paul callahan…mostly common sense

Apple’s announcement of “The world’s thinnest notebook. MacBook Air.” got me thinking. Where are we headed in the world of computing? What is Apple really doing here?

For the moment, it looks like the future of computing, as defined by Apple, has two basic elements: beautiful objects and the Internet. 

Apple creates the most irresistible computing objects – you want to have them, hold them, play with them, and show them to your friends.  The desire that Apple’s objects create in the minds of customers is undeniable.

Apart from their industrial design, Apple’s computing objects have gorgeous GUIs.  And the compute engines under the hood serve the common goal of creating delicious access to the Internet.  The days of differentiation through applications are long gone.  The Internet is the application. 

As long as you build a robust operating system – one that does not leave itself open to attack from the enemies of the manufacturer of the beautiful objects – customers are happy.

What about Microsoft?  Vista has a polished and attractive new face, but it rides on an operating system that is full of security holes and plagued with viruses.  As a result, Mom’s and Dad’s tech support is forced to work full time to keep home software defense systems at peak alert status.  How can that be good for business?

On the Linux front, desktop Linux is still for geeks and hobbiests (I count myself among them).  You can build yourself a wonderfully powerful desktop for $300, or buy a very cheap Linux laptop from Zonbu, but the community is waiting for stable releases of the latest GUIs from KDE and GNOME.  Still no competition for Apple.

Google’s mobile phone effort, Android, a Linux based platform and rapid application development platform could change the game, but only if it fosters beautiful objects on par with Apple’s iPhone.

In the end, Apple has an extraordinary edge.  Though the strategy may not be explicitly stated, the results are easily interpreted…and stellar.

Full disclosure: No position in Intel, Apple, or Google at time of writing.

Directory Tags: | Wireless | Apple | Google | 3G | Linux | Mobile

In the world of perception management, it does not get any better than this.  For months before Google’s entry into the wireless world, blogs were buzzing with speculation over the secret creation of a Linux-based gPhone.  But the real coup de grace was the coverage by the Wall Street Journal and the New York Times during the week prior, on the day of the announcement, and on the day after the announcement.  Getting that kind of business ink can only be described as a demonstration of pure market power, the likes of which rivals Intel’s paid-for Centrino nonsense of a few years ago and Apple’s recent iPhone launch.

But I have to admit that Google’s push into the world of mobile handsets means nothing but goodness for the business.  Google is not going to stem the melting of the ice shelf in Greenland, but it will change the course of the wireless service provider industry.

The drug that we are all hooked on – the mobile phone – will be altered to bring on more Internet applications and yield an even bigger dependency…Hopefully, mobile operators will see that.

Full disclosure: No position in Intel, Apple, or Google at time of writing.

Directory Tags: | Wireless | Apple | Google | 3G | Linux | 700 MHz |SEC |Mobile |

Gizmo is taking another stab at the mobile space.  Gizmo for Mobile looks like it combines IM, Presence, and some form of low-cost long distance, but the beta release has more than a few holes.  At first glance, it look as though Gizmo has the waterfront covered (see the apparent range of phone supported via the animated GIF).  But reading the Gizmo Forum reveals numerous issues such as lack of support for the Palm Treo Windows products.  In the end, I found the biggest problem to be confusion over mobile clients.  As one poster on the Forum put it, “… can they make this any crazier?”

1. Gizmo for Mobile is a call back system, not SIP.  This client is also known as “Gizmo5″ and is a Java-based application.  As the Gizmo Forum explains, “Gizmo for Mobile can do instant messaging and callback, but it cannot do SIP calling. The instant messaging occurs over your mobile providers data connection, and the callback occurs over the mobile network. The advantage of callback is that in many cases (like international calls) it may be cheaper than what your mobile provider would have charged you for the same call.”  It goes on to say “Our network is calling to both parties, and you do get charged for both legs of the call at our standard Call Out rates.  Many posters are already complaining about the cost of paying for both legs, and are asking why this client doesn’t operate like the laptop verison.

2. Gizmo VoIP uses SIP, but doesn’t do IM.  The Gizmo VoIP client also seems to be known as Gizmo for Nokia.  The client uses the Gizmo SIP network, runs on Nokia phones running Symbian S60 only, and allows users to make free Gizmo calls to other Gizmo users via Wi-Fi.  The supported phones listed presumably have the embedded Nokia SIP stack – hence the reason for Gizmo VoIP using a SIP-based client.  Where this product appears to be going is not is not clear.
3. Gizmo for Palm Treo appears to be different yet again.  This client is supported only on the PalmOS versions of Treos, offers interop with the usual list of most popular IM clients, and seems to offer free calling with other standard Gizmo PC-based clients and Gizmo for Palm Treo.  Though there is little technical information about the protocols in use, the IM and call traffic is all carried via the standard data services offered by mobile operators on these phones.

What next for Gizmo Project?  Rationalize the product line.  This is a mess.  I can only imagine what it must be like for the developers – trying to keep this all straight – let alone potential customers.  Up against Skype and Google, I hope they can keep innovating without tearing themselves apart internally.

Full disclosure: No position in Skype, Google, Nokia, or Palm at time of writing.

Directory Tags: | Wireless | Nokia | Google | Palm | VoIP |Gizmo |Mobile |

Having lots of money changes your behavior. It doesn’t matter whether you are an individual or a large company. Look at Microsoft. It has hobbies — endeavors outside of its core businesses which it finds amusing, but don’t really matter — like MSN and MSNBC. Now Google is interested in wireless and has made cryptic comments recently regarding participation in the upcoming FCC auction for 700 MHz wireless spectrum. Is this just a hobby, and is Google behaving like every other overfed rich guy on the planet? Or is the company really willing to step up and change the way mobile networks are constructed, operated, and paid for?

Personally, I think Google should pony up with the money and build a network. It will be the first time it has ever had to deal with ugly nuts and bolts of supporting a real network and cope with the holy terror of customer satisfaction. Maybe Google can change the business, but it needs to do something other than sniping from the sidelines to find out.

Full disclosure: No position in Microsoft or Google at time of writing.

Directory Tags: | Wireless | Microsoft | Google | 3G | 700 MHz |SEC |Mobile |

Financial Times recently reported that Apple has signed several deals in Europe: T-Mobile Germany, Orange France, and O2 UK.  Apparently, the mobile operators have agreed to fork over as much as 10% of the revenues resulting from the use of the iPhones on their networks.  Round one definitely goes to Apple in this boxing match.  This is a brilliant move.  Nothing is harder for mobile operators to do, than giving up a piece of their revenue per user.  Not sure this is true?   Take a read through any mobile operators quarterly earnings slides and see how they crow about increasing average revenue per user (ARPU).

How could this be different from the AT&T rollout in the US?  Though Apple shareholders (which I am not) should be ecstatic.  But Apple users in Europe will need to be satisfied with cooing over the beautiful user interface with the lack of HSDPA for Internet downloading.  Jeesh, get your act together on network side, Apple.  The company certainly can’t use the excuse that Euro operators do not have the HSDPA infrastructure in place.  Heck, operator 3 in the UK, just lowered its HSDPA pricing to $20 per month for 2.8 Mbps.  I do not think we are going to see a price like that from AT&T any time soon.

Full disclosure: No position in AT&T, Apple, 3, Orange, or 02 at time of writing.

Directory Tags: | Wireless | Orange | O2 |TMobile | Apple | UMTS | HSDPA | 3G | Mobile |

Though the market appears to be pumped about femto cells, a number of issues remain unresolved.  Whether those issues turn into storm clouds — and eventually rain on the femto cell parade — is simply a matter of innovation.

If femto cell suppliers can invent solutions that overcome these issues, the femto cell market will launch like a roman candle.  If not, the result will be smoke and sputtering noises for years to come.

Here’s the list in no particular order:

1. Automatic access control and mobility — Femto cells need to prevent drive-by users from camping on inadvertently, but also hand-in and hand-out authorized live calls to and from macro cells.
2. Simple activation — Femto cells need to be as close to zero-touch as possible on activation: probably a single phone call with serial number and a dead-simple web interface to add users.  If femto cells are as bad as Wi-Fi configurations, they will flop.
3. Excellent security — Because femto cells will connect via any Internet service, wireless operators need femto cells to authenticate themselves and then encrypt all traffic using a security tunneling protocol such as IPsec.  Anything less than excellent security will be unacceptable — even for the most liberal wireless operator.
4. High-end scalability — Operators will need to connect millions of femto cells.  But unlike cell phones, femto cells will present millions of IPsec tunnels acting like corporate VPN links that never go down.  This will require great honking security gateways to terminate tunnels and handoff calls.
5. Interference mitigation — As I have previously written, femto cells will need enough intelligence to listen, learn, and then automatically mitigate RF interferenece from macro cells and other femto cells on the block.
6. Core network interface — Because femto cells will use existing mobile phones, they will need to connect to the existing mobile operator core network — often a massively clunky mess.  This has already spurred an architectural battle among femto cell competitors.  Presently it is the wild, wild west, but the least disruptive solution will likely win.

Full disclosure: Employed by AIRV at time of writing.

Directory Tags: | Wireless | WiFi | Wi-Fi | DSL | Cable | UMTS | CDMA | WiMAX | Muni Wi-Fi | Mobile | Femtocell |

The FCC’s recently issued an order on the use of 700 MHz spectrum.  The airwaves have been occupied by television broadcasters, and will be made available for other wireless services, including public safety and commercial services (download the FCC press release).  The spectrum will be vacated by TV broadcasters on February 17, 2009 and auctioned no later than January 28, 2008.  Based on the press release, the FCC order creates:

1. “Open Platform” wireless spectrum.  Whoever wins the auction for this huge chunk of spectrum (22 MHz) must agree to “provide a platform that is more open to devices and applications.”  The goal is to “allow consumers to use the handset of their choice and download and use the applications of their choice.”
2. Nationwide public safetey wireless spectrum.  The winner of the bid for 10–20 MHz of “Nationwide Commercial” wireless spectrum, will join in a Public Saftey/Private Partnership and will also win the right to “build out a nationwide, interoperable broadband network for the use of public safety.”  The winner also gets to use some of the Public Safety network (see the transparent overlap in the figure) as long as their use of the Public Safety network is pre-emptible when there is an emergency.

What is the impact?

1. Google must build a network if it wants to play.  Despite a severe attack of arrogance, Google did us all a favor by influencing the FCC to set aside spectrum for an open platform wireless network.  But the bad news for Google is the fact that it will not be able to buy the spectrum and make money by wholesaling access to the airwaves to others.  Google must bid on the spectrum like everyone else, and then it must build a network and operate it.  Maybe for the first time ever, Google will be faced with getting its hands dirty.  Build a real network, operate it, and deal with all those nasty users complaining that it doesn’t work the way they want it too.  Accountability.  Jeesh, what a bad dream.  Of course, Google can hire someone to build and to run it, but ultimately it will be theirs.
2. The big plum is in the Public Safety spectrum.  The winner of the auction for the National Commercial spectrum, not only gets to build out the Public Safety network and use some of the spectrum when possible, it gets to compete with the Open Platform winner in the 700 MHz band.  What’s so great about 700 MHz?  One of the biggest problems for mobile networks today is coverage, indoor and out.  Because 700 MHz is lower frequency than most of today’s cellular networks, it will have fantastic propagation characteristics.  It will go further in the open air than today’s cellular, and it will penetrate build walls better.  Expect the bidding to be fierce for this chunk of spectrum.

Full disclosure: Employed by AIRV, no position in GOOG at time of writing.

Directory Tags: | Wireless | WiFi | Wi-Fi | DSL | Cable | UMTS | CDMA | WiMAX | Google |Muni Wi-Fi |

I’ve mentioned Truphone in the past as a mobile VoIP by-pass pioneer and declared “advantage Truphone” for the moment.  In fact, I said, “what’s a poor poor Euro-cellular operator to do?  Not much.”  Wrong.  Of course, I was being facecious, but now the tables are turned.

T-Mobile has decided to significantly raise the temperature in the Truphone kitchen.  Om Malik and Jesse Kopelman write about T-Mobile not allowing connections to the VoIP startup.

Now it’s a case of “what’s a poor little startup do do?”

Here is an idea for Truphone CEO, James Tagg.  Drop the whole by-pass strategy and use Truphone’s established infrastructure to deliver a different media service.  I dunno, why not offer a photo sharing system with music and voice over add-ons using the SIP protocol?

Truphone has proven that their infrastructure works and they have absolutely cracked the nut on how to install third party apps in a hostile handset environment. Why not use that expertise for something that won’t send the incumbents into a frenzy of revenge?

Full disclosure: No position in T-Mobile or Truphone at time of writing.

Technorati Tags: | Wireless | WiFi | Wi-Fi | VoIP | 3G | Mobile | T-Mobile |

The telecom world is abuzz with news of femto cells — minature cellular base stations that provide mobile coverage in the home.  A number of wireless operators have announced plans to deploy millions of the widgets (Vodafone, Sprint, Softbank, Orange, Clearwire, and others) and a pile of vendors have announced the intent to offer femto cell products (Huawei, Ericsson, Ubiquisys, ip-access, Airwalk, to name a few).  Femtos are likely to be offered in nearly every flavor of cellular technology: UMTS, GSM, CDMA, and WiMAX.

For consumers the value proposition is simple: better coverage, maybe family in-home calling plans, and higher performance data services since cellular bandwidth is shared by fewer users.

For operators, they get a much lower cost way of delivering mobile broadband — consumers pay for the femtos and the backhaul vial DSL, cable, or fiber services.

If this shift towards tiny base stations in the home does occur in a big way, what does it mean for competing technologies? 

• Muni-Wi-Fi could suffer further indignities.  As carried recently by the AP, it is unclear whether Muni-Wi-Fi can move beyond a community service project.  If mobile operators can offer better stuff via femtos, why would a town pony up for a municiple Wi-Fi project?  Look out, Tropos and BelAir.
• Home Wi-Fi routers will be in a roil.  Wi-Fi’s inherent interference problems will likely be mitigated by the introduction of 802.11n products, but Wi-Fi routers will be competing with femto cell products operating in the licensed spectrum and controlled by experienced operators.  In addition, femto cell products will also plug into the same DSL and cable modems as today’s Wi-Fi routers.  Some DSL router vendors, such as 2Wire have announced plans to offer femto cell products, but it remains unclear whether DSL Wi-Fi routers will subsume cellular femto cell technology or whether it will be the other way around.

Full disclosure: No position in Clearwire, Ericsson, France Telecom, Huawei, Softbank, Sprint, or Vodafone at time of writing.

Directory Tags: | Wireless | WiFi | Softbank | Orange | Clearwire | Wi-Fi | DSL | Cable |Vodafone | Sprint | UMTS | CDMA | WiMAX | Muni Wi-Fi | Mobile | Femtocell |

I received the following thoughtful comments on More on the iPhone network goof:

From Robert Boylin:

Dear Paul Callahan,

You have good points; but with a European launch before ’07 is out, and asia in ’08 I think your skepticism over the 10 million in sales is weak. Apple’s contract with some part supplier(s) is for 6 mil. in ’07 with a potential 2 mil. additional. I think Jobs was conservative in giving the 10 million by the end of ’08. With the broadband networks abroad Apple will have more receptive markets. I expect they’ll add features and software along with new models before ’07 is out.

It’s the cooperation of Yahoo and Google along with supporting the PC and Mac platform software that will be essential. These partners, along with demand, will likely persuade service providers to adjust to the platform’s features. If Apple supports PC software syncing for the business customers the phone’s sales will increase further. They have time to do this. The launch has to be managed and AT&T has to get their 3G network completed for full success. I would expect Apple to sell 3G models by the end of ’07.

Just some thoughts that your article prompted.

Thanks, Robert.  That is very good information on Apple’s supplier contracts.  I agree that sync’ing for business customers will help.  In addition, there is an argument that the focus of real-world use will actually be cellphone+iPod (without a lot of web media access).  That application may be good enough to hit your supplier-promised numbers of 6m units.