October 2009 Archives

The smartphone marketplace is heating up and its not just because Apple has the iTablet on the way. 

The carriers are working hard to find the right device to catch the growing market, but I am not sure that anyone knows how to catch our attention.

Palm has the Pre being marketed with and without Sprint, but last years CES darling is not exactly looking to build a ground swell of community.  Which is a shame since they still have a lot of loyal palm customers.

Likewise HTC is making an effort to support their customers with commercials.

The reality is that social networks maybe the best way to communicate to the most likely customers. 

The Fan Clubs of the devices on Facebook maybe the best place to reach early adopters. 

Its clear the carriers are anxious to avoid another breakout by rivals.

It may be that ATT is good as it gets with the iPhone.

I have already commented on the fact that Telefonica is not having the same dramatic impact with the iPhone as ATT (Verizon [ NYSE: VZ] announced a 30% drop in earnings and slower growth than ATT ).

In China the Nokia E71 has a good following (I am still an N95 fan) and the  cost of the iPhone is equivalent to a $1,000 US dollars over there.  The discussion of Nokia's efforts to protect patents Apple may have violated seems late, but I suspect it will work itself out like many of these do before the court has to make a decision.  IMHO, It probably has more value in the EU to show market / thought leadership than financial value.

More importantly as China continues to manage the operations of their end users the ability to use WiFi has been disabled.  Like the issues of Skype via TOM in China, a closed iPhone with only the carriers network is not as interesting as an IPhone with WiFi.  However, it allows the state to know what it wants to know.

Of course in China if you capture less than .001 of the market you are still busy, so the iPhone success is pretty much a guarantee.

Editor's note: The following is an excerpt from our latest quarterly report on all things Clearwire, the CLEARWIRE NTK OCTOBER 2009 (need to know) report, available now for the low low price of $4.95. In this excerpt we talk about how Clearwire's on-time, on-target market launches in Atlanta and Las Vegas, as well as a host of smaller cities, have kept the company on target with its ambitious 2009 rollout plans. For the full report, order online here. Report excerpt follows:

Vegas, Atlanta and Silicon Valley - but where is Chicago?

Easily the most positive sign for Clearwire during the hot months was its on-schedule rollout of services in Atlanta and Las Vegas, the two bigger markets Clearwire had said it would launch during the summer -- and did. Perhaps catching many WiMAX watchers by surprise was Clearwire's August/September launch of an additional 10 markets for its new, mobile WiMAX services -- a list that included several small Texas towns like Lubbock and Abilene, as well as Boise, Idaho, and Bellingham, Wash.

The quick addition of the smaller markets was a pretty easy strategy to figure out if (like us) you had studied Clearwire closely. Since Clearwire has said many times that the hardest and longest task of launching any new market is getting its towers sited, approved and constructed, it stands to reason that any market where the company already had a tower position could be converted to the newer mobile WiMAX service pretty simply, with maybe an antenna change and some new networking gear on the back end.



At the end of September 2009 there were already reports surfacing about Clearwire quickly upgrading pre-WiMAX customers in some of its remaining 40 old-school markets, and on Oct. 1 the company "lit" two smaller markets (Milledgeville, Ga., and Salem, Ore.), while also making services available in Philadelphia.

Not as meaningful from a subscriber number but worth its weight in market influence was Clearwire's quick launch of its planned "testbed" network for developers in Silicon Valley, with separate clouds covering the campuses of Google, Cisco and Stanford University. Though some saw the testbed launch (which was announced back in May) as a public-relations stunt, from a business standpoint it seems to make perfect sense to put the service in front of folks who make up what is still arguably the world's foremost center of technological innovation and investment.

According to Clearwire, it will offer select subscriptions in Silicon Valley for free, while allowing any other developers in the area to sign up by joining the company's developer program, and then purchasing approved client gear for $50.

In commercial markets, Sidecut Reports was fortunate enough to be on hand, in person, for the "official" launch of services July 21 in Las Vegas, where we learned the following lessons: 1) Clearwire is going to be intensely local with its promotions going forward, which means that national roaming is not going to be a big selling point; 2) The company seems to be putting value ahead of mobility, which we think is a smart move since without a smartphone device,WiMAX isn't as sexy as, say, an iPhone 3GS or a Palm Pre; and 3) the company is going to enlist as many resellers as possible, from the very big (like Comcast and Sprint) to the very small (single-owner shops and mall kiosks) to help get the word out.

To get a feel for how this will roll out, consider the Clearwire sales footprint in the greater Las Vegas metro area: According to Clearwire, it only plans to operate five "branded" outlets in Vegas, including two storefront operations and three mall-based kiosks. The balance of the company's contracts will be sold by a list of 80-plus authorized resellers, including sales locations inside six Vegas-area Best Buy stores, 24 Radio Shack locations, and the rest independent resellers. The key for Clearwire is that all contracts will be with the parent company, and not resellers -- so no matter who signs a customer up, Clearwire will own the billing relationship.

For all the Clearwire knowledge you NEED TO KNOW for the latest quarter, order our CLEARWIRE NTK OCTOBER 2009 report today for just $4.95 -- that's right, less than five bucks for a lengthy take on Clearwire market launches, device plans, business news and more.

Fundamentally the world of packets changed the model of communications forever from one of accessing a stream to establishing a session.  Streams are continual and choose to use them to transport, while sessions are virtual and you create them and send them off from your easiest access point to the ocean of packets passing by. 

Why the crude metaphor?   We are again at that point where the Internet is being challenged at its very core.

Fundamentally the pricing model of streams is being applied to sessions. 

The reason this is important is because the application war is heating up and questions about how numbers are being connected, applications are being allowed on networks and carriers are behaving are driving congressional letters.

If you do not want the sessions to be priced based on usage send me a note.

Editor's note: The following is an excerpt from our latest quarterly report on all things Clearwire, the CLEARWIRE NTK OCTOBER 2009 (need to know) report, available now for the low low price of $4.95.

In this excerpt we talk about why we think the lack of interesting WiMAX end-user devices (or the overpriced ones that did launch) have kept users from flocking to Clearwire's 4G wireless broadband offering. For the full report, order online here. Report excerpt follows:

Prices and Devices: Waiting for a reason 'Why' to try WiMAX
Without a doubt, the coolest thing about WiMAX is its ability to provide a true broadband connection with cellular mobility. One of Clearwire's biggest problems, however, is a lack of a compelling reason to take advantage of that mobile connection -- and the dearth of devices that would allow you to even try.

The growing popularity and use of smartphones points to another WiMAX weakness -- the lack of truly portable devices that can take advantage of the technology's superior connectivity. As Clearwire CEO Bill Morrow showed during his 4G World keynote speech in September, in a side-by-side download speed comparison WiMAX leaves 3G in the dust.

But even the (videotaped) demo itself showed a bit of the WiMAX underwear peeking out: To make the tricky demo -- it was a side-by-side screenshot of two iPhones in a car driving down the road -- all the "regular" iPhone had to do was connect via the 3G cellular network; the WiMAX powered iPhone had to connect via Wi-Fi to a Clear Spot router in the car, which was connected to the WiMAX network via a plug-in USB dongle.

So: The WiMAX iPhone was faster, yes, but its kit was also more expensive and in need of a stylish European man-bag to tote all the extra gear around. Though hybrid WiMAX smartphones do reportedly exist -- HTC claims to be selling one for the Yota WiMAX network in Russia -- Clearwire's customer base so far doesn't seem to be big enough to convince device makers that producing such a beast is worth it.

The one vendor that did launch a cool handheld WiMAX device -- Samsung's Mondi, unveiled at the Vegas Clearwire launch -- turned out an overly expensive, somewhat confusing form-factor machine that wasn't big enough to do "real" laptop work. It also doesn't contain an alternate cellular link to make voice calls an easy proposition.

To top it off, Samsung and Clearwire couldn't even get their pricing message straight -- in Las Vegas, a Samsung PR representative told us that the device would sell at $450 unlocked, or $350 with a two-year Clearwire contract. But a few weeks later when Clearwire started offering the Mondi, the subsidy discount was nowhere in sight -- the device would be $450 to all users, contract or no contract. Meanwhile, the iPhone 3GS sells for $199 with a two-year contract. Any questions?

For all the Clearwire knowledge you NEED TO KNOW for the latest quarter, order our CLEARWIRE NTK OCTOBER 2009 report today for just $4.95 -- that's right, less than five bucks for a lengthy take on Clearwire market launches, device plans, business news and more.

In the last thirty years, the computing world has changed so much, that it is hard to remember the logic of roles and rules that existed and still drive the basis of law and leadership when it comes to telecommunication.  Telecom has always been a service that has made a distinction between service and use.  Telecom services were deliberately limited to enable the maximum amount of people to use the services for whatever activities they choose. 

Enabling the network to be ubiquitous was accomplished by aggregating the costs of service between local services and long distance services.  The cost of providing the connection (the local loop) was harmonized as much as possible with statewide loop costs and subsidization from the long distance market.  However with the ubiquity achieved the opportunity to support specialized services enabled for the early focus of the Internet to be about the signaling on top of the phone network and not inside it.

A primary reason why the issues of the phone network were of no concern was that IP was distance insensitive, and connecting at the closest point on the phone network through dial up or private line was pretty efficient. 

Now the technology and cost models of access are intertwined and efficiency in the network is not represented in any particular type of fee structure.  Nor is there a clear distinction between accessing a service via the phone network, or an "Internet" service that replaces the phone network.

However, certain principles of the phone service have been considered primary and certain have been considered secondary.  Primary services are your origination point for phone calls and have the responsibility for delivering calls to the 911 network. 

Until the Internet, the primary way to innovate on the phone network was to use the network for secondary services; the phone company did this themselves with solutions such as Wide Area Telephone Services [WATS] and 800 numbers. However the place where people were doing more than just talking was with computer networks, ring back services, and call centers. These connections all managed the call after the handoff from the phone network and continued routing the call for innovative services.

With the Internet's inter networking ability to support connectivity on the network without a usage charge these solutions rapidly to advantage to stay connected to provide unique synergies that added value without being a primary service. 

Today with many people using wireless as their primary service, and the ability to provide smart computing devices to the user we again stand at a point where the basis of the regulation of the past no longer matches to the realities of technology.  Today a smart phone can have an application as a result of being part of the Internet or an app store, before there was an app store many companies provided services via these secondary lines.

If you treat all phone numbers as a primary service solution, the result is that the innovation fostered by the ability to connect via the telecom network will never be offered to the telecom network.  On the Internet side the ability to innovate will not be associated with the network connectivity when accessing the Internet but only to the applications. 

Services that do not support primary line functions of origination, or are "free" services should not be driven by the same rules as primary line solutions.

Many people speak about the issues of Net Neutrality without real market drivers behind their rationale.  The principles discussed by FCC Chairman Genachowski assume a controlling factor by the access provider. 

However at the core of the discussion should be relationship of ubiquity and usage.  Service levels and performance

Viewing any service with a phone number from the perspective of telephonic service is as antiquated as the term, which was used to distinguish telephones from telegraphs.

The goal should not be on extending the regulation that tried to curtail monopolies, but to encourage the innovation, which will bring new types of services even to the plain old telephone services.

GoogleVoice is one such service as are many other innovative companies. Via GoogleVoice you can route calls you can initiate signals to originate calls to your primary service number.  It combines the web, video and phone services.

Yesterday, we taxed the system of a friends conference server with a call about Net Neutrality.  It was covered by many other media outlets, which did not give us credit for the call.  It included Hank Hultquist of ATT, Todd Daubert of Kelley Drye and Dave Erickson of Free Conference call.  Rick Whitt was to be on the call, but had to pull attend to other matters.  It was a great call.  And as usual I was my orthogonal self.  I may not be a lawyer, but I make any Congressman proud in confusing the issues.

If you want to listen to the call for yourself listen hear.

Of course, All parties have agreed to come back for round 2 in Miami January 20th at 4GWE

Although Dave Erickson will part of another session about the issues of Applications Compensation.

Can the Enhanced Service Provider exemption stay in place?

On the Google Policy Blog Rick Whitt responds to the FCC letter from ATT regarding Google Voice.  It is very pertinent to the discussion we are having on the Calliflower call tomorrow about Net Neutrality.

We could say the carriers are suffering from a little enhanced services envy, given the fact that Verizon wanted to be compared to Google at the last wall street conference they attended.  In this case ATT wants to point out that GoogleVoice admits that because of tariff anomalies, it is not servicing the rural markets, but does not consider this their battle.

So Let's see if we come to a common ground tomorrow, about what exactly the FCC is trying to accomplish.

Lots of noise today about Cisco's acquistion of Tandberg.

No one wants to take the simple approach.

The best analysis, as usual, comes from our friend Andy Abramson who sees this rightly from the telepresence side of the equation.


Some analysts see this as a blow to Radvision.

To me the issue is different.  Tandberg is a solution that has a loyal customer base and is priced way below the Cisco Telepresence services of Cisco.

I have already spoken about companies like Magor Networks (sister company to CounterPath) and Samsung (both also Radvision) customers that have much lower price points.

IMHO, the issue is the price war on Video Conferencing has hit Cisco.

Their systems which were 100K to start were always being installed and then were subject to issue of prestige vs. practicality.

The acquistion of Tandberg is not a redesign of what exists but extends the product line to the practical participant (although to Andy's point its a better look and feel).

To Andy's point a SIP core should mean interoperability, and Tandberg will add to some of the interoperability Cisco requires to move forward. 

It also should signal that the Cisco Telepresence product line will be driven by the channel market in the next year.