Archive for March, 2006

TV ads losing effectiveness, but what about mobile TV?

Sunday, March 26th, 2006

Didn't I aready payCarl Howe at Blackfriars has put up two interesting posts.  The first cites the diminished effectiveness of TV advertising.  The second highlights findings that show user viewing time increasingly split between the Web and TV, but becoming less tolerant of ads on the whole.

Where does that leave mobile TV?  Yahoo just made a deal with CBS to carry an on-demand version of 60 Minutes with access to archived programs.  But I don’t think mobile TV viewers will be willing to pay for it.  I would think that wireless operators Sprint, Verizon, and Alltel would be interested in offering two tiers of mobile TV viewing via EV-DO:

  1. Free noise.  The equivalent of basic cable but fully ad-funded: music videos from VH1, news from CNN and MSNBC, weather.
  2. Paid-for good stuff.  Like premium cable $10 per month would eliminate ads and get you on-demand versions of the hottest items: HBO episodes of the Sopranos and Big Love, ABC’s Desperate Housewives.

Either way, with viewing time split between TV, Web — and now mobile TV — viewer tolerance for ads can only further degrade.  This actually may push more mobile TV views to the premium package and prop up the ARPU of broadband mobile.

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The 802.11n food fight, Marvell’s response

Tuesday, March 21st, 2006

Food_fightAfter a posting and inside look at the trials and tribulations of 802.11n chip makers, I had a follow up conversation with Mahesh Venkatraman, Senior Technology Marketing Manager for Marvell.  The company says that its 802.11n chipset, the 88W836X family:

  1. Is shipping in volume.  Marvell says that its chips are beyond sampling and are shipping in volume.  The company would give no dates, but indicated that its 802.11n chipset already had several design wins.
  2. Will appear in retail access points (APs) and adapters, first.  Unlike Marvell’s previous focus on the embedded market (Sony PSP, Microsoft Xbox 360, some multimode phones with Wi-Fi), its first 802.11n chipsets will appear in discrete consumer Wi-Fi products such as adapters, routers, and APs.  Marvell characterized the timeframe for these products as “soon.”
  3. Is performing well.  Marvell insists that the chipset is performing well and that it “has a product worthy of shipping.”
  4. Has nothing to do with Intel’s Monahans Xscale.  Marvell’s recently announced work with Intel’s new Xscale family code named Monahans is limited to its 802.11g part, the 88W8686, not 802.11n.

Marvell is nothing if not aggressive in its strategy and its assertions.  It clearly plans to be the first to market with 802.11n and seems to be thriving on the controversy.

Discrete retail gateways and adapters from the likes of Linksys, Belkin, D-Link, and Netgear will soon give us the chance to compare the stability and performance of Atheros, Broadcom, and Marvell 802.11n chipsets.  I expect Tim Higgins at Tom’s Networking will be busy soon.

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Mobile VoIP, fear of the wild things

Monday, March 20th, 2006

Where the wild things areMobile operators are wringing their hands over the use of VoIP in mobile phones.  What are they afraid of?

  • Eroding minutes.  Long the dream of the Fixed Mobile Convergence (FMC) crowd, VoIP-equipped mobile phones could avoid burning minutes by using enterprise Wi-Fi connections.
     
  • More Skypes.  Microsoft, Skype, and others are demonstrating free SIP-based VoIP clients for smart phones running Mobile Windows.  With Google in the mix, the sky is surely falling.

I don’t get it.  Traffic is traffic.  And carriers get paid for transit. 

  1. Carriers will get paid for data.  VoIP calls are just voice calls in data clothing.  And last time I checked, mobile broadband and mobile data was very expensive stuff.  Verizon charges $80 per month for its EVDO-based mobile broadband service, and it certainly doesn’t care if you choose to use EVDO to carry Skype or Microsoft’s Office Communicator Mobile traffic.
  2. FMC will be under carrier control.  I do not — for one second — believe that corporate IT will install FMC gateways on premise to handle mobile traffic over Wi-Fi.  Instead, carriers will install gateways in their networks to originate and terminate FMC calls.  Faced with the proposition of using carrier based FMC gateways or wrestling with their own gear on-site, the choice will be easy.  XO is already stepping up the pace for VoIP wholesale offerings.
  3. VoIP/data traffic should improve the bottom line.  Mobile VoIP will be more cost efficient than today’s circuit-based networks.  No one will argue otherwise.

I can’t think of any realistic mobile VoIP scenario in which mobile operators do not get paid.  Bring on SIP.  Bring on FMC.  Bring on the Skype wannabees.

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Drinking from the MVNO money keg

Wednesday, March 15th, 2006

KegOm Malik and Ian Gilliot have written extensively on the Mobile Virtual Network Operator (MVNO) phenomenon, some of them raising upwards of $300m to build specialty services that ride on existing mobile operator networks.  Both Om and Ian suggest that MVNOs like Amp’D, Helio, XeroMobile, and Mobile ESPN are likely to follow the same boom-bust dynamic of CLECs of five years ago.  I agree.  History is likely to repeat itself.

In fact, a new mania is upon the land as evidenced by the facts surrounding those involved in the most recent wild horse, XeroMobile.  The Register, FT, and others have reported on the strange nature of some of the principals, many of whom recently jumped from a failed effort using the same business model.  Apparently, the past doesn’t seem to matter to a substantial number of investors.

That being the case, there will be winners and losers — just like the last time.  As Om Malik and others point out, the losers will be “private equity investors, venture capitalists, and well in the end the citizens who fund pension funds.” 

The winners will be those who can find a way to tap the keg of money with the biggest spigot and drain the money the fastest way possible.  Since some of the new MVNOs — especially XeroMobile — plan to offer free ad-funded phones, advertising agencies will obviously be one of the winners.  But ultimately, if MVNOs continue to get funding, their efforts and their money will:

  • Fuel the broadband mobile market.  These high-end services will need a lot of pretzels and beer to get them off the ground.  Smart phones from Samung for $400 a pop and all you can eat data services from Verizon at $80 per month will need a huge promotional budgets to acquire customers.  Guess where that money is coming from.
  • Prove or disprove the ad-based business model.  To some, it will not matter whether they succeed or fail.  Either way, critical data on ad-funded networks will be gathered from multiple MVNO experiments.  Google will need to decide whether to play, or to put up its feet and see what survives the fire.

The real beneficiaries of this money-draining exercise will be phone makers Samsung, Nokia, and Motorola, high speed data infrastructure suppliers Lucent, Nortel, and Airvana, and the world’s 3G-transitioning wireless operators.  They will be the ones drinking from the money keg.

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Inside baseball on Wi-Fi chip makers

Tuesday, March 14th, 2006

Baseball clemensThough I just recently wrote about Atheros and its worthy opponents, it is always useful to examine the details of the game from an inside perspective.  Sometimes the smallest details are the most revealing — a flaw in execution, or an unstoppable competitive weapon.  To that end, I recently pinged several well placed sources for insight into the latest trials and customer interactions for Airgo, Atheros, Broadcom, and Marvell.

  1. Airgo has quietly landed some embedded deals, and has had them for an extended period of time. Samsung is shipping Airgo’s miniPCI modules in Samsung-branded PCs. These PCs are sold in the worldwide market outside of the US under the Samsung brand, while similar models without Airgo-inside are sold by Dell around the world.  Airgo has also has successfully inserted its chips into at least one security camera product  — the Smartvue S2.
  2. Atheros is winning handsets in Asia.  As it has in the past, Atheros has put considerable effort into the Japanese market.  Anyone who has attempted winning the likes of NEC, Sony, Matsushita, and Toshiba knows that it is a multi-year affair.  Building on relationships that span almost six years, Atheros has won a major handset deal in Japan and is continuing to win others in the embedded space. Atheros says it is also sampling its 802.11n/EWC products to strategic partners, but I haven’t gotten any direct customer feedback yet on how these look.
  3. Broadcom is very far along with its 802.11n/EWC product.  The company’s ODMs are providing sample boards to major consumer networking companies with far greater performance than the Marvell solution.  Even so, it is not clear how Broadcom’s solution compares to Airgo’s.
  4. Marvell‘s 802.11n-based solution is not exactly reaching out.  Marvell’s 802.11n reference designs are currently being shown to consumer electronics companies — and have horrendous performance.  Sources say that Marvell’s 2×3 solution barely transmits two meters (6 feet) before failing.  There are also major concerns about whether the Marvell solution is really EWC compliant.  Marvell claims it is, and everyone else claims it isn’t…

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Atheros, know thine enemies

Monday, March 13th, 2006

Bar fightWi-Fi chip maker Atheros has done well by anyone’s standards:

  • Doubled its stock price in the past three months
  • Maintained 100% share in enterprise access points (APs)
  • Encroached on Broadcom and Marvell in the consumer space
  • Cut a deal with Qualcomm for the mobile phone market
  • Conspired (er…I mean partnered) with Intel, Marvell, and Broadcom to steal 802.11n away from Airgo

Not bad.  But the competition doesn’t likes it when the other guy is doing this well.  In the fishing business, you never tell the competition how much you landed and where you caught them.  If you do, the rest of the fleet will be crawling all over you like ants on a dead cookie.  Ah yes, but these are public companies.  They must report — and now everybody knows.

So who will be breathing down Atheros’ neck in the near future?  My pick is Marvell.  Why?  Mostly, because others are stumbling.

  1. Airgo is still mourning its loss to the 802.11n consortium and is rushing to spin up silicon that will match the standard.  To date, the company has yet to break out of the low margin consumer Wi-Fi space, nor has it landed any business as an embedded solution for laptops or other devices.  Without more wins, Airgo’s only exit is acquisition.
  2. Broadcom has lost its sting.  A notably aggressive general manager and much of his team took flight in the fall of ‘05.  From the outside looking in, the Wi-Fi chip division seems to have settled in for a long winters nap.  Broadcom could acquire Airgo to get its groove back.

What makes Marvell so dangerous in the Wi-Fi chip business?  It has another business.  The company continues to show excellent results in the Gigabit Ethernet enterprise market which represents 70% of its revenue.  Wi-Fi is currently lumped in under consumer which is the remainder of Marvell’s business.  For the moment, dropping its drawers every time it gets into a Wi-Fi scuffle with Atheros won’t have a big impact on Marvell’s margins.  Despite its public statements, and its vaunted power saving features, Marvell is largely competing on price in the embedded market for laptops, digital cameras, music devices, and printers.  Atheros needs better power saving features and a very large — and visible — win in the high volume mobile handset market to prove it can match Marvell’s prowess in the embedded space.

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AT&T + BellSouth, it’s not about the Internet

Wednesday, March 8th, 2006

I stumbled across Renesys yesterday — an amazing company tracking the growth of the Internet world-wide with “repeatable, objective, unfalsifiable” methodologies.  Renesys has chimed in with an analysis of the impact of several recent mergers on Internet customer-based ranking.  Along with the AT&T-BellSouth marriage the company included Level(3) buying Wiltel and Verizon buying MCI UUnet.

(For those of you not familiar with Internet peering terminology, the Renesys blog entry is full of Autonomous System (AS) numbers, a designation for the peering points between Internet service provider networks.)Internet Visualization

To net it out (no pun intended), Renesys shows AT&T lagging significantly behind Sprint, Level(3), and UUnet prior to the proposed merger — and then shows that AT&T does little to help its ranking by combining with BellSouth or SBC.  Level(3) comes out on top world-wide.

“What’s a poor US-based network to do,” asks Renesys blogger, Todd Underwood.  He suggests that Level(3) buy Global Crossing (GLBC) to extend its lead since GLBC has a bargain-basement market cap of $400m.

If you really want an indication of the speed at which the combination of AT&T, SBC, and BellSouth are going to come together, pay attention to Randall Stephenson, chief operating officer of AT&T.  He was quoted on 6–Mar in LightReading as saying that the combined AT&T will move its “wired and wireless networks to a common IP backbone before the end of the decade.”

End of the decade?  If it is going to take that long, why not buy Global Crossing and Level(3) and have the biggest, badest IP backbone in the universe?

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AT&T + BellSouth, big and scary nonsense

Monday, March 6th, 2006

Monopoly Man with CigarSuddenly, the telecom world has become delusional.  Why?  Maybe it’s the numbers — $67 billion purchase price, $120 billion in sales.  Apparently, such big numbers are the financial equivalent to LSD.

Under the influence of this megamoney drug, the leaders of AT&T and BellSouth met over bird hunting in Georgia and agree to convince their respective boards that putting the two companies together would make the combined company more competitive.  How is it that the new AT&T believes it can dominate the competition?  Scale, my boy, scale.

Really?  Let’s take a look at who AT&T and BellSouth are most afraid of — Verizon and the cable guys.

  1. Verizon wireless has better coverage.  Verizon’s wireless is very profitable and is lambasting the competition with a simple and annoying concept: build a wireless network in the US that actually works.  How’d they do it?  Verizon stuck with CDMA technology instead of cutting over to the old euro-standard, GSM.  Not only does CDMA require fewer base stations to cover the same area as GSM, but Verizon was able to build on an existing infrastructure.  AT&T and Cingular only recently cutover to GSM and will need to spend billions to provide the same.
  2. Cable’s triple play is triple pay.  Comcast and others have proven they can deliver voice and data as well as video content.  That has increased average revenue per user significantly at the expense of the telcos.  Going in the other direction is much harder.  Do you know anyone who is buying their TV services over DSL?  Believe me, it’s not easy over today’s twisted-pair copper network.

Monopoly TycoonHonestly, I cannot see how combining two companies that cannot compete in these two areas improves their situation in any dimension.

But if somehow the combination of AT&T and BellSouth can fix both of these problems — spending billions to fix their swiss cheese GSM network, and magically figuring out how to deliver content — then I’ll believe this merger has some value.  Until then, it is nothing more than two old boys slapping each other on the back.

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Phone TV study, not what you’d expect

Sunday, March 5th, 2006

TV phone in tubI love this kind of story: engineer’s dream meets reality.

Nokia — a totally engineering-driven company — recently participated in a user study of 375 households in Oxford, England, equipped with TV-enabled mobile phones.  Surprise.  The results were not what the researchers expected:

  1. 50% of the test group watched mobile TV when they were inside their homes, not when they were running around being mobile.
  2. People watched their TV phones in strange and interesting places — “taking the mobile phone to the bathroom, watching TV in the bathtub, and using it to listen to music.”
  3. They liked the feeling that they had “control over the TV.”  Wow, who’s controlling who?
  4. The real shocker?  83% were satisfied with the service and were willing to pay ~$10 per month for it.

Go figure.  I count myself among those who would have bet a weeks pay that nobody would have been willing to pay for phone TV.  I still believe that mobile TV services will be add-ons to maintain today’s price point while voice-only services are pushed down.

Knock me over with a feather.

Regardless, this study bodes well for the equipment suppliers of new high speed data services, 1xEV-DO for CDMA networks like Verizon and Sprint and HSDPA for GSM networks like T-Mobile, Cingular, and AT&T.

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Cell phones in airplanes, what CMU really said

Friday, March 3rd, 2006

Post gazette headlineThis is going to be a verrrry geeky entry, so fasten your seat belt for a deep dive.

A Carnegie Mellon University (CMU) study on the impact of portable electronic devices on commercial airplane electronics was widely covered in the press recently, but it was grossly misinterpreted.  The story was picked up and distributed by Associated Press and run in USA Today print editions and various blogs like EnGadget.  Unfortunately, it was lemmings rushing at the cliffs, since none of the reporters bothered to read anything beyond the press release — or to pick up on the researcher history .

Though I was unable to find the full text of CMU study, I did find two articles, one authored by Bill Strauss, in Issues in Science and Technology, Winter 2002 and a second co-authored by Strauss and others from CMU in IEEE Spectrum, March, 2006.  To me, it looked as though both articles were based on the same data and the same study.  The second article picked up the most press.

Timing, as they say, is everything.  But in reality, you should blame the PR agency that wrote the headline for CMU: Carnegie Mellon Researchers Find Cell Phones Pose Greater Risk to Airplane Navigation Than Previously Believed.  Turns out, that is not really what Bill Strauss said.

Here is a clip from the IEEE Spectrum article:

In one telling incident, a flight crew stated that a 30-degree navigation error was immediately corrected after a passenger turned off a DVD player and that the error reoccurred when the curious crew asked the passenger to switch the player on again. Game electronics and laptops were the culprits in other reports in which the crew verified in the same way that a particular PED caused erratic navigation indications.

Here is another quote from 3 years earlier, in Issues and Science and Technology:

In 1996, the crew of an airliner that had just taken off from Salt Lake City International Airport was informed by air-traffic control that the craft was 30 degrees off course. The pilot and copilot’s flight instruments indicated no error. On this day, the weather was good and air-traffic control was able to appropriately vector the aircraft. The flight crew later concluded that electromagnetic interference from a laptop computer being used in the first-class cabin had caused the problem. In his report on the incident, the pilot stated, “I would have really been sweating if it had been instrument flight rules in that mountain area.”

Hmm…Let’s see, DVD player, laptop.  What was that about cell phones?  The CMU study cited one brand and one model of cell phones that has been reported to interfere with GPS-based nav systems on aircraft and it blames the FCC (who regulates the emissions from cell phones) for not coordinating with FAA to get that under control.

In March 2004, acting on a number of reports from general aviation pilots that Samsung SPH-N300 cellphones had caused their GPS receivers to lose satellite lock, NASA issued a technical memorandum that described emissions from this popular phone. It reported that there were emissions in the GPS band capable of causing interference. Disturbingly, though, they were low enough to comply with FCC emissions standards.

Okay, fine.  Let’s get the FCC to talk to the FAA and change the allowable limit for unintended radio emissions from cell phones.  But cell phones operating on the proper FCC-mandated frequencies is not a problem.  Take a look at this chart.  The CMU study actually captured radio emissions from cell phones being used in flight.  But note that the emissions captured are WELL out of the bands used by GPS or any other nav system on aircraft.

Cell phones and airplane frequenciesHad enough?  Now, let me net it out.

  • The CMU press release was cut and paste and widely misinterpreted as indicating that cell phones could make airplanes fall out of the sky.  In reality, DVD players and laptops are probably worse offenders.
  • If cell phone use on airplanes is to be allowed, the FCC and FAA need to coordinate and police the unintended emissions made by cell phones, not the currently regulated RF bands.
  • DVDs, laptops, and other electronics need an equally hard look at the FCC regs level.

In other words, calm down.  Mr. Strauss and others has been talking about this issue for many years.  See the papers sited at the end of the IEEE Spectrum article.  Someone finally listened.  But they heard what they wanted to hear.

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