Archive for the ‘The Pain Truth Blog’ Category
Steve Jobs, Telecom and LTE
Steve Jobs, Telecoms & LTE
Peter Pain, October, 2011
So much has been written already, by so many, about so little of relevance, of one Steven Paul Jobs.
I am not gifted nor knowledgeable enough to compete with the outpourings.
I personally, quietly, privately, contemplated and celebrated the gift he gave us all of his life.
I appreciated his insights in his 2005 Address to Stanford University when he said “Death is Life’s greatest invention … it clears out the old and makes way for the new”.
Its not whether, its only when. He lived his life always resolved to make every day count.
I am a great admirer of Jobs, the company he built, and the products he led and inspired.
The Jobs of the new Apple post-1996 was not “ruthless”, “arrogant”, or any of the countless negative labels ascribed to him. He simply knew what he wanted to do and he did it … make devices that delight people and are elegantly easy and satisfying in the process. Let the market decide. And they did!
The Cube was elegant, but a spectacular failure from which he learned much. the iMac was a revolution.
He resisted calls to allow developers API access to create apps in the original iPhone, saying html coded apps would run within the browser. He was wrong, so in iPhone 3G, apps were born, and took iTunes Apps Store ballistic.
He hadn’t misjudged what the market wanted. He misjudged timing of technology availability. HTML 5.0 then was still immature, and processors not yet fast enough nor batteries big enough, to support Safari as an App environment. But Cocoa with memory sang a sweet apps song … and the rest is history.
In that 2005 Address he said, “looking forward, you can’t connect the dots, you can only do that looking back”, so he never worried about criticism, he focused on what he thought was right. As we look back now, the world acknowledges his brilliance.
And the relevance to Telecoms is … ?
… IOS … iPhone … iPad … and … ?
IOS derived from Mac OS X which incorporated a development of the OPENStep application environment his team developed at NeXT after banishment from Apple in 1987. 20 years from then to iPhone. IOS enabled the iPhone which begat the iPod Touch and the iPad.
Each was a total rethink of how people would want to use everyday useful devices. Jobs saw the power of useable, elegant mobile computing that integrated our most wanted functions … phone, music, internet, calendar, contacts, email and reading. In iPhone/IOS he melded them together in a seamless elegance that people from 8 to 80 can pick up and easily quickly learn to use. He “democratised” email, photo sharing, information access, and movies with these devices.
They did “kinda” exist before iPhone. Ever tried to make a Symbian phone, like my Ericsson M600 try and do email, browser, contacts & calendar in 2007? It could, but the ergonomics were just too hard. Good concept, built by engineers, but massive market fail.
Jobs didn’t invent these ideas. But he did put them together and make them work elegantly, simply, for everyone. And he backed them with a business model that also turned the mobile carrier world on its head. We forget the power of the carriers then. They dictated handset features, functionality and plans. Now Apple drives market demand for handset features, and its success strongly influences all plans offered by carriers.
The most profound result from Steve Jobs driving iPhone/iPad development has been the effect on mobile carriers bandwidth demands. Prior to iPhone, mobile data was almost an afterthought. GPRS appealed to transaction based systems, but browsing, email etc was dismally small. iPhone changed all that. iPhone inspired Android to compete. Smartphones have driven carriers to realise that exponential bandwidth growth and cost of data on 3G networks would eat them alive. HSDPA and HSUPA arose because of this, and then HSPA+, which all helped to lower cost per bit, but didn’t stem the tide.
Its fair to say that LTE development has been driven by smartphones, and iPhone in particular, even though iPhone 4S is not an LTE phone. (More on that in next article). LTE offers a major reduction in cost per bit, and flattens the cost curve with increasing data throughput. Its urgency has been driven by the exponential growth in demand predominantly from smartphones and iPads.
I cannot say that LTE would not have happened without smartphones and iPhone. I just think it would have happened a whole lot later had Steve Jobs not had the early vision to wrap Internet+Music+Phone together in that original iPhone package released in 2007. By doing so, he has forced nothing short of a data revolution on the mobile carriers.
A revolution which goes on ….
… Google and Microsoft (through its acquisition of Skype), and other non-conventional operators, will increasingly challenge conventional carrier models, first offering fixed line voice and data, but with mobile clearly in their sights. It will be interesting to watch how the industry is re-invented again, from the outside in … all because Steve Jobs knew what we wanted before we did.
He will continue to have a profound effect on this Telecoms industry through the LTE revolution and beyond.
Thank you Steve 
In-building Broadband for Mobile - Smart WiFi
Smart WiFi Offload – an easier quicker lower cost path to better in-building network coverage.
With the rapid proliferation of smart-phones, falling costs of unlimited capped plans, and our resultant increased daily dependency on them (my colleague calls it her “life support system”), the number one complaint of most mobile customers continues to be …
Network coverage … particularly in-building coverage.
And where do they have this problem? … most everywhere!
Particularly in two places – where they live and where they work – home and office. For Gen Y’s, who are aggressively dropping fixed line service for an all-wireless world, and busy business people, this is a distressing inconvenience.
There is a really smart solution to this problem for owners of many smart-phones and for Australian carriers.
First, let’s look at the problem being solved.
2100MHz is the main 3G frequency band used by all three carriers, as it’s a heavy lifter for data carrying capacity, so important to smart-phones and their internet demands. The higher frequency means more subscribers can run more data through a single base station. The inconvenience is the higher frequency attenuates more quickly, meaning less range and has less “reach” for in-building coverage than the lower bands of 850 and 900 MHz, which penetrate far into buildings. Low band users can even get coverage in many elevator cars in motion – something 2100 struggles to do.
Telstra’s strategic decision when building NextG to be an early adopter of 850MHz (same as AT&T) around CBD and metro areas, as well as 2100MHz in urban areas, laid a solid basis for its claim to “works better in more places”. Country areas use lots of 850MHz for range.
Although Optus and VHA have, and continue to each invest hundreds of millions of dollars into improved 3G network infrastructure each year, they are working hard just to keep up with exploding smart-phone and dongle data usage, which continue to stress network coverage and in-building reach.
The reality remains today for many users, particularly where only 2100MHz is available or operator backhaul is an issue, that in-building coverage, particularly at home and office, can vary from ordinary to barely usable.
So, other than starting your own www.YourTelcoFAIL.com.au, what to do? Fortunately, more than one answer is emerging.
Femto-cells, or “personal” base stations, connected to your broadband ISP, are moving slowly toward adoption. While ongoing technical issues continue to be resolved, femtos nevertheless find it hard to deliver much range in-home. Typically just 20 metres range is reported … less if concrete or brick walls intervene. Vodafone NZ has just launched femto offerings, similar to those from Vodafone UK, so femto’s are likely to be in the minds of VHA and Optus locally.
But femtos still cost more than a typical adsl modem router and are yet one more box to install and maintain and find a place for amongst the clutter. Once set up, they typically support up to only 4 handsets at a time at home.
But there is another solution…
… Smart WiFi Offload.
Smart WiFi solves the coverage issue from a different perspective by leveraging complementary installed wifi.
Today more than 50% of the Gen X and Gen Y homes already have wifi broadband. Baby boomers less so, but broad-scale take-up of wifi is wide spread inside and outside the home. Many businesses make wifi available to employees at work. It’s in coffee shops, McDonalds, hotels and airport lounges and other public places.
A package of handset client software, and network gateway equipment, provides network operators with a pragmatic and remarkably simple option called Smart WiFi Offload.
Whenever your enabled smart-phone detects roams to an available pre-selected WiFi network ALL your 3G voice text and data traffic is routed by wifi via the local broadband connection rather than over the operator’s 3G network.
So what are the benefits?
- Faster internet data;
- Greater in-home range … wifi has more power and will typically range throughout a home and into the garden;
- No handset limitations. Support all household members’ phones simultaneously off the same broadband wifi;
- Extendable to visitors if you choose to, (difficult to do with femto, or not possible if the user limit is exceeded);
- Its user-centric, not network-centric, so works wherever the user can connect to wifi (think of it like taking a virtual femto with you wherever you go);
- Voice quality is typically better than 3G and approaches fixed-line quality;
- Some Smart WiFi Offload solutions can temporarily shut down the 3G radio in some handsets, extending battery charge compared to having both wifi and 3G enabled;
- Because there is no “app”, it being part of the phone’s software, no user training is required. The user sees no difference in placing or receiving a call or sending/receiving text/MMS other than a small indicator that changes from “3G” to the operator’s wifi offload identifier. The same dialer and handset address book is used, and the operator’s network automatically redirects all incoming calls via wifi to the handset. It couldn’t be simpler;
- … and, depending on operator, if international roaming is enabled, roaming charges could be slashed. In fact, Smart WiFi Offload means there really is no need for third party voip apps, or even calling cards, or using a local sim and having to deal with a number change.
For a look at how this works, see the video on the home page at http://smart-wi-fi.com/
Philipp Humm, CEO of USA’s T-Mobile, commented on 25 January 2011 in an interview by CNet News: “T-Mobile has been a leader in Wi-Fi for a long time. We launched Wi-Fi enabled handsets more than five years ago that had UMA technology that allowed calls to be handed off from the cellular network to Wi-Fi networks … now I think the time is right for it. We are evolving the service from UMA to a lighter client on handsets, which can be used a lot easier. And we’ve already got this service available on some Android phones. So this is evolving to be something that is seamlessly usable.”
The “lighter client” he refers to is a client by Kineto of Silicon Valley. Their client uses the 3GPP’s Release 6 specifications known as UMA/GAN protocol, which is an industry standard. These modern “lighter” handset clients supports the standard, and are interoperable, proven, and in widespread operation in USA with T-Mobile, in Canada with Rogers, and in Europe with Orange UK, Orange France and Telia Sonera of Denmark.
In a nutshell, Smart WiFi Offload, can offer smart-phone users proven, real and immediate network coverage and potential roaming benefits, and it could be up and running in just months of appropriate decisions.
With the advent of LTE only a few years away the imperative of better solutions for high speed data will only increase. Smart WiFi Offload offers a long-term solution for enhanced in-building and public place network coverage.
… watch this space …
Head in the Cloud?
As an industry defined by continual innovation and change, IT&T has an incredible capacity to generate a lot of hype around new products every so often. It’s fair to say cloud computing is the current hyped development in IT&T.
As new technologies come and go, only a few manage to stay and become core industry solutions. Is cloud computing a stayer, what will it take to get it there and who will dominate the market longer term?
The mooted advantages of enterprises moving to the cloud are well documented at a conceptual level, however, are the cloud providers geared up to offer cloud services cost effectively and in the volumes that are being predicted, and is the timing right? Three core elements are needed in order for cloud computing to achieve expectations:
1. Mature technology
2. Service providers and vendors
3. The right business model
The hype surrounding cloud computing is reminiscent of many technologies seen as game changers: the internet is primary amongst these. This brings to mind the various product development cycles, in particular, Gartner’s hype cycle.
Gartner Research’s Hype Cycle diagram
Cloud computing today is situated very much at the Peak of Expectations (some would argue that software-as-a-service has begun its decline), however, expect to see several stages of evolution as the number of players and range of business models expands and then converges, before it arrives at the Slope of Enlightenment.
The hype cycle offers a broad basis for the journey new technologies often take. I’ve added a few of my own:
Phase 1: The Concept
This is the formation of the idea and first stage conceptual testing of its viability. If it’s interesting enough, and there are enough industry players contributing to the emerging space, the concept will gather momentum. For cloud computing, the basic concept of complete outsourcing of IT operations for enterprises has long been a vision. Cloud type services have had several predecessors: hosting, ASPs, grid computing, etc. Advances in IP security and broadband capacity have served as the Technology Triggers to kick-off the momentum.
Phase 2: Join the Bandwagon
Once the idea is seen to have legs, no one will risk being left behind and the concept truly gains momentum. As industry players and consultants see an idea being increasingly discussed, they will invest into the space. The climb to the Peak of Inflated Expectations is a fast and exciting one, with the architecture and design of the commercial service taking shape, often with various business models being launched. Cloud computing has been going through this stage for the past year and a half.
Phase 3: Market Growth & Fragmentation
Approaching the peak in expectation and hype, many new players will emerge to compete in the space. The dominant industry vendors will develop their own services, however, they will be challenged by smaller, innovative and nimbler players. The descent into the Trough of Disillusionment is the difficult and most challenging phase where different business models compete for primacy, channel strategies continue to evolve, and customer experience is tested.
Currently there are many small niche providers cropping up offering their own cloud solutions, alongside major IT companies, system integrators, software vendors and carriers. Tellingly there are many small software vendors that are offering OSS/BSS solutions, namely off-board billing, portal and order management platforms, targeting the cloud providers themselves.
Phase 4: Business Model
The critical element this phase brings to a new technology is the emergence of a sustainable business model that is profitable for the vendors, and provides value to customers. Alliances and channel strategies are bedded down for the longer term. The winners emerge during this phase. Cloud computing is on the verge of entering this period, possibly within the next 18 months to two years.
Phase 5: Market Share & Profitability
The dominant players compete aggressively for market share through service quality, differentiated services and pricing. The strategies for vendors’ solutions will become increasingly sophisticated and targeted to their respective market niches. In this phase, many technologies fall by the wayside, while others continue to prosper. For cloud computing, especially in Australia, this phase is likely another two or more years away with a handful of dominant platform and infrastructure cloud providers to dominate the market.
What does this mean for cloud computing today?
Whilst a small number of brave CIOs have embraced the cloud in totality, the majority are taking a wait and see approach. Savvy IT managers will scrutinise the hosting vendor’s environment, operating procedures, security policies and disaster recovery plans before taking the leap.
According to a recent survey by the IT Governance Institute (ITGI), 60% currently use or plan to use cloud computing for non-mission-critical services. A significant number of respondents had concerns about reliability and security, with one third citing significant legacy infrastructure investments that are influencing their cloud computing plans.
The high growth forecasts are tempered by the fact that most enterprises that have moved to, or are investigating the cloud, are looking at two core areas: testing and development, and messaging and collaboration. These areas, however, are considered peripheral or non-critical services. It is much rarer to find the enterprise that has shifted its entire IT environment to the cloud.
Who is in pole position?
The two main names slugging it out are Microsoft and Google. Microsoft has recruited an impressive array of hardware providers such as IBM, Fujitsu, HP and Dell on its Hyper-V Cloud program.
Although each of these vendors has launched their own private cloud solutions, the foremost objective is still to shift ‘boxes’. Cloud computing has simply provided a new model to market. Given the threat that cloud computng brings to these vendors as their traditional client business is consolidated in the cloud, establishing new partnerships is crucial. What these vendors can’t do is match what service providers offer.
Technology – more than ‘just a pipe’, the clear advantage carriers have is their command of networks, both fixed and mobile, particularly from servers to their customers. They can deliver reliability, measurable QoS and performance SLAs, end-to-end access networks – all core components of cloud computing, and all the traditional domain of service providers.
Service providers also have existing business relationships to leverage, along with large scale IT infrastructure for their own internal use, and experience in dedicated IT services for enterprises. Where this expertise and resources can be integrated effectively, service providers can become a one-stop shop for all communications and IT services.
The reality for most telcos is they are stuck with legacy platforms, even post-transformation, and this infrastructure is not fully equipped to manage sophisticated and complex convergent services such as cloud solutions.
Business model – cloud computing remains largely un-tested in the Australian market. Whilst Telstra and Optus have launched cloud services, the second tier carriers are still in the process of developing their cloud computing strategies.
Convincing their customers, especially mid-sized businesses, of the value of their technology, the differentiator of a quality network, and the impact of QoS on the reliability of their connection, will be a fundamental imperative for all carriers.
A primary challenge for service providers is to ensure their OSS/BSS platforms have the sophistication, flexibility and smarts to manage the unique needs of cloud computing customers: fully automated and real-time service provisioning and billing. Until telcos are able to deliver this to customers, the business models will remain constrained to what is available today.
Service providers are in prime position to own cloud computing. They have the best opportunity to exploit their unique position, especially their clout in network management. They can evolve their own internal infrastructure to enable them to offer cloud computing in scale.
It’s theirs to lose.
MNOs and Ashes
ARE MOBILE OPERATORS LIKE THE AUSTRALIAN CRICKET TEAM?
HAVE THEY TOO BECOME A PRODUCT OF RAMPANT SELF-INDULGENCE?
On 7th January, England’s cricket team beat Australia at Sydney to win the Ashes series 3-1. For the third time in five Test matches, England won by an innings, serving to emphasise the massive gulf between the teams and the complete turnaround since England lost 5-0 the last time they visited Australia. Some commentators saw this coming, even after the first Test, which ended in a draw after England scored 517 runs for one wicket in their second innings.
“England soared. Australia floundered. The gap between the sides has become a chasm … For 10 days the Poms have resembled a well-oiled machine. Their intensity has been unflagging, their fitness superb, their catching sharp, their batting powerful and their bowling incisive … They made the Australians look ordinary. Efficiency was pitted against fantasy, ruthlessness against soft-headedness …
Nor has it been an overnight event. England success has been years in the making and months in the planning. The community has embraced African rigour and antipodean aggression and added the patriotic fervour that has long been its hallmark. On and off the field, England’s has been superior. Administrators, selectors, coaches, back-room staff and captains have formed a unit with a single goal, the search for excellence.”
The world of mobility would do well to absorb some of the lessons from recent events on the cricket pitch, as there is a grave danger that the mobile operators, like Australia, face a rapid decline after years of dominance.
The diagram below shows a simple traditional view of a mobile operator’s key value-adding activities
If we look briefly at each of these elements in turn, we see that:
Marketing, Sales & Service value is under massive threat from consumer-focussed technology and lifestyle brands, such as Apple, Google and BlackBerry, as well as from content-based brands, such as Sky and Fox, not to mention traditional mobile competitors and their kith – the MVNOs.
Networks are being outsourced, so operators are choosing to dilute any future source of value from managing the complexity needed to deliver a seamless and unique carrier-grade service to more than 6 billion customers across the world.
Service-enabling platforms, such as billing, location, presence, authentication, session management, are unproven tools for third parties, even though they theoretically are a source of great value.
As a worst case, these trends could leave a mobile operator being a spectrum library. Such a business could have value, as it will always be a bottleneck asset. However, the release and ownership of spectrum comes with irregular and politically-dependent timing, is highly capital-intensive and has to be purchased in large lumps well ahead of its utilisation.
By taking a look at the stock market performance of relevant companies, one can see whether there is any evidence that these trends are happening or not. The chart below shows the relative stock price performance over the past five years (allowing for stock splits and dividends) of a range of direct and indirect competitors in the converging telecoms/media/technology sectors. I have also drawn the Dow Jones Index to give a baseline comparison.
The companies considered are Microsoft, BSkyB, Vodafone, Google, Nokia, RIM and Apple. Each is rebased so that 14th Nov 2005 = 100.
Vodafone is the line in purple. It is easy to spot on the chart because it is nearly always below the others. Only Nokia has done worse – and that is only in the past six months.
The markets are giving their view – mobile operators are the past, not the future.
It is also clear from the chart that the markets believe that the primary customer systems need, that is the need giving rise to mobility-based value for customers, is far wider than that given by a traditional view of access to communications while on the move (or still but untethered).
Strategic responses by mobile operators will need a new form of strategy-led creativity, one that is systemic in nature and builds on analytical and creative processes that can help redefine the whole market and execute a position of sustained strategic leadership.
As a brief example of this strategy-led creativity, one can consider strategy at three levels:
- Base: the efficiency of data selection, reception and reporting, ie the followership responses
- Core: the synthesis and transference of information, ie the management effectiveness
- Meta: the creation and traduction of knowledge, ie the leadership challenges
One then looks at each level of strategy at each point in the strategy advancement process:
- Position: how to align with customers’ primary functional, emotional and psychological needs
- Develop: how to harness the resources of the organisation to translate customer need into specific products and services
- Execute: how to bring those products and services to market and then support them
This gives a strategic information matrix, developed by my business partner Evolve1st, that can underpin a series of analytical processes designed to enable systemic advantage, that is an advantage built on the alignment of the complete organisation’s systems, people, brand, etc. with the primary market needs to be served. As with the England cricket team in the quote above: “Administrators, selectors, coaches, back-room staff and captains have formed a unit with a single goal, the search for excellence”
Better to win The Ashes than to be in the urn.
For more information on how to be successful at cricket, contact England’s coach, Andy Flower. For more information on strategy-led creativity, contact me, STUART NEWSTEAD Director of Ellare, based in England (stuart.newstead@ellare.biz)
For more information about growing your business in the Communications Technology and Media Sector, contact CreatorTech, www.creatortech.com
Jan 2011
NBN – At last some vision and opportunity for leadership
It’s hard not to get excited and slightly awed by the prospect of a nationwide communications infrastructure that delivers real broadband for everyone.
Before opening the window to the seemingly limitless opportunities that such a network will bring Australia, I’d like to dispel some of the myths that keep cropping up and confusing the general public – although the last election gratifyingly has seen that they may be smarter than we think.
Myth No 1 – Fibre is not a long term investment and will be superceded soon.
While the technology that connects at the end of the fibre will change, just like our PCs, the fibre we rollout will have a lifetime of at least 50 years. As we consider the cost of rolling out a nationwide fibre network – consider this – over 90% of that cost is the deployment of the fibre. It doesn’t take a genius to understand that fibre rollout is a long-term investment.
Myth No 2 – Wireless can do the job just as well as fibre
Does anyone saying that actually do the maths? Which part of 100Mbps guaranteed per household in Australia fits into a shared wireless access network with limited spectrum? This is unless you have a base station per customer – that is connected by fibre, assuming each base station can do 100Mpbs. Hmmm.
What did you say – we won’t need 100Mbps? Tell that to all those on dialup today – I too remember when 56kbps was market leading – what, less than 10 years ago? Besides most of us won’t be getting fibre access for a few years yet, unless you live in Armidale or Port Macquarie. By then 1 Gbps will be the competitive default for medium businesses.
Myth No 3 – No one will invest in the NBN Co after the initial Government
investment.
Ok, now we have the government largely funding, to the tune of $26 Bn, the crucial majority of deployment of a 50 year lifetime national fibre network. This will occur during the first 8 years or so. Thereafter private investors will be invited to buy in and fund the rest ($10-17Bn).
I predict that in 8 years anyone who isn’t seriously moving to using fibre from a small business point of view will be seriously disadvantaged. In fact it will be a world-wide no-brainer – just like mobile become after the initial investment in the ’90. With all the “heavy lifting” already done, investment to fund continued growth will be needed and as close to a sure bet as there is in business. I predict the NBN Co, or the privately owned version of it will be making real money 10 years from now.
The opportunities NBN promises Australia
For the Telecommunications Industry – Building an equal access broadband network will encourage and create lots more competition for retail telecoms services. Frankly, it’s also a get out of jail free card for Telstra in dealing with their problem of growing copper network obsolescence, ongoing cost of maintenance of that network and a corresponding shrinking revenue base. An opportunity, I would argue would be attractive to all copper-based incumbents. It’s great micro-economic reform and even offers a modest return in the long term
For the greater economy – the NBN really about transforming the Australian economy. It’s the next generation distribution network that will underpin serious productivity improvements and new innovative industries. Think of the great distribution networks of the past – for water, gas, electricity, transport, telephony. Each was associated with far wider consequential economic change – whether in terms of where people live, where food is grown and stored, to how we wash our clothes, where we work – and how we communicate.
To have real effect these distribution networks needed to be widespread and available to a majority of people. It may not be a coincidence that all these major distribution networks started as public investments. That in return created major consequential benefits through innovation that transformed economies and created wealth for countries with the foresight to take the lead.
The UN, on 19th September, 2010 has challenged global leaders to ensure that half the world’s people have access to broadband by 2015. They see access to broadband now akin to a basic civil right. No wonder they worked it out in rural Australia.
Numerous studies for example by the European Commission, Brazil, China, Thailand and most recently the OECD point to the significant impact that broadband has on labour productivity.
Paul Budde in his contribution to the UN Broadband Commission, extols a “Trans-sectoral Approach” to exploit the underlying value of a ubiquitous broadband network to transform society for the better. I agree with him – except for that word, trans-sectoral. It still sounds too telecoms oriented – it’s actually fundamental economic reform.
From an Australian point of view, our foresight in deploying a nationwide broadband network gives us a unique opportunity to get our act together and transform ahead of the pack , creating new industries.
A fledgling example of how we are already galvanising our intellect around the NBN opportunity is the Institute for a Broadband-Enabled Society (IBES). IBES had their Inaugral Annual Symposium on 21st September where they showed the fruits of their first year of activities: 40 projects involving 144 researchers and wider participation of universities, government and industry players. A most impressive beginning and an event that bristled with excitement and anticipation of something greater to come.
I, for one, applaud the broadband vision and would welcome debate on how we can get the most out of the NBN – rather than being diverted by myths.
Frank Zeichner 16 October, 2010
GUEST BLOG from ELLARE
THIS MONTH’S BLOG IS COURTESY OF STUART NEWSTEAD, DIRECTOR OF ELLARE CONSULTING. FOR MORE INFORMATION ABOUT STUART, CLICK HERE
BLACKBERRY MESSENGER – ARE YOU APPSTORES IN DISGUISE?
Summary
The BlackBerry Messenger application can become an appstore for message-based content. What could be distinct about this appstore is the way it can deliver value to a community of users through a unique combination of strengths, rather than a specific strength. And the mobile networks can get in on the act as well and breathe life back into their own assets.
Analysis
3118A78B. Is this the shape of things to come? A possible new source of growth for mobile content in general, and BlackBerry and mobile operators in particular?
3118A78B? The BlackBerry Messenger application (BBM) from Research in Motion (RIM) allows BlackBerry users to send messages directly to each other – privately and without parental or state let or hindrance. It is behind some of the recent huge growth of BlackBerry in countries like Venezuela and Indonesia. Each BlackBerry device has a PIN (a bit like a serial number), which is a code of eight characters – hexadecimal numbers if you want to be precise. You swap your PIN with a friend and, hey presto, you can use BBM.
That much is well known. Indeed, the ability to exchange PINs has been around ever since BlackBerrys came on the scene.
What is different is what is behind 3118A78B. I received this PIN the other week as a “Suggested Contact” via a friend of mine. Once I clicked on it, I found myself connected to the Stanley Cup Playoffs – the North American ice hockey club championships.
What I have received since then is news updates and scores as the playoffs have progressed through to the final – which, being solely contested by US and Canadian clubs, will of course establish the “world champions” and the right to hold up the biggest trophy on the planet.
3118A78B shows how BBM can become an appstore for message-based content. The traditional media industry is showing how difficult it is to make money on simple content in the digital age, so being an appstore for content, in itself, is of little benefit. What could be distinct is value to a community of users that is delivered through a unique combination:
- the multimedia extension of BBM (sharing pictures, videos, links, etc)
- the lack of a limit on the length of a BBM message
- the seamless way in which RIM integrates and runs its applications
- the usage info gathered at its network controller (NOC) – about to be launched as a set of services under the “Concierge” banner
- customer insight from the data a mobile operator gathers.
So, 3118A78B could include clips, commentaries, merchandise, maps, last-minute ticket sales, supporting ads with clickthrus – all with (real soon now) carrier billing. Further possible life breathed back into the mobile operator’s revenue streams and customer lifetime values. Other application platforms, such as Apple, Twitter, Facebook or Android each have their own strengths but can’t bring all these elements together.
Once again, RIM is taking an asset it has had since Day One and is seeking to turn it into a marketing strength, rather as it has done in the past with the screen, the keyboard and the messaging systems, and as it is starting to do with the network efficiency of its integrated operations. Clearly RIM would have to ensure that the core purpose of BBM – ie messaging with trusted contacts – remains the core purpose. Beyond that, 3118A78B, whilst niche in its own way, is showing that BlackBerry continues to skate towards where the money is going to be.
Stuart Newstead, May 2010
iPad – Opportunity and Challenge to the Australian Mobile industry
iPad, scheduled for Australian release in late April, continues to attract plenty of controversy and mis-statements.
Many of the criticisms iPad are for what commentators think it isn’t, or can’t do, rather than what it can do. Few have actually touched, much less used an iPad.
Long-time Apple users know the initial release is just the first taste, as Apple will invest considerable R&D to build a market segment through product innovation and evolution.
Apple plans to take a good percentage of sales from Netbooks. Apple’s real goal is to redefine the market niche.
Why an iPad? – The Apple View: It’s the third niche
Many observers missed Apple’s intentions, and didn’t listen carefully to what Steve Jobs actually said in his Keynote introduction on 27th January 2010:
“The question has arisen lately, is there room for a third category of device in the middle, something between a laptop and a smartphone? And of course we have pondered this question for years as well. The bar is pretty high.
“In order to really create a new category of devices, those devices … are going to have to be FAR better at doing some really important things … better than the laptop, better than the smartphone …otherwise it has no reason for being.
(He offers examples including browsing, email, sharing photos, video, music, games and e-books).
“Now, some people have thought that that’s a Netbook. The problem is, Netbooks aren’t better at anything … they are just cheaper; they are just cheap laptops, and we don’t think that they are a third category of device.”
This selected quote contextualises the goal of redefining a new category, by doing things differently and better. People are generally reluctant to accept change until they SEE why it is better. And so it will be with iPad because, its true, netbooks do offer a compromised experience, and nothing new, and alternative “slates” suffer a swag of limitations that have condemned all to market failure to date.
iPad as a better Media Access Device
So iPad isn’t taking any market head-on. It is aiming to redefine how we communicate, access, share and present media.
Rather than a “computer”, iPad offers a media access device, enabling quick, easy access to movies, e-books, internet, and social communications in all their electronic forms. He was very clear about iPad’s role as an electronic reader:
“Amazon has done a great job of pioneering this functionality with their Kindle, and we are going to stand on their shoulders and go a bit further…”
Apple is offering the capable iWork “office suite”; Pages, Keynote and Numbers as practical and useful document creation tools for iPad, with capability to import and export to Microsoft Office. This shows this is no toy reader. It is ready for business and targeted to a new market niche.
Jobs was also clear on what was required to adapt this elegant office suite to iPad:
“…could we come up with an entirely new user interface for these apps? It’s very different than running on a personal computer.
“What they came up with is really magnificent.”
Soft, and special-entry, keyboards and smart gestures result in media/document creation that can rival current tools in productivity, creativity, and speed, but for niche needs.
iPad as a Business Tool
Looking at this device’s introduction, my “wow” instincts predict it will profoundly change not just people’s leisure activities, but how we do business
Laptops have been with us for over 25 years, yet none provide a convenient device that a couple or three business people can sit around to conveniently interact with media; whether photos, presentations or documents. The keyboard is the anchor that weighs the device down on the desktop, allowing only for small moves to overcome viewing angle limitations, while the presenter drives the presentation. Frequently, its a one-way watch-and-listen device while I show-and-tell.
iPad promises a truly interactive device for business people. In sales, business development, buying, learning, or just “doing business,” the person being presented to can move themselves from landscape to portrait, zoom in or out, backwards or forwards around the presentation, and click onto links to additional media. Their media viewing experience is different from a laptop, because it is personal. This is very different to just being shown a PowerPoint on a laptop, and suggests business people will leverage iPad to enliven and enrich their discussions with interactive media.
iPad provides an instant-on “let me show you how we do that” capability. As conversations frequently lead to live media access on the web, or corporate server, 3G data capability will be crucial for business people, to guarantee their media access device can always present what they want, when they want it, wherever they are.
Forget the “Wait, I have to find a public wi-fi hotspot”. It either makes sense with 3G data for ubiquitous business use, or it won’t make sense at all. This need is apart from the inevitable instant video conferencing capability foreshadowed for iPad, though not available in this first release. Meanwhile, joining Webex style multi-party sessions while mobile will become popular, even though the iPad user will offer voice only, while displaying video from fixed users on the call.
And there, dear reader, is the rub.
iPad’s effect on Australian Mobile Data networks
Australian mobile operators have been experiencing massive increases in data traffic, while enjoying only moderate growths in revenue. Telstra reports their mobile data volumes double every eight months.
While smartphones have played a part, the current dominant driver of mobile broadband volumes have been laptops, not smartphones. While the carriers have responded to improve their 3G data networks, particularly in backhaul bandwidth, they are running hard just to stand still in terms of data throughput, latency and in-building coverage.
iPad is set to compound this problem.
For it to succeed as a valid tool for Australia business people. iPad is in part hostage to the Australian networks. iPad’s 7.2Mbps HSDPA will depend on mobile data for its utility, and will suck data like never before, unlike iPhone’s 3.6MHz-only HSDPA capability.
3G data performance is more important to iPad than to current laptops, because to have relevance, iPad applications will typically depend on pulling down current media, less so than displaying internal files. Laptops are often used pre-loaded with static presentations avoiding dependence on 3G. Business people have notoriously little patience with technology when “doing business.” This iPad 3G technology has to “just work” or it won’t be used at work.
We haven’t seen iPad applications yet, only glimpses in the iPad introduction, but I see Marketing and Operations Departments cranking out Keynote presentations or building their own apps, embedded with live data feeds and frequently-updated videos. The finance, medicine, and airline industries immediately suggest themselves as iPad consumers. Over the coming 18 months, we are likely to see a significant shift in how sales, marketing, business development, operations, and other professionals take their message to face-to-face and real-time markets.
iPad offers users choices: Hello, you aren’t tied to your phone plan!
Do Australian telcos yet recognize that, far more than voice, this style of mobile data is going to drive network choice and subscriber satisfaction levels because …
… iPad requires no allegiance to the voice plan!
So, while voice is “good enough”, will iPad users – when their data is “critical” – buy a different carrier than the one powering their iPhone?
If so, this could offer a tremendous short-term advantage to the carrier that has “the network that works better in more places”. Because iPad, like iPhone, is 850MHz only in the low band, as used by NextG, and does not support the 900MHz UMTS/HSDPA frequency used by Optus and VHA. (It does support 2100MHz UMTS 7.6MHz HSDPA used by all three).
This is a critical factor for business users to consider. 850MHz is what gets you better in-building coverage, and better range in the bush.
Telstra’s NextG is acknowledged as offering faster, lower latency, geographically ubiquitous performance with great in-building coverage. It has set a performance standard its competitors will not reach in the current 3G investment cycle. Five years from now, with efficient capital spends, mobile carriers could change that by reconfiguring their networks to use LTE in combination with the extensive geographical coverage of high-speed economical NBN fibre back-haul. By then, the iPad revolution will have moved on, and ubiquitous on-demand mobile high-speed data access will be given as much thought as breathing. It will just work.
iPad – how big an opportunity for Telstra’s NextG?
Until then, Telstra is presented with golden honey-pots they could grab – the mind share and customer loyalty of small business – provided they are intelligent. I don’t mean by continuing to gouge the market with heavy price premiums and mean data allowances. Their network may offer greater utility, but the others do work … well enough. It’s a question of how good is good enough.
Telstra has the lowest opex of the mobile networks. They could intelligently lower margins to take increased market share in data, thereby raising ARPUs for a Win-Win. Customers get iPads, laptops and smartphones that work as intended, enabling increased efficiency and effectiveness for those users. Telstra secures market, generates free cash flow and dividends (the current mantra), and Australians in general benefit.
Or it can continue its current focus on high premiums, and low data allowances, and let their competitors educate the market to accept incremental improvements that raise the lowly bar of “good enough”.
Telstra has always said that mobile, as the major unregulated sector of the Telco competitive landscape, has done better competitively than the regulated sectors of fixed line and data. iPad now challenges Telstra to pick up its game, not to be bypassed as it was by the iPhone revolution, and demonstrate a new competitiveness and willingness to wow customers with better value, not just expensive performance.
iPad and Australian Mobile Operators vision for the future
For everyone’s sake, let’s exhort the Australian mobile industry (Telstra, Optus and VHA) to set iPad and its technology free with innovative plans like AT&T’s. While an Australian unlimited plan is unlikely, given the industry’s difficulties in coping with mobile data, the Mobile Triumvirate are quite capable of offering a low volume (about 750Mb/$20) starter pack and perhaps pay-as-you-go 1Gb/$10 add-on packs for high volume use. And they must allow no-penalty post-paid switching from low-use to high-use plans, to allow users to tailor their needs in anticipation of heavy and light months.
Innovations in iPad mobile data plans can enable a pluralistic and innovative use of this new technology and positively influence how we do business face-to-face.
It is likely that VHA and Optus already get this, and will set their price and packaging to complement their already “good enough” data networks, ensuring they woo a large part of the SMB market, as well as their consumer strongholds. Their market are those who perhaps travel infrequently, and either place less value on, or do not appreciate, NextG’s ubiquitous 3G data coverage, and who are very sensitive to pricing.
What will be REALLY interesting to watch, if Telstra really “gets it”, is how many Optus/VHA mobile phone subscribers take up a NextG micro-sim for their iPad. Because after all, part of the iPad promise is it “works better in more places”.
So couldn’t NextG truly be a “magical and revolutionary product at an unbelievable price”?
Let’s hope we like their definition of “unbelievable”!
That’s the Pain Truth about the iPad challenge to the Australian Mobile Industry.
2010 – A great year to look forward to?
2010 has opened with a mixed bag of opportunities, which is the way 2009 opened, and every year before that. And no doubt, the same way every year for the next millennia or so will begin.
For those of us in the Australian telecoms industry, there is the satisfaction of knowing that events in 2010 could make it a banner year, laying a foundation for growth in the industry over many years to come.Why?
Three important factors:
The NBN in Australia will arrive just in time to support the rapid growth in demand for these capabilities, and change in lifestyle.
Don’t believe in Peak Oil? It is now confirmed by the International Energy Agency’s review in December 2008. Only, the IEA said it will happen by 2020. Their 2009 World Energy Outlook Fact Sheet http://www.worldenergyoutlook.org/docs/weo2009 /fact_sheets_WEO_2009.pdf expects supply to rise to 105 million barrels per day by 2030. Experts like Matthew R Simmons are saying Peak Oil production of 86 mbpd happened already in 2005, and the world will never see 86 mbpd again; see www.simmonsco-intl.com/research.aspx?Type=msspeeches
Who is right? Simmons brings compelling logic to his scenarios, while the IEA continues to rely upon unreliable and discredited reserve data from the OECD. If Simmons is right, we are set for major pricing and availability disruptions in the next three to five years.
At any rate, the West needs to move off its petrochemical dependency, and fast. It will – there are promising bio-engineered and renewable fuels on the horizon – but the question remains, can we move fast enough?
What we do know now is that telecoms will be essential in supporting the profound economic and lifestyle changes required. The process has started already, with NBN Co now moving more aggressively towards public clarity on its objectives, costs and schedule.
So 2010 marks the start of an economic high-growth decade for Telecom providers and suppliers in Australia.
Creator Tech is a continuously evolving work-in-process example of how telecoms technology can impact work productivity and life-style change. From the outset we adopted a “Federated Associates”, non-bricks-n-mortar, remote work process using traditional tools. Now we are moving to web-based collaborative tools, and increasing use of web video conferencing tools, not because of cost, but to save travel time, and energy and because it can be simply a more effective way to work. Yet, in a few short years, the NBN and 4G/LTE will enable a level of mobile telepresence to further enhance these benefits that we can only dream of today.
At the other end of the spectrum, for example, major oil companies are spending big research dollars to find how best to implement completely remote-operated production rigs. The potential savings in production costs are huge, as are the safety benefits. The main enabler is multi-wavelength 10Gig sub-sea cables that can support the massive video bandwidths required for the complex monitoring and control that would be required.
Our planet is increasingly hungry for telecom-enabled solutions, big and small, to help shift our energy production and consumption patterns towards more sustainable alternatives. Our life-style will become inter-woven with pervasive telecoms enabled technology to support these shifts and once again, we will wonder how we did without things we hardly could imagine only a half decade or so earlier.
That’s the Pain Truth about 2010 as the start of a rainbow decade of Telco growth.