An afterlife for smartphones

Smartphones are clearly becoming a commonplace phenomenon. In the USA, smart-phones now comprise more than 20% of all cellular phones, and this number is expected to rise to more than 40% in a few years.

What’s most interesting about smartphones is that, unlike feature phones, smartphones can have a useful second life.

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Ericsson’s self-serving prediction

Ericsson Chief Marketing Officer Johan Bergendahl is predicting that as Mobile Broadband takes off (and it is growing faster than mobile or fixed telephony ever did), Wi-Fi hotspots will become as obsolete as telephone booths. The reasoning is simple – As more and more cellular subscribers start using wireless broadband otherwise known as Wireless WAN (WWAN) technologies (e.g CDMA2000 EV-DO, HSPA/HSDPA/HSUPA, WiMAX, LTE) and it becomes available in many areas, WiFi hot spots will no longer be needed. In fact, Bergendahl says that “Hotspots at places like Starbucks are becoming the telephone boxes of the broadband era”.

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India to become the 2nd largest cellular market in 2008

The cellular market in India is growing rapidly. In 2007 alone the Indian cellular added more than 80 million cellular subscriptions. By end of 2008, India will have more than 300 million cellular customers, according to estimates by Wireless Intelligence. In comparison, the USA is expected to have 270 million customers by the end of 2008. At this level,

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AT&T to complete high-speed 3G wireless network buildout by 2009

AT&T Mobility says it will step up its 3G buildout, expanding its high-speed mobile service to more than 80 additional cities in 2008. The planned expansion will provide AT&T 3rd generation (3G) high-speed data services to nearly 350 leading U.S. markets by the end of 2008, including all of the top 100 U.S. cities. The initiative will entail rolling out 1,500+ additional cell sites in the U.S. The AT&T 3G network now delivers downlink (download) speeds between 600 and 1,400 Kilobits per second (Kbps) and uplink (upload) speeds between 500 and 800 Kbps.

AT&T also plans to complete the deployment of High Speed Uplink Packet Access (HSUPA) by the middle of 2008. HSUPA provides higher uplink speeds and is the next step in the evolution of AT&T’s 3G network that will the transition to High Speed Packet Access (HSPA) standards. With this change, AT&T will catch up to Verizon and Sprint in terms of high speed wireless coverage. In fact, AT&T may even have faster uploads with HSUPA than Verizon or Sprint has with their EV-DO Rev A network.

Currently, there are multiple 3G technologies used by different wireless carriers in the U.S. AT&T uses HSPA that is based on W-CDMA technology, while Verizon, Sprint, Alltel, and U.S. Cellular, use CDMA2000 1xEV-DO technology. Sprint is also building another high-speed wireless network based on WiMAX, which was recently classified as a 3G technology. For 4th generation (4G) services, AT&T will use a technology named Long Term Evolution (LTE), a 4th generation technology that is still in the ‘development’ stage. Verizon too has announced that it will use LTE as its 4G technology, which will align it closely with its half-parent Vodafone, which mainly operates in Europe and Asia.

Will Amazon Kindle a better MVNO model?

amazon_kindle.jpgThe Mobile Virtual Network Operator (MVNO) business in the U.S. is hardly making any headlines these days. That’s because some of the biggest MVNO’s have lately kicked the bucket. First, there was Amp’d Mobile where the management engineered a spectacular demise by burning cash and providing service to those who didn’t pay (a cellular sub-prime gamble of sorts). Then there is ESPN Mobile, which bit the dust after several agonizing months of trying to sell a high priced sports-oriented offer that not even loyal fans would bite. These are just two examples that sealed the fate (see related article on Why U.S. MVNO’s will find it hard to survive) of the traditional MVNO model. However, all hope is not lost. The MVNO business can still be successful – for the right innovator.

In steps Amazon into the picture. Amazon has shown time and again that they can come up with a feasible business model or two that users find compelling and easy to use. For example, Amazon revolutionized selling books online and then made is super easy with features such as 1-click checkout. Then there’s that elastic computing cloud, which I think has a lot of potential.

And now, Amazon has come up with its next innovation – an electronic book reader called Kindle that sells for $399 and makes it easy to read and easy to download e-books anywhere, anytime. Kindle can view, select, purchase, and download electronic books over a high-speed cellular network. Users can also purchase a newspaper or subscribe to daily newspapers, magazines, and blogs for a monthly fee. Newspapers are delivered overnight and blogs are updated several times a day.

Amazon isn’t the first to sell an electronic book reader, but its the first to have an electronic book with the following features:

  1. Easy-on-the-eyes E-Ink. The Kindle, like the Sony Reader, has an electrophoretic display from E-Ink that is designed to look like paper. An LCD screen, a popular choice for e-readers and smartphones, causes more eyestrain.
  2. Download e-books anytime, anywhere using a wireless broadband speeds (no need to look for a hotspot)
  3. No need for a wireless subscription (no contracts, no bills, no worries)

What’s interesting here is that there is no wireless/cellular subscription required. Imagine a wireless device that can connect to a high speed cellular network but doesn’t need a subscription? This is just what Amazon has done and perhaps may have opened up a whole new use for mobile data networks. This contrasts in many ways with the iPhone, which requires a cellular contract, a subscription to cellular Broadband service called EDGE, but doesn’t even allow wireless downloading of songs (except via WiFi hot-spots).

The Kindle operates on Sprint Nextel’s 3G cellular network. But user will not see a bill for wireless service – it’s included in the price of the content. The Kindle is “always-on”, that is always connected to Sprint’s 3G EV-DO network (slides down to the slower 1x network when EV-DO is not available). Interestingly, since Sprint EV-DO network was recently upgraded to Rev A, where users typically get download speeds of about 800 Kbytes, e-books should download quickly. My guess is that the device will not roaming on other networks. Users can also turn the radio off, which will come in handy in airplanes, and will extend the battery life from about two days to one week.

Users can also “sideload” purchased e-books onto the Kindle. In any case, every book purchased is backed up on Amazon along with any bookmarks or notes added by the user. I know that sometimes devices can go bad, so this is one of the most important features for me. I’ve always wanted the backup feature with iTunes, but I guess Apple sees things very differently, and they also have to grapple with a messed up Digital Rights Management (DRM) system.

E-books cost about $9.99, while newspaper subscriptions start at $5.99 per month. There is a small music player on the device for background music while reading, but Amazon isn’t selling music over EV-DO, so users will have to sideload their own songs. This is not a great choice (perhaps it will be added later), because Verizon Wireless claims that 95% of song downloads from its VCAST music service is over-the-air (and its priced higher than for sideloading)

I think Amazon has another great idea with Kindle. It has already sold out in the first 5.5 hours. This is going to be another great product and a good boost for Wireless Broadband services.

Skype goes Cellular with the 3 SkypePhone

skypephone_logo.JPGSkype and UK-based cellular service provider “3” have launched the 3 Skypephone, a mobile phone that allows users to make free Skype calls via the Internet. The 3 Skypephone could also send free Skype Instant Messages (IM). Right now, SkypeOut calls, SkypeIn calls, and voicemails are not available, but the phone makes conventional calls.

The phone is being launched in nine markets including the United Kingdom, Australia, Italy, Hong Kong, Sweden, Denmark, Austria, and the Republic of Ireland. In Britain, the phones will be available for sale in 3’s UK stores on Friday November 2, 2007. It costs 49.99 pounds ($102.6) with pay-as-you-go service, and free with a contract. The company hopes to sell “several hundred thousand” units worldwide in the fourth quarter of this year.

Skype acting CEO Michael van Swaaij expects the launch to boost the group’s 246 million-strong registered user base because “the service was now available to people without computers”. I doubt that the skyphone will make a dent in Skype’s customer base for the following reasons:

  1. 3 subscribers are likely to have access to a computer. In other words, many of the users of the 3 Skypephone will be current Skype users.
  2. “3” is a relatively new company and doesn’t have a large subscriber base.

The 3 Skypephone does not work in the U.S. spectrum bands, so Skype enthusiasts in the U.S. will have to wait!

I wrote an article recently on “4 Reasons you won’t have Skype on Cell phones anytime soon”. Interestingly, “3” is the first operator to open up its network to Skype. For “3” it makes sense as an upstart 3G/UMTS operator, but I highly doubt that the major cellular operators will open up their network (hey, they have to protect their primary revenues) anytime soon.

Qualcomm enables laptops with both EV-DO and HSPA

Qualcomm launched on a Wednesday a dual-3G chip with EV-DO and HSPA (High Speed Packet Access) for laptops. This will enable laptop makers to embed a WWAN chip that can handle any of the two most dominant cellular broadband technologies in the world.

Currently, laptops are available with embedded chips that work with either AT&T’s HSPA or Verizon Wireless’ or Sprint Nextel’s or Alltel’s EV-DO network, but no laptop can work with both HSPA or EV-DO networks. Different parts of the world have different broadband networks – the US, Asia (China, India, and Japan) and Australia have both EV-DO and HSPA, Europe is predominantly HSPA (HSDPA and HSUPA), while Korea is EV-DO, making it difficult for laptop users that travel internationally to use the laptop with Wireless Broadband.

Here are the biggest benefits of the dual-3G chipset for laptops:

  1. Qualcomm’s new Gobi chip can connect to either type of network, so the well-traveled users will have a laptop that will work pretty much anywhere in the world. This would also be a good selling point for wireless service providers.
  2. Rather than make two separate laptops for EV-DO and HSPA, laptop manufacturers can manufacture a single laptop with both. Each chipset will cost more because it packs more punch, thus the dual-3G laptop will be more expensive, but costs can be lowered through volume manufacturing, and reduced marketing, distribution and inventory costs, and simpler sales process.
  3. Customers with multiple subscriptions have the ability to choose the best coverage in a given area without having to lug around multiple laptops or multiple USB or PCMCIA WWAN cards, as well as decide on the lowest cost (especially when roaming).

The Gobi chips are available immediately, and Qualcomm expects them to appear in laptops in the second quarter of next year.

Still, the Gobi chip is limited to EV-DO and HSPA, and does not support WiMAX. Wireless carriers are still rolling out WiMAX (the first rollout in the U.S. will be in 2008), and WiMAX will be an important consideration for laptops.