Mobile Sands

February 26, 2009

Verizon’s LTE Rollout – Lessons from CDMA

Filed under: 3G, LTE — Tags: , , , , , , , — AJ @ 5:58 am

There is lot of speculation in the press, among analysts and in the blogosphere about the timing of Verizon’s LTE deployment. This is unfortunate considering that Dick Lynch has actually provided very clear guidance.  In his interview with Sue Marek of FierceWireless he said, “…when we launch we will do what we did with 1xEV-DO and 1XRTT…” 

Verizon, under Dick Lynch, has been remarkably consistent in its process for deploying new air interface technologies. If one digs through years of Verizon press archives, one will find that Verizon’s EV-DO rollout followed the same process as its 1xRTT rollout.  At both those occasions and now, Dick Lynch was at the helm and we should not expect anything different for LTE.

As in EV-DO, Verizon has initially selected two vendors for LTE.  For EVDO, these two vendors were Lucent and Nortel. For LTE, it is Alcatel-Lucent and Ericsson. This does not mean that Verizon will not have a third vendor.  In EV-DO, the third vendor was Motorola, and as Dick said in his FierceWireless interview, “The rest of the vendors will have another opportunity in the future. We will go out again in mid-2010 and look for vendors for the next wave of the coverage”.

As in EV-DO, each LTE vendor has been assigned one city that each is expected to get on the air in 2009. For EV-DO, Nortel had San Diego while Lucent had Washington DC.   Once the two cities are on the air, each vendor will be expected to work out all the kinks in its products, a process well known in the industry as “First Office Application (FOA)”. A FOA can take anywhere from 3-9 months, depending upon the complexity of the system and the quality of the vendor’s product.

Once FOA is complete for LTE systems, either by the end of 2009 or in early 2010, Verizon is saying that it will start building out a sizeable national footprint.  In the EV-DO case, Verizon announced its decision to start building a national footprint in January 2004. Within 9 months, Verizon had launched EV-DO service in 14 metropolitan areas and by Aug 2005,  it covered 52 metropolitan areas.  All these services were launched using EV-DO data cards.  If Verizon’s LTE vendors can wrap up their FOA by Q1’2010, expect Verizon to at launch LTE data cards in dozen or so markets by Q3 or Q4 of 2010.

The other key player whose actions determine the pace at which Verizon can roll out LTE services is QUALCOMM. Verizon cannot launch an LTE handset (smartphone) unless this handset supports both 1xRTT and EV-DO. It needs 1xRTT to support all the legacy voice features (tough to replicate on IMS) and needs EV-DO for data service wherever there are LTE coverage holes. QUALCOMM is the only company that can build a dual-technology LTE/CDMA chip, and it is doing just so. On Feb 16th, Qualcomm introduced its MSM 8960 3G/LTE chipset, and said that this chip will sample in mid-2010. Since handset vendors need at least 12 months from the date Qualcomm samples its chipsets, to build a commercial device, one should expect the first dual-mode CDMA/LTE handset to reach the market in Q3’2011.

To summarize:

  • Verizon is likely to light up two cities with LTE in 2009 and have meaningful national footprint in 2010. They have a playbook for large scale wireless rollouts and they seem to be following it.
  • There will be no LTE handsets/smartphones in 2010,  just data cards. Therefore, Verizon will continue to add capacity to their CDMA network at least till the end of 2010.
  • Expect CDMA/LTE handsets to reach the market in Q3’2011. 

February 25, 2009

White Space Spectrum Gone Missing? Just 1 Vacant Channel in LA, NY and SF

Filed under: white space — Tags: — AJ @ 3:51 pm

Opening TV White Spaces is supposed to bring us “WiFi on Steroids” . Really?

In one my previous posts, I had argued that the amount of white space spectrum available (as currently defined in FCC’s NPRM) is just not sufficient for wireless ISPs to launch services in urban areas.  But I was still optimistic about the use of white space spectrum for consumer electronics applications. So, when Spectrum Bridge launched a web-based tool to show the white space spectrum available at any location, I decided to use it to find the number of “white space'” channels available in downtowns of 6 major metro areas.

Here are the results:

  • Boston (@62 Boylston St): 5 channels
  • Chicago (@ N Michigan Ave): 9 channels
  • Dallas (@901 Main Street): 2 channels
  • Los Angeles (@138 S Central Ave): 1 channel
  • New York (@ 1460 Broadway Ave):  1 channel
  • San Francisco (@1298 Howard St): 1 channel

If Spectrum Bridge’s database is correct, it means that just one channel is available in downtown LA, NY and SF – three of the largest metro areas in the US.  This severly limits the use of white space spectrum for consumer electronics applications like home networking or in-home video distribution. Even a few towns/cities like LA, NY and SF are sufficient to increase return rate on a consumer electronics device by a few percentage points, which is terrible for the profitability of the product line.  Remember that white space devices also need geo-location capability as well, and they need to compete with mature 802.11 b/g/n devices. Overall, not great for the backers of CogNea standard (see recent press release from GeorgiaTech about goals of this alliance) or startups that want to enter this space.

February 21, 2009

Android Market’s Return Policy Will Discourage Developers

Filed under: Android, App Store, iPhone, New business models, Ovi, Smartphones — AJ @ 5:03 am

Looks like Android team did not see PinchMedia’s presentation on “iPhone AppStore Secrets” before publishing Android Market Business and Program Policies that allow buyers to return an app within 24 hours of purchase! 

PinchMedia is a New York based company that provides app developers with an analytics library to monitor usage. 30 million of the over 500 million downloads from Apple’s store had their analytics software. The numbers collected by PinchMedia show that less than 30% of people who paid for an app used it after 24 hours.  This is not surprising considering that the average number of apps downloaded per iPhone exceeds 30. Those who did not use an app 24 hours after buying it effectively got suckered, but considering that most apps are priced around $0.99, looks like many consumers don’t mind doing a paid trial.  And if you are a developer burning the midnight oil, paid trials rock.

No one gets paid trials in the Android Market (are paid trials evil?).  So once buyers realize that the new fart app (or the advanced tip calculator app) is’nt any more useful than the one they already have, they return it.  This no questions asked return policy will definitely increase the number of paid applications trialed, but is it good for developers?

I don’t think so. The folks at Google could argue that “no-questions asked” returns leads to happier customers.  But will these happier customers pay more for apps on the Android Market than they do on Apple or Nokia’s stores? Unlikely. With a few exceptions, two apps that do approximately the same thing will be priced at approximately the same price in different app markets.

If the average retun rate on Android turns ends up being 75%,  a developer will need four times as many downloads on the Android Market than it  gets on the Apple’s store to make the same amount of money.  That may happen someday, but for now, developers are better off creating paid applications for Apple and Nokia’s Ovi (Symbian) stores.  And I hope the folks at RIM do not follow Android’s path while creating the Blackberry Store.

February 19, 2009

Verizon’s LTE Announcement at MWC Barcelona

Filed under: 3G — Tags: — AJ @ 4:09 am

Verizon’s CTO, Dick Lynch, laid out his company’s LTE plans at Verizon’s first ever Mobile World Congress (aka 3GSM) keynote.  Verizon has now posted his slides on its website.

Key points from the presentation (and subsequent interview with Fierce Wireless)

  • 2009 is the year of pre-commercial LTE trials in the US. No commercial LTE service will be offered in 2009
  • Sizeable footprint in 2010.  PC cards and embedded modules (M2M) expected to be main devices
  • Complete nationwide LTE network by 2015
  • Dick is extremely bullish on wireless data
  • Pace of LTE deployments will be very similar to 1xRTT and 1xEV-DO
  • 3G (i.e. 1x and EV-DO) to stay in network for another 10 years
  • Ericsson and Alcatel-Lucent win RAN business (often >70% of cap-ex)
  • Packet core divided between ALU, Ericsson and Starent
  • IMS divided between ALU and Nokia Siemens Networks (NSN)

I will write a longer post  (using publicly available material) on why Verizon is taking the lead in LTE and how Verizon’s 1xRTT and EV-DO rollout were done. 

There is fair amount of discussion in the press on winners (ALU, ERICY) and losers (NSN, Huawei, Nortel, Motorola). In my subsequent post, I will add my few pennies to the debate as well.

February 17, 2009

Dividing the Mobile Apps Pie – Nokia, Apple, Google, RIM and others

Filed under: App Store, eBooks, Mobile Apps, New business models, Ovi, Smartphones — Tags: , , — AJ @ 3:45 am

Dividing the Pie – Ovi Style

Nokia launched it Ovi mobile application store today.  I read the developer agreement posted on Nokia Ovi’s website.  Like Apple:

  • Nokia is offering developers 70% of the selling price, less applicable taxes.  
  • Nokia has the right to review all applications and decide which applications get published
  • Nokia will not distribute applications that compete with Ovi (so don’t expect an Amazon Kindle store here!)

Nokia allows “Operator Biling”

However, unlike Apple, Nokia plans to offer operator billing.  This is a huge differentiator for Nokia and clearly one of the things they are uniquely qualified to do. With this option, customers who do not have credit cards or who have do not want to be bothered with entering their credit card information, can still buy applications. This can significantly increase the market size of apps, particularly in the developing world, and on low/mid-end phones.

However, from a developer’s standpoint – there is one catch in operator billing. With this option,  a developer does not get 70% of the selling price, but 70% of what the operator gives Nokia.  It allows operators to potentially get a very large cut of the mobile app revenue by mandating operator billing as the only acceptable payment method.  

Nokia and Apple vs. RIM and Google

In comparison to Nokia (and Apple),  Android and Blackberry offer more attractive terms – to both operators and developers.

Palm, Samsung, PocketGear and Handango

The cut taken by Apple, Nokia, RIM and Google pales when compared to the 50% that Palm is asking. Palm uses PocketGear (previously part of Motricity) to run its app stores.  Since Samsung is using PocketGear as well, I expect them to offer the same deal. 

Of course, the revenue share offered by all the phone vendors is better than the 70% that Handango charges developers who have sales over a million dollars! 

Microsoft’s Plan?

Microsoft  has not  disclosed  how the pie will be shared on Windoes Mobile Marketplace. Going by Microsoft’s record, I would expect their revenue share plan to resember Nokia’s or Apple’s rather than Google’s. 

And of course, we will just have to wait and see what Vodafone and China Mobile have up their sleeves!

February 13, 2009

An Amazon App Store?

At MWC next week, Nokia, Samsung and Microsoft are expected to either showcase their mobile application marketplaces (“app stores”) or at least share detailed plans regarding them. Google has announced that its Android marketplace will start supporting paid apps next week. Blackberry  and Palm have already joined the race to build app stores. The one company that has every right to be in race, but has been conspicuously quiet is Amazon.

An “App Store” is a store

Handset vendors rushing to emulate Apple’s success may be forgetting that Apple was one of the world’s leading online retailers of digital content – long before it launched iPhone or its App Store.  Apple, in fact, launched iTunes “jukebox” in Jan 2001, 10-months before the first iPod hit the market.

Apple’s experience in selling music and video online is evident in the way it organizes mobile apps in the iTunes store, from creating top-10/top-50 lists in a wide range of categories to highlighting notable new apps and providing automated and staff recommendations.  Consumers have shopped with iTunes for years. How many handset companies have this kind of expertise?

So, why not partner with Amazon?

In coming years, for a handset to succeed, it will need a rich set of applications. People will not only buy a handset for how it looks or what it costs, but for what it does. Applications will be source of stickiness for both handset vendors and operators. Operators and handset vendors who will not have access to a large ecosystem of application developers will lose subscribers, market share and profits. See my previous post comparing Verizon and AT&T’s performance in Q4’2008.

Not only is Amazon trusted by millions of consumers and has the technology to sell in a compelling manner, but it also has demonstrated that it can succeed in selling digital content. It started a digital music store in Sept 2007 that, in 14 months, became the #2 digital music store. Still far behind Apple, but way ahead of Microsoft. With Kindle, it has shown that it can not only sell lots of DRM-free MP3, and but also work with a large number of publishers and create a profitable, new market.  Can Nokia claim such success with N-Gage?

I am all for the creation of mobile application marketplaces and wish that the new entrants succeed. I just have a nagging feeling that these attempts will look similar to the attempts of dozens of bricks-and-mortar retailers to enter the online retail business in mid-1990s.

Place in the sun for Third-party App Stores

Thankfully, all handset-platform vendors other than Apple are allowing third-parties to create marketplaces. This has allowed companies like Handango and PocketGear to be built, and is allowing Samsung to launch an app store. This keeps the doors open for Amazon to build an app superstore in the future, or for other customer-focused niche marketplaces (think Zappos) to appear.


February 10, 2009

Marvel creates comic books that speak, but what about comics that let you speak?

Filed under: eBooks, games, iPhone, Mobile Apps, Smartphones — AJ @ 7:02 pm

Comic books that speak

 According to a story on RWW, Marvel plans to release a series of “motion comics” via iTunes.  As the Marvel-produced video on RWW shows, motion comics are a hybrid between animation movies and comic books.  It is an innovative use of smartphone platforms, and an improvement over the iPhone comic books and Manga, such as ones offered using iVerse Comics reader, that use traditional panels with balloons.  Marvel’s motion comics actually reminded me of an iPhone children’s book called “Buddy the Bus” created by iOrbi (using its AppInHand software), though Marvel’s version is more dynamic.

 Now, What about letting users record the dialog?

I would be surprised if anyone in the comic business would ever make it this nook of the blogsphere and read this post… but Marvel, iVerse and others –  What about letting readers read out the dialogues in comic books, create their own versions of “motion comics” and upload these version to a server?

Readers who chose to record could follow the same story line or transform it. When a new customer downloads a motion comic app from iTunes, the app could connect to the server and offer the new customer with a wide range of available voiceovers.  A user could pick the default created by the comic book producer or hear voice overs created by her friends on Facebook or Gaia.  Doing so, would be leveraging the capabilities of mobile internet devices to the fullest.

 Labor leads to love

 In these gloomy days of ecomomic winter, who doesn’t need some love? One of the ideas in Harvard Business Review’s list of  “Breakthrough ideas of 2009” was that customers love a product more if they have contributed some labor to it.  The authors, Michael Norton, Dan Ariely and Daniel Mochon call it the “IKEA effect”.  Of course, the labor required cannot be so much that most customers are unable to complete the product (so, comic book companies should not ask readers to illustrate books!).  If Marvel allows customers to recod the dialog in these motion comics, they may love Marvel some more, and love from readers often equates to dollars. Ka-ching!

February 8, 2009

Will Apple Allow Amazon to Sell eBooks on iPhone?

Filed under: App Store, eBooks, iPhone, Netbooks, Smartphones — AJ @ 2:17 pm

Amazon recently announced that it would offer eBooks on mobile phones, in addition to offering them through its eBook hardware, Kindle.  Though, this should put a damper on discussion about “Kindle killers” , will people who flocked to the Kindle substitute it for its software version? More importantly, will Apple allow Amazon to bypass its App Store using “1-click shopping”?

 The “Amazing Kindle”

 Amazon’s Kindle device is absolutely delightful.  It solves practically all the problems that have plagued eBook readers in the past.  

  • Lighter than a paper book with a nice, rubberized grip on the back
  • Convenient page turning buttons mean that you can read with one hand (and hold your coffee mug in another)
  • No-glare screen, thanks to the guys at eInk
  • Wireless, 1-click purchase, over Sprint’s EV-DO network that Amazon calls Whispernet. No need to download books to a PC, and then sync.
  • A huge collection of books including recent bestsellers (Read Outliers – cover to cover – in 4 hours)
  • A battery that seems to last forever (if wireless modem is turned off)

 eBook Readers on iPhone

 Books have become a prominent category on iPhone, prominent enough that Apple recently released an advertisement on reading.  Though reading on the iPhone is not as enjoyable as reading on the Kindle, it is still very nice.  The big draw for me (and for many others) is the off-copyright, free content that is available through iPhone book readers.

 Two eBook distribution models have appeared on iPhone so far:

1. eBooks as Apps: Publishers convert books into Apps that get distributed through the iTunes store.  Several publishers including O’Reilly, Penguin, Sterling and Lonely Planet are trying this route. Startups like Scrollmotion have emerged to help established publishers.  And lots of small companies like CoolGorrilla are creating fresh books around travel and language learning.

2. eBook readers that allow you to purchase books:  One such reader, Stanza, for instance allows a user to buy books from sellers like Fictionwise and Smashwords, as well as download free books from Feedbooks.  Fictionwise offers its own reader as well, called eReader. Shortcovers, a division of Canada’s Indigo book sellers, wants to go down the same route. Though their reader has been getting rave reviews, but is somehow unable to make it through Apple’s approval process.

Will Apple let Amazon sell eBooks through an iPhone App?

Apple would clearly prefer the “eBooks as App” model.  That is where Apple makes money. As evidence, consider the fact that even though Stanza and eReader are the #1 and #3 most popular free apps in the book section of the App Store, they are not mentioned in Apple’s ad on reading.  And Shortcovers has been mysteriously stuck in Apple’s app approval process. 

I would be surprised if Apple approves an Amazon app that lets users make “1-click” purchases. If eBooks ever become a multi-billion dollar market,  Apple would be handing over hundreds of millions of dollars to Amazon (a rival in the music business).  Apple may also have the tacit support of publishers in preventing Amazon from dominating the eBook market.  While Apple takes 30% of an app’s selling price as a distribution fee and lets publishers set the selling price, Amazon has a heavy influence on setting the book’s price and is rumored to take 3565%.

Amazon, of course, understands this and that is why its spokesperson did not name the devices on which its reader will run.  If Apple approves Shortcovers,  it will open the door for Amazon. Otherwise, it is going to be Android or Windows for Kindle’s reader software…








February 6, 2009

Behind the White Space Database Announcement…

Filed under: white space — AJ @ 1:48 pm

Yesterday, Google announced that it has teamed with Microsoft, Dell, HP, Motorola, Neustar and Commsearch to create a group to advise the FCC on how to create the “white space database”.  

The so called, “white space database” is a big sticky point in FCC’s Nov’08 Notice of Proposed Rule Making (NPRM) on white spaces. The FCC decided that virtually all white space devices need to have geolocation capability (i.e. GPS) and be able to access a database of protected radios services (such as TV and public safetey) before operating.  The only exception is personal/portable devices operating under the control of a fixed device.

 The FCC made this decision because in its tests of five white space device (WSD) prototypes last year, only Motorola’s prototype device correctly reported all occupied channels used by TV stations.  Since Motorola used a geolocation/database access feature in combination with spectrum sensing, the FCC decided that a database to protect existing radio services is essential.

Both requirements –  geo-location and ability to connect to a database over the Internet – are very problematic for commercial use of white space devices.  GPS does not work well indoors and consumers may not always want to connect to the Internet.  It means that if you bought a home router that worked in white space spectrum, you will not be able to set it up in your basement without an external GPS antena.  And that, you will not be able to use a “WiFi-on-steroids” network in ad-hoc mode. The list of applications that would be restricted goes on.

Further, this database of protected radio services does not exist today.  Creating it is not easy because it must include the “service countour” of every protected service.   This process has not started yet can drag on for a very long time if all the current users of this spectrum decide to drag their feet.

According to the FCC’s NPRM, “the database will be established and administered by a third party, or parties, to be selected through public notice…” Google and its partners in the white space database group are trying to influence this process to make sure that this database uses an open and non-proprietary format.  Of the two smaller companies in this group, Comsearch (a spectrum management company) is probably wants to be involved in establishing service contours, and Neustar (a clearinghouse) would likely want to adminster the database.

Even if the database gets established, the geolocation requirement will restrict the adoption of white space systems. The alternative is for the cognitive radio technology companies to prove beyond doubt that spectrum-sensing along is sufficient to protect existing services.  This process may take a few years (research, building prototypes, FCC testing, public review of results, final ruling), but is essential for widespread use of white spaces.


February 4, 2009

Cable Operators Paying Increasing Attention to Outdoor WiFi

Filed under: Metro Wi-Fi, Smartphones, Wi-Fi — AJ @ 3:43 pm

Large cable operators seem to be paying increasing attention to outdoor WiFi.  Cablevision said last May that it will invest almost $300M to build a WiFi network in the NY, NJ and Connecticut area and, in September,  it launched its network in Nassau County and parts of Suffolk County Long Island.  At that time, there was speculation that Cablevision is investing in WiFi because unlike Comcast, Time Warner and Brighthouse, it is not investing in Clearwire. However, yesterday Comcast, one the largest cable investor in Clearwire, said that  it is trialing a WiFi network trial at 100 railroad locations in New Jersey.

Cable operators have the ability to overcome the two major obstacles that stood in the way of previous attempts to deploy metro WiFi – the ability to access utility poles and backhaul. Cable companies have been negotitating rights to access poles and conduits with utilities and cities for years, and have the necessary relationships, capital and patience to obtain them for a WiFi deployment.  See FCC-07-187 NPRM for a summary of how cable companies (or others) can get access to mounting assets.  Another useful document on this topic is a white paper on the “Pole Attachment and Telecommunications Act of 1996” written by Bercovici and Magee.  The right to use a pole costs as little as 10 dollars a year (yes, year) after paying a few thousand dollars non-recurring engineering expense.

In addition to being able to get mounting assets and using their own backhaul, cable companies  can leverage their existing customer acquisition and customer service infrastructure.  Further, anyone building a Metro WiFi network now will be able to use more mature equipment than what was available to companies like Earthlink and MetroFi few years ago. 

If cable operators can build good outdoor WiFi networks,  these networks may help them differentiate their broadband offerings from those of  companies like Verizon and AT&T.  And these networks might also play well with WiMAX, whenever that network is ready.

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