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New apps and smart phones to drive demand for 4G mobile networks

We now believe that smart phones and "all-in-one" gadgets will drive the need for more bandwidth and QOS and accelerate mobile network movement to 3.5G (EVDO, HSPA, mobile WiMAX, etc) and 4G (LTE and Advanced WiMAX- IEEE 802.16m).

UK research firm Mobile Squared reports that Apple to hit 1 billion app downloads on April 23rd!  Please see:

http://www.mobilesquared.co.uk/?p=593

They observe that the number of downloads from App Stores is growing exponentially: Apple is now experiencing average daily downloads of 5.1 million apps and requires another 38 million apps to reach 1 billion. At this download rate, the billion mark will be surpassed in a few days. At the start of December Apple announced that it has passed the 200 million download mark. And this was promptly followed by a similar announcement of 500 million downloads by January 19th.

We would expect to see the same growth from other smart phone and "all-in-one" gadget makers (e.g. RIM, Palm, Nokia, etc) who have started their own on-line app stores.

Many of the new apps will require massive amounts of bandwidth, e.g. video sharing, multi-media conferencing, interactive games, Video on Demand, real time broadcast video, Location Based Services, etc. The amount of bandwidth and real time, rich media content demanded by smart phone users will necessitate the need for new mobile networks with higher bandwidth and QOS.

And it appears that more powerful iPhones are just around the corner.  The San Jose Mercury reports: Speculation grows over new Apple products

"Kaufman Bros. analyst Shaw Wu, in a recent note to investors, wrote that Apple could be ready to release a new iPhone packed with a powerful application processor to run more complex software. And Wu anticipates improvements to the device’s battery, which does not last much more than a day during heavy use."

http://www.mercurynews.com/businessheadlines/ci_12167258?nclick_check=1

and here is more proof:

Apple’s App Store: a rapidly growing marketplace

http://www.mercurynews.com/ci_12037710?IADID=Search-www.mercurynews.com-www.mercurynews.com

Implications::

The big problem for network operators is that bandwidth and need for QOS is exploding, while revenues are increasing at a much slower rate. Hence, revenue producing services must be developed and come to market quickly for operators to get a decent ROI on their investments in next generation mobile broadband networks.

Smart phones and all in one gadgets will likely dominate the 4G mobile hand held market (that does not include netbooks and tablet PCs). We see little room for MIDs that do not have voice, conferencing or LBS capability.  The functions envisioned for MIDs will likely be built into smart phones and multi-purpose gadgets (e.g. web based cameras).

Perhaps, the notebook and netbook PC user will be content with nomadic/ portable Internet access and related services (either from WiFi hot spots or WiMAX with USB dongles). The exception is Internet access in high speed trains, e.g. in Japan and Taiwan. In those cases, mobile WiMAX networks are being planned for notebook and netbook users.

Author Alan Weissberger

View all posts by Alan Weissberger | Website

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5 responses to “New apps and smart phones to drive demand for 4G mobile networks”

  1. Alan Weissberger Avatar
    Alan Weissberger

    Here is corroboration of the main message of this article:

    CTIA keynote: 4G needed to avoid wireless network overload

    The surge in popularity of mobile applications and smartphones is resulting in significantly greater data consumption, which could soon push existing wireless networks to their limit.

    From 2005 to 2012, mobile traffic will have increased a thousand-fold, according to a keynote address at the CTIA Wireless 2009: Mobile Life conference. A Cisco white paper predicted that usage on wireless networks would double every year for the next several years, potentially multiplying 66 times between 2008 and 2013.

    http://www.mobilemarketer.com/cms/news/software-technology/2972.html

    Reply
  2. Alan Weissberger Avatar
    Alan Weissberger

    WiMAX vs LTE: Lower WiMAX device cost should give it an advantage over LTE. Here is a quote from an Instat analyst: “An integral part of the WiMAX strategy has been to keep the intellectual property licensing costs low for devices. This keeps the overall cost of WiMAX-enabled devices low, which encourages vendors to add WiMAX capability to their devices. When prices are low, that reduces the risk factor for consumers and encourages them to try it. In Baltimore, users can get a WiMAX USB modem for $59.99 without signing a service contract. A similar 4G modem on Verizon Wireless, using LTE, would cost $239.99 without a service contract.

    With this strategy the WiMAX device roadmap will look like the Wi-Fi roadmap: WiMAX-enabled laptops and data devices will come first, followed by consumer electronics. Where Wi-Fi is today, WiMAX should be in the future.”

    http://gigaom.com/2009/04/25/wimax-can-win-%E2%80%94%C2%A0if-its-not-playing-against-cellular/

    Reply
  3. Alan Weissberger Avatar
    Alan Weissberger

    Pyramid Research says Mobile Broadband Will Trigger Fixed/Mobile Convergence

    Mobile broadband services will trigger fixed/mobile convergence as it becomes increasingly necessary to remain competitive in emerging markets, according to the latest report from Pyramid Research (www.pyr.com), the telecom research arm of the Light Reading Communications Network (www.lightreading.com).

    Mobile Broadband Computing Services: Complement or Substitute for Fixed Broadband examines mobile broadband services enabled by 3G and WiMax networks on a global, regional, and market-by-market basis. Focusing on service plans offered for computing devices, this 111-page report assesses the positioning of mobile broadband computing relative to fixed broadband alternatives. Our tested framework promises to help identify the most efficient strategy for building revenue and sustaining market share in both competitive developed markets and low-income emerging environments. We also provide a five-year outlook on mobile broadband computing trends, including subscriber numbers, penetration levels, and revenue expectations on a market, regional, and global basis.

    Pyramid expects fixed broadband to grow at a CAGR of 9 percent from 2008 to 2014, whereas mobile broadband computing will grow about three times as fast, totaling $69 billion by 2014 – 30 percent the size of fixed broadband, notes Daniel Locke, Senior Analyst at Pyramid Research and co-author of the report. “In the medium term, developed markets such as North America will rake in the most revenue from mobile computing services, considering that operators have earmarked significant investments for HSPA+, WiMax, and LTE networks,” he says. “In mature markets, mobile broadband networks can complement the fixed networks to ensure the best, ubiquitous connectivity, but more importantly, they can be the solution to the digital divide,” he adds.

    “In contrast, mobile broadband networks promise a wider reach and, thus, a larger addressable market in emerging markets, enabling mobile broadband access services to effectively compete with fixed broadband,” Locke says. “In many emerging markets, especially India, Africa, and the Middle East, HSPA and WiMax networks deliver geographic coverage that will not be matched by wireline infrastructure in the foreseeable future,” he adds. “The lack of coverage in emerging markets and rural areas of developed markets also puts 3G and WiMax as obvious choices for receiving broadband service.”

    Although service pricing remains a barrier to adoption, Pyramid expects declining prices and a large variety of prepaid plans to boost take-up over time in emerging markets. Furthermore, in developed markets, 4G technologies such as LTE and 802.16m will eventually support the capacity to provide high-bandwidth applications that will give fixed broadband customers enough reason to switch to mobile service.

    Mobile Broadband Computing Services: Complement or Substitute for Fixed Broadband is part of Pyramid’s research report series. A blend of primary research and qualitative analysis, Pyramid’s research reports offer comprehensive coverage of the fixed and mobile communications space and enable those in the communications industry to stay ahead of changing market dynamics.

    Reply
  4. Alan Weissberger Avatar
    Alan Weissberger

    Market research firm Juniper Research stated this week that direct and indirect revenues from mobile applications will hit more than $25bn by 2014. Juniper said that, while the majority of app revenues today are accrued from one-off downloads, the increasing use of in app billing will enable incremental revenues from additional content and value added services (VAS) providing the dominant revenue stream by 2011.

    Juniper also believes that many Tier 1 operators would seek to deploy their own app stores in a bid to maintain content revenue share, however, the researcher believes that in the longer term, the greatest benefits to operators would be derived from data revenues associated with app usage rather than from the retail price of apps and content – as long as operators rejected the walled garden approach.

    Reply
  5. Alan Weissberger Avatar
    Alan Weissberger

    We strongly believe that today’s wireless networks will not be able to cope with the coming bandwidth explosion that will result from increase use of mobile data and video applications. In our opinion, there are several areas of the network that will have to be upgraded (and possibly augmented by usage restrictions) if mobile data grows anywhere near what Cisco predicts for the ‘Zettabyte Era’ :

    1. Access networks will have to be re-organized to use pico cells, Distributed Antenna Sysems (DAS), or equivalent user segmentation scheme for efficient spectrum re-use within a given metro area.

    2. Many networks will still be congested during periods of heavy video and multi-media downloads/ uploads or streaming. In that case, the operator will have to meter service or even restrict/ block certain apps, e.g. AT&T blocks Sling Box video to handsets.

    3. The other choice is to upgrade the mobile access network to an OFDM/OFDMA wireless access technology like WiMAX or LTE. . Those networks use spectrum more efficiently and have enhancements like MIMO that further contribute to better utilization.

    Problem with this is that it takes a lot of capital to build out a new infrastructure. Further, mobile LTE is a lot farther from being commercially realized then most people expect. That leaves mobile WiMAX as a viable option, but………..???????

    4. Both local and metro backhaul segments will need to be upgraded. The current average cell backhaul is equivalent to only 5 x T1’s and it must be increased in accordance with the volume and bandwidth of traffic in the access network. Microwave backhaul is the solution for local backhaul and will compete with fiber (where available) for metro and longer distance backhaul.

    Reply

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