February II 2009

Fredric Morris, Editor-In-Chief, Connect-World
Fredric Morris
Editor-In-Chief
Connect-World

Economy – handsets – Barcelona

Mobile World Congress, fence sitting, handset & platform positioning, solar power and femtocells

Barcelona, the Mobile World Congress (MWC – ex 3GSM) for 2009, was once again the epicentre for the yearly mobile telephony hypequake. As hypequakes go, this was not much of an earth shaker – only four, five or so on the Richter scale. The sliding economy undercut the exaggeration and a good number of hushed voices (slightly) moderated the general clamour.

A GSMA press release reported that the GSMA Mobile World Congress drew, all told, more than 47,000 people; there were visitors, 1300 exhibitors, 2400 media representatives and others from 189 countries. Visitors to the conference and exhibition included executives from mobile operators, governments, equipment vendors, software developers, Internet service providers and media and entertainment groups. Half of the Mobile World Congress visitors were C-level executives, including more than 2,800 CEOs.

Companies all over are cutting back, even so, the movement was good although some exhibitors mentioned that a good number of people were only there for a quick, highly focussed, trips and were not spending as much time exploring as usual.
Unquestionably, the economy was the spectre lurking just offstage. Everyone was trading opinions about how it will be, what suppliers, operators, entertainment – whatever – would be the hardest or the least hit. Governments, traditionally good targets for complaints, were being touted by a number of vendors as the last of the big time spenders and potential saviours of the industry. From the talk, one would think that troubled economic waters were going to slosh off the backs of the mobile industry’s leaders as though they were ducks, but that didn’t stop them from speaking of the cash governments would inject into economies around the world. There was talk, though, that many mergers and acquisitions were likely – tacit recognition that not all the companies would make it easily through the downturn and that shop until you drop bargain hunting for companies might be planned by groups fortunate enough to have overflowing bank accounts.

Given the optimism, I wonder why so many vendors were stressing how well they could enhance and extend existing technologies and supercharge existing infrastructure instead of pushing the latest and greatest in new infrastructure investment.

Handsets are the eye candy at shows like this; everyone looks, everyone comments and everyone sees great omens in the handset tea leaves and Tarot deck.

The most significant happening in the handset game was not the great number of new product announcement, but a non-event. What happened to the Android handsets? There are nine handset manufacturers (HTC, LG, Motorola, Samsung, ASUSTek, Garmin, Huawei, Sony Ericsson, Toshiba) taking part in the that supports Android, Google’s open source mobile operating system, but only one – HTC – is actually producing Android ready handsets.

I had expected a number of companies to announce new handsets, but despite the adhesion of ten of the world’s largest mobile operators to the Open Handset Alliance (it might soon be 11, Verizon recently spoke of its interest in Android) there was only one new announcement, the HTC Magic model for Vodafone. None of the other major handset manufacturers – despite past talk and promises – had an Android model ready for the market. One has to wonder about the commitment of operators and handset manufacturers alike – with very few exceptions – to open platforms, indeed to any but their traditional, albeit updated, software platforms and their own fenced off domains. Has fence sitting become a mobile sport?

Voice quality is not even mentioned – ‘okay, it’s a phone, it talks’. Mobile handsets are about 12 megapixel cameras (Sony Ericsson); music (Samsung Beat); Internet, email and qwerty keyboards (Nokia E75); interfaces, broadband connectivity (3G, HSDP, WiFi, GPS LG Arena); and, ‘what-can-the-iPhone-do-that-I-cannot’, touch-screen phones (everybody).

Nokia, with Skype, announced its N97 with pre-installed Skype software and WiFi. This lets users call anywhere in the world using the Internet wherever they can access a WiFi hotspot. Skype’s ‘presence function lets users know whenever any of their contacts are online. Is one to wonder why mobile operators are a tiny bit paranoiac?

Could it be that egg sitting, not fence sitting, is the hot mobile sport? Guard the nest, don’t let the customer escape! Control the mobile Web, control the applications, lock the applications to the software platform with widgets and apps from their very own company store; Microsoft, Nokia and Samsung have followed the Apple lead and opened their own stores and Android, if it gets any traction, will probably sell apps as well.

Operators, rightfully, are wary about Internet giants like Google, of software giant Microsoft and handset manufacturers siphoning off their customers and are learning from early experiences with the iPhone (where Apple, not the operator was the big winner) and are hatching plans to sidetrack outsider raids upon their territory. Since, like it or not, phone makers and operators depend viscerally upon one another, one already sees signs that they are likely to join forces, cautiously, to slow the common enemy – the big Internet players like Google.

Handset makers are adhering, timidly, to the green revolution. Samsung’s Blue Earth Phone uses solar power to charge its batteries and its case is made from recycled plastic water bottles. Solar power models were shown by Samsung, ZTE and LG and Solio introduced a standalone solar powered recharging unit. Despite the green sales pitch, I suspect the real motive, the real market, behind the sun-powered handsets is to reach consumers in developing regions of the world where electrical power, if it reaches a region at all, is likely to be a low-grade, on and off again, affair. Whatever the reason, this is an important development.

Broadband was, as always, a hot topic, but Long Term Evolution (LTE’s) expected triumph was somewhat hollow this year. Sure, LTE will go ahead, but the urgency, the edge, seems to have been dulled by the economy. There was a lot of talk about pushing the limits of the existing infrastructure and even going for solutions such as High Speed Packet Access (HSPA) + or even EV-Do that would have been also-rans in a better economy, but instead of being widely available by the end of next year, LTE seems a better bet for 2012. In the meantime, WiMAX is likely to do better in many emerging markets and anywhere operators have not yet invested in 3G infrastructure.

Broadband growth is inevitable, so although LTE growth might slow, support is still strong; at least 15 companies, probably more, including Qualcomm and TI have announced LTE chipsets designed to be embedded in notebooks, netbooks and a host of other devices. The biggest concern, though, is not the technology. Cellcos are more concerned about getting the spectrum to handle the ever-growing demands of broadband applications. New spectrum can be quite expensive, and when it isn’t it is likely to be open – and open the doors for more competition.

Speaking of competition, will anyone ever ‘own’ customers again, the way they were owned in the past? People still talk about owning customers as though the Internet, deregulation and disruptive technologies never happened. Let’s face it, everyone is doing their best to get the biggest piece of each customer’s spending, but fragmentation will increase and yesterday’s business models are slowly dying.

Femtocells, small wireless access points at home or business, that might ease the spectrum crunch for some operators, although few have yet been deployed, are clearly gaining ground as important strategic network options. Femtocells offer fast, high quality wireless broadband coverage in restricted areas. When the user arrives home, femtocells automatically re-routes your mobile phone voice and data traffic away from the mobile operator’s macro-network and into the home broadband connection.

Rates for traffic routed via the femtocell are equivalent to, or less, than those for normal fixed line services and, since traffic on the mobile network is reduced, operators can make better use of their existing spectrum and infrastructure. It is no wonder that the popularity of the femtocell is growing.

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The next issue of Connect-World India will be published early next month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows such as: Convergence India, New Delhi, (19-21 March 2009).

The theme of this issue of Connect-Word India will be – It’s more than outsourcing.

The growth of India’s economy, driven by ICT and business process outsourcing has inspired comment and imitation the world over. The credit given to outsourcing is deserved, but the government policies, astute entrepreneurs a vast number of well educated and prepared professionals that made India’s success in this field are often overlooked. India’s growing ability to source new service and products, not just outsource the operations of others, and its ability to move ahead by its own efforts are also overlooked by those not familiar with the country’s vast pool of talent and potential. This issue of Connect-World India will examine India’s growing strength and look a bit down the road it is travelling.

This issue of Connect-World India will explore the influence of information and communication technology upon the transformation of India, and how India, itself, is transforming technology and processes and helping create a seamless world.

India 2009 Media Pack; Click here

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4 Responses to February II 2009

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