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Showing posts from March, 2007

Vilfredo Pareto, Mobile Apps

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Vilfredo Pareto, an Italian economist, around 1906 coined the Pareto Principle, popularly referred to as the 80-20 rule, "the law of the vital few" or "the principle of factor sparsity." It states that, for many phenomena, 80 percent of the consequences stem from 20 percent of the causes. As applied to any sphere of business or life, it means that a disproportionate share of the results come from 20 percent of the decisions, actions, people, partners, employees or just about anything else you can think of. The rule should therefore apply to virtually any part of the Internet or communications business, because it applies in any business.

If one looks at what is being bought out of the Handango catalog of more than 190,000 titles, across mobile platforms, and aggregating apps by type, you can see that no single category dominates. You might initially conclude that Pareto doesn't apply to the purchase of mobile apps. A different presentation of sales data--ranking…

Can You Survive the IP Shift?

A few of you are familiar with a story I’m fond of telling. Once upon a time my market research company started to get asked what would happen if Congress passed a new telecom act. This was 1994 and 1995. The truth was, we weren’t sure. To make a long story short I embarked on a personal research program to figure that out, and ultimately boiled my findings down to about a dozen bullet points.

Roughly at the same time, I started getting asked what the actual cost of a phone call was, and where that all would sort out. To make a long story short, I wound up with a concept I have called “near zero pricing” ever since. And, ever since, I have urged everyone to build their business models on that premise.

More recently, new questions are being asked. Many successful providers of voice-centric services are asking whether they can remain relevant, and prosper, in an IP world where so much value and revenue conceivably shifts to application providers, and is not captured by “network services” …

Sprint Nextel WiMAX Launches This Year

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Sprint Nextel announced initial service launches in several markets by the end of 2007 and expects to reach 100 million people across the country by yearend 2008. Sprint has chosen Samsung for PC cards available in both single WiMAX mode and dual CDMA 1xEV DO/WiMAX mode for WiMAX service launch use. Additionally, Sprint has selected ZTE Corporation to supply multiple WiMAX 802.16e devices including PC cards in express and USB form factors as well as advanced modem solutions. Sprint Nextel also chose ZyXEL Communications for modem products.

WiMAX service areas for the 2008 launch include Chicago, Detroit, Grand Rapids, Indianapolis, Kansas City and Minneapolis. Samsung will develop Baltimore, Boston, Philadelphia, Providence and Washington D.C. Nokia will develop Austin, Dallas, Denver, Fort Worth, Portland, Salt Lake City, San Antonio and Seattle.

In large part, Sprint Nextel's early success will be determined by customer demand for high speed access services. In part that is becaus…

The Only Question: Who Buys Vonage?

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Pundits used to kick around the idea of "who will buy Vonage?". We are going to find out. With the noise around patent infringement no help, the stock price has dropped to the $3 level. So Vonage's life as an independent company is drawing to a close. Now, to be sure, Vonage executives probably always assumed they would be acquired, someday. That it would be such a "distress" sale probably wasn't comtemplated, at least not initially. No cable company is going to touch it, so that leaves telecom segment players as the only conceivable "network service" buyers. It isn't so clear what value Vonage might represent to application providers. I haven't done the math yet, but at $3 a share, buying the company probably gets close to "customer acquisition cost" for at least some potential buyers with a srategic need for wireline VoIP customer base and associated platform elements. In any event, we are going to find out.

HDTV Bandwidth Planning

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One of the thorniest questions faced by all access providers is how much bandwidth will be required to support high definition and other forms of TV. Operationally, the discussion tends to turn on how many simultaneous HDTV streams might be required. The thinking in some quarters is that only a single HDTV stream and one or two standard definition streams will have to be supported concurrently.

SureWest Communications is planning to support multistream high definition DVRs and that will require additional bandwidth, says Bill DeMuth, SureWest Communications CTO. "We are already experiencing about 1.5 HD TVs per home so that is two streams, and if you want to watch one and record two streams it can easily lead to three to four streams of HD being delivered at the same time.

EarthLink Introduces Wi-Fi Phone

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And it's attractive in the way an iPod is. No mistake, no doubt. About what one would expect from a company that has consumer marketing in its genes.

The phone is manufactured by Accton Technology Corporation and currently is in beta use at the company’s municipal wireless network in Anaheim, Calif.

EarthLink has no illusions about the difficulty of moving its business model forward, after beginning life as a dial-up Internet access provider. Still, it has a better shot than most who began business life that way, and already has done better than many would-be VoIP providers.

It always will be tough to compete with the cable and telephone companies, so you have to appreciate EarthLink's grittiness, toughness and marketing savvy. As they say, "thumbs up" for the phone design.

PhoneGnome Adds Gtalk, MSN, Yahoo!

The PhoneGnome free calling community now includes GoogleTalk (Gtalk), MSN Messenger, and Yahoo! users. PhoneGnome users can now also place free VoIP calls to users on GoogleTalk (Gtalk), MSN Messenger, and Yahoo!

These destinations can be entered in the ‘Quick Call’ box or added to a users' on-line Contacts and called with click-to-dial or by dialing the assigned speed dial code directly on your phone (for PhoneGnome box owners).

The PhoneGnome free calling community now includes:
* All PhoneGnome members, whether web-only, PC, or box, all over the world
* SIPphone/Gizmo Project
* Free World Dialup
* EarthLink MindSpring (formerly Vling)
* Hundreds of additional VoIP services reachable via SIPbroker
* Any SIP user, anywhere in the world (including Asterisk PBXes
* Millions of numbers reachable free through our private peering relationships
* ISN/ITAD numbers (freenum.org)
* GoogleTalk (Gtalk)
* MSN/Live Messenger
* Yahoo! Messenger
* PhoneGnome box users can…

Application Optimized Phones

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Danger. BlackBerry, iPhone. Someday soon, Google phone. Just a few illustrations of the development of application optimized phones. Not application specific, as they are multiple function devices. Rather, optimized for a particular set of functions, with voice as a lowest common denominator

"Some of the time the engineers are dedicated to developing a mobile phone," Google executive Isabel Aguilera is quoted as saying on the Spanish-news Web site Noticias.com.

Simeon Simeonov, Polaris Venture Partners partner, has been told the Google Phone will be a BlackBerry-like device running C++ at the core with an operating system bootstrap, or loading program, and optimized Java, and that it would offer VoIP.

Rumors also link Google and Samsung as partners developing a phone, code-named "Switch." Google and Samsung announced a partnership in January to bundle mobile versions of Google Search, Google Maps and Gmail on certain Samsung phones.

Google has on its payroll Andy Rubin…

Verizon Dangles Bait. Will Fish Bite?

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Verizon is dangling financial bait in front of returning or new customers. Consumers who have chosen to use cable phones, computer phones or wireless phones for their primary lines can now add the reliability and security of a Verizon landline to their household for $9.99 a month for a year. Win back programs are a staple of the competitive communications business, so the mere fact of a win back offer isn't surprising. Even the promotional price, though quite promotional, is unheard of.

The key element here is that Verizon is signaling that it has had enough of competitor poaching, and is prepared to halt the erosion, even at the price of destroying its POTS line margins. The prize now is shifting to lines in service. Broadband may be foundational, but a customer relationship is key to upselling other services. If that is POTS, so be it. The worse thing at this point is stranded assets, not margin off a POTS line, necessarily.

Google, TV Spectrum Auction, GooglePhone

I will say in advance that this is merely a speculation, but look at some of the possible events headed our way, along with a rumor gaining more credence. The rumor is that Google has 100 people working on some sort of Google phone. Then there is the matter of what happens in 2009 when the analog TV broadcast system is shut down, and a block of really valuable spectrum, at frequencies that penetrate walls quite nicely, are available for some other use.

Google is among companies that "really doesn't want to be a communications service provider," and there are good reasons for that being its actual position. But things change. What if wireless service providers "pull a Viacom" and play hardball on approving use of the Google phone, much less actively pushing it. What if Google finds it has no really good choices for ramping up its presence in mobile search, presence and location?

There's all that truly wonderful spectrum being vacated by the TV broadcasters. Th…

Comcast Adding 200,000 Voice Accounts a Month

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Comcast is selling 50,000 wireline accounts a week, says Comcast CEO Brian Roberts. That’s 200,000 lines a month, or as much as 2.4 million lines a year. That’s just Comcast. Time Warner, Cox Communications, Cablevision Systems and other cable companies are adding more lines on top of that.

So wireline attrition does not necessarily benefit wireless companies as much as some might suspect or predict. Some analysts think 40 percent of all U.S. consumers will be “wireless only” in five years, for example.

In some Comcast markets, for example, including Philadelphia and the Washington markets, Comcast is selling 25 times more units of phone services than it is units of video, says Roberts.

Big Ditch or Small Puddle?

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One's attitude towards any access net choice depends in large part on what one thinks one faces. If one believes that the path to the future is largely a matter of small steps, then an incremental approach to access bandwidth makes sense. If, on the other hand, one anticipates disruption, then a bolder choice might be better. Yes, the risk is magnified when a discontinuous access choice is made. But there is great risk if one believes one is going to have to jump a big ditch as well. If you are going to make it, you need to get a good running start and then stake everything on making the leap in a single move.

That's something of the background in all cable or telco considerations about bandwidth upgrades, compounded by the fact that mobile access has to be part of the solution. The point is, jumping a big ditch might require a bolder investment in advance of the leap. If you don't think a leap is required, incrementalism might work. Either way, one bets the business, thou…

Vyyo 3 GHz: Bigger Pipes for Cable

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Even back in 2005, before the YouTube, user generated video wave hit, cable operators were thinking the amount of bandwith they would be delivering in linear fashion would shrink, while on demand services would grow. Over the top Internet video only magnifies the trend. So it is no surprise that cable operators are looking at any number of ways to boost bandwidth without ripping up their hybrid fiber coax plants and going fiber to the home. After all, the consistent cable refrain is that FTTH is way too expense and HFC is much better.

Cablers are looking at signal compression and decoding, upgrades to 1 GHz bandwidth, creating smaller fiber-served neighborhoods, converting to all digital signal formats or overlaying new electronics on the existing plant to make use of non-traditional frquencies. Vyyo is one of the suppliers of an overlay system, and says it can boost downstream bandwidth by about double, and upstream bandwidth by 10 times, for something on the order of $125 investment…

SIP Trunking, Even if You Have no SIP

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Global IP Solutions has introduced Interoffice Voice Trunking, offering enterprise customers free, high-quality voice over their internal networks. And get this: IVT can be used even where an enterprise has TDM phone systems in place, using a gateway that converts TDM to SIP signals.

GIPS claims high-quality voice can be transmitted this way over any network, including the the public Internet. GIPS Solutions' products are fully compatible with the IP PBXs from Cisco, 3Com and Avaya as well as any other H.323 compatible PBX, including circuit switched telephone equipment. IVT runs on any Windows 2000 or XP server, which enables companies to extend the useful life of legacy hardware and also supports any broadband Internet connection.

Presence, Location, Existence

Google in 2005 filed a patent application regarding "a computer-implemented method of providing text entry assistance data, comprising: receiving at a system location information associated with a user; receiving at the system information indicative of predictive textual outcomes; generating dictionary data using the location information; and providing the dictionary data to a remote device." The concept might be looked at as a location-based communications service. It is more, we'd argue.

"Presence," the ability of a computer system to detect your present willingness and ability to communicate. "Location-based" services promise to tie your present location to your lifestyle and preferences. Google's patent goes slightly further. It would make possible not only location-variable messaging and communications, but time of day or day of week personalization as well. The system theoretically could alter the results of any active or passive "search…

Whether WiMAX?

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Whenever the subject of slow moving telcos and broadband access choices come up, wireless typically is mentioned as the most hopeful alternative. So the latest incarnation of the wireless buzz machine is WiMAX, sharpened recently by Sprint Nextel's decision to use WiMAX as its fourth generation network platform, followed by Clearwire's initial public offering, successful by market measures.

Of course, I've been hearing this same refrain for two decades. And there's one surefire way to determine whether any proposed wireless technology is going to be disruptive (in other words, an important competitor to incumbents) is simply to follow the money. If any new wireless technology really is going to disrupt access markets, it has to remain under the control of an upstart, period. As soon as any platform is acquired by the incumbents, it ceases to be disruptive. Clearwire couldbe acquired outright, and still remain disruptive. It simply has to be acquired by a hungry company …

Not Such Great News

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Though it isn't yet clear how serious Verizon's patent infringement case against Vonage will turn out to be, it is hard to see how it is positive, overall, for any service provider targeting the VoIP replacement market as an "over the top" basis. We would assume that cable operators have not chosen implementations Verizon thinks infringing. At the very least, the royalty payments now impose a revenue drag of about 5.5 percent of revenues, if the judgment stands. Vonage still has the single largest number of VoIP subscribers, according to TeleGeography, but what that asset will be worth is just slightly more open to question.

Two Ways to Develop Apps...

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...and neither is completely right. Mobile operators, no less than their wireline brethren, have to figure out now just what applications are hot, and how to build business models around them, but how to balance the walled garden with the over the top open approach to apps.

It's an old argument spun in new ways. Service providers traditionally have created the apps on behalf of end users, with modest success in some cases. The Internet, of course, changes everything. Now end users and third parties can develop as they like, without carrier permission. Neither the walled garden or the completely open approaches will completely exclude the other sort of approach, though.

Gatekeepers will still have a role in guaranteeing better user experience for some third party apps, as well as developing a few of their own apps. Most apps, though, are simply going to be delivered over the top. The real pinch points are going to come where the app involves real time services with high bandwidth re…

Good for Users, Not for Service Providers...

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Businesses can use fixed mobile convergence and VoIP to slash more than 30 per cent from their communications spend, according to researchers at Analysys. How? The same way prices have dropped in other areas of communications: bypass of the public networks.

"Companies are spending over 80 per cent of their call bill on mobile services," says Margaret Hopkins Analsys analyst. That's not surprising, if you consider that most people get mobiles sometime in their teens, and keep using them as they get older, as eMarketer suggests.

Google Phone?

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This from Engadget. Venture capitalist Simeon Simeonov says Google has a team of about 100 people working on the Google Phone. The photo might be simply a represenation of what the user interface would resemble. That isn't the point. The point is that it looks like a buddy list. And it is possible that the buddy list becomes the hub of communications activity in many, perhaps most situations. All of which illustrates the importance of instant messaging as a metaphor for where a good chunk of communications is going. Which is to say, it works better when the people you want to communicate with can signal that they are available, right now.

Apple's Halo is Glowing

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m Pacific Crest Securities says Apple computer unit sales are up 101 percent year over year, with revenue up 108 percent. This is the halo effect from buzz about the iPhone, following the iPod, both of which are raising brand awareness for virtually every product in the Apple family. Apple's PC market share also appears to have nudged up two points over the last six months, says Net Applications. Goldman Sachs predicts that iPod sales could approach 11 to 12 million units in the first calendar quarter of 2007. Morgan Stanley says iPhone interest is actually larger than what the market currently anticipates.

So it appears Apple's brand awareness and buzz is driving iPod and Macintosh sales now, and prepping the market for the iPhone which won't be widely available until later in the year.

In fact, iPod sales will pass 100 million units world-wide in April 2007. Magic.

One Trillion VoIP Minutes

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Some 1,079 billion minutes of VoIP traffic were carried by service providers around the world last year, says ILocus. The data suggest over half of calls were for long distance national calls. Separate estimates by TeleGeography suggest global VoIP minutes amounted to just short of 72 billion minutes last year.

There were 37.5 million voice over broadband subscribers, an increase of 16.5 million subscribers over the year. The biggest growth occurred in the U.S., French and German markets.

In the VoIP equipment market, softswitch and media gateways sales generated combined revenues of $2.2 billion - with 36.9 million Class 5 softswitch licences, 34.8 million Class 4 softswitch licences and 48.2 million service provider media gateway ports sold worldwide.

Bandwidth Now Driven by Consumers

"About 85 percent of carriers want Ethernet intelligence embedded into the optical transport network," says Meriton Networks chief network architect Nick Cadwgan. 

In some cases that means the ability to create Ethernet tunnels through an optical network, so that the transmission fabric starts to become a service delivery fabric. 

In some cases, though, it remains important to transport TDM traffic through the optical fabric, as in the case of wireless backhaul, notes Emanuel Nachum, ECI Telecom executive. "You want to integrate TDM, SONET and Ethernet layers as part of the optical infrastructure," he says. And though it has gone unnoticed in some quarters, dramatic changes in transport bandwidth are starting to occur. 

There's a move to 1 gigabit Ethernet at the edge of the network, in part because that's what the cards now support," says Umesh Kukreja, Atrica executive. "Enterprise sites now are pushing 20 Mbps to 40 Mbps while data centers are put…

iPhone Boosts Analyst Forecasts

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Apple's iPhone will likely see positive acceptance when the device ships in June, according to research firm Goldman Sachs. Goldman points to a recent handset branding survey that was conducted in China, India, the U.K. and the U.S. as evidence that Apple's new gadget might yield positive results for the Cupertino-based company. Despite the fact that the survey took place before iPhone was debuted in January, the number of potential iPhone buyers is equivalent to 75 percent of the installed base of current iPod owners. Just under one-half of the potential buyers come from respondents who have never owned an iPod, and 71 percent of respondents in the U.S. indicated interest in a potential Apple cellular handset.

Separately, Morgan Stanley says they would be buyers of Apple on incremental revenue and operating leverage. The firm believes the market is underestimating the likely success of iPhone. They're raising their annual unit and revenue forecasts to better reflect iPhon…

See What I Mean About the Phone?

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It just looks industrial, compared to the design of the rest of the unit.

Verizon One, Competition Zero

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Verizon is rolling out an all-in-one voice, data, and video center for the home riding on top of Verizon's FiOS service, though it looks like the first generation of the device will not have the planned Ethernet and Wi-Fi capabilities Verizon wants to add. The Verizon One makes VoIP phone calls, supports email access, limited Web searches, calendar functions and streaming audio as well as preview of digital camera images. "Limited" Web access means specific Verizon-approved content in the news, weather and movie listings areas are available.

The cordless phone available as part of the unit is a bit clunky looking, but will support Verizon's VoiceWing VoIP service, slated to be added to the FiOS bundle later this year. The Verizon One also runs Media Manager, the FiOS application that manages and routes all of a user's multmedia content to networked TVs, set-top boxes, and PCs. Hence the importance of Wi-Fi and Ethernet capabilities. The base unit apparently suppor…

But Nokia Says No...

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The problem with market research is that findings can vary wildly from study to study. Nokia, for example, provides smartphone usage data that flatly contradicts other study findings. According to Nokia, messagng and voice drive the actual usage, not audio and video.

Audio, Video Drive Smartphone Use

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Not email access, at least according to this data from ICM Research of users in seven countries.

Watch Wikipedia

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Here's a trend you might not have expected. Wikipedia is one of the four most popular social networking sites, even though it is not of the "hang out with your friends or community" sort. In fact, you probably are among the users (including this one) that has come to expect and rely on the quality of most of the information available on Wikipedia, as well as the timeliness of the updating. If you had asked me whether so many human beings would help create a service so useful and so good, just because they wanted to help, I'd have said "no way." At least some times, what Web 2.0 proponents claim is true, is true. So in chatting with David Beckemeyer, PhoneGnome CEO, why would it not be able to create some sort of user research outfit (one hesitates to use the word "company") that essentially is a wiki, perhaps a private wiki for some purposes, and a public wiki for others? My point is that if IP-enabled applications and services are changing every…

Fiber To Home Forecast

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18 million homes by 2011, say researchers at Parks Associates. Normally I am more skeptical to the downside when evaluating nearly any sort of market forecast. This one, though, seems too cautious to me. We shall see.