Tech Untangled

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”.

This is driven by a couple of factors:
1) Availability of devices - More and more wireless broadband devices are becoming available. There are WWAN PCMCIA cards that fit in laptops, WWAN routers, and even WWAN embedded in laptops. Apparently, Ericsson recently signed a deal to put HSPA in some Lenovo notebooks, but HP and Dell already offer laptops with CDMA2000 (e.g. for Verizon Wireless service) and HSDPA (e.g. for AT&T service) built-in.
2) Declining prices and cost - the price and costs of wireless broadband is still high compared to WiFi, but is decreasing. Bergendahl says that in countries such as Austria, Denmark, and Sweden, the average price for a mobile broadband subscription is only €20 ($31) per month. Also, PCMCIA WWAN cards are pretty cheap now, and broadband built into computers will likely go the same route as they become more popular.
3) Coverage - coverage is becoming pretty good - in the U.S., both Sprint Nextel and Verizon Wireless already cover more than 300 million pops with their EV-DO broadband network and AT&T covers more than 160 cities. Indoor coverage issues can be resolved through femtocells.

There are still some issues to be resolved: “Industry will have to solve the international roaming issue,” Bergendahl said. Another problem is that competing cellular carriers use a different technologies. Verizon Wireless, Sprint Nextel, Alltel and U.S. Cellular use cdma2000 EV-DO while AT&T uses W-CDMA (e.g. HSPA/HSDPA/HSUPA), and then there’s WiMAX as well. In contrast, WiFi is a unified standard.

What’s most interesting here is that this is not just a prediction. It is a subtle attempt to manipulate - See WiFi and mobile broadband compete against each other to a large extent in the sense that they both provide IP transport or Internet Access. Ericsson doesn’t have a strong position in WiFi, but has a very strong position in mobile broadband, especially in HSPA/HSDPA/HSUPA, so it tends to benefit immensely when WiFi is no more and cellular broadband covers the world. This is largely a self-serving, hope-filled prediction.

Like any technology, one day WiFi will fade away. Especially when we move from today’s 3G mobile broadband to 4G mobile broadband (e.g. LTE). Till then WiFi will continue to be just fine, thriving in its niche market. Take this prediction with a grain of salt.

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.

Wow, just several days ago, I wrote that Sprint will launch Femtocells this year. Well, they didn’t wait that long did they?

Sprint Nextel has quietly started selling the AIRRAVE femtocell product in parts of Denver and Indianapolis to provide better cellular coverage and flat-rate calling at home. Sprint Nextel plans to start selling the Airave all across Denver and Indianapolis, as well as in Nashville, Tennessee, by year’s end, and plans to offer it nationwide in 2008. The Airave is made by Samsung Electronics and costs US$49.99. It is designed for plug-and-play so that people can install it themselves by plugging it into a broadband Internet connection (DSL or Cable Internet service required). For a flat monthly rate of $15 for an individual and $30 for a family, one gets unlimited local and nationwide long-distance calls while at home (or whereever the AIRAVE femtocell is).

The Airave works with any Sprint handset, and can support up to 3 handsets simultaneously. When a subscriber leaves home (i.e. goes out of the femtocell coverage area), the handset will automatically shift to the outside Sprint cellular network.

A femtocell is a small cellular base station that provides service specifically inside a building (e.g. a subscriber’s home). Femtocells are seen as competition to WiFi, where some cellular carriers such as T-Mobile use a dual-mode handset that can switch between cellular and WiFi (with WiFi providing the in-building coverage wherever applicable).Femtocells get the name from “femto,” which denotes a small order of size in physics. The idea has been around a long time but until recently was held up by size and cost concerns. While helping subscribers get good service, the devices save carriers from deploying more expensive base stations on towers to get to hard-to-reach pockets.

Sprint is just the first major U.S. carrier to offer femtocells. Expect to hear more about femtocells in the coming future.

3rd Generation (3G) wireless systems, whose primary focus is wireless broadband (data), arrived on the scene a few years ago. You can say that it’s still at its early stages, but the customer uptake shows a very rosy picture for wireless broadband.

There are many factors driving this. One is mobile music downloading. Following behind but catching up fast is mobile video. Recently, I reported that mobile video subscriptions are surging. On top of that, wireless service providers such as Verizon Wireless are taking advantage of the YouTube craze by Enabling YouTube Video Uploads directly from VCAST enabled phones. Not to be left behind, Veoh Video also recently inked an agreement to provide a Veoh Channel on Verizon Wireless’ VCAST video service. Even handset manufacturers such as LG are joining the fray and enabling YouTube uploads directly from the mobile phone.

In the U.S., Sprint and Verizon Wireless are the unheralded leaders in the quest to build 3G networks. They both cover more than 210 million pops (in other words, a significant part of the U.S. wireless coverage area). Then there’s AT&T, which just rolled out 3G service in 160 markets in the U.S. AT&T recently launched a video calling service that runs on the 3G network, although I doubt that its currently driving much customer demand for 3G.

Another driver of 3G is for use as a broadband link for laptops and personal computers (call them wireless modems and wireless routers).

So How fast is the 3G Broadband Wireless growth? According to Wireless Intelligence, as shown in 3G Today, there are 486 million reported 3G CDMA customers. This is counting CDMA2000 1xRTT customers, which in my mind is not 3G, but perhaps 2.5G.

Counting “real 3G” customers, there are 68 million CDMA2000 1xEV-DO customers and 127 million W-CDMA (UMTS) customers worldwide, for a total of 195 million. That’s still a small penetration rate, when you consider the overall cellular landscape. However, the 3G numbers are growing at an annual rate of 70%, which points to a very rosy picture for wireless carriers.