Introduction:
TiEcon is the world’s largest conference for entrepreneurs, focusing on technology markets, entrepreneurial opportunity and innovation. Now in its 16th year, TiEcon 2009 was themed "The BOLD Entrepreneur." The record-breaking attendance of over 3,500 included entrepreneurs, venture capitalists, industry executives, analysts, engineers, and business leaders. TiEcon 2009 lived up to its entrepreneurial spirit by featuring dynamic speakers who showed how they adapted to changing conditions and create their own future, despite a very challenging economic climate. This article reviews two wireless panel sessions, which had a very pragmatic market and business focus.
Wireless – What’s Working, Where and Why?
This session examined the mobile applications, content and services that are gaining broad user adoption. It provided a global perspective of users, usage and market dynamics, the trends, opportunities and words of caution for entrepreneurs going forward.
The panelists were:
- Bernard Gershon, Gershon Media
- Atif Hussein, Nokia
- Yves Maitre, Orange
- Dilip Venkatachari, New Enterprise Associates Ventures (ex-Google)
Mr Gershon was very bullish on mobile video on cell phones, which has been predicted for a long time, but hasn’t happened yet. He assured us that this would be the year (we’ve heard that one before). Bernard stated that mobile video was happening in Korea, with full-length TV episodes (which suck up a lot of mobile network capacity, perhaps requiring a separate dedicated video network).
Mr Atif Hussein of Nokia reminded us that messaging continues to be the “killer app” for mobile phones, but that it continues to evolve and change. Social networking (e.g. Twitter, Facebook) and Location Based Services (LBS) provide opportunity for application software developers. The objective is to connect people wherever they might be and provide location relevant information and entertainment. Atif identified sensor networks and related apps as a growth opportunity. He cited a machine-to-machine locator capability to find “missing cows” in developing countries like India.
Mr Maitre of Orange told us that smart phones and multi-media messaging were “hot” areas. He identified several mobility issues that need to be addressed:
- Partnerships are either being neglected or not working well. The industry needs to reinvent the way companies cooperate with one another.
- Consider the immense processing power people will have in their hands as semiconductor technology continues to progress. What will smart phone, netbooks and gadget makers do with that processing power? What new apps will evolve to take advantage of it?
- Privacy is a huge issue for the industry. With all the information being exchanged over the air, how will user privacy be protected?
- Speeding up the U.S. patent process to protect IP. It now takes 36 to 39 months to obtain a U.S. patent.
Mr Dilip Venkatachari stated that for most of the developing world, the most practical applications of a mobile phone are voice and simple text messaging. He gave India as an example, where farmers get weather alerts and exchange crop price reports with each other via cell phones. “Everything is linked to payments,” he continued. If the price of the phone service, phone and apps drop, that will stimulate much more demand. He noted that there were already 4B mobile phones in use worldwide.
In the developed world, Dilip said that equipping field personnel with mobile phones was a promising new application space. He cited emerging respondents and health care as important examples.
With the increased adoption of smart phones and apps, what are the issues and opportunities? Here are selected comments from the panelists:
- Nokia says that 100M of the 1B mobile phones sold last year were smart phones, with perhaps 200M smart phones to be sold in 2009. Netbooks are also selling very well.
- Orange says that more netbooks are being sold this year then smart phones.
- Mobile payments- from vouchers or pre-paid plans is a huge issue. Cellular operators should segment users by their needs and payment methods. Scalability of the payment method to accommodate multiple users with different payment plans.
- Life style applications (not identified) were seen to be a very promising area.
- Extended battery life is a huge issue, especially when multiple radios are included in the same phone, e.g. WiFi and cellular.
- 3rd party apps to take advantage of Nokia’s capabilities for hand held devices, e.g. maps, messaging, music, cameras, etc. Apps should be optimized to the device.
- App developers have to choose amongst competing mobile operating systems, e.g. Google’s Android vs. Microsoft’s Windows Mobile vs. Nokia’s Symbian vs Apple iPhone, etc. They had better chose carefully!
- Netbook price will be driven down by the competition between Intel and Qualcomm, resulting in even more demand. Orange and NTT DoCoMo will soon sell a 1G byte Mobile Internet Device (MID) with a built-in phone and 7” or 8” screen. Netbooks and MIDs will create a “new revolution” in wireless connectivity, according to Orange.
What’s the role of mobile network operators now and how will it change in the future?
Today, cellular carriers certify applications, while device makers optimize their devices to certain classes of apps and not others. However, it’s the users and not the carriers that understand and select the mobile apps. The user’s experience will ultimately determine the market for new mobile apps and operators will have to adjust their roles accordingly.
According to Orange, the role and functions of the mobile operator will change markedly by 2014 in order to accommodate the quantum increase in processing power of hand held devices. The operator will need to: protect the identify of the mobile user, bill correctly, provide on-screen information that is needed at the right time and place – safely and securely.
Wireless – Where are the VC’s investing?
During this panel session we heard from five VCs about the hot segments and opportunities in the Wireless Industry. Derek Kerton of the Kerton Group moderated the panel session. The panelists were:
- Shawn Carolan, Menlo Ventures
- Ajay Chopra, Trinity Ventures
- Scott Raney, Redpoint Ventures
- Janice Roberts, Mayfield Fund
- Richard Wong, Accel Partners
Here are a few of the questions considered by the moderator and the panelists:
- Are devices the enablers or are mobile apps the differentiators?
- Apps, Smart Phones (Rich Client) apps or SMS based apps?
- Native or web browser-based?
- If devices, what types? Integrated feature packed or targeted low cost?
- A look ahead to provide a sense of where VCs see opportunity for growth and where the bets are being placed e.g. Applications vs. Infrastructure, LBS and Social Networks, consumer Internet vs mobile enterprise?
- Mobile messaging (SMS) continues to be the “killer app.” The “bread and butter” mobile apps continue to be mobile messaging, and teleNavigation (turn by turn directions). Gaming is coming on strong as another “legacy” app.
- A lot of new apps have been developed in the last 12 to 18 months. It makes sense to aggregate many of these apps into a package and scale them to the appropriate distribution model.
A few data points expressed by Ms. Roberts of Mayfield:
- Business models are lagging far behind innovation, e.g. mobile browsers, video and LBS’s.
- It’s difficult to identify vertical markets and properties for mobile apps.
- A portfolio of “bundled” apps might be interesting.
- More opportunities in wireless infrastructure, as carriers move to more open and less proprietary platforms to deliver mobile services.
- The applications running on open platforms may not be hosted by the carriers.
- No hot companies have been identified for new investments.
Apps and app stores: The biggest change in the mobile world has been the large number of new companies that have “sprouted up” in bursts to provide apps for the iPhone and Android platform. The companies get a “proof of concept” via app stores. New entrepreneurs are looking at enhancing user experiences on the “consumer Internet,” as users have gotten much more “Internet savvy.” Many of the entrepreneurs starting these new companies are moving quickly to make money from app stores- a great new distribution channel.
Richard Wong of Accel Partners said there was a new surge of opportunities in wireless backhaul. Today, the average cell size has a backhaul capacity of only five T1 circuits, which will need to be significantly upgraded to accommodate the increase in mobile data traffic. Mr. Kerton noted that backhaul is front and center on the cellular carrier’s radar screens. But what about the cellular access network?
How will cellular carriers solve the bandwidth bottlenecks in their access networks due to the exponential increase in mobile data traffic from smart phones, notebooks and netbooks? Richard Wong of Accel Partners provided his prescription:
- Cell splitting- reducing the cell radius so there are likely to be fewer users per cell. Distributed Antenna Systems (DAS) were being used for this.
- Move to more spectrum efficient network technologies based on OFDM/OFDMA, e.g. WiMAX or LTE
- Block certain types of traffic or meter traffic to limit bandwidth hogs
- Move some of the data traffic to WiFi premises networks (but WiFi radios and interfaces consume a lot of power which decreases hand held device battery life)
- Use a separate network to carry broadcast video traffic
Author’s Note: At the April 19, 2009 Telecom Council meeting on Wireless Infrastructure, Qualcomm and others suggested that network topology changes could be exploited to improve mobile network capacity. Femto-cells were seen as one way of taking traffic of the cellular network and placing it on the (mostly wired) broadband access network.
What business models and new products/ services have potential? What are the key unresolved issues? Here are a few suggestions:
- “Mobile game town” has been successful in Japan. That model can be used to establish virtual goods and virtual communities on the mobile Internet.
- Mobile advertisements- still an experimental area. Carriers don’t want to inundate users with irrelevant information. The key question is how to monetize mobile advertising?
- Success of netbooks, especially amongst college students should be exploited. Mobile operators may sell netbooks like they sell phones and handhelds.
- Licensing apps vs. subscription model for aggregated apps needs to be sorted out.
- Location based social networking for iPhone and Android is a huge potential opportunity.
- Combining voice recognition technology with maps also has potential.
Will open access change anything (vs. the “walled garden” approach of the cellular carrier controlling all apps and devices on the network). It hasn’t really happened yet, according to the panelists. For instance, AT&T blocks Skype use on the iPhone and also blocks Sling Media over its cellular network. Perhaps cellular networks will be truly open when devices based on Google’ Android platform are in more widespread use.
Conclusion:
We are in the early stages of mobile networks that are in transition: from cellular networks that adequately support voice, text messaging and email to mobile broadband data/ video networks that also support voice. This will be a big challenge for incumbent network operators and a huge opportunity for quick and nimble new players
11 replies on “Mobility in the Spotlight at TiEcon 2009 Wireless Sessions”
Great article, Alan. Interestingly, I reviewed the first draft of the article on my Gphone while at stop lights on a way to a dinner with friends. I discovered that Android’s “cupcake” now supports rendering of MS Word documents (at least when sent as an attachment in Gmail).
Once at the dinner, a discussion ensued regarding the movie “Transformers”. My friend used his Blackberry mobile phone to access his NetFlix account so he could add it to his play list. Using his Blackberry, he played a trailer of the movie from the site to verify he had identified the right movie.
The point is that the mobile technology is being integrated in everyday life in ways I certainly wouldn’t have imagined just a few short years ago.
I wonder how location based technology will be integrated with new mobile apps in the future. It would be useful to find the location of various family members when you dialed their cell number or when they were calling you. This could be an adjunct to caller ID service. But would this be an invasion of privacy?
Besides voice calls, I use my cell phone for texting and as a camera. I can send the photos I take via email to my friends and family. As I am not addicted to email or web browsing, I do not use my mobile for those apps. I think too much emphasis is placed on adding bells and whistles to new mobile phones. There aren’t enough practical applications to justify all the hype.
Regarding “practical applications,” how about roaming agreements in rural areas? Last weekend, Caridad and I drove to my cabin in Blue Lake Springs, CA (adjacent to Calaveras Big Trees State Park). The only cell phone service that works there or in the nearby town of Arnold is from VZW. There are no roaming agreements with any other wireless carrier.
On Saturday, we drove to Lake Alpine and Mosquito Lake. Although both lakes were unfrozen/thawed, there was plenty of snow around the lakes. Caridad took several photos on her Samsung Camera Phone. If anyone like to see them please send me email. Caridad could not email the photos at that time, because no cell phone service was available- not even in nearby Bear Valley, where the library had DSL based Internet access.
[Editor’s Note: Chetan Charma was the moderator of “Wireless Monetization” session at TiECON on May 16th in Santa Clara]
Slowly but surely, mobility is becoming pervasive across industry verticals. Mobile Health looks very promising and the impact could be global.
After selling over 100M units for seven straight quarters, Nokia slipped to 93M handsets in Q109, still more than the next three players combined but an 18% drop from Q408 nevertheless. Samsung and LG have been really gaining on their rivals in the past year and are now at #2 and #3 respectively. Motorola and Sony Ericsson with 6% share each round up the top five. While Apple has been stealing all the press, RIM upped the ante by claiming leadership in the smartphone wars by outselling Apple in the first quarter of the year.
The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband – metered billing, UMA, Femtocells, Hotspot buys, WiMAX, LTE, and others.
Rest of 2009 is eagerly awaiting the release of Palm Pre, several Android handsets from HTC, Samsung, Motorola, and others, Windows devices along with follow on of Danger devices, new model(s) of iPhone, and other touch screen devices.
Not surprisingly, Venture money in the mobile sector experienced a rapid decline. Compared to Q108, venture financing declined by 58%. (Source: Rutberg).
In a sign of convergence battles to come, T-Mobile’s @Home and various Femto cell initiatives are taking hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service.
Thanks for this excellent article and great comments. What a pleasure to read unbiased commentary without infomercials or hidden agendas.
I think the greatest challenge for cellular network operators is re-engineering their networks to cope with the coming onslaught of mobile data traffic from smart phones, netbooks, notebooks, and new gadgets (e.g. video camera with a wireless Internet/email interface).
Another issue is power consumption/battery life of multi-mode phones (“WiFi is a power hog”).
Corroboration of previous comment about cellular operators NOT prepared for the increase in mobile data traffic from smart phones:
“AT&T network not ready yet for all Apple iPhone 3G S functions”
AT&T’s wireless network is having a hard time keeping up with the Apple iPhone, a top wireless analyst says.
That’s the reason AT&T (T) isn’t offering multimedia messaging and “tethering” options for the new $199 iPhone 3G S — lack of network juice, says Roger Entner, head of telecom research for Nielsen.
When the iPhone 3G S was unveiled last week, Apple (AAPL) said it would offer both those features. “Tethering” allows a wireless device to serve as a broadband modem to provide over-the-air support for laptops, PCs and the like. Multimedia messaging, or MMS, enables users to attach video clips, audio files, pictures, etc. to text messages.
http://www.usatoday.com/tech/news/2009-06-16-iphone-att-3gs_N.htm
IBM to invest $100m in mobile communications R&D
IBM plans to invest $100m over the next five years in wireless projects, mainly targeted to the wireless enterprise and to emerging markets.
IBM R&D recently identified six main research areas for the next five years, and mobile communications is the seventh, joining services quality, nanotechnology, business analytics, cloud computing, hybrid systems and stream computing. Within mobility, there are three main elements that IBM believes it can turn into real world products and services in the short to medium term, creating new revenue streams.
These are mobile enterprise enablement, emerging market mobility and enterprise-to-end user mobile experience. In the first category, IBM is looking at how the phone is taking on the role of the PC and its first concrete project, in collaboration with an insurance firm, combines GPS, presence technology and a calendar database to identify and dispatch claims adjusters in the field and update the files on their phones.
For emerging markets, the key focus is on new web interfaces and applications to make it easier for people to use the internet even when they have no technical experience or limited literacy. A pilot program in southern India has created a voice community database for farmers and others to retrieve messages and access data using voice.
For the last focus area, IBM’s aim is to “inject mobility into every transaction or relationship a business has with its customers, employees and partners” for applications such as mobile marketing and analytics.
Intel gets the mobility message:
From Moorestown to WiMax, mobile technologies have clearly become the new favorite for the semiconductor giant. An Intel group in Portland, for example, collaborated with a group of independent companies to make the 802.16m wireless standard 40% more efficient at handling voice-over-IP calls.
That seemingly esoteric trick will make Intel-built WiMax chip products better able to tackle the mundane task of transmitting phone calls over IP-based networks, something pretty handy in a mobile device.
Another Intel team is working on building better links between mobile devices and set-top boxes and televisions, which will allow users to control their set-top boxes with voice commands or take a movie they were watching on their television and slide onto their mobile device screen as they walk out the door.
Yet another group is working on ways to charge mobile devices wirelessly, a neat trick that would let you charge the smart phone in your pocket while lounging in the living room–no wires needed.
The future is moving in swiftly: Moorestown’s power-management technologies are expected to be rolled out commercially this year, though other innovations will take longer.
http://www.forbes.com/2009/06/18/intel-future-apple-technology-breakthoughs-moorestown.html
But when all is said and done, Mobile WiMAX has not yet succeeded as a mobile network. And it won’t succeed unless there are many mobile devices. Whatever happened to “the Internet in Your Pocket” and WiMAX MIDs? Once the devices become popular, apps will be developed, e.g. music streaming, mobile video, camera photo uploads, etc.
Intel’s Mobility Message Does NOT include Mobile WiMAX
Intel and Nokia Announce Strategic Relationship to Shape Next Era of Mobile Computing Innovation
http://www.intel.com/pressroom/archive/releases/20090623corp_b.htm?iid=pr1_releasepri_20090623rb
SANTA CLARA, CALIF., and ESPOO, FINLAND, June 23, 2009 – Further uniting the Internet with mobile phones and computers, Intel Corporation and Nokia today announced a long-term relationship to develop a new class of Intel® Architecture-based mobile computing device and chipset architectures which will combine the performance of powerful computers with high-bandwidth mobile broadband communications and ubiquitous Internet connectivity.
To realize this shared vision, both companies are expanding their longstanding relationship to define a new mobile platform beyond today’s smartphones, notebooks and netbooks, enabling the development of a variety of innovative hardware, software and mobile Internet services.
Taking advantage of each company’s expertise as leaders in their respective fields, these future standards-based devices will marry the best features and capabilities of the computing and communications worlds and will transform the user experience, bringing incredible mobile applications and always on, always connected wireless Internet access in a user-friendly pocketable form factor.
The Intel and Nokia effort includes collaboration in several open source mobile Linux software projects. Intel will also acquire a Nokia HSPA/3G modem IP license for use in future products.
The companies expect many innovations to result from this collaboration over time.
“This Intel and Nokia collaboration unites and focuses many of the brightest computing and communications minds in the world, and will ultimately deliver open and standards-based technologies, which history shows drive rapid innovation, adoption and consumer choice,” said Anand Chandrasekher, Intel Corporation senior vice president and general manager, Ultra Mobility Group. “With the convergence of the Internet and mobility as the team’s only barrier, I can only imagine the innovation that will come out of our unique relationship with Nokia. The possibilities are endless.”
“Today’s announcement represents a significant commitment to work together on the future of mobile computing, and we plan to turn our joint research into action,” said Kai Öistämö, Executive Vice President, Devices, Nokia. “We will explore new ideas in designs, materials and displays that will go far beyond devices and services on the market today. This collaboration will be compelling not only for our companies, but also for our industries, our partners and, of course, for consumers.”
Open Source Software Collaboration
The effort also includes technology development and cooperation in several open source software initiatives in order to develop common technologies for use in the Moblin and Maemo platform projects, which will deliver Linux-based operating systems for these future mobile computing devices.
The companies are coordinating their Open Source technology selection and development investments, including alignment on a range of key Open Source technologies for Mobile Computing such as: oFono*, ConnMan*, Mozilla*, X.Org*, BlueZ*, D-BUS*, Tracker*, GStreamer*, PulseAudio*. Collectively, these technologies will provide an open source standards-based means to deliver a wealth of mobile Internet and communication experiences, with rich graphics and multimedia capabilities.
Hosted by the Linux Foundation, Moblin is an optimized open source Linux operating system project that delivers visually rich Internet media experiences on Intel® Atom™ processor-based devices including MIDs, netbooks, nettops, in-vehicle infotainment (IVI), and embedded systems. For more information see http://www.moblin.org.
Maemo is a Linux operating system, mostly based on open source code and powers mobile computers such as the Nokia N810 Internet Tablet. The Maemo platform has been developed by Nokia in collaboration with many open source projects. For more information see http://www.maemo.org.
Enabling common technologies across the Moblin and Maemo software environments will help foster the development of compatible applications for these devices – building on the huge number of off-the-shelf PC compatible applications. The open source projects will be governed using the best practices of the open source development model.
Intel to License Nokia’s HSPA/3G Modem Technologies
Building on today’s announcement, Intel and Nokia have signed an agreement that will enable Intel to license Nokia’s HSPA/3G modem technologies with the aim of developing advanced mobile computing solutions that deliver a powerful and flexible computing experience – combining the best-in-class 3GPP modem technology with the high performance and low power consumption of future Intel Architecture-based platforms.
Intel supports multiple mobile broadband standards on its platforms to address the needs of service providers worldwide, and to provide people with an always-connected experience.
The Nokia modem license complements Intel’s broadband wireless technologies and will enable the company to extend chipset solutions incorporating Nokia’s modem technologies across its mobility offerings in the future.
Nokia is continuing to develop its leading modem technology, which includes protocol software and related digital design for the full suite of 3GPP standards through WCDMA/GSM and its evolution, and then licenses the technology to chipset manufacturers to develop and produce chipsets for device manufacturers.
Nokia’s licensable modem technology is the trusted connectivity choice, providing credible and reliable options for the industry based on Nokia wireless modems’ embedded history and experience. The Intel license of Nokia’s modem technologies is another step in executing Nokia’s chipset strategy to create multiple, competitive chipset choices to the industry.
Another interesting point not mentioned in this press release is the that Microsoft is nowhere to be seen in this Intel announcement. Could these mobile devices and the open source operating systems, such as Maemo and Android start to accelerate a shift from Microsoft’s domination in the PC world, as people increasingly use Mobile devices to do things that would have required a PC a few years ago?
I think Ken’s observation is right on target. Mobile computing devices, e.g. smart phones, MIDs, all-in-one gadgets will replace a lot of things we do today on PCs. Mobile Linux- one of the three focus areas for Intel-Nokia – is a direct competitor of Windows Mobile. Hence, Microsoft’s domination of the OS market may not extend to mobile computing devices.
Separately, this Intel-Nokia partnership could cause Intel to lose focus on mobile WiMAX- a networking technology that still hasn’t gone mobile (see my Oct 2006 post: Will the Real Mobile WiMAX Please Stand Up!). Intel has licensed Nokia’s 3G-HSPA technology for use in future chip sets targeted at mobile computing devices, e.g. MIDs. As such, it could be the death knell for mobile WiMAX as so very few native mode devices have been announced to date. It looks like “the Internet in your pocket” will be 3G-HSPA and not Mobile WiMAX!