 a year, plus $99 per app, to submit new products, though in year one, five apps can be submitted free for the initial annual fee. The Marketplace is expected to launch later this year with the release of Windows Mobile 6.5.
Microsoft knows personalization will be important to attract carrier and consumer support for stores, as Nokia has emphasized with its Ovi platform. It has teamed up with the Design Museum London and Council of Fashion Designers of America to offer exclusive color palettes and wallpapers, making the handset into a fashion accessory. A new Theme Generator will enable users to select pictures from their PC to set as background images, and personalize their navigation bar, scroll bar and highlighted text.
With Ovi Store (and Palm’s store for WebOS) yet to open its doors, carrier attention has mainly been caught by Android Market, though some cellcos are ambivalent about the system so far. T-Mobile USA, despite reservations about the lack of personalization in the Android Marketplace store, dropped clear hints last month that Android would be its primary strategic software platform in future; now Orange has joined the chorus. Orange France plans to launch Android handsets almost as fast as they launch this year, promising smartphones from HTC, Sony Ericsson, Motorola, LG and Samsung. Of course, only the HTC model has launched - Orange should follow T-Mobile in offering the Dream, which the German-owned cellco brands G1, in the coming month or two. Samsung should be next off the blocks, around midyear.
French reports say Orange has declared itself happy with the revenue sharing model of Android Marketplace, and plans to promote the store and the cellphones heavily, partly in a bid to compensate for the law-enforced loss of its iPhone exclusive earlier this year. Vodafone is also adding to Android’s snowball effect in Europe, launching the co-developed HTC Magic next month, and planning its biggest campaign for a smartphone since the pre-Christmas program for RIM Storm. And the Magic is also set to come to the US via T-Mobile, in its 1.7GHz AWS band.
Meanwhile, the Android world has been waiting for Flash to become available and this could happen sooner than expected thanks to a port by software house BSquare. Last fall, Google and Adobe executives talked about plans to work together on a version of the streaming technology, which is almost universal on web-enabled phones, though famously excluded from the iPhone. But BSquare is to move more quickly, porting Flash to Android for an
unspecified global tier one carrier.
According to BSquare, Flash technology presently ships on more than 800m devices worldwide and is used by over one million developers to create video and rich media applications. A year ago, BSquare acquired NEC America’s Adobe Flash Technology consulting business and has now worked on about 40 devices.
The operators may want Android to be more personalized, but they seem to feel they have a little more control over it than they do if they partner with Apple on App Store. Despite the strong success of the iPhone and its related store, for exclusive partners like AT&T, there is a rising backlash from carriers in newer markets ( see Wireless Watch March 25 2009 ). This is reported to have led to the breakdown of multiple rounds of talks with two successive Chinese cellcos, China Mobile and now China Unicom. The problems in the latest near-deal seem to have revolved around the Chinese bar on Wi-Fi in phones, and Unicom’s insistence on installing its own software on the handset, including its own store and iTunes-like application. This was the issue that reportedly killed talks with China Mobile, which also wanted to control the software experience and apps revenue share.
The way that the carrier is sidelined in the Apple model has been one issue that Google and Nokia appear to have addressed to some degree, but Apple has also incurred the wrath of developers with its iron control of its store and its habit of barring apps that compete with its own features. Google made much PR hay from this before Android Marketplace was live, promising a fully open store - but has found there is a difficult balance to draw between openness and ensuring a secure and usable experience for consumers.
In January there was a row over an Android ‘rogue application’ that allegedly wiped data on devices. This sounded warning signals, especially among operators, over the open door policy that Google has boasted of, since consumers may be vulnerable to rogue software that causes harm, deliberately or through poor programming, to their precious phones and data.
There are fears now that if more instances of sub-standard applications arise consumers will be put off using the store - and problems are highly likely as more devices emerge and more developers put software into the Marketplace.
However, now Google is on the other horn of the dilemma, coming under fire for reportedly pulling a tethering app from Marketplace to placate T-Mobile USA, its first carrier partner. Google says it will not endorse apps that violate the terms of service of its cellco partners - T-Mobile does not allow tethering (using a cellphone as a modem for the PC), and so the ‘Wi-Fi Tether for Root Users’ product was barred. Google’s apparent refusal of a tethering app is confusing since Android handsets will soon be offered by many operators that do allow the practise, though sometimes in exchange for an extra data plan fee (like AT&T). That might raise the specter of different versions of the store, or at least different skins, for different carriers - surely the opposite of the open access model that Google so loudly proclaims. As on many occasions before, Google is the scourge of the traditional cellcos in public, pushing for an open internet and new service provider models, but in commercial reality, is as keen to please them and use their powerful channels as any other software house.
Apps stores – what’s in the store for the mobile Internet
By Andrew Mitchell
With CTIA Wireless 2009 just a few short days away, the anticipation of the wireless industry, market and media is growing. One area of the wireless industry that is likely to see a lot more focus in this year’s event is the mobile applications market. Commitments and investments in capable 4G networks and some remarkable advances in MID technologies are now enabling applications developers to bring the art of the possible applications to viable products.
For applications developers and vendors, getting viable products to market is now emerging as a critical consideration. For the mobile Internet the question has become, “what are the business models that can create pervasiveness and profit?” What is becoming quickly apparent is that there are a number of different business models being used today. Are they creating pervasiveness and profit? The answer at the moment would seem to be dependent on where in the mobile Internet ecosystem the business model is being applied.
Similar to mobile content, the notion that the more users are attracted to mobile applications the more investment in development will be realized. And with the shakeout of mobile platforms far from over there will continue to be a level of uncertainty for both developers and distributors of applications. There are many models to consider; let’s have a quick look at a few.
A business model that most would view as successful would belong to Apple. Apple’s iTunes store and App Store are well integrated with Apple’s products and are a hit with users. Carriers are seeing benefit as well with a continued demand for the iPhone contributing to additional recurring revenues. But this business model isn’t a hit with everyone. Some developers who’d like to get their iPhone applications to market find the model’s terms too restrictive and have even challenged it. Cydia Store offers users applications for their iPhones that they won’t find at Apple’s App Store. iPhone users will need to have the device unlocked to use Cydia Store and that’s something that Apple isn’t supportive of.
Long established handset manufacturer Nokia has also adopted a consumer direct approach through its on-line store, Ovi. Nokia’s approach essentially removes the carrier from the applications and content value chains. The model has met with mixed reaction from carriers. Some have recognized the model as being beneficial and driving revenue by way of increased data usage and new activations. Others have viewed it as eroding revenue from the carrier’s own portal offerings. Developers will no doubt be watching this model carefully to see whether or not it is successful in driving demand for applications and therefore worthy of continued investment.
Google’s Android Market represents another consumer direct business model but with a twist. The twist here is that open application development is embraced and encouraged by the model. Developers register with Android Market and are then free to publish and distribute applications through the site. While small in comparison to App Store, Android Market seems to have demonstrated that this model works well for users and developers. Early indications also suggest that the model is working well for device manufacturer HTC and carrier T-Mobile as well.
Just this month Microsoft announced its how its Windows Marketplace for Mobile will work. For a developer, the approach looks similar to Apple’s - a 70/30 revenue split. What’s different for the user is that this isn’t likely going to be the only place you’ll be able to find applications for Windows phones. There’s also no direct carrier or device manufacturer role in this business model. Is there sufficient incentive for developers to invest in participating in Windows Marketplace for Mobile? The market based on the number of platforms sold will certainly be there but will that be conducive enough?
The 4G Trends editorial team will be on site at CTIA Wireless 2009 and will be providing updates on mobile applications and more. Be sure to follow their reports from the event at www.4GTrends.com as well as in next week’s edition of 4G Trends.
