Is the party over for mobile data

Article in this weeks New Scientist about the capacity crunch across mobile networks due to the incredible surge in demand for mobile data, in particular video. If network capacity remains as is and the projections are on track, some time in 2013 is the date when the wireless networks collapse under their own weight. year of the crunchThe author examines four different solutions that the wireless carriers could use to address this issue.

  1. Get rid of “unlimited data” plans. When something is perceived as free, it tends to get used a lot  (cf. the internet). This solution is already being deployed by AT&T for new iPhone 4 users.
  2. Increased bandwidth available to carriers. While this seems feasible, it is highly political and spectrum auctions are viewed by governments as very welcome ‘new’ sources of revenue (so very expensive). Plus doubling the bandwidth will delay the crunch for maybe two years.
  3. Deploy 4G technologies, such as LTE and WiMAX, unfortunately while these promise greater speeds, the uplift in capacity is only 50% over 3G, which just delays the inevitable one year. Given the ‘go slow’ mentality of most carriers when it comes to 4G, I seriously doubt if 4G will be deployed except in major cities until well after 2013.
  4. Deploy femtocells in the home to offload the network (they would hook into the customer’s broadband connection). This would reduce the energy needs of cell towers, improve reception and boost capacity by a factor tens or perhaps even hundreds (the major benefit comes from removing the signal attenuation through walls). There are some interference issues that need to be addressed but I think this is probably a non-starter. Why deploy a femtocell when I already have a wireless router?  Most smartphones like my G1 Android phone can switch between a Wi-Fi and 3G network and there is also the Line2 app for the iTouch which effectively turns an iTouch into an iPhone bypassing the carrier completely. The carriers run the risk of exposing their customers to a bypass technology if they aggressively deploy femtocell technology (unless it is perceived as ‘free’ and they seem loathe to do that.)

Of course, we may all get tired of watching videos, but I doubt it…

Beware the Android

Lots of press this week about the Nexus 1 (a.k.a. the Google phone) and whether it was as good as the iPhone. (see coverage roundup). It may be a moot point. An insightful article, falseiPhoneon the NT Times Gadgetwise blog, describes a counterfeit phone from China, that looks and behaves very much like an iPhone but is in reality an Android-based device.

Seems as if you can the best of both worlds (albeit illegally), an iPhone on a non-proprietary platform. Sort of begs the question, why would I buy an iPhone if I can get an Android phone that can act like one (or as a regular android phone)?

This really could put the cat amongst the pigeons as it divorces the iPhone (user interface) from the Apple iPhone operating system.

Keep the good times a rolling ~ AT&T and the iPhone

Recently Merrill Lynch published a white paper on how much the iPhone means to AT&T and the potential effect of AT&T losing their monopoly (maybe as early as mid-2010).broken iPod A lot depends, of course, if there is going to be a CDMA version of the iPhone.

Here is a summary of their analysis and comments.

  • approximately 11.5 million iPhone subscribers in the USA (3Q09)
  • iPhone subscribers comprise 18% of AT&T’s postpaid subscribers
  • the iPhone has driven an 8% uplift in gross add share for AT&T
  • the iPhone has taken market share away form AT&T’s base but at much higher ARPU
  • because there is little churn associated with the iPhone, the overall churn numbers for AT&T have decreased.
  • the iPhone has been the primary driver of data ARPU growth for AT&T.

The M/L’s analysis treats the iPhone as the only game in town, but with the success of Android-based phones (G1, G2 and ‘Droid) finally giving Apple a run for its money, this is not the case. While these phones have approximately 15-20% of the market share of the iPhone, they do have momentum and a catalog of applications that is beginning to rival Apple’s if not in quantity at least in quality.

Maybe they aren’t really applications after all?

The New York Times ran a small story last week titled “What Do All These Phone Apps Do? Mostly Marketing”  It makes the point that there are a number of iPhone apps whose primary purpose is advertising and/or brand building with the actual function of the application being almost secondary.

A good example cited is a ‘spirit level’ application from Stanley Works.  While I don’t expect my local contractor to whip out his iPhone to make sure that the wall he is building is nice and level. It does a nice job of getting the Stanley name out there and build brand reinforcement as an innovative tool company. There are 400,000 downloads claimed for this application, which seems quite high (my guesstimate is that there are about 10 million at&t  iPhone customers in the US) – which points to an amazing retention rate for an advertisement. No wonder, nearly every business is clamoring to get on the iPhone app bandwagon.

From what I have been able to tell, the same phenomenon is not as pronounced with Android, Windows Mobile, or Palm phones.

Just came across two  other posts – from the attention digital blog a spreadsheet of ‘branded apps’ – it has been populated with iPhone apps (over 200)  so far but there are tabs for Android, Blackberry and Palm. The second is a piece of analysis done by ComScore on the % of US Internet users who click on internet ads. Contrasting the 2007 and 2009 figures for all US internet users

 

July 2007

March 2009

Total clickers

32%

16%

Heavy Clickers

6%

4%

Moderate Clickers

10%

4%

Light Clickers

16%

8%

Others

68%

84%

It appears that the percentage of the internet user population that is ‘clicking’ through on Ads is declining significantly. 84% are not reached by the ad at all. As the mobile internet becomes more prevalent, maybe the  dominant advertising model will become ‘sponsored apps’ and not click through advertising.

Application Catalogs; differentiator or just table stakes?

Finally got around to reading the WIRED September issue. In an article titled “Betting on the Store” Steven Levy makes the argument that the iPhone’s success is primarily due to their immense application portfolio (according to the latest Apple TV ads 75,000 or more)

While I would be the first to agree that the applications are impressive (same goes of course for applications on the PRE, Android, Windows Mobile and Symbian phones) but I think the days of the quantity of applications being the key success factor are about to disappear. There are just too many of them and managing your personal application catalog is becoming onerous at best.

Now in the spirit of full disclosure, I have an Android G1 phone not an iPhone. But I think the same arguments apply – there are  just so many applications (15,000 plus for the G1) and there are very few applications that are inherently exclusive to a platform – for example the Hey Where Are You application (iPhone exclusive) provides the same functionality as Google’s Latitude which is multi-platform). Plus looking across the mass of applications, there are a select group that get used regularly (e-mail), some occasionally  (travel sites), some as needed (a dice throwing app anyone?). I would contend, that all platforms are well served by their application catalogs for regular use and even occasional use applications.

The implication is that Apple’s Application Catalog is the de facto ‘walled garden” and as such every mobile platform needs to have thousand and thousands of apps to succeed is just plain wrong.

There are lots of reasons for the iPhone’s success, the App Store is but a small part of it.

google-latitude

Example of Google Lattitude Application