The international financial services industry is beginning to leverage the enormous subscriber base mobile network operators (MNOs) command, 4 billion in 2008 according to Wireless Intelligence, the GSMA (the GSM mobile phone operators trade association) research arm in London. Banks are initially targeting consumers in the third world by converting their mobile phones into a mobile wallet where cash can be deposited to and spent from. The mobile wallet has generated great excitement and has demonstrated a huge potential in the third world. Electronic currency enables the mobile handset to dispense cash and accept deposits through a bank-affiliated merchant or MNO airtime reseller, thus enabling customer savings and even microloans. The capability leverages the short message service (SMS) on nearly every mobile phone.
Today, most electronic currency successes have been within national borders, but enabling the 190 million migrant workers—3 percent of the world population—to send electronic currency home via mobile phones is the next application financial institutions and MNOs are targeting. And for good reason, according to the World Bank, in 2008, migrant workers sent $433 billion to their home countries, most in the third world.
What’s surprising is how rapidly electronic currency is taking hold in the third world. At the Mobile Money Summit 2009 from June 22 to 25 in Barcelona, Caroline Pulver, FSD (Financial Sector Deepening) Kenya, an independent trust developing inclusive financial markets reported on the impact M-PESA (mobile, PESA money in Swahili) has had on the country. Pulver’s research found that by May this year, 40 percent of Kenya’s adults had used the service. The table below shows what Pulver found Kenyans spent their electronic currency on.
Usage Percentage
Store/save money for everyday use 14 percent
Store/save money for emergencies 7 percent
Pay bills 2 percent
Send money 25 percent
Receive money 28 percent
Buy airtime for someone else, 8 percent
Buy airtime for myself 14 percent
According to the central bank of Kenya, at the start of 2009, there were over 7000 M-PESA agents. This represented substantially more points of service than the combined number of bank branches (887) and ATM (1,435) in the country—serving 6 million customers or 15.3 percent of Kenya’s 39 million population. Since the program’s launch in March 2007 until February 2009, the cumulative value of M-PESA money transfers had reached $1.5 billion. As of February 2009, the monthly value of person-to-person transfers was $190.3 million.
Sponsored by the UK-based Department for International Development, M-PESA began by using Safaricom’s (a subsidiary of UK-based Vodaphone) airtime resellers to issue microloans that borrowers would repay at an interest rate reduced by eliminating the overhead conventional microloans carried. However, the tech-savvy, skilled worker in Kenya began using the facility to transfer cash from working husbands in the city to their families in the country: Safaricom had unintentionally become a bank with its handset providing a teller function and it airtime resellars dispensing cash. Today, according to Stephen Rasmussen, technology program manager at CGAP, an independent policy and research center housed at the World Bank, 70 percent of M-PESA subscribers are banking customers, not the unbanked customers originally targeted.
The service’s popularity drew the attention the Western Union Company, which has a 17 percent share of the international remittance market. (The World Bank estimated that Sub-Saharan Africa received around $20 billion in remittances in 2008, with Kenya accounting for $1.3 billion.) In December, last year, Western Union partnered with Vodafone, parent of Safaricom, to pilot a cross-border Mobile Money Transfer (MMT) service between the U.K. and Kenya. The service would enable customers to send remittances directly to Safaricom mobile subscribers in Kenya in minutes from the UK. The World Bank estimates the fees for transferring $200 cash from the UK to Kenya at $26.64: $15.25 for the money transfer and $5.69 for the currency conversion. It will be interesting to see if the cost comes down or is increased by $0.11 charge for the SMS message charge for an electronic currency transfer.
In June this year, Western Union expanded its reach in international remittance signing a deal with Zain, owned by Kuwait-based Mobile Telecommunications Company KSC, to enable Western Union currency transfers to Zain handset with the Zap platform. Zain’s service is available in Tanzania, where it’s larger than Safaricom, and Kenya where it’s smaller. Zain other distinction from Safaricom is enabling consumer-to-merchant purchase eliminating the need for a cash transaction. For the unbanked the additional fee will makes the transaction uneconomical. However, for business-to-business transactions, the service will have great appeal.
Celpay, owned by South African FirstRand bank, is the another service that has gotten a substantial following in Zambia and the Democratic Republic of the Congo where the DRC government uses Celpay to distribute government payments to former soldiers who have turned in their guns. Registered customers can use their electronic currency for merchant transactions, monthly bill payments, and fund transfer between participating phones. The company’s model is unique first because it provides solutions to businesses rather than end customers. Second, its nascent P2P model reaches unbanked customers without mobile phones, by sending the payment to agents with phones who perform money transfers or dispense cash. In June this year Celpay was processing $25 million per month in gross transactions.
One common element that permeates these successes is that all flourished because they were plowing a green field. Nothing existed before they emerged to provide the service. Another is that each found regulatory agencies willing and able to permit the services to take hold and flourish. In the case of M-PESA, once its popularity got notice, the conventional financial services sector attempted to derail the project only to be rejected by the Kenyan government. In the case of the DRC, electronic currency was an effective means to pacify a military force surrendering its arms.
According to the GSMA, the successes in Africa are being attempted elsewhere in the world. A greenfield deployment in Indonesia, the AXIS mDUIT project, is due to launch in December, 2009. In the Philippines, the SMART Communications’ Island Activations Program hopes to bring electronic banking to isolated customers on remote islands. Mobile network operator Roshan hopes to build an M-PESA-like service in war torn Afghanistan. Electronic currency is taking hold in the third world and in won’t be long before it will get a foothold in the developed world as well.
Wednesday, September 30, 2009
Saturday, September 26, 2009
ARM-Google Alliance Confronts Intel-Microsoft Dominion: Out of Chaos Comes Order
We’re in the throes of one of those major discontinuities that occur in technology evolution periodically. Actually there are two occurring concurrent and affecting one another. Entrenched suppliers hate such events because they are forced to develop new business models for producing revenue. One discontinuity happened with the announcement of the iPhone, which heralded the age of the mobile Internet. The second, precipitated by a genuine desire to bridge the digital divide between the first and third worlds, markedly drove down the cost of computing and heralded two new classes of computing device: the netbook and the smartbook.
The two computing devices are entirely different creatures. The netbook is the product of the traditional PC business, caught unawares when a social experiment got terribly out of hand: an experiment to create a low-cost product for the third world and somehow prevent it from being purchased by the first world. The smartbook is the result of the social networking explosion on the web spurred on by the iPhone creating a web application epidemic.
The netbook came out of the “One Laptop Per Child” initiative that Nicholas Negroponte, started while head of the MIT Media Lab. The program was a noble, well-meaning effort to provide a computer to every child in the third world: roughly a half a billion for an unachievable price of $100 each. That meant open source software and the lowest cost silicon—Linux instead of Microsoft, AMD instead of Intel. The nonprofit organization Negroponte formed, One Laptop per Child, to distribute the PC, shipped its first product the XO-1 at twice the target price: $199. Quanta Computer Inc. based in Tao Yuan Shien, Taiwan manufactured the unit with production stumbling along in fits and starts beginning in November 2007.
Quanta also announced plan to build a version of the laptop for the commercial market, something Asus International also had in mind with its Eee PC, which Asus showcased in two versions at Computex in June 2007. (Negroponte’s hardware and software reference design was well known and easily duplicated using an Intel CPU instead of the AMD unit.) The Asus offering initially contained a Celeron M mobile processor. Asus has since shifted to the Atom CPU, which is the main engine in nearly every netbook currently on the market as is Windows Vista—Microsoft couldn’t be shut out of a major class of portable computing platform. (Search “netbook” on net retailer’s tigerdirect.com and every unit displayed will feature Intel Atom and Windows Vista.)
The price tag on the Eee PC when it shipped in September 2007 ran $349—nearly twice the price of an XO-1 but still pretty inexpensive for a web browsing PC. Needless to say, Asus had plenty of orders to fill when production began. A rush of competitors hurriedly jumped on the bandwagon and the rest is history. The low-cost PC intended for the third world had jumped into the first.
Meanwhile, Intel shut out of the OLPC project in a disagreement with the organization set about building a comparable unit called the Classmate PC. In August this year, CTL Corp. of Portland, OR introduced its 2Go version of the Intel design priced at $399. The design is sold under other brands worldwide. Intel wanted the hearts and minds of the next generation of computer users. Building brand awareness and familiarity in school ensures loyal customers later in life.
As to which has come out the winner, the OLPC organization estimates around 750,000 XO laptops installed worldwide through March this year. Intel says it has shipped 700,000 Classmate PC's in 2008 alone and predicts it will sell over two million Classmate PCs in 2009. Capitalism triumphs over socialism but at a cost. Negroponte’s social experiment had the consequence of lowering computing cost for both the first and third. The average selling price for netbooks today is around $350, according to Taipei-based tech publication, Digitimes. The ASP for a notebook at the start of this year had been pushed down to around $795 according to Port Washington, NY-based market research firm NPD. And the lower priced netbooks are eating into notebook sales.
Figures from market research firm DisplaySearch shows netbooks represent 22 percent of the portable computer shipments the second quarter this year, up from 6 percent in the second quarter of last year. One reason for the popularity of netbooks could be the economy; consumers are opting for the lower priced computer while corporate buyers prefer to hold off replacing laptops until a better economic climate arrives. By then Intel and Microsoft and PC hardware OEMs can return to business as usual. Right? Not if Cambridge UK-based, ARM Ltd and Sunnyvale, CA-based Google and their allies have their way.
The advent of the low-cost netbook almost coincided with the arrival of the iPhone in June 2007 and the birth of the web browsing smart phone. The proliferation of web applications that followed the iPhone introduction cried out for a platform with a larger multi-touch, touch-screen display and keyboard. Enter the smartbook, which is an ARM-based smart phone in a PC enclosure. It runs Linux, Android, or eventually Chrome not a Microsoft OS—all but Win CE having not been ported to the ARM processor. However, the version now being showed doesn’t pose much of a threat. The platform that will challenge the Intel-Microsoft dominion is the +1 GHz-ARM-9 Cortex running the Google Chrome operating system expected out mid-2010.
Smart phone users wanting the web-friendly experience they have come to expect will now find it on a smartbook: instant on, day-long battery life, multi-touch touch-screen display, immediate access to social networking sites like YouTube, MySpace, Facebook, Linkedin, SMS, and a full up Qwerty keyboard all with a price tag much lower than a netbook. To be fair, network service providers will subsidize that lower price. And the subsidy will apply to netbooks and smartbooks, but the user experience will favor the latter over the former. The remaining questions are will the netbook close the user experience gap by the time the killer ARM-Google platform rolls out and will the ARM-Google solution deliver a compelling enough reason to switch.
Regardless of the outcome of the struggle between the Intel-Microsoft and ARM-Google camps, the bottom line is that hardware prices will be reduced. Scottsdale, AZ-based market research firm, In-Stat has suggested that pressure from some of the ARM chip vendors may push Intel to further lower prices on some of their computing devices in the future. That reduction will come from fiercely competitive market share battles in the growth regions of China, India, and South America—where price is a major concern. It will also come from competition for buyers in the U.S. and Asia Pacific. The high-tech world is changing quarter to quarter and the netbook-smartbook evolution is accelerating the process.
The two computing devices are entirely different creatures. The netbook is the product of the traditional PC business, caught unawares when a social experiment got terribly out of hand: an experiment to create a low-cost product for the third world and somehow prevent it from being purchased by the first world. The smartbook is the result of the social networking explosion on the web spurred on by the iPhone creating a web application epidemic.
The netbook came out of the “One Laptop Per Child” initiative that Nicholas Negroponte, started while head of the MIT Media Lab. The program was a noble, well-meaning effort to provide a computer to every child in the third world: roughly a half a billion for an unachievable price of $100 each. That meant open source software and the lowest cost silicon—Linux instead of Microsoft, AMD instead of Intel. The nonprofit organization Negroponte formed, One Laptop per Child, to distribute the PC, shipped its first product the XO-1 at twice the target price: $199. Quanta Computer Inc. based in Tao Yuan Shien, Taiwan manufactured the unit with production stumbling along in fits and starts beginning in November 2007.
Quanta also announced plan to build a version of the laptop for the commercial market, something Asus International also had in mind with its Eee PC, which Asus showcased in two versions at Computex in June 2007. (Negroponte’s hardware and software reference design was well known and easily duplicated using an Intel CPU instead of the AMD unit.) The Asus offering initially contained a Celeron M mobile processor. Asus has since shifted to the Atom CPU, which is the main engine in nearly every netbook currently on the market as is Windows Vista—Microsoft couldn’t be shut out of a major class of portable computing platform. (Search “netbook” on net retailer’s tigerdirect.com and every unit displayed will feature Intel Atom and Windows Vista.)
The price tag on the Eee PC when it shipped in September 2007 ran $349—nearly twice the price of an XO-1 but still pretty inexpensive for a web browsing PC. Needless to say, Asus had plenty of orders to fill when production began. A rush of competitors hurriedly jumped on the bandwagon and the rest is history. The low-cost PC intended for the third world had jumped into the first.
Meanwhile, Intel shut out of the OLPC project in a disagreement with the organization set about building a comparable unit called the Classmate PC. In August this year, CTL Corp. of Portland, OR introduced its 2Go version of the Intel design priced at $399. The design is sold under other brands worldwide. Intel wanted the hearts and minds of the next generation of computer users. Building brand awareness and familiarity in school ensures loyal customers later in life.
As to which has come out the winner, the OLPC organization estimates around 750,000 XO laptops installed worldwide through March this year. Intel says it has shipped 700,000 Classmate PC's in 2008 alone and predicts it will sell over two million Classmate PCs in 2009. Capitalism triumphs over socialism but at a cost. Negroponte’s social experiment had the consequence of lowering computing cost for both the first and third. The average selling price for netbooks today is around $350, according to Taipei-based tech publication, Digitimes. The ASP for a notebook at the start of this year had been pushed down to around $795 according to Port Washington, NY-based market research firm NPD. And the lower priced netbooks are eating into notebook sales.
Figures from market research firm DisplaySearch shows netbooks represent 22 percent of the portable computer shipments the second quarter this year, up from 6 percent in the second quarter of last year. One reason for the popularity of netbooks could be the economy; consumers are opting for the lower priced computer while corporate buyers prefer to hold off replacing laptops until a better economic climate arrives. By then Intel and Microsoft and PC hardware OEMs can return to business as usual. Right? Not if Cambridge UK-based, ARM Ltd and Sunnyvale, CA-based Google and their allies have their way.
The advent of the low-cost netbook almost coincided with the arrival of the iPhone in June 2007 and the birth of the web browsing smart phone. The proliferation of web applications that followed the iPhone introduction cried out for a platform with a larger multi-touch, touch-screen display and keyboard. Enter the smartbook, which is an ARM-based smart phone in a PC enclosure. It runs Linux, Android, or eventually Chrome not a Microsoft OS—all but Win CE having not been ported to the ARM processor. However, the version now being showed doesn’t pose much of a threat. The platform that will challenge the Intel-Microsoft dominion is the +1 GHz-ARM-9 Cortex running the Google Chrome operating system expected out mid-2010.
Smart phone users wanting the web-friendly experience they have come to expect will now find it on a smartbook: instant on, day-long battery life, multi-touch touch-screen display, immediate access to social networking sites like YouTube, MySpace, Facebook, Linkedin, SMS, and a full up Qwerty keyboard all with a price tag much lower than a netbook. To be fair, network service providers will subsidize that lower price. And the subsidy will apply to netbooks and smartbooks, but the user experience will favor the latter over the former. The remaining questions are will the netbook close the user experience gap by the time the killer ARM-Google platform rolls out and will the ARM-Google solution deliver a compelling enough reason to switch.
Regardless of the outcome of the struggle between the Intel-Microsoft and ARM-Google camps, the bottom line is that hardware prices will be reduced. Scottsdale, AZ-based market research firm, In-Stat has suggested that pressure from some of the ARM chip vendors may push Intel to further lower prices on some of their computing devices in the future. That reduction will come from fiercely competitive market share battles in the growth regions of China, India, and South America—where price is a major concern. It will also come from competition for buyers in the U.S. and Asia Pacific. The high-tech world is changing quarter to quarter and the netbook-smartbook evolution is accelerating the process.
Thursday, September 17, 2009
Fixing problems plaguing media-intensive, web-browsing mobile handsets
There are about 4 billion mobile devices in the world today, said Len Lauer, of which about 830 million are 3G today, but the vast majority of the remainder will be migrating to 3G in the next five to seven years. The COO of Qualcomm was speaking with Stacey Higgenbotham a staff writer with GigaOM during the Mobilize 09 conference held in San Francisco on Thursday September 10th defending the position that there’s plenty of life left in 3G now that 4G has begun to appear in the market. I was a fly on the wall listening to their conversation over the Internet thanks to LiveStream.com.
As with previous wireless technology transitions, 4G handsets will be a multimode devices switching from 4G to 3G when outside a 4G service area, which for the near future will be limited to dense metropolitan areas such as LA, New York, London, Paris, Mumbai… Lauer referred to the CTO of Verizon Wireless, Tony Malone, speculating that 3G networks would be carrying voice for the next decade. The major difference between wireless generations is in the bandwidth provided users: from 56 kbit/s up to 114 kbit/s for the previous generation 2G networks, up to 348 kbit/s to 7 Mbit/s for 3G depending on whether the handset was mobile or stationary, respectively. Next generation 4G will see bandwidths of 100 Mbit/s for mobile operation and 1 Gbit/s for stationary. These 4G data rates will certainly be required if social networking users begin capturing and sharing HD video and still images on their favorite on-line community.
However, bandwidth expansion is not a well-ordered process, more a series of fits and starts as the troubles plaguing AT&T in the wake of the new iPhone 3GS launch attests: dropped calls, extremely slow connections and a generally unpleasant experience. This contradicts the incredible, amazing, awesome… experience touted at the Apple rollout. Today the problem exists in the backhaul, the link between the cell tower and the wireless carrier’s network core, which routes the call to its final destination. AT&T needs to invest in boosting its backhaul capacity and it’s investing elsewhere—increasing the number of cell sites, etc.—to the chagrin of Apple.
And you can kind of understand AT&T’s behavior. The Smart Phone represents only 15 percent of the total market and contrary to the popular notion, a good many iPhones are being brought by the well-heeled consumer that can afford the acquisition cost as well as the $100/month subscription. According to the Wireless Association CTIA, there were 270 million wireless subscribers in the U.S. at the end of last year and 85 percent of this total, 229 million subscribers, are also demanding service providers’ attention.
What’s the problem with wireless carrier backhaul? As bandwidth speeds on cellular networks increase and packet-based mobile services attract more users, traffic growth is making traditional backhaul network designs unmanageable. To accommodate 3G build-outs, service providers are reengineering the mobile backhaul infrastructure using Carrier Ethernet technologies. The problem with Ethernet has been that packet delivery was non-deterministic. If the network got overloaded packets could be dropped, something voice packet cannot tolerate.
The problem is now being addressed with Ethernet IEEE 1588 Precision Time Protocol (PTP) and Synchronous Ethernet ITU G.8261, two standards that make Ethernet packet delivery more deterministic. Used together, the two achieve a high level of frequency synchronization a common defined time. Realistic studies in large-scale deployment scenarios indicate an accuracy of 50 ns—more than sufficient to ensure voice packets are delivered as effectively as the existing circuit switch delivery used today.
Still the technology may be available, but the will to implement lies with the service provider. Their concern as Lauer points out is getting a sufficient return to justify the investment. Lauer observes that for the service providers to reach a larger subscriber base, they have to reduce monthly access costs, while making larger infrastructure investments. It’ll be interesting to see how they solve the problem.
As with previous wireless technology transitions, 4G handsets will be a multimode devices switching from 4G to 3G when outside a 4G service area, which for the near future will be limited to dense metropolitan areas such as LA, New York, London, Paris, Mumbai… Lauer referred to the CTO of Verizon Wireless, Tony Malone, speculating that 3G networks would be carrying voice for the next decade. The major difference between wireless generations is in the bandwidth provided users: from 56 kbit/s up to 114 kbit/s for the previous generation 2G networks, up to 348 kbit/s to 7 Mbit/s for 3G depending on whether the handset was mobile or stationary, respectively. Next generation 4G will see bandwidths of 100 Mbit/s for mobile operation and 1 Gbit/s for stationary. These 4G data rates will certainly be required if social networking users begin capturing and sharing HD video and still images on their favorite on-line community.
However, bandwidth expansion is not a well-ordered process, more a series of fits and starts as the troubles plaguing AT&T in the wake of the new iPhone 3GS launch attests: dropped calls, extremely slow connections and a generally unpleasant experience. This contradicts the incredible, amazing, awesome… experience touted at the Apple rollout. Today the problem exists in the backhaul, the link between the cell tower and the wireless carrier’s network core, which routes the call to its final destination. AT&T needs to invest in boosting its backhaul capacity and it’s investing elsewhere—increasing the number of cell sites, etc.—to the chagrin of Apple.
And you can kind of understand AT&T’s behavior. The Smart Phone represents only 15 percent of the total market and contrary to the popular notion, a good many iPhones are being brought by the well-heeled consumer that can afford the acquisition cost as well as the $100/month subscription. According to the Wireless Association CTIA, there were 270 million wireless subscribers in the U.S. at the end of last year and 85 percent of this total, 229 million subscribers, are also demanding service providers’ attention.
What’s the problem with wireless carrier backhaul? As bandwidth speeds on cellular networks increase and packet-based mobile services attract more users, traffic growth is making traditional backhaul network designs unmanageable. To accommodate 3G build-outs, service providers are reengineering the mobile backhaul infrastructure using Carrier Ethernet technologies. The problem with Ethernet has been that packet delivery was non-deterministic. If the network got overloaded packets could be dropped, something voice packet cannot tolerate.
The problem is now being addressed with Ethernet IEEE 1588 Precision Time Protocol (PTP) and Synchronous Ethernet ITU G.8261, two standards that make Ethernet packet delivery more deterministic. Used together, the two achieve a high level of frequency synchronization a common defined time. Realistic studies in large-scale deployment scenarios indicate an accuracy of 50 ns—more than sufficient to ensure voice packets are delivered as effectively as the existing circuit switch delivery used today.
Still the technology may be available, but the will to implement lies with the service provider. Their concern as Lauer points out is getting a sufficient return to justify the investment. Lauer observes that for the service providers to reach a larger subscriber base, they have to reduce monthly access costs, while making larger infrastructure investments. It’ll be interesting to see how they solve the problem.
Sunday, September 13, 2009
A short history of consumer driven technology development
We’re in the midst of yet another evolution in communications. This one is the social networking transformation in which mobile devices are not merely used for voice and E–mail but now Internet terminals for the many social networks we all belong to. It’s yet another example of an activity that began on our desktop and notebook PCs that have migrated over to our handsets, just as text messaging and e-mail did before. And as with every disruptive social phenomenon, those trying to serve this fast moving trend have been caught unawares and are trying desperately to catch up.
In the early part of this decade, users in the 100s of millions outside the U.S.—Asia, the Pacific Rim, and Europe—began to use instant text messaging as a lower cost alternative to voice. The carriers supplied this data service in the spectrum unused for voice calls, which cost them next to nothing and for which they reaped large profits. Instant and short text messaging became its own social phenomenon, with a use model unique from voice and e-mail. The messages were likened to whispering in someone ear—especially during meetings or when you didn’t want anyone but the recipient to know what was being said. In The Philippines text-messaging, citizens-organized daily protests resulted in the ouster of Philippine President Joseph Ejercito Estrada in 2001.
While instant text messaging continued building a following in the U.S., Internet-base social networking on a PC started taking off in early 2004 with the debut of MySpace. Membership went from zero to a million users from January to February of that year and the numbers kept rising from there. Social networkers were now hanging out on MySpace with their PC, talking on their cell phone and/or texting on their cell phone. Cellular service providers in the U.S. were oblivious of the trend. They continued making it more expensive to text than talk, while in the rest of the world service providers did the opposite. Is there any wonder European cellphone users were texting more than twice as much as U.S. users (according to Forrester Research reporting in 2005)?
By mid century, U.S. service providers finally realized that data service was a viable business model. In 2005, CTIA-The Wireless Association, cited an installed base of 190 million cell phones and 90 percent could send text messages and 60 percent of those texting were aged 18 to 27. (A great many of the texters were voting for their favorites on “American Idol.”) By this time, too, the Blackberry demonstrated to telephone service providers that there was a business providing e-mail access via a mobile handset for enterprise users. But, who would want to surf the web with a mobile handset?
In January 2007, with the advent of the iPhone, the notion of providing total Internet browsing on a handset took hold. The idea wasn’t entirely foreign to service providers as they had dabbled with the notion by supplying radios you could plug into your laptop and access the Internet over the cellular infrastructure. And the Blackberry could be pressed into surfing duties, but the experience was painful and cumbersome. However, service providers had no idea of what it was going to take to keep up with millions of iPhone users accessing and moving large media files around the 3G network, something they are now reluctantly coming to terms with.
It took a year but the rest of the smart phone vendors with the service providers excluded from carrying iPhones finally caught on to how to provide web browsing and similar handset functionality—a compelling user experience. This is where service providers find themselves today, facing growing numbers of smart phone users disenchanted with the slow response from the web. And it’s only going to get worse as Apple is no doubt on the verge of introducing an iPhone with full 1080p HD video capture and playback, 20-megapixel still image capture, and no doubt higher fidelity audio capture and playback.
For wireless service providers the once the wireless spectrum is completely utilized, there is nowhere to go except to offload traffic onto the wired infrastructure. The handsets and wireless infrastructure will have to contain increased intelligence to route wireless connections so as to preserve bandwidth while still providing a responsive experience to the user. It’s conceivable that, like toll lanes on congested highways, wireless service providers will begin charging a toll for a faster browsing experience. Those unwilling to pay will be subject to operating speeds that will begin to resemble dial-up 64 kbits/s or less as large numbers of users flood the system during prime usage time.
The more things change the more they stay the same.
In the early part of this decade, users in the 100s of millions outside the U.S.—Asia, the Pacific Rim, and Europe—began to use instant text messaging as a lower cost alternative to voice. The carriers supplied this data service in the spectrum unused for voice calls, which cost them next to nothing and for which they reaped large profits. Instant and short text messaging became its own social phenomenon, with a use model unique from voice and e-mail. The messages were likened to whispering in someone ear—especially during meetings or when you didn’t want anyone but the recipient to know what was being said. In The Philippines text-messaging, citizens-organized daily protests resulted in the ouster of Philippine President Joseph Ejercito Estrada in 2001.
While instant text messaging continued building a following in the U.S., Internet-base social networking on a PC started taking off in early 2004 with the debut of MySpace. Membership went from zero to a million users from January to February of that year and the numbers kept rising from there. Social networkers were now hanging out on MySpace with their PC, talking on their cell phone and/or texting on their cell phone. Cellular service providers in the U.S. were oblivious of the trend. They continued making it more expensive to text than talk, while in the rest of the world service providers did the opposite. Is there any wonder European cellphone users were texting more than twice as much as U.S. users (according to Forrester Research reporting in 2005)?
By mid century, U.S. service providers finally realized that data service was a viable business model. In 2005, CTIA-The Wireless Association, cited an installed base of 190 million cell phones and 90 percent could send text messages and 60 percent of those texting were aged 18 to 27. (A great many of the texters were voting for their favorites on “American Idol.”) By this time, too, the Blackberry demonstrated to telephone service providers that there was a business providing e-mail access via a mobile handset for enterprise users. But, who would want to surf the web with a mobile handset?
In January 2007, with the advent of the iPhone, the notion of providing total Internet browsing on a handset took hold. The idea wasn’t entirely foreign to service providers as they had dabbled with the notion by supplying radios you could plug into your laptop and access the Internet over the cellular infrastructure. And the Blackberry could be pressed into surfing duties, but the experience was painful and cumbersome. However, service providers had no idea of what it was going to take to keep up with millions of iPhone users accessing and moving large media files around the 3G network, something they are now reluctantly coming to terms with.
It took a year but the rest of the smart phone vendors with the service providers excluded from carrying iPhones finally caught on to how to provide web browsing and similar handset functionality—a compelling user experience. This is where service providers find themselves today, facing growing numbers of smart phone users disenchanted with the slow response from the web. And it’s only going to get worse as Apple is no doubt on the verge of introducing an iPhone with full 1080p HD video capture and playback, 20-megapixel still image capture, and no doubt higher fidelity audio capture and playback.
For wireless service providers the once the wireless spectrum is completely utilized, there is nowhere to go except to offload traffic onto the wired infrastructure. The handsets and wireless infrastructure will have to contain increased intelligence to route wireless connections so as to preserve bandwidth while still providing a responsive experience to the user. It’s conceivable that, like toll lanes on congested highways, wireless service providers will begin charging a toll for a faster browsing experience. Those unwilling to pay will be subject to operating speeds that will begin to resemble dial-up 64 kbits/s or less as large numbers of users flood the system during prime usage time.
The more things change the more they stay the same.
Thursday, September 10, 2009
Augmented Reality, Do I Want to Join in?
I’ve been interested in the next big enablers of the mobile Internet and I keep reading that they are likely to be LTE—the 4G wireless replacement for 3G and location technologies—augmented reality (much more intriguing). LTE is simply next generation technology replacing the previous and we can take that as a given. Everything will run faster; you’ll be able to move large files around quicker, etc.
Augmented reality, on the other hand, suggests something unique. According to Wikipedia, AR is a “real direct or indirect view of a physical real-world environment whose elements are merged with, or augmented by, virtual computer-generated imagery.” Your phone knows where you are using its on-board GPS and by accessing Google maps, it can determine what’s around you and can—with a touch-enabled screen—tell you about what’s around you.
I connected the term, which I heard today, with the Apple iPhone 3GS ad "Travel" in which the voice over asked if you want your own personal tour of Paris and declares “there’s an app for that” at which time the iPhone articulates “you’re standing at the center of Paris…” with a picture on the iPhone of the front of Notre Dame and the legend below “Point Zero & Notre Dame.” The iPhone app has a series of sites installed which pops up when the phone comes within range of the landmark (using its onboard GPS location finder) and voila!
I get the impression that the ultimate realization of AR will be a phone that is tied into a cloud-resident data base of all landmarks—not a preselected few a free app on the iPhone can store away. With the right app on your portable device, you will be able to ask the phone about anything you’re in the vicinity of—natural or man made—and it will give you all the relevant facts.
The reason AR will be successful is because of the enormous commercial potential the technology affords. The system that knows the exact location of Notre Dame in Paris will also know the location of nearby coffee shops, restaurants, and every other commercial establishment. Furthermore, the software that can tell you about the world around you is also cleverly evaluating you to determine whether to present you an offer for 10 percent off on a Latte from a nearby merchant or a special deal on a French author the software has determined you might like.
The great problem of becoming an integral part of an AR is that you’re being marketed to by the behavior you exhibit in the augmented reality. And the phone is the device that’s enabling it to happen. The device has not become big brother yet. All it currently has is GPS—the network knows where you are at all times (ironically, the average honest citizen is better monitored than nearly every parolee from a correctional institution), a compass—so the network knows which way you’re going, and an accelerometer which could detect if you’re moving or stationary. In the future, the plan is to attach biometric monitors—great for detecting medical emergencies, but wonderful for marketing to you if your blood sugar is low and you need a sugar fix—the patisserie is offering croissants at 10 percent discount with coffee purchase.
I begin to feel as if I’m part of a closed loop feedback system in which I respond to stimuli that are then readjusted to achieve some kind of behavior in me. The Stimuli are marketing incentives and the response from me is the purchase of a good. Great, I’ve become an element in a machine works that’s designed to endlessly cycle virtual coinage.
Augmented reality, on the other hand, suggests something unique. According to Wikipedia, AR is a “real direct or indirect view of a physical real-world environment whose elements are merged with, or augmented by, virtual computer-generated imagery.” Your phone knows where you are using its on-board GPS and by accessing Google maps, it can determine what’s around you and can—with a touch-enabled screen—tell you about what’s around you.
I connected the term, which I heard today, with the Apple iPhone 3GS ad "Travel" in which the voice over asked if you want your own personal tour of Paris and declares “there’s an app for that” at which time the iPhone articulates “you’re standing at the center of Paris…” with a picture on the iPhone of the front of Notre Dame and the legend below “Point Zero & Notre Dame.” The iPhone app has a series of sites installed which pops up when the phone comes within range of the landmark (using its onboard GPS location finder) and voila!
I get the impression that the ultimate realization of AR will be a phone that is tied into a cloud-resident data base of all landmarks—not a preselected few a free app on the iPhone can store away. With the right app on your portable device, you will be able to ask the phone about anything you’re in the vicinity of—natural or man made—and it will give you all the relevant facts.
The reason AR will be successful is because of the enormous commercial potential the technology affords. The system that knows the exact location of Notre Dame in Paris will also know the location of nearby coffee shops, restaurants, and every other commercial establishment. Furthermore, the software that can tell you about the world around you is also cleverly evaluating you to determine whether to present you an offer for 10 percent off on a Latte from a nearby merchant or a special deal on a French author the software has determined you might like.
The great problem of becoming an integral part of an AR is that you’re being marketed to by the behavior you exhibit in the augmented reality. And the phone is the device that’s enabling it to happen. The device has not become big brother yet. All it currently has is GPS—the network knows where you are at all times (ironically, the average honest citizen is better monitored than nearly every parolee from a correctional institution), a compass—so the network knows which way you’re going, and an accelerometer which could detect if you’re moving or stationary. In the future, the plan is to attach biometric monitors—great for detecting medical emergencies, but wonderful for marketing to you if your blood sugar is low and you need a sugar fix—the patisserie is offering croissants at 10 percent discount with coffee purchase.
I begin to feel as if I’m part of a closed loop feedback system in which I respond to stimuli that are then readjusted to achieve some kind of behavior in me. The Stimuli are marketing incentives and the response from me is the purchase of a good. Great, I’ve become an element in a machine works that’s designed to endlessly cycle virtual coinage.
Tuesday, September 8, 2009
Presenting our lives for the social graph to view in full 1080p HD
I’ve had a chance to read through a number of articles this Labor Day Weekend on the next generation of smart phones. I’ve been struck by the innovation that chip suppliers and mobile handset makers are cramming into these small portable devices. All this innovation aims to serve users increasingly employing handset as a terminal into the “social graph.” I love the term social graph as it connotes a collective consciousness: what all the connections on all the on-line social networks have become.
And what are we putting into our on-line social networks: pictures, video, audio, and lots of text. These multimedia and text files provide tangible evidence of the significant as well as trivial moments of our lives: reminding ourselves as well as our connections of that trip to London, Paris, Taipei…; the birth of our first, second,… child; the Duran Duran, Grateful Dead,… concert…; the minutes and seconds of our lives.
Up until the first decade of the 21st Century, most of these memories resided in our mind, on paper, or stored away in boxes of photographs, 8-mm film, or VHS cassettes and DAT tape. Now, all of that emotional memorabilia has found a home in the social graph, stored away for as long as we keep our accounts active and available for others to view.
What’s making all this possible is the continuing availability of low cost silicon. This eighth most common element in the universe by mass, a tetravalent metalloid with the symbol Si, atomic number 14, and atomic mass 28.0855, has become to the information age what coal was to the industrial revolution. For the social networker silicon is providing the continuous improvement in the fidelity of these captured moments.
Texas Instruments’ new OMAP chip is promising to allow HD quality image and video capture and playback. The specs call for 20-megapixel photographs and 1080p HD video capture in handheld smart phone. How incredible is that! You will be able to capture an unheard of amount of visual detail to share with your connections. Though the images and moving pictures will only be as good as the eye that captures them, the detail will be there in every frame.
What’s propelling the continuing drive to electronically capture and share these transient moments? Are we all modern day Robinson Crusoe’s stranded on planet earth and needing the affirmation of our man Friday that our lives are meaningful, that what we do is contributing to some collective good for the world around us, and—most important of all—that we’re not alone in our small part of the infinitesimal huge universe?
Or maybe we just need to hangout and brag about what we've done.
And what are we putting into our on-line social networks: pictures, video, audio, and lots of text. These multimedia and text files provide tangible evidence of the significant as well as trivial moments of our lives: reminding ourselves as well as our connections of that trip to London, Paris, Taipei…; the birth of our first, second,… child; the Duran Duran, Grateful Dead,… concert…; the minutes and seconds of our lives.
Up until the first decade of the 21st Century, most of these memories resided in our mind, on paper, or stored away in boxes of photographs, 8-mm film, or VHS cassettes and DAT tape. Now, all of that emotional memorabilia has found a home in the social graph, stored away for as long as we keep our accounts active and available for others to view.
What’s making all this possible is the continuing availability of low cost silicon. This eighth most common element in the universe by mass, a tetravalent metalloid with the symbol Si, atomic number 14, and atomic mass 28.0855, has become to the information age what coal was to the industrial revolution. For the social networker silicon is providing the continuous improvement in the fidelity of these captured moments.
Texas Instruments’ new OMAP chip is promising to allow HD quality image and video capture and playback. The specs call for 20-megapixel photographs and 1080p HD video capture in handheld smart phone. How incredible is that! You will be able to capture an unheard of amount of visual detail to share with your connections. Though the images and moving pictures will only be as good as the eye that captures them, the detail will be there in every frame.
What’s propelling the continuing drive to electronically capture and share these transient moments? Are we all modern day Robinson Crusoe’s stranded on planet earth and needing the affirmation of our man Friday that our lives are meaningful, that what we do is contributing to some collective good for the world around us, and—most important of all—that we’re not alone in our small part of the infinitesimal huge universe?
Or maybe we just need to hangout and brag about what we've done.
Tuesday, September 1, 2009
Viral Marketing through Social Media
A couple weeks ago, I received a call from NZ, a serial entrepreneur I met a while back when I was an editor and he was a marketing exec at a high tech company. He was now teaching a class for the women 2.0 organization, which moves from venue to venue. This event was held in an office building on University near Alma in Palo Alto. NZ asked me to present 12 to 14 slides on leveraging social networking for marketing.
I had some free time and was already digging into the new phenomenon. I had been on LinkedIn for several years, pestering all the people I had met during my years in technical journalism to link in with me. Not only did it get me back in touch with long lost contacts, it also showed the power of all these connections, one being NZ. I also had a blog begun back in Autumn 2004, but I had not leveraged Twitter to help drive readership. I was also active on YouTube having posted some 30 odd videos. However, I was simply experimenting with a phenomenon.
I was now being asked to explain to a group of aspiring entrepreneurs how to leverage this social networking to make money. Where do I begin? In the world of on-line marketing, everything begins with a web site, the storefront where you meet your customers. Building a web site is pretty standard faire and I couldn’t add much to what was common knowledge.
Then it struck me. What modern marketing is all about is telling a story, the same story over and over adding unique twist with each telling. The most obvious example is the BMW-produced short videos starring Clive Owen in some clever plot twist aimed at convincing the viewer that BMW is “the Ultimate Driving Machine.”
The entire marketing effort at BMW from their commercials showing the construction of vehicles, to BMWs’ roles in movies like the James Bond series and more recently “Shoot ‘em Up,” keeps telling the story. As evidence of their success, the “BMW, The Ultimate Driving Machine” Facebook page has 30,873 fans, presumably owners or those aspiring to be.
How does an upstart entrepreneur tell their story with no money? For the short presentation to the Women 2.0 audience, I suggested finding an idea related to their business that goes viral. It’s a concept described in “The Tipping Point: How Little Things Can Make a Big Difference,” a book by Malcolm Gladwell. It’s what BMW and every major brand has spent $billions over time producing.
For my example, I suggested a wedding planner business started by a couple, Jill and Kevin. I suggested that J&K might create a website called J&K Weddings. To promote their business they might plan their own wedding, film it and put it on YouTube with their company name and website on the ending credits. To make the video compelling they might do a different walk down the aisle to the alter.
The result might look like the YouTube video JK Wedding Entrance Dance (http://www.youtube.com/watch?v=4-94JhLEiN0), which has garnered, nearly 23 million views in the month it’s been posted and still growing. Whatever business Jill and Kevin were in, it could have leveraged their viral YouTube video and the resulting mainstream publicity (appearance on “Good Morning America” and the Today Show (http://www.youtube.com/watch?v=Xd79E6I5CV4).
I wonder if the idea took hold in any of those in the audience. I keep checking the hot new videos on YouTube just in case.
I had some free time and was already digging into the new phenomenon. I had been on LinkedIn for several years, pestering all the people I had met during my years in technical journalism to link in with me. Not only did it get me back in touch with long lost contacts, it also showed the power of all these connections, one being NZ. I also had a blog begun back in Autumn 2004, but I had not leveraged Twitter to help drive readership. I was also active on YouTube having posted some 30 odd videos. However, I was simply experimenting with a phenomenon.
I was now being asked to explain to a group of aspiring entrepreneurs how to leverage this social networking to make money. Where do I begin? In the world of on-line marketing, everything begins with a web site, the storefront where you meet your customers. Building a web site is pretty standard faire and I couldn’t add much to what was common knowledge.
Then it struck me. What modern marketing is all about is telling a story, the same story over and over adding unique twist with each telling. The most obvious example is the BMW-produced short videos starring Clive Owen in some clever plot twist aimed at convincing the viewer that BMW is “the Ultimate Driving Machine.”
The entire marketing effort at BMW from their commercials showing the construction of vehicles, to BMWs’ roles in movies like the James Bond series and more recently “Shoot ‘em Up,” keeps telling the story. As evidence of their success, the “BMW, The Ultimate Driving Machine” Facebook page has 30,873 fans, presumably owners or those aspiring to be.
How does an upstart entrepreneur tell their story with no money? For the short presentation to the Women 2.0 audience, I suggested finding an idea related to their business that goes viral. It’s a concept described in “The Tipping Point: How Little Things Can Make a Big Difference,” a book by Malcolm Gladwell. It’s what BMW and every major brand has spent $billions over time producing.
For my example, I suggested a wedding planner business started by a couple, Jill and Kevin. I suggested that J&K might create a website called J&K Weddings. To promote their business they might plan their own wedding, film it and put it on YouTube with their company name and website on the ending credits. To make the video compelling they might do a different walk down the aisle to the alter.
The result might look like the YouTube video JK Wedding Entrance Dance (http://www.youtube.com/watch?v=4-94JhLEiN0), which has garnered, nearly 23 million views in the month it’s been posted and still growing. Whatever business Jill and Kevin were in, it could have leveraged their viral YouTube video and the resulting mainstream publicity (appearance on “Good Morning America” and the Today Show (http://www.youtube.com/watch?v=Xd79E6I5CV4).
I wonder if the idea took hold in any of those in the audience. I keep checking the hot new videos on YouTube just in case.
Subscribe to:
Posts (Atom)